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Jim

Collins with Frances Hesselbein

Level 5 Leadership
To discover what separates those who lead organizations from
good to great --from those who don’t -- took 15 years of
rigorous research.
BASIC OVERVIEW

All sectors of society can become great. Not just great companies, but great schools, great churches, great
orchestras, and so on. Good is the enemy of great and that is why so few things become truly great. We settle
for good and therein is the problem. How sad to have lived in a great society of abundance in which we were
privileged to be born, only to face the horrifying truth at the end that we did not live a great life. How
wonderful to realize that greatness is not the function of circumstances, but of conscious choice and
discipline.

EXECUTIVE OVERVIEW

Based on exhaustive studies of matched-pair companies (those birthed at the same time with access to the
same resources and same opportunities), certain principles of greatness become readily apparent. Those who
follow them become great; those who don’t, settle for good.

View leadership as having five levels:

∑ Level 5: Executive
∑ Level 4: Effective leader
∑ Level 3: Competent Manager
∑ Level 2: Contributing Team-Member
∑ Level 1: Highly Capable Individual

At Level 5, there is a duality of leadership – humility and will. Great leaders have a love of leadership and a
genuine personal humility. Collins likes to surround himself with people who don’t care what he thinks, but
rather challenge his thinking. The great leader strives to be ambitious first and foremost for the company, not
his or her own self-interest, and has the will to make good on it.
Personal History by Katherine Graham, the former owner and great leader of the Washington Post, is
recommended reading.

Ask what is your relationship to the “window” and the “mirror.” When the company does well, do you look
out the window and point to the people who made it happen? And when the company does poorly, do you
look in the mirror and say, “I’m responsible?” That’s great Level 5 leadership. The unsuccessful leader is the
one who, when things go wrong, says his people let him down or the economy went south. And when things
go well, he’s the first to look in the mirror and take the credit. It is depressing to see how few Level 5 leaders
are running the country.

Humility is not to be mistaken for weakness. Abraham Lincoln was a strong leader, but a humble man. Lou
Gerstner, a Level 4 leader went to IBM in the early ‘90s as CEO and took the weakened company to a
position of significance. In the process, he became a Level 5 leader because he cared enough. “Something
happened along the way I did not expect,” he said. “I fell in love with IBM.”

The scientific matched-pair studies of corporations found that the discipline and leadership qualities at the
top of great companies were consonant with the great spiritual leaders throughout time who possessed both
humility and will.

Level 5 leaders are the mortar that holds society together. The problem is the lack of wisdom to put Level 5
leaders at the top. The end of the 20th century saw the rise of the celebrity CEO, but celebrity does not
equal leadership. We need to guard against the charismatic leader. What happens if they leave? What happens
if a leader is charismatic and wrong? The leader who lacks charisma has to win on fact and logic and that’s
good for the company.

In the social sector, Level 5 leadership is even more important and more difficult. In the business sector,
there is concentrated executive power, but in the social sector, a great leader must have legislative skills. Such
a leader has to create the conditions in which decisions can be reached.

A rock solid set of core values that never change is required. Ask what do we stand for and what do we have
that should never change? When you give up your values, you lose your soul, and when you lose your soul,
you lose it all. White shirts are not a core value, but a cultural choice.

Level 5 leaders spend less time in being interesting than in being interested.

Frances Hesselbein is a Level 5 leader. When she became CEO of the Girl Scouts of the U.S.A., she inherited
eight years of declining membership. The way it had traditionally done – and emphasis on preparing girls for
marriage and homemaking – was outdated. Where was the merit badge for dealing with testosterone-driven
boys? They had to retain the core values, but change the practices. Frances won the Presidential Medal of
Freedom for her leadership.
The signature of a Level 5 leaders is what happens to the organization after you leave. At the Girl Scouts
post-Hesselbein, membership continued to rise and along with it, the number of volunteers.

From the Interview With Hesselbein

I did not make the Girl Scouts relevant, we did. It happens on the ground in the neighborhoods where the
people are. Bigness inspires no one. We helped each girl reach her own highest potential.

We looked at the people in boxes in our organizational chart and said no more top, no more bottom. We
threw out the language of the old hierarchy and released the spirit and the energy of the organization. The
new language was the language of inclusiveness. The power of the mission was in our shared values and
shared language. We didn’t give orders. It was “our” work. Everyone was involved in the decisions that
affected them.

When your organization is asked to do good things that are not right, you keep your eye on the mission and
say thank you very much.

Leadership is a matter of how to be, not how to do. The quality of the character of the leaders determines
the results.

I always asked myself when it was time for me to leave. I told the Girl Scouts a year in advance that I would
be leaving. It was a model of transition. The last year was the most exuberant of my 13 years with the
organization. The landscape is littered with leaders who didn’t know how to leave. Too many stayed too long.

The secret to my passion is that I get my energy from the people I work with. It pushes me forward. We’re
all learners together.