More than 15,000 hours were put into the Good to Great project by author Jim Collins and his team. In the research, they identified companies that had been following at or below the standard market performance for at least 15 years, and then had a huge increase, dramatically outperforming the market over a 15 year period.
One of the most surprising results of this research was the finding that virtually all of the companies which experienced this “Good to Great” transformation had a different kind of leader at the helm during the key transformation years. In Good to Great, they refer to this type of transformational leader as a “Level 5 leader”.
LEVEL 1 LEADERS are highly capable individuals who make productive contributions through talent, knowledge, skills and work habits.
LEVEL 2 LEADERS are contributing team members who add their individual abilities to the group objectives and work well with others as part of a group.
LEVEL 3 LEADERS are competent managers who effectively organize people and resources to achieve pre-determined objectives.
LEVEL 4 LEADERS are effective leaders who catalyze commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.
Level 4 leaders sound like the type of leaders that elevate the performance of everyone around them and can effectively get priorities done. What more can we ask for than this? The research from Good to Great indicated that ALL of the leaders of the Good to Great companies had something more than their Level 4 counterparts at the less-successful companies. The attributes of this elite group of leaders is described as “Level 5 leadership”.
LEVEL 5 LEADERS build enduring greatness in their companies through a paradoxical blend of personal humility and professional will. Level 5 leaders demonstrate a duality of being “modest and willful, humble and fearless.”
Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious–but their ambition is first and foremost for the institution, not themselves.
Level 5 leaders often were described in interviews as: “quite, humble, modest, reserved, shy, gracious, mild-mannered, self-effacing, understated, did not believe his own clippings, etc. They seek to give the praise to others when things go right, and give the blame to them when things go wrong.
Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.
Conversely, Level 4 leaders often have enormous egos that contribute to the demise or continued mediocrity of their companies.
For example, the CEO of Bethlehem Steel (a less-successful company), blamed all of their company problems on steel imports from foreign companies. Conversely the CEO of Nucor (a Good to Great competitor who thrived during the same era), saw the challenges faced by steel imports as a blessing, because their overseas competitors would have to ship heavy steel across the ocean, giving Nucor a large advantage.
However, Level 5 leadership is not just about humility and modesty. It is also just as much about “ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great… Level 5 leaders are fanatically driven, infected with an incurable need to produce results.”
Level 5 leaders help their successors to have even greater success than they had, and are not threatened by the success of these successors, because their goal is the long-term success of the company. Level 4 leaders often set their successors up for failure.
A damaging trend was identified by Good to Great, in which boards of directors tend to select larger-than-life, dazzling CEOs instead of the more reserved Level 5 leaders, passing by the individuals with the greatest chance to help create an enduring great company. These larger-than-life leaders are actually negatively correlated with going from good to great. Nearly all Good to Great CEOs were hired from within their companies.
So, what can I do to become more like a Level 5 leader? According to Jim Collins, some Level 5 leaders develop this skill through life challenges they have faced. Others were blessed with mentors or parents who helped teach them these principles. In my goal to be more like a Level 5 leader, I need to be better about giving credit to others when things go well, yet accepting the blame myself when things don’t go well. I need to be modest, and never boastful. I also need to be willing to pay the price to help the companies achieve the best long-term results.
Find Good to Great: Why Some Companies Make the Leap… and Others Don’t
(Source: The source for much of the content of this post came from Good to Great, by Jim Collins.)
Posted on May 5th, 2008 by admin
Filed under: Book Reviews, Business Management, Leadership, Self Improvement
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