In his latest book, Good to Great, Jim Collins examines how a good company becomes an exceptional company. The book introduces a new term to the leadership lexicon – Level 5 leadership.
Level 5 refers to the highest level in a hierarchy of executive capabilities. Leaders at the other four levels may be successful, but are unable to elevate companies from mediocrity to sustained excellence.
Level 5 leadership challenges the assumption that transforming companies from good to great requires larger-than-life-leaders. The leaders that came out on top in Collins' five-year study were relatively unknown outside their industries. The findings appear to signal a shift of emphasis away from the hero to the anti-hero.
According to Collins, humility is a key ingredient of Level 5 leadership. His simple formula is Humility + Will = Level 5. "Level 5 leaders are a study in duality", notes Collins, "modest and wilful, shy and fearless."
Jim Collins spoke to Stuart Crainer.
In the 20th and 21st Century, when we're looking at the social world, the Man-made world, we are still in the dark ages. This is shown by our predilection for looking for leadership answers. Leadership is to the 20th Century what God was to the 16th Century. If you stop looking for answers that are always either God or leadership you will find other underlying factors.
The research team said that the CEOs of these companies had a huge impact on whether they shifted from one level to another, whether they went from the good level to the great level. My reply was that the comparison companies also had leaders, exceptional leadership in many cases, but the companies ended up not performing as well.
But the research team pushed back at me. They suggested that I was looking at this as a digital idea - you are either a great leader or you are not, and that's the critical question. But instead it's much more nuanced.
That eventually led to the idea that leadership is an evolving series of capabilities and levels of maturity. So it's not a leadership or not question, it's a "what stage of leadership" question – and what level of maturity are you.
So the answer wasn't leadership; the real answer was, are you a Level 4 leader, or a Level 3 leader, or a Level 5 leader? And that then led to the question "what are those characteristics of the Level 5?"
It is that combination, the fact that it is not about them, it's not first and foremost for them, it is for the company and its long-term interests, of which they are just a part. But it is not a meekness; it is not a weakness; it is not a wallflower type. It's the other side of the coin
The ten that stand out from history are, in reverse order:
David Packard, HP; Katherine Graham, who took the Washington Post to greatness; William McKnight, who invented the idea of managing for innovation at 3M back in the 1940s and 50s; David Maxwell, who got Fannie Mae back on the road; Jim Burke, CEO at Johnson & Johnson during the Tylenol crisis – his great insight was that he had the company prepared for crisis before the crisis came; Darwin Smith, at Kimberly Clark.
Number four would be George Merck of Merck, a supreme example of a great CEO – in terms of understanding what the whole definition of a corporation's role in society should be; then Sam Walton of Wal-Mart; Bill Allen of Boeing, who took over when Boeing had lost 90 percent of its revenue overnight at the end of WWII, and they didn't make a single commercial aircraft. It is an amazing story. Building what, up until the 1990s at least, was the greatest aircraft manufacturer in the world. The track record is extraordinary and he was a classic Level 5.
And at number one: Charles Coffin, GE. I picked Charles Coffin because he stood out. He built the stage on which all the other CEOs played. He created the system. He was the first to invent and put in place systematic management development as a process.
If you stand back and think about it, that's one of the great inventions of the 20th century. He was also the one who instituted the first industrial research and development laboratory. An extraordinary contribution to the organisational field. That's why the number one position goes to Coffin.