In Chapter 5 of Scaling Up: Mastering the Rockefeller Habits 2.0, Verne Harnish highlights a vital quality of successful managers and shows you how to transition from a directive leader to a coach who cultivates high-performing teams. The best managers don’t just oversee work; they actively develop their employees, fostering autonomy and problem-solving rather than creating a culture of dependence.
This blog is part of a series looking at the habits required to successfully scale a sustainable business. Read our introduction about the Scaling Up book and how to implement it in your business, which includes a complete list of all the blogs that explore this book.
Investing in continuous education
The subhead of this chapter, “Keeping and Growing (Educating) the Team”, tells you all you need to know about its underlying philosophy. The key theme is the importance of continuous education. Companies that invest in employee development see long-term benefits, with training keeping teams aligned with business goals and evolving industry demands.
“People join companies. They leave managers. Therefore, to keep your team happy and engaged, you need one thing above all else: great managers – not free lunches or yoga classes!”
This isn’t just about hosting the occasional seminar but about embedding learning into the fabric of the organisation, encouraging employees to seek out knowledge opportunities and bringing new skills back to the business.
Clear expectations and regular feedback are the foundation of strong performance. Employees thrive when they understand what’s expected of them and receive constructive guidance. Structured coaching conversations help clarify goals, while a mix of quantitative metrics and qualitative insights ensures a well-rounded approach to performance management.
How to coach rather than manage
To help you become the best possible manager, Harnish outlines five essential coaching activities, which he lists in reverse order of importance:
5. Hire fewer people, but pay them more
Rather than a rapidly expanding headcount, Harnish advocates for hiring fewer but exceptionally talented employees and compensating them well. High salaries and strong benefits attract top-tier talent, foster loyalty, and reduce costly turnover. A smaller, well-paid, and highly skilled workforce is often more productive and efficient than a larger, mediocre team. Investing in top talent also ensures that employees are capable of handling greater responsibility, reducing the need for excessive middle management and improving overall agility.
4. Give recognitions, and show appreciation
Recognition is a powerful tool for reinforcing positive behaviours and maintaining morale. Harnish highlights that appreciation should be frequent, specific, and sincere (generic praise is ineffective). Public and private acknowledgments, small rewards, and personal appreciations all contribute to a culture of recognition. Employees who feel valued are more likely to stay committed and continue performing at a high level. Managers should also ensure recognition is tied to company values, reinforcing behaviours that align with long-term strategic goals
3. Set clear expectations, and give employees a clear line of sight
Employees perform best when they understand exactly what is expected of them and how their work fits into the bigger picture. Harnish stresses that managers must provide clear, measurable goals and establish direct links between individual contributions and company success. Regular check-ins, transparent communication, and well-defined performance metrics help employees stay aligned. When people see the direct impact of their work, they feel more accountable and engaged, leading to higher performance and better decision-making at all levels.
2. Don’t demotivate; “dehassle”
Rather than focusing solely on motivation techniques, Harnish argues that companies should remove the daily frustrations and inefficiencies that drain energy and enthusiasm. Bureaucratic red tape, slow decision-making, outdated processes, and unnecessary meetings can stifle productivity. Managers should act as problem-solvers, streamlining workflows, removing distractions, and ensuring employees have the tools and autonomy to do their jobs effectively. By eliminating these “hassles,” businesses create an environment where people stay naturally motivated.
1. Help people play to their strengths
Harnish emphasises that employees are most engaged and productive when they can leverage their natural abilities. Rather than trying to fix weaknesses, managers should identify and nurture strengths through tailored responsibilities, training, and coaching. When people do what they excel at, they contribute more effectively and experience higher job satisfaction. Strength-based management also reduces burnout and turnover, as employees feel valued for what they bring to the organisation rather than being forced into roles that don’t suit them.
Right people in the right roles with the right management
Ensuring the right people are in the right roles is a critical element of people management. Great managers assess talent effectively, nurturing A-players and ensuring each team member is positioned where they can contribute most effectively. Those who don’t align with the company’s culture or expectations should be transitioned out to maintain high standards and overall cohesion.
Meetings play a key role in sustaining this momentum. Rather than a waste of time, well-structured meetings (which could mean daily check-ins, weekly team discussions, or quarterly reviews) keep teams engaged and accountable. The best managers ensure these meetings are action-oriented, fostering meaningful conversations that drive progress. I wrote more about these meeting in our blog, Companies With Rhythm Are A Cut Above.
In addition to these meetings, one-to-one coaching is preferred over the quarterly performance review. A regular slot to review KPIs, priorities, and critical numbers from column 7 of the OPSP helps to recognise strengths and weaknesses and discuss strategies to optimise performance. The chapter offers further guidance on how to make these sessions valuable.
Creating a culture of accountability and growth
Beyond structure and strategy, managers also shape company culture. Recognising achievements, reinforcing core values, and celebrating team wins will lead to an engaged and motivated workforce. A strong culture isn’t simply a perk but becomes a driver of long-term organisational success.
Ultimately, the best managers work towards building self-sustaining teams – groups that operate efficiently without constant oversight. By empowering employees with the right tools, guidance, and opportunities for growth, leaders create an environment where individuals take ownership of their roles and drive the business forward.
One insight I find particularly valuable from this chapter is that growth companies are training, because successful scalers prioritise continuous learning. As companies grow, complexity increases; without ongoing education, employees will struggle to keep pace. Training ensures teams stay aligned as everything around them evolves. With better adaptability, innovation, and leadership development, the need to hire externally is reduced. Growth isn’t just about expanding operations – it’s about expanding the capabilities of the people within the organisation.
