CEO Leadership Skills: What Does It Take to Be Level 5?

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...five years later you make an identical decision, but it doesn't work out this time, because your gut hasn't worked out that you're way too busy to provide the personal mentoring and coaching you used to, to bridge the skills gap.

Or your gut doesn't know that the profile of your ideal target client has changed because it's nine months since you had a really detailed interaction with a broad spectrum of your client base...

...or whatever. It's not that your power of snap decision making has disappeared, it's just that a CEO (much as they rail and say 'It isn't so') is farther from the front line of where the data is than the single-point-of-authority entrepreneur - and so it becomes equally important (if not more so) to have trusted systems, trusted deputies and trusted feedback loops.

I think it becomes more about knowing *when* to listen toy your gut - and when not. In the Fun years, the gut is pretty ubiquitous in decision-making, and rightly so. As the business grows and becomes more complex, and the leader's role shifts more to being a CEO, the quality and relevance of the data that the gut is running on degrades, and the us the quality of the decisions does, too.

So for example, in the early days your gut tells you this interviewee has all the right attitudes and you should hire her even though she doesn't have all the right qualifications on paper. And your gut is right.

Five years later

Excellent list Gini. As an advisor to agency CEO's, I would add "commitment" to the traits of a level 5 CEO. For me, commitment means I'll do not I'll try. Few owners/CE0's truly carry out their commitment.

Knowing what to do is important. Actually doing it is the mark of a true leader.

Super post, Gini.

The biggest problem I've seen people consistently struggle with in transitioning from entrepreneur to CEO-leader is to do with trusting their gut.

A finely tuned gut is the single-point-of-authority entrepreneur's biggest asset, and the CEO-leader's biggest liability.

Some people find it really hard to get this, and end up trying to run their larger company the same way they ran their small team, and it just doesn't work.

You. of course, are too brilliant to make any such mistake.

- Les

Gini: My thoughts about what a great Level 5 CEO is after reading your blog and all these fine responses is only one thing. A Level 5 Leader (CEO) or above will spend a great deal of time finding out how to weld his team together and build each others respect for their teammates skills and contributions to the companies success.

I espiecially agree with the statement that those great CEO team members work with their CEO, not for their CEO and that great CEO's inspire these respectable attributes in their people. Glenn

Everyone probably has their idea of what a level 5 CEO is. All the comments I've read are valid.

To me a Level 5 CEO is someone who guides the company to become bigger than the CEO. Too often in entrepreneurial companies, when the CEO disappears, the company does too.

Call it vision, call it passion, call it whever you want, but a true Level 5 CEO guides and nutures a company that grows beyond the CEO.

Gini, your list is fantastic and the responses you've received are great as well. I do agree that you'll need to shorten your ultimate list to truly be effective as a Level 5 CEO. Simplicity is best, and more effective.

As you may know, I have a trademark pending on Visionary Succession Planning. VSP is a program I've developed (and continue to perfect) for entrepreneurs in mostly family-owned businesses. All too often, an entrepreneur properly plans for the legal and financial aspects of succession planning, but doesn't think to address the vision and passion that made the business successful.

I refer to this as, "What would Pop do?" I refer to Pop as the entrepreneur because men were primarily the small business owners in the past and were more visible than women. Even when Mom was involved in the business, and often, many family members were involved as well.

Anyway, the family business was successful for 40-50 years. The family worked long, hard hours. Everyone in the neighborhood knew the family and the business very well. Proper planning was done to make sure Junior would be prepared to take over the business. Pop had his attorney draw up the legal documents, and his CPA prepared the financial documents as well. Pop even set up a bank account with additional working capital for the business for after he was gone, just in case.

Pop passes on and Junior takes over the business. Armed with an MBA and ten years corporate experience, most recently as a Vice President for a Fortune 500 company, Junior integrates new technology into the small business. All seems well, except Junior doesn't have Pop's vision or passion. Slowly, the little things that Pop did everyday for the past 40-50 years, virtually unnoticed, disappear, as do the customers, claiming, "It's just not the same."

Sure, it may seem a drastic example, but the power of vision and passion is what makes an idea, a thriving business. It's the basis of establishing corporate culture. It's the backbone of relationships that are akin to married couples of 40-50 years that complete each others' sentences and know what each other is thinking in particular situations. Especially crucial ones.

So, the one thing I recommend you add to your Level 5 CEO list is to make sure your team, your staff, and your closest executives, truly understand your vision and passion. They must understand all the little things and finest detail of your thought process for critical situations. They should be able to continue driving Arment Dietrich with your hand gently on their shoulders, physically, emotionally, or in spirit. And, in times of doubt or uncertainty, they can think, "What would Gini do."

Gini,

As I have worked with many CEOs in my lifetime here are some thoughts as follows:

1. A Level-5 CEO is one who can delegate everything but be responsible for all.
2. Successful CEOs not only do well at work, but in all facets of life - Jon Huntsman Sr. is a great example of this.
3. Have no more than 4 key things you focus on hourly. CEOs can always tell exactly where they are at any given time - profits, expenses, and all outstanding issues.
4. Be yourself. You will never reach your full potential as someone else. Remember your roots and stick to your knitting.
5. Goals are a means to an end. Remember what the end is in your life.
6. Creativity comes with balance in your life. No balance, no creativity.
7. Remember who "brung you to the dance".
8. Be overly generous to those who make your life possible. If you can get 12%, take 9% ... one of the great Billionares in Hong Kong awhile back was interviewed and this was the reason for his success.
9. Help those who are unable to help themselves without any expectation for assistance in return.
10. Smile and be happy. No one likes a grumpy old frustated woman as a CEO.

Hope some of these help and keep up the excellent work.

-Bob-

Gini. I really enjoyed reading your post. My monthly Vistage meeting today was focused around making your company remarkable. There was a great video clip that the speaker showed us of John Edwardson of CDW speaking about the very topic of your post. A few things that resonated with me from that video clip were: 1. teams make better decisions than individuals and 2. get ideas from others without smothering them with your ideas. I can send you the link as soon as the speaker sends it to me if you are interested. I thought it was a worthwhile 5 minute clip.

Personally, I tend to fall back to my martial arts training and philosophy on a lot of business questions I pose to myself or others pose.

One thing that I always live by is the idea that a great Sensei (leader, teacher, CEO etc.) would welcome the day his student was able to out perform him. I try to take this philosophy and apply it to business and how I train my employees/managers. Don’t just train a successor to take over your position, train them with the expectation and hope that they will take what you have created and make it better and exceed what you have been able to achieve or create. Having the ability to do that and not let ego or other stuff get in the way is a wonderful/magical thing. I think that only someone who has a strong character, self confidence and a non-defeatist attitude can achieve such a goal.

I have also learnt via Cuong Nhu (the martial art I train in and teach) that the following 10 leadership attributes are key: fitness, wellness, assertiveness, openness, fairness, directness, oneness, togetherness, forgiveness and creativeness.

It’s great to think about all this stuff when one is cycling. I find it allows my mind to be free to flow (no interruptions etc.). Old zen stories say that the body (like the mind) is also best equipped to perform when the fighting techniques are no longer required to be first thought before executed (ie. the body is flowing and not thinking about the next move). The moves just come out automatically without thoughts preceding them. There was an old zen story about a zen master who kept asking his best student how many movements of a kata (he was practicing) he could remember. This student had been chosen to defend them against a pending attack on the kingdom. After lots of training, the student finally said he remember none of the movements - the zen master told him he was now ready to go out and protect the kingdom. Takuan said "The mind should be nowhere in particular" and I think this is accomplished when cycling (and other sports too) as it helps the mind to flow and great ideas are borne (just like in the zen story the body flows and great physical feats are accomplished). If you are interested in a quick read “Zen in the Martial Arts” by Joe Hyams is excellent (only 140 pgs!) and its not just about Martial Arts, the lessons are far reaching in my opinion.

Gini:

One other thing I thought of as the kids and I walked to the Library...

Level 5 Leaders are running a marathon, not a sprint. Collins talks about accelerating a flywheel, where every revolution there's a little push that makes it go faster. Level 5 leaders rarely have "bold new initiatives". The iPhone seemed bold and new, but it was in the works for years and actually lagged the market (there were lots of smart phones in the market, some even played music) but instead of reacting to the market, Jobs pushed his team to improve, improve, improve, and those little improvements add up to a great product.

Continuous acceleration, not big leaps.

The last sentence in "How the Mighty Fall" is, "Success is falling down, and getting up one more time, without end."

Great post, Gini! I love that you shared the questions you thought of while riding and am excited to see when and how the solutions develop. One question, when you figure out how to "make it rain", could you please send us all the formula?
-Lois
@loisatvistage

One of the advantages of surrounding yourself with smart people (and being willing to delegate) is you can admit you don't know EVERYTHING as CEO.

There are many younger CEO's who "don't know what they don't know." Which can be dangerous. Most entrepeneurial CEO's are risk-takers by nature (they have to be). But risks must be mitigated in business as much as possible. By using an expert team of with specialties in different areas, the team will supplement any gaps in the leader's expertise.

The key is first to acknowledge you don't have all the answers. By the way, this makes you human--which is a good thing. Most people don't like working for those who live up on the pedestal.

Not much to add Gini, those are all terrific. The most effective leaders are the ones I have worked with, not for. That is not a subtle semantic distinction; worked with as opposed to work for. Understand the people you have around you are resources, provide them an opportunity and an environment to exceed expectations. Develop a plan with them, and pursue it together. Make sure it has realistic goals, achievers often over reach and struggle when they fail. Plans must include milestones to measure progress and offer opportunities to correct or change should it move off course. Provide honest and frequent feedback. Not every plan delivers as expected, help them learn from the experience and measure them not only when they fail, but as they recover. It is more fair and will provide a better measure of the person. You might include more time to pursue a life outside of work. Make sure the things that you are passionate about can respond in kind. I pursue business with my head, not my heart. This helps me be objective when I need to make difficult decisions. The things I love, love me back. I have never gotten that level of passion from any business pursuit.

Gini,

I agree with Brad's points about how true Level 5 leaders don't seek press or make it about themselves (which puts into question many of the role models we typically think of as great CEOS (some of which you mentioned (Dell, Gates, Welch)).

So I'd make one point and add a key attribute. The point: Great CEOs and Level 5 CEOs are not synonymous; at best Level 5 CEOs are a subset of great CEOs.

The key (IMHO) to being a Level 5 leader is authenticity. There is literally a different Level 5 recipe for every leader/CEO - the key question is do you play your music; or do you try to play someone elses?

Gini,

I agree with Brad's points about how true Level 5 leaders don't seek press or make it about themselves (which puts into question many of the role models we typically think of as great CEOS (some of which you mentioned (Dell, Gate, Welch)).

So I'd make one point and add a key attribute. The point: Great CEOs and Level 5 CEOs are not synonymous; at best Level 5 CEOs are a subset of great CEOs.

The key (IMHO) to being a Level 5 leader is authenticity. There is literally a different Level 5 recipe for every leader/CEO - the key question is do you play your music; or do you try to play someone elses?

Hire slow is a great mantra. If the people you hire don't have the compassion, desire for success, friendliness, whatever other things you need to be successful when they walk in the door...you will eventually fire them. In my business, I can teach them how to do things but I can't teach them to be compassionate, to treat people with dignity, how to express themselves. If they don't have those internal abilities and feelings, they won't be successful in my business. Your business will have different needs...hire for that...you can train for competency.

Such a brilliant topic, Gini! I would add a few thoughts to your already insightful and powerful list:

1. Know Thyself: master self awareness
2. Self leadership is a crucial element of any effective leadership
3. Leverage, leverage, leverage
4. Lighten up and have fun! :)

Gini:

I just finished Jim Collin's "How the Mighty Fall" and have been thinking more about these issues as well. Here's a short, and inconclusive list.

Some nuggets from that book.

Level 5 Leaders use a "Window/Mirror" approach. When good things happen they look out the window (we were fortunate, I have great people, our clients are terrific). When bad things happen they look in the mirror (We have fallen short due to MY actions, leadership, ideas, etc.)

Level 5 Leaders have a fierce resolve, and the fire in their belly moves them to consistently work hard in good times or bad. They don't let good times go to their head (because good times come from outside the window) and they take bad times personally. This ambition and resolve is directed toward making a great organization first and last. They see themselves as transient actors in the greater work of furthering their organizational mission.

Level 5 Leaders create clear succession plans and ready multiple members of their team to take over the reigns.

For examples, Lou Gerstner, Andy Groove, Blake Nordstrom, the real level 5 leaders don't have a lot of press or books written about them. It would be a useful exercise to look at the enduring PR or Marketing firms and see who qualifies in your market space. I'd be willing to ponder that over a beer or cup of coffee with you.

My Ireland Franchisee asked me yesterday "What do you do as a leader"? The first thing out of my mouth was "DELEGATE". Thank you so much for validating my response.

I am ready to take your advice by spending more time thinking and creating. It's so easy to spend time on the daily tasks that I think I will need to hang my door sign "Do not disturb I am twittering" more often!

Thank you for a great list!

Well, because you asked... One of my mottos is - to lead is to serve. I try to ask myself every day how I can best support those around me to do their best work. Which you pretty much speak to in your points about supporting and empowering your people.

I would also add--take credit for very little. Give credit willingly and liberally. People thrive when their good work and their energy is validated.

Never get too far away from the work. I worked with a 'leadership team' once that didn't actually engage in the work itself. They'd celebrate when they made a new sale, but didn't seem clued in to when good work was delivered or if we were keeping our promises. They helped me to define my values in terms of service.

Finally, while I might strive to be like Steve Jobs, I have to always remember he achieved the success he did because he never lost his entrepreneurial spirit. You just know that guy knows what's going on at all times and, if necessary, he'll take out the trash. He just does what needs to be done and puts his energies where they will do the most good.

You're a hero of mine, Gini.

Great list! I enjoy reading your posts, Gini!

I would add to your comment on hiring -
Hire character, work ethic and attitude because most everything else can be taught.

Oops - forgot to log out. That was Gini, not Arment Dietrich.

Dan, I like what you've added. That makes me add one more: Don't be afraid to get your hands dirty!

Julio, are you buttering me up for something??

I think once you surround yourself with smart people and let them flourish, it will always be a success in the end. "Hands-on hands-offness" rules most of the time but then you do have to be ready to take charge when needed. Nice list. (Aren't you like a Level 7 already?)

What would I add to the list?

1. Be and Do what others Can't or Won't.
2. Live to Learn - Learn to Live.
3. "Be the change you want to see in the world"

There are not many people I like and even Less that I respect - initial indications are, after reading your posts, that you are joining the very few that are earning positive reviews on both sides of the equation.

Excellent summary Gini.

Dan

Gini,

You have created a brilliant list and any CEO who does all of these things would have an organization that was unstoppable, if they did them all well.

I believe that most CEO's would have to prioritize this list to a shorter one in order to be successful and the one thing that I would add for consideration would be to define, create and reinforce the culture that they have consciously created for the business.

I also have to disagree with you on the point that you are nowhere near the answer. You have amazing insight into what it takes to be a great leader.

Love reading your thoughts, thanks for sharing.

Randy