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
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
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
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
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
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 themselves heroes.
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
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
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.”
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 it.
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 model.
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 book.
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 firstname.lastname@example.org.
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