On the Level About Leadership

By Steve Clabaugh, CLU, ChFC

There are thousands of books about leadership in business and, I have a confession to make, I have read and learned from a lot of them. “Thriving on Chaos;” “The Discipline of Market Leaders’” “On Becoming a Leader;” “One Minute Manager;” “Built to Last;” “Predictably Irrational;” “The Experience Economy;” “New Ideas from Dead CEOs;” “Billion Dollar Mistakes;” “The Seven Habits of Highly Effective People;” and a lot more - but you get the idea.

My business career was focused primarily on turning around struggling organizations or creating and building new ones. Many of these organizations were in the field of voluntary employee benefits – what we used to call worksite benefits. In the process I experienced some successes and, unfortunately, some failures as well. But succeed or fail, I learned from each and every opportunity and challenge.

Here’s one important lesson I learned. If called upon to lead an organization today (stranded on a business desert island so to speak) the book I would bring is Jim Collin’s classic “Good to Great.”

A team of graduate students, working with Jim, reviewed the stock performance, covering a 40 year period, of 1,435 publicly traded companies. They selected, out of that group 11 to study more intensively. Those chosen had a 15 year period of stock returns at or below the general market. Then they had a transition point resulting in a minimum of 15 years of cumulative returns at least 3 times better than the general market return “Good to Great,” published in 2001 is the story of the principles used in common by each of the 11 companies as they achieved a remarkably high bar of success.

The book’s honesty impressed me by its willingness to acknowledge findings that differed from their original assumptions. One of those acknowledgements was about the importance of leadership in building a great company. The bias was that leadership at the top was not likely to be one of the key ingredients in a company transitioning from good to great. The facts of their research, however, led them to conclude otherwise. Not leadership from the high-powered inspirational CEOs whose names were often mentioned in the press but from some very unique individuals who demonstrated what they labeled as “Level 5” leadership.

While there are many different definitions of leadership and leadership levels, (over 1 billion - yes that’s with a “b” - hits on Google), I really like the 5 Levels as described by Collins and his research team. Here they are with some thoughts about how they can impact our own work and that of our organizations today.

Level 1 – Highly Capable Individual

Makes productive contributions through talent, knowledge, skills and good work habits.

This person is often the star of a sales organization, administrative or support organization. They understand the processes and importance of their work and have an enthusiastic attitude about excelling at it. Level 1 leaders have a positive influence on the attitudes and performance of those they work with, both peers and supervisors.

Level 2 – Contributing Team Member

Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.

The Level 2 leader loves working with a team, helping it to meet or exceed its objectives and celebrating together its successes. They are quick to help others on the team be successful with ideas and hands on support. Level 2 leaders are a major key to company success serving as department managers, supervisors, team leaders and in technical roles.

Level 3 – Competent Manager

Organizes people and resources toward the effective and efficient pursuit of pre-determined objectives.

In my experience, Level 3 leaders make up the majority of director, vice president and higher roles, often including C-suite positions. These are highly intelligent, well trained and successful men and women who provide positive direction and motivation for those they are privileged to lead.

Level - 4 Effective Leader

“Catalyzes commitment to a vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.”

A careful study of the most successful companies in our industry will, most likely, find a Level 4 leader at the top. These men and women are comfortable in their roles, passionate about their organizations and driven to succeed. They are good at motivating employees and producers to achieve ever higher goals and mentoring those they identify as having the qualities needed for current and future leaders.

Level 5 – Executive Leader

Builds enduring greatness through a paradoxical blend of personal humility and professional will.” Collins further describes the Level 5 leader as having “ambition first and foremost for the company and its success rather than for one’s own riches and personal renown.

In my experience it is very rare to find a true Level 5 leader in any industry. Over the course of a 40+ year working career, I only had the privilege of working with 1 individual who displayed the characteristics of Level 5 leadership.

So, how can you use this information to benefit you and your organization as our leaders of today and tomorrow in this vital industry? First, buy a copy of “Good to Great” and read it multiple times (I have read it no less than 25 times over the years and just recently re-read it learning something new to emphasize each time). Second, give yourself an honest evaluation of your leadership level. It can be a bit painful (at my best I evaluated myself as good Level 3 with some characteristics of Level 4). Third, work on understanding and working towards the qualities of the next higher level. It will benefit you and your company in more ways than you can imagine.

As always, feel free to reach out if you have questions, comments or want to explore more about this or any other subject we have written about. My email address is: sjcsr@hotmailcom.

Steve Clabaugh, CLU, ChFC started his career in insurance as a Field Agent, moving on to Sales Manager, General Manager, Regional Manager, Vice President, Senior Vice President, and President/CEO. A long time student of professional leadership, Steve created the Relational Leadership program that has been used to train home office, field sales associates, mid-level managers, and senior vice presidents. If you are interested in working with Steve on an individual or organizational basis, contact him at sjcsr@hotmail.com.