Level 5 Leadership: The Triumph of Humility and Fierce Resolve
by Jim Collins
If there’s one management expert who is synonymous with the term “high-performance organization,” it is Jim Collins, who has spent the past 20 years trying to understand how some companies are able to sustain superlative performance.
It may seem surprising that of the seven factors Collins identified as essential to take a company from good to great, he chose to focus on leadership in this 2001 piece. However, even a casual rereading of the article will convince you that he was right to do so.
Collins argues that the key ingredient that allows a company to become great is having a Level 5 leader: an executive in whom genuine personal humility blends with intense professional will. To learn that such CEOs exist still comes as a pleasant shock. But while the idea may sound counterintuitive today, it was downright heretical when Collins first wrote about it—the corporate scandals in the United States hadn’t broken out, and almost everyone believed that CEOs should be charismatic, larger-than-life figures. Collins was the first to blow that belief out of the water.
In 1971, a seemingly ordinary man named Darwin E. Smith was named chief executive of Kimberly-Clark, a stodgy old paper company whose stock had fallen 36% behind the general market during the previous 20 years. Smith, the company’s mild-mannered in-house lawyer, wasn’t so sure the board had made the right choice—a feeling that was reinforced when a Kimberly-Clark director pulled him aside and reminded him that he lacked some of the qualifications for the position. But CEO he was, and CEO he remained for 20 years.
What a 20 years it was. In that period, Smith created a stunning transformation at Kimberly-Clark, turning it into the leading consumer paper products company in the world. Under his stewardship, the company beat its rivals Scott Paper and Procter & Gamble. And in doing so, Kimberly-Clark generated cumulative stock returns that were 4.1 times greater than those of the general market, outperforming venerable companies such as Hewlett-Packard, 3M, Coca-Cola, and General Electric.
Smith’s turnaround of Kimberly-Clark is one the best examples in the twentieth century of a leader taking a company from merely good to truly great. And yet few people—even ardent students of business history—have heard of Darwin Smith. He probably would have liked it that way. Smith is a classic example of a Level 5 leader—an individual who blends extreme personal humility with intense professional will. According to our five-year research study, executives who possess this paradoxical combination of traits are catalysts for the statistically rare event of transforming a good company into a great one. (The research is described in the sidebar “One Question, Five Years, 11 Companies.”)
“Level 5” refers to the highest level in a hierarchy of executive capabilities that we identified during our research. Leaders at the other four levels in the hierarchy can produce high degrees of success but not enough to elevate companies from mediocrity to sustained excellence. (For more details about this concept, see the exhibit “The Level 5 Hierarchy.”) And while Level 5 leadership is not the only requirement for transforming a good company into a great one—other factors include getting the right people on the bus (and the wrong people off the bus) and creating a culture of discipline—our research shows it to be essential. Good-to-great transformations don’t happen without Level 5 leaders at the helm. They just don’t.
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