leadership

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Leadership MGT535
SBS MBA/MSc
Assignment I
Dubai, 2018
Lecturer Name: Mr. Wassim
Date: November 10, 2018
Name: Charbel Matar
Student ID: SBSMBA18011976
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Executive Summary
Through this case, a conceptual analysis has been made on the Leadership theories, traits and
the qualities possessed by the leadership style of Mr. Darwin Smith. A deeper understanding
of the Level 5 leadership and the qualities possessed by the leaders of that level will be
achieved. The following case raises and reaches in the end to findings regarding the famous
debate whether people are born leaders or made to be / become leaders.
We will go in deep and discuss the Level leadership possessed by Mr. Darwin Smith and the
traits and skills he has in the continuous search to answer the golden question, if Level 5
leadership can be developed.
Moreover, based on the final findings, we will reach to the final conclusion concerning the
skills required of a person to be a leader, and if one has to be in the genre of Darwin Smith,
with regards to Level 5 leader. Also, if it is possible in today’s context to have leadership
qualities possessed by Darwin Smith.
In conclusion, Level 5 leadership is the highest level in a hierarchy of leadership capabilities.
Mr. Darwin Smith is an executive with unique capabilities allowed him to achieve a
company’s greatness through “a unique combination of personal humility and strong
professional will. We will explain how we find that there are people who have the seed of
Level 5 leadership and these who don’t. However, it is certainly known that it is best to work
to achieve the best and the goodness.
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Contents
Executive Summary .............................................................................................................................. 2
The case .................................................................................................................................................. 4
Introduction ........................................................................................................................................... 7
1. Discussing the case of Darwin Smith and his qualities as a Leader ......................................... 8
2. Analyzing if leaders are born or made from the personality of Darwin Smith ..................... 10
3. Analysis of the nature of leadership style exhibited by Darwin Smith .................................. 12
4. Types of skills that will be required of a person to be a leader, if one has to be in the genre
of Darwin Smith .................................................................................................................................. 14
5. Is it possible in today’s context to have leadership qualities possessed by Darwin E. Smith?
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Conclusion ........................................................................................................................................... 19
References ............................................................................................................................................ 19
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The case
In 1981, a seemingly ordinary man named Darwin E. Smith was named chief executive of
Kimberly-Clark, a stodgy old paper company whose stock had fallen 36% behind the general
market over the previous 20 years. Smith, the company’s mild-mannered in-house lawyer,
wasn’t so sure the board had made the right choice a feeling that was reinforced when a
Kimberly-Clark director pulled him aside and reminded him that he lacked some of the
qualifications for the position. But CEO he was, and CEO he remained for 20 years.
What a 20 years it was. In that period, Smith created a stunning transformation at Kimberly-
Clark, turning it into the leading consumer paper-products company in the world. Under his
stewardship, the company beat its rivals Scott Paper and Procter & Gamble. And in doing so,
Kimberly-Clark generated cumulative stock returns that were 4.1 times greater than those of
the general market, outperforming venerable companies such as Hewlett-Packard, 3M, Coca-
Cola, and General Electric. As noted in a Harvard Business Review article, Kimberly-Clark is
one of eleven companies on the Fortune 500 since 1975 that has been elevated from good to
great and has maintained its transformed status. Mr. Smith was recognized for making this
accomplishment possible.
Mr. Smith achieved this transformation by building strength within the company. He redefined
and raised corporate goals. To reach this end he persistently examined the company’s
leadership group, winnowing those who did not meet his specifications and promoting those
who did. Mr. Smith also increased the geographical diversification of Kimberly-Clark’s
facilities. The emphasis he placed on consumer products was exemplified by the money he
allotted to research and development ($111 million in 1987) and his decision not to give up on
the fledgling diaper business, against much opposition. His vision helped lead HUGGIES®
diapers to its rank as the number 1 brand in the country today.
Additionally, he strengthened the company’s position in the tissue segment of the paper
industry, pushing both Kimberly-Clark and its competitors to improve and strengthen their
tissue technology and facilities. The financial strength of the industry’s tissue segment today
is testament to his efforts. During Mr. Smith’s tenure as chairman and chief executive officer,
Kimberly-Clark stockholders experienced returns of 19.6% annually, generating cumulative
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stock returns that were 4.1 times greater than those of the general market and outperforming
venerable companies including industry rivals. It had been a welcomed change from the 20
years prior when Kimberly-Clark stock had fallen 36% behind the general market.
Mr. Smith was the type of leader who gave credit for success to the employees, the managers,
his predecessors, and the customers. Smith’s turnaround of Kimberly-Clark is one of the best
examples in the twentieth century of a leader taking a company from merely good to truly great.
Smith is an individual who blends extreme personal humility with intense professional will.
According to a five-year research study, executives who possess this paradoxical combination
of traits are catalysts for the statistically rare event of transforming a good company into a great
one. Darwin Smith was identified as the one who has the highest level in a hierarchy of
executive capabilities in the research. Leaders at the other levels in the hierarchy can produce
high degrees of success, but not enough to elevate companies from mediocrity to sustained
excellence.
Darwin Smith’s leadership qualities not only transformed a good company into a great one but
he was able to get the right people on the bus and the wrong people off the bus and creating a
culture of discipline. Good-to-great transformations don’t happen without Level 5 leaders at
the helm. They just don’t.
Level 5 leadership is counterintuitive. Indeed, it is counter-cultural. People generally assume
that transforming companies from good to great requires larger-than-life leaders big
personalities like Iacocca, Dunlap, Welch, and Gault, who make headlines and become
celebrities. Compared to those CEOs, Darwin Smith seems to have come from Mars. Shy,
unpretentious, even awkward, Smith shunned attention.
When a journalist asked him to describe his management style, Smith just stared back at the
scribe from the other side of his thick black-rimmed glasses. He was dressed unfashionably,
like a farm boy wearing his first J.C. Penney suit. Finally, after a long and uncomfortable
silence, he said: “Eccentric.” Needless to say, the Wall Street Journal did not publish a splashy
feature on Darwin Smith.
But if you were to consider Smith to be soft or meek, you would be terribly mistaken. His lack
of pretense was coupled with a fierce, even stoic, resolve toward life. Smith grew up on an
Indiana farm and put himself through night school at Indiana University by working the day
shift at International Harvester. One day, he lost a finger on the job. The story goes that he went
to class that evening and returned to work the very next day. Eventually, this poor but
determined Indiana farm boy earned admission to Harvard Law School.
He showed the same iron will as CEO of Kimberly-Clark. Indeed, two months after Smith
became CEO, doctors diagnosed him with nose and throat cancer and told him he had less than
a year to live. He duly informed the board of his illness but said he had no plans to die anytime
soon. Smith held to his demanding work schedule while commuting weekly from Wisconsin
to Houston for radiation therapy. He lived 25 more years, 20 of them as CEO.
Smith’s ferocious resolve was crucial to the rebuilding of Kimberly-Clark, especially when he
made the most dramatic decision in the company’s history: sell the mills. Shortly after he took
over, Smith and his team had concluded that the traditional core business coated paper was
doomed to mediocrity. Its economics were bad and the competition weak. But, they reasoned,
if Kimberly-Clark was thrust into the fire of the consumer paper-products business, better
economics and world-class competition like Procter & Gamble would force it to achieve
greatness or perish.
And so, like the general who burned the boats upon landing on enemy soil, leaving his troops
to either succeed or die, Smith announced that Kimberly-Clark would sell its mills even the