The 5 Levels of Leadership: Proven Steps to Maximize Your Potential

by John C. Maxwell

Leadership deals with people and their dynamics, which are continually changing. They are never static. The challenge of leadership is to create change and facilitate growth. Those require movement, which, as you will soon see, is inherent in moving up from one level of leadership to the next.

Too often when people think of their journey into leadership, they envision a career path. What they should be thinking about is their own leadership development! Good leadership isn’t about advancing yourself. It’s about advancing your team. The 5 Levels of Leadership provides clear steps for leadership growth. Lead people well and help members of your team to become effective leaders, and a successful career path is almost guaranteed.

When I developed the 5 Levels, I conceived of each level as a practice that could be used to lead more effectively. As time went by and I used and taught the levels, I realized they were actually principles. Here’s the difference: a practice is an action that may work in one situation but not necessarily in another. A principle is an external truth that is as reliable as a physical law. For example, when Solomon said, “A gentle answer turns away every wrath, but a harsh word stirs up anger,” he stated a principle that is universal and timeless. Principles are important because they function like a map, allowing us to make wise decisions. If we embrace a principle and internalize it, it becomes a part of our values. The 5 Levels influences my leadership life every day.

Level 2 is based entirely on relationships. On the Permission level, people follow because they want to. When you like people and treat them like individuals who have value, you begin to develop influence with them. You develop trust. The environment becomes much more positive—whether at home, on the job, at play, or while volunteering.

One of the dangers of getting to the Permission level is that a leader may be tempted to stop there. But good leaders don’t just create a pleasant working environment. They get things done! That’s why they must move up to Level 3, which is based on results. On the Production level leaders gain influence and credibility, and people begin to follow them because of what they have done for the organization.

Leaders become great, not because of their power, but because of their ability to empower others. That is what leaders do on Level 4. They use their position, relationships, and productivity to invest in their followers and develop them until those followers become leaders in their own right. The result is reproduction; Level 4 leaders reproduce themselves.

The highest and most difficult level of leadership is the Pinnacle. While most people can learn to climb to Levels 1 through 4, Level 5 requires not only effort, skill, and intentionality, but also a high level of talent. Only naturally gifted leaders ever make it to this highest level. What do leaders do on Level 5? They develop people to become Level 4 leaders.

Years ago I remember seeing a Ziggy cartoon by Tom Wilson in which the hero of the strip was on the road to success, and up ahead he could see a sign that said, “Prepare to stop for tolls.” That would be good advice for anyone wanting to rise up the 5 Levels of Leadership. There is no easy way to get to the top. And each time you go up, you pay. You have to be more committed, you have to give more, you have to use more energy, each time you want to go up a level. And so do your people. Nobody achieves anything great by giving the minimum. No teams win championships without making sacrifices and giving their best.

Growing as a leader requires a combination of intentional growth and leadership experience. If people rely only on experience without intentionally learning and preparing for the next level, they won’t progress as leaders. On the other hand, if they only prepare mentally yet obtain no experience through risk and reward, and trial and error, then they still won’t progress. It takes both—plus some amount of talent. But you have no control over how much talent you possess. You control only what you do with it.

What happens when leaders make a job change and begin leading a new group of people? If you assumed that they stay on the same Level of Leadership, you are mistaken. Every time you lead different people you start the process over again. People don’t recognize you as a Level 4 People Developer when you haven’t worked with them. You have to earn that. The same goes for Levels 3 and 2. You start over at Level 1. However, there is good news. If you reached Level 4 with some other group of people, you already know how to get there. And because you’ve done it before, you can move up the levels much more quickly than the previous time.

One of my favorite sayings is, “If you think you’re leading but no one is following, then you are only taking a walk.” That thought captures the true nature of leadership and also expresses the most important insight about the 5 Levels of Leadership. To succeed as a leader, you must help others follow you up the levels. If people aren’t following you, you’re not moving up from Level 1 to Levels 2 and 3. If other people following you up the levels aren’t becoming leaders themselves, then you haven’t reached Level 4. And if the people you’re developing aren’t on Level 4 developing generations of leaders, then you will not achieve Level 5. The entire process includes other people and focuses on helping them. As Quaker leader C. W. Perry said, “Leadership is accepting people where they are, then taking them somewhere.” That’s what the 5 Levels of Leadership is all about!

Part 1—Leadership Level Characteristics

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The leaders who do the greatest harm to an organization are the ones who think they have arrived. Once they receive the title or position they desire, they stop growing. They stop innovating. They stop improving. They rest on their entitlements and clog up everything. Make the most of this opportunity in leadership by making growth your goal. And strive to keep growing. Good leaders are always good learners. To be an effective leader, you must believe that the leadership position you receive is merely an invitation to grow. If you do that and become a lifetime learner, you will continually increase your influence over time. And you will make the most of your leadership potential, no matter how great or small it might be.

Ethical Values—What does it mean to do the right thing for the right reason? Relational Values—How do you build an environment of trust and respect with others? Success Values—What goals are worth spending your life on?

The bottom line is that an invitation to lead people is an invitation to make a difference. Good leadership changes individual lives. It forms teams. It builds organizations. It impacts communities. It has the potential to impact the world. But never forget that position is only the starting point.

I have come to embrace leadership as action, and I endeavor to teach that concept to leaders in conferences and seminars at home and abroad. One of the ways I do that is through my international nonprofit leadership organization, EQUIP, which has trained more than 5 million leaders in 160 countries. The organization’s trainers and I have found the number one challenge in developing countries is introducing the idea of leadership as action instead of position. Leaders in these countries often possess an “I’ve arrived” mindset. We want them to understand one of the most important characteristics of leadership: leaders are always taking people somewhere. They aren’t static. If there is no journey, there is no leadership.

Just because you have the right to do something as a leader doesn’t mean that it is the right thing to do. Changing your focus from rights to responsibilities is often a sign of maturity in a leader. Many of us were excited in early leadership years by the authority we had and what we could do with it. That power can be exhilarating, if not downright intoxicating. It’s the reason President Abraham Lincoln said, “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.” Each of us as leaders must strive to grow up and grow into a leadership role without relying on our rights. If we can mature in that way, we will start to change our focus from enjoying authority for its own sake to using authority to serve others.

Positional leaders can become lonely if they misunderstand the functions and purpose of leadership. Being a good leader doesn’t mean trying to be king of the hill and standing above (and set apart from) others. Good leadership is about walking beside people and helping them to climb up the hill with you. If you’re atop the hill alone, you may get lonely. If you have others alongside you, it’s hard to be that way.

As I began to lead people early in my career, I learned a valuable lesson. I always tried to set up new leaders for success, and I often gave them everything I could to help them become established leaders. A leadership position. My time. My influence. Modeling. Resources. Leadership opportunities. And here’s what I found: if I gave the good potential leaders little or nothing, they still succeeded and became good leaders. In contrast, when I gave mediocre leaders everything I had, they still didn’t succeed and couldn’t establish themselves as good leaders. The position does not make the leader—the leader makes the position.

Clarence Francis, former chairman of General Foods, said, “You can buy a man’s time; you can buy his physical presence at a given place; you can even buy a measured number of his skilled muscular motions per hour. But you cannot buy enthusiasm… you cannot buy loyalty… you cannot buy the devotion of hearts, minds, or souls. You must earn these.” People who rely on their position at Level 1 rarely earn more than “just enough” from their people. And that means they cannot achieve any great level of success, because accomplishment requires more than that. Success demands more than most people are willing to offer, but not more than they are capable of giving. The thing that often makes the difference is good leadership. That is not found on Level 1.

Whistler’s Law says, “You never know who’s right, but you always know who is in charge.” Well, I think Whistler must have known some Level 1 leaders. The truth is that if you have to tell people that you’re the leader, you’re not. If you continue to rely on your position to move people, you may never develop influence with them, and your success will always be limited. If you want to become a better leader, let go of control and start fostering cooperation. Good leaders stop bossing people around and start encouraging them. That is the secret to being a people-oriented leader, because much of leadership is encouragement.

People frequently want to know how the many concepts in my various books go together. As I’ve taught the 5 Levels of Leadership over the years, the book they’ve asked most about is The 21 Irrefutable Laws of Leadership. “Which laws do you practice on Level 1?” people ask. The truth is that every law can be practiced on every level. However, it is also true that certain laws are best learned as a person grows and moves up the 5 Levels of Leadership. I’ve included an explanation of the Laws of Leadership that best apply to each level. They are certainly not necessary for one to learn the 5 Levels, but they are provided for reference in the event that it can serve you in your growth process.

In contrast, when a leader learns to function on the Permission level, everything changes. People do more than merely comply with orders. They actually start to follow. And they do so because they really want to. Why? Because the leader begins to influence people with relationship, not just position. Building relationships develops a foundation for effectively leading others. It also starts to break down organizational silos as people connect across the lines between their job descriptions or departments. The more barriers come down and relationships deepen, the broader the foundation for leading others becomes. When people feel liked, cared for, included, valued, and trusted, they begin to work together with their leader and each other. And that can change the entire working environment. The old saying is really true: people go along with leaders they get along with.

Positional leaders often focus their efforts on serving themselves or their organization, with too little regard for others. However, leaders who move up to Level 2 shift their focus from me to we. They like people and treat them like individuals. They develop relationships and win people over with interaction instead of using the power of their position. That shift in attitude creates a positive shift in the working environment. The workplace becomes more friendly. People begin to like each other. Chemistry starts to develop on the team. People no longer possess a “have to” mind-set. Instead it turns to “want to.” The workplace becomes more enjoyable for everyone—leaders and followers alike.

Recently while on a trip to South Africa, I stopped in a bookstore in Johannesburg and picked up the book Leading like Madiba: Leadership Lessons from Nelson Mandela, by Martin Kalungu-Banda. I read it on my flight from South Africa to Kenya. It was filled with personal accounts of people who had witnessed their leader, Nelson Mandela, placing high value on people and lifting them up. One of my favorite stories was about a successful businessman named Peter, who had been invited by the president to come to his home and have breakfast.

I was stuck in this wrong kind of thinking for several months. But then I realized what my real problem was: I was a people pleaser. My goal had been to make everyone happy. That was the wrong goal. As a leader, my goal should have been to help people, not to make them happy.

As a leader, you have great power to lift people up. Mother Teresa said, “Kind words can be short and easy to speak, but their echoes are endless.” I’m sure Lewis’s encouraging words echoed in Tolkien’s ears as he labored to write his fantasy masterpiece. As a leader, you can have a similarly positive impact on others. People enjoy affirmation from a peer. But they really value it from their leader. The words “I’m glad you work with me; you add incredible value to the team” mean a lot coming from someone who has the best interest of the team, department, or organization at heart.

Many people get the wrong idea about the concept of permissional leadership when they become acquainted with it. Some think that succeeding on the Permission level of leadership means treating the people on their team like family. That is almost always a mistake. People don’t deal realistically with their family. I don’t. I have a commitment level with them that is deeper than with others. Regardless of what they do, I am committed to giving them unconditional love. They have privileges that I extend to no other people. And compromise is a constant. (Anyone who says they don’t believe in compromise has never been married—or stayed married.) What makes a family great isn’t what makes a team great. Families value community over contribution. Businesses value contribution over community. The best teams strike a balance.

Building relationships and then risking them to advance the team creates tension for a leader. That tension will force you to make a choice: to shrink the vision or to stretch the people to reach it. If you want to do big things, you need to take people out of their comfort zones. They might fail. They might implode. They might relieve their own tension by fighting you or quitting. Risk always changes relationships. If you risk and win, then your people gain confidence. You have shared history that makes the relationship stronger. Trust increases. And the team is ready to take on even more difficult challenges. However, if you risk and fail, you lose relational credibility with your people and you will have to rebuild the relationships.

Starbucks founder Howard Schultz said, “If people relate to the company they work for, if they form an emotional tie to it and buy into its dreams, they will pour their heart into making it better.” I believe that is true. What is the key link between people and the company? The leader they work with! That leader is the face, heart, and hands of the company on a day-to-day basis. If that leader connects and cares, that makes a huge difference.

Become Your Team’s Encourager-in-Chief: People are naturally attracted to people who give them confidence and make them feel good about themselves. You can be a leader who does that if you’re willing to become an intentional encourager. Try it out. For the next two weeks, say something encouraging to someone on your team every day. Then watch to see how the person responds. Do that with everyone on your team, and they will not only want to work with you, but they will also get more done.

Winners attract people—some good, some bad, some average. The key to building a winning team is recognizing, selecting, and retaining the best people from the ones you attract. The good news is that if you reach Level 3, you know what productivity looks like because you live it. The bad news is that having talented people on the team doesn’t automatically guarantee success. You can still lose with good players, but you cannot win without them. The difference comes from building them into a team, which I’ll discuss later in the chapter. But remember this: if you aren’t a proven producer, you won’t attract and keep other proven producers. That’s why you need to win Level 3.

Set tangible goals and then reach them. Accept responsibility for personal results. Admit failure and mistakes quickly and humbly. Ask from others only what you have previously asked of yourself. Gauge your success on results, not intentions. Remove yourself from situations where you are ineffective.

Author Stephen Covey asserted, “The job of a leader is to build a complementary team, where every strength is made effective and each weakness is made irrelevant.” That is the ideal that every leader should shoot for—people working together, each bringing their strengths to make the team better and compensating for each other’s weaknesses. How does that happen? First, you must know the strengths and weaknesses of each player.

Staying in your areas of strength—where your efforts yield the highest return—and out of your areas of weakness is one of the keys to personal productivity. And if you can help others on your team to do the same, then you can be successful in leadership on Level 3. For years I have relied on the Pareto Principle as a guideline to help me decide what is worth focusing on and what isn’t. The Pareto Principle basically says that if you do the top 20 percent of your to-do list, it will yield you an 80 percent return on your efforts.

Most leaders feel a great deal of pressure to get a lot of work done. Productive leaders understand that activity is not necessarily accomplishment. It’s very easy for people to work hard all day every day, and never get done the important things that make themselves and their teams productive. What’s the key? Prioritizing. Level 3 leaders do the right things the right way at the right time for the right reasons. They know that an organization where anything goes eventually becomes a company where nothing goes. They plan and act accordingly.

Good leaders on Level 4 invest their time, energy, money, and thinking into growing others as leaders. They look at every person and try to gauge his or her potential to grow and lead—regardless of the individual’s title, position, age, or experience. Every person is a potential candidate for development. This practice of identifying and developing people compounds the positives of their organization, because bringing out the best in a person is often a catalyst for bringing out the best in the team. Developing one person for leadership and success lays the foundation for developing others for success.

This really threw me for a loop. Author and friend Ken Blanchard says, “The test of your leadership is not what happens when you are there, but what happens when you’re not there.” I wondered what the secret was. Why did some organizations continue to succeed after their leaders left while others fell apart?

It’s often difficult to hand over responsibility for a task to others, especially if you believe they won’t do as good a job as you will. But that’s no excuse. You cannot become an effective Level 4 leader unless you are willing to let go of some of your responsibilities. So what’s a good rule of thumb for transferring ownership of a leadership responsibility to someone else? I use the 80 percent rule. If someone on my team can do one of my tasks 80 percent as well as I do (or better), then I give him or her responsibility for it. If you want to be an effective leader, you must move from perfectionist to pragmatist.

Leadership expert and author Max Depree says, “The leader is the servant who removes the obstacles that prevent people from doing their jobs.” What a great description. That kind of Level 4 mind-set requires maturity. It means coming to work every day placing other people first in our thoughts and actions. It means asking, “Who can I add value to today?” and “What can I do for others?” That is not the mind-set of an immature leader. It is the mind-set of a People Developer.

Authenticity—This is the foundation for developing people. Servanthood—This is the soul for developing people. Growth—This is the measurement for developing people. Excellence—This is the standard for developing people. Passion—This is the fuel for developing people. Success—This is the purpose for developing people.

Niccolo Machiavelli said, “The first method of estimating the intelligence of a ruler is to look at the men he has around him.” Look at the people closest to you. What is their caliber? What can be said about their integrity? A leader’s inner circle is the most accurate picture of his or her life. If you don’t like what you see, then invest more of yourself into potential leaders and raise them up to succeed. They in turn will do the same for you.

How does a leader do this? By applying the Pareto Principle. I described in Level 3 how the 80/20 rule can be used to increase productivity. That same principle can be used when developing leaders. As a Level 4 leader, you should focus 80 percent of your attention on developing the best 20 percent of the leaders you have. That focus will bring you the highest return. A handful of leaders will give an organization a far greater return than hundreds of followers.

Level 5 leaders want to do more than just run an organization well. They want to do more than succeed. They want to create a legacy. Journalist Walter Lippmann was right when he said, “The final test of a leader is that he leaves behind him in other men the convictions and the will to carry on.” If you reach the Pinnacle of leadership, you have an opportunity to make an impact beyond your tenure and possibly beyond your own lifetime. You do that by developing a generation of leaders who will develop the next generation of leaders.

The leadership journey has the potential to take individuals through a lifelong process in three phases: learn, earn, return. People at the start of the journey who are given a position of leadership are faced with a decision. Are they going to learn now to lead better, or are they going to rely on their position, guard their turf, and play king of the hill to maintain what they’ve got? Those who choose to learn enter the learning phase and start to slowly climb up the levels of leadership. Typically, when they reach the Production level, they begin to receive recognition and the rewards of leadership. That’s when most leaders enter the earning phase. Many are content to stay there.

The first step in developing leaders is to have a desire to develop people so that they can succeed without you. Leadership author and former FedEx executive Fred A. Manske Jr., observed, “The ultimate leader is one who is willing to develop people to the point that they eventually surpass him or her in knowledge and ability.” On the Pinnacle level, that should always be your goal.

Leaving a successor is the last great gift a leader can give an organization. Leadership-transition difficulties are far too common, and like the passing of the baton in a relay race, a leadership transition must be planned and executed well. Success is dependent upon the leader with the baton handing it off to the next leader when both of them are running at maximum speed. Writer Lorin Woolfe says, “The ultimate test for a leader is not whether he or she makes smart decisions and takes decisive action, but whether he or she teaches others to be leaders and builds an organization that can sustain its success even when he or she is not around.” True leaders put ego aside and strive to create successors who go beyond them.

One of the keys to arriving at the end of our lives without regret is doing the work of creating a lasting legacy. If you are a Level 5 leader, I want to encourage you to use the influence you have now to create a better world. How? First, recognize that what you do daily, over time, becomes your legacy. Whether it’s spending quality time with your family every day, saving money and investing every month, speaking kind and encouraging words to others each day—these actions result in a legacy of positive impact.

Can you identify the experiences that taught you invaluable leadership lessons and shaped you as a person and leader? I certainly can. These are crucible moments. While I was writing The 21 Irrefutable Laws of Leadership, I was surprised to discover that I could remember a specific experience for each law that cemented it in my leadership consciousness. For example, the Law of Victory had become a reality to me in 1970 when I led my organization to reach a goal that nearly everyone believed was impossible. The Law of the Inner Circle became clear to me on my fortieth birthday when I had to admit to myself that I was not as successful as I had hoped to be, and if I was going to accomplish all that I desired to, I needed to develop an inner circle of other leaders to work alongside me.

Use Your Leadership Success as a Platform for Something Greater: If you are a Pinnacle leader, then people respect you outside of your organization and industry, and you have a reputation that gives you a high degree of credibility. How will you use it? What opportunities do you have to contribute to causes greater than your own? Give that some thought, and then leverage your ability for the benefit of others outside of your direct sphere of influence.