Level Five Leadership: The Key to Long-Term Success in Business
In today’s fast-paced business world, it can be easy to overlook the foundational principles that truly drive long-term success. One concept that has remained relevant for decades is Level Five Leadership, a term coined by Jim Collins in his groundbreaking book Good to Great. After conducting a thorough, 15-year research study on companies that made the leap from good to great, Collins identified a unique style of leadership that consistently led these companies to outstanding and sustainable success.
But what does Level Five Leadership actually look like? And how can you apply it to your own life and business?
Understanding Level Five Leadership
At its core, Level Five Leadership is defined by two key traits: humility and fierce resolve. These leaders are not flashy or outwardly charismatic; instead, they exhibit a quiet, relentless drive for excellence and an unshakable focus on the long-term success of the company.
Jim Collins and his research team studied over 1,400 companies in the Fortune 500, looking for those that had made exceptional, sustained progress over 15 years. Out of these, only 11 companies qualified as “great,” based on their long-term performance. What set these companies apart wasn’t just strategy or market conditions—it was the leadership at the helm.
The highest correlation to success in these companies was Level Five Leadership.
But what makes Level Five Leaders stand out?
The Five Levels of Leadership
To better understand what Level Five leadership looks like in practice, let’s break down Collins’ five levels of leadership:
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Highly Capable Individual – At this level, the leader is an individual contributor who excels at producing excellent work. They’re skilled and able to make meaningful contributions.
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Contributing Team Member – These individuals can work well within a team, helping the group achieve results. They play a key role in group success.
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Competent Manager – At this level, the leader is able to organize people and resources effectively to achieve the organization’s goals.
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Effective Leader – This leader is able to rally a team around a compelling vision and set high standards to achieve it. They inspire others to work towards a common goal with enthusiasm and energy.
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Level Five Executive – The ultimate level of leadership, where individuals combine personal humility with professional will. They create lasting greatness for their organizations through a blend of quiet determination and an unyielding drive to achieve long-term goals.
The Power of Humility and Resolve
In Level Five leadership, humility is perhaps the most striking characteristic. These leaders focus on the success of their company, not their own personal recognition. They don’t boast about their achievements; instead, they demonstrate a quiet, calm determination. Their ambition is channeled into making their organization great, not into building their personal legacy.
On the flip side, Level Five leaders also demonstrate fierce resolve—an unwavering commitment to doing whatever it takes to achieve the best long-term results for their company. They don’t give up in the face of adversity, and they always strive for the highest standards, no matter the obstacles.
Real-World Examples of Level Five Leadership
You may recognize some well-known names when it comes to leadership, but the most striking examples of Level Five Leadership come from lesser-known individuals who led their companies to extraordinary heights.
1. Lee Iacocca (Chrysler)
Many people know the name Lee Iacocca, particularly for his role in Chrysler’s remarkable turnaround in the 1980s. In the first half of his leadership, he led the company to great success. However, in the second half of his tenure, his leadership began to decline as he became more focused on personal fame and accolades. He made multiple public appearances, wrote a bestselling autobiography, and became a media star. Unfortunately, this shift in focus led to a decline in Chrysler’s stock, which dropped by 31%. Iacocca’s story serves as a cautionary tale of what happens when a leader loses sight of the company’s needs in favor of personal gain.
2. Darwin Smith (Kimberly-Clark)
On the other hand, Darwin Smith, CEO of Kimberly-Clark, exemplified the traits of a Level Five leader. A humble and introverted accountant, Smith led the company for 20 years, achieving a return on investment that was 4.1 times higher than the market. He made bold, controversial decisions, such as selling off the company’s profitable paper mills to invest in consumer products like Huggies and Kleenex. His unflinching will to transform Kimberly-Clark into a leader in the consumer paper product industry was driven by a focus on long-term success, not immediate rewards.
3. George Kane (Abbott Laboratories)
Another example of a Level Five leader is George Kane, who served as CEO of Abbott Laboratories for 14 years. Under his leadership, Abbott outperformed industry giants like Merck and Pfizer, achieving a 4.5-to-1 return higher than the general stock market. Kane was known for his intolerance of mediocrity. He demanded excellence from his team and made difficult decisions—such as firing family members—if they couldn’t meet his high standards. Despite his no-nonsense approach, Kane was also respected for his quiet, humble leadership style.
Key Behaviors of Level Five Leadership
So, what can we learn from these leaders? Here are some key behaviors and characteristics that define Level Five leadership in today’s world:
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Listen to Understand: Rather than feeling the need to be the loudest voice in the room, a Level Five leader listens first. They seek to understand before seeking to be understood—a concept popularized by Stephen Covey in The 7 Habits of Highly Effective People.
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Hire Smarter People: Level Five leaders recognize they don’t have to be the smartest person in the room. They hire people who are more capable than they are, and they encourage them to take ownership and lead.
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Graciously Give Praise: Great leaders don’t withhold praise out of fear that their team members might ask for more recognition. They offer specific, genuine praise that encourages others to do their best work.
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Respectful Termination: When someone no longer fits within the company’s vision or culture, a Level Five leader addresses it with respect. They make the tough decisions to part ways without dragging the individual or company down.
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Take Responsibility: Great leaders accept responsibility for both successes and failures. They don’t blame external factors like the economy or market conditions. Instead, they look in the mirror and hold themselves accountable.
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Apologize When Necessary: Level Five leaders are humble enough to admit their mistakes. They apologize when necessary, showing vulnerability and fostering a culture of openness and trust.
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Speak Well of People, Even When They Aren’t Around: A Level Five leader speaks highly of their people, even when they are not present. This builds trust and respect, contributing to a positive and supportive company culture.
Conclusion: Applying Level Five Leadership Today
While Jim Collins’ research is decades old, the principles of Level Five leadership continue to hold true today. Whether you’re leading a startup or managing a large corporation, adopting these traits of humility and fierce resolve can help you build an organization that thrives in the long term.
In our fast-moving world, it’s easy to focus on short-term success and individual accolades. However, the true hallmark of great leadership is the ability to inspire and sustain greatness in others. By practicing personal humility and professional will, you can transform your business and achieve lasting success—just like the leaders of the companies studied by Collins.
Remember, it’s not about being the loudest or most visible leader in the room—it’s about having the courage to make the tough decisions, the resolve to stay the course, and the humility to put the needs of the organization before your own.
If you want to elevate your leadership to the next level, consider how you can apply these principles in your own life. Whether in business or personal development, Level Five Leadership offers a timeless path to true greatness.