Are you an effective leader?

Become a Level 5 Leader and catapult your organisation from good to great!

Jim Collins conducted a 5-year research study into what makes a good company great, where other businesses have struggled.

Of 1,435 companies that appeared on the Fortune 500 list in Collins’s initial candidate list, only 11 made the very tough cut in his study.

His findings can be found in his article from the Harvard Business Review “Level 5 Leadership: The Triumph of Humility and Fierce Resolve.”

There was one factor that really stood out.

The most successful organisations all had a Level 5 leadership in key positions, including the CEO, at the pivotal time of transition.

And this one factor did not change whether the company was consumer or industrial, offered services or products or was in crisis or stable state.

It didn’t matter when the transition of a CEO took place or how big the company.

What is a Level 5 Leader, You Ask?

Level 5 leaders have a unique combination of personal humility and professional will.

Humility being key.

They don’t have an extreme personality. They are not egocentric chiefs.

Typical traits of a Level 5 leader include:

• They are inherently humble, often giving credit – even undue credit – to factors outside themselves.
• If they can’t find a specific person or event to give credit to, they credit good luck.
• Level 5 leaders take personal responsibility when things go poorly, never citing bad luck or external factors.
• Often described as timid, ferocious, modest, shy, wilful and fearless; this rare combination of personality traits seems to be the key factor in what propels companies from mediocrity to excellence – and sustains that excellence, even after a new successor.
• When it comes to Level 5 leaders, it’s all about wanting their team members to endure past themselves.
• They are exceedingly humble and want the business to thrive past their own time in the organisation to build an enduring, great company.
• They step back and tap into the genius of others. They get people to think for themselves and find every opportunity to not interfere.
• They have a knack for getting people to be great in their own right.

Conversely, the comparison executives in Collins’ study frequently looked elsewhere for factors to blame but were always quick to credit themselves when things went well.

Turning Leadership on Its Head

This concept ought to change the way we think about leadership.

No business will make the good-to-great transformation (and sustain that change) without Level 5 leaders at the helm. They just don’t.

Often, Boards of Directors make decisions under the false belief that a larger-than-life, egocentric leader is essential to make a company great.

You can quickly see why Level 5 leaders rarely feature at the top of our organisations.

Is it Possible to Transition to a Level 5 Leader if You are Not Already One?

Jim Collins hypotheses that Level 5 qualities are more a result of inherent personality traits and life environment/events than any conscious choice or training.

His hypothesis is that there are two categories of people:

• Those who don’t have the Level 5 seed within them; and
• Those who do.

The first category consists of people who could never in a million years bring themselves to forego their own needs to the greater ambition of something larger and more lasting than themselves.

For those people, work will always be first and foremost about what they get out of it personally (the fame, fortune, power, adulation, etc). It will never be about what they build, create and contribute. Therefore, it’s highly unlikely that this type of person would achieve Level 5 leadership status.

The second category consists of people who could evolve to Level 5. The capability resides within them, although perhaps just buried, ignored or barely emerging. Under the right circumstances – with self-reflection, a mentor, loving parents, a significant life experience, or other factors – the seed can begin to develop.

Kevin Lawrence and Brad Giles – 2 of my remote mentors – are a bit more optimistic on the question of whether we can learn to be a Level 5 leader.

In their podcast “How Do you Become a Level 5 Leader” they discuss how to go from being “a genius with 1,000 helpers (the antithesis to true leadership, but is in itself a form of leadership)” to a true Level 5 leader:

• Start with unlearning the forces that got you to where you are now.
• Develop a sense of humility. It takes a lot of humility and confidence to have outstanding people around you.
• If you’re doing the right thing for an organisation, your people should be able to take your job.
• Never think you are the smartest person in the room. Surround yourself with people you think are smarter and more capable than you. Tap into their genius. Be humbled by working with them.
• The other key is to “start making people accountable. It sits on their shoulders and it’s their job to figure it out, only coming to you if they need help. That’s how you build leaders,” says Kevin Lawrence.

Even how you speak about others is key:

• Level 5 leaders tend to focus on “you”, whilst Level 4 leaders tend to focus on “me.”
• For example, a Level 5 leader will brag about how insanely good someone is that they work with and how that person made stuff happen all on their own, with little to no involvement by them.
• A Level 4 leader will often talk about people more tactically – as in, how good a person is that they work with, but only because they help and guide them.

Would you like to do a free Discovery Meeting to go through a Level 5 Leader diagnostic tool for your organisation?

If so, book a session here. Or, feel free to email us at jonathan@scaleupgrowth.co or call +61 (0) 408 748 980.

I hope you have enjoyed these insights. Have a great week and stay growth-focused!

Cheers,
Jonathan