2Introduction“You can accomplish anything in life, provided that you do not mind who gets the credit.”-Harry S. TrumanLevel 5 Leader: An individual who blends extreme personal humility with intense professional will.
3Darwin E. Smith1971, became chief executive of Kimberly-Clark, a stodgy old paper company.People were afraid that he lacked some of the qualifications for the position.In the 20 years Smith was CEO, he turned Kimberly-Clark to a stunning transformation.Very few people knew anything about Darwin.When asked about his leadership style, he would only reply, “Eccentric”.People thought he was shy.Smith was diagnosed with nose and throat cancer.Smith made very risky business moves, but eventually came out on top.
5Not What We Expected Level 5 leaders Channel their egos away from themselvesGoal of building a great companyIncredibly ambitiousFirst for the institutionThen for themselvesHighest level in the executive capabilities identified in Collins’ researchEmbody all five levels of the pyramid
6Downplay the Executives What distinguishes good-to-great companies?Downplay the role of top executivesAvoid “credit the leader” and “blame the leader”“Leadership is the answer to everything” – “God is the answer to everything”We gained understanding about how the universe worksWe need to do the same with leadership and what makes the differences
7The Data Wins “Ignore the executives” Consistency among great executivesCut from the same clothLevel 5 Leadership“Level 5 is an empirical finding, not an ideological one”
8Humility + Will = Level 5Level 5 leaders are self-effacing individuals who display a fierce resolve to do whatever needed to make the company greatThey channel their ego needs away from themselves and into the larger goal of building a great company.Their ambition is first and foremost for the institution, not themselves.Lever 5 leaders are a study in duality: modest and willful, humble and fearless.Ex: Abraham Lincoln
9Gillette Colman Mockler, CEO from 1975 to 1991 During tenure, faced down 3 potential attacks threatening takeoverMockler chose to fight for the future greatness of Gillette rather than selling out and pocketing a large sum.In the end, Mockler proved right, and his decisions took Gillette from good to great!
10Setting Up Successors For Success David Maxwell CEO of Fannie Mae in 1981Losing $1 million every business dayTurned business around to start making $4 million every dayBeat stock market 3.8 to 1Retired after 9 years while still at the topCompany continued to have success after his departure
11Setting up Successors for Success Key trait of Level 5 leaders:Ambition first and foremost for the company and concern for its success rather than one’s own riches and personal renown.Key trait of the comparison leaders:Concerned more with there own reputation for personal greatness and often failed to set the company up for success in the next generation.
12Setting up Successors for Success Leaders of Comparison Companies:Set successors up for failureChose weak successors
13Rubbermaid Example Stanley Gault Hard-driving egocentricWhen interviewed talked more about I than weRubbermaid had 40 consecutive quarters of earnings growth under his leadership
14Rubbermaid ExampleWhen Gault left, he left behind a company that would not be great, without him.This shows that Gault was an excellent level 4 leader but not a level 5 leader.Level 5 leaders, with ambition first and foremost for the company, would leave behind a company that would continue to be successful.
15Good to great leaders didn’t talk about themselves When questioned about their own contributions the leaders would either be very modest or deflect the success on other people.The good to great leaders had a humble attitude toward their own success but felt appreciative of those executives around them.
16Good to Great leaders never wanted to become larger than life These leaders exhibited qualities such as honest, reserved and mild-mannered.Leaders that showed an egocentric leadership style often showed a quick leap in sales and return to a decline after.Chrysler: - Chrysler is a great example of a leader who wanted to focus the company’s success on themselves as the reason. Although this particular leader did produce results of 2.9 times the market, he felt his greatness was the reasoning behind the increase. As his personal stock soared, Chrysler stock declined to 31% behind the market halfway through his tenure.
17Unwavering Resolve… to Do What Must Be Done “Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, and almost stoic determination to do whatever needs to be done to make the company great”.-Good to Great (p.30)
18Abbott Laboratories George Cain becomes CEO in 1974. Came from within the companyDidn’t have an inspiring personalityHated mediocrityCompany had lived off cash cow for years.Did away with nepotism.If you weren’t the best, you were gone
19Walgreen’s Charles R. “Cork” Walgreen III takes over in 1975. Determined to leave food-service in 5 years.Saw that drugstores were the futureProblems were emotionally driven.
20Be the Plow Horse“The show horse and the plow horse --- he was more of a show horse, whereas I was more of a plow horse.”-Alan Wurtzel, Former CEO (Circuit City)
21The Window and the Mirror LuckAlan Wurtzel- Circuit CityJack Welch- GESam Walton- WalmartThe number one factor for success was Luck
22The Window and the Mirror The emphasis on luck turns out to be good managementLevel 5 leaders look out the window to apportion credit to othersLevel 5 leaders never credit themselves, if none to credit, luck is responsibleLevel 5 leaders look in the mirror to apportion responsibility
23The Window and the Mirror Comparison Leaders do the exact oppositeThe window and the mirror do not reflect objective realityIt seems that great leaders manage by the window and mirror approach
24Can you become a Level 5 leader? Two categories of peopleThose who do not possess the seed of Level 5 (egotistic);And those who do possess the seed (seeks development)The answer is yes for those who fall in the second category.Every “great” company had a Level 5 leader, yet no data supports a credible list of qualities to achieve Level 5 leadership.Practicing good-to-great disciplines could lead to Level 5 leadership
25Summary Level 5 leadership in pivotal transition Level 5 leaders are ambitious for the company first.Level 5 leaders set-up successors for success.Level 5 leaders are modest, self-effacing, and understated.Level 5 leaders seek to sustain results.Level 5 leaders are workmen.Level 5 leaders share recognition and attribute success to other factors.Trend is to select “celebrity” leaders instead of Level 5 leaders.People can evolve into Level 5 leaders.