From TheStreet, posted August 22, 2015
Technology is not the only thing in corporate America that has changed in the past decade. The concept of leadership has evolved as well, said Bill George, author of Discover Your True North.
“Authenticity has become the gold standard for leadership,” said George. “When I first introduced this notion in 2003 it was a foreign idea.”
George is a senior fellow at the Harvard Business School and the former chairman and CEO of medical device maker Medtronic. Medtronic’s market capitalization grew from $1.1 billion to $60 billion under George’s leadership, averaging 35% a year. He is the author of the best-selling Authentic Leadership and a board member of Goldman Sachs, Exxon and the Mayo Clinic.
Discover Your True North is an expanded and updated edition of George’s 2007 bestseller True North. This latest version profiles 101 corporate leaders including Warren Buffett, Howard Schultz, Indra Nooyi, Jack Ma and Michael Bloomberg. It also delves into the stories of leaders who lost their moral compasses like McKinsey managing director turned insider trader Rajat Gupta.
“He was a guy that came up from nothing, orphaned as a child. I think he got too caught up in wanting financial security and unfortunately he got caught up with some bad people,” said George.
George said former Lehman Brothers CEO Dick Fuld’s downfall was due to his inability to listen when former Treasury Secretary Henry Paulson was urging him to find capital or sell the investment bank, which ultimately filed for bankruptcy.
“You can’t be obstinate today. Things are moving too fast, changing too rapidly,” said George. “You need to listen to everyone around you.”
On the other hand, George lauded Berkshire Hathaway CEO Buffett and his leadership style, saying the Oracle of Omaha values integrity above all else.
From CNBC, posted August 19, 2015
Google's plan to reorganize into a holding company called Alphabet is as creative as the company itself.
Like all publicly-held companies, Google faces dual challenges of sustaining its growth through innovation and meeting the expectations of its shareholders. The ever-increasing pressures to deliver short-term results while continuing to make big bets on high-risk, high-gain ventures is a conundrum, even for high-flying Google with its dual classes of stock.
With nearly $70 billion in annual revenue, a market capitalization of more than $450 billion, and a stock trading at 31 times its price/earnings ratio, it will take very large bets on major breakthroughs to sustain Google's growth. Those bets don't turn into winners without enormous investment and the willingness to take big risks. Meanwhile, Google's investors are clamoring for greater transparency, which can lead to pressure to cut back on uncertain investments or create premature visibility. Google's leaders have the wisdom to know that size and creativity are inversely correlated, as witnessed so vividly in the demise of Hewlett-Packard's innovation machine. Thus, they are breaking the company into a collection of innovative organizations — some very large, some small — that provides their leaders the freedom to innovate without near-term financial constraints.
Some pundits claim that greater visibility will stifle Google's innovations, which they term "unprofitable experiments." In reality, all research projects are "losers" until they succeed in the marketplace. These critics don't seem to understand the determination of Larry Page and his cohort of brilliant leaders to transform the world through innovation.
Nevertheless, I won't be surprised to see an activist investor like Dan Loeb or Nelson Peltz call for breaking up Alphabet in a few years into cash-generating Google and growth-generating Alphabet. Their inability to understand the integration of these two differentiated strategies for long-term shareholder value creation — the strategy we followed at Medtronic — never ceases to amaze me.
Other writers are comparing Alphabet to Warren Buffett's Berkshire-Hathaway. Other than both organizations being led by brilliant people, this comparison doesn't hold water. Buffett's genius is buying up traditional low-tech companies and running them well. He openly eschews innovation. Google is all about innovation.
Peter Sims, who co-authored "True North" with me, had a far better comparison: Today's high-tech leaders like Apple, Facebook, Amazon, and Uber are platforms on which to build profitable business extensions off a solid core structure. On the other hand, Alphabet is a platform of platforms. While these platforms may be run independently in the near-term, I suspect that ultimately they will be integrated through the genius of Google's leaders.
The most significant aspect of Google's reinvention as Alphabet lies in its capacity to recruit and retain amazing creative talent, something most innovative companies have been unable to do. Just glance at Google's remarkable stable of innovation leaders:
- In holding company Alphabet alone are co-founders Larry Page and Sergei Brin, executive chairman Eric Schmidt, and CFO Ruth Porat, recently recruited from Morgan Stanley.
- Separating the core business as Google gives the opportunity for Page's confidant Sundar Pichai to become CEO of the enterprise, which also includes You Tube CEO Susan Wojcicki.
- Arthur Levinson, who built Genentech into the world's most innovative bio-pharma company, heads up Calico, with a mission is to extend longevity to 150 years.
- Astro Teller is CEO of Google X, which houses Google's moonshots, such as driverless cars, Google Glass and innovative contact lens.
- Sidewalk Labs is led by recent recruit Dan Doctoroff, former CEO of Bloomberg. Its mission is urban innovation to improve city living.
- Nest under Tony Fadell is working on automated home controls.
- Bill Maris runs Google's $2 billion venture-capital arm, while David Lawee heads up Google Capital.
These aren't just names on the Alphabet organization chart. All of them are superstar innovators with many breakthroughs to their credit. Is there any other organization with so many innovation leaders? Under Alphabet, they can pursue their breakthrough ideas without the day-to-day pressures of quarterly earnings.
In the world of high tech, long-term investors would be wise to ignore the roller-coaster short-term swings in stock price, and bet on the leadership of the companies. In reality, success in high-tech investing is much more closely correlated with innovation leadership than it is with quarterly results.
Having brilliant innovation leaders is what makes Google, Apple and Facebook so successful, and causes Twitter, Blackberry and Nokia to fail. For all of its talent, Microsoft failed to innovate from 2000-2014 not because it lacked innovators, but innovation leaders. With former CEO Steve Ballmer finally moving to the LA Clippers, new CEO Satya Nadella's challenge is to find the leaders who can reignite Microsoft innovation capabilities.
Eric Schmidt and Larry Page understand this phenomenon and have moved aggressively to transform Google's organization structure. Alphabet will enable Google to sustain its innovative character and retain its growing stable of innovation leaders.
From Inc. by Ilan Mochari, posted August 17, 2015
You overcame adversity on your own, through mental toughness, with no help--and it's how you became successful. But it also could be your downfall.
One day in 2007, Arianna Huffington found herself lying on the floor of her home office in a pool of blood. After an MRI, a CAT scan, and an ECG, she learned there was no underlying problem--it was exhaustion which had caused her to faint, her head smashing the corner of her desk and cutting her eye.
The incident prompted her to ask deeper questions about her life of 18-hour workdays, seven days a week. By the time she delivered a commencement speech at Smith College in 2013, she was preaching the gospel of a good night's sleep and asking graduates to measure their lives by a "third metric" -- changing the world for the better -- in addition to those timeless standards, money and power.
You've heard this sort of thing before. You've heard it from Harvard Business School legend Clayton Christensen. You've heard it from Simon Sinek (author of Start With Why) and TOMS founder Blake Mycoskie. And you've heard it in at least half a dozen TED talks from other authors and notables.
So my first question to leadership expert Bill George, who just released an update to his 2007 classic "Discover Your True North", was, why bother? How can you persuade any young leader--whose solipsistic workaholism has been the primary factor in her success--that she needs to take a proverbial chill pill? For it often seems as if entrepreneurs have to learn this lesson the hard way--by collapsing, literally or figuratively. And reminders of retaining a moral compass and striving for work-life balance are as old as the bible--though there's no shortage of TED-talking gurus hawking contemporary versions.
George's answer was optimistic. He hopes the personal-transformation tales gathered in his book will help young leaders "accelerate that learning curve, and become self-aware earlier in their lives, without hitting the wall," he tells Inc. The updated book includes stories about Huffington, Mark Zuckerberg, Chade-Meng Tan (who built Google's employee-meditation program), and many others.
Mind you, George has lived the life and walked the walk himself. While he was CEO of Medtronic, a medical device and technology company, from 1991 to 2001, the company's market cap grew from $1 billion to $60 billion. He then became a credentialed expert on the subject of leadership, authoring four books and joining the faculty at Harvard Business School. He's currently a director at ExxonMobil, Goldman Sachs, and the Mayo Clinic.
So what advice can George give to hard-charging entrepreneurs who may be on the verge of hitting the wall? In an interview with Inc., he boiled the answer down to two components:
1. Find a support team of mentors you'll actually listen to.
George believes Huffington could've avoided her collapse if she'd had a close support team around her--"people who could've been intimate with her, and told her: 'Hey, you're heading for trouble. Let me tell you what I see happening,'" he says.
George cites Zuckerberg as a young CEO who found the right support team--and whose performance has thrived (without hitting a wall) as a result. In 2005, Zuckerberg met Don Graham, CEO of the Washington Post Company. Graham offered to invest $6 million in Facebook. Zuckerberg accepted, only to renege when Accel Partners offered to invest at a higher valuation.
Yet Graham, rather than feeling snubbed, was impressed with how Zuckerberg handled the situation. Later that year, Zuckerberg shadowed Graham for several days to learn how a CEO ought to behave. The relationship deepened. One benefit? Graham advised Zuckerberg to hire COO Sheryl Sandberg and encouraged Sandberg to accept the position, even though she'd be reporting to someone younger. Graham--today the lead director of Facebook's board--benefited from the relationship too, learning from Zuckerberg about online initiatives that would engage Washington Post readers.
More than this, Zuckerberg's relationship with Graham formed a template Zuckerberg would rely on in seeking mentorship. Today, his roster of mentors includes Bill Gates and Marc Andreessen. "People always ask, How does [Zuckerberg] have the wisdom of someone 20 years older?" says George. "The answer is, he sought out really good mentors, early on."
2. Take a break, for at least 20 minutes a day.
No texting. No internet. Just you and your introspective practice. What you do during this time can vary. What matters most is that you're away from your tasks. "I use meditation," says George. "Others go for a run or take a long walk. Religious people pray. The point is, they do something where they're pulling out of the world."
George says the meditation time has helped him make better decisions. In 1997, under his watch, Medtronic had the chance to complete a $15-billion merger. Many employees had reservations about the deal, anticipating a major culture clash between the other company's top-down approach and Medtronic's empowered middle tier of engineers and marketers.
Despite these reservations, the merger was enticing to George, as a way to add to Medtronic's top-line revenues. "The numbers worked well and the [combined] strategy would've been brilliant," says George. Still, his colleagues and coworkers were warning him about the potential culture clash. "They were expressing concerns to me, and I was not listening as much as I should have," he says.
George credits his daily mediation practice for giving him the perspective to heed those warnings. "Then I took the time and did listen," he says. He recognized that while the fiscal and strategic synergies might please merger-drunk investors, the culture clash would ultimately undermine any short-term gains in the stock price. "It took me a while to see that," he says. "I had to back away."
The larger lesson here--and another focus of "Discover Your True North"--is value-based leadership: The idea of using not only fiscal numbers, but also a moral compass and a set of personal beliefs to guide your decisions.
The combination of a support team and daily introspection can help you stay mindful about what's really important in life: Your health. Your loved ones. Their health. Your reputation as an ethical person. Staying out of jail. When those essentials are your true north--and they are reinforced by a support team you'll listen to--you'll be unafraid to back away from lucrative deals for the sake of larger principles. "You don't have to hit the wall or get fired," says George. "You can learn to pull yourself back, to get back to your true north."
"The hardest thing we have to do in business is to see yourself as others see you." - Bill George, author, Discover Your True North
From IndustryWeek, posted August 18, 2015
Title: Senior Fellow
Organization: Harvard Business School
Executive Experience: former Chairman and CEO, Medtronic
The IndustryWeek Manufacturing Leader of the Week highlights the manufacturing leaders, executives and stars who are driving growth in today's industry and helping to shape the future of manufacturing.
Being the leader of a company can be fraught with peril, warns Bill George. If you run a public company, there is more pressure than ever to make every quarter’s results better than the last. Along with those pressures, company leaders can operate in a heady world of fame and financial reward. It is an intoxicating brew that can lead to terrible consequences. That’s why leaders need an internal compass that keeps them on the right path.
In Discover Your True North (John Wiley & Sons, 2015), George, the former CEO of Medtronic and a senior fellow at Harvard Business School, brings fresh insights to how executives can become more effective leaders by resisting the temptations of power and staying true to their values. He advocates leadership that is based on authenticity and creates value for all of a company’s stakeholders.
That process involves practices to discover your “True North” – which George described to IndustryWeek as “your most deeply held beliefs, the values and principles that you lead by.” That requires a lifetime practice of pursuing self-knowledge, he says, but the rewards are leadership that creates trust in employees and develops the cultural foundation for the pursuit of enterprise success.
Stray from those principles and you can find yourself in the same boat as Rajat Gupta, the former managing partner of McKinsey. Gupta grew up in Calcutta and was orphaned as a teenager but he gained admission to a prestigious Indian university and went on to a very successful business career. But in 2012, he was convicted on four counts of insider trading and is currently serving a 2-year prison sentence.
Why would a wealthy and successful man put his career at such risk? George writes it was not a “simple case of greed,” but rather the result of never overcoming poverty in his childhood and the unquenched need for financial security.
“We saw that most of the leadership failures came about from people losing sense of who you are,” George said about his research for True North. “It's not that they were bad people. It's that they got pulled off course, either from pressures they couldn't cope with or seductions - money, fame and power.”
The most important characteristic of leaders, George maintains, is that they be “authentic,” or true to themselves and what they believe in. For years, says George, companies weren’t necessarily looking for authentic leaders. Too often, he says, they were looking for corporate rock stars – the next Jack Welch. As a result, they often went outside their own ranks to find the next financial wizard who could promise quick results.
“I'm a very strong believer that leader should be promoted from within,” George told IndustryWeek. “We went through a decade where almost half of CEOs came from outside their organizations. That showed not only a lack of leadership development but many of these did not work out because they didn’t fit with the culture. They weren’t genuine people.”
George says he is much more hopeful about the current crop of business leaders, who he sees as more collaborative and interested in empowering employees to achieve lasting results.
“Today authenticity is seen as the gold standard for leadership,” he writes in True North. “No longer is leadership about developing charisma, emulating other leaders, looking good externally and acting in one’s self interest, as was so often the case in the late twentieth century.”
Being authentic is more than just a nice social characteristic; George says it is the foundation of business success.
“In business, trust is the coin of the realm,” he writes, as it forms the basis for “customers’ trust in the products they buy, employees’ trust in their leaders, investors’ trust in those who steward their funds, and public trust in capitalism as a fair and equitable means of creating wealth for all.”
Learning from Mistakes
Making mistakes in business is a common denominator, George declares. “We all go through it. Everyone has gone through adversity of one form or another.” But not everyone makes career-destroying mistakes. George says the “difference between those who succeed and those who fail is emotional intelligence and self-awareness.”
Emotional intelligence can be developed, George says, and begins with self-awareness. To become more self-aware, George advocates two routine practices.
- Have an introspective period of at least 20 minutes a day. George says we are bombarded by emails, social media and meetings. “We have to pull back from that, whether we meditate, pray, journal, take a jog,” he says, and use that time to take stock of the day and determine if we are “emphasizing what is important in our lives.”
- Get honest feedback from people you trust and will listen to. While introspection is important, you also need a support team that will give you honest feedback. While people you work with can help make up that support team, George says it is particularly valuable to have a group outside the workplace that you can consult with. He has been part of a men’s group for 40 years that meets on Wednesday mornings. “They can give you honest, sincere advice because they know you at a deeper level,” he said.
George says many leaders are burying childhood traumas or other setbacks rather than dealing with them straightforwardly. He says people have to go beyond seeing themselves as victims and come to grips with these negative events.
“Many people are strongly influenced by their parents in ways they don’t even understand and they are replaying that in the workplace,” George observes. “That is not healthy leadership. You’ve got to process that.”
“We present a new concept called post-traumatic growth,” George explains. “The idea is you take your difficult times and you grow from that. That is where you really learn who you are. It gives you the confidence and resilience to overcome very difficult times.”
Understanding how they overcame adversity can provide leaders with the desire to help others deal with their difficulties and grow as leaders. He compares that to a more selfish attitude of, “Hey, I made it. Why don’t you pull yourself up by your bootstraps?”
Not surprisingly, George is an advocate of 360-degree reviews in business. He said the best feedback he got in business was from his subordinates, not his bosses.
“The hardest thing we have to do in business is to see yourself as others see you,” he says. “The 360 review is one of the best ways to do it.”
Through better awareness of who they are, says George, leaders can move away from “external gratifiers like money and power” and toward leadership that is more about “making a difference and empowering other people.”
“We are all called to serve, in effect servant leaders” says George. “We’re not there to serve ourselves. People who work for us are not there to make us look good, just the opposite. We serve them and they are effective at doing their jobs. It is really critical that we make that journey and realize that leadership is not about us.”
One problem is that most of the metrics used to measure young people, such as SAT scores or college grades, are based on how they do as individuals, notes George. Individual achievement often continues to be the focus for young workers such as engineers or analysts. But as employees move up the ladder to leadership roles, says George, it is important to “flip that switch” and realize that your success comes from serving the people on your team.
“If you do that well, they will do anything for you. That then becomes how you build a successful enterprise,” he says. “People in organizations intuitively know which leaders are committed to the company and bleed the company's colors, and who are in it for themselves.”
George says millennials are different from baby boomers. Unlike that “me generation,” he says, millennials tend to be very collaborative and less concerned about who gets credit for a successful project. And they exhibit fewer biases than earlier generations about race or sexual orientation.
Millennials also want to “make a difference,” says George. “By the way, they don’t want to wait until they are 40 or 50 to do it. They want to do it right now.”
Where is the US Manufacturing Compass Pointed?
What kind of U.S. manufacturing environment will these leaders operate in? George says the U.S. won’t find success trying to compete with China and low-cost manufacturing nations producing standard products.
“The U.S. needs to compete in complex manufacturing based upon product innovation,” he says. ‘I think that is its sweet spot.”
George says the key to that future is developing a new generation of skilled workers.
“There is a huge risk that our workforce right now is becoming obsolete, because we aren’t emphasizing the importance of a well-trained, skilled workforce,” says George. He adds there is too much focus on “generic college education” and not enough attention to vocational education. In that respect, Germany has done an “outstanding job,” says George.
“How can they sell machine tools all over the world – Korea, China, Japan so effectively when they have very high-cost labor? They do so because of the quality and expertise. I think that is what the U.S. has to emphasize,” he says.
There is no country as innovative as the United States, George declares, but in order for that product innovation to continue, he says the nation must do more to develop its workforce expertise. That means more attention to the people that do the work on the shop floor, he notes, providing the training, tools and financial compensation so that manufacturing attracts the best people and rewards them for their contribution to the company’s success.
George clearly believes that a strong manufacturing sector continues to be vital for the American economy and people.
“Hollowing out our manufacturing base and making us a service economy, as some people were talking about 10 years ago, is very, very foolish,” George concludes.
From The Huffington Post, posted August 17, 2015
On your leadership journey, should you take a ladder or a compass?
The answer depends on whether you are trying to build a career or have a fulfilling life. As David Brooks writes in The Road to Character, "Are you pursuing resume values or eulogy values?"
When I graduated from college, I had the naive notion that my leadership journey was a straight line to the top. Keep climbing the rungs of the ladder and eventually I would reach my destination.
Was I ever wrong.
I learned the hard way that leadership isn't about climbing rungs on the ladder of success, while building the perfect resume. Former Vanguard CEO Jack Brennan believes the worst thing people can do is to manage their careers with a career map. He told me, "The dissatisfied people I have known and those who experienced ethical or legal failures all had a clear career plan."
The idea of a career ladder places tremendous pressure on leaders to keep climbing ever higher. Instead, Facebook COO Sheryl Sandberg, favors the idea of a career "jungle gym" where you can move up, down or across. Adds eBay CEO John Donahoe, "Leadership is a journey, not a destination. It is a marathon, not a sprint." On your winding journey, you need a compass to stay focused on your True North, not a ladder whose rungs you climb.
Becoming an authentic leader requires building your character. As Warren Bennis wrote, "Leadership is character, not style. It is who we are as human beings. The process of becoming a leader is much the same as becoming an integrated human being."
In my early years, I was hardly recognized as a leader by my peers. I was eager - too eager - to get ahead. In high school and college, I lost seven consecutive elections. There was a simple reason for this. I was so ambitious and centered on myself that I never took the time to develop close relationships.
Then a group of seniors at Georgia Tech gave me some sound advice. "Bill, you seem more interested in getting ahead than in helping other people. No wonder no one wants to follow your lead." Devastated by this feedback, I took their advice to heart and came to grips with my shortcomings, focusing on others instead of myself. As a result, I was selected to lead many organizations.
Years later, I got caught again in my own trap. In the late 1980s, I was on my way to the top of Honeywell. As executive vice president responsible for nine divisions and 18,000 people, I was one of two leading candidates to become CEO. Driving home one day, I looked in the rear view mirror and saw a miserable person - me. On the surface, I appeared to be energized and confident, but inside I was deeply unhappy. In that instant I realized I was more focused on climbing the corporate ladder than being a values-centered leader who makes a difference in the world. I faced the reality that Honeywell was changing me more than I was changing it--and didn't like the changes I saw.
As Dante starts The Divine Comedy, "In the middle of the road of my life, I awoke in a dark wood, where the true way was wholly lost."
When I awoke to my reality, I reopened the opportunity to join Medtronic that I had turned down three times before. This decision led to the best thirteen years of my professional life. Had I not had that awakening at Honeywell, I might never have seen Medtronic's possibilities.
In researching my new book, Discover Your True North, we interviewed 170 authentic leaders, from Oprah Winfrey to Howard Schultz. All of them followed difficult paths to success and authenticity, yet stayed grounded by building on their life stories. By understanding their formative experiences, they reframed their stories and shaped their leadership around following their True North.
From these interviews we learned that the journey to leadership has three distinct phases, as shown below:
The Journey to Authentic Leadership
Phase I is "Preparing for Leadership," where leaders develop through education, extracurricular experiences, and early professional work. This is the period where character forms and people lead for the first time. In Phase I most people are naturally self-absorbed, as measures of success are based primarily on individual accomplishments. The basis of authenticity, however, lies in the values they develop in these early years.
Phase II, "Leading," begins as individuals take responsibility for leading others and transition from "I to We," culminating in their peak leadership experience. As they take on greater responsibilities, most leaders have setbacks that test them to their core: their sense of self, their values, and their career assumptions. Through these crucible experiences, leaders learn who they are at their essence and prepare themselves for greater challenges ahead.
Phase III is "Generativity," wherein leaders focus on giving back by sharing their knowledge and wisdom with many people and organizations. These days, many leaders are foregoing conventional retirement to share their leadership experiences with others, serving on boards, mentoring young leaders, or teaching and writing. Psychologist Erik Erikson describes the choice in this phase: generativity versus stagnation. For leaders who focus on helping others, this stage is filled with meaning. Those who don't often face the stagnation common with old age.
Regardless of where you are in your journey--just getting started, looking for new challenges, or nearing the top--each leadership experience provides myriad opportunities for personal growth and to discover your True North. If you embrace your life story and learn from its lessons, your leadership journey leads to great satisfaction and fulfillment.
As former Amgen CEO Kevin Sharer said, "You are the mosaic of all your experiences."
Article by Daniel Goleman for LinkedIn.com, posted on August 09, 2015
I spoke with my friend Bill George, Senior Fellow and Professor of Management Practice at Harvard Business School, about what it means to lead ethically. His responses struck me as especially salient in our current business landscape, so I’ve paraphrased them below. (You can read the entire conversation in The Executive Edge: An Insider’s Guide to Outstanding Leadership.)
Trust can be fleeting – especially the trust we instill in leaders. A leader might spend 30 years building trust, and then watch it disappear in 30 minutes if he’s not careful. And when leaders flagrantly violate trust, it’s often never recovered.
Consider the epidemic of distrust caused by leaders putting their self-interests above all else. You’ll even hear some economists argue that this makes sense, because we’re all motivated by money and that’s just how the market functions.
Well, I disagree. Greed is not the market operating. Greed is actually disgraceful. But unfortunately, many leaders get away with it. Then all the people that depend on them—customers, shareholders, communities—are betrayed. Often a whole enterprise is destroyed.
To me, if you’re privileged enough to be in a position of leadership, it is paramount that you maintain the trust of the people for whom you have a responsibility. And if you violate that, then you have failed.
Now, here’s the catch. We all fail. But we can recover. Leaders can bounce back, but they have to prove themselves. I like to think that the virtues you live by when things are going well don’t matter.
The real test is how you behave when times are tough. And if you’re a leader, your constituents want to see what you do under severe pressure. If you can stay true to your values then, people will trust you again. You’ll be viewed as authentic.
In fact, there’s a correlation between being an authentic leader and getting great results.
Here’s an example. When Anne Mulcahy—former CEO and chairperson of Xerox—was faced with bankruptcy, she reconfigured the whole company and made some really daring decisions. She decided not to cut R&D, not to cut customer support, but to invest in the long term. They ultimately had to trim up and have fewer employees in the end, but they came back. They avoided bankruptcy and achieved great success, in fact. And Mulcahy didn’t have finance experience – she rose through the ranks, starting as a salesperson out of college. Authentic in her virtues and loyalty to Xerox; she made many bold decisions and went on to be voted one of America’s Best Leaders by US News and World Report in 2008.
HOW TO BUILD TRUST
So how can you do this? It requires a few qualities.
- You’re willing to get experience doing the work of your team. This doesn’t mean giving rousing speeches, putting out strongly worded press releases, or releasing polished promotional videos. This means you actually spend time with the people doing the work.
- You honor those people by listening and responding in earnest.
When I was at Medtronic, I gowned up and saw between 700 and 1,000 procedures. I’d put on the scrubs, met with the doctor, and watched an open-heart surgery, a brain surgery, or a pacemaker implant. And that’s how I learned the business.
When I was on the board of Target Corporation, the former CEO, Bob Ulrich, explained how he walked about 14 store floors a week. He didn’t tell them he was coming. He just put on a sweatshirt, walk around, and watch the store run.
And take Dan Vasella at Novartis. He’d be down in the labs all the time with the researchers asking, “What are you working on? What are the barriers?”
Instead of being the invisible entity who spends his or her time at black tie CEO events in DC, this is a leader who delves into the real day-to-day functions of the business. And that’s the type of leader who builds trust.
To maintain that trust, you need care about your team, want to be out there with them, and love the business. You really do have to love it! I can’t stress that enough. If you don’t love it, don’t do it.
The Executive Edge is available now on Kindle, iTunes, nook and in print from morethansound.net. You can also watch my conversation about authentic leadership with Bill George here.
Trust is the essence of leadership – the coin of the realm. Unless people build trust with their colleagues, they cannot gain legitimacy to lead, nor can they empower others.
Recent studies have shown that only half of Americans trust their leaders. Since the 2008-09 global financial crisis, many Americans have lost trust in their leaders and the institutions they lead.
Gaining the trust of people is essential for every leader. Leaders cannot be effective without full confidence of the constituencies that grant their institution its legitimacy, nor can capitalism function without trust.
No matter how effective your strategy, your vision, or your communication, you will fail to achieve the desired results for your organization if you can- not inspire trust as a leader. Lack of trust in your leadership will cause your team to fear failure, resulting in less risk-taking, and therefore, less innovation. Building a culture of trust starts with you. You must quell fears of organizational power by exhibiting authentic behavior that inspires trust and fosters an open, safe environment.
To be worthy of trust, leaders must have a clear sense of their True North – the purpose of their leadership and the essence of their beliefs, their values and the principles by which they lead. If they stay on course of their True North and do not deviate under pressure, then they can build trust among colleagues and legitimacy among all their constituencies.
What’s required are new leaders who are grounded in authenticity, relationships, and emotional intelligence. To gain trust, they must be genuine, sincere, transparent, and true to their word. People sense who is authentic and who is not. Only when they are authentic will people grant them the support they need to lead organizations.
To strengthen the trust and confidence in America’s leaders, we need a new leadership mindset and a new breed of leaders, with five characteristics in common:
- They should be authentic leaders, focused on serving their clients and all the institution’s constituents, rather than charismatic leaders seeking money, fame, and power for themselves.
- They should place the interests of their institutions and society as a whole above their own interests.
- They should have the integrity to tell the whole truth, admit their mistakes, and acknowledge their shortcomings. Authentic leadership is not about being perfect. It is having the courage to admit when you’re wrong and to get on with solving problems, rather than covering them up.
- They need to adapt quickly to new realities, changing themselves as well as their institutions, rather than going into denial when things don’t go as intended.
- They need the resilience to bounce back after dev- astating losses. Resilience enables leaders to restore trust by empowering people to create new solu- tions that build great institutions for the future.
Earning trust requires significant time and effort, and must come from a place of authenticity. Trust cannot be faked. You cannot become a trusted leader by try- ing to imitate someone else. You can learn from others’ experiences, but there is no way you can be successful when you are trying to be like them. People trust you when you are genuine and authentic, not a replica of someone else.
Don’t be afraid to show your vulnerability. Be transparent with your team, even when the truth may be unpopular or inconvenient. Don’t punish those who bring you bad news. Encourage risk-taking and celebrate “good failures” as opportunities to learn and move forward.
Remember: trust starts with you but it is a win-win for everyone.
Bill George is the former Chair and Chief Executive Officer of Medtronics and author of four best-selling books including True North and Seven Lessons for Leading in Crisis. www.billgeorge.org
This article was originally published for the Winter 2015 issue of Trust Magazine.
From The Huffington Post, posted August 10, 2015
Are you all you want to be? Do you have a path to fulfilling your dreams?
You can do so just by being yourself, and developing the gifts already inside you. Can you recall a time when you felt intensely alive? A moment when you could say with confidence, "This is the real me?" That is when you are in sync with your True North.
True North is your orienting point - your fixed point in a spinning world - that helps you stay on track as a leader. It is derived from your most deeply held beliefs, values, and the principles you lead by. It is your internal compass, unique to you, representing who you are at your deepest level.
The key to finding fulfillment in life is to Discover Your True North - the title of my latest book, being released this week (Wiley: August 17, 2015). To become an authentic leader you have to discover your True North and stay on its course throughout your life. As you do so, you will be prepared to lead in this new era. A fulfilled life is not just about your self-interest, but serving those around you and taking on challenges to make this world a better place.
Written as a follow-up to True North (2007), Discover Your True North focuses on all leaders - from Millennials just starting their careers to CEOs at the peak of their leadership. It is the most comprehensive guide ever written to becoming an authentic leader. We have assembled the most important learnings from the stories of 101 leaders we profiled, as well as our latest ideas on developing authentic leaders.
In preparing to write Discover Your True North, I took a closer look at today's leaders by interviewing 47 exceptional leaders in addition to the 125 leaders in our original 2005-06 research. The new group is more diverse, more global, and more in tune with society's issues. They include Arianna Huffington, Jack Ma, and Mike Bloomberg among others. Through teaching executives at Harvard Business School, I also have had opportunities to interact with more than 5,000 business, non-profit and government leaders.
These interviews confirmed the dramatic changes in today's leaders:
- Authenticity has become the gold standard for leaders.
- Charisma, image and style have been replaced by character, humility, and service.
- Hierarchical leaders are out, empowering leaders are in.
- Today's leaders celebrate diversity and understand how to lead in global environments.
- They are in sync with society's most important issues and are committed to use their organizations to create positive value for all stakeholders.
How Leadership Has Changed
Our expectations for leaders have escalated significantly in the past decade, in part due to the 2008-09 financial crisis that damaged the public's perception of leaders. From these experiences, today's leaders learned what not to do, as they witnessed many of their predecessors trap themselves chasing money, fame, and power - losing sight of their True North. They learned the perils of putting self-interest ahead of the institutions they led.
Simultaneously, the Millennials have changed our expectations for leaders. This generation won't tolerate bureaucracy or excess hierarchy, and they work in more collaborative ways. Millennials want to make meaningful contributions immediately to the world and yearn to see their leaders as real people, authentically struggling with challenges just as they do.
Finally, today's leaders are more diverse in gender, race and national origin, and are much more focused on global leadership.
The Journey to Discovering Your True North
The journey to authentic leadership begins with understanding yourself. As Howard Schultz, CEO of Starbucks, told me, "The reservoir of all my life experiences shaped me as a person and a leader." Many of us are influenced by painful crucibles: personal illness, death of a loved one, or discrimination. By reflecting deeply on these events, we can understand ourselves and the values we hold most dear.
This process of discovering who you are at your deepest level requires introspection, support, and feedback. Mindful practices, such as daily meditation, prayer, or journaling, are important first steps. From there, you can incorporate outside feedback from close friends, family, and mentors. But ultimately, you must take responsibility for your own development.
Authentic leaders are true to themselves and to their beliefs. They have discovered their True North, align people around a shared purpose, and empower them to lead authentically. Because they engender trust and develop genuine connections with people, authentic leaders are able to motivate them to achieve higher levels of performance. As servant leaders, they are more concerned about serving people than their own success or recognition.
Discovering your True North takes a lifetime of commitment and learning, but its rewards are unlimited. Some days will be better than others, but as long as you are true to who you are, you can cope with the most difficult circumstances life presents.
As you embark on your journey, or enter into your next phase, I hope you will take Discover Your True North with you. At the end of each chapter you will find valuable exercises that help you understand yourself more deeply and stay on track. To start your process now, check out my website for the book which contains useful self-assessment tools, in-depth features of the interviewees, video content, and articles on authentic leaders.
By dedicating yourself to discovering your True North, you can fulfill your dreams and become an authentic leader who makes a positive difference in your world.
Article by Dan Schawbel for Forbes, posted August 10, 2015
I spoke to Bill George, who is a Senior Fellow at the Harvard Business School and former chairman and CEO of Medtronic, the world’s leading medical technology company. Bill spoke about the latest update to his bestselling book called “Discover Your True North“, gives examples of successful leaders, explains the leadership qualities of the next generation of leaders and more.
Bill is a board member of Goldman Sachs, Exxon, and the Mayo Clinic. George has been recognized as “Executive of the Year” by the Academy of Management, “Director of the Year” by the National Association of Corporate Directors, and received the prestigious Bower Award for Business Leadership – given annually to the nation’s top business leader.
Dan Schawbel: Why did you decide to update your classic book now and what did you do to expand on your work?
Bill George: Since its publication in February 2007, True North has had great resonance with leaders of all generations, and now with the Millennials, and has continued to be widely purchased and used in educational programs. My goal was to write a follow-on book that retained the essential elements of True North yet goes deeper into authentic leadership to include all we have learned about leadership in the past eight years. In addition, I wanted to broaden the group of interviewees by interviewing 47 new leaders who are more global and more diverse, with many more females, more nationalities and more racial minorities.
Discover Your True North introduces new ideas like post-traumatic growth (PTG) to cope with crucibles, an in-depth understanding of the role of emotional intelligence and self-awareness and how they are developed, the journey from “I to We,” global leadership and developing global intelligence (GQ), and the need for corporations to become “stakeholders in society.”
Schawbel: Can you give an example of one or two leaders you added to the book and how they found their true north?
George: Here are some examples of leaders who discovered their True North:
Ken Frazier, chair and CEO of Merck, is the grandson of a South Carolina slave who is carrying on the narrative started by his grandfather in standing against the crowd and going your own way to help solve the world’s problems, through large investments in high risk research to treat chronic diseases like cancer and Alzheimer’s.
Paul Polman, CEO of Unilever, has focused his company on its True North: bringing sustainability to consumer products while expanding into emerging markets to address the world’s environmental challenges.
Indra Nooyi, chair & CEO of PepsiCo, introduced Performance with Purpose nine years ago to shift the company’s business mix to healthy foods and beverages to address the global obesity problems.
Jack Ma, founder of Alibaba, is China’s first global leader who is linking two billion Asian consumers with Western products from one million small businesses to address the jobs challenges around the world.
Schawbel: What new types of leaders have you been paying attention to and what leadership qualities have been transferred from one generation to the next?
George: I am very pleased to see the emergence of many more authentic leaders since my 2003 book, Authentic Leadership, was published. Today’s leaders learned the pitfalls of the charismatic leaders of 1990s and 2000s, who were often imposters focusing on their self-interest instead of their institution’s best interest. They recognize that authenticity has become the gold standard for leadership. They also know that the hierarchical leadership style of the past is ineffective with today’s generations, so they are leading in inspiring and collaborative ways. In other words, they have made the “I to We” journey, which many leaders of my generation never did.
The younger generations of Millennials and Gen Xers want to make a difference now and not work in a stifling or political bureaucracy. They are paving the way for the future of leadership –leaders that care about solving real problems, not just getting to the top.
Schawbel: Do you believe that leaders are born or made? Why?
George: All of us are born with gifts of leadership that are unique to us. We must develop ourselves to become effective as authentic leaders who make a difference in the world, and avoid the pressures and seductions to chase money, fame and power. This development process takes rigor and continues throughout our lifetimes as we gain greater self-awareness, a sense of our leadership purpose, and the capacity to empower other leaders.
Schawbel: Can you talk about some of the leadership qualities that Obama has and why he’s been either effective or not effective as president?
George: President Obama has a clear sense of his True North, understands and lives his values, and focuses on the areas of great importance to him and the nation. He has a long-term view that at times has been pulled off course by his need to satisfy domestic political pressures. Yet he has governed with great integrity and never compromises his basic beliefs. His weakness comes in trying to do too much himself, and in not building a strong team around him so that he can delegate to others in his administration. He could be much more effective if he built more collaborative relationships with members of Congress.
Dan Schawbel is the Founder of WorkplaceTrends.com, a research and advisory membership service for forward-thinking HR professionals.
Kudos to Starbucks founder Howard Schultz for his candid Op-Ed in today’s New York Times. Howard has the courage and wisdom to speak truth to power when he says: "Too many political leaders put party before country, power before principle, and cynicism before civility. Our country is in desperate need of servant leaders willing to embrace those who are not like them."
Howard’s life story is featured in Chapter 1 of my new book, Discover Your True North. To learn more about Howard, please visit my book’s website: www.discoveryourtruenorth.org.
Here is the text of his Op-Ed:
From The New York Times, posted August 6, 2015
FROM the earliest days of Starbucks, I’ve been captivated by the art of leadership. I was mentored over three decades by Warren G. Bennis, the eminent professor and scholar on leadership. I’ve gathered insights from peers, and I’ve drawn inspiration from our 300,000 employees. But nothing I’ve read or heard in the past few years has rivaled the power of the image I viewed on my cellphone a few years ago: Pope Francis, shortly after his election, kneeling and washing the feet of a dozen prisoners in Rome, one of them a young Muslim woman, in a pre-Easter ritual.
In recent weeks, I have taken to recalling that humble, inspiring act of servant leadership as I observe the antithesis: a field of presidential aspirants unable to rise above petty politics. I know candidates want to play to the party faithful during the primary season, but the challenges facing us today are too dire for another status- quo election. We cannot afford more false promises, slogans, theatrics and fool’s gold. Our nation has been profoundly damaged by a lack of civility and courage in Washington, where leaders of both parties have abdicated their responsibility to forge reasonable compromises to expand the economy, rebuild our infrastructure, improve schools, transform entitlement programs and so much more. We have become too desensitized to the horrendous metrics that define today’s America, from student-loan debt to food-stamp dependency to the size of our prison population.
As a boy growing up in public housing in Brooklyn, I was told by my mother that I could be the first in my family to graduate from college. A scholarship and an entry-level job at Xerox created a path upward that was typical for many of my generation.
For too many Americans, the belief that propelled me, that I had the opportunity to climb the ladder of prosperity, has greatly diminished. I hear it from coast to coast as I sit with customers in our stores. Six in 10 Americans believe that the younger generation will not be better off than their parents. Millennials have never witnessed politics devoid of toxicity. Anxiety, not optimism, rules the day.
Despite the encouragement of others, I have no intention of entering the presidential fray. I’m not done serving at Starbucks. Although we have built an iconic brand while providing even part-time employees with access to health care, free college education and stock options, there is more we can do as a public company to demonstrate responsible leadership.
The values of servant leadership — putting others first and leading from the heart — need to emerge from every corner of American life, including the business community.
While Americans have diverse views in what they want from Washington, I reject the notion that our divided and dysfunctional government is merely a reflection of what the political class calls the red-blue divide. Too many of our political leaders are putting party before country, power before principle and cynicism before civility. The common purpose that created this great nation, which has united us in difficult moments, has gone missing.
Our country is in desperate need of servant leaders, of men and women willing to kneel and embrace those who are not like them. Everyone seeking the presidency professes great love for our nation. But I ask myself, how can you be a genuine public servant if you belittle your fellow citizens and freeze out people who hold differing views?
Every one of the candidates offers grand promises about new leadership and new solutions. But where do they stand on working with their rivals? Regardless of who wins the presidency, the odds of the same party controlling a filibuster-proof Senate are slim. If we want to turn the nation around, we have to act differently. Save for the most rabid partisans, most people don’t want one-party rule. They want Democrats and Republicans to work together.
Americans who are tired of politics as usual should demand a clear answer to a simple question from every candidate: What will you do to unite all of us?
Our country deserves a candidate courageous enough to select a member of the other party as a running mate. Our country deserves a president humble enough to see leadership not as an entitlement but as a privilege.
The speculation about my candidacy reminds me of a lesson from a great Jewish leader. A decade ago, I visited the Western Wall in Jerusalem with Nosson Tzvi Finkel, a widely respected rabbi in Israel. As we approached one of the holiest sites in Judaism, the rabbi halted about 10 yards away as a crowd of admirers gathered nearby. I beckoned him further.
“I’ve never been closer than this,” the rabbi told me. Astounded, I asked why. “You go,” he said. “I’m not worthy.”
Howard Schultz is the chairman and chief executive of Starbucks.