Knowledge & Insight

Are you a level 5 leader?

Wed 2 January 2013

Step into any high street book shop and you’ll find the "management" section filled with volumes offering insights that range from "interesting" to "useful", and even occasionally "invaluable". But few management books have stood the test of time as well as Jim Collins’ "Good to Great: Why Some Companies Make the Leap... and Others Don't."

Published in 2001 this authoritative tome was the result of a five-year research project that sought to identify the factors that drive “good” companies to become “great” companies. Collins based his analysis and conclusions on hard data, intentionally excluding all sentiment about “iconic brands” or “visionary products”. For Collins, success was all about the numbers, and his definition of a “great company” was one with key financial indicators several times the market norm. Using the US Fortune 500 as his research environment, the short list of 11 corporations that earned the accolade “great” included stand-out successes like Gillette and Kimberly-Clark.

Of all the different contributory factors that Collins investigated, he came to a very simple yet compelling conclusion that every “great” company possessed a common asset - they all had what he described as a “level 5 leader”. On the face of it, that’s perhaps not too surprising - “great companies have great leaders” might seem a fairly obvious statement to make. But what makes Collins’ conclusions really interesting is the characteristics exhibited by these “level-5” leaders, because they don’t look or behave as one might imagine.

Collins describes level-5 leaders as blending “extreme personal humility with intense professional will,” and this is very different from the dashing and dynamic leaders most of us would picture if we tried to envisage the CEO of a typical global corporation. Yet Collins’ analysis explores these leaders’ characteristics in great detail and reveals some fascinating insights. He says level-5 leaders:

  • Are humble and self-effacing
  • Display an “unwavering resolve” and “workmanlike diligence” in achieving objectives
  • Recruit good people and have the confidence to delegate
  • Are willing to take responsibility for failure, and are happy to give credit to others

The picture Collins paints is very different from the bold entrepreneur-type leader, and this is a key point because entrepreneurs often struggle to delegate. Yet in large and complex organisations, effective delegation is a key asset for a successful leader. Delegation also requires an innate self-assurance, a genuine confidence in one’s own abilities, and a reluctance to delegate can often be a sign of insecurity. A willingness to delegate demonstrates that you are confident in your choice of executives and senior managers, and that you are comfortable for others to be seen to be successful in delivering results (even if you have engineered the strategy that facilitates it).

Evolving into a level 5 leader

Collins believed that the self-confidence so evident in level-5 leaders was generally developed in childhood. However, there is a growing body of evidence to demonstrate that this robust self-confidence can also be nurtured through positive action. So, if you’re an entrepreneurial type leader who relies on charisma and strength of personality to motivate and manage, then you have to make a conscious effort to step back from the limelight, to reflect, and to apply some of that “workmanlike diligence” instead of making decisions based on instinct.

You shouldn’t try to change the person you are, but by learning to modify your behaviour you can add another dimension to your leadership style. This can be achieved through executive coaching or even simple reflection and self-analysis. Everyone has weaknesses, and by identifying yours you can effectively delegate responsibilities to those members of your executive team who are strong in these areas. This kind of behaviour demonstrates great personal strength and can deliver significant benefits in terms of organisational performance. It can also help motivate your senior people and help you get the best out of them by recognising their strengths and utilising them to the full.

Effective delegation, together with the sharing of success and a willingness to accept responsibility are all key steps towards building an effective executive team, one that recognises and utilises each team members’ talent to the full. This is the essence of what Jim Collins identified in his level-5 leaders. And with this insight, it’s easy to see why these “humble and self-effacing” individuals have been so successful in taking their companies from good to great.

UK companies looking to appoint level 5 leaders

At Stone Executive we’re increasingly finding that the characteristics Collins describes in his level-5 leaders are precisely those qualities sought by boards of directors recruiting CEO’s and senior staff. So it’s clear that a growing number of UK companies share Collins’ view on what makes an effective leader.

We have seen a distinct shift in the attributes our client companies seek when recruiting senior executives. There is less demand for charismatic leaders with essential technical competencies, and a growing appetite for individuals with the discipline and determination to see their plans through to fruition. Employers increasingly want leaders who can break down complex challenges into manageable components that can be addressed and systematically overcome.

More than 10 years after Collins’ seminal book was first published, its findings are as relevant as ever, and today his insights are being utilised by a growing number of UK companies as their boards seek to replicate the performance of Fortune 500 high-flyers.

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