There are really three parts of this question of the right people. The first is the right people on the bus. Second is the wrong people off the bus. But third is the right people in the right seats.

When Colman Mockler became chief executive of Gillette in 1975, he spent 55 percent of his time moving people around in seats on the bus. He got some people off, but most of it was trying to find the right seat for people. What he said is that just as a company has its three circles—he didn’t use these terms, but it’s essentially what he said—just as a company has its three circles, its passion, and its wiring (what it can be really outstanding at and maybe where it can best contribute, which translates into economics), individuals have their own three circles. Right? Where your passion lies, what you’re genetically encoded for, and what you can contribute that is of value to the institution, which would be the analogy to the economic engine.

The key as a manager is to find or construct seats where an individual’s three circles line up with the needs and responsibilities of that seat. If you have the right person on the bus, but they’re in the wrong seat, they will fail or they’ll certainly struggle. A lot of the task is to answer a very difficult question. If I’ve got a people problem here—even somebody who seemed right before, but now they’re struggling—the first assumption, if you’re trying to reach Level 5, is to assume that you as a manager have blown it. I’m the one who’s responsible for their failing. I must have somehow—first line of defense—I must have failed by not preparing them for the seat, by not picking the right seat for them, by not recognizing the fact that the seat is much larger than what their capabilities are at the moment, whatever. Just sort of always assume you screwed up.

Second, though, is if you go through all that, and you still come to the conclusion that somebody is just the wrong person on the bus, you have to confront that fact. But if it’s somebody who’s really proven themselves in one seat and they’re failing in another seat, there’s somehow something that is wrong about either the seat selection or in the development process of that person for the seat.

Now, there is one caveat to all this, which is that if you watch organizations develop, sometimes what happens is a very uncomfortable situation. It’s a brutal-facts situation. Whereas the bus gets larger and goes faster, the seats get bigger and more difficult. And at some point, somebody who had the capabilities to hold a particular seat on the bus—it outgrows them. They cannot fulfill the responsibilities of that seat for whatever sets of reasons. Something’s changed in their life; they don’t grow into it, whatever. There then comes a really difficult decision, which is usually taken in concert with them. Do you want to have a smaller seat, or do you really not want to be on the bus?

That’s the nature of entrepreneurial growth. It happens in every entrepreneurial company that there are some people who were perfect when the bus was a little tiny minivan; and when it finally becomes a big Greyhound bus going down the road, they just—the seat is just too big for them. Part of the challenge as a manager is to really be right in answering the following question: can they grow into that seat or not?

Jim Collins