Level 5 Leaders - Characteristics and Operating Style

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Compelling Humility

Level 5 leaders are characterized by compelling humility. They shun public attention. They are never boastful. They are always happy to discuss at length about their company and the contribution of their people.

But they are generally averse to discussing their role in the success of company. Jim Collins reports one CEO saying "There are lot of people in this company who could do my job better than I do." All the level 5 leaders Jim Collins came across in his research were responsible for the remarkable successes of their companies but they never admit that.

Level 5 leaders are quiet, and show calm determination when a task is to be accomplished. In case of poor results, they do not blame the external environment. (Refer exhibit 9.2 for an example).

Exhibit: 9.2 Ken Iverson

In the 1970s and 1980s American steel firms faced a lot of problems due to cheap imports coming from Japan and other countries. The CEO of Bethlehem steel put the blame on imports for poor performance of the company. In contrast, Ken Iverson (Iverson) the CEO of Nucor saw it as a blessing. He said that domestic steel companies have a huge advantage compared to the imported steel which have to be shipped all the way across the ocean, which involves huge cost. Iverson even spoke against the protection given to domestic steel industry.

The root of all the problems facing the domestic steel companies according to Iverson was management's inability to change. He felt that the domestic companies were not doing well because they failed to adapt the changing technology. This is the difference between Ken Iverson, a level 5 leader according to whom incompetence in management was the reason for the poor performance of steel plants in the USA while according to others cheap imports was to be blamed.

Adapted from "Onward and Inward", Across the board, Sep/ Oct 2001, Vol. 38, Issue 5.

Operating Style of Level 5 Leaders

Level 5 leaders lead with the help of disciplined people, disciplined thought, and disciplined action. They first identify disciplined people. They don't manage them. Because they don't need to. Through these disciplined or right people, they manage the system. Then they attempt at disciplined thought. Discipline is necessary to face brutal facts. It is a prerequisite to hold faith. Faith then creates right environment to have a disciplined thought. Similarly discipline is necessary to persist till the organization identifies its Hedgehog concept (it is explained clearly below). In majority of organizations Jim Collins studied it took nearly four years to identify hedgehog concept. Disciplined people are the source of discipline. Finally, disciplined action is necessary. This only ensures the expected results.

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