Jim Collins argues that leaders that combine extreme personal humility with intense professional will, that shun the attention of celebrity, are the ones that make good companies great.
The companies reviewed in this book had to meet the following good-to-great benchmark:
They had to have experienced 15-year cumulative stock returns that were at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years.Each company was then compared to other similar companies that either never made the good-to-great leap (or made it but did not sustain it), in order to determine what distinguished the good-to-great company from all others.
Level 5 Leadership
What the research found was that the leaders who had turned good companies into great companies had what Collins termed level 5 leadership. They had the following characteristics:
They set up successors for success. Many leaders fail to set their companies up for success when they depart, or pick a weak leader to replace them at the helm — after all, what better testament to your own personal greatness than that the place falls apart after you leave? Level 5 leaders like Fannie Mae’s former CEO, David Maxwell, make sure those who follow them are poised to continue a successful path, or to exceed the expectations that arise as a result of that success.
They are compellingly modest. In contrast to the very I-centric style of some other leaders, Level 5 leaders do not typically talk about themselves, preferring to direct attention to other individuals, or to the results of the company as a whole. They don’t aspire to be larger-than-life heroes, or to be placed on a pedestal. They are seemingly ordinary people quietly producing extraordinary results.
They have unwavering resolve. Level 5 leaders do not simply exude modesty or humility; they also have a ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.