Are great executives born, or are they home-grown? How to find out.By Ellen Frankenberg
“Getting the right people on the bus” has become a routine phrase among business leaders, thanks to the breakthrough research in Jim Collins’ fine book, Good to Great. Collins and his crew compared outstanding national companies with their less successful competitors—for example, Kroger vs. A&P, Nucor vs. Bethlehem Steel, Walgreen vs. Eckerd—to find what made the difference between success and decline.
According to Collins, the leaders of these standout companies put people before strategy. They got the right people on the bus, moved the wrong people off and ushered the right people to the right seats. Only then did they decide where to drive the bus.
In a family business, getting “the right people” on the bus takes a unique spin, because the children you love so well may not be “the right people” for your particular bus (i.e., business).
Sometimes you can move your son to a different seat; sometimes you have to tell your daughter that she needs to get off at the next stop and transfer to another bus that will more likely take her to her own unique destination. Sometimes you have to look for other leaders beyond the family who can drive the bus in the right direction.
Does this mean you should sell the bus? Not necessarily. The Ford family chose a series of non-family executives (some more successful than others) to lead Ford Motor Company until the presumably right great-grandson of Henry came along. Young Bill Ford was groomed with a variety of company responsibilities until he was chosen as CEO in 1999. How successful his leadership will be remains to be seen. But Henry Ford’s descendants retained 40% of the voting stock, so they could determine not only when one of their own should get on the bus but also when he should drive it.
A leader who can take a company from “good to great” emerges through a hierarchy of capabilities to become a top executive:
Level 1: Highly capable individual. Makes productive contributions through talent, knowledge, skills and good work habits.
Level 2: Contributing team member. Contributes to the achievement of group objectives; works effectively with others in a group setting.
Level 3: Competent manager. Organizes people and resources toward the effective pursuit of predetermined objectives.
Level 4: Effective leader. Catalyzes others to commit themselves to pursue a clear and compelling vision.
Level 5: Executive. Builds enduring greatness through a combination of personal humility and professional will.
The Level 5 executives whom Collins discovered—those whose companies sustained great performance for 15 years or more—were all cut from the same cloth, whatever their industry. They demonstrated a “compelling modesty” and left their egos behind. They relied principally on inspired standards, not charisma, to motivate. They channeled ambition into the company, not themselves. They groomed successors for even more greatness than their own.
Paradoxically, the Level 5 executives also demonstrated unwavering resolve to do whatever needed to be done to produce the best long-term results, no matter how difficult. They persistently looked out the window, not in the mirror, to discover the ingredients of success—commending other people and external factors rather than taking the bow themselves.
Are Level 5 leaders born, or can they be home-grown? Their inner personalities remain a mystery, but their performance within the company can be observed and described.
As you begin to determine who has the potential to lead your company, you may also want to implement a widely used tool: a “360-degree assessment,” tailored to the kind of leadership your company needs at this time. A 360-degree assessment is a brief evaluation form completed from all the points of the compass—by those who work around, above and below a candidate, usually five or six observers who complete the form anonymously. The compiled data are then shared with the candidate, so he or she can determine priorities and develop strategies for growth.
Such an evaluation, tailored to Collins’ research, might ask these observers to rank the candidate from “poor” to “excellent” on items such as:
• Demonstrates good work habits (Level 1).
• Contributes to the effectiveness of the team (Level 2).
• Organizes people so they can reach their objectives (Level 3).
• Stimulates the group to achieve high performance (Level 4).
• Credits others, more often than promoting self (Level 5).
Asking those who work closely with your daughter or nephew to evaluate them on these essential leadership criteria will help you clarify, with the help of more objective data, who belongs on the bus and who doesn’t. You may want to ask the maintenance people to complete an evaluation, as well. They may know more about your potential successors than you imagine.
If you must ask someone you love to move to another seat on the bus, or leave the bus altogether, it helps to have data such as a 360-degree assessment available. Data must be sifted and focused into one or two realistic goals against which individuals can measure themselves. The individuals can then make a plan to raise their leadership capabilities. Often a mentor or coach can provide practical support and feedback, so the odds increase that they’ll actually implement their growth plan, or decide for themselves whether they’re on the right bus—or in the right seat.
Challenging your successors to develop their leadership potential may be the best thing you can do for the future of your company and your family. Great leaders are as rare as great companies. But the buses are constantly leaving the station.