Level 5 Leaders
Level 5 LeadersWhy was the study conducted?
Jim Collins conducted the study with 22 research associates from 1996 to 2000 to search the reason that “catapults a company from merely good to truly great”. Are there any common features – in particular concerning leadership style - within those companies that had shifted from good results to great performance on the long run? Why other companies failed to reach excellence when others outpace their competitors in a sustainable way? Are their managers sharing common personality traits? Can a good company become a great one and how?
What was the main research question?
The study focus on the leadership traits of the CEO of those few companies which reach excellence, so called “good-to-great” companies. How do they behave? How do they communicate? What are their backgrounds?
Same studies have been made among most of the companies who did not really succeed to clearly outperform their competitors during a long period of time.
How was the study made?
• The first step was to select among the “1435 companies that appeared on the fortune 500 from 1965 to 1995” those who had a specific pattern regarding their performance. The targeted companies were those who had during 15 years stock performance below or at the level of the stock market and from a transition point succeeded to have “cumulative returns” of at least 3 times the market during the next 15 years. It is also important to note that this shift should not be industry specific. These criteria have enabled to select a limited number of 11 companies.
• The second step was to select peer companies, i.e. companies who were acting in a similar field and were comparable in terms of size, age, customers and performance until the transition point than those 11 good-to-great companies but did not have the same success afterwards.
• The third step was to search for qualitative and quantitative information, which could explain the performance of the selected companies and their...