Blog > Category: Leadership

What Does It Take To Be A Leader And For Leadership To Show Up?

From The Customer Blog by Maz Iqbal: http://thecustomerblog.co.uk/tag/bill-george/

Leadership matters.  Whilst there are many ways of grappling with leadership, I value the ontological lens and in particular the ontological model of leadership that has been developed and is being taught by Werner Erhard et al. In this post I continue the conversation on being a leader (and leadership) that I started in the last post.

Warning: authenticity is not an easy conversation

Today, I wish to grapple with authenticity. To grapple with and get authenticity one needs to grapple with human existence (being and doing).  And in particular one needs to suspend one’s existing listening (how one thinks of, relates to) of authenticity.  Furthermore, it takes courage as the conversation of authenticity/inauthenticity unconceals that which we are committed to keeping hidden.  If you are not up for this today then I suggest that you go and do something else.  If you are up for the conversation then let’s begin.

What constitutes authenticity in this ontological model of leadership?

At a superficial level being authentic is being genuine, being real -”the real thing”.  Dive into this, grapple with this, and you are likely to find yourself grappling with the question “How does a human being determine when he/she is being genuine, being real?”  Put differently, “Genuine/real with regards to what exactly?”  Think of it this way,  determining whether this iPad before me is a genuine Apple iPad is a different realm of enquiry to determining if I/you are being genuine/real/authentic in the way that I/you show up in the world.  Yet we need to ring-fence it if we are to grapple with it.

In the ontological model of leadership, Werner Erhard et al are clear on what constitutes authenticity.  They define authenticity as:

being and acting  consistent with who you hold yourself out to be for others, and who you hold yourself out to be for yourself”. 

Notice that central to this definition is ‘who you hold yourself out to be’: not your personality, not your thoughts, not your feelings, not social convention…… How to make sense of ‘who you hold yourself to be’? Think of it as a declaration that you make, a stand that you take on yourself, a commitment to a set of values and/or specific future.

Authenticity is central to leadership and being a leader

How to position the importance of authenticity to leadership?  Perhaps it is best to share the words of Bill George, former CEO of Medtronic, Harvard Business School Professor of Leadership, and best-selling author:

“After years of studying leaders and their traits, I believe that leadership begins and ends with authenticity.” 

Werner Erhard et al write:

“Being a leader requires that you are absolutely authentic, and true authenticity begins with being authentic about your inauthenticities, and almost no one does this.”

Did you get that?  The access to authenticity is being authentic (confronting the truth) about where/how you are being inauthentic (not being/acting in accordance with ‘who you hold yourself out to be’).  Yet, almost no one does this.  Do you remember how the business world reacted to Domino’s Pizza decision to come out in 2010 and tell the truth about their pizzas? Surprise, bafflement, astonishment: What, you are going to own up to the fact that your pizzas taste like cardboard!

Inauthenticity is ubiquitous

Inauthenticity is the default setting and state of human existence. You, I and just about everyone is being  inauthentic – at the very least in some ways, at certain times, with certain people and in certain situations.  To date I have distinguished two kinds of inauthenticity.

First, there is the kind where I, you, sacrifice our personality, character, spirit, stand in response to external pressures: the pressure to appear to be a certain kind of person, the pressure to adopt a particular mode of living, the pressure to ignore one’s own moral and aesthetic objections in order to have a more comfortable existence. If you take the time to reflect and are willing to be open to that which shows up then you will see where and how often you have trodden this path.  Else read Sartre’s novels – they provide a great access to the inauthentic mode of being/living.

The second kind of inauthenticity is of the kind which is normally hidden from us.  This kind of inauthenticity lies in the realm of what we don’t know that we don’t know: we do not have access to our real reasons for being the way that we are being, acting the way that we are acting, and we ignore crucial facts about own lives (and the world we find ourselves in) in order to avoid facing up to and confronting uncomfortable truths. Spend some time in the counselling room and you will see this vividly: you cannot help seeing how the human being is blind to certain aspects of him/herself. Or just watch the TV series “The Office”.

Heart of the matter: we refuse to confront our inauthenticities

Imagine that you are driving a car and you find that you have a flat tyre.  Having a flat tyre is not an issue provided you are willing to acknowledge and confront the fact that you are driving a car with a flat tyre.  Acknowledging and confronting the fact creates an opening for you to take effective action: to replace or repair the flat tyre.  It is the same with inauthenticity: inauthenticity is not an issue if you and I are willing to confront where/how we are being inauthentic.

Yet inauthenticity is an issue.  It is an issue because you and I are not willing to confront our inauthenticities.  Here is what Werner Erhard et al have to say on the matter:

“..because we avoid at all costs confronting our inauthenticities, we are consistently inauthentic about being inauthentic – not only with others, but with ourselves as well.” 

If you find this assertion hard to stomach then allow me to share with you the conclusion that Harvard Professor Chris Argyris came to after spending 40 years studying human beings and organisations:

“Put simply, people consistently act inconsistently, unaware of the contradiction between their espoused theory and their theory-in-use, between the way they think they are acting, and they way they really act.”

Want to be a leader? Generate the courage to be authentic about your inauthenticities

By now it should be clear that being authentic is absolutely essential to being a leader and the exercise of leadership.  It should also be clear that the default setting of human existence is inauthenticity and as such inauthenticity is ubiquitous.  So one critical challenge of being a leader is to life oneself up from this fallen state of inauthenticity.  This is how Werner Erhard et al put it:

“If you cannot find the courage to be authentic about your inauthenticities, you can forget about being a leader……..The actionable access to authenticity is being authentic about your inauthenticities..”

As a pragmatic course of action it means that you must:

Be willing (and proactive) in discovering and confronting your inauthenticities – where in our lives you are not being and/or acting consistent with who you hold yourself out to be for others AND who you hold yourself out to be for yourself; AND

Tell the truth (to yourself and the appropriate people) about where you are not being genuine, real, authentic – the appropriate people tend to be the one’s that you are most likely to resist telling the truth to.

If you are willing to take this on then take a look at these areas

By virtue of human there are certain domains of life that suck us towards/into a state of being inauthentic. So if you are up for being a leader (or simply up for a life of freedom, self-esteem, courage and peace of mind) then take a look at the following:

Most of us are driven to look good and avoid looking bad.  Werner Erhard et al put it this way “.. most of us have a pathetic need for looking good, and almost none of us is willing to confront just how much we care about looking good..”  Look, how many of us are afraid to ask a question or voice our opinion for the fear of looking stupid, the only one who does not get it?  I say the reason so many of us insist on being right (rather than admit we are/were wrong) is to look good and avoid looking bad.  Where are you sacrificing your authenticity simply to look good and avoid looking bad?  If you do the work you will find a gold mine of inauthenticity here; it would not be going to far to say that wanting to look good and avoid looking bad runs us!

Every single one of us wants to be admired (to be recognised as a person of worth/significance/importance/high status), and yet almost none of us is willing to be with and confront how desperately we want to be admired.  And how readily we will give up our authentic voice, our stand, in a situation where we perceive that being straightforward, honest, genuine threatens us with a loss of admiration.

In many situations, many of us want to be seen as being loyal members of the group even when we are not.  How many of us are playing at being loyal simply to avoid the consequences (loss of admiration, looking bad, being made out to be wrong, being punished) of being perceived as being not loyal, not a team player.  Have you noticed how easily you will sacrifice ‘who you hold yourself out to be’ for the sake of fitting in, being admired and rewarded?  This is how you get ‘groupthink’ and the ‘Bay of Pigs’ fiasco and many others like it in organisations.

The good news if you are up for being a leader

So far this post might just show up in your listening as ‘bad news’ and leave you deflated/resigned/cynical.  So I want to share another quote from Werner Erhard et al:

“We are all guilty of being small in these ways – it comes with being human.  Great leaders are noteworthy in having come to grips with these foibles of being human – not eliminating them, but being the masters of these weaknesses when they are leading.”

And finally

If you wish to get a taste of authenticity/inauthenticity (and its importance to the human condition) then I recommend reading Book VI:The Russian Monk, Chapter 1:The Elder Zosima and His Visitors, Section (d) The Mysterious Stranger, from Fydor Dostoevsky’s masterpiece: The Brothers Karamazov.  If you have the hardback edition by Pevear and Volokhonsky then the page number is 301.

In the next post in this series I will take a look at the third foundational strand of the ontological leadership model: being committed to something bigger than oneself.

For those of you who have made it this far, I thank you for putting into this conversation that which it takes to be in this conversation.  I am grateful that you exist and that I have the privilege of being in this conversation with you.  I look forward to listening to your perspective, your experience on authenticity.

Harvard's Bill George: A Model of 21st Century Leadership

Posted by Warren Bennis on September 4, 2012 for Bloomberg Businessweek

Last Saturday morning, Aug. 26, I called my old friend Bill George for two reasons, mainly to wish him a happy birthday on his 70th—I was two weeks early—and to discuss an unlikely article in that morning’s Financial Times, “The Mind Business.” It reported that some of the “west’s biggest companies are embracing eastern spirituality as a path to bigger profits.” Among them, General Mills (GIS), Google (GOOG), First Direct, Target (TGT), Aetna (AET), plus many Silicon Valley firms such as Facebook (FB), Twitter, and LinkedIn (LNKD) that share ideas on yoga, meditation, and mindfulness, a popular form of Buddhist practice, which advocates feel helps them stay “grounded,” even calm, in our hyper-manic digital age.

In the FT piece, Bill makes the business case for meditation, which he’s been practicing, along with his longtime spouse and partner, Penny, since 1974: “William George, a Goldman Sachs (GS) board member [also, I have to add, ExxonMobil (XOM)] and a former chief executive of healthcare giant Medtronic (MDT) … is one of the main advocates for bringing meditation into corporate life. … ‘If you’re fully present on the job, you will be more effective as a leader; you will make better decisions and you will work better with other people. … I tend to live a busy life. This keeps me focused on what’s important.’”

(Have you met anyone recently who isn’t rushed? I bought a ticket last month to hear a speaker discuss his book, Rushed, and, yeah, I was too rushed to make it.)

But meditation is only a skip and a hop in the arc of Bill’s career trajectory, which isn’t close to peaking. After his undergraduate degree at Georgia Tech, he did go for an MBA and went on to work for prominent global companies on three continents, resigning from Medtronic when he was 58, which nowadays I would call “early adulthood.” I decided to ask him a question the other morning I always wanted to but shied away from, why he “retired so young.” He responded with a Minnesota-nice but defiant, “I didn’t retire, Warren,” softening his voice when he came to my name. “I vowed never to remain more than 10 years as a CEO or top gun in any organization. Ten years is plenty, more than enough time to make your mark in any organization.”

Bill went on to say some extremely wise things about a topic rarely discussed openly (or, at best, at six degrees of elusiveness) about the stages of a management career, especially about the retirement phase. Bill has never given much thought to retirement, “the very last thing execs should think about. Anyway, I’m going to live to a hundred! I’ve talked to too many retirees who go to Florida to play golf and despite their parched and faux words, such as ‘I’ve been a success at retirement,’ or ‘saved a lot in state taxes,’ they just look tired more than retired.”

I don’t want to make light of the issue. None of us is immortal. And who’s going to tell you that you’ve lost your marbles or “your touch.” A young friend of mine, meaning to be respectful and gentle, told me a few months ago, lowering his head to avoid eye contact, “Well, I’ll say this about you: You may not be at the top of your game but you’re still at the top of your field.” I retorted acidly, absent respect or kindness, ‘Thank you, DoctorJones, for damning me with faint praise.” Emphasis mine. He’s a psychiatrist, of course.

Retirement is a difficult issue and doesn’t have a positive connotation, perhaps especially so in our culture. My American Heritage Dictionary heartily confirms this. It states, “Despite the upbeat books written about retiring and the fact that it is a well-earned time of relaxation from the daily business of work, many people do not find it a particularly pleasant prospect.”

I’ll have more to say about this in some future blog but want to end on a positive note, using young Bill George as an example, one that today’s MBA students would do well to consider as they ponder the long arc of their own careers. He responded to my question about why he retired so young this way: “I had to go out in the wilderness again to renew, reinvent myself. Had to engage in spiritual projects in a way, which for me, meant learning how to impart whatever I’ve learned to others. So I’ve been teaching for the last dozen or so years. At Harvard, I’ve introduced a course pretty much based on two books I wrote since my Medtronic days, Authentic Leadership and True North. Chances are that I’ll be looking for a new shore one of these days.”

I think of Bill George as a protean leader, based on the Greek myth of the early sea god Proteus, “an old man of the sea,” as he was called, “with flexibility, versatility and adaptability.” Bill George in no way is “old,” whatever that means today. He’s still swimming upstream, probably at this minute, in Vail, Colo., in water that, sitting here in sunny Santa Monica, chills me to the bone.

Rotman Magazine: Thought Leader Interview: Bill George

In this recent interview with the Rotman School of Business in Toronto, I talk about the importance of leaders following their True North in order to avoid being derailed, including your compass for the journey and making the transition from "I" to "We." To read the article, click here.

Financial Times Article on Mindful Leadership

The Financial Times carried an outstanding article over the weekend on Mindful Leadership that features General Mills (ranked #1 for developing leaders by multiple surveys), Target, Aetna, & Google along with my inputs. I have meditated for 38 years & can attest to its benefits for my leadership. I also have spent time with all four companies and can attest to the authenticity of their leadership and the quality of their leadership development initiatives. Read More

Developing Innovative Leaders

From MWorld Summer 2012

Steve Jobs has become a symbol of innovative leadership. Sad to say, there aren't many leaders like him. Most of them -- Google's Larry Page, Amazon's Jeff Bezos, Facebook's Mark Zuckerberg, Genentech's Arthur Levinson, and Starbucks' Howard Schultz -- are entrepreneurs who founded and built their businesses. 

These days virtually all large companies want to be innovative, yet they aren't producing innovative leaders. What has happened to these leaders in large corporations? Have they been squeezed out by constant focus on producing short-term results and replaced by financially-oriented managers who respond to Wall Street's demands for quarterly earnings? Or do corporate leaders lack the basic understanding of what is required to lead innovative organizations? While hundreds of books and articles have been produced on innovation, very little has been written on what is required to produce innovative leaders. 

Research and Product Development Are Not Innovation

In this era, many companies are investing heavily in research and product development, yet they fail to create innovative products and ideas. U.S. pharmaceutical companies like Pfizer and software companies like Microsoft illustrate that heavy spending on research and product development doesn't necessarily yield innovations. In contrast, the breakthrough ideas that created Genentech, Google, and Facebook illustrate what can be done with limited budgets. It is important to recognize that research, product development, and innovation are radically different disciplines. 

Research is based on well-established scientific principles. At its best, research produces scientific breakthroughs that extend knowledge like Schottky's invention of the transistor and Novartis's breakthrough drug Gleevec for treating chronic myelogenous leukemia. Product development, on the other hand, follows established engineering principles to improve existing products.

Innovations result from unique ways of looking at problems that produce original solutions. Another approach to innovation takes existing ideas and combines them into unique solutions. In retrospect, the outcome may seem obvious, yet is highly original. Apple's iPad is an example, combining Apple's iPod, iPhone, and iMac to create a breakthrough product. 

  1. Because research and innovation require long time frames, the pressure on business-unit leaders to produce near-term success often results in funds being shifted from innovative projects to product development and product extensions. 
  2. Large organizations that are heavily dependent on previous successes frequently squeeze out innovative ideas and the innovators who create them. Not infrequently, the most innovative ideas run into significant difficulties in their infancy and get killed or underfunded in favor of high-profitability development projects. 
Qualities of Innovative Leaders

To overcome these pitfalls, organizations need innovative leaders at the top willing to sacrifice near-term financial results to support their innovators through success and failure. The characteristics of great innovative leaders are dramatically different from traditional business managers. Here are five essential qualities they must have to lead innovation: 
  1. Passion for innovation. Innovative leaders not only have to appreciate the benefits of innovation, they need a deep passion for innovations that benefit customers. Just approving funds for innovation is insufficient. Leaders must make innovation an essential part of the company's culture and growth strategy. 
  2. A long-term perspective. Most investors think three years is "long-term," but that won't yield genuine innovation. Major innovations can change entire markets as the iPod and iTunes did, but they take time to perfect products and gain adoption by mainstream users. Leaders cannot stop and start innovation projects as if they were marketing expenses; they must support innovation regardless of the company's near-term prospects. 
  3. The courage to fail and learn from failure. The risks of innovation are well known, but many leaders aren't willing to be associated with its failures. However, there is a great deal to be learned from why an innovation has failed, as this enhanced understanding can lead to the greatest breakthroughs. At Medtronic, our failures with implantable defibrillators in the 1980s led to far more sophisticated approaches to treating heart disease in the 1990s. 
  4. Deep engagement with the innovators. Innovative leaders must be highly engaged with their innovation teams: asking questions, probing for potential problems, and looking for ways to accelerate projects and broaden their impact. That's what HP's founders Bill Hewlett and David Packard did by wandering around HP's labs and challenging innovators. 
  5. Willingness to tolerate mavericks and defend them from middle management. The best innovators are rule-breakers and mavericks who don't fit the corporate mold and are threatening to middle managers following more typical management approaches. That's why innovative leaders must protect their maverick's projects, budgets, and careers rather than forcing them into traditional management positions. 

How can companies develop innovative leaders capable of ascending to top management? They need to identify these emerging leaders and then give them their most challenging projects, while protecting them from failures and organizational conflicts.

Some Examples of Innovative Companies

When I joined Medtronic in 1989, it was evident that the innovation process had broken down. My first week, I was informed that all innovative ventures were being divested because they were losing money and the company needed improved short-term results. The company had many highly innovative people, who were demoralized by lack of senior management support. Engineering problems and product development overruns were absorbing all their funds. To solve both problems simultaneously, we created entirely separate organizations with different profit-and-loss structures and put disciplined leaders in charge of the established organization and innovative leaders in charge of breakthrough ideas. 

To solve engineering problems, a highly disciplined engineer restructured the product development process. He cut new product lead times from 48 to 18 months with a rigorous approach that kept unproven ideas and innovation off the critical path. He selected disciplined engineers as project leaders and produced a steady stream of products resulting in near-term success. This provided the profits and cash flow to fund innovative ideas as well as refuel the product development process. 

Meanwhile, two very innovative senior executives led the creative side: a scientific leader and a medical doctor with a keen interest in technology and innovative medical ideas. They created a series of venture projects addressing unmet medical needs. Although many projects failed, enough succeeded to propel Medtronic to sustain a growth rate in excess of 18% for a 20-year period. This built the company from $400 million to $16 billion in revenue and gave Medtronic a reputation as "an innovation machine." More important, innovations resulted in a dozen major medical breakthroughs to treat intractable disease, including original therapies for heart failure, spinal pain, cerebral palsy, and Parkinson's disease. 

Because the established business organization contained most of the people and budgets, I focused more attention as CEO on the innovators. This ensured their projects and their careers didn't get crushed by the established organization that produced near-term profits. Since many of the innovations couldn't withstand careful scrutiny at their outset, they had to be protected from engineering and financial analysis until they were sufficiently proven to put them through rigorous product design and clinical testing. 

In recent decades the creators of America's great growth corporations have been succeeded by established business leaders lacking the innovative drive to sustain growth. The stories of Hewlett-Packard and Amazon are particularly instructive. For 30 years, HP was the role model of innovation, producing 20% revenue growth and 20% operating profits. As it grew, HP became complacent and bureaucratic. In response, its board divested its original businesses and went outside four consecutive times to appoint commercially oriented CEOs, none of whom has restored the company's innovative capacity. 

In contrast, Amazon founder Jeff Bezos never wavered in his commitment to online retail marketing, even when the dot-com bubble burst in 2002 and Amazon's stock declined more than 90%. More recently, Bezos ignored short-term profitability to expand into hardware with the Kindle. Faced with mounting costs and technical difficulties, Amazon's financial chief asked him how much he was prepared to lose on this venture. Not flinching, Bezos replied, "How much money do we have?" He was so committed to this venture that he was prepared to stake the company's future on its success. As a result, Amazon is transforming the book world from printed books to electronic. 

Conclusion

For America to regain its global competitiveness, a new generation of innovative leaders needs to take over top roles in our leading corporations, not just found startup companies on the West Coast. This new generation seems to be emerging, led by IBM's Sam Palmisano, Ford's Alan Mulally, PepsiCo's Indra Nooyi, Lilly's John Lechleiter, and General Mills' Ken Powell. For America to regain its competitive edge, we will need many more like them. 

Developing Innovative Leaders

From MWorld Summer 2012

Steve Jobs has become a symbol of innovative leadership. Sad to say, there aren't many leaders like him. Most of them -- Google's Larry Page, Amazon's Jeff Bezos, Facebook's Mark Zuckerberg, Genentech's Arthur Levinson, and Starbucks' Howard Schultz -- are entrepreneurs who founded and built their businesses. 

These days virtually all large companies want to be innovative, yet they aren't producing innovative leaders. What has happened to these leaders in large corporations? Have they been squeezed out by constant focus on producing short-term results and replaced by financially-oriented managers who respond to Wall Street's demands for quarterly earnings? Or do corporate leaders lack the basic understanding of what is required to lead innovative organizations? While hundreds of books and articles have been produced on innovation, very little has been written on what is required to produce innovative leaders. 

Research and Product Development Are Not Innovation

In this era, many companies are investing heavily in research and product development, yet they fail to create innovative products and ideas. U.S. pharmaceutical companies like Pfizer and software companies like Microsoft illustrate that heavy spending on research and product development doesn't necessarily yield innovations. In contrast, the breakthrough ideas that created Genentech, Google, and Facebook illustrate what can be done with limited budgets. It is important to recognize that research, product development, and innovation are radically different disciplines. 

Research is based on well-established scientific principles. At its best, research produces scientific breakthroughs that extend knowledge like Schottky's invention of the transistor and Novartis's breakthrough drug Gleevec for treating chronic myelogenous leukemia. Product development, on the other hand, follows established engineering principles to improve existing products.

Innovations result from unique ways of looking at problems that produce original solutions. Another approach to innovation takes existing ideas and combines them into unique solutions. In retrospect, the outcome may seem obvious, yet is highly original. Apple's iPad is an example, combining Apple's iPod, iPhone, and iMac to create a breakthrough product. 

  1. Because research and innovation require long time frames, the pressure on business-unit leaders to produce near-term success often results in funds being shifted from innovative projects to product development and product extensions. 
  2. Large organizations that are heavily dependent on previous successes frequently squeeze out innovative ideas and the innovators who create them. Not infrequently, the most innovative ideas run into significant difficulties in their infancy and get killed or underfunded in favor of high-profitability development projects. 
Qualities of Innovative Leaders

To overcome these pitfalls, organizations need innovative leaders at the top willing to sacrifice near-term financial results to support their innovators through success and failure. The characteristics of great innovative leaders are dramatically different from traditional business managers. Here are five essential qualities they must have to lead innovation: 
  1. Passion for innovation. Innovative leaders not only have to appreciate the benefits of innovation, they need a deep passion for innovations that benefit customers. Just approving funds for innovation is insufficient. Leaders must make innovation an essential part of the company's culture and growth strategy. 
  2. A long-term perspective. Most investors think three years is "long-term," but that won't yield genuine innovation. Major innovations can change entire markets as the iPod and iTunes did, but they take time to perfect products and gain adoption by mainstream users. Leaders cannot stop and start innovation projects as if they were marketing expenses; they must support innovation regardless of the company's near-term prospects. 
  3. The courage to fail and learn from failure. The risks of innovation are well known, but many leaders aren't willing to be associated with its failures. However, there is a great deal to be learned from why an innovation has failed, as this enhanced understanding can lead to the greatest breakthroughs. At Medtronic, our failures with implantable defibrillators in the 1980s led to far more sophisticated approaches to treating heart disease in the 1990s. 
  4. Deep engagement with the innovators. Innovative leaders must be highly engaged with their innovation teams: asking questions, probing for potential problems, and looking for ways to accelerate projects and broaden their impact. That's what HP's founders Bill Hewlett and David Packard did by wandering around HP's labs and challenging innovators. 
  5. Willingness to tolerate mavericks and defend them from middle management. The best innovators are rule-breakers and mavericks who don't fit the corporate mold and are threatening to middle managers following more typical management approaches. That's why innovative leaders must protect their maverick's projects, budgets, and careers rather than forcing them into traditional management positions. 

How can companies develop innovative leaders capable of ascending to top management? They need to identify these emerging leaders and then give them their most challenging projects, while protecting them from failures and organizational conflicts.

Some Examples of Innovative Companies

When I joined Medtronic in 1989, it was evident that the innovation process had broken down. My first week, I was informed that all innovative ventures were being divested because they were losing money and the company needed improved short-term results. The company had many highly innovative people, who were demoralized by lack of senior management support. Engineering problems and product development overruns were absorbing all their funds. To solve both problems simultaneously, we created entirely separate organizations with different profit-and-loss structures and put disciplined leaders in charge of the established organization and innovative leaders in charge of breakthrough ideas. 

To solve engineering problems, a highly disciplined engineer restructured the product development process. He cut new product lead times from 48 to 18 months with a rigorous approach that kept unproven ideas and innovation off the critical path. He selected disciplined engineers as project leaders and produced a steady stream of products resulting in near-term success. This provided the profits and cash flow to fund innovative ideas as well as refuel the product development process. 

Meanwhile, two very innovative senior executives led the creative side: a scientific leader and a medical doctor with a keen interest in technology and innovative medical ideas. They created a series of venture projects addressing unmet medical needs. Although many projects failed, enough succeeded to propel Medtronic to sustain a growth rate in excess of 18% for a 20-year period. This built the company from $400 million to $16 billion in revenue and gave Medtronic a reputation as "an innovation machine." More important, innovations resulted in a dozen major medical breakthroughs to treat intractable disease, including original therapies for heart failure, spinal pain, cerebral palsy, and Parkinson's disease. 

Because the established business organization contained most of the people and budgets, I focused more attention as CEO on the innovators. This ensured their projects and their careers didn't get crushed by the established organization that produced near-term profits. Since many of the innovations couldn't withstand careful scrutiny at their outset, they had to be protected from engineering and financial analysis until they were sufficiently proven to put them through rigorous product design and clinical testing. 

In recent decades the creators of America's great growth corporations have been succeeded by established business leaders lacking the innovative drive to sustain growth. The stories of Hewlett-Packard and Amazon are particularly instructive. For 30 years, HP was the role model of innovation, producing 20% revenue growth and 20% operating profits. As it grew, HP became complacent and bureaucratic. In response, its board divested its original businesses and went outside four consecutive times to appoint commercially oriented CEOs, none of whom has restored the company's innovative capacity. 

In contrast, Amazon founder Jeff Bezos never wavered in his commitment to online retail marketing, even when the dot-com bubble burst in 2002 and Amazon's stock declined more than 90%. More recently, Bezos ignored short-term profitability to expand into hardware with the Kindle. Faced with mounting costs and technical difficulties, Amazon's financial chief asked him how much he was prepared to lose on this venture. Not flinching, Bezos replied, "How much money do we have?" He was so committed to this venture that he was prepared to stake the company's future on its success. As a result, Amazon is transforming the book world from printed books to electronic. 

Conclusion

For America to regain its global competitiveness, a new generation of innovative leaders needs to take over top roles in our leading corporations, not just found startup companies on the West Coast. This new generation seems to be emerging, led by IBM's Sam Palmisano, Ford's Alan Mulally, PepsiCo's Indra Nooyi, Lilly's John Lechleiter, and General Mills' Ken Powell. For America to regain its competitive edge, we will need many more like them. 

Penn State Lesson: Today's Cover-Up was Yesterday's Opportunity

The most damaging portion of former FBI Director Louis Freeh's comprehensive report on the Pennsylvania State pedophilia scandal is his conclusion that four senior university officials concealed football coach Jerry Sandusky's child abuse from 1998 to 2011, even from its board of trustees, because they wanted "to avoid the consequences of bad publicity."

In so doing, these officials—including legendary head football coach Joe Paterno and President Graham Spanier—placed their own reputations ahead of the harm that Sandusky did to young boys for the next 14 years.

Ironically, had Penn State turned Sandusky over to legal authorities in 1998, the public would have viewed its actions as protecting the victims, thereby enhancing the University's reputation. Instead, these men caused grave damage to a great university while allowing Sandusky free reign to destroy lives.

Sadly, the Penn State situation is not unique. Consider these other cases:

  1. Had President Richard Nixon acknowledged his role in the Watergate scandals, he could have saved his presidency and his legacy.
  2. Had the hierarchy of the Roman Catholic Church acknowledged its pedophilia scandals, it would have protected victims and its moral authority.
  3. Had President Bill Clinton admitted his relationship with Monica Lewinsky, the scandal would have subsided, enabling him to focus on his pro-growth policies to balance the budget and create jobs; instead, he had to fend off impeachment.
  4. Had Martha Stewart and Rajat Gupta admitted their roles in insider trading, they could have plea bargained, moved past their ethical lapses, and possibly avoided prison time.
  5. Had Best Buy founder Richard Schulze not covered up CEO Brian Dunn's improprieties, he could have retained Best Buy's reputation for sound values (and his own).

Contrast these actions with JPMorgan CEO Jamie Dimon, who took immediate responsibility for his firm's recent trading losses, calling them "stupid and egregious." While Dimon has taken considerable heat during the past month, his reputation as a "truth teller" remains intact. Eventually, JPMorgan will be restored and corrective actions put in place to mitigate future risks.

The deeper question raised by these examples is this: What causes leaders to cover up inappropriate actions instead of acknowledging them immediately?

Many leaders strive for such a high degree of perfection that they are unwilling to admit mistakes. They feel tremendous external pressure to be perfect, but in reality they are far more successful when they areauthentic. Were they to think rationally and consult with others about what to do, they would see it is better to acknowledge the truth, no matter how painful, because the truth will surface eventually. More importantly, they can prevent further harm to the victims. While leaders may rationalize that a cover-up protects the interests of their organizations, the damage of one typically harms their institutions far more than the direct admission of a mistake.

The Greatest Generation, venerated for placing stewardship and institutional trust ahead of self-interest, contrasts starkly with those in this generation of leaders who believe that putting self-interest first is acceptable. The cardinal responsibility of leaders is to always put their organizations first. As leaders become increasingly successful, their reputations soar and they begin to think they have to be perfect, contributing to their inability to acknowledge mistakes. Or they conflate their interests with the institution, thinking "I am the institution."

In doing so, they head for a fall—often taking their organizations down with them. Meanwhile, the public loses trust in them, and everyone associated with the organization gets hurt. This problem is compounded when many leaders fail, further alienating the public.

Reversing this loss of trust will require a concerted effort to develop a new generation of responsible leaders. No longer can leaders be chosen strictly for their abilities. In the future they must also be selected for their sense of institutional responsibility, based on their performance under stressful conditions. They must be bound by a sound governance system and constraints that require them to acknowledge their responsibilities to their organizations.

Developing this new leadership generation will require programs that focus on their inner sense of responsibility, their integrity and purpose in leading, and accepting themselves as imperfect human beings striving to do their best to help their organizations. An integral part of their development is gaining the self-confidence to acknowledge mistakes and make their actions transparent. Many leaders fear showing their vulnerabilities, but actually gain power and respect in being authentic.

Improving leadership development and selection won't prevent all failures, but it will go a long way toward minimizing them and restoring trust in our leaders.

Authentic Leadership Revisited

Nine years ago today the New York Times favorably reviewed Authentic Leadership, my first book. At the time "authenticity" in leadership was not a well-established idea. Many people asked, "What is an authentic leader?" although the concept seemed self-evident to me as being genuine, real and true to who you are. In those years authenticity has been popularized by Oprah Winfrey and others, as people search for the real thing.

With repeated leadership failures, many people today are eager to find authentic leaders, and the ideas have gradually become widely accepted, even among academics. More and more students are studying authentic leadership and striving to lead in this way. In spite of several well-publicized leadership failures, the new generation of corporate CEOs, many of whom I know personally, are highly authentic and doing an excellent job of leading, in spite of the economic headwinds. I find these trends very encouraging and feel that they bode well for the future of corporate leadership.

For those of you interested in Authentic Leadership and its successor, True North, here are two excellent blogs summarizing its ideas: http://bit.ly/P71wLS and http://bit.ly/NJ7z8x. If you haven't read either or both, of course www.amazon.com would be happy to send them to you.

As always, your feedback on these ideas is greatly appreciated.

Finding a Cure for "CEO-itis"

By: Joann S. Lublin for The Wall Street Journal

Warning: You could be at risk of contracting "CEO-itis."

An affliction of arrogance that plagues many people picked for powerful posts, its symptoms include a tendency toward isolation, belief that you're smarter than others, preference for loyalists, aversion to changing course even in the face of failure -- and love of royal treatment.

It appears to occur when promising managers reach the corner office or other C-suite spots. Once infected, once-successful executives often underperform and put themselves at great risk of early exits, experts say.

In June, John Figueroa quit after 17 months as chief executive of Omnicare Inc. "He believed he accomplished the goals established by the board,'' the nursing-home pharmacy operator announced.

But Mr. Figueroa also acted imperiously, ignored suggestions from colleagues, and made extensive personal use of the corporate aircraft, according to people familiar with the situation.

In short, the CEO title went to his head, one informed individual says. McKesson Corp., Mr. Figueroa's prior employer, had recommended him as a collaborative team player, another person remembers. Omnicare declined to comment.

Mr. Figueroa says he's "very proud of all the great things we accomplished" during his Omnicare stint, though he concedes he wasn't a warm and fuzzy boss. "I certainly did not make friends with everyone as tough decisions had to be made," he says. "We changed things very quickly, and looking back, I could have been better" at communicating with the board and managers.

Similarly, while Mr. Figueroa denies abusing perks, he confirms that a friend of his daughter flew with him, his wife and daughter on the corporate aircraft during a business trip.

Every top executive once was a rising star, building a base of influence. What changes them along the way?

David Kirchhoff, head of Weight Watchers International Inc., admits that he's had bouts of CEO-itis since assuming command in 2007. "It's almost impossible to avoid completely," he explains. "People treat you differently" when you become chief executive. He says he keeps his ego in check by working closely with people who enjoy teasing him.

Senior managers with an inflated sense of their superiority repeat actions long after they stop working because they overlook "information that has changed," says Carol S. Dweck, a Stanford University psychology professor and author of "Mindset: The New Psychology of Success." The rapid pace of change in most businesses requires more questioning, not less, she notes.

The problem, also called CEO disease, "is beyond epidemic," in part because executives today are so stressed that they fail to open themselves to new ideas and see themselves as "God's gift to the world," says Richard Boyatzis, an organizational behavior, psychology and cognitive science professor at Case Western University. He co-wrote "Primal Leadership,'' a 2002 book that discusses CEO disease.

Still, it is possible to get ahead without getting a swelled head. The remedy, leadership specialists say, involves the often painful process of reattaching an executive's feet to the ground.

Here are suggestions, gathered from ten present and former CEOs, for how to maintain equilibrium after you land a top job:

Surround yourself with highly capable lieutenants. 

"You have to have enough self-confidence to know you'll do well if you have a bunch of smart people doing well," Mr. Kirchhoff observes.

Strong, talented associates "make it easy to acknowledge I don't always – or even often – have the best idea in the room," concurs Scott Wine, CEO of Polaris Industries Inc., a maker of off-road vehicles, motorcycles and snowmobiles. That's why "I cannot be arrogant or expect unwarranted privileges," he adds.

Encourage dissent, discourage sycophants.

Help subordinates overcome their fear of offering frank feedback – but resist their seductive accolades.

"Reward people who challenge you," recommends William George, a former CEO of Medtronic Inc. "I didn't promote people who didn't take me on."

Mr. George says he especially disliked associates who frequently flattered him or showed up uninvited at meetings in order to gain face time with the CEO. For the worst sycophants, "I actually had to move them out," recollects Mr. George, now a management practice professor at Harvard Business School.

Regularly admit and fix your mistakes. 

Taking responsibility for your errors "is a very powerful way to keep yourself humble,'' Mr. Kirchhoff says. He recently took his own advice.

Weight Watchers' first-quarter profit fell more than expected on virtually flat revenue growth. During a May earnings call, Mr. Kirchhoff blamed the disappointing performance on execution issues. "I bear responsibility for those misses," he said.

Treat every employee with respect. 

Carin Stutz, hired to lead Cosi Inc. in January, is trying to revive the struggling fast-casual dining chain. Her predecessor resigned shortly after Nasdaq warned that it might delist the company. 

"There is definitely a lot more attention and visibility in this (CEO) role," says Ms. Stutz, previously a Brinker International Inc. executive. "I feel more responsible than ever to respect and support people."

Ms. Stutz chose a highly visible way to demonstrate respect for Cosi workers. She spent ten hours a day during her initial five weeks as CEO going through store-manager training. Among other things, she baked bread, prepared food and ran the cash register at restaurants in three cities.

Find an objective sounding board outside the office. 

A spouse, executive coach or informal group of advisors can alert you about looming signs of CEO-itis.

Mr. George, for instance, has attended a men's support group every Wednesday morning for nearly 35 years. "You're losing it (humility),'' some members warned while he ran Medtronic.

He says he was being too direct with his employees because he thought he had all the answers. Thanks to such reality checks, Mr. George adds, "you pay attention to your behavior.''

Enhance Your Overseas Experience

This article originally appeared in Harvard Business Review.


As the world becomes increasingly global, the need for true global citizens to lead organizations in business, nonprofits, and government is far greater than in decades past. Global citizens who understand the importance of cultural nuances are able to bring people together across organizational boundaries and are more effective working and collaborating anywhere in the world.

 

Becoming a global citizen requires that aspiring leaders spend time living in different countries early in life, so they can appreciate cultural differences, incorporate what they learn into their work lives, and build networks of global relationships. A key to the success of IBM's Sam Palmisano, for example, was the understanding he gained by living in Japan that enabled him to create IBM's "globally integrated enterprise" in 2006.

Corporations seek leaders who are comfortable in many cultures; they want those who can speak multiple languages and understand the nuances of doing business outside their home regions. In fact, many global companies have formal international rotation programs to build such global leaders. German consumer company Henkel requires its leaders to work in at least two countries to be considered for promotion.

But the benefits aren't just organizational. Living in different countries and cultures can lead to a rounder, more fulfilling life. Take our experiences, for example. Bill had formative experiences living with his family in Belgium in the early 1980s and in Switzerland ten years ago. Leading global businesses since the early 1970s and serving as a board member of two European companies, Bill's travels throughout the world shaped his ideas for developing global leaders. John found working abroad in Europe and the Middle East not only improved his understanding of the importance of cultural and regional differences, but also helped him build a global network of friends and colleagues and lasting memories of the places he visited.

For aspiring leaders who want to become global citizens and increase their global fluency, here are some suggestions to get started:

1. Target at least one fundamentally different culture. While it may be tempting to live in a culture similar to your own — for example, Americans working in Great Britain — the most compelling learning experiences come from living in cultures that are sharply differently from your own. Chinese professionals working in South Africa, for example, will find their existing cultural assumptions challenged as they gain increased humility by learning local languages and coping with different norms.

2. Spend time studying overseas. Studying in different cultures enables young leaders to understand cultural nuances and become actively engaged with global organizations. Harvard Business School now sends all 900 MBAs to work overseas in its Global Immersion Program. Global organizations prefer candidates who have studied abroad because these early experiences will broaden your perspective about seeking fascinating global opportunities throughout your life. Look for opportunities, and if you're already out of school, ask if your organization offers programs to give you experience abroad.

3. Learn the local language. As English becomes the language of business, it is tempting to get by with limited knowledge of local languages. That's a mistake. Learning local languages enables you to appreciate cultural nuances and develop more personal relationships. Being fluent in multiple languages makes it easier to learn new ones and opens up career opportunities.

4. Don't judge cultural differences or local people. When your new environment is sharply different from prior experiences, it's tempting to make snap judgments about your experiences and stay attached to your own culture. Resist that temptation by observing, listening, learning, and understanding rather than judging. Use your insights to improve local ways of operating, but don't rush to criticize.

5. Share international experiences with your family. Living in new countries brings your family much closer together and will be a time for growth, bonding, and learning as a family. Hold parties for your local neighbors, join a local church, and get involved in your children's school. Host regular visits from parents and close friends. Balance breadth and depth in your travels to explore many different areas and countries, and spend time talking with local people. But don't travel so much that you fail to get deeply involved in your new community and explore its richness.

The coming decades will belong to those global citizens who are comfortable operating anywhere in the world and who can collaborate with people of different cultures to develop solutions to the world's most pressing problems. Organizations filled with these global citizens will not only survive but thrive and grow. For you, life will be richer and more fulfilling.