Are You Following Packard's Law? - Carter Reports

PEOPLE. Of all the components of business, people continues to reign as the number one decision for success and growth. Jim Collins, author of Good to Great, states “The best executives have always focused first on getting people who share their values and standards. They understood that vision and strategy cannot compensate for having the wrong people. Once you have the right folks in place, it’s much easier to steer the bus as conditions change.”

David Packard recognized this principle during the founding of Hewlett Packard.

Packard’s Law

No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company. David Packard

But how do we know we have the right people? I continue to get this question from clients, alliances, and many of my relationships. Until you settle your people issues, they will consume a tremendous amount of emotional energy and make it difficult to focus. So I want to share again the principles that Jim Collins teaches about the right people. They are classic, simple and easy to use in your business.

Five Keys

Here are Collins’ five keys(1) to knowing you have the right people:

Do they share the core values of the organization that you are building? This is priority one! You can’t get people to share your core values-the key is to find people who already have your core values. And what does this require of you? Yes, a clear understanding and communication of your own company core values.
Do they need to be “managed?” If you need to tightly manage someone, you have probably made a hiring mistake. The right people are self-motivated. They want to learn and progress.
In key positions, do they have exceptional capability? Do they have the potential to be one of the best in the seat or position they occupy in your company?
Do they understand the difference between having a job and holding a responsibility? The ability to get this distinction is paramount. The best people are productively neurotic; when they see a hole, they want to fill it and make it better.
If it were a hiring decision all over again, given all you know about this person, would you enthusiastically hire them again? This question often creates some dissonance. Think it through carefully. If you would not rehire-then it requires another decision from you.

Collins cautions that there is one more consideration you must make. Do you have the right person in the wrong seat or position? They may be a great person, but you have made a managerial mistake and placed them in the wrong seat.

So, is it fun to be part of your business for you, your employees and stakeholders? Attract the right people; people who share your Core Values and have a track record of delivering results. Identify your “A Players” and let them know they are valued as such. This is your leadership priority.

Contact me to discuss these concepts in more detail and how they apply to your company.

(1) Based on Jim Collins “Who First, Then What.”