12 Insights of the Level 5 Leader

12 Insights of the Level 5 Leader

Dallas T DeFee, PhD

(c) 2009

Jim Collins in his classic Good to Great, discusses a hierarchy of 5 levels of leadership: 

1. The Highly Capable Individual who exercises personal skills by making individual contributions,
2. The Contributing Team Member who not only demonstrates the knowledge and skill of level 1, but also collaborates well to make a group more effective,
3. The Competent Manager who allocates, aligns, and directs resources (including people) for accomplishing pre-determined objectives,
4. The Effective Leader, who creates a shared commitment to a mission and stimulates high performance by setting standards and demonstrating a consistent and high competence,
5. The Executive Leader, who personifies a paradoxical mix of personal humility and indomitable will to achieve greatness, not for themselves, but for the organization and the accomplishment of its mission.

Level 5 Leaders not only create a great organization – school, company, non-profit, or even an army, but they set up their successors for even greater success in the future. When things go well, Level 5 Leaders give a full measure of credit to factors outside themselves, and in particular, to the accomplishments of others in the organization. When things go bad, they first look in the mirror, never blame bad luck, and search for a way forward that is consistent with their personal values.  Leave 5 Leaders show personal modesty and are fanatics in pursuit of results rather than self or even group aggrandizement. They think of themselves as servants, never masters, and make hard decisions because it is their responsibility.  They know that success always includes a measure of good luck, and that personal fame is at best a fickle friend and, at worst, a treacherous ally.

Finally,through both study and experience, the Level 5Leader is one who has developed insight into (1) personal strengths andweakness, (2) his or her specific organization, and (3) the larger environmentin which the organization functions.  Twelve of these insights follow.

Insight #1                                   

Planning is the easy part.

Consider starting a new business.  You begin by developing a succinct vision,mission statement, and roadmap for accomplishing a set of financial goals – a PLAN.  The paradox is that you should begin at theend, i.e. the ultimate objective that includes how and when to exit inthe venture.

Then, create a unique concept and FOCUSon marketing, competition and product development.  Devise ways to (1) differentiate fromcompetitors – your mission, (2) create customers – your market,and (3) make money from your efforts – your business model.

Next FUND the venture with acombination of financial resources, including (1) first and foremost your investment, (2) contributions ofother owners, other investorsinterested in long-term appreciation of business value, (3) debt, both personal or business loans,and (4) cash from business operations,namely bootstrapping.  (Aside: It isoften forgotten that success begins with bootstrapping.  Borrowing is guaranteed to increase you risk. At best, you leverage your own money bygoing into debt, but it’s much better to raise money by sharing ownership.)

Finally ADAPT yourplans to changing market conditions by getting feedback from your earlycustomers and partners. Planning, Focusing, Funding, and Adapting is easy?  Yes, compared to EXECUTION, because all thisprefatory stuff is about ideas. And ideas are cheap. And there are plenty ofpeople around willing to criticize your ideas, and if you are willing tolisten, improve on them – for free.  Ifyou have any doubt about this, write down your new business ideas in anorganized and coherent fashion, and then take them to your friendly localbanker, or rich mother-in-law if you are reallybrave.

Plansare only good intentions unless they immediately degenerate into hard work.  Peter Drucker

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