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THE HIGH-PERFORMANCE ORGANIZATION

BEST OF

HBR

2001

If there's one management expert who is synonymous with the term "highperformance organization," it is Jim Collins, who has spent the past 20 years trying to understand how some companies are able to sustain superlative performance. It may seem surprising that ofthe seven factors Collins identified as essential to take a companyfrom good to great, he chose to focus on leadership in this 2O01 piece. However, even a casual rereading ofthe article will convince you that he was right to do so. Collins argues that the key ingredient that allows a company to become great is having a Level 5 leader: an executive in whom genuine personal humility blends with intense professional will. To learn that such CEOs exist still comesas a pleasant shock. But while the idea may sound counterintuitive today, it was downright heretical when Collins first wrote about it-the corporate scandals in the United States hadn't broken out, and almost everyone believed that CEOs should be charismatic, larger-than-life figures. Collins was the first to blow that belief out of the water.

Level 5 Leadership
TheTriumph of Humility andFierce Resolve
by Jim Collins

What catapults a company from merely good to truly great? A five-year research project searched for the answer to that question, and its discoveries ought to change the v^ay we think about leadership.

I

n 1971, a seemingly ordinary man

med Darwin E. Smith was named cfeief executive of Kimberly-Clark, a stodgy old paper company whose stock had fallen 36%behind the general market during the previous 20 years. Smith, the company's mild-mannered in-house lawyer, wasn't so sure the board had made the right choice - a feeling that was reinforced when a Kimberly-Clark director pulled him aside and reminded him that he lacked some of the qualifications for the position. But CEO he was, and CEO he remained for 20 years. What a 20 years it was. In thatperiod. Smith created a stunning transformation at Kimberly-Clark, turning it into the leading consumer paper products

company in the world. Under his stewardship, the company beat its rivals Scott Paper and Procter & Gamble. And in doing so, Kimberly-Clark generated cumulative stock returns that were 4-1 times greater than those ofthe general market, outperforming venerable companies such asHewlett-Packard, 3M, Coca-Cola, and General Electric. Smith's turnaround of Kimberly-Clark is one the best examples in the twentieth century of a leader taking a company from merely good to truly great. And yet few people - even ardent students of business history-have heard of Darwin Smith. He probably would have liked it that way. Smith is a classic example of a Level 5 leader-an individualHARVARD BUSINESS REVIEW

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THE HIGH-PERFORMANCE ORGANIZATION shunned attention. When a journalist asked him to describe his management style. Smith just stared back at the scribe from the other side of his thick blackrimmed glasses. He was dressed unfashionably, like a farm boy wearing his first J.C. Penney suit. Finally, after a long and uncomfortable silence, he said, "Eccentric."Needless to say, the Wall Street Journal did not publish a splashy feature on Darwin Smith. But if you were to consider Smith soft or meek, you would be terribly mistaken. His lack of pretense was coupled with afierce,even stoic, resolve toward To explain: Shortly after he took over. Smith and his team had concluded that the company's traditional core businesscoated paper-was doomed to mediocrity. Itseconomics were bad and the competition weak. But,they reasoned, if Kimberly-Clark were thrust into the fire of the consumer paper products business, better economics and world-class competition like Procter & Gamble would force it to achieve greatness or perish. And so, like the general who burned the boats upon landing on enemy soil, leaving his troops to succeed or die. Smith announced that...