People or Strategy — Which Comes First?

Peter Drucker: “ Profit is not the chicken, it is the egg”

I had the business equivalent of the the chicken vs. the egg discussion with a colleague the other day. Which first, people or strategy? He voted egg, but I’m a chicken guy.

Getting the right people on the bus, as author Jim Collins suggested in his book “Good to Great,” is imperative. But like all short exhortations, it gets twisted. He also advises thinking of “who before what.” In other words, good people before setting direction.

I’m a big fan of Collins, but I believe this is dangerous if applied incorrectly.

Looking for people who share the organization’s values, are enthusiastic, and have some passion for your vision or mission is a great first step toward hiring those who’ll ride on your bus. In that sense, “who before what” is smart. However, hiring a passionate sales leader to be your CFO or a zealous technologist to lead your service business doesn’t cut it.

People before strategy sounds warm and fuzzy, but if you need a bus driver, you don’t hire a well-meaning barista. You hire a damn bus driver!

If your strategy’s driving force is products, you need great R&D, product development experts and salespeople able to sell features and benefits. If you have a market-driven driving force, you need a different breed of salesperson, less R&D and perhaps more systems engineering. If your driving force is production capability, you need industrial engineers, manufacturing systems experts and a crack purchasing staff.

There’s a sequence to building a business that lends itself to clarity, alignment and smoother sailing. In its simplest form, the order is where (vision), what (strategy), who and how (tactics).

The type of people you want on your bus and the organizational structure you use depends on where you’re going and what you have to do to get there. Are there some universal traits that are beneficial in most businesses? Yes, but that’s like saying we need oxygen and water to be successful in life.

The skills and organizational structure required to succeed in my publishing client’s environment are much different from those in my consumer product client’s environment.

If you don’t believe me, try starting a new business without identifying destination or strategy. Tell your prospective investors that it doesn’t matter because you’ve hired some great people and have an organizational structure that feels warm and fuzzy (or cold and compliant, if that’s your thing). Investors sometimes say they bet on the jockey, not the horse. But they won’t bet on a jockey without a horse!

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