Level 5 LeadershipLevel 5 Leadership Jim CollinsJim Collins
““You can accomplish anything in You can accomplish anything in life, provided that you do not life, provided that you do not mind who gets the credit.mind who gets the credit.””
--Harry S. TrumanHarry S. Truman
Mike Shaner, Ph.D.
A Couple of Things About Jim CollinsA Couple of Things About Jim Collins
Wrote Wrote Built to LastBuilt to LastWrote Wrote Good to GreatGood to Great–– Study of 1435 Good CompaniesStudy of 1435 Good Companies–– Examined their performance over 40 yearsExamined their performance over 40 years–– Companies that outpaced the rest of the Companies that outpaced the rest of the
industry (exceeded the stock market by at industry (exceeded the stock market by at least 3X over 15 years!) (independent of least 3X over 15 years!) (independent of industry!)industry!)
Who in the heck is Darwin E. Smith?Who in the heck is Darwin E. Smith?
DidnDidn’’t he write t he write ““Origin of the SpeciesOrigin of the Species””??InIn--house lawyer who was CEO of house lawyer who was CEO of KimberlyKimberly--Clark for 20 yearsClark for 20 yearsDuring his time KimberlyDuring his time Kimberly--Clark generated Clark generated stock returns 4.1 times the general marketstock returns 4.1 times the general marketHe described his management style as He described his management style as ““EccentricEccentric””His shyness was coupled with a fierce His shyness was coupled with a fierce resolve toward life.resolve toward life.
Darwin E. SmithDarwin E. Smith
Sold the paper millsSold the paper mills——even in Kimberly, WIeven in Kimberly, WIInvested in brands like Invested in brands like HuggiesHuggies and and KleenexKleenexIn retirement Smith reflected on his In retirement Smith reflected on his exceptional performance by saying exceptional performance by saying ““I I never stopped trying to become qualified never stopped trying to become qualified for the job.for the job.””Classic example of a Level 5 Leader!Classic example of a Level 5 Leader!
Level 5 LeadersLevel 5 Leaders
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.
Why is it called Why is it called ““Level 5Level 5””??
Level 2
Level 3
Level 4
Level 5
Level 1 Highly Capable Individual
Contributing Team Member
Competent Manager
Effective Leader
Level 5 Executive = Humility + Will
Who the heck is Colman Who the heck is Colman MocklerMockler??
CEO of Gillette from 1975 to 1991CEO of Gillette from 1975 to 1991A gracious, patrician gentlemanA gracious, patrician gentlemanHeld off three hostile attacks in order to Held off three hostile attacks in order to fight for the future greatness of Gillettefight for the future greatness of GilletteA placid persona that held an inner A placid persona that held an inner intensity to be the bestintensity to be the best
Who the heck is David Maxwell?Who the heck is David Maxwell?
CEO of Fannie Mae who took over when CEO of Fannie Mae who took over when they were losing $1M every business daythey were losing $1M every business dayTurned the company into a highTurned the company into a high--performance culture that earned $4M performance culture that earned $4M every day and beat the stock market 3.8 every day and beat the stock market 3.8 to 1.to 1.
In over three quarters of the comparison companies, Collins found executives who set their
successors up for failure or chose weak successors, or both.
e.g. Rubbermaid and Stanley Gault
Who of these folks do you know?Who of these folks do you know?
Darwin SmithDarwin Smith----------now you do!!now you do!!
Colman Colman MocklerMockler------ditto!!ditto!!
David MaxwellDavid Maxwell------dittoditto——but but what about:what about:
George CainGeorge Cain
Alan Alan WurtzelWurtzel
Jim HerringJim Herring
Lyle Lyle EveringhamEveringham
Joe CullmanJoe Cullman
Fred AllanFred Allan
Carl Carl ReichardtReichardt
Cork Walgreen (a Cork Walgreen (a gimmiegimmie))
Nucor
Philip Morris
Pitney Bowes
Wells Fargo
Kroger
Circuit City
Abbott Lab.
Which do YOU want?Which do YOU want?
Show horse or plow horse?Show horse or plow horse?
Window or the mirror?Window or the mirror?
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.
The Two Sides of Level 5The Two Sides of Level 5
Professional WillProfessional Will–– Creates superb results, Creates superb results,
a clear catalyst in the a clear catalyst in the transition from good to transition from good to greatgreat
–– Demonstrates an Demonstrates an unwavering resolve to unwavering resolve to do whatever must be do whatever must be done to produce the done to produce the best longbest long--term results, term results, no matter how no matter how difficult.difficult.
–– Sets the standard of Sets the standard of building an enduring building an enduring great company; will great company; will settle for nothing less.settle for nothing less.
–– Looks in the mirror, Looks in the mirror, not out the window, to not out the window, to apportion apportion responsibility for poor responsibility for poor results.results.
The Second SideThe Second Side
Personal HumilityPersonal Humility–– Demonstrates a Demonstrates a
compelling modesty, compelling modesty, shunning public shunning public adulation; never adulation; never boastful.boastful.
–– Acts with quiet, calm Acts with quiet, calm determination; relies determination; relies principally on inspired principally on inspired standards, not standards, not inspiring charisma, to inspiring charisma, to motivatemotivate
–– Channels ambition into Channels ambition into the company, not the the company, not the self; sets up self; sets up successors for even successors for even greater success in the greater success in the next generation.next generation.
–– Looks out the window, Looks out the window, not the mirror, to not the mirror, to apportion credit for apportion credit for the success of the the success of the company.company.
Can You Learn to Become Level 5?Can You Learn to Become Level 5?
The great irony is that the animus and The great irony is that the animus and personal ambition that often drive people personal ambition that often drive people to positions of power stand at odds with to positions of power stand at odds with the humility required for Level 5 the humility required for Level 5 leadership.leadership.Combine that irony with the fact that Combine that irony with the fact that boards of directors frequently operate boards of directors frequently operate under the false belief that they need to under the false belief that they need to hire a largerhire a larger--thanthan--life egocentric leader.life egocentric leader.
Therefore:Therefore:
You can see why Level 5 leaders rarely You can see why Level 5 leaders rarely appear at the top of our institutions.appear at the top of our institutions.The problem is not with the availability of The problem is not with the availability of Level 5 leaders. The problem is Level 5 leaders. The problem is recognizing that what they have is recognizing that what they have is important.important.
Finally!Finally!
Can I become a Level 5 leader?Can I become a Level 5 leader?No prescriptionNo prescription------sorry. Except to practice sorry. Except to practice the other findings that lead a company the other findings that lead a company from Good to Great.from Good to Great.–– Disciplined PeopleDisciplined People–– Disciplined ThoughtDisciplined Thought–– Disciplined ActionDisciplined Action