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taken from Humilitas by John Dickson

Jim Collins, the Stanford University business analyst and author of the best-selling Good to Great conducted a five-year study exploring what turns good companies into great ones. He defined a "great" company as one that experienced a turn-around in which it financially outperformed the market trend by at least three times for a fifteen-year period. One classic example is Gillette, best known for shaving products. Betweeen 1980 and 1995 the company enjoyed cumulative stock returns 7.39 times greater than the general stock market. Only eleven companies in the US made Collins's "great" category. Most notable were those that didn't make the cut, including Coca-Cola, Johnson&Johnson, Walmart and General Electric, companies that only outperformed the market by 2.5 times.

Many observers were surprised to learn that one of the key factors in all eleven good-to-great companies during the growth phase was what Collins describes as Level 5 Leadership - that is, leadership marked by two characteristics: steely determination and an attitude of humility. Collins records the puzzlement of his research team at the consistency of this finding:

"We were surprised, shocked really, to discover the type of leadership required for turning a good company into a great one. Compared to high-profile leaders with big personalities who make headlines and become celebritities the good-to-great leaders seem to have come from Mars. Self-effacing, quiet, reserved even shy - these leaders are a paradoxical blend of personal humility and professional will. They are more like Lincoln and Socrates than Patton and Caesar."

Collins's 2009 book How the Mighty Fall bears out the flipside - when successful companies become arrogant, it often spells their downfall.