how this ONE SKILL can scale your business

Summary

• Having the right people is paramount for business growth.
• The ability to spot high potential leaders is more valuable than any one skill.
• Great teams build effective strategy, marketing, cash flow management, and products.
• Initially, I didn't understand the importance of having a strong team as I thought of myself as the most valuable team member.
• As an example, a company grew from $15 million to $70 million in three years after restructuring and bringing in high-potential people.
• High potential leaders have three key traits: capacity, character, and motivation.
• Capacity is a person’s ability to grow in their role and take on new responsibilities.
• Character is the alignment of a person’s morals and behavior with company values.
• Motivation is the person’s desire and willingness to perform the job.
• Promote people based on their rate of progress rather than their current performance.
• Look for people who show continuous growth and improvement over time.
• Value humility over arrogance; people who quietly perform well without self-promotion often make better leaders.
• Embrace people’s extremes; strengths often come with matching weaknesses, but teams can balance out these disparities.
• Focus on developing your existing team rather than always seeking external talent.
• Regularly review your calendar to ensure you're dedicating time to coaching and developing your team.
• Always aim to identify and invest in high-potential players to avoid bottlenecks and ensure continuous business growth.
• Remember the takeaway: capacity, character, motivation; promote based on progress, value humility, and embrace strengths and weaknesses for effective teamwork.

Video

How To Take Action

I would suggest implementing some easy strategies to grow your business or improve personal development without spending a lot of time or money.

First, focus on the people around you. Great companies are built on great teams. Identify potential leaders based on three traits: capacity, character, and motivation.

Capacity is how much a person can grow in their role. Look at how much someone has improved over time. If they are constantly learning and improving, they are high-potential.

Character means they align with your company's values. Think about what qualities are important to you, like honesty, responsibility, and teamwork.

Motivation is their willingness to do the job. Someone might be very skilled and have high values but if they are not motivated, they won’t be effective.

Once you spot these high-potential people, invest time in developing them. Schedule regular check-ins to give them feedback and set up goals. This builds a strong team and makes you less of a bottleneck in decision-making.

Promote based on their progress, not just on their current performance. Someone who is growing quickly will likely succeed in higher roles. Also, value humility. Often, the best leaders are those who work hard quietly rather than boasting about their achievements.

Also, embrace extremes. Someone might be amazing at marketing but terrible at organizing. Instead of expecting one person to be good at everything, balance your team’s strengths and weaknesses.

Lastly, review your calendar. Make sure you’re dedicating time to coaching and developing your team. This proactive approach saves time in the long run and ensures continuous growth in your business.

Quotes by Leila Hormozi#### "The potential of our business rests in the strength of our people"

– Leila Hormozi

"Your ability to build a great team and to select the right people is more valuable than any one skill that you yourself can have"

– Leila Hormozi

"What they're able to select to be on their teams help them realize their Vision"

– Leila Hormozi

"It's not always great that somebody's done a job for 15 years because if you haven't continued to excel"

– Leila Hormozi

"Humility is usually a better indicator of success and of potential than misplaced confidence"

– Leila Hormozi

Full Transcript

today what I want to share with you is the one skill that the unlock to growing and scaling your company that most people don't ever do how to recognize Leaders with high potential the reason this is so important is because the potential of our business rests in the strength of our people okay so having the right people is by far the most important thing that we can have in business therefore being able to spot the right people is arguably the number one skill that you want to have so I know what you're thinking which is like wait being able to pick the right people's more important than strategy Marketing sales cash flow product yes and why is that okay because the right people will select the strategy and build it build the marketing manage the Cash Flow Design the right products so people picking is actually a more valuable skill than even being the most talented person on the team in fact if you look at the best CEOs what do they talk about they don't talk about how great they are they talk about their teams and the people that they're able to select to be on their teams help them realize their Vision this is why when people say people Trump strategy culture eats strategy for breakfast all of these things here's the thing in the beginning of having my business I did not understand this I didn't understand it because I hadn't lived it yet and the disadvantage a lot of people have is if they're still small and they haven't grown to a size where their team is actually able to move the business forward they have this contorted view of reality that they are the most valuable person on the team but the reality is your ability to build a great team and to select the right people and to train the right people and to be able to spot potential in the right people is more valuable than any one skill that you yourself can have and so the question is how do we recognize high potential leaders so that we can continue to have a high potential company okay so I'm going to give you an example of one of our portfolio companies people always seem to think that when they're like wow Alex and L growing companies what is this fancy magic they're doing right okay let me tell you what we actually did this company so business reached out about 4 years ago and they were doing about 15 million a year they were dealing with a very common set of constraints that a lot of businesses do they were all the founders were basically doing everything literally working 18 hours a day they were pulling their hair out they were like freaking out super busy right they had unicorn employees which are people that like have immense key man risk that everything relies on them they felt like it was a roller coaster nothing was consistent month over month and so it felt like it was just consistent up and down and they didn't know if they were going to go out of business next month or if they were going to explode and so what they looked like before 15 million in revenue and they had about 7.6 million in E up great company good margins however we said to ourselves let's see what we can do if we get the right people in this business because when I looked at what existed they had the right product they had product Market fit they had the right marketing they had a machine that worked and what happens is that a lot of people they only have one tool to use to grow their business and so they keep using that tool like a hammer but at some point you need a screwdriver or you need an axe or you need a spoon and the reality is is that you yourself probably don't know how to use every tool to the best of your advantage and so we said we need people with different tools to grow this business because we know that the founders they're really good with a hammer right and in this case it was marketing but they weren't necessarily great with a screwdriver they weren't great with an axe they weren't great with a chainsaw and so we needed to find people who were and so what did we do first thing we is that we reoriented the founding team we clarified roles we turned one of the founders into the CEO we turned the other founder into the chief product officer we then identified their Chief Operating Officer out of their leadership team then we brought in the best head of sales that we knew we brought in a 10 out of 10 marketing director we got a solid controller in place we found ahe of development so they could build an engineering team and we found a head of people to hire and manage what did that allow us to do because before 15 million 7 million in iida where were we now we grew the company to 70 million in 3 years and is on track to do well over a 100 this year how did we do that well we were able to build out a backend product which added about 20 million a year in profit why were we able to do that because we had somebody overseeing operations and delivery and then we were able to increase sales by 20% and profit from that about 6 million per year why because we finally had somebody that was able to grow sales then we were able to scale our marketing by about 50% which resulted in equivalent Revenue growth and why was that because we finally had someone that could scale the marketing team not just be good at marketing and then lastly we were able to use the profits from the increase in revenue and iida to then invest in building a software team which we used to build out that development team which then increased the Enterprise Value by about 5 to 6X so what did that result in a company that with the right people we created 170 million in Enterprise Value in less than 3 years all from finding the right high potential people this is not because we said now every one of the founders needs to go learn sales and marketing all these things we said we have to get good at picking the people and specifically what we do at acquisition. comom is for our portfolio companies we pick the people for them because we know it is a very rare skill to have and so the question is if you're watching this and you have your own business you're like that sounds great I would like to go from 15 million to 70 million as well then what you want to do is you want to be able to identify what is a high potential individual in your company how do you know that somebody has the potential to be a leader in company that can make change and grow the business and that is what I want to cover today so what is a high potential player HPP somebody who possesses three things one is the capacity two is the character and three is the motivation I'm going to break these down so you understand what I mean by this because saying these words is great it's like be honest trustworthy all these things okay but what the hell does that actually mean and that's what I want to talk about so the ideal leader let's break down capacity capacity is the true top capability of a person okay so what is their ceiling a lot of you have probably heard of the Peter Principle someone will continue to perform until they hit their level of incompetence right like you're competent here competent here competent here oops you get a promotion now you're incompetent so the question is how are you able to look at somebody and say what is their capacity how much room do they have left if you hire somebody to be a salesperson how do you know they have the capability to become a sales manager to become a sales director to become a cro and so you want to figure out what is the capacity of this person the second piece is character okay character is the display of mental and moral qualities in someone's Behavior now specifically for your company you want this character to demonstrate your values and so for me I might look for something different than you look for I'm going to look for somebody who has competitive greatness you know they're they're doing this because they want to be excellent not because they want a paycheck I'm looking for somebody who has sincere cander somebody who can be canderous they can be honest they're not worried about being too transparent and lastly I have unimpeachable character which is somebody who I want to associate with as a company and publicly on and off the field because they are a person of high moral Integrity those are three things that I look for in the character of a person so for you you have to ask yourself what do what do I look for what are the values that I need this person to be aligned with so that they uphold what I have as my standard for character and lastly is motivation because you can have somebody who's got super high capacity who has amazing character and they have no desire to do anything and so what is motivation motivation is how much willingness or desire this person has to do the job at hand if you're missing any one of these things it messes up the equation because somebody has amazing character and they're very motivated but they just can't get past a level they have low capacity and that caps them whereas if you have somebody with high capacity and high motivation but they do things to achieve things in a way that goes against your values that doesn't work either and then lastly if you have someone with high capacity and High character but low motivation then you have that has all the potential in the world and no desire to capitalize on it and so that is why you look for somebody with capacity character and motivation when I'm hiring people I literally think through this in my head I'm like do they have the capacity do they have the character do they have the motivation if they have those three things they are probably somebody worth investing in and here's the thing these people are all around you but unless you possess the skill of knowing how to spot these people you will not find them and you will certainly not keep them because people like this who have all those three things they need to be nourished they want to be invested in and they want to grow yes they want to get paid well but mostly they're here because of what they want to do and who they want to become along the way and so if you are not the leader that can help them get there you can't spot them you cannot invest in them then you're going to lose those people and so what is your job as a leader okay your job is to one identify the people with high potential you have to have the ability to spot them the second is you have to invest in actually training them third is you have to let them go you've got to let them do their thing and you've got to not micromanage and lastly is just get the out of their way let them do their thing so what I want to go into now are three principles that you can use to spot high potential leaders over the last nine years my main focus as a founder and CEO of a company has been how to find people with Talent people ask me all the time like what's the secret it must be the marketing must be this must be the funnel go look at any piece of it those things on their own are not strong what is strong is the team that we have assembled and behind every great business that we've built gym launch Allen Prestige Labs acquisition it is a team of people behind it it it's not just me and Alex it is the team that has been able to do it and so I will preach this until somebody actually gets it but this is how you actually grow a company okay so I want to teach you guys the three frames that I use to spot leaders that I know can grow a company the first principle that I want to explain is that to spot a high potential leader you look for rate of progress not rate of performance so what you want to do is you want to promote people for their potential not just their current performance okay so what does that mean is you want to hire recruit and promote people for what they can do in the future not just what they do in the present now this sounds kind of weird so let me break it down for you basically a lot of people you'll hire somebody say they come in as a VP of marketing and they are a good performer and they continue to perform like this they just have consistent performance that's good but what does that tell you about the future if you to promote them is it likely that they will grow no a lot of people think if I promote someone they will grow it's actually the opposite if somebody is growing you promote them and so you actually want to look at how quickly somebody's growing in a company not their current performance because somebody who has great performance but has not shown improvement over a year is unlike to improve in the future whereas somebody who's actually at a sales manager but they've started as a sales person and before that they were BD and before that they were doing cold calls and they've been not able to go and jump four steps ahead in just a year that person has a higher growth trajectory than this person and so a lot of people make the mistake of saying I brought this person in they're really good and I think they'd be good in this other role so if I promote them they will grow but the reality is you actually want to find the people who they might be a step or two behind but they're rate of growth is really freaking fast I'm sure you could all think of somebody like this and now you're probably thinking to myself oh crap I've promoted all these people who come in and they've been great but they haven't continued to grow and that is exactly where a lot of companies get stuck is they promote people who are good performers have consistent performance but they're not promoting the people who consistently get better what somebody's done in the past in your company is the biggest indicator of what they'll do in the future if somebody's consistent in performance that's good but if we promote them they're unlikely to suddenly become a different person and quickly grow whereas if somebody's continued to be growing over time and time again and then you promote them they're going to keep growing the growth was not because of the promotion the promotion was because of the growth if you consistently over promote people who do not have that growth trajectory then your organization will quickly underperform because those people hit their level of competence if they could grow more they would most people will do that but the reality is they are probably at their capacity and so you want to look for people who continue to break through that capacity time and time again because likelihood they do in the future is much higher an example of this is when when I was building Allan and I was taking people from gym launch to help me build Allan I had a woman and she started off as an administrative assistant and then she went from an administrative assistant to an events manager and then she went from an events manager to a customer success manager and then I was at a point where I was like I really need a VP of customer success for the software company and I start interviewing all these VPS from the outside thinking like I need to hire this fancy person to come in and do all these things and what I couldn't help that was gnawing in the back of my head was I kept looking at her you know she'd gone in 14 months from an ad Ministry of assistant to an amazing CSM and I saw that she had leadership capabilities and quality she was already kind of semi like quasi leading the team but I felt like well there's got to be a lot that you know she just hasn't learned yet and she she has to learn so I should bring in this other person and after going through the interview process what I realized was you know if she's been able to learn all these other things in such a short Peri period of time what's stopping her from learning this next one you know I know how to do the job I can help her get there and if anything she'll be more loyal she's probably going to perform better she's a better culture fit and so what I did is I actually gave her the job instead and she became the best head of customer success that I had ever had she was phenomenal like 11 out of 10 beating all of these other people I'd interviewed who'd been doing the job for 15 or 20 years what that really taught me was it's not always great that somebody's done a job for 15 years because if you haven't continued to excel in prove what does that say about that person it says that they're not growth oriented that they've already hit their level of capacity and what she had done is she had just continued to improve her rate of progress and her rate of progress was very high so what happened when I put her in this new role is it just continued to go in that direction whereas for a lot of people if I brought someone from the outside I'm sure they would be good but I don't think that they would have continued to excel at the rate that she had the second principle that you want to apply when looking for high potential players is to look for and prioritize humility over arrogance I cannot tell you how many times I talk to people at our events in our portfolio and they promote somebody who's the loudest in the room who displays the most confidence in the room who talks the most and what they don't realize is that humility is usually a better indicator of success and of potential than misplaced confidence because a lot of times somebody speaks a lot because they're trying to make up for the fact that they might not do a lot somebody has to talk about how good they are because they're actions don't speak loud enough we want to look for people who don't over promote themselves they let their work speak for them and a lot of times if you look there's a lot of studies on this people Overlook others in the workplace who are quieter and who don't talk as much who don't take up as much space on meetings but here's the thing high potential leaders often don't know they are when someone is unskilled they often don't see their own faults whereas on the other hand when someone is exceptionally competent at something they often doubt their abilities and don't know how good they actually are and so it comes natur natur Al to them because they don't actually know how hard it is and so an example of this is that I had a customer service department when we were building gym launch and I had two girls that I had hired and they were both great one was very shy her name was Leia and then another girl was much louder her name was Dietra Dietra was always talking was always telling me what needed to happen was always saying what needed to be done and so I really needed a lead of customer service and so what did I do is I promoted drra because she was always talking she always telling me what she think need to happen within about four to six weeks I realized I was like like I don't know if I promoted the right person because I looked and I was watching what was happening and Leia was actually doing a lot of work for drra behind the scenes she wasn't asking for the credit she wasn't trying to ha the credit and she wasn't even trying to show off to me she was just doing it because that's who she was and so I actually went to Dietra 5 weeks after I promoted her and I said listen I've made a mistake you might be able to feel it because you've been asking Leia for a lot of help but I can see it which is I think I promoted you when I shouldn't have and I actually think I should have promoted her instead and I was very honest about it and what's crazy is this was the only time in the history of doing this that somebody has actually understood that and so they both stayed on the team and Leia took over and though she was so quiet she was one of the best leaders that I ever had because what did she do what do quiet people do what do people that are shy or do they're always constantly giving credit to the team taking blame on themselves taking responsibility on they're always doing and making sure they're getting the job done rather than talking and trying to show off putting the credit on others rather than promoting them El to get it and that is what you want to look for is a lot of times what happens is the person that's allow us on the meetings and on the team gets the attention and they're the person that we think oh this is the person I'm supposed to promote right but reality is that's actually not usually the person a lot of the best leaders I've had they've been people that are quiet people have had to like pull confidence out of and I've had to encourage them and breathe confidence into them but here's the thing it's a lot easier for me to encourage somebody and create and give them more confidence through the things they go through and through the encouragement I put upon them rather than to find somebody who thinks their don't stink and try and temper them down and tell them that they're not that great be really careful because a lot of leaders we overlook this we think that the best people are the loudest we think the best people know that they're the best the reality is it's often the opposite and also let's be real who wants to follow somebody who keeps talking about how freaking awesome they are nobody nobody wants to follow somebody who talks about how great they are people want to follow people who talk about how great they are the third principle when it comes to spotting high potential players is to embrace extremes extreme extreme gifts are often matched by an extreme weakness I'm sure if you're watching this you're probably thinking about yourself right I know I can think about myself what's interesting is that a lot of people are looking for someone who's very well-rounded they're looking for a head of marketing and they're like wow this guy he's so good at marketing but he's just not great with details and organization well what I would like to say is this is why we have teams and not just people you yourself cannot build an entire company that's why you need a team around you because I don't look at it as what person and how balanced one person is but I look at how balanced to team it the reason that we don't have teams of one is because it's damn near impossible unless somebody's been doing it for a very long time for someone to have every single trait a 10 out of 10 the reality is if you want somebody to be incredibly good at one thing they've probably ignored and not nourished other areas of skills and so they might be brilliant at a couple things and terrible at others but you don't want those shortcomings to scare you away from the fact that they might be really freaking good at the job and so instead of focusing on someone's flaws you want to try and get them only working in their strengths and then find people to put around them whose strengths are their flaws this is how you build a team it's not that every person is perfect it's that there's opportunity in one person's flaws for the other person to be strong there and that's how they balance each other out an example of this would be me and Alex a lot of people might look at Alex and say that you know he's just too into marketing he's too focused on brand he's too focused on content he's not operational enough detail oriented enough he doesn't slow down enough or someone might look at me and they might say oh my gosh she can be too cautious sometimes she's overthinking too often she needs to be able to take some risks so what happens neither of us have tried to you know really hone in on fixing our weaknesses instead we've said well how great is it that we have each other this is why we have each other because together I get to focus on my strengths he gets to focus on his strengths then together we make an amazing team and this is how it works for everybody if you're scared of the fact that somebody is weak in one area you don't need to be scared if you have a plan for putting somebody else there who is strong in the area they are weak and so the question is why do we miss these things well even the most experienced leaders often don't see the amount of talent that they're sitting on the daily demands of the job get in the way they're too busy doing the day-to-day things so developing teammates gets put last leaders especially have to keep account of their time why because where a Leader's time goes is one of the most valuable resources in the company how you manage your time and attention predes how much money you will make meaning you have to learn how to manage your time and attention before you know how to use it to make money and so this isn't just for the founders in the company it's for all the leaders underneath and so the number one thing that I see people Miss is they spend all their time trying to tread water and they're not putting the time into developing people to creating a succession plan to developing Talent that's already on the team instead they put all their time into well I guess I need to find new people because nobody has the skill and so the question is where are you spending your days is it managing tasks is it checking quality of work is it approving decisions if you're doing that then eventually you are the bottleneck and if you don't have high potential leaders in the pipeline you will be the bottleneck and the reason that your business cannot grow because what happens once you hit capacity and you have nobody else underneath you to give it to you stop business stops growing and so I can guarantee you that if you trade the time of approving decisions managing tasks like doing all the day-to-day for coaching your team you save yourself loads of hours and you'd be able to grow your company much faster because this is called a proactive leader rather than a reactive leader proactive leaders always prioritize developing their team this is something that has taken me years to understand and the reason I think it's so important is because the reason I'm able to grow a company quickly is not because of any magic trick it's because of this stuff I know how to pick the right people and I prioritize developing them giving them feedback training them having them watch me having them Shadow me telling them how they can get better and giving them opportunity and then getting the out of their way that is where all of my heads space goes because I know know that the only way to relieve yourself the only way to nourish Talent the only way to grow a company is to find and grow people as my number one priority and so the question just is does your calendar reflect that what I want you to do is like go look at your calendar right now and ask yourself am I actually even putting time towards it it's like No I gave feedback that one time six weeks ago but do you actually designate time for your team to give them that feedback to help them and to nourish them because a lot of times what happens is that companies get bloated because you hire people and the reality is nobody's 100% perfect everyone has at least 30% that they need to get developed eventually extrapolate that out enough and you hire all these people and never develop them then you have a bunch of like half baked cookies and then you go to the store and you buy baked cookies and say great I'm just going to bring some in and then what do you have this big hodge podge mess this is how companies get bloated that's not how it works if it was I would tell you to do that if it actually worked but it doesn't instead you've got to invest in Talent you've got to nourish them and you got to develop them and the thing is if you're sitting here thinking actually like that sounds great but I just don't have time you have time you just don't have priorities and you haven't yet understood this because maybe you haven't gone through enough pain yet thing is the difference between humans and animals is that you can learn from the mistakes of others a lot of animals can't they don't have that intellectual ability and the thing that has always stuck with me since the first I ever started a business was that I would rather learn from the mistakes of others than learn from myself and so please learn from my mistake and do not prioritize the doing of the tasks and the doing this over the developing of your entire team because reality is you don't lack time you lack priorities and so again to recap we want to look for people who have the capacity the character and the motivation and then the three principles we want to use once we've identified those people is prioritizing humility over arrogance promoting for rate of progress rather than current performance and embracing extremes rather than shying away from them so here's the thing intelligence is the speed of learning it's the ability to apply new Behavior to the same circumstance what I want you to do after watching this video if you actually want to learn is that you're you're going to go look at the or chart you have now you're going to go look at your team I want you to identify who's the first person that stands out as a high potential player and I want you to put together a plan for hireing and develop that person into being a leader who can grow your company