"Alexander Miha" <miha[at]gmx.net> wrote
- quote -

We disagree. We should speak of statistical p-values, approximating how much
confidence we have that the coincidence of "Level 5" yada in 11 great
companies is not due to chance. Of course one would also want to confirm
that the other companies had "Level 5" leadership much less often. I am only
providing a sound bite here.

It sounds like you're taking this study as an indication of causality. I
never take such studies as that; rather, they /suggest possible/ causality.

- quote -

I think you should go to the source and answer your questions before
presuming that the sound bite version at Motley Fool represents bad
research. My post was not meant to be an endorsement per se of what MF
summarized. It is supposed to be a lead for those interested in further
study of company management, for the purposes of picking stocks or mutual
fund managers or brokerage companies, etc.

Of course, just about any measure of what constitutes "good business
leadership" may be criticized, because this is something not at all easily
quantified. Does that mean we don't even /try/ to identify the existence of
traits that make a successful leader? For my part, unless we want to throw
out vast quantities of study of human behavior (in markets; in day-to-day
transactions; etc.) that have helped advance the human condition, the answer
is no.

On Mon, 06 Feb 2006 14:52:07 -0600, Elle wrote:

- quote -

This may be true, but (nothing personal) I find it pretty useless
as a future indicator (of, say, success of another company).

First, taking a small subset based on a parameter A (e.g. 11 great
companies above), finding a common parameter B in it (e.g. a "Level 5"
leader) and then using B to predict A is generally an excellent source
of false, difficult to investigate hypotheses.

Less importantly, while it sounds good, it is written as awfully
subjective: is this guy humble enough? what about his professional
will (if you ask different people whether a person has it, I suspect
you will get different answers)?

Regards,
Alex

This past weekend I rented the 2005 DVD documentary on the Enron debacle,
"The Smartest Guys in the Room." Anyone interested in the machinations of
major corporations going downhill likely will be enthralled by this careful
assemblage of news footage, Congressional testimony by former Enron players
Jeff Skilling and Sherron Watkins, among others, interviews with California
public utility officials and teenage-looking male Enron "energy traders,"
etc.

This documentary supports a thesis I read recently at The Motley Fool:
---
Level 5 leadership
In 1996, renowned management researcher Jim Collins and his research team
took on a mammoth task. They sought out companies that had underperformed
the S&P 500 for at least 15 years, and then, at a point in time aligning
with a new CEO, went through a transition to subsequently outperform the
stock market three times over for the next 15 years. Out of 1,435 Fortune
500 companies they studied, only 11 achieved and sustained greatness. What
did all of these 11 companies have in common? Each had a "Level 5" leader at
the helm.

According to Collins, a Level 5 leader displays -- with dedication bordering
on the religious -- the paradoxical combination of deep personal humility
and intense professional will. Such managers will settle for nothing less
than an enduring great company, and they are intolerant of mediocrity and
stoic in their resolve to do whatever it takes to produce great results.
They will set up superb successors for even more greatness in future
generations, and at all times will demonstrate a compelling modesty,
shunning public attention.

"Think Small, Think Great," November 22, 2005,
http://www.fool.com/news/commentary/...ry05112207.htm ,
---

(Motley Fool's authors actually trumpet humility as a feature of effective
business leaders often, as a key word search of its site shows.)