1. “Good To Great”
launch120, Inc.
Debra Chanda
debra.chanda@launch120.com

2. Flywheel
Buildup…
Disciplined People Disciplined Thought Disciplined Action
„You can accomplish anything in life, provided that
you do not mind who gets the credit,‟ Harry S. Truman

3. Level 5 Leadership Case Study
• Kimberly Clark Example
• Stodgy Old Paper Company
• Stock fallen 36 percent behind general market in last 20
years
• Darwin Smith, CEO, stunning transformation: turning KC
into the leading paper-based consumers products
company in the world
• Stock Returns 4-1
• Beat Rivals, Scott Paper and Procter and Gamble
• Outperformed Hewlett Packard, Coca-Cola, 3M.

4. How Did This Happen?
• Decided that traditional Core Business—Coated paper
was doomed (economics bad, competition weak)
• Announced Decisions to sell the Mills
• Throw all proceeds into the consumer
business, investing in brands like Huggies and Kleenex
• The business media called the move stupid and
downgraded the stock
• Smith never wavered
• 25 years later Kimberly Clark owned Scott Paper and
beat P & G in 6 out of 8 product categories.

5. How Did This Happen?
Through Level 5 Leadership
Level 5 Executive
Builds enduring greatness through a paradoxical blend of
Level 5 Personal humility and professional will.
Effective Leader
Level 4 Catalyzes commitment to and vigorous pursuit of a clear and
Compelling vision, stimulating higher performance standards.
Competent Manager
Level 3 Organizes people and resources toward the effective and
Efficient pursuit of predetermined objectives
Contributing Team Member
Level 2 Contributes individual capabilities to the achievement of
Group objectives and works effectively with others in a group
Highly Capable Individual
Level 1 Makes productive contributions through talent, knowledge,
Skills, and good work habits.

6. Level 5 Leaders
• Channel their ego needs away from themselves into the larger
goal of building a great company
• Their ambition is first and foremost for the institution, not
themselves
• A Study in Duality: modest and willful, humble and fearless
• Example of Colman Mockler, CEO of Gillette from 1975 to 1991
• Faced three attacks (hostile takeover bids from
Revlon, Coniston Partner—investment group)
• Had Gillette been flipped to Perelman, shareowners would have
reaped an instantaneous 44 percent gain on their stock
• Colman did not capitulate, choosing instead to fight for the
future greatness of Gillette
• Bet on technologically advanced systems, later known as the
Sensor and Mach3. They felt that the future profits and share
price in these secret development plans outweighed the short
term take over offers
• If flipped, shareholders and Mockler would have come out 3
times worse.

7. The Two Sides of Level 5
Leadership
Professional Will Personal Humility
• Creates superb results, a clear • Demonstrates a compelling
catalyst in the transition from modesty, shunning public
good to great. adulation.
• Demonstrates an unwavering • Acts with quiet, calm
resolve to do what must be determination; relies principally
done to produce best long term on inspired standards, not
results. inspiring charisma, to motivate.
• Sets the standards of building • Channels ambition into the
an enduring great company; Will company, not the self; sets up
settle for nothing less. successors for even greater
• Looks in the mirror, not out the success in the next generation.
window to apportion • Looks out the window, not in the
responsibility for poor mirror, to apportion credit for the
results, never blaming other success of the company – to
people, external factors, or bad other people, external
luck. factors, and good luck.

8. Level 5+ A “Genius with a
Management Team Thousand Helpers”
Level 5 Leader Level 4 Leader
First Who First What
Get the right people on the bus. Set a vision for where to drive the bus.
Build a superior executive team. Develop a road map for driving the bus.
Then What Then Who
Once you have the right people in Enlist a crew of highly capable “helpers”
Place, figure out the best path to To make the vision happen.
Greatness.

9. Three Circles of the
Hedgehog Concept
What are you deeply
Passionate about
What you can What drives
be best in the your
world at Economic
Engine

10. What is the Hedgehog?
• Simple crystalline concept that flows from
deep understanding about the intersection
of the preceding three circles.
• Hedgehogs see what is essential and
ignores the rest.

11. Economic Denominator
This table shows the economic denominator insight attained by the good-to-great
companies during the pivotal transition years.
Company Key Insight
Shift from profit per product line to
Abbott: per employee profit per employee fit with the idea
of contributing to cost-effective
health care.
Shift from profit per single store to
Circuit City: per geographic profit per region reflected local
region economies of scale.
Fannie Mae: per mortgage Shift from profit per mortgage to
profit per mortgage risk level
risk level
reflected that managing interest risk
reduces dependence on the
direction of interest rates.
Gillette: per customer Shift from profit per division to profit
per customer reflected the economic
power of repeatable purchases
times high profit per purchase.

12. Economic Denominator (cont.)
Company Key Insight
Kimberly-Clark: per Shift from profit per fixed asset (the
mills)to profit per consumer brand; would
consumer brand be less cyclical and more profitable
Kroger: per local population Shift from profit per store to profit per local
population reflected that local market
share drove grocery economics.
Nucor: per ton of finished steel Shift from profit per division to profit per
ton of finished steel reflected unique blend
of high-productivity mixed with mini-mill
technology.
Philip Morris: Per global Shift from profit per sales region to profit
per global brand reflected the
brand category understanding the the key to greatness lay
in brands that have global power.
Walgreens: per customer visit Shift from profit per store to profit per
customer visit reflected a symbiotic
relationship between convenient (and
expensive) store sites and sustainable
economics.

13. Preserve the core, Stimulate
Progress
Preserve Preserve
Core values Passion for creativity
Core purpose Fanatic attention to detail
Abhorrence of cynicism
The “Disney Magic” Change
1920s: Cartoons
Change
1930s:Full-length features
Cultural and Operating Practices
1950s:TV, MMC
Specific goals and Strategies
1960s:Theme Parks
1980s:International
1990s:Cruise Line
Preserve the Core/Stimulate Progress at
Walt Disney Company, 1920s – 1990s

14. Summary
• Every good-to-great company had Level 5 leadership during the
pivotal transition years
• Level 5 leaders set up their successors for even greater success in
the next generation, whereas egocentric Level 4 leaders often set up
their successors for failure
• Level 5 leaders display a workmanlike diligence—more plow horse
than show horse
• Good-to-great leaders began the transformation by getting the right
people on the bus (the wrong people off) and then figured out where
to drive it
• Good-to-great leaders were rigorous, not ruthless, in people
decisions. They did not rely on layoffs and restructuring as a
primary strategy for improving performance

15. Summary
• Good-to-great leaders began by getting the right people on the bus
and the wrong people off
• Good-to-great leaders were rigorous, not ruthless, in people
decisions. They did not rely on layoffs and restructuring as a
primary strategy for improving performance
• Good-to-great management teams consist of people who debate
vigorously in search of the best answers, yet who unify behind
decisions, regardless of parochial interest
• Understand what you can be the best in the world at, and equally
important what it cannot be the best at
• Good-to great companies set their goals and strategies on
understanding not bravado
• Short term pressures of Wall Street were not inconsistent with this
model. The key is in managing them.

16. “There is no worse mistake in public leadership
than to hold out false hopes soon to be swept
away.” Winston Churchill