Level 5 leaders who build the greatest and most durable companies think first about “who” and then about “what.” They first get the right people on the bus (and the wrong people off the bus) and then figure out where to drive the bus.

When you’re facing chaos, turbulence, disruption, and uncertainty, and you cannot possibly predict what’s coming around the corner, your best “strategy” is to have a busload of disciplined people who can adapt and perform brilliantly no matter what comes next. Our research supported what we came to call “Packard’s Law” (named in admiration after HP’s co-founder): No company can consistently grow faster than its ability to get enough of the right people and still become a great company. If a company consistently grows faster than its ability to get enough of the right people, it will not simply stagnate, it will fall. The number one metric to track isn’t revenue or profit or return on capital or cash flow; the number one metric is the percentage of key seats on the bus that are filled with right people for those seats. Everything depends on having the right people. (Directed reading: Good to Great, Chapter 3; BE 2.0, Chapter 2.)

Yet there are three barriers to scaling up, which we’ll discuss in the next chapter:

• Leadership: the inability to staff/grow enough leaders throughout the organization who have the capabilities to delegate and predict

• Scalable infrastructure: the lack of systems and structures (physical and organizational) to handle the complexities in communication and decisions that come with growth

• Marketing: the failure to scaleup an effective marketing function capable of attracting new customers, talent, advisors, and other key relationships to the business.

Thus, to overcome these barriers your team must master, using our tools, four fundamentals:

• In leading People, take a page from parenting: Establish a handful of rules, repeat yourself a lot, and act consistently with those rules. This is the role and power of Core Values. If discovered and used effectively, these values guide all the relationship decisions and systems in the company.

• In setting Strategy, follow the definition from the great business strategist Gary Hamel. You don’t have a real strategy if it doesn’t pass two tests: First, what you’re planning to do really matters to enough customers; and second, it differentiates you from your competition.

• In driving Execution, implement three key habits: Set a handful of Priorities (the fewer the better); gather quantitative and qualitative Data daily and review weekly to guide decisions; and establish an effective daily, weekly, monthly, quarterly, and annual meeting Rhythm to keep everyone in the loop. Those who pulse faster, grow faster.

• In managing Cash, don’t run out of it! This means paying as much attention to how every decision affects cash flow as you would to revenue and profitability.

2. Demands: Leaders have to balance two often competing demands on the business — People and Process. This requires simultaneously maintaining a great reputation with the employees, customers, and shareholders (the People side of the business); and improving the productivity of how the firm makes/buys, sells, and tracks these transactions (the Process side of the business).

3. Disciplines: To effectively execute, there are three fundamental disciplines (routines): Set Priorities; gather quantitative and qualitative Data; and establish an effective meeting Rhythm. It’s in these meetings, debating the data (the brutal facts!), where the priorities emerge.

4. Decisions: Ultimately, all of the above require some decisions. To scale the business requires getting four key decision sets — People, Strategy, Execution, and Cash — absolutely right, and there are right and wrong answers. Shortchange any one element and you’re not maximizing your opportunity.

Handling a company’s growth successfully requires three things: an increasing number of capable leaders; a scalable infrastructure; and an effective marketing function.

CEOs often avoid these decisions because they involve executives who have become dear friends. We recognize that this is a touchy subject, but it must be faced if the organization is to grow. One option is for some of the early team members to help launch a new product or division. They are usually more comfortable in a start-up situation or working on a smaller team. And several of the early leaders might be relieved to have the burden of an increasingly important and complex function taken off their shoulders. You won’t know until you have these crucial conversations.