Verne Harnish on Managing Growth

Will Price at Hummer Winblad has a really nice blog post up on a speech he attended by Verne Harnish the other day

Verne is a long time friend, extremely captivating and insightful speaker, and a guy who has been around entrepreneurs and entrepreneurship forever.  I first met Verne in 1990 at the first Inc. Magazine / MIT Entrepreneur Forum / YEO Birthing of Giants Conference. This was a conference that Verne created for founders of companies under the age of 40 with at least $1 million of annual revenue.  My company was four years old, we’d just broken the $1m mark, had 12 employees, and I was struggling with all of the normal startup issues.  In four days, I met 59 other people, many of whom became close friends, who were either struggling with or had struggled with similar stuff.  This was also my introduction to a long standing involvement with YEO.  I remember driving home from Endicott House thinking “Holy Shit, I Am Not Alone.” 

When Amy and I moved to Boulder in 1995, Verne was the only guy we knew living there.  He and his wife Julie moved away shortly after we showed up, leaving us friendless in Boulder, but only for a brief period of time.  Over the years, I’ve seen Verne periodically, but every time I see something like what Will wrote up, I remember how amazingly great Verne is at standing in front of a group of people and talking about the issues that entrepreneurs deal with.

If you ever have a chance to hear Verne talk, take it.  If not, grab his book Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Fast-Growth Firm – it’s great roughage for any entrepreneur’s diet.

  • mickslam23

    This book looks great. I’ll buy it this afternoon.

  • sigma

    Looked at the book: No thanks.

    The book seems to have many anecdotes and a lot of plausible conjecture but seems to be missing any very solid conclusions well supported by solid representative data.

    There are six broad points that are easy to see and make the whole picture simpler:

    (1) Really bad management really is possible. It is easy to generate a long list of things that have been done and that one should not do.

    (2) There is very little really spectacularly good management. Mostly organizations get by with fairly routine and obvious approaches.

    (3) The US is awash in people who rather quickly learn to be in the middle of the pack as acceptable managers. There are examples in education, government, and the military. The US is awash in people who have done reasonably well managing over 100 people.

    (4) There is a long list of companies that grew with great success with relatively little contribution by ‘experienced professional management’. Such companies include IBM, FedEx, Microsoft, Oracle, and Google. I saw a lot of the most important growth of FedEx at very close hand: Mistakes were made, but in the end there was fantastic success. The successes were mostly just from giving reasonably serious attention to the clearly important problems. The mistakes were not good but not fatal. For the successes, there was no magic.

    (5) In any important field, a body of solid knowledge would be good to have, and one important step is formulation of the knowledge from relatively imprecise beginnings. There is a long list of subjects with polished formulations, from mathematics to physics, chemistry, and electronic engineering, and texts on these subjects are in strong agreement. Then there is ‘business management’: The formulations look crude; the university courses look crude; the texts have poor agreement. It it easy to conclude that polished, or even good, formulations are missing.

    (6) For people who need to manage organizations, we can draw four conclusions: (A) Avoid the obvious mistakes. (B) Care a lot and try hard. (C) Until there is some strong agreement among business management texts with clearly polished formulations, do not take advice in business management books very seriously; between now and then, don’t hold your breath waiting. (D) Don’t let someone tell you that you do not have enough “business management knowledge and experience” and, thus, must turn over control of your company to someone else who is claimed to have such ‘valuable’ qualifications. To relinquish control in this way is to permit yourself to be talked out of much of your life’s work due to some of the lowest quality ‘career-oriented’ writing currently being printed on paper — don’t do it. More generally, first, yes, there is some excellent material between covers of some books, some real crown jewels of civilization — rock solid, polished, powerful, valuable. There is also a lot of junk between the covers of some books; some of it is about as bad as it can be. It is good to realize that there is this wide range of quality and still better to have seen enough of the good and the bad to be able to tell the difference. For business management books, mostly just “f’get about it”. Still more generally, one of the most important roles of a good education is what you learn not to ‘learn’, that is, how to avoid getting convinced of nonsense. In particular, a business owner who really has built something valuable can face a new challenge: There can be people trying to trick the owner into handing over what they have built. The solution is simple: Don’t hand it over.

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