Habits and routines are at the heart of sustainable business growth.
If you want to keep everyone aligned and move the company forward at a quick pace, the Rockefeller Habits provides a great framework for focus, communication and accountability throughout the company.
What are the Rockefeller Habits
The Rockefeller Habits, popularized by author and entrepreneur Verne Harnish, are a set of principles designed to help businesses achieve their goals effectively.
The principles are named after John D. Rockefeller, the American oil magnate who founded Standard Oil – one of the most successful businesses of the 19th century. Rockefeller was known for his disciplined and methodical approach to business, which helped him achieve great success. The Rockefeller Habits are designed to help business owners emulate his approach.
Ultimately, mastering the Rockefeller Habits can help businesses or all sizes to achieve your goals more quickly and efficiently.
The Importance of the Rockefeller Habits
If you only had one tool to improve execution within your company, this would be the one.
After all, routine sets you free – especially when business feels fast and squirmy.
The principles focus on setting clear priorities, creating a culture of execution, and investing in the right resources to make progress.
In short, mastering the rockefeller habits provides you with a framework for scaling, by helping you make better decisions and execute well at all levels of the company.
The 10 Rockefeller Habits
Rockefeller Habit #1: The Leadership Team is Healthy Team and Aligned
This is listed as habit #1 for a reason, because it must be in place for the others to be effective. In other words, if your leadership team is not in alignment, it will undermine every other strategic initiative.
Here’s how you know if this habit is in place:
• Everyone understands each other’s differences and styles.
• The team meets weekly for strategic thinking (not just meetings about execution).
• The team participates in ongoing executive education – always growing & improving
• The team is able to engage in constructive debates where everyone feels comfortable participating. In other words, you know how to argue productively
Rockefeller Habit #2: Everyone is Aligned on the # 1 Priority for the Quarter
If you have too many priorities, you have no priorities.
While I recommend having up to 5 “rocks” each quarter (that is, a priority that represents a chunk of a larger annual or multi-year initiative), it is still important to identify which of your 5 priorities is the most important, and needs to be accomplished to move the company forward.
Here’s how you know if this habit is in place:
- You have identified a “Critical Number” as a way to focus what is needed to move the company ahead this quarter.
- You have identified and ranked 3-5 Priorities (Rocks) for the quarter, that are tied to bigger picture goals.
- A Quarterly Theme and Celebration/Reward are announced, bringing the priorities and Critical Number to life for all employees.
- The Quarterly Theme and Critical Number posted throughout the company (physical and/or digital), and employees are aware of the progress each week.
Rockefeller Habit #3: Meeting Rhythms
Communication is one of the biggest complaints in most companies. When an effective communication rhythm is established, information moves efficiently and accurately, creating accountability for ensuring goals are are hit.
Here’s how you know if this habit is in place:
- All employees are in a daily huddle (aka, a “stand-up meeting”) that lasts less than 15 minutes.
- All teams have a weekly meeting with accountability on projects and priorities.
- The executive and middle managers meet for a day each month, focused on learning, resolving big issues, transferring the DNA through all levels of management.
- There are quarterly and annual meetings, where the executive team meets off-site to think strategically and create execution plans.
Rockefeller Habit #4: Every facet of the company has a person assigned with accountability
This habit is about creating both functional and process accountability.
While individual accountability can be challenging within organizations, oftentimes where the ball really gets dropped is in the handoff from one step of a process to the next. For example, if there’s a break-down in the process between sales and fulfillment, it’s easy for each department to point a finger at the other. And that is when you realize that if 2 or more people are accountable, then no one is!
Here’s how you know if this habit is in place:
- The Function Accountability Chart (FACe) is complete and up to date (right people, doing the right things, right).
- Financial statements have a person assigned to each line item.
- You have identified the 4-9 core processes and assigned an owner to each, using the Process Accountability Chart (PACe).
- Each 3-5 year Key Thrust has a corresponding person on the Advisory Board to provide internal expertise.
Rockefeller Habit #5: Ongoing Employee Input Is Collected To Identify Obstacles And Opportunities
This habit helps businesses understand their team’s needs, challenges, and areas for improvement. By asking employees for feedback on a regular basis, leaders will be able to hone in on problems quickly and find viable solutions. It also helps build trust with the team and increase employee engagement.
Here’s how you know if this habit is in place:
- All executives (and middle managers) have a Start/Stop/Keep conversation with at least one employee weekly.
- Insights from employee conversations are shared at the weekly executive team meeting.
- Employee input is collected weekly about obstacles and opportunities.
- A mid-management team is responsible for the process of closing the loop on all obstacles and opportunities, so employees know their feedback was valued.
Rockefeller Habit #6: Reporting and analysis of customer feedback data is frequent and accurate
This habit emphasizes the importance of understanding customer wants and needs so that your business can be responsive. It encourages businesses to stay on top of customer feedback like you stay on top of financials. This allows you to develop a deeper understanding of customer priorities, build strong relationships, and provide the best products and services to continue to earn their trust and loyalty.
Here’s how you know if this habit is in place:
- All executives and middle managers have an intentional conversation with at least one customer/end user per week.
- Insights from customer conversations are shared at the weekly executive team meeting.
- All employees are involved in collecting customer data.
- A mid-management team is responsible for the process of closing the loop on all customer feedback.
Rockefeller Habit #7: Core values and purpose are ‘alive’ in the organization
Having a clear purpose will help employees stay focused, motivated and engaged in their work. When employees buy into the purpose and model the company’s core values, your organization is heading in the right direction. This habit helps you to consistently reinforcing the values and purpose through actions, conversations, decisions and rewards.
Here’s how you know if this habit is in place:
- Core Values are Purpose are articulated, and both are known by all employees.
- All executives and middle managers refer back to the Core Values and Purpose when giving praise or reprimands.
- HR processes align with the Core Values and Purpose (hiring, orientation, performance reviews, recognition, etc.).
- Actions are identified and implemented each quarter to strengthen the Core Values and Purpose.
Rockefeller Habit #8: Employees can articulate the company’s strategy accurately
There are key components of your strategy that are essential for every employee to know and understand. This helps to create a unified culture, where everyone is working together, ensuring goals are met.
This habit is in place if all your employees can articulate the following:
- The company’s Big Hairy Audacious Goal (BHAG) – progress is tracked and visible.
- A succinct definition of your Core Customer.
- 3 Brand Promises – And the KPIs used to measure the promises are reported on weekly.
- Elevator Pitch – A compelling response to the question “What does your company do?”
Rockefeller Habit #9: All employees can answer quantitatively (KPIs) whether they had a good day or week
By making sure that all employees have a clear understanding of what success looks like for them, it ensures that everyone is rowing in the same direction. It also motivates employees to strive for higher performance since they can easily measure their own success. These key performance indicators are outlined clearly in column 7 of the One-Page Strategic Plan.
Here’s how you know if this habit is in place:
- 1 or 2 Key Performance Indicators (KPIs) are reported on weekly for each role/person.
- Each employee has a Critical Number that aligns with the company’s Critical Number for the quarter (clear line of sight).
- Each individual/team has 3-5 Quarterly Priorities/Rocks that align with the companies priorities.
- All executives and middle managers have a coach (or peer coach) holding them accountable to behavior changes.
Rockefeller Habit #10: The Company’s Plans And Performance Are Visible To Everyone
Visibility leads to accountability.
If everyone can see the goals, and understand how they and their team contribute to the desired outcomes, it encourages collaboration, feedback and focused efforts. It also helps to minimize misalignment as teams move forward and take action in support of their objectives.
Here’s how you know if this habit is in place:
- A “situation room” is established for weekly meetings (physical or virtual).
- Core Values, Purpose and Priorities are posted throughout the company.
- Scoreboards are up everywhere displaying current progress on KPIs and Critical Numbers.
- There is a system in place for tracking and managing the cascading Priorities and KPIs.
How to Implement the Rockefeller Habits
Start by having each member of your leadership team rate your company on each habit on a scale of 1-10. Gather everyone’s input, then discuss the similarities or differences in your ratings.
Next, pick 1 or 2 habits to focus on improving over the coming quarter. Don’t try to install every habit at once! You’ll find that improving a couple of habits by a couple of points will start to make a difference. If you continue to repeat this exercise each quarter, your organization will build on these habits and strengthen overall.
How do you decide where to begin?
Well, for the most part, it doesn’t matter where you start – with the exception of one. None of the other 9 habits can be effective if you don’t have the first one working.
That is: The Executive Team Is Healthy And Aligned
If your leadership team isn’t currently healthy & aligned, it’s prohibiting your progress, or worse, sending you backwards.
Once you have a solid rating on habit #1, you can have a discussion amongst the leadership team to decide on which habit to install next.
You might consider:
- Which habit would help to solve our most persistent headaches?
- Which habit would make the biggest impact on hitting our goals this quarter?
Conclusion
Lots of companies scale up… but then screw up.
In other words, rapid growth isn’t sustainable if you don’t have the foundation to keep the wheels on for the journey, and ensure profitability along the way.
By mastering the 10 Rockefeller Habits, your company will be aligned, engaged and able to move faster. It will allow you to achieve profitability that exceeds your industry average, keep the company culture in tact, and enjoy the climb.
Check out this video and rate your own company on each of the 10 habits. Then pick 1 habit to focus on improving in the coming quarter.
(And if you’re not sure where to begin, I’ll tell you which one I think is most important.)
Integrating Rockefeller Habits is just one step in growth. Get in touch to find out more about our Business Coaching Programs, how to create a Strategic Plan, and take your business to the next level.
FAQs
1.Where did the Rockefeller habits come from?
The Rockefeller Habits were developed by Verne Harnish, author and founder of Scaling Up Coaches. It is based off John D. Rockefeller’s business practices and philosophy, and focuses on setting clear goals, maintaining focus and momentum, developing a culture of execution, communicating vision and objectives clearly to team members, and connecting strategy to the bottom line.
Verne Harnish’s books, Mastering The Rockefeller Habits and Scaling Up (Mastering the Rockefeller Habits 2.0), are filled with practical advice and strategies that can be used to increase the value of a business.
2.What are the Rockefeller principles?
The Rockefeller principles, first developed by J.D. Rockefeller in the 19th century, are a set of guidelines that help businesses succeed and grow. The principles focus on building personal relationships with customers, developing good habits within an organization, pursuing consistent growth targets, and achieving maximum efficiency from all areas of operations.
These principles continue to be relevant today, as they form the basis of many successful businesses and are often referred to as “the Rockefeller Habits.” By utilizing these principles, businesses can ensure that they remain competitive and successful for years to come.
