our lack of corporate leadershipWhat makes a truly great leader? Is it attention to detail, a vision for the future, or maybe a strong personality? Is it having an education from Harvard or another top business school?

Maybe the formula for superior leadership is in fact much simpler than trying being the man or woman with the most magnetic personality and impressive resume. In fact, it may be that the best way to spot a great leader is simply to look for someone who doesn't focus on profits.

What Matters More Than the Bottom Line?

It may sound like heresy to say this in the business world, but the key to being a great leader is to know your place within the organization.

The Barrett Values Centre has published two concepts known as the Seven Levels of Personal Consciousness and the Seven Levels of Organizational Consciousness. The Seven Levels of Consciousness start with "survival" at Level 1 and "relationships" in Level 2. The people who work within an organization at these levels are required to focus on short-term daily results. They have an awareness of the long-term picture but have their eyes on building an organization that can be successful today.

This laser-like focus on the here-and-now is a great trait, but not once you get into the executive ranks. At the other end of the spectrum, different skill sets are required to be a successful leader.

CEOs at levels 6 and 7 need to keep an eye five to 10 years into the future to make their companies successful. A Level 6 leader is described as "making a difference," and Barrett defines a Level 7 leader as a "wisdom keeper and visionary ... motivated by the need to be of service to the world. Their vision is global and they have a holistic perspective on life."

Who Acts Like a Level 7?

Does that sound anything like a quote from one of Apple's (AAPL) executives? Steve Jobs and now new CEO Tim Cook have often used the phrase "delight our customers" to describe their driving force.

Jobs helped revolutionize the personal computer, changed the way we get music, and reinvented the way we look at cell phones. In talking about these products, he never spoke about return on investment or other metrics the company wanted to meet. In other words: Delighting customers was the main goal; financial returns would follow if the first goal was met.

Another leader who exemplifies a wisdom keeper and visionary is Steve Ells, founder of Chipotle (CMG). The company puts its focus on quality food and the customer experience rather than creating a cheaper product like McDonald's (MCD). Ells once said, "Today we recognize that fresh isn't enough. It's important to understand how animals are raised and how vegetables are grown if you're going to source the best ingredients and serve the best-tasting food."

That's one of the reasons founders generally provide better returns to shareholders than non-founder CEOs. Founders have to start with a vision for a company and are more equipped to be Level 7 leaders than those with a fancy degree or who climbed through an organization.

Why Aren't There More Level 7 Leaders?

Problems arise when people are promoted through an organization simply because of success at a lower level.

Remember, the skills that made you a great factory floor manager or financial manager don't necessarily correlate to the skills needed to be CEO. But that distinction is often missed, leading to a lack of quality leadership.

There are plenty of examples of bad leaders, but one group that stands out is comprised of the three men who competed to succeed Jack Welch at General Electric (GE). These men were supposed to be the best and brightest from America's leadership training grounds. All three had distinguished educations, with Jeffrey Immelt and Jim McNerney holding MBAs from Harvard Business School.

Despite success at less elevated levels of GE, where a lower level of organizational and personal consciousness was required, these CEOs weren't able to make the transition to a higher level of consciousness.

Immelt, who succeeded Welch at GE in 2001, has generated a total return of -44% for shareholders over the past 10 years. Robert Nardelli was ousted from Home Depot (HD) after six years on the job and presided over Chrysler when it went into bankruptcy. The jury is still out on McNerney, who helped cut costs (and innovation) at 3M (MMM) and is just now launching the 787 Dreamliner at Boeing (BA), three years behind schedule. McNerney hasn't been a dud like the other two, but visionary is hardly a word I would use to describe him.

Bottom Line

When looking at companies as investments, it's important to evaluate the CEO just as thoroughly as you evaluate profits or the balance sheet. A strong Level 7 leader can have the vision to turn a company into a powerhouse, but someone without that skill can sink it.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool. The Motley Fool owns shares of Apple and Chipotle. Motley Fool newsletter services have recommended buying shares of Apple, 3M, Chipotle, Home Depot, and McDonald's, as well as creating a bull call spread position in Apple.


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savemycountry911

Of course Obama is not a leader. We need a real president. Evan is low rating with his 50 screen names again.

October 10 2011 at 4:42 PM Report abuse +1 rate up rate down Reply
onegr8writer

My idea of corporate leadership is a man like Jack Windolf, CEO of Bollinger Insurance. Mr. windolf took a personal $500,000 bonus and gave each of his 434 employees a $1000 bonus ! If every greedy CEO out there had this same mindset, think of how many families could prosper from a shared windfall. Why in the Hell does one man need 500k, a mil, 10 mil, 20 mil bonus ? Did he do all the work himself . Also, I'm talking cash ! Not stock options or profit sharing and so on that restricts the employee. Let each employee enjoy that hard earned bonus and stimulate the economy .

October 10 2011 at 12:34 PM Report abuse rate up rate down Reply
ken62445

Check on Brad Smith at Intuit who succeeded a former GE developed leader who focused on Customer Delight and leading a learning organization. Brad learned well from his mentor.

October 09 2011 at 11:52 PM Report abuse rate up rate down Reply
BIG KELL

Yeah the guy at Chipolte is a "wisdom keeper and visionary." He's the guy with the company slogan: "Food with Integrity." How's that square up with their practice of hiring illegal aliens?

The current CEO of GE who -44% for shareholders was just on "60 Minutes." This sucker said he will go anywhere in the world to build plants, because it will fulfill his mission of doing what the shareholders want. My feeling is that the shareholder would wish he'd go away.....he's a snake. By they way he's Obama's "Jobs Czar." Ironic HUH ?

October 09 2011 at 10:12 PM Report abuse -1 rate up rate down Reply
democracks0

HIGH RANKING DEMOCRATS SAID IT'S TIME OBAMA STARTS ACTING LIKE A LEADER. OR IN OTHER WORDS HE LACKS LEADERSHIP.

October 09 2011 at 12:04 AM Report abuse -4 rate up rate down Reply
1 reply to democracks0's comment
Greg&Patty

democracks: So you're just hating him immemsely no matter what he does-maybe still pissed that McCain didn't win, opps, that's right...McCain is now a pariah among many Tbaggers dupes and the hard right....

October 10 2011 at 1:01 PM Report abuse +1 rate up rate down Reply
Dereck

Future Cast!

Citing the "Dismissal" of all the Mortgage Fraud Settlements by Bank of America, Fannie Mae, and Freddie Mac I will be the first to adjust your attention to the fact that "No Legal Judgment or Settlement involving any Bank, Corporation, or Company under the Controlling Interest of the Federal Banking System Worldwide will ever payout", this means that at least 85% of every Lawyer and Law Firm in the World will lose their highest paying Clients which will lead to the layoffs and Contract Termination of the 85% of Lawyers and Law Firms that I just mentioned. I make this statement with "No Regard" to Lawyers what-so-ever based on my long-term prior knowledge of so many of them being involved with the "Criminal Conspiracy" that "Compromised" our Financial Stability and National Security leading to our situation here today!

Thank You

October 08 2011 at 8:51 PM Report abuse rate up rate down Reply
Dereck

Left up to the Media, AOL, and the Huffington Post we will all be homeless and penniless commenting like "Freak Show Idiots" and not "Informed Individuals".

October 08 2011 at 8:44 PM Report abuse +1 rate up rate down Reply
John Lewis

Of the CEOs mentioned here, note the longevity in the position DESPITE costing the shareholders money and value and, of course, jobs at the rank-and-file level in their respective companies. In one instance (Nardelli) like so many others it appears that once you have achieved C-level executive status you go from that level laterally to other companies, regardless of track record. Try being anyplace else in their organization demonstrating the same record and see how fast you are on the street.

October 08 2011 at 11:07 AM Report abuse +3 rate up rate down Reply
dodie1990

No lack of corporate leaders who make millions and millions. Right now they are sitting on record cash in their businesses. They will not invest or hire unless and until there is some certainty from the goveernment.

October 08 2011 at 10:52 AM Report abuse +4 rate up rate down Reply
savemycountry911

That is what I was going to post, Fluff. Guess I'm just a dittohead.

October 07 2011 at 9:14 PM Report abuse +3 rate up rate down Reply