What is Level 5 Leadership Good morning. Do you ever ask yourself what makes a good company great? Is it the number of Six-Sigma black belts on the payroll? Is it the leverage you can exert over your unions? Is it the lack of defined benefit retirement plans? Or the efficiency with which the company can bid and execute on contracts? Some would argue that each of these has played a role in making numerous good company’s great in recent history, or giving them some other competitive advantage. But do these things lead to greatness, or are they just byproducts of a focus on greatness by employees and their leaders? I am not here to debate these questions today. I am here to explore the ways in which leadership, what some call Level 5 Leadership is necessary for sustained greatness in any organization, whether it is a Fortune 500 company, or a non-profit. Justin R. Young, MBA, BSME Senior Design Engineer January 29, 2011

Why are you on this webinar? Define Level 5 Leadership Plan of strategies to get Level 5’s into your organization Learn what you can do to develop your own Level 5 skills Note To Speaker: Briefing cover the bullets.

-- Click and talk through comparisons. Good Great Let’s zero in on what we are talking about today. Do you want to be GOOD at what you do? Or do you want to be GREAT? On a personal level, as engineers many of us would agree to be adequate or timely, reliable or well thought of, or even OK by inspection. However, what about in terms of good versus great regarding areas outside our own personal lives. Things like universities, or governments, or the performance of our corporations. Is good sufficient or would greatness be a whole lot better? Just to illustrate this point, and to paint a picture for you, I am going to put some company logos on the screen, and I want you to think about whether they are good, or they are great companies! -- Click and talk through comparisons. And now here are all six companies stack up where I think they should be. Bottom line, when I talk about leadership greatness, I am talking about the pursuit of sustained, world class greatness. Not just being good. As humble engineers we talk about better as the enemy of good enough. But as leaders we need to seek greatness for ourselves, our subordinates, and for our organizations.

Poll What defines a great leader (Pick two): Humility Boldness Vision Will Charisma So, I want to see where all of you sit when you think about what it takes to be a great leader. You will see five words on your screen. I want you to pick the two words which define a great leader. You have 15 seconds to complete the poll. Note to speaker: After the majority of attendees have responded: write down the results on a piece of paper. Thank you for responding to my poll. I am going to hold those answers for a few moments.

The Leadership Pyramid Level 5 Leader Effective Leader Competent Manager The Leadership Pyramid has been created by Jim Collins, author of the book Good To Great, in order to illustrate the relationships between five levels of leadership that he and his research team identified when analyzing the performance of Fortune 500 companies. And at the top of this five level pyramid is the Level 5 Leader. Highly Capable Individuals makes contributions through talent, knowledge, skills, and good work habits. Contributing Team Members utilize individual capabilities to the achievement of group objectives and work effectively with others in a group setting. Competent Managers organize people and resources toward the effective and efficient pursuit of predetermined objectives. Effective Leaders catalyze commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards for the entire organization. I want to take this opportunity to give you the results of my poll before revealing level 5 of the pyramid: Note to Speaker: Summarize results least popular to most popular. Now, let me provide you with Jim Collins’ answer. Level 5 Leaders, those leaders greater than all others, build enduring greatness through a paradoxical blend of personal humility and professional will. Individuals are necessary at all levels of the pyramid, and your career may place you at the top, bottom, or middle right now. But not everyone is born with the ability to be a Level 5 Leader. But there are things you can do today to become one. And we’ll discuss those in a few minutes. And what of those other words: Vision, Boldness, Charisma. All are important in there own way. But none of them lead to enduring greatness without those characteristics of personal humility and professional will. Contributing Team Member Highly Capable Individual

Level 5 Personal Humility Professional Will An inherent ability to selflessly shun the limelight and deflect the credit for his success to others? Professional Will So I have a case study for you: Was Abraham Lincoln a level 5 leader? Let’s take just a minute to define those terms, “personal humility” and “professional will.” Note to Speaker: Explain personal humility and professional will from slide. Let’s cross check these definitions with a few quotes from President Lincoln’s career: In 1832 Lincoln said this: "Every man is said to have his peculiar ambition. Whether it be true or not, I can say for one that I have no other so great as that of being truly esteemed of my fellow men, by rendering myself worthy of their esteem. How far I shall succeed in gratifying this ambition, is yet to be developed." -- March 9, 1832 - First Political Announcement In 1863 Lincoln said: "I freely acknowledge myself the servant of the people, according to the bond of service -- the United States Constitution; and that, as such, I am responsible to them." -- August 26, 1863 - Letter to James Conkling And In 1864 Lincoln said: "I happen temporarily to occupy this big White House. I am living witness that any one of your children may look to come here as my father's child has."  -- August 22, 1864 - Speech to the One Hundred Sixty-sixth Ohio Regiment Lincoln was a man who exhibited both humility and will his entire life. In leadership, Lincoln sought greatness not for himself, but for his country, and for his fellow man. Lincoln is arguably one of the greatest Level 5 leaders in history. An unwavering focus on doing the right things for the long term good of his organization

Built To Last Clock Building Not Time Telling Core Ideology Preserve The Core | Stimulate Progress Personal Humility | Professional Will Level 5 Leaders build organizations built to last: They are clock builders. They build greatness into a company by putting the systems and people in place to keep the parts of the organization moving. This is in contrast to some good leaders who worry about feeding their egos. The ultimate test of this concept is whether the organization sustains greatness even after the departure of its leader. The great leaders focus on preserving the core of the clock, focusing on the products and services which are central to the organization’s vitality and what it stands for. Level 5 Leaders work tirelessly to stimulate progress toward concrete results and achievement of the organization and its people. And of course, they operate with a combination of humility AND will. These four behaviors enable the Level 5 Leader to build a truly great organization.

Jim Collins’ All-Time Greatest Leaders So what kinds of leaders are we talking about? Some time after his book Good To Great was published, in 2006 Jim Collins’ provided a list of the all-time greatest CEO’s: The ten that stand out from history for Jim Collins are, in revers order, (in Jim Collins’ own words): 10. David Packard, HP; 9. Katherine Graham, who took the Washington Post to greatness; 8. William McKnight, who invented the idea of managing for innovation at 3M back in the 1940s and 50s; 7. David Maxwell, who got Fannie Mae back on the road; 6. Jim Burke, CEO at Johnson & Johnson during the Tylenol crisis – his great insight was that he had the company prepared for crisis before the crisis came; 5. Darwin Smith, at Kimberly Clark. 4. George Merck of Merck, a supreme example of a great CEO – in terms of understanding what the whole definition of a corporation's role in society should be 3. Sam Walton of Wal-Mart 2. Bill Allen of Boeing, who took over when Boeing had lost 90 percent of its revenue overnight at the end of WWII, and they didn't make a single commercial aircraft. It is an amazing story. Building what, up until the 1990s at least, was the greatest aircraft manufacturer in the world. The track record is extraordinary and he was a classic Level 5. 1. Charles Coffin, GE. I picked Charles Coffin because he stood out. He built the stage on which all the other CEOs played. He created the system. He was the first to invent and put in place systematic management development as a process. If you stand back and think about it, that's one of the great inventions of the 20th century. He was also the one who instituted the first industrial research and development laboratory. An extraordinary contribution to the organizational field. That's why the number one position goes to Coffin. * From http://www.management-issues.com/2006/5/24/mentors/jim-collins-and-level-5-leadership.asp; 23 Jan 2011.

Placing Level 5 Leaders Assess Commit Develop So how do you get Level 5 Leaders into your organization? First, you must commit to building not just a good organization, but a great organization. Jim Collins developed the model of a Level 5 Leader from a small subset of CEO’s of Fortune 500 companies, leaders with these traits will benefit levels of an organization far down the chain of command, enabling those lower levels to become pockets of greatness within. And of course, if you are near the top of your organization, you must have the desire, now that you have the awareness, to place Level 5 Leaders at the top in order to build truly great companies, companies built to last. Once you have committed to building an organization led by people with Level 5 attributes, you must assess the leaders at the top of the organization, and at the top of your operating units, functional departments, and project teams. Assessments of current and prospective leaders will enable you to gain insights into their skill sets, styles, and values. And with this knowledge in hand you must develop those with the potential to be Level 5 Leaders, and develop an organization which has the expectation that leading with personal humility and professional will, focusing on moving the organization and its people forward to greatness rather than goodness, is the best path forward. Are there other management styles to choose from? Of course. But based on Jim Collins’ work a focus on Level 5 Leadership is the best style for building long term greatness. Commit Develop

Do You Have What It Takes? Humility Will Clock Building Core Ideology Do you have what it takes to be a Level 5 Leader? Not everyone does. Some people by their very nature, seek to lead, seek to move things forward, and do so without looking for credit. Others look to control, cajole, intimidate, or scare people into doing things “their way.” And “their way” is the only way. I suspect that most of us are somewhere in the middle. We desire success for ourselves and those around us. But we look for credit in the form of bonuses, raises, public praise, or the occasional Christmas turkey. I think it is fine to seek these things, as long as it is not to the detriment of those around you. Jim Collins writes in his book that some people will never be Level 5 Leaders. He says “For these people, work will always be first and foremost about what they get – fame, fortune, adulation, or power – not what they build, create, and contribute.” Are you ready to become a Level 5 Leader?

Good To Great So, it is the desire to “build, create, and contribute” that leads the way to becoming a Level 5 Leader. Jim Collins writes that he cannot offer one set of steps for that development. But what he does suggest is to focus on implementing the other key practices in his book Good To Great. These include concepts titled: First Who, Then What Confront The Brutal Facts The Hedgehog Concept Culture of Discipline Technology Accelerators Flywheel Concept By focusing on implementing these concepts in your organization, and in your daily work life, you very well might just turn out to be a Level 5 Leader. I highly suggest you visit Jim Collins’ website to do additional research and find some excellent downloadable tools to get the ball rolling. Thank you very much. I would like to open the chat board up for any remaining questions. Tony?

What is Level 5 Leadership For questions or comments Justin R. Young youngj921@asme.org Get more information at www.jimcollins.com