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.