Collins' Good To Great
In 1996 Jim Collins asked the question, "Can a good company become a great company and if so, how?" (Collins, p195) Collins and a dedicated band of 22 researchers set out to discover what transforms good companies into truly great companies. Their criteria for greatness was tough: The researchers sought companies that had underperformed the general stock market for at least 15 years, then went through a transition, and subsequently outperformed the general stock market by at least three times for the next 15 years.
Starting with 1,435 companies that appeared on the Fortune 500 list from 1965 to 1995, the researchers eventually identified only 11 that made the cut. The companies that were selected were Abbott Laboratories, Circuit City, Federal Home Loan Mortgage, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo.
Although there are other factors involved for taking a company from good to great', what these great companies turned out to have in common was a particular kind of leader during the transition period, but it wasn't a headline-grabber like Chrysler's Lee Iacocca or GE's Jack Welch. On the contrary, the leaders of the long-term success stories were people like Kimberly-Clark's Darwin Smith. Called Level 5 leaders, these top executives "possess a paradoxical mixture of personal humility and professional will" (Collins, p195).
In Good to Great Collins classifies leaders into five levels. A level 1 leader is a highly capable individual. He plays an important role in the success of his organization through his own talent, knowledge, skills, and good work habits. A level 2 leader is a contributing team member. He is very good at working with his team members and ensures that his team meets its assigned objectives, and fulfills the core purpose. A Level 3 leader is a competent manager. He is skilled at organizing people and resources towards the effective pursuit of company objectives. A Level 4 leader is an effective leader. He sets high level performance standards. He is remarkable at motivating his people and leading them single-mindedly towards realizing his vision for the organization. A Level 5 leader transforms the organization into a great institution. As mentioned earlier, he epitomizes personal humility and professional will. Leaders do not need to work sequentially through each level to reach the top, but each higher level requires the capabilities of all the lower levels.
Darwin Smith, chief executive officer (CEO) of Kimberly-Clark from 1971 until his retirement in 1991 has been identified by Jim Collins in his number 1 best seller Good to Great as “a Level 5 leader—an individual who blends extreme personal humility with intense professional will” (p. 38) . Collins (2011) goes on to explain that the focus of Level 5 leaders is not on themselves or their egos, but rather on the building great companies. Darwin Smith earned his Level 5 designitaion by taking a company that during the twenty-year period (1951 – 1971) prior to his assuming the reins of Kimberly-Clark had under-performed the market by some
A level 5 leader is able to blend personal humility (selfless and never boastful) with an intense professional will to achieve superb results by bringing people together to work towards a common goal. Level 5 leaders although may appear calm or quiet, demonstrate an unwavering attitude to do whatever must be done ethically to achieve sustainable outcomes do not matter how difficult. “Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious-but their ambition is first and foremost for the institution, not themselves” Jim Collins (2001). Mulally never spoke about himself and his ideas
Smith, David J. "Transitions And Transformations of Successful Leaders." Grand Rapids Business Journal 31.32 (2013): 9. Regional Business News. Web. 28 Feb. 2014.
One may wonder exactly what it is that qualities a strong leader possesses. A strong leader is determined, and strong willed. They must be of good judgment, and without bias. They cannot easily be persuaded, and they are firm, yet at the same time, a good lead must also empathize with his subordinates, and have the best interest at heart for said subordinates, at all times. However, with that being said, a good leader cannot be afraid to discipline his subordinates when necessary. Unmistakably, being a leader is a very difficult feat – one which not everyone can accomplish. A leader must be an authority, a friend and a counsellor, all at once. They must be responsible, and always take into account the disadvantages of a situation. Not everyone is suitable to be a leader, whereas, just about anybody can be a good role model.
The styles of leadership to be discussed are transactional, transformational, and “level 5.” The leadership styles will be explored based on the scenario information. There will also be a theoretical assumption used to show company changes that will occur after Executive A retires. From the information presented, the changes could occur immediately or gradually depending on the length of the transition period.
...ons need to keep adapting to ever changing situations. Successful change in a sense is measured by longevity. Flexible leaders realize the need for change and innovation within a company. Great leaders are those that recognize the need for change. They tend to learn more from their success than they do from there failure. Companies like Wal-Mart, Nike, and 3M have all made major innovations over the years that allowed each of them to have continuing success. Companies like Kodak and Blockbuster that claimed victory to soon fail to innovate which lead to their failure. How much of this is determined by the leadership? I think the leader is the proponent of transformational change within an organization. I do not think NEWC declared victory too soon. They had withstood the test of time, but what they did not do was adapt and continue to change.
...r whole effort into it and they give above and beyond because they want the result to be good for results matter. The leader generates work that meet commitment and generate results that surpass and go above and beyond the normal requirement (Lord & Maher, 1991).
Good to Great: Responding to Change. I think that Jim Collins' book is essential for future entrepreneurs, managers, and leaders in the Philippines. The tips given by the author are useful in the dynamic, ever-changing, and constantly fluctuating business environment of the Philippines. Jim Collins described the kind of leader who can address these changes as a Level 5 leader "a paradoxical blend of personal humility and professional will." The Level 5 leader is not the "corporate savior" or "turnaround expert". Most of the CEOs of the Good To Great companies as they made the transition were company insiders. They were more concerned about what they could "build, create and contribute" than what they could "get - fame, fortune, adulation, power, whatever". No Ken Lay of Enron or Carly Fiorina of HP, the larger-than-life CEO, led a Good To Great company. This kind of executive is "concerned more with their own reputation for personal greatness" than they are with "setting the company up for success in the next generation". Transformations from Good to Great start when a company finds a CEO who is humble but iron-willed, and who is ambitious for the company, not necessarily for himself or herself.
This case study demonstrates a young woman leader, Toby Johnson, who used to serve in the military as a pilot and attended Harvard Business School, joined PepsiCo’s Leadership Development Program (LDP), and was working in the management team at the Williamsport plant. She determined to forge ahead, and led the plant to achieve the Level 3 CI and also won the Doolin Award, which the Williamsport plant had never achieved before. The problem that Johnson encounters currently is that if the plant should continue to forge ahead and achieve the ultimate Level 4 CI, which will cost huge amount of money and efforts with the risk of her sudden leave of plant.
There are many different ideas about what it means to be a good leader and what the leadership means. In a simple explanation, leadership is a technique that an individual influence a group of people to achieve a common goal. A good leader can be a supervisor, manager or a business owner. Leaders are people who have expertise in achieving goals, no matter what their job titles are. Leadership is about coping with change. In a modern age we live, especially in the twentieth century, “more companies are looking for people with great leadership skills” because they can solve problems (2015, P. 13). In my idea a good leader has a vision and motivation to a team so that they can work together toward achieving
Although there are many outstanding, albeit necessary qualities of a good leader, it is the leader’s beliefs in which greatness is given its first breath, fostered by action, and spread throughout the institution. A great leader believes in encouraging, not destroying; in setting the precedence instead of yielding to prominence ; in collaboration, not division; in giving, not taking; and in having high standards and volunteering to be the first of many to be held to them. A great leader does not take advantage of the people being lead, but instead, creates an advantage for the people by giving them the opportunities to lead. Only when people take ownership of an institution will passion be cultivated, action be taken, and greatness be achieved.
In Good to Great, Jim Collins discusses major key points companies have used to go from a good company to a great one. He did this by discussing seven characteristics companies should listen and absorb to transition from being good to becoming great. These characteristics included: level 5 leadership, first who…then what, confront the brutal facts, the hedgehog concept, a culture of discipline and the flywheel. Companies who can approach these successfully are the ones who enable themselves to separate from other competing companies. Furthermore, the statement Jim Collins said, which caught my attention immediately, was not in these seven characteristics, but in the first chapter of the book.
Many Scholars characterize the core qualities and skills necessary for an effective leader. Useem defines leadership as “Creating a vision and translating that vision into actions”. Historically, an effective leader was assumed to be exceptionally knowledgeable, authoritative, and dominate. Those leaders applied the command and control method to lead an organization. With the passage of time, this definition has been changed. The modern definition of an effective leader is honest, courageous, trustworthy, inspirational, and result-oriented. Today’s leaders create shared values and vision, and empower others to achieve their targets.
A leader accomplishes this level when they have performed consistently, obtaining desired results, for an extended period. People hold the leader in high regard and defer their ultimate respect for the leader. This level is difficult to accomplish and Maxwell, (2013) reminds us that most leaders rarely accomplish this level. Holst, (1999) describes this stage of leadership, saying this is a leader who has enhanced their spiritual, physical, mental and moral faculties to their highest degree possible resulting in the development of integrity (p.
A Level 5 CEO is the greatest leadership level. It is destined to build enduring business greatness through a combination of personal humility and professional will. There are many steps that someone needs to walk through until he or she reaches this level of leadership. The journey to Level 5 business leadership can be accelerated by mastering ones emotional intelligence. Emotional Intelligence consists of four parts: self-awareness, self-management, social awareness, and relationship management. Any CEO in progress must make sure that he has been practicing these concepts on a daily basis.