Chapter 2 Level 5 Leadership Ayanna Lewis Andy Sorrel Grant Brown Nick Abboud

The ordinary qualities of a great leader Most good leaders have the qualities you’d expect them to have, perfect hair, perfect smile, strong and outgoing. A great leader is different. Most great leaders are more shy and quiet, they tend to stand in the background and watch. A great example of this is Darwin E Smith, who was CEO of Kimberly-Clark, a paper products company. When he first came on board, the company’s stock had fallen 26% behind the general market in the last 20 years. Under his leadership, the company's stock generated cumulative returns 4.1 times greater than the market average.

Darwin E Smith Darwin E Smith was CEO of Kimberly-Clark paper products from 1971 to 1991. During his time there, he took the company from good to great. He took several steps in doing this that payed of very well. One of the steps he took (the most dramatic action in the company’s history was selling all the mills, the coated paper industry was dead. The interesting thing about him wasn’t exactly what he did, but how he acted. He didn’t have a strong bravado like most good CEOs do, he was more shy and had a calm demeanor about him. He had no airs of self-importance and he never reached “hero” status or celebrity status. He once showed up to an interview he showed up looking like “A farm boy wearing his first suit bought at J.C. Penny” (Collins 18). He attended Indiana University at night, while he worked a full time job during the day. He earned admission into harvard law school. He is a great example of a level 5 leader. He has extreme personal humility and intense professional will.

What Smith Did: One of the boldest moves Smith made was selling all the paper mills they owned. Their market (coated paper products) was a failing market and he realized that. He moved the company into the consumer paper products industry, going against leading competition like Proctor and Gamble. They took all the profits from selling the mils and invested in brands such as Huggies and Kleenex. Everyone thought he was crazy to do this but they put their trust in their CEO and it payed off, Kimberly Clark was out performing Scott Paper Products in all categories and Proctor and Gamble in most of the same categories.

Level 5 Leaders Expectations Many Level 5 leaders want to see the company even more successful in the next generation, comfortable with the idea that most people won’t even know that the roots of trace back to their efforts. Compelling Modesty Good-to-great leaders don’t talk about themselves During interviews they talk about the company and the contributions of other executives and deflect discussions about themselves Those who work with good-to-great leaders describe them as: Quiet or reserved Humble and understated Self-Effacing or shy Gracious

Ambition for the Company: Setting up successors for Success Level 5 leaders want to see the company want to see the company even more successful in the next generation, comfortable with the idea that most people won’t even know the roots of that success trace back to their efforts. Comparison leaders, concerned more with their own reputation for personal greatness, often failed to set the company up for success in the next generation. Good - Great leaders never wanted to become larger-than-life heroes

Unwavering Resolve… to do what must be done A level 5 leader is not just having humility and modesty but it is equally important to be able to ferociously resolve, an almost stoic determination to do whatever is needed to be done to make the company great They are fanatically driven, infected with an incurable need to produce results, they will sell the mills or fire their brother if that’s what it takes to make the company great.

Humility & Will Level 5 leaders study in duality to be: modest and willful, humble and fearless. Ex: Abraham Lincoln (one of the few Level 5 presidents in the U.S.) He never let his ego get in his way of doing what was best for the nation. Those who mistook his shy nature and awkward manner as signs of weakness found themselves mistaken, to the scale of 250,000 Confederate and 360,000 Union lives, including his own. While it is a bit of a stretch to compare good-to-great leaders to Abraham Lincoln they do display the same qualities.

Level 5 Hierarchy

Do What Must Be Done !!! In 1975, Charles R. “Cork” Walgreen decided to transform his company through insider-driven change. Although Walgreens had invented the malted milkshake, and food service was a family tradition since his grandfather, he realized that his company would be more profitable if it dropped out of the food industry and became a convenient drugstore.

The Window and the Mirror -Level 5 leaders know that good businesses are based on great colleagues, successors, and predecessors -Perspective and attitude can REALLY affect business! As opposed to approaching an issue as an obstacle, look at it like a stepping stone. -Blame and credit the right source

The Window and the Mirror (continued) “Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck)...never blaming bad luck when things go poorly” (page 35) Everyone outside the “window” credits the leader’s guidance, while the level 5 leaders recognize their employees’ work.

The Two Sides of Level 5 Leadership Professional Will Personal Humility Creates superb results Humble Does whatever it takes to get desired results Acts with quiet, calm determination Sets a standard of building and enduring great company Sets up successors Takes responsibility for ALL results, good or bad; looks in mirror Credits external factors for success; looks out the window Professional Will: Work is first for these people, they want fame, fortune, adulation, power, etc. Personal Humility: They value traditions, not yet Level 5 Leaders, but have potential to be under the right mentor