Page 61 - The extraordinary leader

38 • The Extraordinary Leader

that far exceed those of the good leaders. They will create even less turnover,
motivate employees to a much higher degree, and satisfy customers to a much
higher level.
These studies clearly demonstrate the significant difference an extraordi-
nary leader makes on bottom-line results and confirm that if leaders can move
from the “good” level to the “extraordinary” level at a reasonable cost to the
organization, the return on that investment will be substantial.
Jim Collins conducted fascinating research in which he and his research
team examined results from 1,435 companies from 1965 to 1995. This
research found 11 companies that made significant transformations from
“good to great.” The 11 companies had an average stock return 6.9 times
higher than that of the general market. These companies held that rate for
15 years after the point of transition. In looking at a variety of variables
about the cause of this success, Collins gave specific instructions to
researchers to downplay the role of senior executives. Collins’ researchers
looked at every possible variable that might affect the success of each com-
pany. Over time, his researchers found that they could not ignore the con-
tributions of senior executives. Collins indicated that “There was something
consistently unusual about them.” Collins and his research team found that
all 11 companies consistently had a leader whom they labeled a “Level 5
executive.” “Level 5 executives built enduring greatness through a para-
doxical combination of personal humility plus professional will.” The lead-
ership was not the only factor that differentiated the 11 companies, but it
was one of the critical variables. The researchers identified five other
factors, but effective leadership plays a critical role in the execution of
each one. 4

Is “Good” Good Enough?
Though the results for extraordinary leaders are much better than those for
poor leaders, the current problem is that too many good leaders feel that
being “good” is good enough. They are satisfied that they are not poor
leaders and, therefore, remain unchallenged to go to the next level. Many of
these good leaders do not recognize that continued improvement in
leadership would make a substantial difference in the outcomes they are
attempting to produce. Many “adequate” leaders stay where they are because
they fail to understand the differences between good and extraordinary
leaders.