Level 5

1
Good to Great
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
2
Good to Great
Level 5 Leadership
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
3
Level 5 Leadership
5Level 5 Executive 4Effective
Leader 3Competent Manager 2Contributing Team
Member 1Highly Capable Individual
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Level 5 Leadership

• Leaders who employ a paradoxical mix of personal
  humility and professional will
• Set up successors for even greater success
• Compelling modesty, self-effacing, understated

• Fanatically driven to produce sustainable results
• More plow horse than show horse

5Level 5 Executive 4Effective
Leader 3Competent Manager 2Contributing Team
Member 1Highly Capable Individual
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Level 5 Leadership

• Attribute success to other than themselves

• Look in mirror and take full responsibility for
  poor decisions
• Many people have the potential to evolve into
  Level 5

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Good to Great
First Who Then What
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
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First Who . . . Then What

• Leaders began the transformation by first getting
  the right people on the bus (and the wrong people
  off the bus).

• Who questions came before what decisions -
  before vision, strategy, organization structure,
  and tactics.

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First Who . . . Then What

• Leaders were rigorous, not ruthless in people
  decisions.

• Three practical disciplines for being rigorous
• When in doubt, dont hire
• When you know you need to make a people decision,
  act

• Put your best people on your best opportunities,
  not biggest problems

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First Who . . . Then What

• Management teams debate vigorously to find best
  answers, yet unify behind decisions.

• Right person has more to do with character
  traits and innate capabilities than with
  knowledge, background, or skills.

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Good to Great
Confront the Brutal Facts
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
11
Confront the Brutal Facts

• Setting off on the path to greatness requires
  confronting the brutal facts of current reality.

• Must create a culture wherein people have a
  tremendous opportunity to be heard and,
  ultimately, for the truth to be heard.

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Confront the Brutal Facts

• Lead with questions, not answers
• Engage in dialogue and debate, not coercion
• Conduct autopsies, without blame
• Build red flag mechanisms where information
  cannot be ignored

• Four basic practices

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Confront the Brutal Facts

• Stockdale ParadoxRetain absolute faith that you
  can and will prevail in the end, AND at the same
  time confront the most brutal facts of your
  current reality, whatever they might be.

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Good to Great
Hedgehog Concept
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
15
Hedgehog Concept

• Hedgehogs simplify a complex world into a single
  organizing idea, a basic principle or concept
  that unifies and guides everything.
• Hedgehogs see what is essential, and ignore the
  rest.

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Hedgehog Concept

• The Hedgehog Concept is a deep understanding of
  three intersecting circles translated into a
  simple, crystalline concept

• What you are deeply passionate about
• What you can be best in the world at
• What drives your economic engine

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Hedgehog Concept
Simplicitywithinthe three circles
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Hedgehog Concept

• Getting the Hedgehog Concept takes an average of
  four years.

• It is an iterative process by The Council

• The right people
• Engaged in vigorous dialogue and debate
• Infused with the brutal facts
• Guided by questions formed by the three circles

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Hedgehog Concept
All Guided by the Three Circles
An IterativeProcess
Ask Questions
TheCouncil
Dialogue Debate
Autopsies Analysis
ExecutiveDecisions
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Good to Great
Culture of Discipline
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
21
Culture of Discipline

• Getting disciplined people who engage in
  disciplined thought and who then take disciplined
  action, fanatically consistent with three circles

• People who rinse their cottage cheese
• Not about a tyrant who disciplines

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Culture of Discipline

• Involves a duality.

• Requires people who adhere to a consistent
  system.
• Gives people freedom and responsibility within
  framework of that system.

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Culture of Discipline

• Includes willingness to shun opportunities that
  fall outside the three circles.

• Budgeting is to decide which arenas fit Hedgehog
  Concept and should be fully funded and which
  should not be funded at all.

• Stop doing lists are more important than to
  do lists.
• Anything that does not fit with our Hedgehog
  Concept, we will not do.

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Good to Great
Technology Accelerators
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action
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Technology Accelerators

• Good-to-greats avoid technology fads and
  bandwagons.

• Yet they often become pioneers in the application
  of carefully selected technologies.

• Does it fit directly with your Hedgehog Concept?
• Good-to-greats used technology as an accelerator
  of momentum, not a creator of it.

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Technology Accelerators

• Technology by itself is never a root cause of
  either greatness or decline.

• Crawl, walk, run can be a very effective
  approach, even during times of rapid and radical
  technological change.

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Good to Great
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerations
Disciplined People
Disciplined Thought
Disciplined Action
Flywheel
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The Flywheel

• Good-to-great transformations never happened in
  one fell swoop.

• There was no single defining action, no grand
  program, no one killer innovation, no solitary
  lucky break, no miracle moment.
• Instead they followed a predictable pattern of
  buildup and breakthrough.
• Like pushing on a giant, heavy flywheel, it takes
  a lot of effort to get the thing moving at all,
  but . . .

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The Flywheel

• With persistent pushing . . .
• In a consistent direction . . .
• Over a long period of time . . .

• The flywheel builds momentum . . .
• Eventually hitting a point of breakthrough.

• In good-to-great companies problems of
  commitment, alignment, motivation, and change
  largely take care of themselves.
• Alignment follows from results and momentum, not
  the other way around.

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Good to Great
Level 5 Leadership
First WhoThen What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action