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Bill George

Harvard Business School Professor, former Medtronic CEO

Insightful Night at Ted Mann Concert Hall

Thank you again to everybody who joined David Gergen, John Donahoe, Anne Mulcahy, Marilyn Carlson Nelson, and me last night for the Summit on Leading in Crisis.  It was a successful, honest, and insightful conversation.  Here are some of the highlights below, told in real-time:

 

6:17 – I want to set a very honest stage, so I commence with the acknowledgement that we are all facing crisis, and today’s leaders need to be very honest about past faults and future projections.  Our major problems are in the area of global peace, poverty, education, job creation and innovation.  However, it is in crisis that we have the opportunity to make things better. 

 

Don’t waste this crisis, as it is a defining moment for our country to improve. 

 

6:19 – At that, I turned it over to our leaders:  Anne Mulcahy, David Gergen, Marilyn Carlson Nelson, and John Donahoe

 

6:23 – I ask Anne Mulcahy how she approached taking over as Xerox CEO, a role she initially had never planned for.  Anne explained that her 35 years at Xerox, gave her perspective on the company heritage and culture, and earned her a variety of applicable competencies.  Going into the position, Anne explained that it was important for her to grasp the seriousness of a Xerox’s problems while maintaining a high level of optimism.  Logistically, the most important thing was simply the proper alignment of her people.

 

6:25 – I followed up: “How do you exude confidence when times are tough?”  Anne explained that when she became CEO, she traveled the globe to see every major operation.  (Paraphrasing) “We didn’t make decisions too quickly,” she explained.  This helped everyone at Xerox feel like they were part of the solution – which was important, because they were.  Then, she regrouped her team and they settled on a Wall Street-oriented action plan.

 

6:27 – To the entire panel, I posited:  “What should every leader know about crises?”  David Gergen responded that crises come in different forms, and the key is preparation.  For instance, Ben Bernanke is a student of the great depression which made him prepared to respond appropriately when the economy crashed last year.  Furthermore, the most important crisis for government to deal with is the crisis that is over the horizon 5 to even 15 years away.  Leaders must summon the will to address these issues and not always pander to popular tastes – they must have courage to say what needs to be said.

 

I asked: “Does a President need to create a sense of crisis to get the people to act?” 

 

David Gergen responded in the affirmative.

 

6:34 – I then turned to Marilyn Carlson Nelson.  “How do you prepare your employees for inevitable crises?”  Leaders must empower their team at all times, she explained.  They must instill in individuals the idea that they have the ability to lead, and that the expectation exists for them to lead when the time comes.  Every foot soldier of Napoleon’s Army napoleon foot soldier had a baton in their pack so that if they fell the next person could lead.  Marilyn tried to create a similar mentality.

 

6:43 – To John Donahoe: “eBay provides an immense marketplace for small business.  How have you reacted to the recent financial crisis?”  John prefaced with the acknowledgement that 25 million people sell products on eBay, and 1.3 million make their primary or secondary living.  EBay provides an outlet for people to start their own business, putting it in a uniquely precarious position with the financial collapse.  The Economic crisis was front and center for them because of their relationship with the customer – the customers are struggling, and the crisis had become a rallying call for the company to recommit to creating opportunity for them.

 

John went further, explaining that last year at this time the big retailers said that they were going to have a horrible season, so they decided to discount everything to get rid of inventory.  Big companies can do this, but small retailers – Ebay’s sellers – cannot.  John and eBay stopped running ads on TV and reallocated that money towards discounts for purchases on the site.  John conceded that these were not easy changes to make, but necessary ones.  The crisis created the opportunity to change the culture and the business model to refocus on the customer.

 

6:55 – Paraphrasing John Donahoe:  “This gets to the test of what America is all about.  70% of new job creation in the patst70 years has been through small business.”

 

Anne Mulcahy chimed in: “We (big companies) are not the solution.”

 

John Donahoe continued, asserting that technology enables the entrepreneurial instinct of Americans.  He recalls a visit to a couple who sell clothing, which they purchase from department stores at liquidation and then sell on eBay.  They have created a job. 

 

Marilyn Carlson Nelson agrees, but asserts that small business needs big business to handle distribution. A partnership between the two must exist, and America needs to make financing available so that entrepreneurs can get their small businesses going.

 

7:07 –   To the panel, I ask: “How do you maintain yourself during crisis? How do you remain resilient? How do you be vulnerable, and still be a leader?”

 

The silence on the stage triggered laughter throughout the room!

 

Anne Mulcahy offered that people inspire you during difficult times.  During the darkest days at Xerox, she was inspired by the amazing set of people that were coming to work every day.  “You have this incredible sense of accountability,” she recalled.

 

John Donahoe recalls that Jeff Immelt once said, “They didn’t make me CEO because of how much I know they chose me because of how quickly I could learn.”

 

7:32 – “What type of leadership is going to bring back the civil discourse?”  Anne Mulcahy found the recent lack of civility very concerning.  And one person, one leader, cannot remedy the situation alone.  The most glaring examples of public indignity have occurred in politics lately, and Anne asserts that is responsibility of the various government branches to lead in bringing people together. 

 

David Gergen revealed that he is worried about two things: 1) the future potential for the incivility to develop into violence; and 2) the future of practical governability.  If every issue is going to see our politicians and citizens so deeply divided, David wondered how we can expect to move forward.  He asserted that if we continue on this line of polarization it’s going to be hard to maintain ourselves as a power.   It is up to our President, member of Congress, community and civic leaders, to turn the tide and make a difference in how people think.  He agrees with the President that we have to find a way to make civility interesting.

 

7:47 – As time wound down, I asked a question on a hot-button issue: “People are angry about executive compensation?  Should it be regulated?”

 

Marilyn argued that boards have to take it on, and is confident that most, but not all, will.  She is reluctant to allow legislation on the matter to run rampant as there is an unsustainable business model if you can’t recruit top talent.  And money draws talent.

 

David Gergen agrees, arguing that all societies need some self restraint and it is up to the CEO community to take some responsibility.

 

Anne Mulcahy projects that this is not an issue that will see an overnight fix.  Boards have to step up to the plate to make sure that they don’t return to the past.  Accountability among and by boards is paramount.

 

In closing, John Donahoe summed up the discussion’s focus on crisis quite well.  (Paraphrasing) “Leaders should embrace adversity not fear crises as the will allow them to become good leaders.” 

 

I couldn’t agree more.  As I say in 7 Lessons for Leading in Crisis: “A smooth sea never made a skilled mariner.”

 

Thanks again to everyone who joined us at Ted Mann Concert Hall last night.  And thanks again to our panelists David Gergen, John Donahoe, Anne Mulcahy, and Marilyn Carlson Nelson.