GOOD TO GREAT: CHAPTER 2

Ashley Gonzenbach, Brian Byrne,

Diana Perkins, Amanda Long

Darwin E. Smith

Grew up on a farm in Indiana Paid his way through college In-house lawyer Promoted to CEO of Kimberly-Clark Nose and throat cancer Great leader

“I never stopped trying to become qualified for the job.”

Level 5 Leaders

Good leaders Manage for the success and betterment of

themselves Great Leaders

manage for the success and betterment of the company and the people as a whole

An individual who blends extreme personal humility with intense professional will.

Why is it called “Level 5”?

Level 2

Level 3

Level 4

Level 5

Level 1 Highly Capable Individual

Contributing Team Member

Competent Manager

Effective Leader

Level 5 Executive

= Humility + Will

Level 5 Leaders

Coleman Mockler, CEO Gillette CEO from 1975-1991 Fought off three takeover bids Invested in radically new and technologically

advanced systems Died after making cover of Forbes magazine

Level 5 Leaders

David Maxwell, CEO Fannie Mae Took over when Fannie Mae was losing $1

million a day Transformed Fannie Mae to beat general stock

market 3.8 to 1. Gave up $5.5 million of remaining retirement

package back to Fannie Mae

Level 5 Leaders

Ken Iverson, CEO Nucor

Comparison company Scott Paper was set up for failure by CEO

Chrysler also rose in performance only to decline in later years

Unwavering Resolve to Do What Must Be Done

Level Five Leadership Not just about humility and modesty Equally about ferocious resolve

- Stoic determination to do whatever needs to be done to make a good company great

Deciding How to Describe Good-to-Great Leaders

Initial Terms and Ideas

Selfless executive Servant leader Can be

misleading Certain labels

sound meek and weak

Only portray the humility side

The Other Side of the Coin

Fanatically Driven Infected with

incurable need to produce results

Will do what must be done

Humility + Will = Level 5

George Cain CEO Abbott Laboratories

Inside the company

Key asset- inspired standards

Would not tolerate meritocracy

Set out to destroy nepotism at Abbott

Took the company from good to great

Charles R “Cork” Walgreen IIICEO of Walgreens

Did not let the his family and emotional ties effect his decisions

Took a chance Transformed the

entire business

Alan WurtzelCEO Circuit City

Took over family’s small company

Was a plow horse rather than show horse

Sheer workmanlike diligence

Credits luck Ties into “The

window and the mirror” concept

Window In the Mirror

Look out the window at all the people who contributed to the success

Credit factors outside themselves

If the cannot find a person or event to credit they credit luck

When Things Go Well Look in the

mirror and blame themselves

Never blame bad luck

Don’t look out on others

When Things Go Poorly

Joseph F. Cullman IIICEO of Phillip Morris

Refuses Credit for success

Credits good fortune

Great colleagues, successors, and predecessors

Wrote book “I’m a Lucky Guy”

Ken IversonCEO of Nucor

Comparison of corporate view with Bethlehem Steel

Challenge from imports

Stoke of good fortune

He saw problems in management

Irene RosenfeldCEO of Kraft Foods

Came from within Kraft

Took over while Kraft was in a sluggish stage

Been there 20+ years prior

Held numerous other positions in the company

Exudes passion and perseverance

What They All Have In Common

George Cain Charles R “Cork”

Walgreen III Joseph F. Cullman

III Alan Wurtzel Ken Iverson Irene Rosenfeld

Modesty and HumilityCame from withinThe will to do what must be doneEmphasis on luck and good fortuneThe Window and the Mirror

Cultivating Level 5 Leadership

Can you learn to become Level 5? Two categories of people

1. Those who don’t have it2. Those who do have it

Practice the 11 good-to-great leaders’ characteristics and their ways

Summary: The Two Sides of Level 5 Leadership

Creates superb, clear results

Does what must be done

Sets standard for great a company

Looks in mirror for bad results

Modest; not boastful Acts on standards, not charismaSets up successors or successLooks out the window for great results

Professional Will Professional Humility

Irene Rosenfeld, CEO Came within the company

Been with Kraft for 20 + years Very competitive

Determined on standards, not self Very ambitious

Wanted to be president, will get done what needs to be done

Three Takeaways

Setting up Successors for Success David Maxwell of Fannie Mae

A Compelling Modesty very non I-centric style

The Window and the Mirror Look out the window for credit Look in the mirror for blame

References

www.kraftfoodscompany.com

Collins, Jim. Good to Great. p 17-40. 2001. HarperCollins Publishers Inc.