I love competition. I’ve been an athlete all my life in sports and business, and healthy competition makes us better. Iron sharpens iron. I’m also a fan of the “Moneyball” way of thinking; not just playing the game but understanding how the game itself can be advanced. That’s why I find the evolution in Private Equity so interesting.
As I laid out in the first post, the investment industry is evolving beyond financial engineering and operational playbooks. It has to. The next constraint on value creation and returns is clear: It’s the ability of organizations to develop human capital (“People”) that enables value creation. That also sits at the heart of GrowthFire’s “Unlocking Potential”.
Research is catching up to what savvy leaders have known for a long time: human capital and culture drive superior results, but only when embedded in how a company actually operates. Not as slogans, but as core values and systems.
• McKinsey & Company found companies strong in both people development and performance grew revenue 2x faster, had half the earnings volatility, and were 1.5x more likely to sustain top-tier performance during disruption
• Gallup (347 companies, 3.35M employees, 736 studies) found highly engaged teams had more than 2x the odds of success
• Research from the National Bureau of Economic Research shows management practices alone explain ~30% of performance variation
• Harvard’s John Kotter and James Heskett found companies with performance-enhancing cultures delivered 682% revenue growth vs 166%, and 756% net income growth vs 1%
This isn’t about “culture” in the abstract, it’s about how companies develop people and teams to achieve great things. Those “great things” ultimately lead to greater value creation and higher valuations.
The implication is straightforward. The companies that outperform aren’t just the ones with the right financial structure, better deals, clear strategies, or better products. Those are table stakes. The outperformers build legacies by developing their people into leaders who can execute repeatedly and predictably.
Investing in people leads to more predictable revenue, faster growth, lower turnover, greater adaptability, and a lower risk profile. That’s what “Unlocking Potential” means in practice, and why human capital is increasingly a driver of growth quality, resilience, and enterprise value, even in a world of AI.
Chances are, you already have an incredibly powerful, underdeveloped asset in your business. If you’re not investing in it, someone else will.
In the final post, I’ll break down how leadership teams build this capability, and what separates those that do it well from those that don’t.