Book SummaryMastering the Rockefeller Habits, by Verne Harnish

1-Page Summary1-Page Book Summary of Mastering the Rockefeller Habits

The oil tycoon John D. Rockefeller was—and still is—the richest person in history. He made his fortune by founding the Standard Oil Company and growing it into a mind-bogglingly large multinational corporation. According to entrepreneur Verne Harnish, Rockefeller grew his company using simple fundamentals of business management that any leader can use to optimize their business and maintain organizational health during chaotic periods of growth.

In Mastering the Rockefeller Habits, published in 2002, Harnish sums up the secrets to business success with three habitual business practices that he drew from Titan, a biography of Rockefeller. These three “Rockefeller Habits” are Focusing on a Purpose, Tracking Progress Objectively, and Conducting Effective Meetings. (Harnish refers to these habits as Priorities, Data, and Rhythm, respectively.)

(Shortform note: In Scaling Up, Harnish expands this list of three Rockefeller Habits into a list of 10. Most of these 10 items comprise other advice included in Mastering the Rockefeller Habits that we’ll discuss later in this guide, such as the suggestion to...

Mastering the Rockefeller Habits Summary The Long Term: Your Core Values and BHAG

As we mentioned, the first Rockefeller Habit is Focusing on a Purpose. According to Harnish, to make your business a success, you must decide on a long-term goal you want the business to accomplish. Then, ensure that everyone in the company understands and focuses on the single most productive thing they can do to help reach that goal.

To know what long-term mission you want your business to accomplish, you must become fully aware of your business’s Core Values, argues Harnish. These values describe your business’s internal code of ethics: What should the company do, and what shouldn’t it do? What kinds of work are worth pursuing? For example, an auto parts manufacturer’s core values might include absolute dependability, creative problem-solving, and positive environmental impact.

Every company has a set of implicit Core Values, but you can’t properly align the company under this unifying direction until you become consciously aware of what they are. To identify your company’s Core Values, Harnish recommends collaborating with trusted leaders in your company to create a list of three model employees who represent the best parts of your company’s culture. Then, talk about...

Mastering the Rockefeller Habits Summary The Medium Term: Your Unique Value

It’s not enough to identify your company’s BHAG—you also need to come up with a plan for how to get there. To do this, Harnish says that you need to determine what Unique Value your company and (currently) no one else can deliver to the customer (Harnish calls this your Brand Promise). For example, a private tutoring service’s Unique Value could be helping young students build motivation skills, so they want to spend time studying.

Harnish explains that your Unique Value helps your business succeed by giving it a competitive advantage. If you build your business strategy around your Unique Value, you can dominate a competitive market.

(Shortform note: In Competitive Strategy, Michael Porter argues that delivering Unique Value isn’t the only viable way to gain a competitive advantage in your industry; rather, it’s one of three. Alternatively, you can gain an advantage by setting prices lower than anyone else or catering to a niche market within an industry. For example, if you sell tennis...

Mastering the Rockefeller Habits Summary The Short Term: Guiding Metrics

Harnish argues that in addition to Focusing on a Purpose, successful companies need to practice the Rockefeller Habit of Tracking Progress Objectively: Create ways to measure the company’s financial health and progress toward its goals. Keeping a close eye on this data will help guide your strategic decisions in the short term.

Harnish recommends you primarily focus on tracking two types of data: Profitability Indicators and Target Metrics.

Type #1: Profitability Indicators

First, identify metrics that give a clear impression of your company’s financial health and general productivity. We’ll call these metrics “Profitability Indicators” (Harnish refers to them as “Smart Numbers”). For example, a social media platform’s Profitability Indicators could be the percentage change in the number of new users this week compared to last week, the ROI for this week’s advertisements, and the percentage of users who used the social media platform every day.

According to Harnish, studying your company’s Profitability Indicators in real time allows you to detect rapidly changing market conditions and unforeseen budget problems caused by your company’s growth. **Unless you have...

Mastering the Rockefeller Habits Summary Today: Focused Daily and Weekly Meetings

The final Rockefeller Habit is Conducting Effective Meetings. While many companies see meetings as recurring drains of time and productivity, Harnish asserts that frequent meetings greatly accelerate your progress—as long as you run them the right way. Every meeting should have a predefined agenda and a strict time limit to ensure it’s not wasting anybody’s time.

(Shortform note: Research confirms that many companies view meetings unfavorably. In one survey of 182 senior managers, 72% agreed that “meetings are unproductive and inefficient.” Harnish’s solutions (a strict agenda and time limit) resolve meeting participants’ most common complaints: that meetings are unfocused and take too long. However, many leaders fail to implement these simple improvements. Why? According to research, when someone leads a meeting, they view it as significantly more productive than other participants view it. Thus, the people in charge don’t realize how important it is to gather employee feedback and optimize their agenda.)

Harnish says that most companies already run...

Shortform Exercise: Use Target Metrics to Drive Short-Term Results

Organizing a group to achieve any meaningful results requires unified short-term focus, which in turn requires everyone to aim at the same clear Target Metric. Practice setting a Target Metric like this to create alignment across an entire company or concentrate the efforts of a single team.

What is one major short-term goal you want your team or organization to achieve? How does this goal help the organization make progress toward its grand, long-term purpose? (For example, perhaps you run a hotel and want to make guests more satisfied with their service. This would help your parent company achieve their vision of providing luxurious-feeling accommodations to travelers on a budget.)