[00:00:34.090]
Welcome to episode 211 of The Non-Anxious Leader Podcast. I'm Jack Shitama. Before I get into today's episode, this is one last reminder that Family Systems 101, the free course that takes place in the Non=anxious Leader network, begins February 7. That's Tuesday, February 7. It runs every Tuesday evening for eleven weeks, from seven to 08:30 P.M. Eastern time, and it goes through my book, If you met my family, you'd understand. There is a link to information in the show notes where you can find out more and also register. We would love to see you there beginning Tuesday, February 7. So just remember, if you are listening to this, after the time of publication, the course may already have started. And now, without further ado, here is Episode 211, Level Five Leaders and Self-differentiation. In his book Good to Great, Jim Collins defines great leaders as what he calls a level five leaders. And to understand what a level five leader is, it's helpful to go through all five of the levels. Level One is a highly capable individual who uses their talent, knowledge, skills and work habits to make a positive contribution to the organization. Collins calls a level two leader a contributing team member who helps achieve group objectives and works well with others.

[00:02:06.570]
A level three leader is a competent manager who is able to organize people and resources to achieve predetermined objectives. A level four leader is an effective leader who gains commitment and pursuit of compelling vision and stimulates the group towards high performance standards. So all of those levels of leadership are important. And presumably when you get to level four, you've been able to work through levels one, two and three and show that you can do those as well. What a level five leader, though, is completely different than what we might think in terms of management, where management is getting things done and leaders are about doing the right things. A level five leader builds enduring greatness through a paradoxical combination of personal humility and professional will. Now, another way to describe professional will is that they have a fierce resolve to achieve the mission of the organization. The idea for this episode came from a Harvard Business Review classic article written by Jim Collins himself, titled Level Five Leadership the Triumph of Humility and Fierce Resolve. Collins and his team spent over a decade doing research to see what distinguishes leaders who can lead sustained excellence versus those who can lead organizational greatness for a period of time, but then ultimately see things decline.

[00:03:40.710]
Whenever I see the terms paradoxical and counterintuitive, which are two of the ways that Collins describes level five leadership, then I get interested because I know that that's kind of how life is. Life is counterintuitive and it's paradoxical and we hold things in tension. And as you would probably guess, I see elements of self-differentiation in these concepts of personal humility and professional will. So let's break it down. You may know that Collins and his team use a methodology where they try to find two companies that are nearly identical in size and product mix. They are in the same industry, and then they compare them over a period of time and they see which ones can actually achieve sustained excellence. And they do measure sustained excellence by stock price, which is a financial measure. But it is a way to see what type of leader can actually achieve the objectives of an organization for a sustained period of time. And since we are in the business of making an impact in the world, we have objectives, we have things that we want to achieve. And the question is, can these principles help us lead sustained excellence?

[00:04:57.410]
And I think they can. Once Collins and his team identified companies that had sustained excellence, then they went to interview the CEOs who had been the leaders of these companies for that period of time. The first characteristic that they identified among all of these level five leaders was personal humility. This idea that they weren't egocentric, they weren't necessarily even big personalities. Many of them were introverted or quiet or shy. But they had this common characteristic of personal humility. In those interviews, they found that the CEOs didn't even like to talk about themselves and would instinctively kind of deflect discussion away from their own role. And when they were pressed by the interviewers about it, they would say things like, I hope I'm not sounding like a big shot, or I don't think I can take much credit for what happened. We were blessed with marvelous people. According to Collins, one leader even said, there are a lot of people in this company who could do my job better than I do. I believe self differentiated, nonanxious leaders express this type of humility because they know they can't do it alone. Part of being selfdifferentiated is knowing that you are not independent, you are interdependent.

[00:06:21.050]
Collins researchers were also surprised to find out that level five leaders actually attributed much of their company's success to luck. They determined that this emphasis on luck was part of a wider pattern that they called the window and the mirror. Level five leaders exhibit humility when it's time to give credit because they look out the window. They look to factors that are outside themselves, like the people they work with and luck and the circumstances, and they don't take the credit themselves. On the other hand, when things don't go well, they look in the mirror and they take responsibility for when things go poorly. They are the ones who say the buck stops here and no matter what it was, I'm the one responsible. The window is a function of humility. It's understanding that we can only control our own functioning. And that means when good things happen, there are usually a lot of other people and factors involved. As a person of faith, I would not use the term luck. I would say that the grace of God was at work. This doesn't look much different than luck to others. But for me it fits my theological beliefs, which is we can do nothing good apart from the grace of God.

[00:07:42.290]
The mirror is the epitome of taking responsibility for self without blaming others. This is true self-differentiation. This is what nonanxious leaders do. If you are the leader, then in the end, regardless of all the factors involved, if something doesn't work out, you do everyone a favor by owning it. This reduces anxiety and it frees people up to learn from what happened and to do better in the future. For me, these concepts of personal humility and the Window and the mirror emphasize the importance of emotional connection and selfdifferentiation, as well as taking responsibility for self. According to Collins, the other main differentiator of level five leaders is professional will or fierce resolve. And to me, that emphasizes the importance of self definition. One of the leaders that Collins and his team identified was the CEO of Abbott Laboratories, George Cain. When he took over the business, its performance was in the bottom quartile of the pharmaceutical industry. Cain believed that one of the biggest problems that Abbott Laboratories had was nepotism. And so he set about rebuilding the board and the executive team with the best people that he could find, regardless of whether they were part of the family that had controlled the business.

[00:09:14.630]
Now this is interesting because Abbott was one of those family members. He was the son of a previous president, Collins Wright, "Holiday gatherings were probably tense for a few years in the Cain clan. Sorry I had to fire you. Want another slice of turkey"? But in the end, family members were pleased with the performance of their stock. Cain had set in motion a profitable growth machine. From its transition in 1974 to 2000, Abbott created shareholder returns that beat the market four and a half to one, outperforming industry superstars Merck and Pfizer by a factor of two. Now, we know that stock performance is not the only measure of excellence, but if that is the objective of the corporation, then Abbott achieved its objective and did it spectacularly under Cain's leadership. Self-differentiation is about knowing your own goals and values, this is self-definition. Nonanxious leaders are mission focused, not focused on their own personal achievements. And they put the mission first, even over family members. Imagine the amount of surrounding togetherness pressure that Cain faced as he decided to fire family members from the executive team. Talk about taking a well defined, non anxious stand.

[00:10:35.690]
For me, it's easier to remain calm when I'm focused on the mission, when I'm focusing on what I want, my personal objectives, it's easier to get reactive. It's this focus on the missional that gives level five leaders their fierce resolve, and when combined with humility, they are able to say, I may be wrong, but this is what I believe, or you don't have to agree with me, but I'm asking you to disagree and commit. Collins does write that the vast majority of people will never become a level five leader because they will never be able to subjugate their own needs, their own ambitions, to a greater cause, a greater purpose, the mission of their organization. If their work is about what they get fame, money, power, affirmation then they will never be able to build an organization where people can really contribute to the greater mission. One thing that Colin says is ironic is that actually it's that personal ambition that often drives people to become level four leaders but stands in the way of becoming a level five leader. He says that those who can make it to level five leadership are able to do so because the capability is inside of them, and then they have the right circumstances, they have a certain personal experience, they have a mentor, they come from a supportive family, they are able to reflect and become aware of who they are.

[00:12:15.120]
And so then focus on the mission. And he says from that, the seed of personal humility and professional will can develop and evolve. Collins writes, "Some of the level five leaders in our study had significant life experiences that might have sparked development of the seed. Darwin Smith fully blossomed as a level five leader after his near death experience with cancer. Joe Coleman was profoundly affected by his World War II experiences, particularly the last minute change of orders that took him off a doomed ship on which he surely would have died. He considered the next 60 odd years a great gift. A strong religious belief or conversion might also nurture the seed. Coleman Mockler, for example, converted to evangelical Christianity while getting his MBA at Harvard. And later, according to the book Cutting Edge, he became a prime mover in a group of Boston business executives that met frequently over breakfast to discuss the carryover of religious values to corporate life." Collins cautions that level five leadership is not achieved through some kind of formula, but I think understanding this idea of personal humility and professional will fierce resolve is important. I believe you're listening to this podcast because you want to make a difference in the world, and understanding these concepts when you integrate them with the concept of self differentiation can help you to do that.

[00:13:50.970]
That's it for episode 211. You can find the show notes and the transcript at thenonanxiousleader.com/211, and you can connect with me by emailing me at jack@christian-leaders.com. Until next time, thanks and goodbye.

[00:14:35.290]