Good to GreatCHAPTER 2 – LEVEL 5 LEADERSHIP

Darwin Smith• “Best example of taking a good company

and making it great”

• CEO of Kimberly-Clark 20 Years

• Stock Returns 4.1 times higher during his time

• Not a typical leader but used Level 5 Leadership

Level 5 Leadership

“Level 5” Refers to a five-level hierarchy of executive capabilities with Level 5 at the top.

Humility + Will = Level 5

“Level 5 Leaders are ambitious… first and foremost for the company, not

themselves”

Research

“Leadership is the answer to everything” is like saying “God is the answer to everything”

- Where did Level 5 Come From?- Collins ignored executives- Team Disagreed- Found that Level 5 Leadership was consistent

in all great companies- Comparison companies lacked Level 5

Leadership

Ambition for the Company: Setting Up Successors for Success

• Key part in making business sustainable and ultimately making the business great.

• Ambition first and foremost for the company and concern for its success rather than one’s own riches and personal renown.

• In over 3 quarters of the comparison companies successors were setup for failure, or chose weak successors, or both.

A Compelling Modesty

• Not to be confused with false modesty

• Great leaders tended to place more emphasis on others and the company, rather than themselves.

• Did not take credit for themselves, even where it was due.

• “Seemingly ordinary people producing extraordinary results.”

Unwavering Resolve… to Do What Must Be Done

• Level 5 leaders are driven to produce results

• You must be willing to do whatever it takes

• Promoting from within = stronger resolve

The Window in the Mirror• Level 5 leaders look out the window to

apportion credit to factors outside themselves when things go well

• At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly

• Simplified, they accept blame for bad, and give credit to others for good.

Level 5 Summarized

• Modesty & Humility– Someone who does not care about the credit– Accepts blame for failures – but does not give

up

• Will– Direct ambitions towards companies’ goals

first and foremost– Strong Resolve

Atypical Leadership Characteristics• Tend to be introverts

• Less charismatic

• Highly motivated (not really atypical)

• Motivated more by success of company than themselves