What Level is your Leadership?

Lolly Daskal’s article in Inc.com last week was a great reminder of a famous HBR article I read years ago, one that changed my view of leadership completely. Lolly’s article provides excellent insight on leadership qualities and is a good read. In it, she describes 10 important adjustments to make in your leadership style to be a boss who goes from being good to great.

Her article reminded me of the timeless leadership lessons that Jim Collins uncovered while writing his best-selling business book, Good to Great: Why Some Companies Make the Leap…And Others Don’t. In that book, Jim and his team researched 1,500 companies and identified 11 that made the leap from being good companies to ones that outpaced the market. The 11 great companies he identified averaged cumulative stock returns nearly 7 times the general stock market for more than 15 years. In working to determine all the factors that led to these remarkable transformations, he discovered something unique in the leadership traits of their CEOs. He called it Level 5 Leadership.

He introduced the world to his discovery in an HBR article called Level 5 Leadership: The Triumph of Humility and Fierce Resolve. What he revealed in that landmark article was something that was counterintuitive, revolutionary, and still true to this day. His findings challenged the age-old, conventional wisdom that the best CEOs had to have large egos, be charismatic, and act like larger-than-life figures. Instead, he discovered the CEOs that built these long-term, sustainable, great companies had a “paradoxical combination of personal humility and professional will.”

According to his research, Level 5 Leadership was a necessary requirement for these companies to transform from good to great. He cites examples of companies like Kimberly-Clark, Gillette, Abbott Laboratories, Walgreens, and Nucor Steel. Each of these companies was transformed into a great organization, one that outpaced the market, under the guidance of a Level 5 Leader.

So what exactly is a Level 5 Leader? According to Jim Collins, the Level 5 Leader sits on top of a hierarchy of 5 different leadership types:

Level 5 – Executive – Builds enduring greatness through a paradoxical combination of personal humility plus professional will.

Level 4 – Effective Leader – Catalyzes commitment to a vigorous pursuit of a clear and compelling vision; stimulates the group to high performance standards.

Level 3 – Competent Manager – Organizes people and resources toward the effective and efficient pursuit of predetermined objectives.

Level 2 – Contributing Team Member – Contributes to the achievement of group objectives; works effectively with others in a group setting.

Level 1 – Highly Capable Individual – Makes productive contributions through talent, knowledge, skills, and good work habits.

Collin’s research showed extensive evidence of Level 4 Leaders who had improved companies in the short-term, but long-term transformation only occurred with a Level 5 Leader at the helm. Level 5 Leaders have two unique leadership characteristics not seen in Level 4 Leaders. Collins describes these qualities, personal humility and professional will, as the “yin and yang” of Level 5 Leadership:

Level 5 Leaders are humble and exhibit personal humility

• They demonstrate a compelling modesty, shunning public adulation; never boastful.
• They act with quiet, calm determination; relying principally on inspired standards, not inspiring charisma, to motivate.
• They channel their ambition into the company, not themselves; they set up successors for even more greatness in the next generation.
• They look in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck.

Level 5 Leaders demonstrate relentless professional will

• They create superb results and are the clear catalyst in the transition from good to great.
• They demonstrate an unwavering resolve to do whatever must be done to produce the best long-term results, no matter how difficult.
• They set the standard of building an enduring great company; they will settle for nothing less.
• They look out the window, not in the mirror, to apportion credit for the success of the company—to other people, external factors, and even good luck.

Jim’s stories of these humble-but-fierce CEOs who led remarkable turnarounds in their organizations, forever changed the way I thought of leadership. His well-researched and compelling arguments changed the minds of many others as well. Much of the thinking on corporate leadership was challenged by his revolutionary findings. Today, you can see evidence of his influence in leadership books, articles and blog posts. If you go back and re-read Lolly Daskal’s article you can see the traces of Level 5 Leadership in her descriptions of a what makes a great boss.