When in Doubt, Don't Hire

From Jim Collins, Good to Great: Why Some Companies Make the Leap… And Others Don’t (HarperBusiness, 2001), Chapter 3, “First Who…Then What,” p. 54. The line is Practical Discipline #1 in the section “How to Be Rigorous,” where Collins lays out three rules he found running through the staffing patterns of the good-to-great companies. The other two: when you know a personnel change has to happen, act on it; and put your best people on the biggest opportunities, not the biggest problems.

Collins anchors the first discipline in what he calls Packard’s Law, after HP co-founder David Packard: no company can grow revenues consistently faster than its ability to get the right people to implement that growth. Filling a seat with someone who almost meets the bar is, in this framing, not a partial win; it is borrowing against future growth. His lead example is Dick Cooley at Wells Fargo, who hired exceptional people without specific jobs in mind for years before his successor Carl Reichardt led the company through banking deregulation.