Business Case Studies, Executive Interviews, Jim Collins on Level 5 Leadership

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Executive Interviews: Interview with Jim Collins on Level 5 Leadership
January 2008

Jim Collins
Founder of Management Laboratory in Boulder,

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  • And what did you find?
    Working on the monograph taught me that there are significant differences between the business and social sectors. For instance, in business, money is both an input (a resource for achieving greatness) and an output (a measure of greatness); in the social sectors, money is only an input, and not a measure of greatness. We also recognized the distinction between executive leadership (found more in business) and legislative leadership (found more in the social sectors). In business, a single individual often has enough concentrated power to simply make executive decisions; in the social sectors,

    composed of a much more complicated governance and power structure, rarely do we find a single individual not even the nominal chief executive with enough concentrated power to make the big decisions by himself or herself. There are a number of additional observations that came clear to us when setting the social sectors in contrast to the business sector, yet one overarching point stands out: the primary path to greatness for the social sectors is not to become more like a business; the critical difference INTERVIEW 6 is not business versus social, but great versus good.

  • What ideas from your research have been most helpful to you as an individual?
    I ve been particularly influenced by the First Who principle. I used to believe that the critical questions in life were about what what decisions to make, what goals to pursue, what answers to give, what mountains to climb. I ve come to see that the most important decisions are not about what, but about who. The primary question is not what mountains to climb, but who should be your climbing partner. If you want to have a great life, the most important question is not what you spend your time doing, but who you spend your time with. First who, then what life is people.

  • What ideas from your research have most appealed to other people at a personal level?
    Two ideas: People have found very helpful the idea of a personal hedgehog concept: what you are passionate about, what you are genetically encoded for, what you can make a living at. If you find the intersection of these three circles, you have a personal hedgehog for life. Second is the idea of the Stockdale Paradox for dealing with difficult times: you must retain absolute unwavering faith that you can and will prevail in the end and at the same time confront the most brutal facts of your current reality. Many people have told me that the Stockdale Paradox helped them through difficult times.

  • What are the most important lessons you ve learned from your passion for rock climbing that have influenced your way of thinking about building great companies?
    I ve learned so much from rock climbing. I ve learned the importance of picking the right partner. I ve learned the importance of assessing risk. I ve learned the importance of always learning, always being a beginner. But perhaps the most important lesson for business is to not confuse luck with competence. I had a professor in graduate school named Robert Burgelman who pounded into me the idea that the single most dangerous perspective in business and life is not outright failure, but to be successful without being absolutely clear about why you were successful in the first place. Success, he pointed out, clouds judgment. Better to operate with brutal selfhonesty about the role of factors other than yourself. As I look at the best executives from my research, they used this idea not as a form of weakness, but as a form of selfdiscipline perhaps we were just lucky, so we d better be just that much more disciplined to make ourselves just that much stronger, so that we will still be strong if our luck ever runs out . This is exactly the type of productive neurosis you need to prevail in highly turbulent or dangerous environments, where overestimating your capabilities can lead to disastrous outcomes.

  • What has been the most important decision in your own career?
    The decision to become a selfemployed professor. I loved teaching entrepreneurship and small business at Stanford Graduate School of Business in the early 1990s, but I found that I did not fit entirely into the mold of a traditional academic, and I did not want to go down the traditional academic path. With the guidance of great mentors who helped me think through my options, I came to see that I could choose to invert the phrase professor of entrepreneurship and, instead, become an entrepreneurial professor. Thats when I moved back to Boulder, Colorado, set up a research laboratory in my old first grade classroom, and became a self-employed professor. I explicitly did not set up a consulting business or a training company. Rather, I organized my calendar exactly as I did when on faculty at Stanford: 50% of my time in research, writing and idea development; 30% of my time in various forms of teaching; 20% of my time on administrative and organizational tasks that just need to get done. I was lucky that the decision worked, and I remain passionately engaged in my intellectual work.

1. Leadership and Entrepreneurship Case Studies
2. ICMR Case Collection
3. Case Study Volumes

This Interview was published in Effective Executive, IUP, January 2008.

Copyright © 2006 Jim Collins.

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