Across the research Jared Diamond reviewed, the individual leader accounts for 15 to 30% of the variation in company profits, and the calendar year the business is trading in accounts for about 2%.
Corporate boards set chief-executive pay on the premise that the person they hired was the one person who could do the job. Diamond spent a book testing that premise, against the natural experiments social scientists have built over recent decades and against a rule he invented himself.
"Few people pass the Hamlet Test in the business world."
Diamond wrote the 1997 book Guns, Germs, and Steel, and his new book applies the same comparative method to business, political, sports and religious leaders, counting in each case how many other people were in a position to do what that leader did.
I listened to the full interview so you can skip it.
25 minutes of audio, 16 minutes of reading.
Here are the 13 takeaways that matter.
👤 Guest: Jared Diamond, the historian behind Guns, Germs, and Steel, whose new book Profits, Prophets, Coaches, and Kings asks when a leader actually changes an outcome
🎙️ Host: Adi Ignatius, editor at large at Harvard Business Review, who was its editor in chief for 16 years
👥 Also on: Alison Beard, executive editor at Harvard Business Review and co-host of the IdeaCast
📰 Published: 1 September 2026 on the HBR IdeaCast podcast feed
🟢 Spotify | 🟣 Apple Podcasts | 🔗 Show notes | ⏱️ 25 min | ✅ Time saved: 9 min
Key Takeaways
Individual leaders explain 15–30% of the spread in company profits The calendar year the business is trading in explains about 2%
Jeff Bezos was not the only American who could have founded Amazon The test asks whether any of the other 340 million could have done it instead
A leader passes only where nobody else had both the means and the motive In 2002 there were 22 pomegranate growers in the United States, and one couple held half the crop
Most business leaders change how a thing gets done, not whether it happens at all eBay came first and Walmart already sold everything, so the online everything store was Bezos's stamp rather than his invention
Timing decides more often than boards want to believe Gates and Jobs saw the same magazine cover, and the difference was what each of them did about it
There is no single trait to hire for, and charisma is only one of several routes Diamond's counter-examples are a dictator who terrorized his staff and a president who ran good discussions
A high-discretion industry pays more and fires faster Railroad and public-utility chief executives get neither the fortune nor the sack
Firing a struggling chief executive usually buys a rebound that chance would have delivered anyway UCLA fired eight basketball coaches after John Wooden, and its athletic department carries $150 million of debt
1. Biographies Settle Nothing
Ignatius set the argument up before Diamond spoke. On one side is the great man theory, which credits individual leaders in business, politics, religion and sports with uniquely affecting historical developments; on the other is the view that leaders are hemmed in by context and circumstance and change little. His first question was why the argument was worth digging up again.
Diamond said the usual evidence cannot settle it, because a biography studies one person and a comparison needs more than one. "The traditional way in which historians and biographers have tried to settle the role of the leaders is by writing biographies. But biographies don't settle things."
Two methods are new since the argument was last had. One is the natural experiment, a technique social scientists have developed over recent decades for comparing cases that differ in one respect; the other is a rule Diamond introduced himself and calls the Hamlet Test "Because the debate still remains unresolved."
2. Bezos Fails the Hamlet Test
The test asks a counterfactual question about supply: given everyone else who was available and capable at the time, was this person the only one who could have produced this outcome?
Shakespeare passes because the comparison set survives and none of it comes close. "I call it the Hamlet Test because you can ask, was Shakespeare the only person who could have written that great play, Hamlet?" The other Elizabethan playwrights are known and their work can be read: "There are about 25 of them. We've got their plays, we can judge their plays. Some of them are slightly good, but none of them remotely approach Hamlet." Diamond added that Hamlet was Shakespeare's 22nd play, written after Romeo and Juliet and Julius Caesar, so he was already established
Bezos fails on the size of the comparison set, not on the quality of what he built. "Well, the population of the United States is about 340 million and it's impossible to make an argument that out of those 340 million, the only one who could found Amazon was Jeff Bezos." "So Shakespeare passes the Hamlet Test, but Jeff Bezos does not pass the Hamlet Test."
A political leader can pass where the pool of candidates was genuinely tiny. "The founding president of Botswana, Seretse Khama, was uniquely qualified because upon independence, Botswana had only 22 university graduates and Seretse Khama was the chief of the largest tribe, the one on whose land, diamonds were found."
3. The Resnicks Passed It
Asked who passes in business, Diamond gave one example and made clear how rare it is.
His case is the pomegranate juice industry, which he says did not exist anywhere in the world before 2002. Pomegranates had been cultivated for 4,000 years and juiced by hand in Middle Eastern markets, but the fruit is hard to squeeze and nobody made juice industrially
The constraint was not skill but the overlap of capacity and motive. "As of 2002, there were 22 people in the United States who grew pomegranates and 21 of them didn't have much money and they had no motivation to make industrial scale pomegranate juice." "There was one couple, they had 50% of the pomegranate production in the United States and they were interested in the medical benefits of pomegranates and they didn't care about the money from it." That couple was the Resnicks: "They, like Shakespeare with Hamlet, were uniquely qualified to set up the pomegranate juice industry in the U.S. and the world."
"Few people pass the Hamlet Test in the business world."
4. Most Leaders Shape the How
Ignatius pushed back with a second definition of great leadership: seizing a moment and shaping an outcome that would have arrived anyway. Diamond accepted it as a separate category rather than a weaker version of the first.
The two categories are different claims, and only the first is about whether the thing happens at all. A leader can matter because nobody else could have done it, or because several people could have done it and each would have done it differently
Social media is the second kind. "No, there were social media before him and there was social media after him, but he did it in a distinct way."
Amazon is the second kind too, and the comparison is the point. Bezos decided the store should be online and should sell everything: "Well, Walmart also has an everything store, but it's not online." eBay came before Amazon and worked in a different way again
Diamond's summary of the category is that the leader's contribution is the method: without them it would have been done, but done differently
5. The CEO Is 15–30% of It
Ignatius put the boards' own justification to him — that chief executives are paid astronomical salaries and bonuses because they are uniquely qualified — and asked whether the research supports it.
It does not, on average. "On the average, my research does not support that approach."
Four things move company profits, and Diamond gave the sizes of two of them. The analysis splits the spread in profitability from one company to another between the year, the industry, the individual company and the chief executive "On the average, the year accounts were only about 2% of variation." His example is 1930, a bad year for everyone because of the Depression Industry is a second factor, and he contrasted a profitable one, teenage t-shirts, with an unprofitable one, tightly regulated public utilities The company is a third: he said Procter & Gamble has been very well managed for 150 years, in a profitable soap industry, and is particularly profitable within it
The chief executive is the fourth, and the number is the headline. "On the average, individual leaders account for between 15 to 30% of the variation."
His illustration of the pay argument is a leader claiming a tenth of the profit. "Pay me $10 billion because your company made $100 billion" — to which Diamond's answer is that in most cases other leaders could have made that $100 billion, while conceding that some leaders really do make a difference
6. Five Times Leaders Matter
Asked when leadership does make a difference, Diamond named five conditions.
One: the rare job only one person is qualified to do — the Hamlet Test case from earlier in the conversation
Two: the moment exists at all. Gates and Paul Allen had been talking about microcomputers and Gates kept saying the time was not right, until the January 1976 cover of Popular Electronics showed Intel's new chip "With this new chip, we can finally do it. We got to do it fast because other people will do it." Diamond noted that Steve Jobs saw the same cover
Three: recognizing the moment and being able to act on it. Some people see the moment and can seize it, others see it and can do nothing; Churchill got the wartime premiership he had wanted, but "Winston Churchill did not manufacture World War II."
Four: the absence of substitutes underneath. Clement Attlee made perhaps the biggest changes to British society in the 20th century, Diamond said, and gets little credit because four or five of his associates could have done it
Five: getting a country to do what it does not want to do. "Franklin Roosevelt got the United States to prepare for World War II when Americans did not want to prepare for World War II." Charles de Gaulle got the French to accept Algerian independence on the same terms
The Genghis Khan case sits underneath all of it as the limit: he founded the largest land empire in history at the wettest point in two thousand years, without knowing it. "If Genghis Khan had been born 10 years earlier or 200 miles further away, we wouldn't know anything about Genghis Khan." Only in the last decade did chronologists work out why the timing mattered
7. Charisma Is Not Required
Ignatius asked what he would have a board ask two chief-executive candidates. Diamond declined to give a single question and attacked the premise instead.
The answer is that there is no one thing. "I'm going to frustrate you by saying there is no one thing to look for in a leader."
Business schools teach charisma, and Diamond's counter-example is deliberately uncomfortable. He said Hitler, unfortunately, was very charismatic
Three other routes work without it. "You can be an effective leader by terrorizing your subordinates." His example is Augusto Pinochet, whom nobody has called charismatic John Kennedy was charismatic, but what Diamond credits is that he was a great discussion leader during the Cuban Missile Crisis Churchill's route was expressing himself well
"So short answer is, there is no magic formula despite what business schools do."
8. Recognizing the Moment
Ignatius pressed on whether visionary leadership is really just the ability to see that a moment has arrived, and said out loud that he was fishing for a neat, Malcolm Gladwell-style explanation.
Diamond refused the single answer again. "Welcome to interviewing Jared Diamond. There is no simple answer."
Some of it is luck the person never knew about. "Mark Zuckerberg was lucky that he was a sophomore at Harvard at what was at 2002, the perfect time to found a social media." A year or two earlier the technology was not adequate, and Diamond said Zuckerberg did not know this
Some of it is a number the founder went and looked at. Diamond said Gates and Bezos both recognized the right moment: "Jeff Bezos saw that the use of the internet had increased by, what, factor at 2.3 in the last 12 months." On that basis, Diamond said, Bezos concluded they had to move immediately
And some of it is being told. Elon Musk was weighing graduate school at Stanford when someone told him it was the right time to do what he wanted to do and he had better do it now
The three outcomes he distinguishes are recognizing the right time, missing it while it is there, and succeeding in a period when timing was not the binding constraint
9. Founders Outlive Themselves
Ignatius noted that founders have unusual freedom to set institutions and norms that persist after they leave, and asked how that differs from running a mature company.
Diamond widened it past business immediately, saying his book covers political, sports and religious leaders and that founders matter in politics as much as in commerce
The mechanism is institutional persistence, and it runs both ways. "Founders create institutions that then are likely to carry on." Seretse Khama in Botswana and Lee Kuan Yew in Singapore are his good cases; Diamond said Lee's institutions carried Singapore forward "The founding leader of Algeria set up bad institutions that have hampered Algeria today, so founders can make a difference either for the good or for the bad."
10. Sports Data Is Cleaner
Asked what connected the leaders he studied across fields, Diamond named timing first and then something he said surprised him about where the research comes from.
Much of the work on sports coaches has been done by business school professors, which he did not expect
The reason is measurement, and he laid out the contrast. "In the business world, business CEOs, they're often invisible. They don't jump up and down on the sidelines." A result may take five or ten years to appear, or never appear Sports supply the opposite: a coach visible on the sideline, several games a week, a league of several dozen teams all organized the same way "Sports are a particularly good area to study effective leaders."
The methods travel back the other way, which is what makes the sports research relevant to business. "And so some of the best papers on sports leaders, sports coaches, have been done by business school professors who debug their methods in sports because the database in sports are so neat, and then they applied those methods to the business world."
11. Enduring Success Is Rare
Ignatius asked whether anyone passes the test repeatedly, or whether these are all moments in time.
Diamond's one durable business case is the company he had already used as the example of a well-run firm. "In the business world, Procter & Gamble has been successful for 150 years."
Churchill is his case against durability in politics. Outstanding as a wartime leader, undistinguished in his first peacetime term, and in his second, Diamond said, terrible enough that his associates were eager to get him out and eventually did
The sports case is the one where the counterfactual is visible. "Well, Tom Brady goes away to another team and Tom Brady is very successful with his other team and Bill Belichick is no longer successful, making one uncertain whether Bill Belichick's great record goes to the credit of Bill Belichick or how much of it goes to the credit of Tom Brady."
12. High or Low Discretion
Ignatius asked what an individual can actually do to raise their own chances of consequential success. This is the one question Diamond answered with a rule.
The choice is an industry, and the variable is how much decision-making power the job carries. "If what you want to do is to have a chance of becoming very rich and being influential, but you're willing to run the risk of being fired, you pick an industry in which the CEO has what's called high discretion." "Not discretion in the sense of being polite and careful, but discretion in the sense of having a lot of decision-making power."
High discretion means the fashion businesses, and it cuts both ways. A friend of his runs a company making t-shirts for teenagers, where a pattern lasts two weeks; the friend is good at picking the next two weeks and is very successful, and at lunch the day before yesterday, in his 60s, he told Diamond he was afraid of running out of money for the rest of his life The same applies to computers, soap and perfume: the right perfume makes you rich and the wrong one gets you fired
Low discretion is the trade for security, and Diamond named the industries. "Once you have a railroad, the tracks are there for the next 75 years." He said the same of blast furnaces, where there is only one way to build one, and of tightly regulated public utilities — nobody knows who runs the Los Angeles Department of Water and Power, and nobody fires them either
Ignatius offered the management-literature answer, that differentiated success requires courage, and courage can end in failure as easily as in accomplishment. Diamond's example was Musk: "There was an occasion in Elon Musk's business development where in the morning he thought that he was likely to go bankrupt by the evening, and between the morning and the evening, he got more investors, so he did not go bankrupt and he now has his trillion dollars."
13. Firing the Coach Costs
The last substantive exchange was about the board's standard response to a struggling company.
Replacing the chief executive assumes the chief executive is the problem, and usually several other things are. "The CEO is not the only reason for a business struggling." Diamond listed a down cycle in the industry and bad decisions made by other people in the business
His evidence is his own employer. "And following John Wooden, we've had a series of, I think, eight basketball coaches. We fired every single one of them. They've had winning records, but not as good winning records as John Wooden." Every firing meant buying out a contract. "The result is that my athletic department at UCLA is $150 million in debt." He added what the same money buys elsewhere in a university: a great many classics and German professors
The research says the rebound after a firing is mostly noise. Diamond said business school professors have shown that the next coach usually does better for random reasons, that firing the coach is usually a bad decision, and that it does not produce a permanent improvement
Bonus Insights
Beard framed the episode around pay before Diamond said a word. "I do like that topic, especially in an era when boards are rewarding CEOs with astronomically large contracts." She said the size of the contracts is what makes a listener wonder whether the talent is really differentiated enough to justify them
Beard also predicted the answer in the opening exchange, saying she imagined it had a lot to do with being in the right place at the right time, which is close to where Diamond ended up
Ignatius named the kind of answer he wanted and did not get. "I mean, yes, I'm always looking for a nice, neat, well-wrapped up Malcolm Gladwell-esque explanation of the world, but is that it?"
Diamond's closing answer was an analogy about marriage rather than a summary about leadership. Asked for one final thought, he said the question itself is the problem: "Your asking that question shows that you are going to get divorced in the next year because a happy marriage requires 37 things." "And similarly in the business world and the world of politics, there are multiple factors, but at least I boil them down to five factors rather than 37 factors."
Diamond's bottom line is that the leader is one of four things that move a company's results and rarely the largest of them, so the honest question for a board is not who is uniquely great but whether this particular job, in this particular industry, at this particular moment, is one where the person in the chair can change the answer at all.
Products, Companies & Tools Mentioned
Amazon (Diamond's main example of a company that would have existed without its founder, built differently by somebody else)
Walmart and eBay (The two comparisons that make the point: one sold everything without being online, the other was online before Amazon and worked differently)
Procter & Gamble (His example of the individual company as a driver of profit separate from the industry, and his one case of enduring corporate success)
Intel (The chip on the 1976 magazine cover that told Gates the moment had arrived)
UCLA (Diamond's own university, whose athletic department he says is $150 million in debt from buying out fired basketball coaches)
Boston Red Sox (His example of the sports schedule that gives researchers a usable record of a coach's performance)
Los Angeles Department of Water and Power (The low-discretion job: tightly regulated, nobody knows who runs it, nobody gets fired)
Books & Resources Mentioned
Profits, Prophets, Coaches, and Kings: (When) Do Leaders Matter? – Jared Diamond (The new book this interview is built on, covering business, political, sports and religious leaders)
Guns, Germs, and Steel: The Fates of Human Societies – Jared Diamond (His 1997 book, named by Ignatius as what Diamond is best known for)
Popular Electronics, January 1976 (The cover showing Intel's new chip, which Diamond says both Gates and Jobs saw)
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