Few people have done more for Entrepreneurs and CEOs than Verne Harnish: Verne is the founder of the world-renowned Entrepreneurs’ Organization (“EO”), a global network of entrepreneurs and CEOs that boasts over 16,000 members worldwide. For the past 15 years, Verne has chaired EO’s premiere CEO program, the “Birthing of Giants” held at MIT, a program in which he still teaches today.
Verne is also the Founder and CEO of Scaling Up, a global executive education and coaching company with over 200 partners on six continents.
He is the author of multiple global bestselling books including Mastering the Rockefeller Habits; The Greatest Business Decisions of All Time (for which Jim Collins wrote the foreword); Scaling Up (Rockefeller Habits 2.0) (which has been translated into 23 languages and has won eight major international book awards including the prestigious International Book Award for Best General Business book); and his latest book, Scaling Up Compensation.
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Verne Harnish: Founder of The Entrepreneurs' Organization (EO), Author of "Scaling Up" and "Mastering the Rockefeller Habits" – In The Trenches
Specific Questions and When They’re Asked
- (4:25) You have a new book out called Scaling Up Compensation. Can you briefly summarize the five core compensation principles that you explore in this book?
- (6:45) When crafting a compensation plan, what is the best way to balance between individual goals, departmental goals, and company goals, knowing that they three can sometimes present conflicts and/or unintended consequences?
- (8:55) What are some examples of customer-centric goals that tie together company, departmental, and individual incentive schemes?
- (11:10) When creating a customer-centric compensation scheme, how do you decide which customer requests you should be listening to, and which requests you should ignore?
- (14:55) In crafting compensation plans, you’re an advocate of “fairness, not sameness”. But if individual incentives plans are tailored to specific people, how do you avoid the risk or too much complexity and administrative burden? Or lack of confidentiality amongst employees?
- (22:05) It seems to be particularly hard for CEOs to hire a “#2” or “right hand” to take some of the day-to-day responsibilities off their plate. What advice would you give to a CEO currently contemplating (but struggling) to make such a hire? Why does this seem to be such a difficult hire for CEOs and entrepreneurs to make?
- (28:00) When filling this types of role, why do internal hires tend to work out more frequently than external hires do?
- (31:50) Many CEOs want to make a key executive hire, but are worried that they don’t have the budget to do it. However, in some cases, the value that these new hires would generate could create the budget bandwidth that these CEOs are seeking. How would you counsel a CEO who currently finds herself stuck in this type of circular logic?
- (33:55) How do you recommend that CEOs structure “trial periods” when making key executive hires?
- (36:15) What habits/rituals/routines/practices have you integrated into your own life to ensure that you are running this marathon called entrepreneurship at a sustainable pace?
- (42:10) You’ve created a tool called The One Page Personal Plan. What is it? Why is something like this an important exercise for entrepreneurs and CEOs to go through?
- (48:45) In a recent interview, you were asked what advice you might give to your 20-year-old self, and you responded by saying that you would “buy versus build”. What did you mean by this?
- (52:25) Some CEOs are at a crossroads where on one hand they can sell their companies and realize value now, but on the other hand they can further invest in growth and potentially get more later. What should CEOs at such a crossroads ask of themselves?
- (53:10) What are the 3 to 5 books that you would put on your personal Mount Rushmore of books that every entrepreneur and CEO must read?
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Links to All Resources Discussed
- Book: Who, by Geoff Smart & Randy Street
- Book: Uncommon Service by Frances Frei
- Book: Three Alarms by Eric Partaker
- Book: The Goal by Eliyahu M. Goldratt
- Book: Great by Choice by Jim Collins
- Book: Bringing Out the Best in People by Aubrey Daniels
- Book: Influence by Dr. Robert Cialdini
- Book: The Heart of Business by Hubert Joly