Level 5 Leadership

By Nisha Hariyani

• “You can accomplish anything in life, provided that you do not mind who gets the credit.”

• -Harry S. Truman

Outline

• Classification of leaders

• Level 4 Leadership

• Level 5 Leadership

• Characteristics of level 5 leaders

• Operating style of level 5 leaders

Opening Case Darwin Smith CEO of Kimberly ClarkSmith decided to sell the company’s mills and

enter the consumer paper products business. Media called it stupid and stock went down

Kimberly Clark was in competition with P&G and Scott paper.

He had only two options that is to become a great company, or to perish.

He invested heavily in building brands like Huggies & Kleenex tissues – which appeared suicidal.

• Kimberly Clark had beaten P&G and Scoot paper in 6 to 8 products under the leadership of Smith.

• It also out performed the market by ratio of 4:1

• Its performance was far better then great companies like HP, Coca cola and even GE

What makes a company Great ?

Leadership can take a company from “Good” to “Great”

Classification Of Leaders

Level 1: Effective Individual Contributor

Level 2: Effective Team Player

Level 3: Effective Manager

Level 4: Effective Leader

Level 5: LEVEL 5 EXECUTIVE

LEVEL 5 Vs. LEVEL 4

• Highly ambitious for the success of his company

• Eg: Sam Walton – level 5 leader – wall street. He wanted to prove that his company is bigger then himself

• Is often more bothered about his personal greatness than of the company’s greatness

• Eg: Lee Iacocca – level 4 leader – Chrysler. He did save company but was more interested in his own image then company

• “ I want to look from my porch, see the company as one of the great companies in the world someday, and be able to say, ‘i used to work there’ ”

– Attitude of level 5 leader

Level 5 Leadership

Characteristics of Level 5 Leaders

• Fierce Will– Creates superb results, a clear catalyst in the

transition from good to great

• Compelling Humility– Demonstrates a compelling modesty,

shunning public adulation; never boastful.

Fierce will

• Robert Aders of Kroger sums up this will:

– “there was a certain Churchillian character to what we were doing. We had a very strong will to live, the sense that we are Kroger, Kroger was here before and will be here long after we are gone, and by god we are going to win this thing. It will take us a hundred years, but we will persist for a hundred years, if that’s what it takes.”

Compelling Humility• Al Dunlap had to say

– Scott Story will go down in the annals of American business history as one of the most successful, quickest turnarounds ever. Not my story.

– Its no me its my people and my company was at the right place at right time.

– He always gave credits to others refusing to accept his crucial role in the transformation

Operating Style of Level 5 Leaders

Level 5Leadership

First Who…Then What

Confront theBrutal Facts

HedgehogConcept

Culture ofDiscipline

TechnologyAccelerators

Disciplined People Disciplined Thought Disciplined Action

BuildupBreakthrough

Good to Great

First Who . . . Then What

Leaders began the transformation by first getting the right people on the bus (and the wrong people off the bus).

Leaders began the transformation by first getting the right people on the bus (and the wrong people off the bus).

“Who” questions came before “what” decisions - before vision, strategy, organization structure, and tactics.

“Who” questions came before “what” decisions - before vision, strategy, organization structure, and tactics.

First Who . . . Then What

Three practical disciplines for being rigorous:When in doubt, don’t hireWhen you know you need to make a

people decision, act

Three practical disciplines for being rigorous:When in doubt, don’t hireWhen you know you need to make a

people decision, act

Put your best people on your best opportunities, not biggest problems

Put your best people on your best opportunities, not biggest problems

Leaders were rigorous, not ruthless in people decisions.

Leaders were rigorous, not ruthless in people decisions.

Confront the Brutal Facts

Must create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

Must create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

Setting off on the path to greatness requires confronting the brutal facts of current reality.

Setting off on the path to greatness requires confronting the brutal facts of current reality.

Confront the Brutal Facts

Lead with questions, not answers

Engage in dialogue and debate, not coercion

Learn from Mistakes: Conduct autopsies, without blame

Build red flag mechanisms where information cannot be ignored

Lead with questions, not answers

Engage in dialogue and debate, not coercion

Learn from Mistakes: Conduct autopsies, without blame

Build red flag mechanisms where information cannot be ignored

Four basic practices:Four basic practices:

Hedgehog ConceptHedgehogs see what is essential, and

ignore the rest.

What you are deeply passionate about

What you can be best in the world at

What drives your economic engine

What you are deeply passionate about

What you can be best in the world at

What drives your economic engine

If an organization is not the best in the world in its core business then it can not be a great company

Discipline Vs Freedom• Getting disciplined people who engage

in disciplined thought and who then take disciplined action

• George Cain, Abbott Laboratories adopted a system called “responsibility accounting”

• Cain recruited entrepreneurial

leaders and gave them enough

freedom to follow their own

idea to attain objectives.

Leaders have freedom but within the specified

boundaries

Adopting Technology

Yet they often become pioneers in the application of carefully selected technologies.

Yet they often become pioneers in the application of carefully selected technologies.

Does it fit directly with your Hedgehog Concept?

Good-to-greats used technology as an accelerator of momentum.

Does it fit directly with your Hedgehog Concept?

Good-to-greats used technology as an accelerator of momentum.

Good-to-greats avoid technology fads and bandwagons.

Good-to-greats avoid technology fads and bandwagons.

Can You Learn to Become Level 5?The problem is not with the

availability of Level 5 leaders. The problem is recognizing that what

they have is important.