Verne Harnish outlines key strategies for upscaling a business through his 4D framework: Drivers emphasize leadership in staff development, Demands focus on balancing stakeholder needs with product quality, Discipline encourages creating achievable quarterly goals, and Decisions involve regular risk management to prioritize issues. Effective scaling requires a clear brand promise, a long-term 'big hairy audacious goal' (BHAG), and an up-to-date one-page strategic plan (OPSP). Businesses must also enhance financial reserves, optimize the cash conversion cycle, and maintain open communication to support their strategic vision.

1. Verne Harnish
How to Upscale Your Business
techacute.com /how-to-upscale-your-business/
So you want to upscale your business? It’s one of the most common
goals of companies, I can’t blame you. Especially startups are defined
by their ‘yet to be planned and executed’ scaling phase and pursue to
exit their state as startup and become a stable business with a
sustainable and viable business model as well as the options for
upscaling. But just to pull you back to reality, neglecting the trends,
upscaling is not a goal – it’s a potential necessity to achieve your
goals. So first think about this: Why do you want to upscale your
business?
Growth Does Not Equal Success
The collective perception of scaling up a business seems to validate the success of a company. From
my point of view however the size of an organization does not provide a score on its efficiency or
profitableness. For instance if your goal is not to to employ and pay as many people as possible
without increasing profits, you need to focus on your actual organizational goals and utilize as least
resources as possible to reach same.
The 4D Framework for Upscaling
In his book ‘Scaling Up’, Verne Harnish explains his 4D framework to give business owners and
business developers a guideline on how to upscale their business. It consists of the following four
major columns which carry the methodology. Let me try to give you a quick overview of the segments.
First D: Drivers
The executives and managers of a company need to walk the talk and drive development of staff just
as much as they need to improve the profitability of the organization. If you don’t account for learning
and striving towards a better cooperation, scaling the organization up will introduce more trouble than
benefit.
Second D: Demands
You need to find the right balance between the demands of the stakeholders (or clients, users) and the
requirements that are to be taken into account in order to build your product/deliver your service. When
streamlining your processes, make sure you cut only unnecessary fat and not cut the qualitative edge
that is your advantage over your competitors.
Third D: Discipline
Create a battle plan on how you think you can achieve your goals. Segregate the steps towards the
overall goal into achievable quarterly goals and make sure everyone in the company is aware of the
quarterly goals – that is the number one priority and should be permanently omnipresent. That means
people can work towards this goals rather than just work. This allows everybody to work towards the
organizational strategy. Reemphasizing the quarterly goals in meetings and other communication
should further aid to achieve the goals.
Fourth D: Decisions

2. When you seek to scale up you should track all your issues and opportunities based on a regular risk
management exercise. You need to prioritize the biggest issues to be solved first and jump on all kinds
of quick wins (little effort tasks with major benefit).
Actions for Your Managers
As per first D above, you need to change what your mid management does. They need to actually give
up the (micro-) management and empower people. The manager remains accountable for his or her
team but making each team member responsible for something they will then own from now on.
Knowledge on the what and how-to needs to be transferred by training and a proper knowledge
management system. You are in a good state when the managers can take 4 weeks off for vacation
with no doubt that everything will continue to run smooth in their absence.
Goal Setting
Setting up KPIs ( Key Performance Indicators) is a way of measuring performance for your managers,
achieving all green KPI numbers in the monthly report is good but does not equal goals. Harnish says
you need one primary external facing brand promise, a BHAG (Big Hairy Audacious Goal) and a OPSP
(One-Page Strategic Plan) that you should always keep up to date.
Brand Promise
Your brand promise is the single attribute that best defines your company. Think about your unique
value proposition and think about what makes you special amongst the competition. You should focus
on that and make it your brand promise in alignment with your marketing strategy. This is what the
world should know you for and how they will think about you.
BHAG
The BHAG or Big Hairy Audacious Goal is your primary long-term goal. This is what you seek to
achieve in a time-frame of about 20 to 25 years time. The BHAG should be broken down into steps that
can be achieved in a smaller frequencies such as 3 to 5 years per step.
OPSP
Your One-Page Strategic Plan will help you to visualize and communicate the company’s goals to
internal or external audience. The OPSP is very hand to have but needs to be kept up to date at all
times. You also need to make sure that every step and task in the OPSP has a responsible person
assigned to. You need to make sure you have a priority one item clearly outlined that receives a major
focus and you need to mark down the metrics in which these goals can be measured. Afterall you can’t

3. manage what you can’t measure. But don’t only be grim about the OPSP, make sure the benefits of
achieving goals are clear and the reward for achieving same is stated as well. Gamification can also be
a excellent tool to improve culture to complete tasks on all levels of the organization.
To sum up your goal setting strategy, you should make sure that you have a vision and it is segmented
into achievable steps in a plan. This will help you with strategic decision making and support you to
deal with prospects, suppliers and maybe even with HR matters.
Finance
Before you even think about upscaling your business, you need to know that every growth step will
munch up your funds big time before a new stable level is reached. In order to prepare for an upcoming
attempt to scale your business up, you need to make sure to increase your financial reserves. Take a
look at the Cash Conversion Cycle (CCC) and you will be able to figure out how long you take until an
investment comes back as turnover (ROI). In general the smaller the time span of your CCC the better.
To shorten your CCC you should initially segregate the total into the four components of sales, delivery,
billing/payment and production/inventory. After you did that you need to work to improve these silos one
by one. You should not tackle more than one at a time. In each of these silos you might find
opportunities to improve the cycle time by reducing typical issues (a Six Sigma culture can help with
that) or by improving the overall business model.
Communication
If you want to help your cause, you should allow your staff to know about your vision and strategy. Even
if you strategy is agile and prone to dynamic change your teams will understand that and will still
appreciate the insight. The value-add for the business is that each piece in the clockwork of your
business knows the direction it should move to on their own. Nevertheless you should frequently
communicate the strategy, the goals and also the steps associated with same. Don’t expect anybody to
read your mind if you are not communicating these things frequently.
Further Reading
Summary
Based on Verne Harnish’s bestseller I have tried to reflect the lessons we
learn from him in a compact way. If you have a good idea now on what you
should do now – that’s great. Nevertheless I still suggest you to dive down
into the subject of upscaling more. This is one of the most critical activities
a company could transition through and countless organizations have
failed this step and don’t exist anymore because of that failure. If you have
feedback or want to share some more tips on upscaling a business please
drop your thoughts into the comments section below. Many thanks for
reading!

4. Photo credit: Sebastiaan ter Burg / Nan Palmero / Brian Ujiie / Raymond Clarke
Christopher Isak
Founder at TechAcute.com
Part geek, part business and part cyborg-like wearable tech aficionado – that is
our Chris. Moving out of home and into to the big city of Frankfurt in Germany at
the age of 18, he is rumbling through the corporate world ever since. His hot
topics are ITSM, Unified Communication and wearables.