Packard’s Law

“No com­pa­ny can con­sis­tent­ly grow rev­enues faster than its abil­i­ty to get enough of the right peo­ple to imple­ment that growth.” — Dave Packard, co-founder of Hewlett Packard

I’m very grate­ful to have spent more than 25 years work­ing with amaz­ing CEOs and entre­pre­neurs. I’ve been able to wit­ness as they scale their busi­ness­es towards achiev­ing their big goals and visions.

After being down this path of growth with so many dif­fer­ent orga­ni­za­tions you begin notic­ing themes and pat­terns. Also, you rec­og­nize the core things that can make mas­sive dif­fer­ences in a com­pa­ny’s abil­i­ty to either scale or to stay stuck.

One of the most con­sis­tent themes we find is the lev­el of unneed­ed tur­bu­lence due to not hav­ing enough right peo­ple in key lead­er­ship roles. This results in the inabil­i­ty to take them where they want to go next.

The peo­ple in those roles have got them to where they are now. But to be able to take a com­pa­ny from an inspi­ra­tion to $20 mil­lion or $50 mil­lion in rev­enue takes a very spe­cif­ic skill set. And to take that busi­ness and scale it to $100 mil­lion or $500 mil­lion often requires dif­fer­ent insights, under­stand­ings and been-there-done-that expe­ri­ence. (I’m not say­ing that mea­sur­ing your suc­cess based on rev­enue is a good idea. It’s just a com­mon way of illus­trat­ing scale this par­tic­u­lar idea. I pre­fer scal­ing up profits.)

This is where Packard’s Law comes in: that com­pa­nies can’t grow faster than the abil­i­ty for peo­ple and sys­tems to man­age that growth.

The Right People

When young engi­neers Bill Hewlett and David Packard start­ed their com­pa­ny in 1937, they knew they were going to man­u­fac­ture inno­v­a­tive elec­tron­ic prod­ucts. How­ev­er they put off decid­ing exact­ly what until they had hired peo­ple who shared their val­ues and stan­dards. They knew that with the right peo­ple in place they would always gen­er­ate oppor­tu­ni­ty. With­out them, their growth would always be con­strained. They would even hire great peo­ple with­out know­ing exact­ly what they were going to do! And if they hired the wrong per­son, they were quick­ly terminated.

While there will always be chal­lenges and sys­tems that need to be revised, the right peo­ple in lead­er­ship are real­ly what makes the biggest difference.

Lead with Strength

When we work with orga­ni­za­tions we focus (with the CEO) on their direct reports. Sub­se­quent­ly, mov­ing to their direct reports to make sure they have the right peo­ple in the right roles.

For exam­ple, pro­mot­ing your best per­form­ing sales­per­son to head of sales with­out con­firm­ing their lead­er­ship skill set. Do they have the com­pe­tence or appetite to be the leader? Will they coach and men­tor their sales­peo­ple instead of clos­ing the deals themselves?

So, how do you get the right peo­ple in those key roles? And, in keep­ing with Packard’s Law, have addi­tion­al strength and capa­bil­i­ty to keep your com­pa­ny growing?

How can you add peo­ple to the team, change their roles — and some­times make tough deci­sions — so you can con­tin­ue to lead with the strength of your peo­ple ver­sus hav­ing peo­ple scram­ble to keep up and hang on by their fingernails?

Keep in mind, when your team doesn’t have the exist­ing capa­bil­i­ties, you can fur­ther invest in their edu­ca­tion to build them or bring in experts/​consultants, as a short-term way to help build that capa­bil­i­ty, into the organization.

The Chal­lenge

When was the last time you eval­u­at­ed the per­for­mance of your direct reports and their direct reports to:

• Make deci­sions about how you’re going to help the strong ones stay or get stronger?
• Get into a posi­tion where those who aren’t mak­ing the mark can be at their best?
• Help find a grace­ful way for those who are in the wrong orga­ni­za­tion to find the right home?

About Kevin:

CEOs typ­i­cal­ly place their first call to Coach Kevin with a cri­sis to solve. They stay because of his busi­ness acu­men and no-holds-barred, tell-it-like-it-is style.

Kevin’s career spans 20 years, over a dozen coun­tries and four con­ti­nents. He’s worked with hun­dreds of CEOs and exec­u­tives, help­ing them to break through busi­ness chal­lenges, grow their com­pa­nies and find per­son­al suc­cess along the way.

These expe­ri­ences inspired Kevin’s book, Your Oxy­gen Mask First, in which he reveals the 17 habits every leader must know to tran­scend the per­ils of suc­cess, and achieve even more.

About Lawrence & Co:

Lawrence & Co’s work focus­es on sus­tain­able and enhanced growth for you and your busi­ness. Our diverse and expe­ri­enced group of advi­sors can help your lead­ers and exec­u­tive teams stay com­pet­i­tive through the use of var­i­ous learn­ing tools includ­ing work­shops, webi­na­rs, exec­u­tive retreats, or one-to-one coaching.

We help high-achiev­ing lead­ers to have it all – a great busi­ness and a reward­ing life. Con­tact us for sim­ple and impact­ful advice. No BS. No fluff.