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How Leaders Build Trust

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.

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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 KindleiTunesnook and in print from morethansound.net. You can also watch my conversation about authentic leadership with Bill George here.

Trust: Essence of Leadership

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:

  1. 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.
  2. They should place the interests of their institutions and society as a whole above their own interests.
  3. 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.
  4. 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.
  5. 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

Huffington Post: Introducing: Discover Your True North

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.

Forbes: Bill George: His View On The Next Generation Of Leaders

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.

New York Times: Howard Schultz: America Deserves a Servant Leader

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. 

Fortune: Bill George: The hierarchical leader is out. The empowering leader is in.

From Fortune, posted August 3, 2015

The former Medtronic CEO and management expert discusses the profound shift in priorities among successful business leaders working today.

Bill George was CEO of Medtronic from 1991 to 2001 and, during that time, grew the company’s market value from $1 billion to $60 billion. He has since become one of the nation’s leading voices on business leadership and serves as a senior fellow at Harvard Business School. His book, Discover Your True North, was first published in 2007, but later this month, he will release an updated version, more than half of which will be new content based on interviews with 48 additional leaders. Fortune excerpted his first book in 2007.I talked with him about his new book last week.

Fortune: How has business leadership changed since the first version of this book was published in 2007?

Bill George: I think we have seen a tremendous change in leadership. You now see a very different kind of leader. Far less hierarchical. More collaborative. More empowering of workers. More global in outlook. And more in tune with public issues.

Why is this happening?

When I wrote my first book in 2003, Authentic Leadership, people said, what do you mean by authentic leadership? I was writing in response to the corporate scandals that were going on. And I asked, what has happened to my generation of leaders? Maximizing shareholder value had morphed into maximizing short-term value and this had led to the corporate scandals. It wasn’t just Enron and Worldcom, it was companies like Bristol Myers and Xerox that also had accounting scandals.

Then in 2008, we hit the wall of the financial meltdown. This had a big influence on how people looked at leadership. In my era, CEOs were viewed as heroes. They were on the cover of magazines. And all of a sudden, we were bums.

You also saw the failure of a lot of so-called charismatic CEOs. Half of the CEOs were coming from outside the company. We had shifted to this external view. And many of them failed.

Now, things have shifted back. CEOs are coming from within companies. That’s a big change. People like Frank Blake at Home Depot, Ann Mulcahy and Ursula Burns at Xerox, Indra Nooyi at Pepsi. They aren’t flashy, they are solid kinds of people.

And they have high EQ [emotional intelligence]. High EQ is really important. IQ is not the criteria. You have to be smart to be a CEO, but the differentiating factor above 120 IQ is EQ.

Hasn’t the very nature of leadership changed as well? Formal hierarchies don’t seem to work anymore.

Yes. The hierarchical leader is out. The empowering leader is in.

One driver of that is the Gen Xers and the millennials, who will not work in a hierarchical company. They would rather work at Google; at an empowering place, where they feel they have a mission.

Another driver is the impact of technology on transparency. Everything a leader does has to be transparent today. People want to meet their leader in a town hall forum, and ask some tough questions. Also, globalization has had a huge impact. You have to have empathy for people whose lives are different from yours.

The epitome of that leadership today is someone like Paul Polman of Unilever. He has taken an Anglo-Dutch organization and turned it into a truly global organization. The other thing about Polman is he is really leading the way in dealing with a prominent public issue—environmental sustainability.

CEOs used to avoid taking stands on controversial public issues.

Yes. Society has demanded that change. It will not tolerate companies that avoid these issues. The strength of social media, the regulators, all demand it. You have to respond to these public concerns; you cannot ignore them. If you have bad meat in Indonesia, it’s going to be known all over the world almost instantly. You had better make it transparent. It has caused CEOs to deal on a much more transparent basis.

Milton Friedman used to say, “The social responsibility of business is to make a profit.” What happened to that view?

What Friedman didn’t articulate was how you make a profit. The only way you make a long-term sustainable profit is to align your company and its employees around a common sense of purpose. Like Indra Nooyi says, “performance with purpose.”

That’s also driven by young people. People are asking, why am I working here? And if you don’t answer the question, they will work somewhere else. They have mobility; they have global mobility today.

Who are some other leaders who embody this approach?

Jack Ma of Alibaba very much embodies this. He’s a genius. He is connecting 2 billion Asian consumers with 1 million small businesses in North America, South America, whatever. His sweet spot is not big business but small business.

I also see someone like Indra Nooyi of Pepsi as a great global leader. She strongly resisted breakup of the company, recognizing the global context she was operating in. And Mark Zuckerberg. He is one of the new generation that is very global in their outlook.

Huffington Post: The Millennials: Ready To Lead Now

From The Huffington Post, posted August 3, 2015

Many Baby Boomers look down on Millennials as over-protected, lazy, attention-seeking young kids who haven't faced hardship.

They are dead wrong.

By 2020, Millennials -- born between 1981 and 1997 -- will make up 50 percent of the workforce. As their influence grows, we'll see a generation more focused on authenticity, mindfulness, and learning through adversity. Millennials are ready to lead now. As they do, they'll transform our ideas of leadership for the better.

Worried about Millennial leadership? Don't be. More than any generation, Millennials are transforming our ideas about leadership, as they use their life stories to fuel their authentic purpose -- their True North. They are highly collaborative, culturally competent, and celebrate diversity of gender, race, national origin and sexual preference. 70% of Millennials support same-sex marriage compared with 45 percent of Baby Boomers.

Lazy? Hardly. They are constant learners and the most educated generation ever. In the workplace, they are deadline-driven employees who get lots done in short periods. Growing up as digital natives, they are constantly connected and eager to learn new technologies. As social media experts, they are their organization's megaphone to the new generation.

Attention-seeking? Not quite. Millennials have a deep passion for making a difference in the world. They seek careers where they can have immediate impact with emphasis on social good. No doubt they are impatient. Born into a world with instant communication, they want to have influence on those around them. Consequently, they are unwilling to tolerate bureaucracy. That's why so many are starting their own businesses and nonprofit organizations.

Not everything is rosy for the Millennial generation. The profligacy of the Baby Boomers is saddling them with enormous debt and unfunded Social Security and Medicare obligations, as well as mountains of student debt. While Millennials are working more hours than any prior generation, their average earnings are the lowest since 1980.

The most prominent Millennial leader, Mark Zuckerberg, displays the wisdom and maturity we can expect of this generation. Zuckerberg founded Facebook at age 19; now at 31, he is already worth $35 billion. Older entrepreneurs have waited to give away their fortunes. Zuckerburg hasn't. He and his wife Priscilla Chan have already made enormous charitable grants, such as $2.5 billion in Facebook stock to the Silicon Valley Community Foundation, $100 million to Newark public schools and $75 million to San Francisco General Hospital. Millennials look up to him: a survey of Millennials named Zuckerberg as best representative of their generation.

Zuckerberg's leadership mirrors that of Malala Yousafzai - the 18-year-old Pakistani woman who became the youngest Nobel Prize laureate. At the age of 12, Malala began writing about life with the Taliban. Three years later, an armed gunman boarded her school bus and shot her, grazing her forehead. After months of intensive care, she set out on a global campaign to improve female access to education.

This past winter I met Taylor Carol, a Harvard College student whose life story defines his mission. Upon meeting, Taylor seems like the all-American student: ingenuous, hardworking, and surrounded by friends. Then he tells you he was diagnosed with terminal cancer at age 11.

When a baseball injury didn't heal, Taylor to a nearby hospital for testing. There a doctor told him he had a rare form of leukemia that doesn't respond to normal treatments and had only two weeks to live. Unwilling to accept that diagnosis, his parents took him to Seattle Children's Hospital for experimental treatment.

The next two years of Taylor's life were as difficult as anyone can imagine: bone marrow transplant, weeks in complete isolation, and inability to eat, walk, or speak for extended periods. Most difficult of all was watching the death of his best friend, Christian. Taylor explained, "I was broken by Christian's death. Why did he die and I lived?"

Facing hardship isn't new to this generation, but their response is. Millennial leaders face life with what psychologist Carol Dweck calls a growth mindset. They see crucibles as opportunities for post-traumatic growth (PTG) where they can embrace life's uncertainties and use them for personal growth. 

Taylor used his experience in overcoming terminal cancer to develop his abilities as a singer/songwriter. He became National Spokesperson for the Leukemia and Lymphoma Society and helped raise $10 million. Having missed four years of school, he was advised to get a graduate equivalent degree (GED). Instead, he studied intensely and was accepted to Harvard College. Taylor is currently working in Los Angeles -- singing, songwriting, and producing his first album.

Nadir Vissanjy overcame great difficulties just to graduate from college. Born in Lisbon, Portugal, he moved with his family to Central California at age nine. When his parents divorced, Nadir lost legal status in America and became undocumented. Since his mother worked in a convenience store, college wasn't financially possible. In his senior year of high school, California passed the Dream Act, permitting undocumented children to pay in-state college tuition. Suddenly, Nadir's life changed.

Inspired by this opportunity, Nadir has devoted his life to giving back. At Sonoma State, he became student body president, and was elected chairman of the California State Student Association. Graduating recently from MIT's Sloan School and Harvard Kennedy School, he is returning to Oakland "to give back to the system that has given me so much."

By embracing all aspects of their life stories, Millennial leaders are discovering their True North and acting on it to improve the world. Maybe it's time for the Baby Boomers to step aside and turn over leadership to this remarkable new generation of leaders like Zuckerberg, Yousafzai, Carol, and Vissanjy.

Huffington Post: The Power of Mindful Leadership

From The Huffington Post, posted July 27, 2015

From the moment you wake up, you're bombarded with distractions. Emails clog your inbox, requests pile up, and notifications flicker in the background. Within moments your attention is scattered. Given the realities of today's 24/7 world, how do great leaders slow down and focus in order to make thoughtful decisions?

Mindfulness.

Mindfulness is the practice of self-observation without judgment with a focus on our minds and inner voices. Mindful practices include daily meditation, prayer, journaling, or jogging alone. In a fast paced world, mindfulness enables you to clear your mind of clutter, focus on what is important, and be creative. Leaders like Arianna Huffington and Steve Jobs are well known for their mindfulness practices.

As our lives have become filled with technology, the distractions we face increase exponentially. With it, our ability to focus has diminished, but our need to think clearly in order to make complex decisions has not. More than ever, leaders need to train themselves to be fully present.

Becoming a mindful leader isn't easy. There are no five easy steps to do so. A few years ago when I asked the Dalai Lama how we can develop a new generation of compassionate, mindful leaders, he replied simply, "Develop a daily habit of introspection."

Today many more companies are promoting mindful practices to improve the health and decision-making of their leaders. Google, under the tutelage of Chade-Meng Tan, trains 2,000 engineers in meditation each year. When I visited Google this spring, it was evident that mindfulness is one of the key reasons behind Google's innovative and harmonious culture. Leading financial services firms like Blackrock and Goldman Sachs offer mindfulness courses for their employees. At General Mills Janice Marturano was so successful in mindfulness training that she founded the Institute for Mindful Leadership.

My Mindful Practice: Meditation 
In 1975 my wife Penny and I went to a weekend program on Transcendental Meditation. At the time I was working nonstop, coming home exhausted, and having late dinners. I even got denied for life insurance because of high blood pressure. After the training, I started meditating twice daily--not as a spiritual practice, but for health reasons. Forty years later, I still practice regularly.

Meditation is the best thing I have ever done to calm myself and separate from the 24/7, connected world. By centering into myself, I can focus my attention on the important things, develop an inner sense of well-being, and gain clarity in making decisions. My most creative ideas come from meditating, and meditation has built resilience to deal with difficult times. No doubt it has helped me become a better leader.

The Science of Mindfulness 

Mind training, of which meditation is one form, can change the composition of your mind. Research by Wisconsin's Richard Davidson demonstrated direct correlation between mindfulness and changes in the brain - away from anger and anxiety and toward a sense of calm and well-being. UCLA's Mindful Awareness Research Center found meditation can improve executive functions (sustaining attention, diminishing distractibility) better than medication in many cases.

Daniel Goleman, the father of emotional intelligence, describes the effect of mindfulness for focusing the mind's cognitive abilities. As Goleman says in his new book, Focus, "One way to boost our will power and focus is to manage our distractions instead of letting them manage us."

The Growing Importance of Mindfulness 
Increasingly, companies see mindfulness training as a competitive advantage. Aetna, the nation's third largest health insurer, partnered with Duke University to study meditation and yoga. Researchers found these practices decreased stress levels by 28%, improved sleep quality (20%), reduced pain (19%), and improved productivity 62 minutes per employee per week. Aetna is now offering similar programs to all employees as well as its insured customers. 

The World Health Organization estimates that stress costs American businesses roughly $300 billion dollars per year. Over the past thirty years, we've experienced an 18-23% increase of self-reported stress for men and women, respectively. As companies such as Google, General Mills, Blackstone, and Goldman Sachs have shown, mindfulness training decreases stress levels.

The key to effective leadership is the ability to integrate your head (IQ) with your heart (EQ). As Buddhist monk Thich Nhat Hanh taught me years ago, "The longest journey you will ever take is the eighteen inches from your head to your heart." Our hearts are where essential leadership qualities like passion, compassion and courage reside. By practicing mindfulness, mindful leaders exhibit high levels of self-awareness and intentionality in their actions.

The best time to start a mindful practice is now, but don't take the word "practice" lightly. Maintaining the discipline of your practice isn't easy. To become a mindful leader, you need to make this a daily introspective act. As you do so, you'll worry less about day-to-day problems and focus on what is most important. As you become more mindful, you will be a more effective, successful and fulfilled leader.

That's worth twenty minutes a day, isn't it?

Bill George is a senior fellow at Harvard Business School and author of Discover Your True North. He is the former chair and CEO of Medtronic. Read more at www.BillGeorge.org, or follow him on Twitter @Bill_George.

Afterword: If you are interested in engaging more deeply in mindful leadership, please join Penny and me at the Mindful Leadership Conference in Washington, DC on November 6-8, 2015: http://www.mindfulleader.org/#home

People + Strategy: The New Global Leaders

Originally published in People + Strategy Journal: Volume 38, Issue 3, Summer 2015

When 31-year-old Facebook founder Mark Zuckerberg decided he wanted a deeper understanding of China, he made concerted efforts to learn Mandarin and then demonstrated his acumen by speaking comfortably with Chinese students. In May, Alibaba founder Jack Ma promoted 42-year-old Daniel Zhang to CEO to “hand over leadership to those born in the ’70s.” These are just two examples of the new global leaders.

As they focus on expanding their business around the world, companies are facing a dearth of experienced global executives capable of leading in all parts of the world, especially in emerging markets. We can rise to the challenge of how companies develop authentic global leaders of all ages by increasing their global intelligence (GQ). Given the enormous volatility of emerging markets, leading today’s global organizations requires different skills and personal qualities than in the past. Just a few years ago, geographic managers could ensure success by relying on their knowledge of local markets, operating skills, technical understanding, and financial acumen.

No longer.

To create dynamic global strategies and adaptive organizational structures, today’s leaders must understand the global context of their business and possess awareness of how geopolitical events can impact it. They must be skilled in aligning their multicultural organizations around the company’s mission and values, making them the unifying force coalescing their far-flung organizations. Interpersonally, they need high levels of self-awareness, cultural sensitivity, and humility to empower people throughout the world. Finally, they must be able to develop other global leaders and serve as their mentors and role models.

Beyond those challenges, today’s society is demanding that global leaders practice the highest ethical standards and contribute meaningfully to countries in which they do business. It is no longer sufficient to meet the demands of the shareholders and laws and ethics of their home markets without regard for the negative consequences that their businesses may have on the countries where they operate. As a result, global leaders are partnering with local governments to support the progress and growth of their societies.

While it is challenging to possess all these qualities, nothing less is required to sustain consistently superior performance. Firms run by a cadre of global leaders effective in operating in this new world will be more competitive, more productive, and more profitable over the long term.

The multi-national model, with its matrix structure that attempts to balance strategic business units with geographic organizations, has become the dominant organization form, but today its effectiveness requires different kinds of leaders. In the past, multi-national organizations like British bank HSBC sent talented expatriates from their home countries to lead regional and local units and transfer headquarters standards, processes, control systems, and marketing approaches to local countries. These expatriates often failed to take advantage of the creative skills of their local teams and thus were unable to meet the unique needs of local markets. Consequently, they couldn’t compete with skilled local companies with deeper understanding of local consumers.

To maximize growth in emerging markets, companies are recognizing they require greater diversity in their decision-making ranks rather than dominance by headquarters nationals. As a result, they are opening up their executive ranks to the best leaders from around the world, without preference for home country executives. Unilever’s chief operating officer, Harish Manwani, says, “If 70 percent of our future business comes from emerging markets, then 70 percent of our leaders must come from emerging markets.”

Yet even the most progressive companies are struggling to develop top global leaders from emerging markets. Under the leadership of former CEO Daniel Vasella, M.D., and CEO Joe Jimenez, Switzerland-based pharmaceutical company Novartis has been one of the most progressive in expanding its executive ranks beyond its historic Swiss management. Today, its nine-person executive committee consists of four Americans, including CEO Jimenez, two Swiss, and a Belgian, Briton, and German. Yet neither Vasella nor Jimenez considers Novartis’s top team as global. Says Vasella, “We won’t be global until we have a Chinese, an Indian, and a Latino as well as more women.” Adds Jimenez, “It’s not because we aren’t looking, but we haven’t been able to develop them.”

“The big difference between global executives and Americans who have never worked outside America,” continues Jimenez, “is respect for cultural differences. I have seen many people who can’t become global leaders because all their decisions are steeped in their home country’s culture.”

It isn’t just American companies that are dominated by local nationals. Even at Japanese, Indian, Chinese, and German companies it is rare that a non-national executive breaks into the company’s top ranks. As Siemens’ CEO Peter Loescher said in 2008, “Siemens is not achieving its full potential on the international stage because its management is too white, too German, and too male. If you don’t reflect your global client base, you cannot achieve your full potential.”

Historically, companies focused on sending promising leaders from their home country overseas for developmental assignments to position them for key corporate positions. That relegated foreign executives to being country managers and didn’t prepare them to run global business units or reach the top executive ranks. Meanwhile, many foreign nationals who came to headquarters for development faced “tissue rejection” when they returned home.

Developing Global Leaders with Global Intelligence

To address these challenges, leading-edge companies are developing a new generation of global leaders effective anywhere in the world. They recognize that ultimately the diversity of their top leaders must reflect the diversity of their customers. Developing these new global enterprise leaders will require different types of experiences combined with leadership development programs vastly different from today’s corporate training programs. The shortcomings of many global leaders—and subsequent failures—usually result from the lack of leadership capabilities that together make up what we call “global intelligence” (GQ).

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

  • Adaptability to changing world
  • Self-awareness
  • Cultural curiosity
  • Empathy
  • Alignment
  • Collaboration
  • Integration

Let’s explore each of these seven characteristics.

Adaptability to Changing World

Being a global leader today requires understanding the world and anticipating changes ahead. Global leaders must be able to respond quickly to the rapidly changing global context by shifting resources to opportunity areas and developing contingency plans to cope with adverse geopolitical situations.

Novartis’s Vasella, who spent his formative business years working in the U.S., is an example. He is a visionary who built Novartis from the outset of the 1996 merger of two mid-sized Swiss pharmaceutical companies (Sandoz and Ciba-Geigy) into one of the world’s leading health care companies. His strategic initiatives, such as moving research headquarters from Basel, Switzerland to Cambridge, Massachusetts to tap into top scientists at MIT and Harvard, were well ahead of their time. Vasella also foresaw the need to move from a Swiss-dominated management team and board of directors to a global leadership team, without regard to nationality.

Self-Awareness

To understand how they will react to the cultural differences they encounter in emerging markets, global leaders must understand their strengths, vulnerabilities, and biases, starting with recognizing the dominant paradigms they grew up with versus those of their headquarters organizations. It requires humility to recognize that other cultures often have better ways of doing things embedded in their cultural norms.

When I was president of Honeywell Europe in the 1980s, the corporation sent American expatriates to Europe to transfer U.S.-based marketing programs as well as engineering and manufacturing expertise. A number of them were insensitive to significant differences in these markets and were intent on imposing U.S. practices. I asked INSEAD Professor Andre Laurent to create a program for Americans to help them understand these cultural differences. He proposed two days on American culture before getting into European cultures, because “Americans rarely understand their own cultural biases, and assume their ways are superior ‘if only the Europeans understood.’”

Cultural Curiosity

Global leaders must be curious about myriad cultures and understand how they operate and have the humility to recognize what these cultures offer their organizations. This requires an insatiable desire to learn about these cultures.

When many corporate executives visit India or China, they stay in international hotels, eat Westernized cuisine, and spend their time in offices reviewing presentations. As a result, they learn little about the local culture. Far better to get into the countryside, stay in local hotels, eat at local restaurants, and talk with local people. I learned how important it is to do this in 1975 by living for three weeks in a one-room apartment with my wife and two-year-old son in all-Japanese area of Tokyo. Each day, we learned what middle-class life in urban Japan was like.

On my first trip to China in 1984, I spent 10 days in the countryside negotiating a joint venture. Awakened one morning by cowbells, I saw farmers leading their oxen to market. When I went to the market, I found the government market and the private market. Asking a local which had better produce, he explained, “Obviously, the private market where prices are higher, as farmers sell their required quotas at fixed prices in the government market.” This was the beginning of Deng Xiaoping’s new elite farmers. Had I stayed at Westernized hotels in Tokyo and Beijing, I never would have gained critical insights into each culture.

Empathy

Empathy is the ability to walk in someone else’s shoes. It requires engaging people from different cultures on a personal level, rather than standing back and judging them. Empathy builds rapport through bonding on a human level and the building of lasting relationships. Only with empathic understanding are leaders able to engage colleagues from different cultures and empower them to achieve exceptional performance.

On my first visit to India, I conducted a “Medtronic Mission and Medallion Ceremony” for several hundred Indian employees, giving each a bronze medallion symbolizing Medtronic’s mission. Afterward, they asked me to plant a tree honoring them with my visit. Rather than a simple tree-planting, this was a traditional Indian ceremony, complete with painting my face, washing my hands, and talking with a native healer. Meanwhile, the employees stood with rapt attention to observe how I was responding to their tradition.

Alignment

Global leaders need to align employees around the company’s mission and values with a commitment that transcends national and cultural differences. Achieving alignment is far more difficult in emerging markets because local employees are being asked to put company values ahead of their native values, often in cultures where ethical standards differ sharply from the company’s. However, this does not mean giving up their culture and their norms, as norms can differ widely, provided that employees commit to the company’s ethical standards and business practices.

Global leaders like former IBM CEO Sam Palmisano understand it isn’t possible to write a code of rules and regulations covering every context. In launching IBM’s 2003 “values jam,” he wrote, “In this world of intense scrutiny, one reaction is to create more processes, controls, and bureaucracy. A better alternative is to trust the values that bind us together in the absence of controls. Values provide the framework to make decisions when procedures aren’t clear, using judgment based on values.”

Gaining alignment requires frequent face-to-face meetings in myriad countries to understand how the mission and values translate locally. Alignment is the only tool that inspires organizations to achieve superior performance and unites them in difficult times. The ability to achieve alignment in complex global organizations is the trademark of exceptional leaders.

Collaboration

In the global context, collaborative leaders create horizontal networks that cut across geographic lines, unite people around common goals, and create a modus operandi that transcends geographic goals. This requires putting the company’s and project’s goals first, and working in partnerships to achieve them. The most successful geographic collaborations are orchestrated by leaders who know the strengths and weaknesses of each geographic group and make assignments that take advantage of their relative strengths.

When Bangladesh-born Omar Ishrak became CEO of Medtronic in 2011, the company was struggling to establish itself in emerging markets. He immediately diversified its executive committee by promoting six executives from emerging markets and holding quarterly meetings in Shanghai and Mumbai. In addition, he created new business models for emerging markets to enable locals to gain access to Medtronic therapies.

Integration

The greatest challenge facing global leaders is incorporating local issues into an integrated corporate strategy. Such a strategy enables them to optimize their position in a wide array of local markets in an efficient manner to create sustainable competitive advantage. Doing so requires deep understanding of local markets and the vision to see how their companies can serve their customers 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.

Unilever’s Manwani takes the tradition of “think global, act local,” and turns it on its head, saying the key today is to “think local, act global.” In his view, all strategies emanate from a deep understanding of local needs, but if they only act local, global companies have no competitive advantage over local suppliers. Rather, they need to create global strategies to leverage their unique strengths to deliver superior solutions for customers.

Next Generation Global Leaders

Role models for these new global leaders include executives like Unilever’s Paul Polman, PepsiCo’s Indra Nooyi, and Alibaba’s founder Jack Ma.

Under Polman’s leadership, London-based Unilever, with 170,000 employees in 160 countries, has become one of the world’s most global companies with 55 percent of its revenues coming from emerging markets. Yet Polman acknowledges the company still has a long way to go in developing global leaders as most of its senior executives come from the U.K. or the Netherlands. Since becoming CEO in 2009, Polman has invested heavily in developing global leaders, sending its 600 top executives to London and Singapore for in-house training as authentic global leaders. He says, “In the long-run, the only true differentiation is the quality of leadership of all.”

PepsiCo’s Nooyi got her university education in India before attending Yale’s graduate school. As CEO since 2006, she has focused on “performance with purpose” to steadily shift PepsiCo’s product portfolio to healthful foods and beverages and meet the needs of emerging markets. She has also diversified her global leadership team with a wide range of nationalities.

Alibaba’s Ma has emerged as China’s first true global leader. A remarkable visionary who has created over $200 billion in shareholder value, Ma is creating an ecosystem that can serve two billion Asian consumers with products from one million small businesses sourced throughout the world.

Stepping Up to the Challenge

Just as Mark Zuckerberg’s success at Facebook and Daniel Zhang’s promotion at Alibaba herald the rise of younger global leaders, global companies are crying out for a new generation of leaders—regardless of age—to step up to challenging leadership roles. Progressive companies like Unilever, Novartis, PepsiCo, and Alibaba are working hard to develop this new cadre. While ideas will evolve about how to develop them, one thing seems clear: Sustaining success in the 21st century will require global chiefs with sophisticated leadership qualities that operate with high levels of GQ. 

CNBC: Learning From Starbucks On Job Creation

From CNBC, posted July 22, 2015

Never accuse Starbucks CEO Howard Schultz of being afraid to take on tough issues.

His latest effort is aimed at the issue of youth unemployment, which is stuck at 12 percent for people 16 to 24 years of age. This age category includes many young people who dropped out of school and have never been regularly employed. In many cases, they do not have the skills or training required for today's jobs, even with four million current jobs going unfilled. None of this fazed Schultz, as he organized Opportunity 100,000 to create 100,000 jobs for unemployed youth.

This time, however, he isn't taking on such a complex issue alone. In his recent announcement, Schultz said he had commitments from 16 companies that include some of America's largest employers: Wal-MartTargetMicrosoftMacy'sCVS Health and Hilton.

Schultz is hearkening back to the days of his youth growing up in Brooklyn's Bayview housing projects. There he witnessed many people, including his father, who were left out of the American dream. Determined to change this, Schultz put together funds to acquire the original Starbucks from its founders in 1987. 

He created Starbucks "to build a company my father would be proud to work at," adding, "My inspiration comes from seeing my father broken from the 30 terrible blue-collar jobs he had over his life, where an uneducated person just did not have a shot." Later Schultz provided health-care coverage for all Starbuck's employees, including part-timers. "I wanted to build the kind of company my father never had a chance to work for, where you would be valued and respected, no matter where you came from, the color of your skin, or your level of education, and a company that linked shareholder value to the cultural values we create with our people." Today, Schultz has built a thriving enterprise that employs 191,000 people in 22,000 stores, as Starbucks has created $83 billion in value for its investors, including employees who get "bean stock."

Schultz's vision goes far beyond providing first-level jobs to youth. He is equally committed to helping them develop the skills needed to take on higher level, better paying positions. To this end, he has teamed with Arizona State University to establish online training programs for his employees. He and his wife are contributing $30 million toward local job training and mentorship programs. Next month Schultz is kicking off Opportunity 100,000 with a jobs fair in Chicago.

While Schultz's initiative will impact only a fraction of the 5.6 million young people who are neither working nor studying, it is a worthy effort to attack one of America's most persistent problems. The larger issue is the capacity of the American economy to generate sufficient jobs that pay Americans a living wage, not just the current minimum wage.

America needs to embark on a massive revamping of our training and education systems to prepare our young people for the jobs of the future. Such a program should start in high school and offer students a choice of a college track or a vocational track, much like the German system. This includes apprenticeship programs, such as those created by North Carolina's Central Piedmont Community College, which has over 20,000 students, with the support of the Germany's Siemens. If we can train people for skilled jobs in computer graphics and programming, skilled trades like electricians and carpenters, or running complex machines, companies can and should pay them much more for their efforts. In doing so, they can fill many of the four million vacant jobs companies report having.

That's the only viable way to attack the pervasive income inequality challenges we face. The goal must be to make the pie larger, rather than legislating what share everyone gets of a fixed pie. In turn, America will become more competitive in global markets, and all our citizens will be able to realize the American dream, just as Howard Schultz has done.

Commentary by Bill George, a senior fellow at Harvard Business School and the former chair and CEO of Medtronic. He is the author of the book "True North." Follow him on Twitter @Bill_George.

Disclosure: Bill George does not own any of shares of Starbucks or Siemens, nor does he have any other business relationships with the company.