In Jim Collins book \u201cHow the Mighty Fall,\u201d we learn about Packard\u2019s Law in Stage 2 of a company\u2019s decline.\u00a0 Several things stood out to me and I feel I need to use these specific thoughts when I evaluate myself and our leadership team.
\nPackard\u2019s Law states that no company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company. Though we have discussed Packard\u2019s Law in our previous work, as we looked through the lens of decline we gained a more profound understanding: if a great company consistently grows revenues faster than its ability to get enough of the right people to implement that growth, it will not simply stagnate; it will fall.
\nAny exceptional enterprise depends first and foremost upon having self-managed and self-motivated people\u2014the #1 ingredient for a culture of discipline. While you might think that such a culture would be characterized by rules, rigidity, and bureaucracy, I\u2019m suggesting quite the opposite. If you have the right people, who accept responsibility, you don\u2019t need to have a lot of senseless rules and mindless bureaucracy in the first place!
\nOne notable distinction between wrong people and right people is that the former see themselves as having \u201cjobs,\u201d while the latter see themselves as having responsibilities. Every person in a key seat should be able to respond to the question \u201cWhat do you do?\u201d not with a job title, but with a statement of personal responsibility. \u201cI\u2019m the one person ultimately responsible for x and y. When I look to the left, to the right, in front, in back, there is no one ultimately responsible but me. And I accept that responsibility.\u201d
\nWhile the specifics regarding who would be the right people for key seats vary across organizations, our research yields six generic characteristics:<\/p>\n
\u201cIf I were to pick one marker above all others to use as a warning sign, it would be a declining proportion of key seats filled with the right people. Twenty-four hours a day, 365 days a year, you should be able to answer the following questions: What are the key seats in your organization? What percentage of those seats can you say with confidence are filled with the right people? What are your plans for increasing that percentage? What are your backup plans in the event that a right person leaves a key seat?\u201d Jim Collins. \u201cHow the Mighty Fall.\u201d
\nIf you find people in key leadership positions within your organization that are not in alignment with these six standards you need to consider the path of your organization.\u00a0 It is ok to make a mistake and go the wrong way, but are you going to be so committed to that wrong choice that you never correct your path?\u00a0 Remember stage one is to voice hubris (pride) and make the best decisions for the organization first.\u00a0 It becomes more difficult to correct stage one if you are breaking Packard\u2019s Law.<\/p>\n","protected":false},"excerpt":{"rendered":"
In Jim Collins book \u201cHow the Mighty Fall,\u201d we learn about Packard\u2019s Law in Stage 2 of a company\u2019s decline.\u00a0 Several things stood out to me and I feel I need to use these specific thoughts when I evaluate myself and our leadership team. Packard\u2019s Law states that no company can consistently grow revenues faster …<\/p>\n