“The old adage ‘People are your most important asset’ is wrong. People are not your most important asset. The right people are.”
– Jim Collins

In order for a “good” company to transition into a “great” company, they must have a culture that embodies Disciplined People. Step One is to have a Level 5 Leader at the reins. Step Two is for that Level 5 Leader to focus on the “who” within their organization. The “who” always comes before the “what” of vision, strategy, and tactics, or organizational restructuring and technological solutions.

It’s tempting for good leaders to focus on the “what” first – especially if they have the talent to execute the “what” themselves. On the surface it seems effective because it produces immediate results. However, Jim Collins calls this the “genius with a thousand helpers” method – the problem with this method, and why it rarely leads to greatness is – what happens when the genius leaves?

Everyone has been so conditioned to taking orders, and acting without questioning those orders that they end up lost, and directionless without their leader. In effort to keep things going, they’ll often times try to mimic their predecessor and make bold, visionary moves, but since they themselves are not geniuses – their attempts usually prove unsuccessful.

A Level 5 Leader avoids this problem by thinking of their business as a bus. Their first priority is to get the right people on the bus, and secondly, to make sure those people are in the right seats. They also make sure the wrong people for the business get off the bus. Only when the right people have been established do they focus on the “what” of the business – the strategy, the direction, the vision for greatness.

Great vision is irrelevant without great people. Great people are self-motivated and guided by an inner drive to produce great results. Great people don’t need to be tightly managed, and often times are as talented if not more so than their leader. Great people are on the bus because of who else is on the bus – not because of where the bus is going.

The wrong people only care about where the bus is going. This causes many problems later down the road if and when the bus needs to change direction. A Level 5 Leader doesn’t just steamroll people into changing directions if the need arises, instead, because they picked the right people –they let the team work together to determine the next best direction. This always leads to greatness.

Level 5 Leaders use compensation to get and keep the right kind of people, rather than incentivizing the right kind of behavior from the wrong kind of people, It’s who you pay, not how you pay them. Because of this, Level 5 Leaders are rigorous when it comes to people decisions – especially top management. Rigorous, not ruthless – ruthless would be mindlessly hacking and cutting jobs, especially in hard times.

Rigorous means acting according the the following three principles:

  1. When in doubt – don’t hire. Don’t settle just because you just need a body – wait until you’re absolutely certain you have the “right” person. It is better to let a position go unfilled until the right person comes along.
  2. When you know you need to make a people change – act. If you have a wrong person on your team, and you need to let them go – don’t drag things out for your own convenience. It will only hurt the company and damage morale.
  3. Put your best people on your biggest opportunities, not your biggest problems. If your most talented people are all tied up dealing with problems, that prevents them from developing the opportunities that night just dissolve all your problems in the first place.

Sometimes the right people are already on the bus, they’re just in the wrong seat. Don’t be afraid to move people around if they’re not succeeding in their current role. However, don’t be afraid to let people go if you’ve identified them as the wrong kind of people. Great companies, and Level 5 Leaders create such an environment that only the right kind of people will want to stay.

What kind of people do you have on your bus? Are they in the right seats? Have you identified the seats that you need filled? Don’t be afraid to hire people more talented than yourself – that’s one of the marks of a strong leader!

“Without counsel plans fail, but with many advisers they succeed.”
– Proverbs 15:22 (ESV)