Level 5 Revisited

Being that it's still one of the most useful and relevant books that I've read while working at IF, I thought I'd re-visit "Good to Great" and the concept of Level 5 Leadership. As many of us have read the book and have heard the term "Level 5 Leader" we may have a general idea of what the term means but I thought I'd provide another example, taken from Jim Collins' website (www.jimcollins.com), which also has some very useful tools to use relative to some of the other concepts he introduces in his book.

Two sides of the Level 5 leader

On the one hand… Creates—and is a clear catalyst in creating—superb results. Yet on the other hand… Demonstrates a compelling modesty, shunning public adulation and never boastful.

On the one hand… Demonstrates an unwavering resolve to do whatever must be done to produce the best long-term results, no matter how difficult. Yet on the other hand… Acts with quiet, calm determination and relies principally on inspired standards—not an inspiring personality—to motivate.

On the one hand… Sets the standard of building an enduring great organization and will settle for nothing less. Yet on the other hand… Channels ambition into the organization and its work, not the self, setting up successors for even greater success in the next generation.

On the one hand… Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck. Yet on the other hand… Looks out the window, not in the mirror, to apportion credit for the success of the company—to other people, external factors, and good luck.

I used to think of these leaders as rare birds, almost freaks of nature. But then a funny thing happened after a seminar where I shared the Level 5 finding and bemoaned the lack of Level 5 leaders. After the session, a number of people stopped by to give examples of Level 5 leaders they’d observed or worked with. Then again, at another seminar, the same thing happened. Then again, at a third seminar—and a pattern began to emerge.

It turns out that many people have experienced Level 5 leadership somewhere in their development—a Level 5 sports coach, a Level 5 platoon commander, a Level 5 boss, a Level 5 entrepreneur, a Level 5 CEO. There is a common refrain: “I couldn’t understand or put my finger on what made him so effective, but now I understand: he was a Level 5.” People began to clip articles and send e-mails with examples of people they think of as Level 5 leaders, past or present: Orin Smith of Starbucks Coffee, Joe Torre of the New York Yankees, Kristine McDivitt of Patagonia, John Whitehead of Goldman Sachs, Frances Hesselbein of The Drucker Foundation, Jack Brennan of Vanguard, John Morgridge of Cisco Systems, former Secretary of State George Shultz, and so on. My list of Level 5 leaders began to grow exponentially.

Then it dawned on me: Our problem is not a shortage of Level 5 leaders. They exist all around us. Like the drawing of two faces that transforms itself into a vase, depending on how you look at the picture, Level 5 leadership jumps out at us as soon as we change how we look at the world and alter our assumptions about how it best works.

No, our problem lies in the fact that our culture has fallen in love with the idea of the celebrity CEO. Charismatic egotists who swoop in to save companies grace the covers of major magazines because they are much more interesting to read and write about than people like Darwin Smith and David Maxwell. This fuels the mistaken belief held by many directors that a high-profile, larger-than-life leader is required to make a company great. We keep putting people into positions of power who lack the inclination to become Level 5 leaders, and that is one key reason why so few companies ever make a sustained and verifiable shift from good to great.

The fact that our culture has evolved away from Level 5 leadership, however, does not mean that the culture is right or that we should accept it. After all, our culture in the 1990s also embraced the idea of irrational exuberance and infused people with the idea that they could—indeed should—get rich quick by creating companies that were Built to Flip rather than Built to Last. The culture was neither right nor healthy, and we would have done better to reject that culture and hold to fundamental tenets of creation and value that we knew in our guts to be eternally true. The same holds for our current misguided confusion of celebrity and leadership; it is neither right nor healthy. If we allow the celebrity rock-star model of leadership to triumph, we will see the decline of corporations and institutions of all types. The twentieth century was a century of greatness, but we face the very real prospect that the next century will see very few enduring great institutions. If good is the enemy of great—and I believe it is—the current trends in leadership give the decided edge to the enemy.

Yet I remain optimistic. For one thing, I sense an increasing societal unease with the emergence of celebrity leaders who care more about themselves than they do about the institutions for which they are responsible. Smart people instinctively understand the dangers of entrusting our future to self-serving leaders who use our institutions—whether in the corporate or social sectors—to advance their own interests. For another, we now have hard empirical evidence that shows such leaders to be negatively correlated with sustained great results, and this evidence should bolster courageous boards of directors. Finally, and perhaps most important, I am absolutely convinced that the seed of Level 5 leadership is widely dispersed throughout society. It can be identified. It can be cultivated. It can be developed. Given encouragement and the right tools, it can flourish. And if it does, so will our institutions.

Copyright ©2001 Jim Collins. All rights reserved.

- Paul -