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Unformatted text preview: Level 5 Leadership Level 5 Leadership Jim Collins
“You can accomplish anything in life, provided that you do not mind who gets the credit.” Harry S. Truman
Mike Shaner, Ph.D. A Couple of Things About Jim A Couple of Things About Jim Collins Wrote Built to Last Wrote Good to Great – Study of 1435 Good Companies – Examined their performance over 40 years – Companies that outpaced the rest of the industry (exceeded the stock market by at least 3X over 15 years!) (independent of industry!) Who in the heck is Darwin E. Smith? Who in the heck is Darwin E. Smith? Didn’t he write “Origin of the Species”? Inhouse lawyer who was CEO of KimberlyClark for 20 years During his time KimberlyClark generated stock returns 4.1 times the general market He described his management style as “Eccentric” His shyness was coupled with a fierce resolve toward life. Darwin E. Smith Darwin E. Smith Sold the paper mills—even in Kimberly, WI Invested in brands like Huggies and Kleenex In retirement Smith reflected on his exceptional performance by saying “I never stopped trying to become qualified for the job.” Classic example of a Level 5 Leader! Level 5 Leaders Level 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 selfinterest. Indeed, they are incredibly ambitious—but their ambition is first and foremost for the institution, not themselves. Why is it called “Level 5”? Why is it called “Level 5”?
Level 5 Level 5 Executive = Humility + Will Level 4 Effective Leader Level 3 Competent Manager Contributing Team Member Highly Capable Individual Level 2 Level 1 Who the heck is Colman Mockler? Who the heck is Colman Mockler? CEO of Gillette from 1975 to 1991 A gracious, patrician gentleman Held off three hostile attacks in order to fight for the future greatness of Gillette A placid persona that held an inner intensity to be the best CEO of Fannie Mae who took over when Who the heck is David Who the heck is David Maxwell? they were losing $1M every business day Turned the company into a high performance culture that earned $4M every day and beat the stock market 3.8 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 Smithnow you do!! Colman Mocklerditto!! David Maxwellditto—but what about: George Cain Alan Wurtzel Jim Herring
Abbott Lab. Circuit City Kroger Lyle Everingham Joe Cullman Fred Allan Nucor Philip Morris Pitney Bowes Wells Fargo Carl Reichardt Cork Walgreen (a gimmie) Which do YOU want? Which do YOU want? Show horse or plow horse? 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 5 The Two Sides of Level 5 Professional Will – Creates superb results, a clear catalyst in the transition from good to great – Demonstrates an unwavering resolve to do whatever must be done to produce the best longterm results, no matter how difficult. – Sets the standard of building an enduring great company; will settle for nothing less. – Looks in the mirror, not out the window, to apportion responsibility for poor results. The Second Side The Second Side Personal Humility – Demonstrates a compelling modesty, shunning public adulation; never boastful. – Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate – Channels ambition into the company, not the self; sets up successors for even greater success in the next generation. – Looks out the window, not the mirror, to apportion credit for the success of the company. Can You Learn to Become Level 5? Can You Learn to Become Level 5? The great irony is that the animus and personal ambition that often drive people to positions of power stand at odds with the humility required for Level 5 leadership. Combine that irony with the fact that boards of directors frequently operate under the false belief that they need to hire a largerthanlife egocentric leader. Therefore: Therefore: You can see why Level 5 leaders rarely appear at the top of our institutions. The problem is not with the availability of Level 5 leaders. The problem is recognizing that what they have is important. Finally! Finally! Can I become a Level 5 leader? No prescriptionsorry. Except to practice the other findings that lead a company from Good to Great.
– Disciplined People – Disciplined Thought – Disciplined Action ...
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This note was uploaded on 04/22/2009 for the course ECON 4939 taught by Professor Staff during the Spring '08 term at Colorado.
- Spring '08