Jim Collins' book Good to Great is worthwhile reading. Here share with you of the key points of the book. The book says every good to great companies has a Level 5 Leader. What's a Level 5 leader then?

Chapter 2 – Level 5 Leadership

Level 5 – Level 5 Executive: Builds enduring greatness through a paradoxical blend of personal humility and professional will

Level 4 – Effective Leader: Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards

Level 3 – Competent Manager: Organizes people and resources toward the effective and efficient pursuit of predetermined objectives

Level 2 – Contributing team member: Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting

Level 1 – Highly Capable Individual: Makes productive contributions through talent, knowledge, skills and good work habits.

Summary: The two sides of level 5 leadership

Professional Will

-         Creates superb results, a clear catalyst in the transition from good to great

-         Demonstrates an unwavering resolve to do whatever must be dome to produce the best long term results, no matter how difficult

-         Sets the standard of building an enduring great company, will settle for nothing less

-         Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck.

Personal Humility

-         Demonstrates a compelling modesty, shunning public adulation; never boastful

-         Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate

-         Channels ambition into the company, not the self, sets up successors for even greater success in the next generation.

-         Looks out the window, not in the mirror, to apportion credit for the success of the company – to other people, external factors, and good luck

Key points:

-         Every good to great company had level 5 leadership during the pivotal transition years

-         Level 5 refers to a five level hierarchy of executive capabilities with level 5 at the top. Level 5 leaders embody a paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves.

-         Level 5 leaders set up their successors for even greater success in the next generation, whereas ego centric level 4 leaders often set up their successors for failure

-         Level 5 leaders display a compelling modesty, are self-effacing and understand. In contrast, two thirds of the comparison companies had leaders with gargantuan personal ego s that contributed to the demise or continued mediocrity of the company.

-         Level 5 leaders are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decision.

-         Level 5 leaders look out the window to attribute success to factors other than themselves. When things go poorly, however, they look in the mirror and blame themselves, taking full responsibility. The comparison CEOs often did just the opposite- they looked in the mirror to take credit for success, but out the window to assign blame for disappointing results

-         One of the most damaging trends in recent history is the tendency to select dazzling, celebrity leaders and to de-select potential Level 5 leaders.

-         I believe that potential Level 5 leaders exist all around us, if we just know what to look for, and that many people have the potential to evolve into level 5.

-         Larger-than-life, celebrity leaders who rode in from the outside are negatively correlated with going from good to great. Ten of eleven good to great CEOs came from inside the company, whereas the comparison companies tried outside CEOs six times more often.

-         Level 5 leaders attribute much of their success to good luck, rather than personal greatness.

-         We were not looking for level 5 leadership in our research, or anything like it, but the data was overwhelming and convincing. It is an empirical, not an ideological, finding.

Chapter 3 – First Who … Then What
Key points:
- The good to great leaders began the transformation by first getting the right people on the bus ( and the wrong people off the bus) and then figure out where to drive it
- The key point of this chapter is not just the idea of getting the right people on the team. The key point is that ”who” questions come before “what” decisions – before vision, before strategy, before organization structure, before tactics. First Who, then what – as a rigorous discipline, consistently applied.
- The comparison companies frequently followed the “genius with a thousand helpers” model – a genius leader who sets a vision and then enlists a crew of highly capable “helper” to make the vision happen. This model fails when the genius departs.
- The good to great leaders were rigorous, not ruthless, in people decision. They did not rely on layoffs and restructuring as a primary strategy for improving performance. The comparison companies used layoffs and restructurings as a primary strategy for improving performance. The comparison companies used layoffs to a much greater extent.
- We uncovered three practical disciplines for being rigorous in people decisions:
1. When in doubt, don’t hire – keep looking. (Corollary: A company should limit its growth based on its ability to attract enough of the right people.)
2. When you know you need to make a people change, act. ( Corollary: First be sure you don’t simply have someone in the wrong seat)
3. Put your best people on your biggest opportunities, not your biggest problems. ( Corollary: If you sell off your problems, don’t sell off your best people)
- Good to great management teams consist of people who debate vigorously in search of the best answers, yet who unify behind decisions, regardless of parochial interests.
- We found no systematic pattern linking executive compensation to the shift from good to great. The purpose of compensation is not to “motivate” the right behaviors from the wrong people, but to get and keep the right people in the first place.
- The old adage” People are your most important asset” is wrong. People are not your most important asset. The right people are.
- Whether someone is the “right person” has more to do with character traits and innate capabilities than with specific knowledge, background, or skills.

Key points:
- All good to great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality
- When you start with an honest and diligent effort to determine the truth of your situation, the right decisions often become self-evident. It is impossible to make good decisions without infusing the entire process with an honest confrontation of the brutal facts.
- A primary task in taking a company from good to great is to create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.
- Creating a climate where the truth is heard involves four basic practices:
1. Lead with questions, not answers
2. Engage in dialogue and debate, not coercion.
3. Conduct autopsies, without blame.
4. Build red flag mechanisms that turn information into information that cannot be ignored.
- The good to great companies faced just as much adversity as the comparison companies, but responded to that adversity differently. They hit the realities of their situation head on. As a result, they emerged from adversity even stronger.
- A key psychology for leading from good to great is the Stockdale Paradox: Retain absolute faith that you can and will prevail in the end, regardless of the difficulties, and at the same time confront the most brutal facts of your current reality, whatever they might be.
- Charisma can be as much a liability as an asset, as the strength of your leadership personality can deter people from bringing you the brutal facts.
- Leadership does not begin just with vision. It begins with getting people to confront the brutal facts and to act on the implications
- Spending time and energy trying to “motivate” people is a waste of effort. The real question is not, “How do we motivate our people?” If you have the right people, they will be self-motivated. The key is to not de-motivate them. One of the primary ways to de-motivate people is to ignore the brutal facts of reality.

Unexpected findings
- The good to great companies are more like hedgehogs – simple, dowdy creatures that know “one big thing” and stick to it. The comparison companies are more like foxes – crafty, cunning creatures that know many things yet lack consistency.
- It took four years on average for the good to great companies to get a Hedgehog Concept
- Strategy per se did not separate the good to great companies from the comparison companies. Both sets had strategies, and there is no evidence that the good to great companies spent more time on strategic planning than the comparison companies.
- You absolutely do not need to be in a great industry to produce sustained great results. No matter how had the industry, every good to great company figured our how to produce truly superior economic returns.

I'll posting all the key points of this book, hope you find it useful.

Unexpected findings
- The more an organization had the discipline to stay within its three circles, with almost religious consistency, the more it will have opportunities for growth.
- The fact that something is a “once-in-a-lifetime” is irrelevant, unless it fits within the threee circles. A great company will have many once-in-a-time opportunities.
- The purpose of budgeting in a good to great company is not to decide how much each activity gets, but to decide which arenas best fit with the 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.

Unexpected findings
- The idea that technological change is the principal cause in the decline of once-great companies (or the perpetual mediocrity of others) is not supported by the evidence. Certainly, a company can’t remain a laggard and hope to be great, but technology by itself is never a primary root cause of either greatness or decline.
- Across eighty-four interviews with good to great executives, fully 80 percent didn’t even mention technology as one of the top five factors in the transformation. This is true even in companies famous for their pioneering application of technology, such as Nucor.
- “Crawl, walk, run” can be a very effective approach, even during times of rapid and radical technological change.

Unexpected results
- Those inside the good to great companies were often unaware of the magnitude of their transformation at the time, only later in retrospect, did it become clear. They had no name, tag line, launch event, or program to signify what they are doing at the time.
- The good to great leaders spent essentially no energy trying to “create alignment”, “motivate the troop”’ or “manage change”. Under the right conditions, the problems of commitment, alignment, motivation, and change largely take care of themselves. Alignment principally follows from results and momentum, not the other way around.
- The short-term pressures of Wall Street were not inconsistent with following this model. The flywheel effect is not in conflict with those pressers. Indeed, it is the key to managing them.

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