In the first part of Jim Collins’s 2001 book Good to Great he presents the concept of “Disciplined People”.
One piece of this is Level 5 Leadership. Those companies that outperformed the market for at least 15 years had it. This meant leadership at the very top that is intensely focused on the success of the organization. These individual leaders are not household names and they aren’t written about in major business journals; in fact, typically no one outside the organization has heard of them. They are humble, balanced, hard-working individuals with high individual and corporate standards.
They contrast this with other, very successful organizations, where the top leader is seemingly more focused on the success of the top leader, rather than the organization overall. These leaders, through their own talents, may very readily elevate the performance of an organization to very high levels, but a “great” organization needs to sustain this performance for at least 15 years. What the researchers found is that these charismatic leaders typically failed to build a strong management organization around them. Once these leaders moved on or retired, the organization was not able to sustain its level of performance.
My observation #1 – the concept of Level 5 Leadership relates to “good well-established” companies hoping to become great. If an organization is striving to simply become a “good well-established” company then a Level 5 Leader may not be their best choice. They may need a more charismatic individual with strong vision and forcefulness.
The second, related, part is First who, then What. This relates to the importance of building a solid team. As they describe it, you get the right people on the bus, the wrong people off the bus, and the right people in the right seats. They advocate being disciplined in moving people around to get the best possible management team. If you are convinced that a certain person will not be the right one long term, you do them no favors by delaying management decisions.
Also, notice that the phrase is ‘First who, then What’. They suggest that strategies evolve more naturally once the right people are involved. The variety of disciplines and expertise from a solid management team will help drive better strategy and greater commitment to the strategy. For an established company it is far less effective to develop a new strategy and then move people around to staff it.
My observation #2 – Practical experience bears out a related point. As they say, when people are committed to the organization and the strategy, you never need to worry about “motivation”. If motivation is a problem in your organization, you don’t have the right people. Think back on your own experience – have you ever needed to be “motivated” to do something you truly believed in?
These two ideas – “talented, focused, humble leadership” and “the management team is the first thing you need to get right” – are not profound. Often, the benefit comes from distilling and effectively articulating the intuitively obvious.