5 Keys to Growth from "Scaling Up" by Verne Harnish

Updated: Jan 16




Scaling Up, has been sitting on my shelf for a year now. The one-page tools are something I have found a lot of value from and have certainly applied to my own life and business.


The book can be bought from amazon

https://www.amazon.com.au/Scaling-Up-Build-Meaningful-Business/dp/0986019526


These are the 5 keys to growth that I took away from this book.




1. Prediction, Delegation, Repetition


Harnish suggests that challenges in the business can be linked to managements abilities in prediction, delegation and repetition.


Prediction – the business leader needs to stay one step ahead of industry trends, clients needs, technology employees. This becomes increasingly harder to do as the business grows and the leader becomes more removed from the frontline and interactions with frontline staff and customers.


Delegation – When organisations reach 10 employees the leader can delegate away their weakness but as the organisation grows the leader must also delegate away their strengths in order to build a business based on procedures rather than the personal strengths of the leader.

Repetition – Systemising and consistently promoting a common message throughout the organisation until it becomes second nature


2. Pay More Hire Fewer


Harnish makes the claim that


one great employee can replace three good ones,

keeping the total wage to revenue cost competitive.


He recommends attracting the best talent, pay above market rates and invest heavily in training and development to keep their productivity high enough to justify the increased cost.


He gives the example of The Container Store, who are highly selective in their hiring practices because of “the brand promise we’ve made to our customers to provide exceptional customer service”.


3. Communicate With Narratives Instead of Bullet Points


The author took this story from Bezos and how he runs meetings in Amazon.


The premise is that instead of creating powerpoint presentations with bullet points, he creates a 6-page narrative memo.


This takes longer to produce, but


creating a narrative requires clear thinking. It allows the writer to elaborate on the thinking behind the idea and gives the reader a greater understanding.

4. Grow People Through Coaching


As googles analytics team discovered, one-on-one coaching is the number 1 factor linked to great management” (Harnish,79)


Harnish recommends to regularly set aside a weekly or monthly meeting, 30 mins weekly or 1 hour monthly and use a coaching framework that reduces step by step the need for support until the task can be fully delegated.


5. Cash Flow V Profit


The old adage,


Turnover is Vanity, Profit is Sanity, Cash is Reality


sums up this section of the book.


It looks at keeping cash flow as a key priority in the business and not just profit. Profit can be manipulated and subject to opinion, but cash flow determines whether or not the business will survive.


If the cash flow is not optimal, he recommends;




Shorten the Cycle


Maximising the efficiency of what you do, increases the speed at which you get paid. If you are closing sales more efficiently, delivering products and services more efficiently then you are getting paid quicker.

Invoicing more regularly with shorter payment times and creating a personal relationship with your client’s accounts personnel.

Consider taking deposits and upfront payments where possible.


Eliminate mistakes


The number one reason invoices are paid late is due to mistakes. Make sure that the product or service has been fully delivered and to standard and that there are no mistakes in the invoices.


Change the business model