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Good to Great . Chapter 2 – Level 5 leadership. Darwin Smith. “Best example of taking a good company and making it great” CEO of Kimberly-Clark 20 Years Stock Returns 4.1 times higher during his time Not a typical leader but used Level 5 Leadership. Level 5 Leadership.

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Good to Great

Chapter 2 – Level 5 leadership

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Darwin Smith

  • “Best example of taking a good company and making it great”

  • CEO of Kimberly-Clark 20 Years

  • Stock Returns 4.1 times higher during his time

  • Not a typical leader but used Level 5 Leadership

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Level 5 Leadership

“Level 5” Refers to a five-level hierarchy of executive capabilities with Level 5 at the top.

Humility + Will = Level 5

“Level 5 Leaders are ambitious… first and foremost for the company, not themselves”

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“Leadership is the answer to everything” is like saying “God is the answer to everything”

  • Where did Level 5 Come From?

    • Collins ignored executives

    • Team Disagreed

    • Found that Level 5 Leadership was consistent in all great companies

    • Comparison companies lacked Level 5 Leadership

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Ambition for the Company: Setting Up Successors for Success

  • Key part in making business sustainable and ultimately making the business great.

  • Ambition first and foremost for the company and concern for its success rather than one’s own riches and personal renown.

  • In over 3 quarters of the comparison companies successors were setup for failure, or chose weak successors, or both.

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A Compelling Modesty

  • Not to be confused with false modesty

  • Great leaders tended to place more emphasis on others and the company, rather than themselves.

  • Did not take credit for themselves, even where it was due.

  • “Seemingly ordinary people producing extraordinary results.”

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Unwavering Resolve… to Do What Must Be Done

  • Level 5 leaders are driven to produce results

  • You must be willing to do whatever it takes

  • Promoting from within = stronger resolve

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The Window in the Mirror

  • Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well

  • At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly

  • Simplified, they accept blame for bad, and give credit to others for good.

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Level 5 Summarized

  • Modesty & Humility

    • Someone who does not care about the credit

    • Accepts blame for failures – but does not give up

  • Will

    • Direct ambitions towards companies’ goals first and foremost

    • Strong Resolve

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Atypical Leadership Characteristics

  • Tend to be introverts

  • Less charismatic

  • Highly motivated (not really atypical)

  • Motivated more by success of company than themselves