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Psychology Today: Know Thyself: How to Develop Self-Awareness

From Psychology Today, posted September 29, 2015.

How well do you know yourself?  How deeply do you understand your motivations? 

If you’re on this website, you probably know the basics of psychology. You understand biases, the power of the halo-effect, or even how we make decisions. 

But, do you understand what drives you? Your own self-image? Or how others experience you?

The charge, “Know thyself,” is centuries old, but it has never been more important. Research from psychologist Daniel Goleman shows that self-awareness is crucial for all levels of success. As he outlines in Emotional Intelligence, above an IQ of 120, EQ (Emotional Intelligence) becomes the more important predictor of successful leaders. Developing self-awareness is the first step to develop your EQ.

You can’t gain self-awareness through knowing psychology. Rather, it requires a deepunderstanding of your past and current self. Experiences shape how we see the world. So, we have to reflect on how the world has shaped us. 

How can you gain self-awareness?  Here are three steps to start. 

1.Understand Your Life Story

Over the past 10 years, psychologists have focused on a new field of research called narrative identity. As Dan McAdams, Northwestern University psychology professor, explains, “The stories we tell ourselves about our lives don’t just shape our personalities –- they are our personalities. ”

Your narrative identity is the story of your life; but it’s more than just a story. How you understand your narrative frames both your current actions and your future goals. As research from Southern Methodist University shows, writing about difficult life experiences improves our physical and mental health. How much you confront your life’s challenges - what I call “crucibles” - defines your level of self-awareness. 

So, how can you begin? In Discover Your True North, I give a few questions to start. 

Looking at your early life story, what people, events, and experiences have had the greatest impact in shaping the person you have become?
In which experiences did you find the greatest passion for leading?
How do you frame your crucibles and setbacks in your life?

2. Create a Daily Habit of Self-reflection 

Next, you should develop a daily practice of setting aside at least twenty minutes to reflect on your life. This practice enables you to focus on the important things in your life, not just the immediate. Research from Wisconsin’s Richard Davidson demonstrated direct correlation between mindfulness and changes in the brain - away from anger and anxietyand toward a sense of calm and well-being.

Reflection takes many forms. Some keep a journal, some pray, and others take a long walk or jog. Personally, I use daily meditation as my mindful habit. By centering into myself, I am able to focus my attention on what's really important, and develop an inner sense of well-being.

3.Seek Honest Feedback

We all have traits that others see, but we are unable to see in ourselves. We call these "blind spots." Do you see yourself as others see you? If not, you can address these blind spots by receiving honest feedback from people you trust.

Receiving feedback is hard. So, focus on psychological triggers that might block your learning. As Harvard’s Sheila Heen argued in “Thanks for The Feedback”, three main triggers prevent our learning: relationship triggers, identity triggers, and truth triggers. If you feel defensive, think back to why you do. Often, we can explain it using these triggers. 

Becoming self-aware won’t happen in a day. Rather, it will take years of reflection, introspection, and difficult conversations. As you follow these three practices, you will find you are more comfortable being open, transparent, and even vulnerable. As you do, you will become a more authentic leader and a more self-aware person.

Psychology Today: Know Thyself: How to Develop Self-Awareness

From Psychology Today, posted September 29, 2015.

How well do you know yourself?  How deeply do you understand your motivations? 

If you’re on this website, you probably know the basics of psychology. You understand biases, the power of the halo-effect, or even how we make decisions. 

But, do you understand what drives you? Your own self-image? Or how others experience you?

The charge, “Know thyself,” is centuries old, but it has never been more important. Research from psychologist Daniel Goleman shows that self-awareness is crucial for all levels of success. As he outlines in Emotional Intelligence, above an IQ of 120, EQ (Emotional Intelligence) becomes the more important predictor of successful leaders. Developing self-awareness is the first step to develop your EQ.

You can’t gain self-awareness through knowing psychology. Rather, it requires a deepunderstanding of your past and current self. Experiences shape how we see the world. So, we have to reflect on how the world has shaped us. 

How can you gain self-awareness?  Here are three steps to start. 

1.Understand Your Life Story

Over the past 10 years, psychologists have focused on a new field of research called narrative identity. As Dan McAdams, Northwestern University psychology professor, explains, “The stories we tell ourselves about our lives don’t just shape our personalities –- they are our personalities. ”

Your narrative identity is the story of your life; but it’s more than just a story. How you understand your narrative frames both your current actions and your future goals. As research from Southern Methodist University shows, writing about difficult life experiences improves our physical and mental health. How much you confront your life’s challenges - what I call “crucibles” - defines your level of self-awareness. 

So, how can you begin? In Discover Your True North, I give a few questions to start. 

Looking at your early life story, what people, events, and experiences have had the greatest impact in shaping the person you have become?
In which experiences did you find the greatest passion for leading?
How do you frame your crucibles and setbacks in your life?

2. Create a Daily Habit of Self-reflection 

Next, you should develop a daily practice of setting aside at least twenty minutes to reflect on your life. This practice enables you to focus on the important things in your life, not just the immediate. Research from Wisconsin’s Richard Davidson demonstrated direct correlation between mindfulness and changes in the brain - away from anger and anxietyand toward a sense of calm and well-being.

Reflection takes many forms. Some keep a journal, some pray, and others take a long walk or jog. Personally, I use daily meditation as my mindful habit. By centering into myself, I am able to focus my attention on what's really important, and develop an inner sense of well-being.

3.Seek Honest Feedback

We all have traits that others see, but we are unable to see in ourselves. We call these "blind spots." Do you see yourself as others see you? If not, you can address these blind spots by receiving honest feedback from people you trust.

Receiving feedback is hard. So, focus on psychological triggers that might block your learning. As Harvard’s Sheila Heen argued in “Thanks for The Feedback”, three main triggers prevent our learning: relationship triggers, identity triggers, and truth triggers. If you feel defensive, think back to why you do. Often, we can explain it using these triggers. 

Becoming self-aware won’t happen in a day. Rather, it will take years of reflection, introspection, and difficult conversations. As you follow these three practices, you will find you are more comfortable being open, transparent, and even vulnerable. As you do, you will become a more authentic leader and a more self-aware person.

Huffington Post: The Inner Work of Leaders

From The Huffington Post, Posted September 24, 2015.

The following is an excerpt from Daniel Goleman's new collection, The Executive Edge: An Insider's Guide to Outstanding Leadership.

Daniel Goleman: You say that you have to do a certain kind of inner work to find your true north, to be an authentic leader. What is that inner work, and where does it lead?

Bill George: I think it starts with your life story, knowing where you came from, who you are, what really is important. What has shaped you along the way. And what we found was everyone wants to talk about that, but about 80% of the people want to talk about the crucible -- the most difficult time of their life. Think of the crucible where the refiner's fire tests you, and that's where you're really tested. We aren't tested by success; we're tested by going through a very difficult time and saying, "If I can get through this, I can get through anything." You don't deny that you went through that, and I think that's what shapes you, but the key is: How do you frame that crucible?

Goleman: The crucible can be a job loss, a disaster, a business going under?

George: A rejection by good friends, not being cool in school. I lost seven elections. Was I a failure? Yeah, but I had to learn from that experience. I wanted to be a leader and I was being rejected, seven times in a row.

If you aren't willing to live it, if you go into denial and say, "well, that didn't happen" -- actually it did happen. It's part of who you are, so it's how you frame it. Can you frame yourself as a victim? "Those kids didn't like me, so that was the problem," or do you see how that was a great learning experience, and ask yourself, "how do I learn?" And so that then shapes what we call your true north, your most deeply held values and beliefs. What do you really believe, at your core? Do you believe people are inherently good, or basically not good? What are the values you live by, and then what are the principles you translate into leading or interacting with people?

And people know what those are. I've rarely encountered anyone who didn't know. The question is: "Can I stay on course? Can I be successful? They're going to kill me. If they knew who I really was, they wouldn't be interviewing me." Well, actually, they might! It's a cathartic experience to share who you are, and not be rejected. I think that's so important, because otherwise you're living a lie. You're hiding parts of you -- that you got fired from a job, that you had problems. But that's part of who we are. If that's what has shaped you, it's a good thing.

Goleman: What's the role of self-awareness in finding your authentic self?

George: There's been a lot of work -- and you've done a lot more work than I have on this -- but one of the things that I've observed in leaders is beyond a certain level of IQ. Leadership is not defined by IQ, it's defined by emotional intelligence. And at a certain level of IQ, I actually think it's inverse, so if your IQ is so high that you won't listen to anyone else, you're not going to be a very good leader. And so it can actually work against you.

Goleman: Although, I would say it may not be your actual IQ. It sounds like you're talking about a narcissistic leader.

George: Exactly. That's a person who has to be the smartest person in the room, no matter what the question is, what the field is, or whether it's his area of expertise or not.

But to me, the essence of emotional intelligence is self-awareness. How can I have great relationships with other people if I don't know who I am? And that is the key factor of why people are successful in leadership. They may achieve, they may get to this point, but they may fail too. Better to fail early than to fail when you get the big responsibility.

What I've been wrestling with is how do you gain self-awareness? I feel that you have to have real-world experience. I think you have to have a way to process experiences internally. Call it reflection, introspection. I have to meditate regularly. Some people like to pray. Some people have an intimate person, a spouse, or someone with whom the can share everything. You have to have some way to process that experience. Just having the experience doesn't do it, because you'll repeat the same mistakes and you just find the mistakes get bigger and bigger. I also think you need to have a way to process it through feedback -- honest feedback with other people that you trust, not feedback from people you don't trust. Having a group of people with whom you can share on an intimate level, not at a superficial level. So many of our societal interactions are superficial today. They don't allow us to be truly authentic.

From The Executive Edge: An Insider's Guide to Outstanding Leadership. Copyright 2015 More Than Sound. Reprinted with permission from More Than Sound.

Huffington Post: The Inner Work of Leaders

From The Huffington Post, Posted September 24, 2015.

The following is an excerpt from Daniel Goleman's new collection, The Executive Edge: An Insider's Guide to Outstanding Leadership.

Daniel Goleman: You say that you have to do a certain kind of inner work to find your true north, to be an authentic leader. What is that inner work, and where does it lead?

Bill George: I think it starts with your life story, knowing where you came from, who you are, what really is important. What has shaped you along the way. And what we found was everyone wants to talk about that, but about 80% of the people want to talk about the crucible -- the most difficult time of their life. Think of the crucible where the refiner's fire tests you, and that's where you're really tested. We aren't tested by success; we're tested by going through a very difficult time and saying, "If I can get through this, I can get through anything." You don't deny that you went through that, and I think that's what shapes you, but the key is: How do you frame that crucible?

Goleman: The crucible can be a job loss, a disaster, a business going under?

George: A rejection by good friends, not being cool in school. I lost seven elections. Was I a failure? Yeah, but I had to learn from that experience. I wanted to be a leader and I was being rejected, seven times in a row.

If you aren't willing to live it, if you go into denial and say, "well, that didn't happen" -- actually it did happen. It's part of who you are, so it's how you frame it. Can you frame yourself as a victim? "Those kids didn't like me, so that was the problem," or do you see how that was a great learning experience, and ask yourself, "how do I learn?" And so that then shapes what we call your true north, your most deeply held values and beliefs. What do you really believe, at your core? Do you believe people are inherently good, or basically not good? What are the values you live by, and then what are the principles you translate into leading or interacting with people?

And people know what those are. I've rarely encountered anyone who didn't know. The question is: "Can I stay on course? Can I be successful? They're going to kill me. If they knew who I really was, they wouldn't be interviewing me." Well, actually, they might! It's a cathartic experience to share who you are, and not be rejected. I think that's so important, because otherwise you're living a lie. You're hiding parts of you -- that you got fired from a job, that you had problems. But that's part of who we are. If that's what has shaped you, it's a good thing.

Goleman: What's the role of self-awareness in finding your authentic self?

George: There's been a lot of work -- and you've done a lot more work than I have on this -- but one of the things that I've observed in leaders is beyond a certain level of IQ. Leadership is not defined by IQ, it's defined by emotional intelligence. And at a certain level of IQ, I actually think it's inverse, so if your IQ is so high that you won't listen to anyone else, you're not going to be a very good leader. And so it can actually work against you.

Goleman: Although, I would say it may not be your actual IQ. It sounds like you're talking about a narcissistic leader.

George: Exactly. That's a person who has to be the smartest person in the room, no matter what the question is, what the field is, or whether it's his area of expertise or not.

But to me, the essence of emotional intelligence is self-awareness. How can I have great relationships with other people if I don't know who I am? And that is the key factor of why people are successful in leadership. They may achieve, they may get to this point, but they may fail too. Better to fail early than to fail when you get the big responsibility.

What I've been wrestling with is how do you gain self-awareness? I feel that you have to have real-world experience. I think you have to have a way to process experiences internally. Call it reflection, introspection. I have to meditate regularly. Some people like to pray. Some people have an intimate person, a spouse, or someone with whom the can share everything. You have to have some way to process that experience. Just having the experience doesn't do it, because you'll repeat the same mistakes and you just find the mistakes get bigger and bigger. I also think you need to have a way to process it through feedback -- honest feedback with other people that you trust, not feedback from people you don't trust. Having a group of people with whom you can share on an intimate level, not at a superficial level. So many of our societal interactions are superficial today. They don't allow us to be truly authentic.

From The Executive Edge: An Insider's Guide to Outstanding Leadership. Copyright 2015 More Than Sound. Reprinted with permission from More Than Sound.

Total Picture: Bill George. Discover Your True North

From Total Picture, Posted September 22, 2015.

 

Don't expect the same Q&A with Bill George on other podcast interviews. We don't go by the talking points provided by the publisher. True North, originally based on first-person interviews with 125 leaders, became a must-read business classic when it was first introduced in 2007. Today, authenticity has become a key issue in the C-Suite, boardroom, in HR and recruiting initiatives, corporate communications, marketing campaigns, and of course, politics.

In his substantive follow up to True North - Discover Your True North: Becoming An Authentic Leader, Bill George, former Medtronic chairman and CEO, and senior Fellow at the Harvard Business School, Introduces 47 additional interviews with leaders who represent the diversity of a new generation.

Welcome to a Leadership Channel podcast on TotalPicture, this is Peter Clayton. Today, I'm pleased to welcome Bill George to the program.

Today's feature interview with Bill George is brought to you by RecruitiFi, a unique new category of recruiting that connects top recruiters with companies looking to hire exceptional talent. Use this link and receive a special discount offer on your first JobCast.

I also want to give a shout-out to our friend and frequent contributor to TotalPicture David Dalka, who was instrumental in organizing today's interview, research and development of our talking points. David was scheduled to participate in our discussion with Bill, but couldn't, due to technical issues with his Skype connection.

Questions Peter Clayton asks Bill George in this podcast:

I've had a number of retired and former CEOs tell me what they miss the most is the corporate jet. What do you miss the most?

Although Medtronic has a diverse board of directors (good for them)! What did you learn from the transition as CEO to former CEO? Going from 110% to 0%

You are on a number of important boards, including Mayo Clinic and Goldman Sachs. Joining a board of directors is not what it was 20 years ago. What have you learned from your participation in a number of high-profile boards?

What advice do you have for those seeking, or considering board membership?

Speaking about 20 years ago... it's a different world today. Corporate PR departments no longer control the message: Facebook, Twitter, Glassdoor and others do. What recommendations do you have for leaders regarding social media - and how they consistently deliver their "True North" in such a volatile 24/7 environment?

M&A deal are back in fashion. However, corporate cultures often clash. - (Say BofA and ML) What advice to you have for those in management and leadership positions caught in a merger? How can True North help determine outcomes?

Bill George is Senior Fellow at the Harvard Business School and former chairman and CEO of Medtronic, the world's leading medical technology company. Under his leadership, Medtronic's market capitalization grew from $1.1 billion to $60 billion, averaging 35 percent a year. He is the author of the best-selling Authentic Leadership and 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.

 

Link to Podcast HERE.

Total Picture: Bill George. Discover Your True North

From Total Picture, Posted September 22, 2015.

 

Don't expect the same Q&A with Bill George on other podcast interviews. We don't go by the talking points provided by the publisher. True North, originally based on first-person interviews with 125 leaders, became a must-read business classic when it was first introduced in 2007. Today, authenticity has become a key issue in the C-Suite, boardroom, in HR and recruiting initiatives, corporate communications, marketing campaigns, and of course, politics.

In his substantive follow up to True North - Discover Your True North: Becoming An Authentic Leader, Bill George, former Medtronic chairman and CEO, and senior Fellow at the Harvard Business School, Introduces 47 additional interviews with leaders who represent the diversity of a new generation.

Welcome to a Leadership Channel podcast on TotalPicture, this is Peter Clayton. Today, I'm pleased to welcome Bill George to the program.

Today's feature interview with Bill George is brought to you by RecruitiFi, a unique new category of recruiting that connects top recruiters with companies looking to hire exceptional talent. Use this link and receive a special discount offer on your first JobCast.

I also want to give a shout-out to our friend and frequent contributor to TotalPicture David Dalka, who was instrumental in organizing today's interview, research and development of our talking points. David was scheduled to participate in our discussion with Bill, but couldn't, due to technical issues with his Skype connection.

Questions Peter Clayton asks Bill George in this podcast:

I've had a number of retired and former CEOs tell me what they miss the most is the corporate jet. What do you miss the most?

Although Medtronic has a diverse board of directors (good for them)! What did you learn from the transition as CEO to former CEO? Going from 110% to 0%

You are on a number of important boards, including Mayo Clinic and Goldman Sachs. Joining a board of directors is not what it was 20 years ago. What have you learned from your participation in a number of high-profile boards?

What advice do you have for those seeking, or considering board membership?

Speaking about 20 years ago... it's a different world today. Corporate PR departments no longer control the message: Facebook, Twitter, Glassdoor and others do. What recommendations do you have for leaders regarding social media - and how they consistently deliver their "True North" in such a volatile 24/7 environment?

M&A deal are back in fashion. However, corporate cultures often clash. - (Say BofA and ML) What advice to you have for those in management and leadership positions caught in a merger? How can True North help determine outcomes?

Bill George is Senior Fellow at the Harvard Business School and former chairman and CEO of Medtronic, the world's leading medical technology company. Under his leadership, Medtronic's market capitalization grew from $1.1 billion to $60 billion, averaging 35 percent a year. He is the author of the best-selling Authentic Leadership and 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.

 

Link to Podcast HERE.

Huffington Post: Are Companies Succumbing to Shareholder Pressures?

From The Huffington Post, posted September 22, 2015.

Are companies and their boards succumbing to short-term pressures from shareholders?

That's the concern of Larry Fink, CEO of Blackrock, the world's largest fund manager with $4 trillion in assets under management. Fink personally wrote to all CEOs in the S&P 500 index last spring to warn them about trying to return money to investors through so-called "shareholder-friendly" steps like increasing dividends and buying back stock. Fink believes pressure from activist investors is harming long-term shareholder value, despite stock price increases that often follow.

The pressures today have never been greater on chief executives and boards to produce short-term results and maximize shareholder value. The paradox of these pressures is that they may actually destroy long-term shareholder value if they force executives to cut R&D, capital spending, new ventures and expansion in emerging markets, thus constraining future growth potential.

What is missing in the faux debate about "shareholders versus stakeholders" is a deeper understanding of how shareholder value is created. It is not just by cutting costs, as steadily declining revenues spell doom as they did for Sears and Kodak. Rather sustainable shareholder value - which I believe should be the goal of every company - comes from serving society through great products and services that in turn meet customer needs and create profitability, cash flow for ongoing investments and shareholder value. As Infosys Founder Narayana Murthy argued, "You cannot sustain long-term shareholder value without creating sustainable value for your customers."

The responsibility of corporate leaders is to achieve their short-term objectives while investing for future growth. It is not an either-or trade off. But those who make their quarterly numbers by cutting future investments or financial engineering are headed for trouble. Investors can always sell their stock before the long-term consequences are apparent, but corporate leaders are responsible for ensuring their firm's viability for the long-term.

Look at what happened to General Motors under former CEO Rick Waggoner and his predecessors, who consistently opted for short-term profits over product improvements and quality. Over forty years GM's U.S. market share eroded from 52% to 18%, and the firm wound up in bankruptcy when the global recession hit in late 2008. Contrast that with Ford's Alan Mulally who borrowed $23.5 billion in 2006 to invest in retooling Ford's entire product line and had sufficient reserves to withstand the 2008-09 market downturn -- consequently, Ford continues to thrive.

In recent years short-term traders and hedge funds have steadily gained power. These active investors, earning high fees and taking 20% of gains, have had a powerful impact on capitalism. For the past five years, however, they have struggled to justify their high fees because they have been unable to consistently outperform index funds, so increasingly they focus on driving short-term gains rather than investing for long-term returns.

These trends are raising questions about the ultimate purpose of business: is it solely to meet shareholder's near-term expectations or do companies have larger obligations to serve society and all their stakeholders, including shareholders?

Public companies get significant privileges as limited liability corporations because they are chartered to serve society. If they do not honor their obligations to individual countries, they may be forced to depart, or have their freedom constrained by laws like Dodd-Frank imposed on financial institutions. Unfortunately, current pressures in the financial system may be forcing companies to view themselves as extractors instead of beneficiaries of society.

As my HBS colleague Michael Porter argued in his 2011 HBR article, "Creating Shared Value," when businesses focus on both societal benefit and economic profit, they do the most good through the business model itself. General Electric's Eco-Imagination line, for example, develops energy efficient products like traditional light bulbs that are growing rapidly and have positive externalities in saving energy.

Instead of including society as one of its many stakeholders, World Economic Forum President Klaus Schwab argues that companies should view themselves as stakeholders in society. When the world we live in improves -- education expands, violence decreases, or global warming slows - everyone wins, especially shareholders. Walmart, for example, cut greenhouse gas emissions in 2009 by reducing packaging and decreasing truck routes by 100 million miles, and it saved $200 million.

As Porter observed, "The new thinking reveals that congruence between societal progress and productivity in the value chain is far greater than traditionally believed. Few companies have reaped the full productivity benefits in areas such as health, safety, environmental performance."

A pioneer in the sustainability movement, Unilever CEO Paul Polman summed up this new mission of business, "It's not enough anymore to say you contribute to a better world. Instead of thinking how you can use society to be successful, you have to start thinking how you can contribute to society and the environment to be successful." Polman concluded by saying, "Unilever's purpose is having a sustainable business model that is put at the service of the greater good. It is as simple as that."

What if all companies reframed their purpose along these lines? Think of the impact that global companies and local enterprises could have on addressing the world's most pressing problems.

Huffington Post: Are Companies Succumbing to Shareholder Pressures?

From The Huffington Post, posted September 22, 2015.

Are companies and their boards succumbing to short-term pressures from shareholders?

That's the concern of Larry Fink, CEO of Blackrock, the world's largest fund manager with $4 trillion in assets under management. Fink personally wrote to all CEOs in the S&P 500 index last spring to warn them about trying to return money to investors through so-called "shareholder-friendly" steps like increasing dividends and buying back stock. Fink believes pressure from activist investors is harming long-term shareholder value, despite stock price increases that often follow.

The pressures today have never been greater on chief executives and boards to produce short-term results and maximize shareholder value. The paradox of these pressures is that they may actually destroy long-term shareholder value if they force executives to cut R&D, capital spending, new ventures and expansion in emerging markets, thus constraining future growth potential.

What is missing in the faux debate about "shareholders versus stakeholders" is a deeper understanding of how shareholder value is created. It is not just by cutting costs, as steadily declining revenues spell doom as they did for Sears and Kodak. Rather sustainable shareholder value - which I believe should be the goal of every company - comes from serving society through great products and services that in turn meet customer needs and create profitability, cash flow for ongoing investments and shareholder value. As Infosys Founder Narayana Murthy argued, "You cannot sustain long-term shareholder value without creating sustainable value for your customers."

The responsibility of corporate leaders is to achieve their short-term objectives while investing for future growth. It is not an either-or trade off. But those who make their quarterly numbers by cutting future investments or financial engineering are headed for trouble. Investors can always sell their stock before the long-term consequences are apparent, but corporate leaders are responsible for ensuring their firm's viability for the long-term.

Look at what happened to General Motors under former CEO Rick Waggoner and his predecessors, who consistently opted for short-term profits over product improvements and quality. Over forty years GM's U.S. market share eroded from 52% to 18%, and the firm wound up in bankruptcy when the global recession hit in late 2008. Contrast that with Ford's Alan Mulally who borrowed $23.5 billion in 2006 to invest in retooling Ford's entire product line and had sufficient reserves to withstand the 2008-09 market downturn -- consequently, Ford continues to thrive.

In recent years short-term traders and hedge funds have steadily gained power. These active investors, earning high fees and taking 20% of gains, have had a powerful impact on capitalism. For the past five years, however, they have struggled to justify their high fees because they have been unable to consistently outperform index funds, so increasingly they focus on driving short-term gains rather than investing for long-term returns.

These trends are raising questions about the ultimate purpose of business: is it solely to meet shareholder's near-term expectations or do companies have larger obligations to serve society and all their stakeholders, including shareholders?

Public companies get significant privileges as limited liability corporations because they are chartered to serve society. If they do not honor their obligations to individual countries, they may be forced to depart, or have their freedom constrained by laws like Dodd-Frank imposed on financial institutions. Unfortunately, current pressures in the financial system may be forcing companies to view themselves as extractors instead of beneficiaries of society.

As my HBS colleague Michael Porter argued in his 2011 HBR article, "Creating Shared Value," when businesses focus on both societal benefit and economic profit, they do the most good through the business model itself. General Electric's Eco-Imagination line, for example, develops energy efficient products like traditional light bulbs that are growing rapidly and have positive externalities in saving energy.

Instead of including society as one of its many stakeholders, World Economic Forum President Klaus Schwab argues that companies should view themselves as stakeholders in society. When the world we live in improves -- education expands, violence decreases, or global warming slows - everyone wins, especially shareholders. Walmart, for example, cut greenhouse gas emissions in 2009 by reducing packaging and decreasing truck routes by 100 million miles, and it saved $200 million.

As Porter observed, "The new thinking reveals that congruence between societal progress and productivity in the value chain is far greater than traditionally believed. Few companies have reaped the full productivity benefits in areas such as health, safety, environmental performance."

A pioneer in the sustainability movement, Unilever CEO Paul Polman summed up this new mission of business, "It's not enough anymore to say you contribute to a better world. Instead of thinking how you can use society to be successful, you have to start thinking how you can contribute to society and the environment to be successful." Polman concluded by saying, "Unilever's purpose is having a sustainable business model that is put at the service of the greater good. It is as simple as that."

What if all companies reframed their purpose along these lines? Think of the impact that global companies and local enterprises could have on addressing the world's most pressing problems.

Post Bulletin: Summit Sets Sights on Health Care Delivery

From PostBulletin.com, posted September 18, 2015

Four years after its creation, the Mayo Clinic Center for the Science of Health Care Delivery kicked off its inaugural Delivery Science Summit on Wednesday.

The three-day conference at Mayo Civic Center is the ambitious initiative's first opportunity to gather medical, big-data and clinical-research professionals in order to move academic initiatives closer to implementation.

The three goals of the gathering were "the holy grail" of health-care reform, in the words of Mayo Clinic CEO Dr. John Noseworthy: improve population health, improve the patient experience and better manage costs.

This means looking beyond the best treatments for illnesses, said course director Dr. Lois Krahn, to understanding the barriers preventing health systems from delivering those treatments on a consistent basis.

"We hope our participants will gain an appreciation of high-quality health-care delivery, that it's important to get the right diagnosis, and critical to get the right treatment. But unless that reaches the patient, we will not reach our objective."

The center was made possible by a $100 million gift from benefactors Robert D. and Patricia E. Kern, and its work is meant to be shared.

"It's really a chance to begin to roll up our sleeves to fix health care as a team," said Dr. Veronique Roger, director of the center, who said that a big challenge is learning how to take ideas into practice. "How do we get it to become business as usual, that's the big question. It takes 17 years for information to get from the lab into practice. We need to compress that time."

Speakers drew attention to integrated care and team-based medicine, historically Mayo attributes positioning the center to become a leading voice on the question of how to repair a fragmented system.

"We are organized around hospital needs and departments," said opening speaker and former Medtronic CEO William George. "We need to organize health systems around patients, and not siloed departments."

George also called for organizing care around disease states and not medical specialties, in order to insure that specialties work together. "All too often we are reimbursing outputs," he said, "not outcomes."

His other targets included "the unhealthy competition between primary and specialty care," and the idea that only those at the top of the system can make change happen.

"Leadership happens at every level," he said. "The missing element in health care is the absence of leaders. Each of us is called upon to lead and do what we can to make changes in the system."

"We need a deeper understanding of the last three feet of health care," he said, "the distance between me and my doctor, or my nurse or my receptionist. We have to understand the last three feet of medicine."

The meeting drew 80 percent of its 350 attendees from within Mayo Enterprise, but also drew visitors from six countries and 23 states. It continues today through Friday at the Mayo Civic Center. 

Post Bulletin: Summit Sets Sights on Health Care Delivery

From PostBulletin.com, posted September 18, 2015

Four years after its creation, the Mayo Clinic Center for the Science of Health Care Delivery kicked off its inaugural Delivery Science Summit on Wednesday.

The three-day conference at Mayo Civic Center is the ambitious initiative's first opportunity to gather medical, big-data and clinical-research professionals in order to move academic initiatives closer to implementation.

The three goals of the gathering were "the holy grail" of health-care reform, in the words of Mayo Clinic CEO Dr. John Noseworthy: improve population health, improve the patient experience and better manage costs.

This means looking beyond the best treatments for illnesses, said course director Dr. Lois Krahn, to understanding the barriers preventing health systems from delivering those treatments on a consistent basis.

"We hope our participants will gain an appreciation of high-quality health-care delivery, that it's important to get the right diagnosis, and critical to get the right treatment. But unless that reaches the patient, we will not reach our objective."

The center was made possible by a $100 million gift from benefactors Robert D. and Patricia E. Kern, and its work is meant to be shared.

"It's really a chance to begin to roll up our sleeves to fix health care as a team," said Dr. Veronique Roger, director of the center, who said that a big challenge is learning how to take ideas into practice. "How do we get it to become business as usual, that's the big question. It takes 17 years for information to get from the lab into practice. We need to compress that time."

Speakers drew attention to integrated care and team-based medicine, historically Mayo attributes positioning the center to become a leading voice on the question of how to repair a fragmented system.

"We are organized around hospital needs and departments," said opening speaker and former Medtronic CEO William George. "We need to organize health systems around patients, and not siloed departments."

George also called for organizing care around disease states and not medical specialties, in order to insure that specialties work together. "All too often we are reimbursing outputs," he said, "not outcomes."

His other targets included "the unhealthy competition between primary and specialty care," and the idea that only those at the top of the system can make change happen.

"Leadership happens at every level," he said. "The missing element in health care is the absence of leaders. Each of us is called upon to lead and do what we can to make changes in the system."

"We need a deeper understanding of the last three feet of health care," he said, "the distance between me and my doctor, or my nurse or my receptionist. We have to understand the last three feet of medicine."

The meeting drew 80 percent of its 350 attendees from within Mayo Enterprise, but also drew visitors from six countries and 23 states. It continues today through Friday at the Mayo Civic Center.