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Amazon Book Review: Thomas M. Loarie

This was originally published on Amazon.com

By Thomas M. Loarie 

“Walgreens is Waiting for Answers About Theranos”

“Attention Shareholders: Beware of the Board”

“Credit Suisse Settles ‘Dark Pool’ Case”

“Stanford Business School Steps Down After Affair with Wife of Direct Report”

“Bribery Case Hits UN”

“Volkswagen Chief Martin Winterkorn Resigns Amid Emissions Scandal”

“VC Arrested for Insider Trading Now Accused of Defrauding His Firm”

These recent headlines in the Wall Street Journal highlight the on-going problem of leaders who have “gone south” and have taken their organizations with them. Stanford business school professor Jeffrey Pfeffer would use these as examples of how “the leadership industry has failed.” Prescriptions for leaders to be more truthful are at odds with what goes on in the real world. “The ability to lie can be very useful for getting ahead,” says Pfeffer. “Manipulation is a foundation for social power…in fact; there is a reciprocal relationship between power and lying.”

That brings us to Bill George’s latest book, “Discover Your True North: Expanded and Updated.” In it, George brings his wisdom, observations, examples, and practices to bear on helping leaders be something more than what Pfeffer proposes. He encourages us to build on our natural leadership gifts and to stay on our “True North” track to inspire and empower others to excellence. According to George, our “True North” is the internal compass which, based on deeply held beliefs, values, and principles, “represents who we are at our deepest level.” Knowing our internal compass helps when pressures and seductions detour us from achieving our purpose in life. It is our lifesaver… alerting us to get back on track when the life being lived is not aligned with who we are at the deepest level.

George’s “True North” needs some reconciling to Pfeffer’s belief about the reality of leadership. Pfeffer talks about power for the sake of power while George talks about power that flows from character. This disconnect may be attributed to the lack of good role models for those seeking to be leaders. I have observed over the years that leadership training if not reinforced by good role models does not lead to “True North” leadership. It is hard work to develop the type of leader George talks about. It is “The Road Less Traveled” due to the required investment of time by both the student and the role model.

For this reason, I recommend “Discovering Your True North” but with the caveat that it is reinforced by a role model. This may be satisfied with George’s concept of a “support team” that he details in the book. I have worked with Bill George and can vouch that he is the real thing. I am sure that he provides the modeling needed to those he touches in the classroom and for those he works with in his consultancy.

In brief about this updated edition – George revisits his NYC Times best-seller and now business classic that was released in 2007. He integrates his personal insights gained as CEO of Medtronic and as a professor and Senior Fellow at Harvard Business School with new first-person interviews of 48 “authentic global leaders.” These leaders include many who have garnered the positive attention of the press and have inspired and empowered millions to excellence –Indra Nooyi, Jack Ma, Alan Mulally, John Mackey, Sheryl Sandberg, Michael Bloomberg, and many others. He also includes updates on the original 125 participants featured in his first book and includes a chapter on finding your “GQ,” your global quotient.

George also includes case studies of those who were seduced and made bad choices, which led to painful detours in their lives – Rajat Gupta (insider trading), Lance Armstrong (fraud and demonization of those who tried to get the truth known), and Michael Baker (fraud). It is early but we all may have something to learn from what appears to be a scandal of major proportions at Theranos. Did Elizabeth Holmes take time to find her “True North”? Did she take a detour? Will Theranos survive? For her, this book may be too late.

Those who read the first book will find this to be just as inspiring. For those who missed the first book, they will find this to be a treasure and regret they missed the 2007 edition.

Watch Bill George at Georgia Tech's Impact Speaker Series

Bill George speaks at Georgia Tech IMPACT Speaker Series on Discover Your True North. 

Link to Video

Jack Ma: China's First Global Leader

In the new edition of Discover Your Truth North, bestselling author Bill George profiles nearly 50 new leaders, including Warren Buffett, Indra Nooyi, Arianna Huffington, Paul Polman, Mike Bloomberg, Mark Zuckerberg, and others.

In the following excerpt from Discover Your True North, George explains how Jack Ma became China’s first global leader and how other leaders can develop global intelligence, or “GQ.”

Alibaba’s Jack Ma has emerged as China’s first truly global leader, the face of the new China: a free-enterprise entrepreneur working within the confines of a Communist government to build a more equitable society.

Ma was on fire as we talked over lunch the day that Alibaba launched the largest initial public offering (IPO) in history. Its stock price makes Alibaba the eighteenth-largest global company by market capitalization. Ma’s goal isn’t making money. Because of Alibaba’s success, he is already China’s wealthiest citizen, with a $20 billion net worth. Yet when he asked his wife whether it was more important to be wealthy or have respect, they agreed upon respect.

In person, Ma is warm, affable, open, and authentic. For all his success, he is extremely humble, preferring to talk about building a great company that helps customers, creates jobs, and serves society. “I’m just a purist. I don’t spend 15 minutes thinking about making money,” he said. “What is important in my life is influencing many people as well as China’s development. When I am by myself, I am relaxed and happy.” He added, “They call me ‘Crazy Jack.’ I hope to stay crazy for the next 30 years.”

China’s large and growing economy has made it an increasing economic force the past two decades, but it has not produced global companies. Instead, Chinese businesses have focused domestically and engaged in low-cost production for international companies. Ma has a very different approach. He sees the Internet as a worldwide phenomenon that knows no borders. Today, the Alibaba companies serve 600 million customers in 240 countries. Ma intends to expand aggressively in the American, European, and emerging markets by linking 1 million small businesses with 2 billion Asian consumers. He also has plans to disrupt China’s commercial banking and insurance sectors.

“I want to create one million jobs, change China’s social and economic environment, and make it the largest Internet market in the world.” –Jack Ma

In the times I have been with him, Ma relishes telling his life story. Raised in humble origins in Hangzhou in the 1980s, he overcame one obstacle after another. He was rejected at virtually every school he applied to, even grade schools, because he didn’t test well in math.

Yet he persevered. From ages 12 to 20, he rode his bicycle 40 minutes to a hotel where he could practice his English. “China was opening up, and a lot of foreign tourists went there,” he said. “I showed them around as a free guide. Those eight years changed me deeply, as I became more globalized than most Chinese. What foreign visitors told us was different from what I learned from my teachers and books.”

As a young man, Ma applied for jobs at 30 companies and was rejected at every one. He seemed most stung by his experience at Kentucky Fried Chicken where 24 people applied and 23 got jobs. Ma was the only applicant rejected. Consequently, he became an English teacher at Hangzhou Electronics Technology College. When he visited America for the first time in 1999, he was stunned by the entrepreneurial culture he saw in California. “I got my dream from America,” he said. “In the evenings in Silicon Valley, the roads were full of cars, and all the buildings had lights on. That’s the vision of what I wanted to create [at home in China].”

Returning to Hangzhou, he and Joe Tsai (now executive vice chair) founded Alibaba in Ma’s modest apartment. “We chose the name,” he explained, “because people everywhere associate it with ‘Open, Sesame,’ the command Ali Baba used to open doors to hidden treasures in One Thousand and One Nights.” Ma focused on applying his team’s ideas to help businesses and consumers find their own hidden treasures. He was unsuccessful in raising even $2 million from American venture capitalists, but, once again, he persevered. Eventually, he raised $5 million through Goldman Sachs, and later, Masayoshi Son of Japan’s SoftBank invested $20 million.

Ma is passionate about building the Alibaba ecosystem in order to help people, a philosophy that he is trying to embed into the DNA of the company. At the company’s founding, he issued generous stock option packages to early employees because he wanted to enrich their lives. The day of the IPO, he insisted Alibaba’s six values–Customer First, Teamwork, Embrace Change, Integrity, Passion, Commitment–be placed on the pillars of the New York Stock Exchange.

Ma’s commitment to a cause larger than himself has propelled him forward.

My vision is to build an e-commerce ecosystem that allows consumers and businesses to do all aspects of business online. I want to create one million jobs, change China’s social and economic environment, and make it the largest Internet market in the world.

American tech leaders, such as Larry Page of Google and Mark Zuckerberg of Facebook, have emphasized technology and product above everything. Not Ma. “I’m not a tech guy,” he said. “I’m looking at technology with the eyes of my customers—normal people’s eyes.”

With his light-hearted nature, Ma participates in annual talent shows where he sings pop songs. He also practices Tai Chi and martial arts, which he calls “the most down-to-earth way of explaining Confucianism, Buddhism, and Taoism. These practices cherish brotherhood, morality, courage, emotion, and conscience.”

Ma worries that China lost an entire generation when Mao Zedong phased out Confucianism and other forms of spirituality. His bold vision is to restore that sense of values and purpose to the next generation. “It’s not policies we need, but genuine people,” he said. Ma is highly ethical in his business practices. He noted, “I would rather shut down my company than pay a bribe.”

For all his confidence, Ma is not without worries. He believes his biggest challenges are to create genuine value for his customers, to work cooperatively with the government, and to build his team of global leaders. He would like to use his wealth to found a university for entrepreneurs that can produce the next generation of Chinese entrepreneurs. “Our challenge,” Ma said, “is to help more people to make money in a sustainable manner. That is not only good for them but also good for society.”

“Ma embodies the global intelligence, or GQ, that is needed for today’s global leaders.” –Bill George

Developing Global Intelligence (GQ)

Ma embodies the global intelligence, or GQ, that is needed for today’s global leaders. Succeeding in the new global context will require companies to cultivate a cadre of executives—as many as 500 per company—who have the capabilities of global leaders. Developing these new leaders requires unique leadership experiences, ideally in emerging markets, combined with leadership development programs that differ materially from today’s corporate training programs. Traditionally, the latter have focused on managerial skills and building one’s functional knowledge. Yet the shortcomings of leaders—and their subsequent failures—usually result from the lack of leadership capabilities that we call global intelligence, or GQ.

GQ consists of seven elements, all of which are essential for global leaders:

  • Adaptability
  • Awareness
  • Curiosity
  • Empathy
  • Alignment
  • Collaboration
  • Integration

Several of these characteristics—such as awareness—seem very similar to parts of the process we’ve examined for discovering your True North. That’s by design. Global interactions heighten the stress that leaders face. The more global the context, the more demanding leadership becomes. When leaders are placed in emerging market situations, the complexity increases exponentially because the differences in language, culture, customer preferences, negotiating tactics, business practices, laws, and ethical standards are so great. The same applies to the activities of daily living in these countries. That’s why many otherwise solid leaders struggle with global assignments and working in emerging markets.

Let’s examine each of these characteristics of global leaders.

Adaptability

Being a global leader requires the ability to understand today’s volatile world and foresee changes coming in the years ahead. Global leaders must be able to adapt quickly to the rapidly changing global context by shifting resources to opportunity areas and developing contingency plans to cope with adverse geopolitical situations.

This is particularly true in emerging markets, where frequent changes in government, currency movements, financial crises, ethnic conflicts, wars, and terrorism may literally change the business climate overnight. In recent years, we have seen this happen in Greece, Egypt, Iraq, Pakistan, Ukraine, Russia, and India, to mention just a few. Global leaders must be prepared to alter their tactics quickly to adjust to changes.

Awareness

Leaders need to understand the world around them, as well as themselves—their strengths, vulnerabilities, and biases—to perceive how they will react to the significant cultural differences they encounter. When people from developed countries live in emerging markets, they become much more aware of themselves and their insecurities as they begin to understand the complexities of other languages, being in the minority, and differences in cultures and norms.

“One of the greatest challenges global leaders face is incorporating local and global issues into an integrated corporate strategy.” –Bill George

Curiosity

Global leaders must have deep curiosity about the cultures they encounter. This includes a personal passion for diverse experiences and an insatiable desire to learn from other cultures. They also must be humble to recognize that different cultural norms and ways of doing things guiding other cultures may often be superior to their own. When you visit an emerging market, such as China or India, do you stay in a deluxe hotel and eat in Western restaurants, or do you get out into the country, meet the people, go to local markets and shops, and visit people’s homes to see how they live? That marks the difference between domestic leaders traveling overseas and global leaders who are open to experiencing all the world has to offer.

Empathy

Empathy is the ability to walk in someone else’s shoes. This requires humility and the capability to engage people from different cultures personally, rather than standing back and judging them. Empathy builds rapport and bonding and creates lasting relationships. Only with empathy are leaders able to draw the highest level of engagement from colleagues from different cultures and empower them to achieve exceptional performance.

Alignment

The challenge for global leaders is to align all employees around the company’s mission and its values, a commitment that transcends national and cultural differences. Achieving alignment is far more difficult in a global context because the business practices and ethics in emerging markets often differ so dramatically from those of developed countries. Thus, global leaders are asking local employees to put the company’s mission and values ahead of the business practices and values in countries where they have grown up and worked. It is no longer sufficient just to comply with the laws and ethics without regard for negative consequences their business practices may have on the countries in which they operate. However, this does not mean giving up their culture and the norms by which they live, because norms can vary widely from country to country.

Collaboration

In a global context, collaboration is the ability to create horizontal networks that cut across geographic lines, bring people together around common goals, and create a modus operandi that transcends geographic norms. In authentic global collaborations, participants put company and project goals first and work together in partnerships to achieve them. The most successful geographic collaborations are led by global leaders who know the strengths and weaknesses of each regional group and who make assignments within the team to take advantage of their relative strengths.

Integration

One of the greatest challenges global leaders face is incorporating local and global issues into an integrated corporate strategy. Such a strategy enables them to optimize their position in a wide array of local markets efficiently to create sustainable competitive advantage. Doing so requires deep understanding of local markets and the global vision to see how their companies can serve their customers’ needs in a superior manner by leveraging their corporate strengths. That’s the only way they can outcompete local companies, which often have a cost advantage because they operate in the region.

As Unilever’s COO Harish Manwani explained, “We have a globally distributed organizational model that balances local relevance with obal leverage.”

We don’t believe in “Think local; act global.” Instead, we believe in “Act local; think global.” The company starts by acting locally, creating relevance through an understanding of consumer needs and desires and their local cultures. Then we leverage Unilever’s vast global resources to deliver superior products to meet those needs. This is how we gain competitive advantage over local producers. We are committed to bringing our expertise to local markets.

Today’s authentic global leaders recognize that in the future, businesses can only thrive by serving all the people of the world equitably while also contributing to their societies.


This article was originally published 10/22/15 on Knowledge@Wharton.

Huffington Post: The Surprising Difference Between Careerism and Leadership

From The Huffington Post, Posted on October 21, 2015

Ask yourself whether you are leading with purpose or just trying to get ahead?

Do you actually believe in something larger than your compensation, your career trajectory or your next success?

I often tell young leaders, if their work has no meaning or satisfaction, they are better off quitting and sitting on the beach until they decide what they want to do.

Many people’s work is completely disconnected from their values and their purpose. This lack of purpose isn’t something to deal with by working with a nonprofit in your spare time. If you don’t take action to address this disconnect, it can become like an insidious cancer that eats at your soul. Long-run, a lack of purpose can lead to burnout, poor decision-making, and even moral derailment.

Understanding Your Purpose

Your purpose is the genuine deeper meaning in your work. It reflects why you do what you do.

Understanding your purpose is essential to becoming a better leader. People who lead with a sense of purpose that is aligned with their company’s purpose make better long-term decisions and are more authentic. 

But this is not as easy as it sounds. Discerning your purpose takes a combination of introspection and real-world experiences before you can determine where you want to devote your energies.

The first step to knowing your purpose is to understand your life storyWe all face times of crisis, pain or rejection in our lives. Reflecting on the life you've lived helps you to discover your True North – the beliefs, values and principles most important to you. 

Before you take on a leadership role, ask yourself: “What motivates me to lead this organization?” If the honest answers are simply power, prestige and money, you are at risk of being trapped by external gratification as your source of fulfillment.

This never works. Why? Simply, you can never have enough money, fame or recognition. When you give someone else the power to decide if you’re successful (whether it’s the Forbes 400 list or an invitation to Davos), you lose. If you allow some external force to define your success, you have essentially abdicated your soul.

There is a deep voice inside you that yearns to bring your unique gifts to this world. If you neglect that voice, you create deep misalignments that eventually will surface.

Purpose at Work   

Ken Frazier traveled a unique road en route to becoming CEO of Merck, the leading pharmaceutical research company. Born before the 1863 Emancipation Proclamation, Frazier’s grandfather was a slave in South Carolina. He sent his son, Frazier’s father, to live in Philadelphia. With no formal education, Frazier’s father became a janitor, yet taught himself to read, reading two newspapers a day. In spite of his limited opportunities, he had a profound influence on Frazier’s life.

After his mother died when he was 12, Frazier and his sisters had to fend for themselves after school, avoiding the gangs that dominated the streets outside his house. “I learned very early from my father that one has to be one’s own person and not go along with the crowd,” Frazier says. His father asked him, “Kenny, how are you going to carry on your grandfather’s narrative of being free and your own person? You better do what you know is right, and not be fixated on what other people think of you.”

While studying at on Penn State scholarship, Frazier decided he wanted “to become a great lawyer like Thurgood Marshall, affecting social change.” At Harvard Law School, he was acutely aware he wasn’t from the same social class as his classmates. He wryly notes, “Lloyd Blankfein [CEO of Goldman Sachs] and I were the only students who ‘were not of the manor born.’”

Shortly after he joined Merck, Frazier took on the extremely difficult task of defending Merck from over 40,000 lawsuits filed after the pain drug Vioxx was withdrawn from the market due to alleged cardiovascular problems. Frazier did so successfully, catapulting him into the CEO’s chair where he faced a greater challenge: short-term shareholders pressured him to cut back Merck’s research as several of its competitors were doing. Frazier stayed the course, committing to spend a minimum of $8 billion per year on research in order to pursue cures for devastating diseases like cancer and Alzheimer’s.

Reflecting on his sense of purpose, Frazier explains, “Merck’s purpose is aligned with my personal sense of who I want to be and what I hope to contribute to the world. At Merck, you have the opportunity to make tangible contributions to humanity. There’s a yearning in all of us to leave something meaningful behind, because we know we have a short time on earth. Merck gives me the chance to leave something to people 20, 50 or even 100 years from now because we did the right things today.”

Asked what his father would say about his remarkable success, Frazier says modestly, “He’d say, ‘The boy did what he was supposed to do.’”

Turning Purpose Into Action 

Your leadership purpose is not meaningful until it is applied to solving problems you encounter in the real world. When you align your personal purpose with an organization’s mission, you unlock the full potential of people in the organization.

That’s what I tried to do at Medtronic where we connected employees’ True North with the company mission of “restoring health, alleviating pain and extending life.” My successors, especially current CEO Omar Ishrak, have pursued this mission with vigor, contributing to the 100 times increase in the company’s market value over the past 26 years. More importantly, the number of people each year restored to full health has grown from 300,000 to 15 million.

As long as you focus on your True North, understand your purpose and use it to make a difference in the world, you can leave a legacy that inspires those who follow. 

More Than Sound: The Contemplative Leader: A Conversation with Bill George

Authentic leaders have developed a keen inner focus. They know what’s going on inside of themselves. They’re in touch with the relationship between their emotions and their actions. Most importantly, they possess a meta awareness – an awareness of awareness itself.

Bill George, Senior Fellow at Harvard Business School and author of Discover Your True North, has some interesting methodologies for helping leaders master their self-awareness. Here’s what he had to say about a practical technique to develop self-awareness in his recent conversation with Daniel Goleman.

***

The Contemplative Leader

When I introduce the concept of inner focus, some people view it as being egotistical. I think it’s just the opposite. Most business leaders I know are incredibly focused, but they’re focused on their business goals. Inside they’re a mess. Why? Because they don’t take time to get clarity about what it is they’re trying to do and who they are. You can’t be a good leader until you have a real depth of awareness of who you are and what you’re about. Otherwise you’re just chasing your tail, so to speak.

All of us – not just leaders – are so outwardly oriented. We don’t truly know ourselves because we don’t spend any time on trying to know ourselves. We don’t take the time to examine why we react when X situation occurs. We just react according to our habits. Business as usual.

People often ask me, how do I gain self-awareness? For me, maintaining an introspective or contemplative practice has been essential to my success. I’ve been a meditator since 1975. I try to sit for at least a few minutes a day, twice a day.

Before that, I was a wreck. I was just chasing everything – 25, 50 objectives all at once. I had no sense of clarity. And when I began to meditate, I gained a sense of what’s really important. I learned to separate the wheat from the chaff. And I come out of it with a sense of clarity. Here are the three or four things that I really need to go focus on.

But I also got a much deeper sense of what I’m about and who I am, as well as a sense of wellbeing and tranquility. Without that sense of wellbeing you can’t really be an effective, focused leader. You can’t feel good about yourself if you continue to let ghosts from the past chase you.

Now, you’re contemplative practice doesn’t have to be meditation. It could be prayer. It could be talking with a loved one in great depth. It could be going for a jog to clear your head. It could be taking a long walk. I happen to like meditation, but I’m not saying that’s the only way.

Gain more insights on authentic leadership fromBill George in Leadership: A Master Class Training Guide and The Executive Edge: An Insider’s Guide to Outstanding Leadership.

 


This article was originally post 10/21/ 2015 on morethansound.net.

Arielle.com: Top Harvard Professors Weigh in on VW Dieselgate: What It Means For Leadership, Culture and the Future of Work

The VW scandal, like every good scandal before it, has left business leaders wondering where exactly it all went wrong, who at VW is behind it and whether the brand can recover.

It even spawned a hashtag, #dieselgate, which has become the world’s unofficial forum for discussing causes of the crisis and its possible fixes – all while aiming a healthy amount of frustration and resentment at the company’s top executives.

We spoke to respected leadership influencers Bill George and Amy Edmondson, both Harvard Business School professors and prominent authors, to get their take on what business leaders can learn from the scandal.

These are, as Bill puts it, devastating times for VW.

For the traditionally well respected brand, the emissions scandal is a major breach of trust – and it’s the pre-meditated, calculated aspect of the violation that makes it so hard to swallow.

There’s no doubt that, in Amy’s words, “it’s actively deceptive, an act of fraud”, but the real question we’ve all been asking is this: how far up the corporate chain does it go?

If we were to believe the CEO of VW USA Michael Horn, not very far at all.

Horn, facing a grilling before US Congress last week, was to be seen accepting little of the blame: “This was not a corporate decision. No board meeting […] has authorised this. This was a couple of rogue software engineers who put this [deception device] in for whatever reason”.

This is, at best, a flimsy excuse.

As Bill wryly observes of the hearing, “Mr. Horn did not distinguish himself in the eyes of the public”.

Leadership Lesson #1: Take Full Responsibility.

It’s in the VW response we find clues to our first leadership lesson: to err is to be human, but to cover up is to sin.

“The cover-up can be worse than the crime”, Amy points out.

When the issue is that of broken trust, deflecting questions, acting slippery and distancing themselves from “the real villains” is one of the worst things VW executives can be seen doing.

It’s unlikely that anyone other than those involved know the truth of the matter, but it’s exactly this kernel of truth that needs to come out.

“The new CEO needs to be very hard-nosed in getting out publicly exactly who is responsible”, argues Bill – “the longer they withhold that information for, the harder it’s going to be”.

VW’s management of the crisis up to this point, then, has been less than ideal.

Although their senior leaders seem to be contrite – “We’ve totally screwed up”, admits Horn – this contrition runs barely skin deep.

Scapegoating and proclamations of C-Level innocence aren’t likely techniques to win any CEO of The Year awards, regardless of whether such proclamations are true.

Horn and his colleagues are equating innocence with ignorance, but ignorance is no excuse, says Amy:

“If the top officer of the corporation doesn’t know what’s happening that’s problematic – a serious leadership failure. Whether you know or not, you’re still responsible. You’re responsible for creating the culture that tells people what to do in the absence of prescriptive rules. This is a situation exactly like that”.

The real issue here is that of company culture. It’s what Bill calls the “executive responsibility” – whether your people feel that they can get away with breaching practices.

Which brings us to our second major leadership lesson.

Leadership Lesson #2: Culture Is The CEO’s Job.

Top executives might not know everything that’s going on in their company, but setting standards at the macro-level means guiding decisions at the micro-level.

To put it bluntly, if the leadership team had done its job and built the company culture on the right foundations, we wouldn’t be having this discussion.

Without doubt, the ever-increasing globalisation of business plays a role here – but it also can’t be used as an excuse.

As former Chairman and CEO of Medtronic, a medical device company which operates in 140 companies, Bill certainly understands firsthand the difficulties of operating across continents:

“These events should bring home to every company in the world that when you’re operating in another country you have obligations in terms of their law and compliance. You have to go along with whichever laws they have in place, whether or not you agree with them, and that’s the Chief Executive’s job – to go out and speak to different people on the front-line in every country and ensure people are compliant.”

There’s no point crying over spilt milk, though. The real question is, what next?

For Amy, “what must come out of this is a top to bottom soul-searching. An evaluation of the culture, of the technical processes, of everything”.

The VW leadership team has remarkable challenge ahead of it. Broadly, they have a choice to view the crisis as either:

  • a crappy problem they must survive through, or
  • a remarkable opportunity to shake up and rebuild the company – for the better

Their choice will determine the direction of all their subsequent strategies and will determine the future of VW.

Leadership Lesson #3: Leverage The Silver Lining.

Experienced businesspeople know that every crisis tends to be an opportunity in disguise.

As leaders we learn and grow the most not when business is sailing smoothly, but when times are tough.

Which points to our next leadership lesson: VW can leverage this scandal to radically change how its people (as well as its customers, business partners and the society at large) think about work, performance and the environment.

Just like reformed ex-murderers become champions of human rights, in a bold move VW could use the story of its own turnaround to position itself as a champion of conscious, high-performance work culture and environmental protection.

Far fetched? Definitely. Difficult? Yes. Worth trying? Also yes. Will it be considered at the board level? Maybe. Will it be attempted? If current VW response is anything to go by, probably not.

Leadership Lesson #4: ROI of Authentic Leadership.

The crisis extends beyond VW.

One of the major implications of such scandals is the narrative they construct and play into: the narrative, as Bill notes, “of all business people being dishonest until you catch them. It’s a horrible narrative, but it’s damaging to business as a whole”.

This means businesses worldwide have work to do in the wake of the VW scandal.

“Other companies need to be very clear about differentiating themselves”, says Bill, “introducing testing of their own and assessing their own processes. Businesses can differentiate themselves here, because this was a moral failure. It was not an inadvertent mistake.”

For Amy, “the object lesson here is that there’s very powerful vicarious learning to be done. If other leaders aren’t taking this lesson to heart, they’re wasting the opportunity.

Executives need to take the opportunity to assess – where could we be falling short on our promise to customers and society? How can we resolve that?”

Which brings us to perhaps the most powerful leadership lesson of all: the truth will always out.

It’s a lesson, Amy notes, that it’s surprising we still have to teach: that “nowadays all secrets have expiration dates; there’s no such thing as a permanent secret”.

It’s this point that proves most salient, as the scandal rolls on: ability to lead with authenticity and integrity is a skill that’s in demand more than ever.

Monster Hiring Podcast: Authentic Leadership

Today’s leaders face greater challenges than ever before. 

Yet some of the most accomplished leaders are succeeding in their roles by following what Bill George calls their True North.

In this Monster podcast with the best-selling author Bill George, we hear the stories of authentic leaders, including PepsiCo’s Indra Nooyi and Starbuck’s Howard Schultz, as highlighted in George’s latest book,Discover your True North (Wiley, 2015.) 

Learn what it takes to become an authentic leader, and how it can transform your life and career at any level in the organization. 

Tune in to this podcast on leadership with best-selling author Bill George. 

Medtronic's George, Red Hat's Whitehurst, Citrix's Lipson talk leadership in the C-Suite

Bill George knows leadership - and can attract it when he needs to. 

The CEO that took Medtronic from a $1.1 billion market capitalization to $65 billion, George brought a a leader-heavy crowd to downtown Raleigh early Wednesday for the launch of his new book, “Discover Your True North,” where he told them directly that leadership can’t just be about the balance sheet. There’s room, he says, for “passions” in the C-Suite.

In the audience were a few people used to talking numbers, executives such as ChannelAdvisor CEO David Spitz, SEPI Engineering & Construction CEO Sepi Saidi, Highwoods CEO Ed Fritsch, former IBM site lead Dick Daugherty, Empire Properties CEO Greg Hatem, MCNC CEO Jean Davis and dozens of other C-Levels.

George says he was on track to lead global technology firm Honeywell when he looked in his rear view mirror (literally on his way home from work) and realized he was miserable, an epiphany led him to the “best 12 years of my life,” when he left the company for the much smaller Medtronic, a firm making a big difference in the lives of patients. Satisfaction is achieved by focusing on what you want. Not what you think you want, he says, bringing two Raleigh businessmen in front of the crowd to prove his point: Jim Whitehurst, CEO of Red Hat and Jesse Lipson, site lead for Citrix’s Raleigh operation.

Whitehurst, too, left a “cushy job” for something completely different – in his case, it was Delta for Red Hat.

“Everyone thought I would be CEO,” he says of his time at Delta. Despite a bankruptcy, Delta was a success story, and one he could have ridden to the top. “I remember going home… and saying I can’t go somewhere to lay off a lot of people… I just can’t do it.”

And then the call from a much smaller company came – Red Hat.

“I think a lot of people get enamored with size… versus what gets you up and gets you excited every day,” he says.

Lipson, vice president and general manager, Workflow and Workspace Clouds, at Citrix did the opposite. He moved from something physically small to something bigger when the company he founded a decade ago, ShareFile, was bought out by Citrix. ShareFile had 80 employees when it was acquired, a move that propelled the headcount to more than 600 in downtown Raleigh. And the acquisition was necessary for growth.

His competitors were raising serious cash, he recalls.

“We decided we needed to do something,” he says. And the Citrix wallet would help ShareFile grow.

It’s a new generation of leadership, George says – where it’s about the impact, not just the balance sheet numbers. And it’s not just what leaders are doing in the boardroom.

Since selling, Lipson, like his cohorts on stage, has had time for what George calls “passions.” In Lipson’s case, it’s HQ Raleigh, the entrepreneurial coworking organization he cofounded downtown.

“I’m beginning to see the potential of that as a business,” he says, admitting that, at first, it seemed “like a charity project.”

Today, about 125 organizations exist in the space, creating real jobs and real innovation, he says.

"It’s exciting to see the innovation and entrepreneurship and all the energy in Raleigh and this whole area,” George told the crowd. "I think we’ve always been looking for innovation beyond the Silicon Valley model.”

But whether you’re in the C-Suite in the Raleigh skyline or overlooking Silicon Valley, leadership is different today than in George’s class of C-levels, he says. He points out cautionary tales, such as Enron. He points out to “adjustments” that, today, “would be considered fraud."

“What happened to my generation of CEOs?” he asks rhetorically. “I think we got caught up with charisma and style and equated it to leadership.”

The event was hosted by Three Ships Media CEO Zach Clayton, who has his own entrepreneurship story. Six years ago, Clayton turned down corporate offers to start Three Ships Media, which today employs 55 people. 

Lessons From Volkswagen (and Other) Scandals

From Huffington Post on Oct. 12, 2015 

"Without a moral center, you will swim in chaos" -- James Burke, Former Johnson & Johnson CEO

The Volkswagen scandal hit new lows this week when German-born Michael Horn, CEO of Volkswagen America, refused to acknowledge the people responsible for falsifying emissions tests on 11 million vehicles or to release essential documents. In front of the U.S. House Committee on Energy and Commerce, he chose instead to blame lower-level engineers.

Does anyone really believe a scandal of this magnitude and scope was actually masterminded by a few engineers? In my experience, it would be highly unlikely for first-level engineers to take the risks inherent in such an illegal scheme and even more improbable that their superiors knew nothing about it, especially in a hierarchical organization like Volkswagen.

Unfortunately, this kind of dissembling and cover-up has become all too common in corporate circles. It only serves to harm ethical companies as the public loses trust in all corporate leaders.
It's been a bad year for organization ethics. In September United Airlines' CEO Jeff Smisek was forced to resign for cutting unethical deals with the head of the Port Authority for New York and New Jersey. Toshiba's top officials admitted to seven years of corrupt accounting. Even the soccer world was rocked when FIFA's executive committee acknowledged that corruption had reached its highest levels, and suspended president Sepp Blatter, right-hand man Jerome Valcke, and European head Michel Platini.

What should organizations do when the organization is corrupt from the top down? In my new book, Discover Your True North, I address how essential it is for leaders at the top to set standards for the entire organization. Yet all too often, people on the lowest rungs of the ladder are fired or blamed for illegal activities, while the bosses protect themselves. Even when forced to resign, they walk away with large termination settlements. For example, United's Smisek received nearly $20 million in termination pay after his corrupt dealings with public officials were exposed.

Every organization needs clear values that establish its principles and set firm ethical boundaries on its actions. Confronted by the 1980s Tylenol crisis, in which lethal poison was placed in Tylenol pills, former Johnson & Johnson CEO James Burke used his company's famous Credo to guide his actions. He observed, "Without a moral center, you will swim in chaos."

Employees encounter many gray areas in their work. They need clarity about where to draw the line between acceptable and unacceptable actions. That's what IBM's CEO Sam Palmisano established after becoming CEO. He shifted IBM's entire 440,000 person organization - which operates in many countries where corruption is the norm -- to "Leading by Values."

Former Citigroup CFO Sallie Krawcheck took a heroic action when she insisted on refunding losses to clients misled by her firm during the 2008 financial crisis. She bluntly asserted Citi broke clients' trust by pushing low-risk alternative investments that were actually high risk. When CEO Vikram Pandit vehemently disagreed, Krawcheck took her argument directly to Citi's board of directors, which backed her actions. A miffed Pandit later fired her. Krawcheck knew she could always get a job, but she recognized she couldn't recover her values.

But what can be done when organizations like FIFA and Volkswagen are corrupt at the top? The only solution is to clean house at the highest levels of the organization and weed out the poison in the system. Otherwise, the organization will ultimately revert to its unethical practices.

That's what Germany's Siemens did when audits revealed it paid out $1.8 billion in bribes. Board chair Heinrich von Pierer, who presided over the unethical dealings as CEO, was forced to resign. Board chair Gerhard Cromme and CEO Peter Loescher were brought in to clean up the mess. To their credit, they squarely faced the issues, terminating the company's entire executive committee and firing 400 top executives. A new governance and compliance system was established, and all employees went through extensive compliance training. It cost the firm $2.7 billion in fines and legal fees, but now Siemens is operating ethically throughout the world and has been restored to full health.

FIFA and Volkswagen would be wise to follow Siemens' approach of bringing in outsiders to address their scandals, with outsiders leading the board and executive management. Their actions should include hiring new law firms and accountants to conduct independent investigations, and terminate anyone who is directly or indirectly involved with corrupt dealings. In FIFA's case, this may include current members of its governing board involved in the corruption.
Leaders should always put the institution first. Instead, all too often organizations protect individuals until they are "proven" guilty, as Blatter's attorney is arguing FIFA should do. It is far better to separate them completely from the organization, and let the courts determine criminal culpability.

Finally, transparency is essential: the board should reveal all the findings of its legal and accounting reports and make them public immediately. It is far better for the board to reveal them rather than waiting for political bodies, the media, or the courts to extract this information. By vigorously investigating its own actions and transparently sharing the findings, the organization begins to rebuild the credibility necessary to return to business.

Only through aggressive, transparent actions can corrupt organizations be restored to fulfill their missions.

Bill George Interview: 'Northern' Exposure to Leadership

From Workforce, Published on Oct. 12, 2015

by James Tehrani

No one ever said leading is easy. You hear about leading by example all the time, but what about examples of leading? Bill George, the former CEO of medical-device-company Medtronic Inc., draws up a road map to leadership in his recently updated book “Discover Your True North.” In the book, he interviews 125 people about their ideas on leadership. What he concludes is that people who learn from their life experiences, or “crucibles” as he calls them, and follow their leadership compass “northward” can achieve “authentic leadership.” Workforce editor James Tehrani recently caught up with George, now a Harvard University business professor, to learn more. An edited transcript follows.

Workforce: Can you give me an idea of what you mean by ‘true north’?

Bill George: True north is your most deeply held beliefs, the values you live by and the principles you lead by. So it’s really the essence of who you are. Who are you as a person? You know your center; it’s like your moral compass.

WF: You talk about the myth that leaders are born. Can you explain that?

George: I think it’s [leadership] a combination of the qualities you’re born with, but then you have to develop. It’s no different from a cellist who’s going to Carnegie Hall. You don’t just show up; you have to practice every day. And I think people need to practice their leadership every day.

WF:  What are some of the qualities that you would look for in a leader?

George: Far and away No. 1 is authenticity. Are they genuine people? Are they good in their skin? Are they real? And do they come across as who they are? There’s some free-flowing ideas about faking it to make it or pretending you have charisma or putting on a good impression for an interviewer. That’s a good way to get in trouble and hire the wrong person. … I think all too often we look at résumés rather than the person behind the résumé. That’s where big mistakes are made.

WF: You interviewed 125 leaders for your book, was there an answer that surprised you?

George: We asked people about their traits and characteristics, and they wouldn’t talk about that. They wanted to talk about their life experiences, their life story. We never expected how important that was going to be. … We hit upon the thing that was the most important, and that’s the impact of the greatest crucible of their life, the most challenging experience they’ve ever had and how they framed that. And the great leaders framed those experiences not as victims — they didn’t just stuff them and forget about them — they used them as opportunities for growth. In the new book, we talk about an emerging concept called ‘post-traumatic growth’ of how people are using challenging experiences early in life to grow as leaders and as human beings.