In my previous column, we explored the traits of Level 5 leadership and how to incorporate these principles into our daily work. Today, I want to build on that foundation by examining what might be the single most important factor in organisational success—getting the right people on your team.

Packard's Law: The Foundation of Sustainable Growth

David Packard, Level 5 leader and Hewlett-Packard co-founder, established what's now known as 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."

This principle isn't just theoretical—it's echoed by virtually every successful business leader throughout history. Warren Buffett put it succinctly:

"The best asset any company has is its people. Hire the right people, invest in their development, and empower them to succeed."

The Investor's Perspective

Pay attention to what sophisticated investors emphasise when evaluating companies. They consistently tell us they invest in management teams rather than just underlying assets. This isn't mere rhetoric—it's the fundamental truth of how value is created and sustained.

Silicon Valley's most successful entrepreneurs attribute their outcomes to just a handful of critical hiring decisions. The most effective CEOs view their role as 90% talent acquisition and 10% enabling that talent to thrive.

The Cascading Effect of Excellence

When you hire exceptional people, you trigger a powerful chain reaction. As Steve Jobs observed, top performers relish working alongside other high-caliber colleagues, creating natural retention. They also attract and hire similarly talented individuals, building a self-reinforcing ecosystem of excellence.

This approach creates a natural filtration system. When a mediocre performer somehow makes it through your hiring process, they typically stand out immediately and either quickly improve or exit the organisation. Great companies often experience higher initial turnover as poor fits are identified and addressed, followed by remarkable stability as the right team coalesces.

The Freedom of Excellence

Perhaps most compelling is what happens when you build a team exclusively of high performers: bureaucracy, artificial culture-building initiatives, and internal politics simply become unnecessary. Organisations that compromise on talent inevitably create complex systems designed to manage mediocrity—policies and procedures that penalise their top 20% of performers to accommodate the bottom 80%.

As Jeff Bezos emphasised:

"I'd rather interview 50 people and not hire anyone than hire the wrong person."

First Who, Then What

Jim Collins' landmark study "Good to Great"[1] revealed a consistent pattern among companies that achieved sustained market outperformance: they prioritised getting the right people "on the bus" before determining where to drive it.

Having experienced both the pain of hiring mistakes and the extraordinary rewards of getting it right, I can attest that Collins' observation is profoundly true.
If hiring decisions are so important then, what can we do to give us the best chances of success?

1. Recognise the importance of hiring decisions.

Listen to the sage! If David Packard, Steve Jobs, Jeff Bezos, Steven Bartlett, Richard Koch, Jim Collins, Codie Sanchez, Warren Buffet and many, many other successful investors, CEOs, writers, and academics stress the importance of making the right hiring decisions, it may be prudent to heed to their advice.

I’ve spent most of my career to date working within and running professional services organisations that specialise in the supply of exceptional services by giving clients access to exceptional individuals.  The irony is, if our client base had heeded the advice of the champions of industry listed above when hiring their own in-house teams our client’s dependence on our firm would be significantly reduced and, in some cases eliminated.

2. Act like it’s important.

Hiring is often something we try and fit around our day jobs. We fill our 9-5 by firefighting today’s emergencies and then give the briefing call to the head-hunter whilst shuffling along the M25 and eating our dinner all at the same time.

Pause, reflect on what’s important (deploy the 80/20 Principle) and allocate your limited resources (time and ability to delegate) accordingly.

3. Fail to prepare, prepare to fail.

Before engaging with a single candidate, develop your complete hiring ecosystem:

• Detailed job specifications
• Compelling employee value propositions (EVPs)
• Talent acquisition plan with associated documents (e.g. adverts)
• Clear probation plans
• Performance metrics
• Comprehensive onboarding and offboarding procedures

For an exemplary approach, I recommend Codie Sanchez's framework in "Mainstreet Millionaire," particularly the chapter "Step 3: C Is for Command.”[2]. Before proceeding, ensure you can answer these critical questions:

• What does excellence look like at 30, 60, and 90 days?
• How will we measure success objectively?
• How does this role directly improve productivity or profitability?
• What's the complete value proposition for the employee (beyond compensation)?
• Do our incentives align with our core values?
• What are the precise accountability structures?
• What are the cash flow implications if the hire fails?

If you can't answer these questions with clarity and conviction, you're not ready to begin recruiting.

4.  Maintain uncompromising standards

"If there's doubt, there is no doubt" is a principle I borrowed from a former mentor that has served me exceptionally well in hiring decisions.

While compromise has its place in many contexts – I’ve found it very useful domestically! It's fundamentally destructive in hiring. Every time I've proceeded despite reservations or settled for the second-best candidate, I've created problems that far outweighed any short-term relief of filling the position.

5. Build quality relationships with professional head-hunters and recruiters

Retain them (that means pay at least part of their fee up-front). Treat them with egality and pay them well. Take time to develop a relationship with the top performing recruiters within your industry before you go to market. They’ll save you many hours, and if you retain them, will provide invaluable and impartial advice that helps you avoid some very expensive mistakes. Borrow, not just their network but their experience of making the right long-term hiring decisions with their clients.

6. Act decisively when mistakes occur

Even the most diligent hiring processes sometimes fail. When this happens, swift action is essential. The most successful leaders all make hiring mistakes—what distinguishes them is their willingness to acknowledge and address these errors promptly.

Remember that keeping someone in a role for which they're fundamentally unsuited serves no one—not the individual, not their colleagues, and certainly not the organisation. As difficult as these conversations may be, they're far less damaging than allowing poor fits to undermine your culture and performance.

The Path Forward

Getting the right people on your bus isn't just one aspect of leadership—it's the foundation upon which everything else rests. By approaching hiring with the strategic importance it deserves, you create the conditions for sustained excellence and remove the obstacles that typically constrain organisational performance.

Alex is a director of Penpole Consulting, a Digital Transformation and Cyber Security service provider. Penpole helps clients increase productivity and reduce organisational risk with their expert CISOs, programme and project managers, change specialists, data migration experts, and technical specialists in testing, training, integration, and configuration. Want to connect? Reach out to Alex directly at alex.franklin@penpole.co.uk.