If you want the people with whom you work to improve their performance, first improve your own. If you want others to expand their capabilities, first expand your own.

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.)

Your company is a maximization machine—it wants to make the best use of its finite resources—so it is greatly interested in identifying precisely who to invest in, and how.

The problem with this stems from the way your company executes on these good intentions. Why, for example, does it assume that it will net a good return only from certain people? Surely, the cliché that “Our people are our greatest asset” applies to all of the people in the company. As we’ve seen, every human brain retains its ability to learn and grow throughout adulthood. For sure, each brain grows at a different speed and in a different way, but this implies only that each person learns differently, not that—categorically—some people do and some don’t. Therefore, the best course of action for any maximization machine worth its salt would be to figure out where and how each brain can grow the most, rather than zeroing in on only a select few brains and casting aside the others.

But more often the real shock of growth is that over time you’ll bring on people who are just okay. Relative to the amazing people you brought in early, they’ll seem unimpressive. Mostly fine, good team players, get the job done.

And that’s not the end of the world. As the company expands, you need all kinds of people at all kinds of levels.

You can’t wait for the perfect A+ candidate to appear for every single empty slot. You need to hire. The best of the best don’t always want to join a big team, or they’re tied up in another job, or you can’t afford them or give them the titles or responsibilities they want.

And sometimes the people you don’t expect to be amazing—the ones you thought were Bs and B+s—turn out to completely rock your world. They hold your team together by being dependable and flexible and great mentors and teammates. They’re modest and kind and just quietly do good work. They’re a different type of “rock star.”

By far the hardest part of growth is finding the best people—in all their different incarnations—trusting your team to hire them, then making sure they’re happy and thriving.

Our pet peeve is when a company’s leaders think it should grow regardless of profit. This is just reckless, unless you’re a venture-backed firm pioneering new territory. For everyone else, we recommend getting profitable with the work you have, proving you can get to 15% profitability (based on our adjusted Simple Numbers), adding labor to knock profit back

to 10%, and then growing to 15% again. Lather, rinse, and repeat.