Read this exclusive Q&A with Verne Harnish, Owner and CEO of Scaling Up, who will be speaking at CEO Seminar in January. 

What was the driving force behind Entrepreneurs’ Organization and Scaling Up?

In 1986 I had the opportunity to host Steve Jobs for his first public presentation after being fired from Apple – part of an event recognizing the top 100 young entrepreneurs under the age of 30.  Later that evening I noticed Steve standing alone and the words of my mentor Joe Mancuso came to me: “It’s OK to be independent, but no reason to be alone.”  So that evening I passed the hat to raise some money and a year later formally launched what is today the Entrepreneurs’ Organization (EO) – 15,000 entrepreneurs around the globe who support each other at the top!

Later I felt it was time for EO to host its own executive leadership program, so I partnered with MIT and Inc. Magazine and launched it in 1991. There is plenty of information on how to start a business; and I have an MBA that is supposed to help you run a larger firm; but there wasn’t the playbook for “growing up” a company.  30 years later it’s a program in which I still teach today. 

It continues to serve as the perfect crucible to design the tools/techniques which are at the heart of our global Scaling Up organization today – helping leaders of growing firms manage the chaos that comes with scaling up an organization. 

And we’re very purpose driven.  Scaleups are the engines of our local economies – generating all the net new jobs and innovation – and we want to be there to help. 

Can you summarize your “Four Decisions” methodology relative to scaling a business?

Though businesses aren’t this neatly organized, we grouped all the decisions leaders make into four areas of the business:  People, Strategy, Execution, and Cash.   Scaling organizations is first and foremost about relationships – attracting and retaining customers, employees, vendors, investors, and attention in the marketplace. We’ve developed a set of tools that help you think through these People aspects of the business.

Next are a set of decisions that integrate various strategic frameworks into a unified approach which helps you identify the right market opportunities.  Noting “the riches are in the niches” our tools help you craft a Strategy which aims to dominate your chosen market.  And without a clear strategy you can state simply, it’s more difficult to execute – or you’ll waste the next few years executing a mess. 

Execution is about creating relentless repeatability within the organization – including a set of ten Rockefeller Habits which help reduce the drama, time, and costs associated with scaling up an organization.  And with talent becoming a limiting constraint, companies can’t afford to just throw people at the problem.  Streamlining processes help make everyone’s job easier, helping retain your people and customers.

Last, you can get by with decent people, decent strategy, and decent execution, but not a day without Cash.  Given that growth sucks cash, often firms are “growing broke” without knowing it.  We have a set of robust tools to help companies dramatically improve their cash conversion cycle.  In many cases, we can help you create a business model where growth generates significant cash. 

In what ways can business owners utilize the material in “Scaling Up” to streamline their operations and experience long-term growth?

To date over 80,000 firms are using our tools/techniques to successfully lead and manage their companies.  It starts with a tool that helps them assess and get “the right butts in the right seats” with appropriate KPIs.  It includes three “tests” for determining if you have the right people – and four criteria for selecting new talent to attract to the business.

To help nail the right strategy, we walk leaders through a strategic thinking process that determines the essence of their brand and the three brand promises they should perfect with a chosen group of core customers.  When successful, this strategy reduces the need for marketing costs and improve gross margins. 

We next help implement a set of routines that “set you free” in executing your strategy and in dealing with some of the common challenges with scaling up, especially communication within and between teams and functions in the organization.  We’re known for a specific set of meeting rhythms that reduce the time it takes to manage the business by 80% -- and structuring quarterly themes that drive alignment around achieving your one-page strategic plan (OPSP).

Last, but sometimes first, we have a simple but elegant tool to model the cash flow of the business – and the 7 levers you can use to increase the cash and profit of the business.  We also help with pricing strategies and setting compensation.  We just released a new book Scaling Up Compensation: 5 Design Principles for Turning Your Largest Expense into a Strategic Advantage.   

Why should attendees be excited about your keynote session?

I’ll be sharing four specific ideas – one each for People, Strategy, Execution, and Cash – that you can use immediately to drive a positive impact in the business.  We’ll look at the #1 most important question to ask in each of the four decisions – and practical examples of how various small to mid-market firms answered these questions, driving much better results.  In the end it’s about generating more money, saving more time, and having more fun in scaling up your business.  And scaling isn’t just the top line – it’s scaling your margins, profit, reach, and getting your life back to enjoy time with family and friends.

What can attendees expect to take away from your presentation?

Answered above, I hope.

Be sure to register for the event to catch Verne's full keynote session.