Blog

Leadership Kudos and Gaffes: Recognizing a leader's legacy

Leadership Kudos go to all those who have finally recognized Steve Jobs’ leadership legacy. Jobs didn’t fit anyone’s classic description of a leader but he was always authentic, passionate, visionary and committed to the highest standards – AND he grew wiser by understanding his failures and following his heart to the end. It is great to see him so recognized at his passing. His best advice that we can all follow: "Your time is limited, so don't waste it living someone else's life. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition." 


Leadership Gaffes this week go to Reed Hastings of Netflix who tried to be too clever with Qwikster.  He got caught with chasing his escalating stock price . . . and wound up destroying 65% of Netflix market cap. Hasting needs to get back to focusing on his customers before he loses them to competitors Amazon and Apple.  While Hastings admitted his error, he doesn’t seem to acknowledge the root cause of his mistakes. As Rob Kaplan says, it’s time to look at the person in the mirror.

Remembering the Greatest Innovator of the Past Fifty Years

With the tragic death of Steve Jobs at the age of 56, the world lost its greatest innovator in the past fifty years. Through his visionary genius, Jobs transformed five separate fields: personal computers with the Macintosh and iMac, animated films with Pixar studios, music players with the iPod, entertainment storage with iTunes, the smart phone with the iPhone, and most recently, created an entirely new field with the iPad. No one in history has successfully transformed so many different fields.

Jobs was not an engineer or scientist, nor did he make use of traditional marketing techniques such as consumer focus groups. Rather, his creative genius was his ability to perceive what consumers would want before they could articulate it. In a data-based era where everyone is demanding data and “proof” in advance, Jobs used his intuitive abilities to envision the kind of problems that would please consumers and meet their unstated desires.

Then he translated those wants into simple, yet elegant devices that were so intuitive to use that no user manual was required. In 1985 he pioneered creative graphics, using a wide array of color, that brought computer screens to life and made them easy to use without understanding programming languages. I had my first Apple product with the Apple 2 in 1982, but my engagement with personal computers really took off with my first purchase of a Macintosh in 1986. Since then, I have enjoyed using my iPod, iTunes, iPhone, iPad, and I ‘m looking forward to becoming an iCloud user.

What’s not well understood about Jobs is the extent to which he was influenced by failure – his own. Recognizing the limits of his managerial abilities in his younger years, the Apple board insisted he bring in a business partner, which led to the recruiting of John Scully in 1982. That marriage, which seemed to go well at first, blew up in 1985 when the two differed on strategy. Was it Jobs’ rigidity over refusing to open up Apple’s unique software to applications developers, or Scully’s need to call the strategic signals – or simply an inevitable power struggle between two strong-willed personalities? We may never know the real answer to that question.

Confronted; by Scully with an “either/or” decision, the board unwisely went with Scully and fired Jobs. As Jobs said later, “How can you get fired from the company you founded?” But fired he was and cut adrift at age thirty to rethink his future. In his prescient graduation address at Stanford University in 2005, the year after he was first diagnosed with pancreatic cancer, Jobs acknowledged that his firing freed him from carrying the burdens of managing a large enterprise. It also permitted him to pursue his creative desires, unencumbered by managerial tasks he didn’t enjoy and wasn’t especially good at.

For the next twelve years, Jobs flourished while Apple floundered. He founded a new computer company called NeXt that enabled him to start all over in designing his ideal computer. Then he bought a small computer graphics subsidiary of Lucas Productions from George Lucas and turned it into Pixar animation studios. Pixar became the greatest producer of animated films of all time, highlighted by Toy Story 1, 2, and 3. At the height of its success, he sold Pixar to Disney in 2006, taking a large ownership position in that company and joining its board of directors.

Meanwhile, Apple stumbled after Jobs left, as Scully demonstrated that he lacked the insights or leadership abilities to keep Apple’s success going through creative designers and exciting new products. His termination led to a succession of outside recruits, including Michael Spindler and Gil Amelio, all of whom fell victim to their inability to lead and inspire Apple’s people. In a historic turn of events, the Apple board purchased NeXt in its desperation in 1996 and brought Jobs back in an undefined role.

But this was not a rapid turnaround. Jobs led the design of the iMac, which was widely appreciated by Apple devotees, but failed to stem the steady slide of Apple’s market share, which dipped below 3%. Apple’s stock continued to slide. By 2003 it was worth no more than when Jobs returned to Apple seven years earlier. My former company, Medtronic, had a market capitalization in 2003 that was ten times Apple’s; today, the tables are reversed as Apple is the world’s most valuable company with a share value that is ten times Medtronic’s.

Then came the iPod, which to computer gurus seemed like a diversion from the computer business, and perhaps it was. But its linkage to reams of legal music files through iTunes wiped out both the player business and the compact disc market. More importantly, it paved the way for integrated information/entertainment devices like the iPhone and iPad, putting Apple well ahead of established competitors in those fields.

It is worth noting that Apple is the only integrated computer company with its own unique hardware, software and retail stores. The latter has created the highest sales per square foot in the history of retailing, featuring only Apple products and authorized accessories.

To me, the most important lesson of Steve Jobs’ life is the way in which he learned from his own hardships – of being an adopted child, of being fired, and of facing death every day for seven years. He accepted these hardships not just as part of life, but as opportunities to go his own way in making a difference in the world.

And make a difference he did! No one in our lifetime has made more unique contributions to the worlds of innovation, of business, or of consumer stimulation. Let us hope that in celebrating his life many other young people will be inspired to go their own ways, trust their intuition, and pursue their dreams and their visions. That could be Steve Jobs’ greatest legacy of all.

Leadership Kudos and Gaffes: Amazon taking the Kindle to the next level and Kodak's board for ruining a great company

Leadership Kudos this week go to Jeff Bezos of Amazon, introducing his latest product breakthrough, a new tablet called Kindle Fire. Listed at a remarkable price of $199 (Apple charges $499), the Fire will offer users a remarkable array of Amazon products, all stored on Amazon's cloud and rapidly downloaded. Staying true to his convictions, Bezos stayed the course with his on-line retail strategy in 2002 when the stock market collapsed and his stock lost 92% of its value. Then he invested heavily in Amazon's first hardware product, the Kindle, revolutionizing the book reading business. This week Amazon's market capitalization topped $100 billion. You have to admire Bezos' courage is taking on Apple frontally, something H-P and others have failed to do.

Leadership Gaffes go this week to the Kodak Board, which has presided over the demise of a once-great corporation. In past twelve years Kodak stock has lost 99% of its value, plunging from $75 to a new low this week of $0.78. (That's not a typo!) Anticipating the digital revolution but unable to develop an internal leader, the board went outside its ranks to recruit George Fisher, then CEO of Motorola, who served as CEO from 1993-2000, but was unable to move the company into the 21st century. Fisher was succeeded by Dan Carp, who drifted from one strategy to the next during his five years as CEO. Then Antonio Perez was recruited from H-P to save the company once again, something he has failed to do. A sad tale, much like H-P, of a board that can't figure out what business it is in.

Leadership Kudos and Gaffes: Howard Schultz builds long-term value at Starbucks

Leadership Kudos for the week go to Starbucks Chair & CEO Howard Schultz, who returned as CEO three years ago and has restored SBUX to its original coffeehouse feeling where baristas and customers have real relationships, not the assembly line feeling it had slipped into. Revenue and earnings growth have been restored, thanks to Schultz. And Howard has the courage to take a stand on our political impasse, buying full-page ads imploring people not to give to either party until someone puts country ahead of party. Who says leaders can't stay true to their values and their roots and build great global franchises?

Leadership Gaffes this week go to Solyndra leadership and government officials who funded it. Solyndra squandered a $535 million government "loan" by building solar panels its customers didn't want. Now it is bankrupt and can't repay the loan. Maybe renewable energy companies should be held to the same economic tests that other industries are - of keeping their costs below their revenues without subsidies - and bring costs in line while innovating. A sobering experience for everyone who believes in subsidizing preferred technological solutions.

Fortune - The Church of B-School

FORTUNE -- About an hour into a leadership class at Columbia Business School, all 50-odd students were sitting rail-straight with their eyes closed. A blonde research associate with the slightest hint of a German accent cooed instructions at the front of the class. "Notice the sensation of your shoes," he said.

Personal Leadership & Success, which is taught by leadership expert Hitendra Wadhwa, is considered one of the "softer" offerings at Columbia, especially when compared to "hard" courses such as finance. The idea behind it is that good leadership begins with self-knowledge, hence the meditation exercise.

It may seem far out, but there are similar classes at business schools across the country. Stanford has offered a class called "Touchy-Feely" since 1966. And a class at Harvard Business School takes this idea of self-knowledge through group learning a step further.

Recreating the community group

The class, developed by former Medtronic (MDT) CEO and Harvard management professor Bill George, runs on the premise that groups of business-minded leaders can offer better leadership guidance than other networks, including family and friends. For this class, Harvard MBAs from different backgrounds are put into small groups where they complete coursework together and share deeply personal experiences.

Those shared experiences can fill an unmet need for community. Americans have become less social, George argues in his recently published book True North Groups. He cites the work of fellow Harvard professor Robert Putnam, whose research has shown that Americans' participation in groups outside of work, such as rotary clubs or religious groups, has plummeted. According to Putnam's research, the number of people attending meetings of any kind of club in the U.S. dropped by 58% from 1975 to 2000.

That's where some business schools are starting to step in, and students are responding. Personal Leadership & Success is one of the top 10 most popular electives for second-year MBA students at Columbia out of about 200 elective courses. Since 2008, over 600 students have applied every year for the 240 spots in Bill George's class at Harvard (George now teaches a version for executives). This year, the Personal Leadership & Success program for MBAs is expanding to take on 60 more students per year.

Some students say they are attracted to these kinds of courses because they feel like they are learning to lead in a vacuum. According to Rye Barcott, a Duke Energy (DUK) employee and Harvard Business School alum who took George's class, the problem with many leaders today has little to do with their ability to crunch numbers, but rather a lack of values. "When you think about the biggest failures of corporate executives, they're not necessarily technical failures, but ethical ones, " Barcott says.

Programs like George's class can help sharpen those ethics in future executives, says HBS alum and film executive Peter Bisanz: "I think that if our business leaders had insight into their own strengths and weaknesses, we would not have had the excessive greed that would have led to the financial crisis."

Granted, both of these men were star students in the class and they believe in the methodology. But they both opened up to their peers in ways that may seem, at first glance, out of place in a business school setting.

The crux of George's class is the students' identification of a "crucible" moment, described in True North Groups as sharing with their groups "the singular experience that has tested you to the limits and impacted your life." Some choose to open up in front of everyone, and these crucible moments can be intense -- one person stood up and came out as a homosexual in front of the whole class, Bisanz says. Bisanz himself shared his experience with alcoholism.

It can be tough to have the kind of intimate interactions with personal friends that are necessary to grow as a leader, George argues in his book. Barcott agrees: "How do you bring up what the crucible moment is in your life without sounding like a tool?"

The program is no stand-in for therapy though, George insists, and some topics should stay out of these discussions. For example, in his book, he refers to a married couple in a True North group that wanted to talk about issues they had been having as swingers. It was disruptive.

But students likely to be at Harvard Business school could use the self-reflection a True North group requires, perhaps more than anybody, says Bisanz. "A lot of them haven't had to be subjected to deep personal examination of their lives," he says, because their paths have led to a top business school, so they've been pretty successful by most standards. But he thinks that makes business-oriented soul searching even more necessary. "When those people are tried and tested, they're going to have to decide who they are and what they believe in."

A generation in search of purpose?

This idea that your beliefs should guide your career resonates among younger students and employees. Take Ben Austin, one of the students in Wadhwa's class at Columbia. He used to work for film crews in Hollywood, fetching lattes, he jokes, but actually scoping out promising films at festivals. He hopes Wadhwa's class will help him hone his sense of purpose and match that to his career goals. He isn't so much looking for a job as a skill set, he says.

Millennials tend to, on the whole, crave jobs with a greater purpose. In a survey by consulting firm Mercer, young jobseekers ranked a company's good reputation as one of the most important draws for a job, although salary still held the No. 1 spot. More than other workers, "Millennials are looking for a value congruence -- it's very important for them that the company they work for reflects their values," says Jason Jeffay, a senior partner at Mercer consulting firm.

Clearly, that's not true for all young people. Plenty of MBAs are strictly salary-driven, and both George's and Wadhwa's classes are electives, so they select for a population that's searching for this kind of guidance. It's unclear whether coursework like this could ever be mandatory, George says.

When work and personal life become one

At its core, these courses try to teach "social intelligence," otherwise known as compassion mixed with common sense. Being a decent, fulfilled person will help you become a better leader and manager, the thinking goes.

In truth, the business and personal worlds are collapsing in on each other. Many of us carry work with us wherever we go and spend more time with colleagues as the workday grows longer and longer. So it makes sense that business schools are turning into places where students want to learn how to be good at life in general.

Ben Austin said as much. He suggested that this article open with a description of the students meditating, then continue to describe how no, this wasn't a scene at a temple of worship but rather [dramatic pause] "Columbia Business School: a temple of commerce."

Austin has a point. The lines between where we go for moral guidance and where we go to learn how to balance a budget are growing blurrier these days.

 


Orginially Posted on Fortune.com on September 15, 2011

Leadership Kudos and Gaffes: Two Women Leaders

Leadership Kudos this week go to German Prime Minister Angela Merkel for her courage in keeping the Euro together as Greece's finances unravel. Germany the healthiest economy in Europe, thanks to the strength of its export business and its competitive manufacturing base, and Merkel is willing to take the political heat on the domestic front to help finance Europe's recovery. Germany is an important role model of economic success for the United States and other developed countries to study and even emulate.

Leadership Gaffes go to Carol Bartz, who was terminated by the Yahoo board of directors. Going out with guns blazing, Bartz told Fortune Magazine, that Yahoo's board is "a bunch of dofuses" and "they f---ed me over." Bartz may have inherited a struggling business model, but she presided over a series of strategic missteps.  She overestimated the much-hyped search deal with Microsoft.  She failed to realize the seriousness of the company's restructuring need and foolishly promised "no layoffs," a promise she later reneged.  Her indecisiveness over the Alibaba deal -- back and forth, ultimately to no end -- seems a metaphor for her tenure as CEO.  There are no winners in this mess.  

What the President Should Say on Jobs and the Economy

Tonight President Obama addresses the nation at a joint session of Congress about his plans to expand job growth. Here’s what he should say:

My Fellow Americans:

Our country is facing a jobs crisis of major proportions, the greatest since the 1930s. This nation’s strength is based on its strong economy and the global corporations that dominated their industries and fueled growth throughout the world. But now that strength is waning, as other nations, from China, India, Singapore, and Brazil to Germany and Switzerland, threaten to outstrip us in competitiveness.

In the 1990s our economy produced 23 million jobs and three consecutive years of budget surpluses. The combination of the Bush tax cuts and spending to finance two wars and entitlement plans created an enormous debt burden that future generations will be forced to carry. The historic downgrade of the U.S. debt rating from AAA to AA+ by Standard and Poor’s is a warning we cannot ignore.

The excesses of the past decade have imperiled our fiscal stability and left 25 million Americans – 16.2% of the workforce – unable to find full-time jobs.  As a result, the United States has its smallest full-time workforce – less than 55 percent – and hundreds of thousands are dropping out each month.

When I came into office, I inherited a broken economy. Our banks, insurance companies and automobile makers were on the brink of bankruptcy. We took aggressive steps to stop the bleeding, and prevented the world from depression. I launched a $893 billion stimulus package but it had limited impact on the structural jobs crisis.

A robust recovery must start with jobs growth. Recent figures confirm that jobs are not growing, and there is no indication they will return without aggressive actions on our part. Yet we continue to get pulled off course by partisan showdowns over the budget and debt ceiling.

We need to stop making it difficult to grow businesses and hire workers in America. In response to excesses of the past, we overregulated our industries. With domestic growth approaching zero and the challenging regulatory, tax and political climate, companies are investing instead in rapidly growing emerging markets in Asia, Latin America and Middle East.

As a result, the jobs crisis is more severe than ever. The U.S. has sunk further into debt, and the country has reached the limits of its borrowing capacity. Our political stalemate has paralyzed our ability to take decisive action.


Therefore, I will use the powers entrusted in me as your President to take the actions required to put Americans back to work and restore domestic growth. All these steps must be taken without increasing the budget deficit.

Here is my plan:

  • Restore fiscal stability by implementing the proposals of the Simpson-Bowles Commission to bring revenues and expenditures in line and reduce deficits by $4 trillion.
  • With the recent debt downgrade, the government cannot subsidize federal jobs; therefore, I am appointing John Bryon, my Secretary of Commerce nominee and a former CEO, as Jobs Czar to work closely with American employers, large and small alike, to stimulate domestic investment and create 10 million jobs over the next decade.
  • To create a positive climate for business investment like that of the 1980s and 1990s under Republican presidents Ronald Reagan and George H. W. Bush and Democrat Bill Clinton, I am ordering all federal agencies to reduce or suspend unnecessary regulations and focus instead on expanding private sector jobs in the energy, transportation, health care, information technology, and financial service industries, as well as small businesses.
  • To prepare unemployed Americans for 21st century jobs, I will reprogram existing funds to invest in retraining and vocational/technical education.  

  • To make America more attractive for investment, I propose reducing the corporate rate to 20 percent, while eliminating complex deductions and credits.
  • For the remainder of my term, I will suspend taxes on repatriated foreign profits for corporations that reinvest their portion of the $1 trillion in cash trapped overseas in manufacturing, research, and job creation.
  • I will expand the number of H1-B visas, travel visas and green cards to make America an attractive place for immigrants to visit, work and start companies.
  • To expand exports, I will implement a free trade policy by moving ahead with free trade agreements with South Korea, Columbia and Panama, while working with nations of this hemisphere to turn NAFTA into the Americas Free Trade Agreement.

 

As your President, I am prepared to put my re-election on the line to put Americans back to work, reignite economic growth, and restore America’s competitiveness. While my plan will not please the extremes of either political party, I ask all Americans to join me in this commitment by putting their country ahead of partisan politics.

True North Groups offer approach to developing leaders

Minnesota companies like General Mills, 3M and Cargill have developed national reputations for their leadership development programs. As a result, they have developed many exceptional leaders, which has enabled them to sustain their performance for decades.

As these companies have expanded globally, they also have led the business world in the shift from hierarchical organizations to collaborative, horizontal ones. This is especially important with younger generations because the command-and-control model so prevalent in the 20th century has ceased to be effective. It fails to motivate front-line employees and take advantage of their knowledge and wisdom, especially in global organizations that require collaboration across different cultures.

IBM's CEO Sam Palmisano pioneered the notion of a globally collaborative organization in 2003 as he transformed IBM's hierarchy from functional and geographic silos into an integrated global network. He started with a "values jam" involving 300,000 employees over four days and articulated his ideas in a 2006 Foreign Affairs article, "The Integrated Global Enterprise."

The shift to collaborative organizations with flat structures is causing a reassessment of the ways that organizations develop leaders. Traditionally, organizations have focused on a select group of leaders who can assume the organization's top roles and have invested substantial sums on a few, while leaving others to rely on traditional management skills. Rather than just a few stars, global organizations will need many talented leaders -- hundreds, even thousands -- operating throughout the organization.

For the leaders of today, we are learning that emotional intelligence (or EQ) is more important than IQ. EQ is based more on authenticity and how well-grounded leaders are. In my experience leaders haven't failed for lack of IQ, but rather a lack of emotional intelligence.

In interviews with 125 authentic leaders for True North, we learned that EQ starts with self-awareness about your life story and the crucibles you have experienced. Becoming self-aware is hard to do on your own. People need safe places where they can share their experiences, challenges, frustrations and then get honest feedback. Such a place can be provided by True North Groups -- intimate peer groups where people talk openly in a confidential setting. These groups enable people to gain a deeper understanding of themselves by revealing hidden areas and blind spots.

In a True North Group, people feel comfortable in challenging members when they sense they are losing their bearings or deviating from their values. Members learn to accept others rather than judge them, and celebrate the differences of people with different life experiences. Groups provide support when people face challenges in their work or their lives. Psychologist Daniel Goleman, who wrote "Emotional Intelligence," says, "At a time when we need authentic leaders more than ever, True North Groups ... should be part of every leader's development."

Co-author Doug Baker Sr. and I first formed a True North Group back in 1975. Along with six other men, we have met weekly for the past 36 years. In 1983 we formed a monthly couples group with our spouses and two other couples. These groups have been a godsend in my life, helping me think through my decision to leave Honeywell to join Medtronic and later supporting my wife Penny and me when she was diagnosed with breast cancer.

At Harvard Business School, 1,500 MBAs and executives have experienced these groups in our leadership development courses. Their evaluations have been uniformly positive. Many describe the experience as transformative. Unilever is asking its top 500 executives to participate in True North Groups.

Baker, a former executive at American Express Financial Advisors (now Ameriprise), and I have formed the True North Groups Institute to enable other companies to create similar groups. They have minimal cost and no professional leaders are required (although some organizations use facilitators to get them started). Only limited staff is needed to support them, making them scalable for organizations that need to develop large numbers of leaders.

I believe these groups can be instrumental in developing values-centered, collaborative leaders at all levels for large global organizations, and transforming leadership in the process.

 


Originially Posted: Star-Tribune on September 3, 2011

Launch of True North Groups

Last Thursday we had the launch of True North Groups at the University of Minnesota. Following an opening reception, we had a "Conversation on Personal and Leadership Development" with 450 people participating in the event that was hosted by the Center for Spirituality and Healing. Center director Dr. Mary Jo Kreitzer moderated the dialogue with my co-author Doug Baker and me, with many stimulating and profound questions and comments from the attendees.

For those who were not able to attend, the entire conversation was videotaped and will be hosted soon on www.billgeorge.org and www.truenorthgroupsinstitute.org. Doug and I would welcome your comments on our website about your experiences in small groups like True North Groups. 

Follow me on Twitter and connect with me on Facebook to see comments from the event. 

Why We Wrote True North Groups

Since 1975, Doug Baker and I have been actively involved in small, personal groups that have helped us navigate personal challenges with our families, careers, and health. Our group is a place where we have explored the important questions in life, and clarified and reinforced our own True North values. At their best, group members serve as caring coaches and thoughtful mentors.

Over the years we have been asked by friends and acquaintances, "How can I form such a group?" So the idea for True North Groups was born. It describes the important role that small, intimate groups are playing in personal growth and in developing leaders with high levels of self-awareness and emotional intelligence. The latter part of the book provides "how-to" manual for creating a True North Group. Our belief in the value of these groups is what motivated us to write True North Groups and form the True North Groups Institute.

What is a True North Group and what sets it apart from other groups?

  • 6-8 people meet regularly for personal discussions
  • Primary purpose is the journey of self-awareness that develops stronger leaders
  • The members follow a structured curriculum to guide that journey
  • Participants develop their hearts, forming a balanced head-heart combination

True North Groups provide the best vehicle to help people develop as human beings and leaders, providing a powerful path between our personal lives and the organizations we engage every day. They enable us to become fully alive, awakening to the enormous possibilities within each of us.

A True North Group can serve as a nurturer, truth teller, mirror and an inspirer, among other roles. It can be an antidote to social isolation, which is being increasingly recognized as a serious issue in modern society. This sense of isolation helped give rise to the “Facebook phenomenon,” which helps connect millions of people online. But social media is certainly not a substitute for intimate, trusting relationships where people can discuss their most difficult challenges, as they can in True North Groups.   

The book is organized around a familiar sequence – forming, norming, storming, performing, and reforming.  In forming your new group, the most important thing is to gather a strong group of members who are compatible and respectful of each other. Groups of people in similar age range and life stages are usually most effective.  

It is my hope that this book will provide you with a deeper understanding of the important role that a True North Group can play in your life and how you can form one.  I invite you to share your stories of True North Groups on my website and connect with other True North Group members on Twitter with the hashtag #TrueNorthGroups or on Facebook.