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CNBC: Twitter is in 'very deep trouble': Pro

William George, Sr. Fellow at Harvard Business School and Former Medtronic CEO, weighs in on the latest action coming from Twitter and their business strategies.


This article was originally posted to CNBC.com on 01/25/16

CNBC: What CEOs Need to Ensure Companies' Success

At the World Economic Forum in Davos, Switzerland, a lot of people were palpitating about the decline in stock prices since the start of 2016, the precipitous drop in oil prices, the slowdown in China, war in the Middle East – even the prospects of Donald Trump or Ted Cruz in the White House. The stock market tends to overreact to perturbations like these, just as it did to Greek concerns in 2014 and 2015.

For the two dozen CEOs I talked to at Davos, it is "full speed ahead." Not that they aren't concerned about these geopolitical factors. Rather, they have already anticipated this kind of volatility and designed their corporate strategies to adapt rapidly to changing global conditions.

No doubt the slowdown in the global economy is a significant factor, but it certainly does not impact everyone equally. Rather, in Warren Buffett's infamous words, "When the tide goes out, you find out who is swimming naked." In my view, times like these separate the well-run companies from the short-term players that are caught unprepared.

Let's look at contrasts in several industries between companies with the best leaders who have long-term strategies and those who choose to react to short-term events. Here are some of the winners where investors might place long-term bets:

Unilever vs. Procter & Gamble: Since becoming CEO in early 2009, Unilever's Paul Polman has built a diversified strategy to pursue the world's markets with vigor. He's rapidly adapting to changing conditions using the banner of "sustainability," which he sees as Unilever's growth engine in spite of troubled markets. Meanwhile, archrival P&G struggles without a clear strategy. It seems focused mostly on paring back by selling off brands as new CEO David Taylor takes over. In 2015, P&G's stock dropped 15 percent, while Unilever's was up 4 percent.

PepsiCo vs. Coca-Cola: PepsiCo's Indra Nooyi put her strategy in place even earlier than Polman. Soon after being named CEO in late 2006, she declared PepsiCo's strategy of "Performance with Purpose" to focus on healthy foods and beverages. By 2020, PepsiCo plans to reach $30 billion in nutritional product sales, up from $10 billion in 2010. Pepsi's archrival, Coca-Cola, led by CEO Muhtar Kent, elected to double down on sugar-based Coke. Initially, Coke appeared to be winning, but in the last four years, PepsiCo has steadily pulled ahead. Meanwhile, Kent has painted Coke into a strategic corner, appealing to a declining demographic as millennials eschew sugar-based drinks.

Exxon vs. British Petroleum: What will happen to oil companies as oil prices drop from over $100 to under $30 a barrel? Having served on Exxon's board for a decade, I saw first-hand how veteran CEO Rex Tillerson prepares the company for major downturns. Exxon keeps its balance sheet flexible, which gives it the capacity to take advantage of financial stress. Meanwhile, BP's balance sheet never recovered from the Deepwater Horizon incident in the Gulf of Mexico, and it lacks the cash to take advantage of current investment opportunities.

Delta vs. United Airlines: On the opposite side of the oil price decline, Delta is benefiting from lower fuel costs. It is using savings to invest in the higher-revenue business traveler and to reward its high-frequency travelers. CEO Richard Anderson has figured out the basics of appealing simultaneously to both the value-conscious traveler and the business market while achieving superior operational efficiency and high load factors. Meanwhile, United continues to struggle with both service and efficiency. Since 2012, it has ranked near the bottom in delays, cancellations, and mishandled bags. With newly appointed CEO Oscar Munoz recovering from a heart transplant, United may not be in a position to make necessary changes.

Starbucks vs. McDonalds: The growth that Starbucks has enjoyed since founder Howard Schultz returned as CEO in 2009 is nothing short of phenomenal. Meanwhile at McDonalds, new CEO Steve Easterbrook has made much needed changes and the stock market has hailed his initiatives. Nevertheless, it will be very difficult for McDonalds to return to sustained growth as it is trapped with a declining demographic. McDonald's has yet to shake its reputation of serving unhealthy, highly modified foods, which is limiting its appeal to health-conscious consumers.

Target vs. Wal-Mart: Target's new CEO Brian Cornell has moved rapidly to appeal to the younger generation. Cornell has focused on mothers, babies, families and wellness with an omni-channel strategy that is paying off in rising same-store sales. Wal-Mart is trapped with an old demographic and has yet to attract large numbers of millennials. It has too much space as many consumers shift to online purchases. If anyone can turn around giant Wal-Mart, it is new CEO Doug McMillon, a highly progressive leader who is making all the right moves and deserves a long runway to complete the turnaround.

Medtronic vs. Pfizer: Under CEO Omar Ishrak, Medtronic is on a roll. It has successfully integrated its $50 billion merger with Covidien, and its innovation pipeline is paying off in higher growth. Recently, Medtronic announced an additional $1.5 billion in high tech acquisitions. Recently, Pfizer purchased Allergan for $160 billion – more than five times Allergan's revenues. Unlike Medtronic, Pfizer is financially strained and its pipeline is paltry. Allergan won't help much in that regard as it too has a limited pipeline. Expect Pfizer CEO Ian Reed to reach the limits of financial engineering soon after he realizes the cost savings from consolidation of Allergan.

While I don't expect these sharp comparisons necessarily to manifest themselves in the near-term stock performance, they will become evident over the next 3-5 years. In a challenging market, investors will be well advised to be highly selective in their investments and focus on the quality of leadership. It is in difficult times that leadership makes the largest difference and becomes evident. The winners above have leaders who have proven their capacity to take advantage of the current challenges and come out on top.

Commentary by Bill George, a senior fellow at Harvard Business School and the former Chairman and CEO of Medtronic and previously served on the board of Novartis. He is author of the book "Discover Your True North" (Wiley: August 17). Follow him on Twitter @Bill_George.

Disclosure: Bill George holds stock in Exxon and Medtronic, but none of the other companies listed above.

For more insight from CNBC contributors, follow @CNBCopinion onTwitter.


This article was originally posted to CNBC.com on 1/25/16

DavidBurkus.com: 0703 | Becoming an Authentic Leader with Bill George

Bill George is professor of management practice at Harvard Business School, where he has taught leadership since 2004. Mr. George is the former chairman and chief executive officer of Medtronic. He is the author of the new book, Discover Your True North, an updated version of his bestseller True North. In this interview, we discuss how to become an authentic leader.

[Listen in iTunes] [Listen on Stitcher]

In This episode, You’ll Learn:

  • How to define your values
  • How to Build your support team and lead an integrated life
  • How to make journey from “I” to “We” as an empowering leader

If you enjoyed the show, please rate it on iTunes or Stitcher and write a brief review. That would really help get the word out and raise the visibility of the show.

Resources Mentioned In This Episode:

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You’ll also love the Radio Free Leader starter kit. It’s a collection of the BEST episodes of the show in an easy to digest format to help you lead smarter with thinkers like Daniel Pink, Adam Grant, Dan Ariely, Nilofer Merchant, and more.

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This interview was originally published to davidburkus.com on 1/19/15

America is in the Middle of a Philanthropic Revolution

AMERICA’S PHILANTHROPISTS AREN’T WAITING ANY LONGER FOR POLITICIANS OR BUSINESSES TO SOLVE THE WORLD’S MOST PRESSING PROBLEMS.

To those optimistic, persistent souls who have a vested interest in seeing positive social change in the U.S., here’s a sobering message: if you are looking for meaningful government support, don’t hold your breath.

Political gridlock and mounting federal debt have effectively rendered the U.S. government impotent, robbing it of its historic ability to spur social change. Americans give Congress a miserable 11% approval rating, and when the government does take action, it seems to bungle the job. President Obama’s Affordable Care Act promised to transform health care. After debacles in the rollout of the law, many Americans are accepting penalties versus buying insurance due to the increases in health insurance premiums. Meanwhile, rapid escalation of drug prices continues unabated.

Can business step into the void and champion meaningful change?                                

Many companies are making important contributions, but CEOs have less leeway than ever to make bold investments in their communities. Due to growing pressures from short-term shareholders and increasing regulations, companies have been severely constrained in making targeted, long-term investments that drive social change.

America’s philanthropists aren’t waiting any longer for politicians or businesses to solve the world’s most pressing problems. They are committing massive amounts of their own money to solve the most difficult challenges in health, education, job creation, and the environment.

In doing so, they are elevating the importance of philanthropy in American society and across the world. By targeting their funds to achieve tangible results, philanthropists are demonstrating they are indeed “the passing gear of society.”

Following a long line of benefactors like Andrew Carnegie, John D. Rockefeller, and Henry Ford, Microsoft founder Bill Gates ignited the current philanthropic revolution. In 2000, he and his wife Melinda announced they were creating a foundation worth $44 billion—half his net worth. Inspired by Gates’ passion and effectiveness, his friend Warren Buffett announced in 2006 he would contribute $30 billion of Berkshire Hathaway stock and have it managed by the Gates Foundation. Since 2000, the Gates Foundation has given away $39 billion to eradicate diseases in developing countries, enable people to emerge from poverty, and improve K-12 education.

Bill and Melinda Gates are anything but “checkbook philanthropists.” They are devoting the bulk of their time traveling the world searching for opportunities to make a difference with their funds. Their focus on overcoming disease, improving education, and lobbying for climate change initiatives is having a powerful impact. They have also built an organization of 1,200 talented people who manage their grants.

In 2011, Gates and Buffett decided to recruit other philanthropists by launching “The Giving Pledge.” By the end of 2015, they had persuaded 141 wealthy couples and individuals to give away at least 50% of their fortunes—a clear indication of the growing power of philanthropy.

Their efforts have borne fruit in the case of Facebook founder Mark Zuckerberg and his wife, Dr. Priscilla Chan. After giving $100 million to Newark, New Jersey schools,$120 million to Bay Area schools, and 18 million Facebook shares (now worth $1.9 billion) to the Silicon Valley Community Foundation, they made the audacious announcement that they would give away 99% of their Facebook stock during their lifetime, an amount currently valued at $45 billion. They decided to make these contributions through a limited liability company (LLC) to have greater flexibility to make grants, lobby for causes, and invest in promising innovative ideas. If Facebook continues its remarkable growth, the ultimate value of the Zuckerbergs’ giving could easily exceed $100 billion.

The Chan-Zuckerberg Initiative makes clear the dedication of Millennials to drive social change. Millennials have a deep passion for making a difference in the world and are focused on making a difference throughout their lives, rather than waiting until their death. At 31, Zuckerberg’s commitment comes at a much younger age than even Gates and Buffett. As he wrote in his inspiring letter to his newborn daughter, “We must make long term investments over 25, 50, or even 100 years.”

In Zuckerberg’s case, it didn’t take long for the cynics to pounce. Because their investment vehicle is an LLC rather than 501(c)(3) foundation, writers like Jesse Eisinger inThe New York Times accused Zuckerberg of a public relations coup, saying, “we are turning into a society of oligarchs.” Eisinger apparently fears the power of the wealthy to influence social change, as Rockefeller, Ford, and Carnegie did in the early 20th century.

Eisinger even had the audacity to assert that he could do a better job of distributing this money than Zuckerberg. Without a touch of humility, he wrote, “I think I might do a good job allocating $45 billion. Maybe even better than Zuckerberg.” Eisinger ignores one simple fact: it’s not his money.

Critics like Eisinger are missing a critical point. Rather than hoarding their money or creating family dynasties as many of their predecessors did, a growing number of wealthy Americans are pledging their fortunes to benefit society.

The critics argue the allocation of these funds is the proper role for government. As Eisinger wrote, “Society can’t rely on the beneficence and enlightenment of the super-wealthy. We need to take a portion uniformly—some kind of tax on wealth.”

This perspective is misguided. The technological and organizational genius of leaders like Gates and Zuckerberg can bring tremendous contributions to the improvement of social welfare. The critics’ apparent alternative—to redesign the U.S. tax system by instituting additional levies on income, capital gains, and estates—would inevitably backfire. They ignore the reality that excessively high tax rates would shut down the incentives that have made America the world’s most entrepreneurial nation—and also the most generous. Because European countries do not permit deductions for philanthropic gifts, philanthropy in those countries pales in comparison to charitable giving in America.

The magnitude of giving by these philanthropists marks a turning point in American society. Rather than criticizing leaders who are stepping up to help solve the most pressing problems of global society – devoting not just their money but their time as well – we should be venerating them. As a result of their remarkable generosity, philanthropy in 2016 is poised to stand alongside government and business as one of the most powerful forces influencing social change.

Bill George is Senior Fellow at Harvard Business School, author of Discover Your True North, and former Chairman and CEO of Medtronic


This article was originally posted to Fortune Magazine on 1/17/2016

Leadership Lessons from Martin Luther King, Jr.

On the third Monday in January, the United States holds a federal holiday to commemorate Martin Luther King, Jr.’s birthday and, more important, to honor his immense contributions to this country’s civil rights movement. 

Bill George, a senior fellow at Harvard Business School and an expert on leadership, took time ahead of the holiday to reflect on Dr. King’s lasting legacy and to discuss his case “Martin Luther King, Jr.: A Young Minister Confronts the Challenges of Montgomery.”

What compelled you to write this case?

Bill George: I went to college in the early 1960s in Atlanta, where Dr. King lived and had grown up. This was during the height of the civil rights movement he was leading, his “I Have a Dream” speech, and the marches on Washington and in Alabama. King’s legacy of staying true to your beliefs, pursuing your purpose, and exhibiting courage under pressure are profound lessons for leaders in all walks of life.

How do you teach it?

BG: The most powerful moment in the case – and perhaps in Dr. King’s life – occurs in 1958 in Montgomery, Alabama. He was a young preacher with his first parish, and he was chosen at a town meeting one night to lead the protests against racial discrimination. It was a role he neither sought nor was prepared for, since his whole education to that point (including obtaining his doctorate from Boston University) had focused on a scholarly approach to religion aimed at becoming senior minister at his father’s large church in Atlanta. But he could not ignore this new calling.

Traumatized by his predicament, King gets down on his knees and prays for guidance. This is King’s crucible, something that presages all that lies ahead. It represents the turning point in his life. As we all know by now, he decides to accept the call to lead the fledgling civil rights movement. From this point forward, events lead inexorably not only to Memphis and his tragic assassination, but also enormous progress toward racial equality in the United States.

While perhaps not as dramatic as King’s, all of us experience crucibles. It is important that we understand their meaning for our lives, and how they shape our future direction. The key to coping with your crucible is to reframe it in terms of a learning experience and an opportunity for personal growth that will prepare you to deal with the challenges that lie ahead.

Looking back at Dr. King’s legacy, what are some of the most applicable lessons for leaders today?

BG: The most important lesson that all leaders can draw from Dr. King is to recognize how you can make a difference in the world through your leadership, and then to step up to the challenge when opportunities present themselves. When you do so, undoubtedly you will encounter roadblocks and opposition. That’s when it becomes imperative to have the courage and resilience to persevere in order to fulfill your mission. In a very real sense, the character you demonstrate in achieving your purpose is the legacy you leave to those leaders coming along behind you.

“IN A VERY REAL SENSE, THE CHARACTER YOU DEMONSTRATE IN ACHIEVING YOUR PURPOSE IS THE LEGACY YOU LEAVE TO THOSE LEADERS COMING ALONG BEHIND YOU.”

Education laid the foundation for many of Dr. King’s great ideas. How important was that in terms of his leadership and his development of innovative approaches to difficult problems?

BG: Unlike many other civil rights leaders of his era, Dr. King was a scholar who not only pursued depth in his religious studies, but became a student of Gandhi and his approaches to non-violent civil disobedience. Gandhi’s philosophies form the heart of King’s non-violent marches on behalf of racial equality. In its time this was a highly innovative approach to challenging racial discrimination in the American South.

Coretta Scott King is an important figure in this case. Can you talk about her role in Dr. King’s success?

BG: Coretta Scott King was an incredibly strong woman who was at Dr. King’s side throughout his challenging civil rights protests. She knew the dangers he faced and feared for his loss as a husband and father. Yet she was supportive and faithful throughout his ordeals until the very end. After his death, she did her best to further his mission, which was truly their mission, and to carry on his legacy.

One of the issues that I intentionally chose to leave out of the case is King’s relationships with other women – something that FBI Director J. Edgar Hoover kept files and photos of and for which King has been criticized. While King’s lack of fidelity to Coretta does not diminish him and his legacy, it was clearly one of his greatest weaknesses. On the other hand, I think this illustrates that all leaders are imperfect. We should not excuse their failings, but those shortcomings should not cause us to lose sight of their accomplishments and the greater good that they do.


This article was originally posted to HBS.org on 1/15/16

Coaching For Leaders: Episode 225

On today’s show, we learn how to discover your True North with Bill George, one of America’s most seasoned business leaders.

Bill is a senior fellow at Harvard Business School and the former Chairman and CEO of Medtronic, the world’s leading medical technology company.

He is the author of four bestselling books, including True NorthAuthentic Leadership, and his most recent book, Discover Your True North, which is what he’s here to talk about today. 

Attune: The Role of Focus in Authentic Leadership

About

Reading glasses work well when you’re reading a book, but don’t try to drive across town wearing them. To do that, you need glasses that can change focus. The same is true with leadership. You need a different kind of focus to manage yourself, others, and the greater systems around you.

Attune: The Role of Focus in Authentic Leadership is a 40-minute streaming conversation between Daniel Goleman and Bill George about the three kinds of focus that are essential for enhancing your ability to give feedback, motivate people, and respond to changing situations in your environment.

Focus and Authentic Leadership

Their discussion draws on examples from their own careers and those of business and world leaders, and highlights the benefits of developing each type of focus.

Why inner focus? Self-awareness allows leaders to manage their inner world.

Why other focus? Developing empathy helps leaders build effective relationships and interactions.

Why outer focus? Awareness of larger systems helps leaders choose effective strategies.

Topics covered include:

Learn the three types of empathy

Find your leadership blind spots

Giving and receiving feedback

Handling the heat in crucible moments

Understand the dangers of groupthink

Order Now!

Delta Sky Mag: Leading Through Giving

From a young age I have understood the importance of giving. My father and mother instilled in me the practice of giving tithes, and I have stuck with that practice my entire life. Both of my parents were very involved in giving back – from local charities and organizations to the United Way and Rotary Club.

I believe that we must make a resolution to give back, however. It cannot be something that taught early but never executed. We must also be willing to donate our time in addition to our money.

Finally, it is critical that we prioritize the causes that we are truly passionate about. Otherwise, we may spread ourselves too thin between the innumerable amount of valiant causes that exist in the world.

Bottom line: Find the places you actually care about giving back to; then, commit yourself to contributing time, money and effort.

Link to full article                              


This was originally posted to Delta Sky Magazine.

 

Delta Sky Mag: Leading Through Giving

From a young age I have understood the importance of giving. My father and mother instilled in me the practice of giving tithes, and I have stuck with that practice my entire life. Both of my parents were very involved in giving back – from local charities and organizations to the United Way and Rotary Club.

I believe that we must make a resolution to give back, however. It cannot be something that taught early but never executed. We must also be willing to donate our time in addition to our money.

Finally, it is critical that we prioritize the causes that we are truly passionate about. Otherwise, we may spread ourselves too thin between the innumerable amount of valiant causes that exist in the world.

Bottom line: Find the places you actually care about giving back to; then, commit yourself to contributing time, money and effort.

Link to full article                              


This was originally posted to Delta Sky Magazine.


Omaha.com: Understanding personal stories that matter not just the facts of your life can help you succeed

If you work in corporate America, you probably have a polished and well-rehearsed story you tell about yourself. 

Maybe it’s not Oprah Winfrey’s rags-to-riches tale; indeed, it may not seem to you like much of a story at all. But if you’ve written your LinkedIn profile or rehearsed an elevator pitch, you have at least begun to shape your experiences and attributes into story form.

As you move ahead or change direction in your career, you revise the story so it reflects your growth and highlights your latest achievements.

But despite how impressive your story is on paper, it’s less likely to become a success story if the voice inside your head keeps telling a different, doubt-filled version.

Perhaps it seems best to try to ignore or silence the harsh assessments that bounce around your skull. But a book on leadership suggests you tune in because a person’s life stories affect the future more than any set of inborn characteristics or leadership skills.

“Your life stories define your leadership, including the impact of parents, teachers, coaches, illness, poverty, trauma, rejection and other difficult experiences,” said Bill George, author of “Discover Your True North: Becoming an Authentic Leader” (Wiley, 2015).

Your life stories can spur you to excellence, but they also can hold you back. It depends on how you frame the stories and how you narrate them, consciously or otherwise, in your head. This narration — generally internal chatter called self-talk — can be constructive or crippling.

For example, you may tell yourself that you’re stuck. Though that’s not a story per se, it’s a lesson learned from one or more life stories that can shape your attitudes, decisions and behavior — and, therefore, your prospects if you allow it.

“The way you deal with your greatest adversities will shape your character far more than the adversities themselves,” George wrote. “Much like iron is forged by heat, your significant challenges and your most painful experiences present the greatest opportunities for your personal growth.”

It’s how you understand yourself through your stories that matter, not the facts of your life, he said.

Since self-awareness leads to self-acceptance, paying attention to the stories you tell yourself can empower you professionally and personally.


This article was originally posted to Omaha.com