Level 5 Leadership is Jim Collins's term for leaders who combine personal humility with intense professional will: modest about themselves, relentless about the organization's results.
Where it comes from
Collins and his research team screened 1,435 Fortune 500 companies for a rare pattern: fifteen years of returns at or below the stock market, a turning point, then fifteen years of cumulative returns at least three times the market. Eleven companies made the cut.¹ Collins had told his team to look past the CEO, suspecting that crediting the leader was too easy an answer. The data overruled him. At every one of the eleven turning points stood a leader with the same unusual profile, and the comparison companies lacked it. Collins tells the story himself in his 2001 Harvard Business Review article "Level 5 Leadership: The Triumph of Humility and Fierce Resolve," which HBR's editors later chose for their collection of ten must-read articles on leadership.² Darwin Smith, CEO of Kimberly-Clark from 1971 to 1991, is his model: a quiet, self-effacing in-house lawyer who sold the company's paper mills and bet its future on consumer brands such as Kleenex. "Level 5" is the top rung of Collins's five-step hierarchy, which runs from highly capable individual to executive.
Where it goes wrong
The idea is often shortened to "modest people win." Collins describes a pairing, and the second half carries as much weight as the first: humility about oneself and fierce resolve about results, including hard calls on strategy and people. The study itself has drawn questions. Looking back at winners makes it easy to find the traits we expect, and several of the eleven stumbled later. Circuit City filed for bankruptcy in 2008, and Fannie Mae was placed under government conservatorship the same year. Finance professors Bruce Resnick and Timothy Smunt found the companies' later stock performance unexceptional.³ Newer research with different methods supports the core intuition: in a study of 63 companies in China, CEOs their teams rated as humble showed more empowering leadership, and their top teams worked together more closely.⁴
Talent Takeaway
Collins offers a simple test he calls the window and the mirror. When things go well, Level 5 leaders look out the window and credit others. When things go wrong, they look in the mirror. When we select or develop leaders, we can watch for both, and then for the second half: how hard the person pushes for results the team has yet to see.
¹ Collins, J. (2001). Good to great: Why some companies make the leap… and others don't. HarperBusiness.
² Collins, J. (2001). Level 5 leadership: The triumph of humility and fierce resolve. Harvard Business Review, 79(1), 67–76. https://hbr.org/2001/01/level-5-leadership-the-triumph-of-humility-and-fierce-resolve-2. Reprinted in HBR's 10 must reads on leadership (2011). Harvard Business Review Press.
³ Resnick, B. G., & Smunt, T. L. (2008). From good to great to … Academy of Management Perspectives, 22(4), 6–12.
⁴ Ou, A. Y., Tsui, A. S., Kinicki, A. J., Waldman, D. A., Xiao, Z., & Song, L. J. (2014). Humble chief executive officers' connections to top management team integration and middle managers' responses. Administrative Science Quarterly, 59(1), 34–72. https://doi.org/10.1177/0001839213520131
Further reading: Owens, B. P., & Hekman, D. R. (2012). Modeling how to grow: An inductive examination of humble leader behaviors, contingencies, and outcomes. Academy of Management Journal, 55(4), 787–818.
