Leadership to the 5th Power

What do you think: can you study to be a leader? Or is it something else? You might have seen leaders and ‘leaders.’ Certainly, great leaders need skills that can be obtained and learned. But a truly great leader needs something else that is not easily defined. We had a rare opportunity to interview Jim Collins, the creator of Level 5 Leadership, to dig deeper into the issue.

Climb All Levels

You might have heard of Level 5 Leadership. Jim Collins is the father and founder of the concept, starting his research as early as 1996. From all the 1,435 companies he looked at, he chose 11 really great ones. Collins stated that those companies were led by level 5 leaders. In his model, levels 1 and 2 are considered as employee levels, level 3 as mid-management and levels 4 and 5 as leader levels. Collins says that to be able to step up to level 5, you need all 4. If we look at some of the successful businessmen in the near history, we can see that many of them have climbed all five levels. Let’s take former Nordic Business Forum keynote speakers Sir Richard Branson and Jack Welch as examples. They started as highly capable individuals, became contributing team members, later competent managers, then effective leaders – and, finally, in my opinion, great leaders. Both have had a significant impact in management models which are utilized around the world.

Humility Pays Off

Over the past 15 years Collins has learned to understand his findings and Level 5 Leadership better. “My competence has increased, as well as my understanding,” he says and continues: “Even if you are the originator of an idea, your understanding of it will mature, evolve and deepen over time.” So, if you come up with a new idea, let it simmer long enough. Collins says that the main finding during his 15 years of working on Level 5 Leadership is that Level 5 Leaders lead with spirit of service to a cause that is much bigger, more enduring and more important than they are as persons. So, they make themselves less important than the cause by developing great and real humility. For example, Apple’s Steve Jobs created a cause and didn’t want to make a big deal out of himself. As we know, the cause is very much alive unlike Jobs – may he rest in peace. Being a humble leader does not mean lack of confidence but channeling one’s ambition and drive outward for the benefit of a company. Collins specifically points out the fact that Level 5 Leaders are so committed to pursuing the cause that they are willing to endure tremendous pain and suffering for it. To build a great company requires a lot of it, for sure. How many of us would be ready to throw ourselves in?

Choose a Meaningful Life

Now we know that the way to the top of Collins’ leadership pyramid might be very long, taxing and painful. So, he gives us the flip side of the journey. A pursuit of happiness is perhaps less sustaining than the pursuit of meaning. Having a quest or a company where you also really have to put yourself in service, might extract a lot from you and be a burden. The flip side is that it gives your life a real meaning. He says: “If you had to choose between a meaningful life and a happy life, it would be better to have a meaningful life.”

What Separates a 4 from a 5?

How do Level 4 Leaders differ from Level 5 Leaders? After all, it’s just one step away. At this stage Collins calls the lower four levels as skills – which is very descriptive – and says that you would need all of those skills. He says both Level 4 and Level 5 Leaders can be effective and very good at inspiring people to follow. In the concept of following, only one word makes a huge difference between these two levels. Level 4 Leaders are very good at inspiring people to follow them, where Level 5 Leaders are very good at inspiring people to follow a cause. From the mouths of those leaders, we would either hear “Hey, follow me!” or “Hey, I might not even be here at some point but you are skilled enough to follow and pursue the cause and what we are trying to do.” Enough said? Not yet. There’s more than just the humility and the will. The ‘5ers’, as Collins calls them, are extremely disciplined and fanatic about their pursuit. As a result, the 5ers are incredibly willful. At this point of the interview I got shivers down my spine when Collins nearly sounded like a preacher, quoting a 5er: “I will do whatever, and I mean whatever, no matter how hard, how extreme, how intense, how long it takes, whatever it takes to make good on that cause.” Lowering his voice back to normal level, Collins concludes: “That willfulness, that discipline, that fanaticism, is really a part of the differentiating of the level 5.”

How Do You Become a 5er?

When asked what it takes to become a Level 5 Leader, Collins took me by surprise when he said that he can’t really tell. What?! Ok, he let me off the hook by saying that he is more of an observer and a thinker, and can’t speak from having done it. At this point I realize I have been interviewing many Level 4 Leaders. They tend to immediately give advice on ‘how to,” although they have no practical experience. Collins showed his humility, so in my eyes he is a 5er – despite his own opinion. One of the things I notice at this time is that Collins is not talking about absolute truths when he is answering. He often starts with “I think…” so from that perspective, he is an observer and a thinker.

What does it then take to become a 5er? We already know the difference, now we need the means. Collins starts by saying that you should find something that you are so passionate about that it almost brings the level 5 out of you. In practice,for example, it’s the company you are building, the way that you are trying to impact the world or the movement that you are trying to create. It will lead to the point where you say: “In order to accomplish this, I have to grow and become a better leader.” When people ask Collins how they can grow, the answer is simple: do really big, hard things.

Do really big, hard things. Leadership alone is not enough to make you the best in the world. You need the right people, the culture and discipline as well.

If you throw yourself on a difficult path, the path will make you grow. He tells a short anecdote about Bill Allen, who ran a small law firm in Seattle, Washington, and sat in the board of Boeing as corporate counsel. When Boeing’s president Philip G. Johnson suddenly died in 1944, Allen was nominated as the CEO. Although he was not trained to be a CEO, he had a tremendous sense of responsibility for Boeing. At the time Boeing did not make any commercial airplanes, so Allen came up with the idea of turning military airplanes to commercial ones. In order to get that done and save the company, Allen had to grow very quickly. As Boeing’s mission was to bring the world into a jet age, they were on a difficult path, doing very big, very hard things which forced both the company and Allen to grow.

What Differentiates a Good Company from a Great One?

During his research Collins compared companies that were ‘twins’. Companies that basically were similar to each other in terms of their products, their size, their opportunities, their position, their customers, and the methodologies they had. Now, how and why was the other twin doing so much better than the other one? In the comparison, Collins found companies that had made an inflection from good performance – or even worse – to outstanding performance that lasted for 15 years. The other comparison companies who had the same grounds were not performing that well. Why?

It appeared that there was no question that the leaders played a significant role in the companies under research. One of the big findings was that the companies during the inflection had Level 5 Leaders, where the comparison companies had Level 4 Leaders. Surprisingly, during the research Collins was not looking for the answer nor wanting to find it. He was not interested in leadership. The focus at that time was on the companies and stock return patterns, not people. So, the Level 5 Leadership just ‘bubbled up’ during the research, as Collins said. And hasn’t this bubbled-up-finding changed the way of management or what?

Can Leadership Alone Heal an Ailing Company?

Every company has its bad times. For some companies it means they have to sack their business. Some companies struggle and barely survive. Some companies recover quickly and start or keep on growing. So, can leadership heal an ailing company? This question was one of the key reasons Collins and his team did the ‘Good to Great’ study. A few years prior to that, Collins had published ‘Built to Last’, where they studied companies that had had a great start and been great ever since. “Walt Disney had Walt Disney and Wal-Mart had Sam Walton. For our study ‘Built to Last’ was useless because it didn’t tell us what if you were not great,” says Collins.

In conclusion: having a Level 5 Leader is necessary, but not sufficient. You need the right people, the culture and the discipline as well. Leadership alone is not enough to make you the best in the world. But here’s an interesting catch: Level 5 Leaders know they can’t do it alone. They would say “No, I am a piece of this equation.” Does it then mean that Level 4 Leaders think they can? If you ask me, I’d say yes.

This article appeared on the August 2014 issue of Nordic Business Report. Read the full magazine here »