From Fortune, posted August 3, 2015
The former Medtronic CEO and management expert discusses the profound shift in priorities among successful business leaders working today.
Bill George was CEO of Medtronic from 1991 to 2001 and, during that time, grew the company’s market value from $1 billion to $60 billion. He has since become one of the nation’s leading voices on business leadership and serves as a senior fellow at Harvard Business School. His book, Discover Your True North, was first published in 2007, but later this month, he will release an updated version, more than half of which will be new content based on interviews with 48 additional leaders. Fortune excerpted his first book in 2007.I talked with him about his new book last week.
Fortune: How has business leadership changed since the first version of this book was published in 2007?
Bill George: I think we have seen a tremendous change in leadership. You now see a very different kind of leader. Far less hierarchical. More collaborative. More empowering of workers. More global in outlook. And more in tune with public issues.
Why is this happening?
When I wrote my first book in 2003, Authentic Leadership, people said, what do you mean by authentic leadership? I was writing in response to the corporate scandals that were going on. And I asked, what has happened to my generation of leaders? Maximizing shareholder value had morphed into maximizing short-term value and this had led to the corporate scandals. It wasn’t just Enron and Worldcom, it was companies like Bristol Myers and Xerox that also had accounting scandals.
Then in 2008, we hit the wall of the financial meltdown. This had a big influence on how people looked at leadership. In my era, CEOs were viewed as heroes. They were on the cover of magazines. And all of a sudden, we were bums.
You also saw the failure of a lot of so-called charismatic CEOs. Half of the CEOs were coming from outside the company. We had shifted to this external view. And many of them failed.
Now, things have shifted back. CEOs are coming from within companies. That’s a big change. People like Frank Blake at Home Depot, Ann Mulcahy and Ursula Burns at Xerox, Indra Nooyi at Pepsi. They aren’t flashy, they are solid kinds of people.
And they have high EQ [emotional intelligence]. High EQ is really important. IQ is not the criteria. You have to be smart to be a CEO, but the differentiating factor above 120 IQ is EQ.
Hasn’t the very nature of leadership changed as well? Formal hierarchies don’t seem to work anymore.
Yes. The hierarchical leader is out. The empowering leader is in.
One driver of that is the Gen Xers and the millennials, who will not work in a hierarchical company. They would rather work at Google; at an empowering place, where they feel they have a mission.
Another driver is the impact of technology on transparency. Everything a leader does has to be transparent today. People want to meet their leader in a town hall forum, and ask some tough questions. Also, globalization has had a huge impact. You have to have empathy for people whose lives are different from yours.
The epitome of that leadership today is someone like Paul Polman of Unilever. He has taken an Anglo-Dutch organization and turned it into a truly global organization. The other thing about Polman is he is really leading the way in dealing with a prominent public issue—environmental sustainability.
CEOs used to avoid taking stands on controversial public issues.
Yes. Society has demanded that change. It will not tolerate companies that avoid these issues. The strength of social media, the regulators, all demand it. You have to respond to these public concerns; you cannot ignore them. If you have bad meat in Indonesia, it’s going to be known all over the world almost instantly. You had better make it transparent. It has caused CEOs to deal on a much more transparent basis.
Milton Friedman used to say, “The social responsibility of business is to make a profit.” What happened to that view?
What Friedman didn’t articulate was how you make a profit. The only way you make a long-term sustainable profit is to align your company and its employees around a common sense of purpose. Like Indra Nooyi says, “performance with purpose.”
That’s also driven by young people. People are asking, why am I working here? And if you don’t answer the question, they will work somewhere else. They have mobility; they have global mobility today.
Who are some other leaders who embody this approach?
Jack Ma of Alibaba very much embodies this. He’s a genius. He is connecting 2 billion Asian consumers with 1 million small businesses in North America, South America, whatever. His sweet spot is not big business but small business.
I also see someone like Indra Nooyi of Pepsi as a great global leader. She strongly resisted breakup of the company, recognizing the global context she was operating in. And Mark Zuckerberg. He is one of the new generation that is very global in their outlook.
From The Huffington Post, posted August 3, 2015
Many Baby Boomers look down on Millennials as over-protected, lazy, attention-seeking young kids who haven't faced hardship.
They are dead wrong.
By 2020, Millennials -- born between 1981 and 1997 -- will make up 50 percent of the workforce. As their influence grows, we'll see a generation more focused on authenticity, mindfulness, and learning through adversity. Millennials are ready to lead now. As they do, they'll transform our ideas of leadership for the better.
Worried about Millennial leadership? Don't be. More than any generation, Millennials are transforming our ideas about leadership, as they use their life stories to fuel their authentic purpose -- their True North. They are highly collaborative, culturally competent, and celebrate diversity of gender, race, national origin and sexual preference. 70% of Millennials support same-sex marriage compared with 45 percent of Baby Boomers.
Lazy? Hardly. They are constant learners and the most educated generation ever. In the workplace, they are deadline-driven employees who get lots done in short periods. Growing up as digital natives, they are constantly connected and eager to learn new technologies. As social media experts, they are their organization's megaphone to the new generation.
Attention-seeking? Not quite. Millennials have a deep passion for making a difference in the world. They seek careers where they can have immediate impact with emphasis on social good. No doubt they are impatient. Born into a world with instant communication, they want to have influence on those around them. Consequently, they are unwilling to tolerate bureaucracy. That's why so many are starting their own businesses and nonprofit organizations.
Not everything is rosy for the Millennial generation. The profligacy of the Baby Boomers is saddling them with enormous debt and unfunded Social Security and Medicare obligations, as well as mountains of student debt. While Millennials are working more hours than any prior generation, their average earnings are the lowest since 1980.
The most prominent Millennial leader, Mark Zuckerberg, displays the wisdom and maturity we can expect of this generation. Zuckerberg founded Facebook at age 19; now at 31, he is already worth $35 billion. Older entrepreneurs have waited to give away their fortunes. Zuckerburg hasn't. He and his wife Priscilla Chan have already made enormous charitable grants, such as $2.5 billion in Facebook stock to the Silicon Valley Community Foundation, $100 million to Newark public schools and $75 million to San Francisco General Hospital. Millennials look up to him: a survey of Millennials named Zuckerberg as best representative of their generation.
Zuckerberg's leadership mirrors that of Malala Yousafzai - the 18-year-old Pakistani woman who became the youngest Nobel Prize laureate. At the age of 12, Malala began writing about life with the Taliban. Three years later, an armed gunman boarded her school bus and shot her, grazing her forehead. After months of intensive care, she set out on a global campaign to improve female access to education.
This past winter I met Taylor Carol, a Harvard College student whose life story defines his mission. Upon meeting, Taylor seems like the all-American student: ingenuous, hardworking, and surrounded by friends. Then he tells you he was diagnosed with terminal cancer at age 11.
When a baseball injury didn't heal, Taylor to a nearby hospital for testing. There a doctor told him he had a rare form of leukemia that doesn't respond to normal treatments and had only two weeks to live. Unwilling to accept that diagnosis, his parents took him to Seattle Children's Hospital for experimental treatment.
The next two years of Taylor's life were as difficult as anyone can imagine: bone marrow transplant, weeks in complete isolation, and inability to eat, walk, or speak for extended periods. Most difficult of all was watching the death of his best friend, Christian. Taylor explained, "I was broken by Christian's death. Why did he die and I lived?"
Facing hardship isn't new to this generation, but their response is. Millennial leaders face life with what psychologist Carol Dweck calls a growth mindset. They see crucibles as opportunities for post-traumatic growth (PTG) where they can embrace life's uncertainties and use them for personal growth.
Taylor used his experience in overcoming terminal cancer to develop his abilities as a singer/songwriter. He became National Spokesperson for the Leukemia and Lymphoma Society and helped raise $10 million. Having missed four years of school, he was advised to get a graduate equivalent degree (GED). Instead, he studied intensely and was accepted to Harvard College. Taylor is currently working in Los Angeles -- singing, songwriting, and producing his first album.
Nadir Vissanjy overcame great difficulties just to graduate from college. Born in Lisbon, Portugal, he moved with his family to Central California at age nine. When his parents divorced, Nadir lost legal status in America and became undocumented. Since his mother worked in a convenience store, college wasn't financially possible. In his senior year of high school, California passed the Dream Act, permitting undocumented children to pay in-state college tuition. Suddenly, Nadir's life changed.
Inspired by this opportunity, Nadir has devoted his life to giving back. At Sonoma State, he became student body president, and was elected chairman of the California State Student Association. Graduating recently from MIT's Sloan School and Harvard Kennedy School, he is returning to Oakland "to give back to the system that has given me so much."
By embracing all aspects of their life stories, Millennial leaders are discovering their True North and acting on it to improve the world. Maybe it's time for the Baby Boomers to step aside and turn over leadership to this remarkable new generation of leaders like Zuckerberg, Yousafzai, Carol, and Vissanjy.
From The Huffington Post, posted July 27, 2015
From the moment you wake up, you're bombarded with distractions. Emails clog your inbox, requests pile up, and notifications flicker in the background. Within moments your attention is scattered. Given the realities of today's 24/7 world, how do great leaders slow down and focus in order to make thoughtful decisions?
Mindfulness is the practice of self-observation without judgment with a focus on our minds and inner voices. Mindful practices include daily meditation, prayer, journaling, or jogging alone. In a fast paced world, mindfulness enables you to clear your mind of clutter, focus on what is important, and be creative. Leaders like Arianna Huffington and Steve Jobs are well known for their mindfulness practices.
As our lives have become filled with technology, the distractions we face increase exponentially. With it, our ability to focus has diminished, but our need to think clearly in order to make complex decisions has not. More than ever, leaders need to train themselves to be fully present.
Becoming a mindful leader isn't easy. There are no five easy steps to do so. A few years ago when I asked the Dalai Lama how we can develop a new generation of compassionate, mindful leaders, he replied simply, "Develop a daily habit of introspection."
Today many more companies are promoting mindful practices to improve the health and decision-making of their leaders. Google, under the tutelage of Chade-Meng Tan, trains 2,000 engineers in meditation each year. When I visited Google this spring, it was evident that mindfulness is one of the key reasons behind Google's innovative and harmonious culture. Leading financial services firms like Blackrock and Goldman Sachs offer mindfulness courses for their employees. At General Mills Janice Marturano was so successful in mindfulness training that she founded the Institute for Mindful Leadership.
My Mindful Practice: Meditation
In 1975 my wife Penny and I went to a weekend program on Transcendental Meditation. At the time I was working nonstop, coming home exhausted, and having late dinners. I even got denied for life insurance because of high blood pressure. After the training, I started meditating twice daily--not as a spiritual practice, but for health reasons. Forty years later, I still practice regularly.
Meditation is the best thing I have ever done to calm myself and separate from the 24/7, connected world. By centering into myself, I can focus my attention on the important things, develop an inner sense of well-being, and gain clarity in making decisions. My most creative ideas come from meditating, and meditation has built resilience to deal with difficult times. No doubt it has helped me become a better leader.
The Science of Mindfulness
Mind training, of which meditation is one form, can change the composition of your mind. Research by Wisconsin's Richard Davidson demonstrated direct correlation between mindfulness and changes in the brain - away from anger and anxiety and toward a sense of calm and well-being. UCLA's Mindful Awareness Research Center found meditation can improve executive functions (sustaining attention, diminishing distractibility) better than medication in many cases.
Daniel Goleman, the father of emotional intelligence, describes the effect of mindfulness for focusing the mind's cognitive abilities. As Goleman says in his new book, Focus, "One way to boost our will power and focus is to manage our distractions instead of letting them manage us."
The Growing Importance of Mindfulness
Increasingly, companies see mindfulness training as a competitive advantage. Aetna, the nation's third largest health insurer, partnered with Duke University to study meditation and yoga. Researchers found these practices decreased stress levels by 28%, improved sleep quality (20%), reduced pain (19%), and improved productivity 62 minutes per employee per week. Aetna is now offering similar programs to all employees as well as its insured customers.
The World Health Organization estimates that stress costs American businesses roughly $300 billion dollars per year. Over the past thirty years, we've experienced an 18-23% increase of self-reported stress for men and women, respectively. As companies such as Google, General Mills, Blackstone, and Goldman Sachs have shown, mindfulness training decreases stress levels.
The key to effective leadership is the ability to integrate your head (IQ) with your heart (EQ). As Buddhist monk Thich Nhat Hanh taught me years ago, "The longest journey you will ever take is the eighteen inches from your head to your heart." Our hearts are where essential leadership qualities like passion, compassion and courage reside. By practicing mindfulness, mindful leaders exhibit high levels of self-awareness and intentionality in their actions.
The best time to start a mindful practice is now, but don't take the word "practice" lightly. Maintaining the discipline of your practice isn't easy. To become a mindful leader, you need to make this a daily introspective act. As you do so, you'll worry less about day-to-day problems and focus on what is most important. As you become more mindful, you will be a more effective, successful and fulfilled leader.
That's worth twenty minutes a day, isn't it?
Bill George is a senior fellow at Harvard Business School and author of Discover Your True North. He is the former chair and CEO of Medtronic. Read more at www.BillGeorge.org, or follow him on Twitter @Bill_George.
Afterword: If you are interested in engaging more deeply in mindful leadership, please join Penny and me at the Mindful Leadership Conference in Washington, DC on November 6-8, 2015: http://www.mindfulleader.org/#home
Originally published in People + Strategy Journal: Volume 38, Issue 3, Summer 2015
When 31-year-old Facebook founder Mark Zuckerberg decided he wanted a deeper understanding of China, he made concerted efforts to learn Mandarin and then demonstrated his acumen by speaking comfortably with Chinese students. In May, Alibaba founder Jack Ma promoted 42-year-old Daniel Zhang to CEO to “hand over leadership to those born in the ’70s.” These are just two examples of the new global leaders.
As they focus on expanding their business around the world, companies are facing a dearth of experienced global executives capable of leading in all parts of the world, especially in emerging markets. We can rise to the challenge of how companies develop authentic global leaders of all ages by increasing their global intelligence (GQ). Given the enormous volatility of emerging markets, leading today’s global organizations requires different skills and personal qualities than in the past. Just a few years ago, geographic managers could ensure success by relying on their knowledge of local markets, operating skills, technical understanding, and financial acumen.
To create dynamic global strategies and adaptive organizational structures, today’s leaders must understand the global context of their business and possess awareness of how geopolitical events can impact it. They must be skilled in aligning their multicultural organizations around the company’s mission and values, making them the unifying force coalescing their far-flung organizations. Interpersonally, they need high levels of self-awareness, cultural sensitivity, and humility to empower people throughout the world. Finally, they must be able to develop other global leaders and serve as their mentors and role models.
Beyond those challenges, today’s society is demanding that global leaders practice the highest ethical standards and contribute meaningfully to countries in which they do business. It is no longer sufficient to meet the demands of the shareholders and laws and ethics of their home markets without regard for the negative consequences that their businesses may have on the countries where they operate. As a result, global leaders are partnering with local governments to support the progress and growth of their societies.
While it is challenging to possess all these qualities, nothing less is required to sustain consistently superior performance. Firms run by a cadre of global leaders effective in operating in this new world will be more competitive, more productive, and more profitable over the long term.
The multi-national model, with its matrix structure that attempts to balance strategic business units with geographic organizations, has become the dominant organization form, but today its effectiveness requires different kinds of leaders. In the past, multi-national organizations like British bank HSBC sent talented expatriates from their home countries to lead regional and local units and transfer headquarters standards, processes, control systems, and marketing approaches to local countries. These expatriates often failed to take advantage of the creative skills of their local teams and thus were unable to meet the unique needs of local markets. Consequently, they couldn’t compete with skilled local companies with deeper understanding of local consumers.
To maximize growth in emerging markets, companies are recognizing they require greater diversity in their decision-making ranks rather than dominance by headquarters nationals. As a result, they are opening up their executive ranks to the best leaders from around the world, without preference for home country executives. Unilever’s chief operating officer, Harish Manwani, says, “If 70 percent of our future business comes from emerging markets, then 70 percent of our leaders must come from emerging markets.”
Yet even the most progressive companies are struggling to develop top global leaders from emerging markets. Under the leadership of former CEO Daniel Vasella, M.D., and CEO Joe Jimenez, Switzerland-based pharmaceutical company Novartis has been one of the most progressive in expanding its executive ranks beyond its historic Swiss management. Today, its nine-person executive committee consists of four Americans, including CEO Jimenez, two Swiss, and a Belgian, Briton, and German. Yet neither Vasella nor Jimenez considers Novartis’s top team as global. Says Vasella, “We won’t be global until we have a Chinese, an Indian, and a Latino as well as more women.” Adds Jimenez, “It’s not because we aren’t looking, but we haven’t been able to develop them.”
“The big difference between global executives and Americans who have never worked outside America,” continues Jimenez, “is respect for cultural differences. I have seen many people who can’t become global leaders because all their decisions are steeped in their home country’s culture.”
It isn’t just American companies that are dominated by local nationals. Even at Japanese, Indian, Chinese, and German companies it is rare that a non-national executive breaks into the company’s top ranks. As Siemens’ CEO Peter Loescher said in 2008, “Siemens is not achieving its full potential on the international stage because its management is too white, too German, and too male. If you don’t reflect your global client base, you cannot achieve your full potential.”
Historically, companies focused on sending promising leaders from their home country overseas for developmental assignments to position them for key corporate positions. That relegated foreign executives to being country managers and didn’t prepare them to run global business units or reach the top executive ranks. Meanwhile, many foreign nationals who came to headquarters for development faced “tissue rejection” when they returned home.
Developing Global Leaders with Global Intelligence
To address these challenges, leading-edge companies are developing a new generation of global leaders effective anywhere in the world. They recognize that ultimately the diversity of their top leaders must reflect the diversity of their customers. Developing these new global enterprise leaders will require different types of experiences combined with leadership development programs vastly different from today’s corporate training programs. The shortcomings of many global leaders—and subsequent failures—usually result from the lack of leadership capabilities that together make up what we call “global intelligence” (GQ).
GQ consists of seven elements, all of which are essential for global leaders:
- Adaptability to changing world
- Cultural curiosity
Let’s explore each of these seven characteristics.
Adaptability to Changing World
Being a global leader today requires understanding the world and anticipating changes ahead. Global leaders must be able to respond quickly to the rapidly changing global context by shifting resources to opportunity areas and developing contingency plans to cope with adverse geopolitical situations.
Novartis’s Vasella, who spent his formative business years working in the U.S., is an example. He is a visionary who built Novartis from the outset of the 1996 merger of two mid-sized Swiss pharmaceutical companies (Sandoz and Ciba-Geigy) into one of the world’s leading health care companies. His strategic initiatives, such as moving research headquarters from Basel, Switzerland to Cambridge, Massachusetts to tap into top scientists at MIT and Harvard, were well ahead of their time. Vasella also foresaw the need to move from a Swiss-dominated management team and board of directors to a global leadership team, without regard to nationality.
To understand how they will react to the cultural differences they encounter in emerging markets, global leaders must understand their strengths, vulnerabilities, and biases, starting with recognizing the dominant paradigms they grew up with versus those of their headquarters organizations. It requires humility to recognize that other cultures often have better ways of doing things embedded in their cultural norms.
When I was president of Honeywell Europe in the 1980s, the corporation sent American expatriates to Europe to transfer U.S.-based marketing programs as well as engineering and manufacturing expertise. A number of them were insensitive to significant differences in these markets and were intent on imposing U.S. practices. I asked INSEAD Professor Andre Laurent to create a program for Americans to help them understand these cultural differences. He proposed two days on American culture before getting into European cultures, because “Americans rarely understand their own cultural biases, and assume their ways are superior ‘if only the Europeans understood.’”
Global leaders must be curious about myriad cultures and understand how they operate and have the humility to recognize what these cultures offer their organizations. This requires an insatiable desire to learn about these cultures.
When many corporate executives visit India or China, they stay in international hotels, eat Westernized cuisine, and spend their time in offices reviewing presentations. As a result, they learn little about the local culture. Far better to get into the countryside, stay in local hotels, eat at local restaurants, and talk with local people. I learned how important it is to do this in 1975 by living for three weeks in a one-room apartment with my wife and two-year-old son in all-Japanese area of Tokyo. Each day, we learned what middle-class life in urban Japan was like.
On my first trip to China in 1984, I spent 10 days in the countryside negotiating a joint venture. Awakened one morning by cowbells, I saw farmers leading their oxen to market. When I went to the market, I found the government market and the private market. Asking a local which had better produce, he explained, “Obviously, the private market where prices are higher, as farmers sell their required quotas at fixed prices in the government market.” This was the beginning of Deng Xiaoping’s new elite farmers. Had I stayed at Westernized hotels in Tokyo and Beijing, I never would have gained critical insights into each culture.
Empathy is the ability to walk in someone else’s shoes. It requires engaging people from different cultures on a personal level, rather than standing back and judging them. Empathy builds rapport through bonding on a human level and the building of lasting relationships. Only with empathic understanding are leaders able to engage colleagues from different cultures and empower them to achieve exceptional performance.
On my first visit to India, I conducted a “Medtronic Mission and Medallion Ceremony” for several hundred Indian employees, giving each a bronze medallion symbolizing Medtronic’s mission. Afterward, they asked me to plant a tree honoring them with my visit. Rather than a simple tree-planting, this was a traditional Indian ceremony, complete with painting my face, washing my hands, and talking with a native healer. Meanwhile, the employees stood with rapt attention to observe how I was responding to their tradition.
Global leaders need to align employees around the company’s mission and values with a commitment that transcends national and cultural differences. Achieving alignment is far more difficult in emerging markets because local employees are being asked to put company values ahead of their native values, often in cultures where ethical standards differ sharply from the company’s. However, this does not mean giving up their culture and their norms, as norms can differ widely, provided that employees commit to the company’s ethical standards and business practices.
Global leaders like former IBM CEO Sam Palmisano understand it isn’t possible to write a code of rules and regulations covering every context. In launching IBM’s 2003 “values jam,” he wrote, “In this world of intense scrutiny, one reaction is to create more processes, controls, and bureaucracy. A better alternative is to trust the values that bind us together in the absence of controls. Values provide the framework to make decisions when procedures aren’t clear, using judgment based on values.”
Gaining alignment requires frequent face-to-face meetings in myriad countries to understand how the mission and values translate locally. Alignment is the only tool that inspires organizations to achieve superior performance and unites them in difficult times. The ability to achieve alignment in complex global organizations is the trademark of exceptional leaders.
In the global context, collaborative leaders create horizontal networks that cut across geographic lines, unite people around common goals, and create a modus operandi that transcends geographic goals. This requires putting the company’s and project’s goals first, and working in partnerships to achieve them. The most successful geographic collaborations are orchestrated by leaders who know the strengths and weaknesses of each geographic group and make assignments that take advantage of their relative strengths.
When Bangladesh-born Omar Ishrak became CEO of Medtronic in 2011, the company was struggling to establish itself in emerging markets. He immediately diversified its executive committee by promoting six executives from emerging markets and holding quarterly meetings in Shanghai and Mumbai. In addition, he created new business models for emerging markets to enable locals to gain access to Medtronic therapies.
The greatest challenge facing global leaders is incorporating local issues into an integrated corporate strategy. Such a strategy enables them to optimize their position in a wide array of local markets in an efficient manner to create sustainable competitive advantage. Doing so requires deep understanding of local markets and the vision to see how their companies can serve their customers in a superior manner by leveraging their corporate strengths. That’s the only way they can outcompete local companies, which often have a cost advantage.
Unilever’s Manwani takes the tradition of “think global, act local,” and turns it on its head, saying the key today is to “think local, act global.” In his view, all strategies emanate from a deep understanding of local needs, but if they only act local, global companies have no competitive advantage over local suppliers. Rather, they need to create global strategies to leverage their unique strengths to deliver superior solutions for customers.
Next Generation Global Leaders
Role models for these new global leaders include executives like Unilever’s Paul Polman, PepsiCo’s Indra Nooyi, and Alibaba’s founder Jack Ma.
Under Polman’s leadership, London-based Unilever, with 170,000 employees in 160 countries, has become one of the world’s most global companies with 55 percent of its revenues coming from emerging markets. Yet Polman acknowledges the company still has a long way to go in developing global leaders as most of its senior executives come from the U.K. or the Netherlands. Since becoming CEO in 2009, Polman has invested heavily in developing global leaders, sending its 600 top executives to London and Singapore for in-house training as authentic global leaders. He says, “In the long-run, the only true differentiation is the quality of leadership of all.”
PepsiCo’s Nooyi got her university education in India before attending Yale’s graduate school. As CEO since 2006, she has focused on “performance with purpose” to steadily shift PepsiCo’s product portfolio to healthful foods and beverages and meet the needs of emerging markets. She has also diversified her global leadership team with a wide range of nationalities.
Alibaba’s Ma has emerged as China’s first true global leader. A remarkable visionary who has created over $200 billion in shareholder value, Ma is creating an ecosystem that can serve two billion Asian consumers with products from one million small businesses sourced throughout the world.
Stepping Up to the Challenge
Just as Mark Zuckerberg’s success at Facebook and Daniel Zhang’s promotion at Alibaba herald the rise of younger global leaders, global companies are crying out for a new generation of leaders—regardless of age—to step up to challenging leadership roles. Progressive companies like Unilever, Novartis, PepsiCo, and Alibaba are working hard to develop this new cadre. While ideas will evolve about how to develop them, one thing seems clear: Sustaining success in the 21st century will require global chiefs with sophisticated leadership qualities that operate with high levels of GQ.
From CNBC, posted July 22, 2015
Never accuse Starbucks CEO Howard Schultz of being afraid to take on tough issues.
His latest effort is aimed at the issue of youth unemployment, which is stuck at 12 percent for people 16 to 24 years of age. This age category includes many young people who dropped out of school and have never been regularly employed. In many cases, they do not have the skills or training required for today's jobs, even with four million current jobs going unfilled. None of this fazed Schultz, as he organized Opportunity 100,000 to create 100,000 jobs for unemployed youth.
This time, however, he isn't taking on such a complex issue alone. In his recent announcement, Schultz said he had commitments from 16 companies that include some of America's largest employers: Wal-Mart, Target, Microsoft, Macy's, CVS Health and Hilton.
Schultz is hearkening back to the days of his youth growing up in Brooklyn's Bayview housing projects. There he witnessed many people, including his father, who were left out of the American dream. Determined to change this, Schultz put together funds to acquire the original Starbucks from its founders in 1987.
He created Starbucks "to build a company my father would be proud to work at," adding, "My inspiration comes from seeing my father broken from the 30 terrible blue-collar jobs he had over his life, where an uneducated person just did not have a shot." Later Schultz provided health-care coverage for all Starbuck's employees, including part-timers. "I wanted to build the kind of company my father never had a chance to work for, where you would be valued and respected, no matter where you came from, the color of your skin, or your level of education, and a company that linked shareholder value to the cultural values we create with our people." Today, Schultz has built a thriving enterprise that employs 191,000 people in 22,000 stores, as Starbucks has created $83 billion in value for its investors, including employees who get "bean stock."
Schultz's vision goes far beyond providing first-level jobs to youth. He is equally committed to helping them develop the skills needed to take on higher level, better paying positions. To this end, he has teamed with Arizona State University to establish online training programs for his employees. He and his wife are contributing $30 million toward local job training and mentorship programs. Next month Schultz is kicking off Opportunity 100,000 with a jobs fair in Chicago.
While Schultz's initiative will impact only a fraction of the 5.6 million young people who are neither working nor studying, it is a worthy effort to attack one of America's most persistent problems. The larger issue is the capacity of the American economy to generate sufficient jobs that pay Americans a living wage, not just the current minimum wage.
America needs to embark on a massive revamping of our training and education systems to prepare our young people for the jobs of the future. Such a program should start in high school and offer students a choice of a college track or a vocational track, much like the German system. This includes apprenticeship programs, such as those created by North Carolina's Central Piedmont Community College, which has over 20,000 students, with the support of the Germany's Siemens. If we can train people for skilled jobs in computer graphics and programming, skilled trades like electricians and carpenters, or running complex machines, companies can and should pay them much more for their efforts. In doing so, they can fill many of the four million vacant jobs companies report having.
That's the only viable way to attack the pervasive income inequality challenges we face. The goal must be to make the pie larger, rather than legislating what share everyone gets of a fixed pie. In turn, America will become more competitive in global markets, and all our citizens will be able to realize the American dream, just as Howard Schultz has done.
Commentary by Bill George, a senior fellow at Harvard Business School and the former chair and CEO of Medtronic. He is the author of the book "True North." Follow him on Twitter @Bill_George.
Disclosure: Bill George does not own any of shares of Starbucks or Siemens, nor does he have any other business relationships with the company.
From The Huffington Post, posted July 20, 2015
Donald Trump wants to become president. He's running a campaign based on vanity and ego, not authentic leadership, with some prejudice tossed in. You will have to look far and wide to find a public figure who is less authentic than Trump. Last Saturday he reached a new low when he attacked Senator John McCain's war record, saying, "He's not a war hero because he was captured." While McCain was held captive in the "Hanoi Hilton," Trump avoided the war through deferments.
Trump is the perfect illustration of why "you can't fake it to make it" to become a leader. Running for the nation's highest office without ever holding an elected position, he is trying to act like a leader without developing himself as an authentic human being. People immediately sense who is authentic and who is not, and Trump doesn't pass the sniff test.
Nevertheless, according to Fox News, Trump leads the Republican primary polls. This may say more about dissatisfaction of the electorate than Trump's qualifications to be president. Without question, a Trump presidency would severely damage our nation. "The Donald" has driven organizations into bankruptcy, made racist slurs, and denied climate change. As a result, a dozen companies recently severed ties with him.
As a wannabe leader, Trump tries to comb over more than his hair. In the past, he has advocated government health care, an assault weapons ban, and 14.25 percent flat tax on all wealthy Americans. Now he opposes all three. Does he stand for anything, other than promoting Donald Trump?
In 2012 Trump told Newsmax the GOP wouldn't win election if it was perceived as "mean-spirited to Latinos." Contrast that with his recent presidential announcement, "When Mexico sends its people, they're bringing drugs, they're bringing crime, they're rapists." With that, he stirs up racial prejudice and divides our country.
Trump's phoniness stands in sharp contrast to Starbucks CEO Howard Schultz. This past Monday, Schultz announced that Starbucks, in partnership with 16 other companies, will hire 100,000 minority youth workers by 2018. In addition, Schultz is putting his money where his mouth is. He and his wife Sheri donated $30 million from their family foundation to fund local job training. Through these initiatives, Schultz is hearkening back to the challenges of his youth by making a commitment to help young people get started. As Schultz said "It's very personal for me, having grown up in public housing and understanding what it was like to be that poor kid."
At Harvard Business School, we have spent the past 10 years in helping develop authentic leaders among MBAs and executive participants. As I describe in my forthcoming book, Discover Your True North, the mark of an authentic leader is being a servant leader who focuses on others. To become authentic leaders, all of us have to make the transition from "I to We" -- recognizing that leadership is not about us, but empowering the people we serve.
Howard Schultz made that transition, which Trump never did. At Starbucks, he's focused on improving the lives of employees, becoming the first retail chain to offer health care to all employees, including part-timers. Over the past five years, Starbucks has committed to hiring 10,000 veterans, providing in-job training, and paying for employees' online college education through Arizona State University. Schultz has also been an advocate for same sex marriage, gun control, and improved federal health care. In the absence of federal government action, he believes the business community must take the lead in addressing the jobs crisis.
Schultz isn't perfect, but he acknowledges his mistakes and moves on. For example, his "Race Together" campaign this past spring received an avalanche of criticism. In this case he moved too far, too fast to address a highly charged subject, but does anyone doubt that we need to have honest discussions about racial issues?
On the other hand, Trump has only moved from "I" to "I am running for president." Where Schultz has focused Starbucks on serving others, Trump has focused his companies on promoting himself. Over the past 30 years, Trump developed multiple products with his name: Trump Towers, Trump Vodka, and my favorite, Donald Trump The Fragrance. In his television show, "The Apprentice," Trump's favorite phrase was "You're Fired," spoken with all the compassion of a cruel despot.
In the past, Trump's self-serving style of leadership was all-too-common. In that era many leaders focused on extrinsic metrics of success: money, power, and fame. Today's authentic leaders recognize that to be effective leaders they must serve others. They know that empowering others to lead, rather than exerting power over them, is the only way their organizations can be successful.
Donald Trump's rise in the polls legitimizes a broken style of leadership. For young leaders, Trump provides the wrong type of model - a self-focused egomaniac. For authentic leaders, Trump insults the humble service they give to their organizations. For the rest of us, Trump represents a well-crafted persona who cannot be trusted.
As our increasingly diverse nation honors the enormous contributions of newly immigrated Americans, it is a sad commentary that Trump's racist statements about Mexicans have taken him to the top of the Republican polls.
Does something smell rotten in this presidential election? It must be Donald Trump The Fragrance.
Insightful article from Emily Peck for Huffington Post in which I'm honored to be quoted, posted July 20, 2015:
After spending decades as Wall Street darlings, arrogant business leaders are out of fashion. The new hotness for CEOs these days? Displaying humility, self-awareness and honesty.
In this new world, a good leader doesn’t brag about his "TEN BILLION DOLLARS," as Donald Trump's campaign did last week. A good leader doesn’t rank his workers and fire the bottom 10 percent each year, as revered General Electric CEO Jack Welch did back in the day. The new CEOs project humility. They apologize when they screw up. They admit when they don’t know something, and they empathize with their workers and treat them decently.
“You have to be real and authentic. It requires having strong character,” the former CEO of Medtronic, Bill George, told The Huffington Post. “The Donald Trumps of the world, they make it in politics, not business.”
Since declaring his intention to seek the Republican nomination for president last month, Trump has been out on the campaign trail, touting his leadership skills and experience. But for the most part, the business world has actually moved past his autocratic style. The shift has happened gradually over the past few years, in part because the financial crisis bred a deep mistrust for overly confident leaders and in part because social media has made it much easier to call out a boss for arrogance or wrongdoing.
“The world has become more transparent, and the bar is being raised for who the leader is, not just what they know how to do,” said Fred Kiel, a former chief executive who now runs a consulting firm focused on leadership.
Highly regarded CEOs are nearly six times as likely as poorly regarded CEOs to be considered humble, according to a survey of 1,700 executives across the globe (minus CEOs) released in March by Weber Shandwick, a public relations firm. Weber Shandwick also found more than 50 articles that mentioned “CEO humility” in 2014 -- about twice the average number for each year going back a decade or so.
Humility in this case shouldn’t be confused with shyness, said Leslie Gaines-Ross, a public relations strategist at Weber Shandwick who advises executives on how to enhance their reputations. Rather, it’s about being more thoughtful and introspective. “It used to be that there were many more celebrity CEOs,” she said. “Now, most are more intent on building a good place to work than being stars.”
Consider the first line of Satya Nadella’s email to employees on his first day as CEO of Microsoft: “Today is a very humbling day for me.”
Nadella, a longtime Microsoft worker, has rapidly changed the culture at the company since becoming chief executive last year. He's fostered more teamwork and collaboration among employees who were once pitted against each other through a Hobbesian performance review structure. He’s forged partnerships with companies once considered bitter rivals.
He’s also quick to acknowledge when he’s made a mistake -- as he did last year after telling women to have faith in the system to give them the “right raise.”
Microsoft’s stock is up 8 percent since Nadella started.
Apple CEO Tim Cook also embodies the new leadership style. Cook’s been outspoken in his support for gay rights, first coming out as gay in an October 2014 essay for Bloomberg Businessweek, then becoming a high-profile advocate for the LGBT community. He even chastised his home state of Alabama over its treatment of poor people and minorities.
“Here’s a guy who seems to stand up for what he thinks is right,” said Kiel. “He’s also open to admitting mistakes.”
Cook’s 2012 apology for a botched rollout of mapping software stood in sharp contrast to the non-apology offered by his predecessor, Steve Jobs, over an iPhone glitch in 2010.
Under Cook, Apple’s financials have soared.
CEOs who display character run companies that perform better financially, according to Kiel’s research -- an exhaustive seven-year study of 84 CEOs across multiple industries.
Kiel defined character using four moral principles: integrity, responsibility, forgiveness and compassion. He also came up with a list of 25 behaviors and attributes that embody these principles, like “telling the truth,” “forgiveness” and “owning up to your mistakes.”
He and his team asked CEOs to assess themselves on these traits, and asked their employees how they would rank their CEOs on the same metrics. They discovered that the CEOs who were graded as having the strongest character brought in five times more for the bottom line than the low-character CEOs.
The CEOs at the bottom, said Kiel, tended to see the world as a dangerous place where people would take advantage of you. They didn’t always tell the truth. They placed their own financial security over the well-being of their company and their employees. Their workers didn’t trust them.
The arrogant CEO started losing favor during the early 2000s with the downfall of self-interested scoundrels like Tyco’s Dennis Kozlowski, of $6,000-shower curtain fame, and Enron’s Jeff Skilling and Ken Lay, both convicted of fraud and conspiracy.
The nail in the coffin was, of course, the financial crisis of 2008, when Americans lost patience for executive bravado and arrogance.
“The recession changed everything, and we are just coming out of that on a global basis,” said Gaines-Ross.
Another reason for the change has to do with the way chief executives are hired these days, said George, the former Medtronic CEO, who is a fellow at Harvard Business School and who writes frequently about what he calls authentic leadership. About 85 percent of chief executives are hired from within their company, he said, and "boards don’t easily get fooled by internal candidates."
George was careful to note that arrogant CEOs aren’t yet extinct. “Wall Street is a little behind,” he said. “There’s so much ego there. Big ego.”
It’s worth noting that the shift in leadership style has coincided with the rise and influence of women in the business world. “Women do tend to be more down-to-earth and genuine,” said George. “But I don’t think this is a gender thing.” There are women who embody the old style, too, he said. (They seem to be pretty rare, though, considering less than 5 percent of Fortune 500 CEOs are women.)
What's really turned the tide in favor of positive human traits in the corner office is social media. Like other public figures, CEOs can’t escape the ubiquity of Twitter, Facebook, iPhone videos and the rest. If they make a misstep, the world will know. Their employees will know. They will demand answers and apologies. Chip Wilson, co-founder of Lululemon, was vilified on Twitter and Facebook in 2013 after he said that some women didn’t belong in the company’s yoga pants. He ended up leaving the company.
The arrogant superstar CEO was probably best embodied by GE’s Welch, a hard-charging “celebrity CEO” who famously fired the company's bottom 10 percent of performers every year. The strategy, which was replicated elsewhere, didn’t exactly win the hearts and minds of his employees. Welch’s GE was “where the weak went to the wall and only the strong survived,” as one columnist wrote at Forbes earlier this year.
“It is really hard to find a celebrity CEO these days,” said Gaines-Ross. “Trump is one of the very few.”
When HuffPost asked whether Trump -- whose campaign did not respond to a request for comment for this article -- was doing well reputationally, Gaines-Ross laughed.
“No," she said.
From The Huffington Post, posted July 13, 2015
In late 2006, Alan Mulally arrived as the new CEO of Ford with a plain shirt, slacks, and a big smile. That smile quickly faded, however, when he asked to meet workers in the main factory. "I'm sorry", a colleague told him, "but Ford executives don't talk directly to factory employees." Unflinching, Mulally insisted on going to the factory floor. Once there, he spoke to the workers about their dreams, their hopes for the company, and the values of Ford.
In my new book, Discover Your True North, I profile Mulally and his leadership at Ford. During his seven years there, he transformed Ford from the brink of bankruptcy to an $8 billion profit. Mulally's low-key, "aw shucks" demeanor helped him connect with employees. As his workers grew to trust him, he made difficult deals for the company -- cutting the total cost of hourly workers from $97 to $55 per hour.
This change made Ford's UAW workers in the Midwest competitive with foreign, non-union assembly plants in the South, enabling Ford to shift jobs from Mexico to the Midwest. When he stepped down in 2014, Mulally left Ford as the most successful and financially stable automobile company in the U.S.
The key to Mulally's success? Authentic leadership.
As he said in 2013, "Leadership is being authentic to who you are, thinking about what you really believe in and behaving accordingly." Mulally lives that every day. At Ford, he attended strategic meetings in person. He then followed up directly to ensure successful outcomes and a supportive team.
Authenticity has become the gold standard for leadership. No longer is leadership about developing charisma, emulating other leaders, or looking good externally. Instead, leadership is about inspiring and empowering those you lead.
All of us want to be led by real people, not figureheads. As our organizations become less hierarchical, we yearn for leaders we can relate to as regular human beings. As a leader, the only way you can achieve this is to be your authentic self. You cannot "fake it 'til you make it," because people sense intuitively whether you are genuine or not. As Cameron Anderson at the University of Berkeley explains, there are always physical signs -- shifting eyes, rising voice, and other giveaways -- that identify imposters.
Unfortunately, not all leaders focus on being real. A year after Mulally joined Ford, Robert Nardelli took the reins of another Detroit automaker: Chrysler. Nardelli had been highly successful at General Electric, where he was one of three finalists to succeed Jack Welch. After leaving GE, he had an unsuccessful term as CEO of Home Depot before joining Chrysler.
At Chrysler, he tried to emulate the leadership style of his mentor, Jack Welch, which caused many to refer to him as "Little Jack." Unlike Mulally, who enjoyed casual conversation with employees and often ate in the company cafeteria, Nardelli preferred a command-and-control style. At Chrysler, this aloof style created a barrier between him and employees.
In contrast, Mulally created trust with his employees, enabling them to face the reality that Ford was going out of business unless dramatic changes were made. Eventually, Mulally's straight-forward approach enabled union workers to embrace lower wages. This move saved Ford jobs and helped create others. Nardelli, however, couldn't convince Chrysler workers to take similar pay cuts. Just two years after starting, Nardelli resigned as CEO of Chrysler, and the company filed for bankruptcy.
Authenticity drives our success. Without it, today's leaders are destined to fail.
What makes an authentic leader? Authentic leaders have discovered their True North, align people around shared purpose and values, and empower them to lead authentically in order to create value for all stakeholders.
Authentic leaders are constantly focusing their calling and purpose -- their True North. The only way to discover your True North is through rigorous examination of your life story, acceptance of your crucibles, self-reflection, and getting honest feedback as you rub up against the world.
To be an authentic leader, you must have both integrity and vulnerability. Integrity is the commitment to tell the whole truth, even when it is easier to conceal it. Vulnerability is the act of sharing your whole self, even when it's more comfortable to hide those parts you don't like.
Authentic leaders are true to themselves and to what they believe. Rather than letting the expectations of others guide them, they are their own persons and go their own ways. They engender trust and develop genuine connections with others. Because people trust them, authentic leaders are able to motivate them to achieve high levels of performance.
This is not to say that authentic leaders are perfect. Far from it. All leaders have weaknesses and are subject to human frailties and mistakes. Authentic leaders constantly try to improve themselves. By acknowledging their shortcomings and admitting their errors, their humanity comes through, and they are able to connect with people and inspire them.
Shakespeare wrote, "To thine own self, be true." To become an authentic leader, you should do the same.
From The Huffington Post, posted July 6, 2015
"True North is your orienting point that helps you stay on track as a leader. It is derived from your most deeply held beliefs, your values, and the principles you lead by." -- Introduction to Discover Your True North
Today, I am launching this new weekly column, "True North Leaders," in conjunction with The Huffington Post. Each Monday, it will feature leadership insights and the stories of authentic leaders making important differences in the world. We will also take on current leadership challenges and analyze why leaders fail. Most important, the ideas in this column will help you discover your True North, so you can lead authentically throughout your life.
First, a little personal background about why I believe it's so important to develop more True North Leaders. After 33 years in the business world, the last thirteen at Medtronic, I set out on a journey to discover my next steps. As part of my search, I spent 18 months in Switzerland teaching business and technical leaders at two leading Swiss institutions before joining the faculty of Harvard Business School.
It is no secret that there has been a crisis in the business world the past twelve years. While I was in Switzerland, the first corporate crisis -- stimulated by the scandals at Enron, WorldCom and other companies -- ripped the business world asunder. When Congress passed Sarbanes-Oxley to reform corporate governance in 2003, more than 200 companies announced "accounting adjustments," some as much as $3 billion. Five years later, the financial crisis hit, triggered by the failure of Lehman Brothers, AIG, Citigroup, Fannie Mae and many leading banks.
These crises were not caused by the lack of governance procedures or subprime mortgages, but rather by failed leaders.
What caused leaders to fail?
In the 1990s many corporations chose the wrong people as CEO. Under pressure from Wall Street to maximize short-term earnings, boards of directors frequently selected leaders for their charisma rather than their character. These leaders put their companies at risk by focusing on the spoils of leadership instead of building organizations for the long-term.
These stock market pressures boomeranged in the fall of 2008 when many financial institutions became insolvent, forcing the U.S. government to intervene to save the system from complete collapse. The Great Recession that followed depleted the savings of millions of Americans and U.S. unemployment rose above 10 percent.
As a result, trust in business leaders fell to its lowest level in 50 years. In business, trust is the coin of the realm. The success of any organization depends upon customers' trust in its products, employees' trust in their leaders, and investors' trust in those who steward their funds. Seven years later, public trust in business leaders is still low.
The positive side of these crises is the high quality of leaders who have emerged. From these debacles today's leaders learned what not to do. They saw many of their predecessors get caught in the trap of chasing money, fame and power, and learned the perils of putting self-interest ahead of the institutions they served.
True North Leaders are the antidote to this crisis -- people who can lead us through the myriad problems we face. While many of the leaders we feature have accomplished remarkable things, these columns aren't about their successes, but rather the incredible challenges they overcame in becoming leaders. Through in-depth studies of 170 leaders, we learned their successes are the result of what they learned about themselves through their life stories, their crucibles and their journey to discover their True North.
These new leaders are bringing about a fundamental transformation in leadership. No longer is leadership about being charismatic, emulating others, or acting like a leader without going through rigorous self-reflection. These leaders learned that being authentic is the most effective and sustainable way to lead.
The hierarchical leadership style of the 20th century is fading fast in favor of today's empowering and collaborative leaders. In today's organizations people want to make meaningful contributions to the world through their work. They seek opportunities to lead now, not to wait their turn as so many did in my generation. They yearn to see their leaders not as figureheads, but as real people, authentically struggling with challenges just as they do.
This is not to say that these new leaders are perfect. Far from it. All leaders have weaknesses and are subject to human frailties and mistakes. Yet by acknowledging their shortcomings, their humanity comes through, and they are able to connect with people and inspire them.
As we examine these leaders, we hope to challenge you to learn more about yourself and your leadership, and to discover your True North. The bottom line is this: You can discover your True North right now.
- You do not have to be born with certain traits and characteristics
- You do not need a title or have to be at the top of your organization
- You can step up and lead at any point in your life.
There are no magic answers here -- no seven easy steps. People recognize immediately who is authentic and who is not, so you cannot "fake it until you make it." Instead, by being authentic and continuing to develop yourself, you can become a True North leader.
I look forward to going with you on this journey.
Bill George is senior fellow at Harvard Business School and former chair & CEO of Medtronic. He is the author of four best-selling books, including True North. His new book, Discover Your True North, will be available in late August, 2015.
This has been a very good week for America – a week in which the rights and dignity of all people have been upheld.
In just a week, what progress we have made! Recall:
- The Supreme Court upheld the legal right of all people to marriage, overcoming centuries of discrimination against same sex couples.
- The Court also affirmed the Affordable Care Act that offers health care to most Americans – ensuring the millions now covered by health insurance will continue to receive coverage.
- Republican leaders in the Senate and House worked with President Obama to give the president the ability to ratify free trade agreements, including the Trans-Pacific Partnership.
- The President spoke for all Americans as he preached on grace, then captured a unifying moment in Charleston and across the country as he sang “Amazing Grace” at Emanuel AME church.
- Americans banded together to ask that the Confederate flag be taken down – 150 years after the end of the Civil War.
- The Gates Foundation announced it will invest $2 billion in breakthrough renewable energy projects.
For socially progressive, fiscally conservative people like myself, these are signs of genuine progress that our country is getting back on the right track, attempting to heal some of our historic wounds and bring the country together, so we can focus on growth and opportunities for all Americans to live healthy and prosperous lives.
In each case, leaders made the difference by acting with courage and listening to their conscience. Kudos to:
- Justice Anthony Kennedy who wrote the majority opinion on marriage equality.
- Chief Justice John Roberts who wrote the majority opinion upholding the Affordable Care Act.
- Speaker John Boehner, Leader Mitch McConnell, and President Obama for uniting forces against the Democrats and labor unions to bring the benefits of free trade to all Americans.
- South Carolina Governor Nikki Haley, four living former South Carolina governors, and the South Carolina congressional delegation who unified to urge the Confederate flag be removed from the South Carolina statehouse.
- Bill Gates for his focused philanthropy and for encouraging others to join him and Warren Buffett in The Giving Pledge to give away 50% or more of their net worth.
It is pioneering leaders like these and many others who are making the difference in our country, in large ways and small.
Finally, on a personal note, at a gathering in Minneapolis, Hillary Clinton praised the George Family Foundation for the work of its Catalyst Initiative to address “toxic stress” in underprivileged communities through mind-body approaches to health. My wife Penny George’s visionary leadership in integrative health is enabling people to achieve health in mind, body, and spirit. Penny continues to inspire and amaze me.