Collins revolutionized the world of management thinking with his
and Jerry Porras’ influential 1994 book Built
to Last—on the success factors of enduring, visionary companies.
His newest book, Good
to Great: Why Some Companies Make the Leap... And Others Don’t
(Harper Collins, 2001) was a five year effort to respond to a challenge
from one of my former McKinsey colleagues who asked, “If you’re
not an enduring, visionary company, but want to become one, how
do you do it?”
Good to Great, Collins and his research team
describe a pattern of market winners who “made the leap,” reflecting
a special combination of discipline and focus in people, thought,
and action. The analysis and discussion are elegant and very compelling,
and the book is certain to become another business bestseller. Its
framework also includes a particular perspective on a determinate
form of leadership, which Collins labels as the fifth level above
the normal progression that successful leaders pass through. Called
Level 5 leadership, it characterizes the handful of companies that
have truly gone from good to great, at least as measured by extraordinary
and sustained return to shareholders. According to Collins, Level
5 leadership goes beyond the normal “cover of Fortune
magazine” paragon of vision and performance management. It represents
a further, almost spiritual achievement of “building greatness through
a paradoxical blend of personal humility plus professional will.”
Think Abraham Lincoln more than George Patton.
are honored to have had a conversation with Jim Collins for this
issue of Learning in the New Economy Magazine, given our theme of
leader learning and the important—if somewhat counterintuitive—advance
of his newest research. We believe people will be talking about
Level 5 leadership for a long time. Anyone thinking about learning
and leadership development must factor Jim Collin’s research into
their own plans and programs.
this discussion, which all-too-poignantly occurred in Jim Collins’
new office—situated in a rehabilitated building, once his own elementary
school in Boulder, Colorado, we delved into multiple points and
follow-on ideas emerging from Good to Great. Some of our most exciting
exchanges were about Level 5 leadership and the fundamental question
of whether and how it can be taught. The excerpt that follows revisits
a key segment of the conversation, which occurred on a sunny afternoon
on Sept. 10, 2001.
Before we get into leadership per se, let’s talk a little
about the kind of people one generally needs in an organization,
and the implication for learning versus intrinsic qualities. One
strong implication of your work is that when you’re hiring, you
need to think more about character
than knowledge. By
your view, knowledge can be taught, character can’t. Am I right?
It’s a little more complicated than that. Since I’ve
finished the book, my thinking on this has evolved. I’ve been reflecting
a lot on, fundamentally, what it means to be the right person. The
more I think about it, the more I see a direct link between two
key concepts in our research: “The right people on the bus” and
“The culture of discipline.” Let me explain.
I have this
absolutely wonderful assistant named Vicky. She’s like my air traffic
controller; she’s much more than just an administrative assistant.
Air traffic control carries big responsibility; planes crash, people
die. It’s very different than putting in hours on tasks to do a
job. It implies taking on the fundamental responsibility to keep
the planes flying. What that means for Vicky is that her job is
not to follow the system; her job is to rebuild the systems as needed
so that planes don’t crash. I think that is an absolute cornerstone
element of what it really means to be “a right person on the bus.”
take two people applying for a job, both who have comparable knowledge
of how to do the job. One brings knowledge, and only knowledge,
and uses it to do his or her job. The second, however, fundamentally
sees that they also have the burden of responsibility, and, all
of a sudden, makes the relationship to knowledge fully dynamic.
The second person is hired for the responsibility and the burden
in fulfilling responsibility, which requires constant dynamic development
of knowledge and systems. You build systems so that things work.
That gets to the issue of character.
We know from
Built to Last that
character means a fit with the basic values of the institution.
That’s very important. But the values vary from company to company.
So are there any universal dimensions of character? In this work,
we found that a universal dimension of character—or what it means
to be the right person—is this very deep distinction between having
a job and holding a responsibility. That has vast implications for
everything that one might do in an organization.
So in terms of making the leap from good to great, or
indeed growing from Level 4 to Level 5, can leadership capability
Not for everybody. I believe some people absolutely cannot
become Level 5 leaders. Some can. Bill Gates may be an example of
someone who has grown through learning. As his sense of responsibility
and his role have grown with the power and stature of the company,
his own position in that hierarchy has also grown—to a bigger burden
of responsibility (versus just the vision of leadership).
I see two things
more clearly about Level 5 since finishing the book. First, there
are a lot of Level 5s out there. You begin to realize how many really
effective and successful organizations have Level 5s as a cornerstone.
I think that one of the reasons our society works as well as it
does is that we’ve have Level 5s throughout the infrastructure and
all over the place.
the second thing is similar to Aristotle’s notion of excellence
being something that you grow into through an active disciplined
habit. The way you grow into Level 5 is with a series of very concrete
practical decisions you make at important juncture points along
your professional journey.
My wife is
a cross-country running coach, and I watch her wrestle with Level
5 decisions. A case in point—a student might have done something
embarrassing to the team, but happens also to be one of the top
varsity runners. As the coach, she is always concerned about how
well the kids run and what their scores are going to be. But ambition
and responsibility to the overall program and its stature mean that
she may have to throw that kid off the team. That decision is one
of those juncture points.
So it’s on-the-job learning, and being aware of the junctures—and
also learning from what might be the mistakes? Being self-aware
and self-reflective. What are some of the main stumbling blocks
that prevent people from becoming Level 5?
That’s an interesting question. Most people fixate on
the humility implied in this leadership model because it’s so unusual
relative to our current culture. But the “will” dimension of the
Level 5 is equally astounding. These people display such a strong
will on behalf of their institutions, saying, “I will fire my brother
if that’s what it takes for the company” or “I will sell the mills
my grandfather built if that will make us successful.” They have
an almost stoic resolve—a very special trait. So I believe that
what holds a lot of people back from Level 5, ironically enough,
is not the “humility” piece, but the “will.”
At the core
is the central question of whether your ambition first and foremost
is for yourself and your ego, or whether your ambition is for the
work or company (or whatever you happen to have responsibility for).
On the way to Level 5, you face many junctures. At one fork is a
decision that reflects more ambition for self and ego, and at the
other, there may be a decision that is more ambition for the company
or the work. Level 5 is reaching those junctures and knowing the
right decision on behalf of the institution and
having the will to execute without blinking.
I think Level
5 people get a lot of practice in those decisions. When they confront
that fork in the road the first ten times, they make the wrong choice.
But maybe the next ten times, they make the right choice—say four
out of ten times. After that, it’s maybe five out of ten. These
are hard choices. Experience helps.
If your data is right and Level 5 produces more “built
to last” companies than not, then the leadership imperative is for
everyone to try to get to the top of the pyramid [Level 5 in the
leadership model]. Do you believe that the best organizations in
the world would have all Level 5s? And, is this a leadership model
for everybody in an organization, not just the executive suite?
Does the Level 5 imperative go up and down the hierarchy and belong
in every person’s professional development plan?
I don’t mean to oversell the Level 5 idea—I really want
to teach it. Given what I understand, I can’t imagine that an organization
would not produce better results if you had more Level 5s throughout
all standard responsibilities.
mean that Level 1s, 2s, 3s and 4s can’t produce results—of course
they can. But Level 5s produce the best and longest lasting results.
At almost any span of responsibility, there’s the potential to become
more Level 5-like in ways that produce better results. In any span
of responsibility, you do have a fundamental question of required
results. So, would you produce better for any leadership role with
a Level 5? I think yes.
If you want to build an army of Level 5 people across
your organization, how would you do that?
I’ll have to answer that from the standpoint of who’s
the “who” we’re talking about. The answers for a CEO would be different
than for the head of HR or the head of, say, executive development.
I would answer differently depending on the position in question.
If I were a
CEO or general manager of a division with top executive responsibilities,
I would systematically purge out of the system people around me
who could not be Level 5 and operate in a Level 5 way.
Get the “wrong ones off the bus”?
Absolutely. What happens then is Level 5s tend to attract
other Level 5s. In good to great companies we’ve noticed that executive
teams headed by a Level 5 tend to become self-reinforcing. Being
conscious about the right people on the bus was like a magnet to
attract others. As teams acquired more level 5 capability, a kind
of cascading effect encouraged other teams below them to also attract
more level 5 leadership.
Should companies use psychological testing to identify
No, I would do it more on observation of managers on
the job—how they handled their “forks in the road” decision points.
I think it’s more like what the Supreme Court Justice [Potter Stewart]
said about pornography: “I can’t define it, but I know it when I
see it.” I think that’s especially true when you see what is decidedly
not Level 5. You have to be very careful about having people around
who are decidedly not capable of being Level 5. They are ultimately
destructive to creating a Level 5 environment.
But you have to make the distinction between, “Not there
yet, but could be” versus “Never going to get there.” You also suggest
that part of the virtue of Level 5 leaders is that they tend to
cut people enough slack to really understand them. They don’t just
rush in and fire half the people when they take on a new assignment.
That’s right. There’s no evidence that Level 5s rush
to judgment in determining members of teams around them. But there
is evidence that once they have made a judgment, they are swift
in their decisions and their actions. That may sound obvious, but
it’s really quite rare.
The other thing that’s needed to build this kind of leadership is
to educate people, even the CEO, about what is Level 5. I would
mainly try to accomplish that through role modeling by the right
people on the executive team; but I also think there’s value in
educating members of the team on what the model is and why it matters.
So simply educating leaders in the model can add value?
I think it really does. We learn by stories and role
models, and we need models to operate with. If all that the regular
business press gives us is Lee Iacocca and Jack Welch, we have to
combat that with a different model. So I think it’s important to
give people the stories of Darwin Smith [CEO, Kimberly-Clark] and
David Maxwell [CEO, Fannie Mae]—these heroes who would not make
I listened to a course recently on ancient Greek civilization and
the role of the Iliad and the
Odyssey. The story of the mythic hero was the culturally
shaping force that defined the essence of their civilization for
ancient Greeks. We need to do the same thing with our modern business
leaders. We need to give people a different Iliad, a different Odyssey,
where leaders like Smith and Maxwell become the emblems of success.
Okay, but say I’m a Vice President of Human Resources
or Vice President of Executive Development. I read Good to Great, and so did my CEO; and suddenly
she’s clamoring for more of these Level 5 people. I can imagine
the CEO saying, “We’ve got 6,000 people who need to be Level 5 by
Thursday.” How do you handle the demand?
It’s not going to be done instantly, of course, but here’s
how to get started. I would follow a two-pronged strategy.
people, both up and down the organization, what is Level 5. When
people understand things, it’s enormously helpful.
Second, focus on the company’s selection process, particularly on
who gets what kinds of seats on the bus. That’s really more important
that any training process. I wouldn’t look at it as, “I have a set
of managers and I’m going to turn them into Level 5 leaders.” I’d
turn it around and say, “We have positions of responsibility. Who
are the people who have the greatest capacity to potentially be
Level 5s? And, who are the people who don’t
have the capacity for Level 5?” I would make my job helping to determine
who gets to hold what seats on the bus, rather than trying to transform
every bus member and seat holder into a Level 5.
So, at the end of the day, is it much more about getting
the right people and then giving them the right positions of responsibility?
In the same spirit, would you want to keep moving people around
in the organization, giving them different responsibilities—help
to find the right fit, and also expose them, as you say, to lots
of critical decision junctures?
That’s right. I think putting people in the right managerial
seats is a function of 1) do they have the capacity to be Level
5s or should they hold any seat at all? And 2) does it align with
their own personal objectives—fit the three circles of competence,
passion, and economic requirements?
This means getting very clear about results and linking
them directly to self-awareness.
Absolutely. In building Level 5 leadership, another thing
I would do is to push hard not to evaluate managerial success until
the results are in. Fundamentally, the question for a leader ought
not to be, “Did you simply deliver results when you were there?”
but also, “Did results continue to improve after you left, and did
you succeed at correctly determining and building the successors
in the key areas of responsibility?”
Or, to use language from your model, did you bring in
leaders to help make the flywheel go even faster?
Level 5 leadership is a seductive concept. Do you think
it may be abused?
Oh yes. That worries me a lot. Ever since Built to Last came out, I am constantly asked
about how to get values into an organization: “We want to be ‘Built
to Last’, but we need some values.”
You know what?
I can’t give you values. If you don’t have values then I’m sorry,
we don’t have anything to talk about. These kinds of questions just
make it programmatic. It becomes worse than not knowing the model
at all. In the same way, I would resist coming up with training
programs and diagnoses for Level 5. There may be a lot of interest
coming in for these kinds of things, more than we can probably handle—from
people who want access to this material as if reading it would be
like taking some simple pill. I fear that people may actually damage
it through oversimplification.
So it’s not going to be a simple training program in
your view. It’s more that the organization itself has to become
the learning program. In other words, you have to think about the
whole organization and it has to do with the people at the top,
the culture, the values, and the discipline that you’re talking
about. Those are not easily grafted on through a training program.
I suppose some of it also comes from communicating important
cultural signals, such as changing the metrics for success in your
reward systems and the symbols of who gets promoted and why. But
that still will not be satisfying for those managers always looking
for the quick fix.
The number one thing is to make great people decisions
about who gets responsibility. I really think that is THE cornerstone
of Level 5.
I could argue that almost every innovation can be supported
by good tools. The tools challenge seems to me to be “How do we
make it better, easier, faster” to do what you just said? How do
we empower or enable managers and leaders to find the right people
and make the right people decisions?
How do we identify people who have Level 5 capacity within
our own organizations—those that are not Level 5 yet, but have Level
5 capacity? How do we help them grow in their specific responsibilities
and evolve toward Level 5 once they are in those responsibilities?
The key first question involves identification and selection. The
second involves development and training. What I see as the inverse
problem is, fundamentally, when you try to train the wrong people
into the right people.
That’s a disaster. If you want to actually help an organization,
people need to be enabled to better judge and see, coach, and develop
the Level 5 potentials. I would also suggest that it’s about empowering
individuals and enabling coaching, or giving the tools to individuals
to be more self-aware. Helping people get to that kind of awareness
should actually become part of leadership development.
My perhaps naïve, but very genuine hope for what will
happen with these ideas is that there will be a whole bunch of people
who basically say, “I’m just going to become Level 5 as best I can
in my responsibilities.” They may be the supplies manager at the
Army Depot in Lexington, Kentucky, or in any other basic role, but
they’re going to do everything they can to grow and develop the
people in their organization. Maybe they have some wrong people
on the bus that they’re going to get off, and they’re going to confront
the brutal fact that they need to make changes. They’re going to
find a way for their supply depot to prevail. They’re going to find
the simple things that they do really well, better than any other
supply depot, and compete on those capabilities. They’re going to
build and nurture their culture in line with our model. Good
to Great is a book that someone can take at any span
of responsibility and do something with—frankly, much more than
with Built to Last.
Any final piece of practical advice for would-be Level
Yes. Never take a managerial responsibility
where you do not have the power to decide the “who’s.” If you can
decide the “who’s on the bus,” then you can create a pocket of greatness
in your organization or your part of the organization. And if the
rest of your organization doesn’t become great, so be it. You’re
making the best contribution you can—and learning every day from
Jim, clearly there’s a lot of your own soul in this book,
which is one thing that makes it great. In closing, what about your
own laboratory? Do you feel you are trying to run it and your research
in a Level 5 way?
Yes, but without being Level 5 yet. Maybe someday I will
be. It’s very interesting that as these findings started to emerge,
the way we ran all the research teams began to change, to coincide
with what we were finding. We unconsciously evolved to fit our own
as the study went on, I dwelled much more on the “who” rather than
the “what” when I was making a hire. That was a big change for me,
and was totally driven by the research that I was learning from
in real time. And the way we run our research council now is very
much a “brutal facts prevail” model, just as you’ll find in the
We also apply
the three circles test [passion, unique competence, financial fit]
constantly to the way we make our decisions. For example, if somebody
asked me to do a teaching engagement, we would run it through the
three circle questions: 1) Would I be passionate about doing it
in a month? 2) Is there someone in the world who could do a better
job, or am I uniquely suited? 3) How does it fit with our economic
denominator, which is cash flow per day versus the opportunity cost
of being away from research and writing? Any invitation that fundamentally
fails the three circles test (except perhaps for scholarships and
non-profit work) we decline. We’re constantly refining our own discipline…
but believe me, it is not always easy.
* * *
Collins and I shook hands and went our separate ways, not knowing
the next day would truly set the world on a course that demanded
a new level of responsibility like never before. If you haven’t
done so already, get yourself a copy of Good
to Great. In these turbulent days, it will be well worth your
Collins has invested over a decade of research into learning and
teaching about enduring great companies. He has co-authored four
books, including the classic Built
to Last, and the recently released Good
to Great. His
work has been featured in Fortune,
The Economist, USA Today, Industry Week,
Inc., and Harvard Business Review. Visit him on the
Internet at http://www.jimcollins.com.
Manville is Publisher of LiNE Zine and Chief Learning Officer at
Saba. Contact him at email@example.com.
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