Book Review: Scaling Up: How a Few Companies Make It… and Why the Rest Don’t

    By: Teresa Jurgens-Kowal, PhD, NPDP on Dec 12, 2016

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    Scaling Up: How a Few Companies Make It… and Why the Rest Don’t by Verne Harnish.  Gazelles, Inc.:  Ashburn, VA (2014).  246 + ix pages.  US$29.95 (hardcover).

    Product managers and product development practitioners are challenged to satisfy customer needs. Yet without attention to the needs of internal customers and careful regulation of business processes, new products can fail to generate revenue or to meet growth objectives.

    Verne Harnish’s recent book, Scaling Up, addresses these challenges so that any business can grow to the next level. After a short introduction, the book is divided into four thematic areas: people, strategy, execution and cash. Each section begins with an overview and presentation of a toolset and templates to structure the manager and team’s growth initiatives.

    People

    Three chapters are dedicated to the people in an organization. Chapter 3 discusses leadership with a focus on functional accountability. This is especially important for new product development (NPD) teams as each team member must fully represent his or her function. NPD cannot be successful, nor can a business grow, without integration of multiple perspectives into the development project.

    Chapter 4, “The Team,” also brings forth key points on selecting team members based on their passion for the mission over specific skills. General skills and knowledge coupled with curiosity can better serve an NPD team than narrow and deep hiring requirements.

    Strategy

    Harnish presents a one-page “Vision Summary” template in Scaling Up that is useful for NPD teams. One common failure of new products: The development team loses track of the customer value during a long technical design process. The vision summary brings the focus back to several key goals, including the values, purpose and brand promise, so that the team can strategically deliver the product objective.

    Moreover, the brand promise must be defined quantitatively. Without a specific metric, it is difficult to assess and monitor business goals. The brand promise builds customer trust, leading to repeat purchases and, ultimately, profitable growth.

    Execution

    The third theme of Scaling Up focuses on executing the chosen strategy with the given set of people. This is also where Rockefeller habits (from Harnish’s previous book Mastering the Rockefeller Habits) are reiterated in checklist form. Rockefeller habits include alignment, communication, values, purpose and reporting. Every action of every employee must support the strategic priorities in order for growth to occur.

    In Chapter 11, “The Meeting Rhythm,” Harnish makes an argument for several routine meetings on a daily, weekly, monthly and quarterly basis. Meetings in this context serve as communication pathways more so than decision-making or problem-solving venues.

    Cash

    Finally, part four of the book describes the more mundane aspects of business growth. Cash flow is an important part of new product success and growth, yet we often pass over detailed analyses with broad arguments of expected sales, ROI and market share.

    Running an NPD project with the viewpoint of a small-business owner focuses the team to prioritize net cash flow on a micro-level. Without true cash returns, separated from the overall corporate financial support, an individual product cannot be judged successful. NPD team members and project leaders should review this section to select key financial metrics and to understand the impact of product feature decisions on cash flow.

    Conclusion

    Scaling Up is a prescriptive model for business growth. Many of the tools and templates can be applied directly to NPD projects. NPD teams need to have a vision and selecting passionate, enthusiastic team members can drive toward that purpose.

    Small-business owners and entrepreneurs can benefit from reading Scaling Up as much as NPD teams. Harnish subtly reminds us that our focus must always be on the customer and that a disciplined approach can lead to greater degrees of success. This book is recommended for businesses that are planning scale growth and for NPD teams lacking structure.

    Teresa Jurgens-Kowal, PhD, NPDP
    Simple-PDH and Global NP Solutions, LLC

    Released: December 12, 2016, 1:07 pm | Updated: December 13, 2016, 1:56 pm
    Keywords: PDMA Blog


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