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Bill George

Harvard Business School Professor, former Medtronic CEO

Leadership in the 21st Century

Leadership in the 21st Century
Westminster Town Hall Forum
Minneapolis, Minnesota
March 15, 2007

It is a privilege to return to the Westminster Town Hall Forum to address the challenging subject of “Leadership in the 21st Century.”  Four years ago I spoke here in the aftermath of the fall of Enron, World Com, and Tyco. My subject was “Crisis in Corporate Ethics: Where Have All the Leaders Gone?”  My remarks that day were a precursor to my first book, Authentic Leadership, which challenged the new generation of leaders to lead more authentically than the previous generation.

Since that time, I have been teaching leadership and leadership development at Harvard Business School, and studying how to develop a new generation of authentic leaders to run our corporations, thus avoiding a repeat of these ethical lapses and destructive actions. The result is my new book, True North: Discover Your Authentic Leadership, which is being launched nationwide today.

The Leadership Crisis in America
America today faces a major crisis in leadership that spans the fields of politics, government, business, non-profits, education and religion. Confidence in our leaders, especially in business and politics, has fallen to an all-time low. Recent surveys by the Gallup poll show that only 22 percent of Americans trust our business leaders. That’s not just a problem – it represents the potential for disaster.

In part, the problem comes from a wrongheaded notion of what constitutes a leader, driven by an obsession with leaders at the top. In far too many cases we have selected the wrong people to lead and given them too much power – power they have often abused by violating the trust placed in them as leaders. As President Abraham Lincoln once said, “If you want to find out what a man is made of, give him unlimited power and watch how he uses it.”  In many cases leaders have abused their power to serve themselves, instead of others.

Our entire system of capitalism, in which I believe so fervently, is based on trust – trust in the corporations and institutions that serve us and in their leaders. Through our legal system, society has granted corporations enormous freedom and power to make money for their owners while serving their constituencies and benefiting society as a whole. If we in the business community violate that trust, we risk losing those privileges and destroying the very system that has made the American economy the most vibrant and enduring in the history of the world.  Witness the 2003 Sarbanes-Oxley Act, hastily passed by the U. S. Congress in thirty-one days in response to the crisis of confidence created by the fall of Enron and other companies. Violating the public trust risks the loss of capitalism’s freedoms.

For business leaders, trust is the vital fuel that makes our system function effectively. If our customers do not trust us, why would they buy our products?  Physicians implanting life-saving Medtronic defibrillators in their patients have to trust Medtronic to ensure their quality. The same is true for every consumer who buys a new automobile, computer or television set. Employees trust their corporate leaders to build successful businesses that will provide good jobs, sound benefits like health care, and retirement plans. Investors trust corporate leaders to provide fair returns on their investments. And the public trusts corporations to act in the public interest. When leaders violate that trust, the lives and livelihood of their customers, employees, and investors at risk –  and they risk the freedoms of our entire system of capitalism.

Learning from Authentic Leaders
My Harvard study of and how authentic leaders developed was undertaken with the support of my colleagues, Diana Mayer and Peter Sims, who is the co-author of True North. It is the largest in-depth study ever undertaken about how business leaders develop. The 125 leaders we interviewed provided us with deep insights into how they developed into authentic leaders and became successful. They were remarkably open and candid in sharing their life stories, personal struggles, failures, and triumphs.

These 125 leaders are a diverse group of women and men from a wide array of racial, religious, socioeconomic backgrounds and nationalities, and ranged in age from 23 to 93. Within the group, 28 percent are females, eight percent are racial minorities, and twelve percent are international citizens. Half are CEOs, and the other half includes an array of non-profit leaders, mid-career leaders, and young leaders just starting on their journeys.

In the past fifty years leadership scholars have conducted more than one thousand studies attempting to determine the definitive leadership styles, characteristics, or personality traits of successful leaders. None of these studies has produced a definitive profile of the ideal leader. Thank goodness. If scholars had produced a cookie-cutter leadership style, people would be forever trying to emulate it. That alone would make them into personas.

Kevin Sharer, who is currently chairman and CEO of Amgen, saw the downside of GE’s cult of personality in the 1980s while working as Jack Welch’s assistant. As he said, “Everyone wanted to be like Jack, but leadership has many voices. You need to be who you are, not try to emulate somebody else.”

The reality is that no one can be authentic by trying to be like someone else. There is no doubt that you can learn from the experiences of others, but there is no way you can be successful trying to be like them. People trust you when you are genuine and authentic, not an imitation. As Dr. Reatha Clark King of General Mills told me, “If you’re aiming to be like somebody else, you’re just being a copy-cat because you think that’s what people want you to be  You will never be a star with that kind of thinking. But you might be a star— unreplicatable—by following your passion.

After interviewing these 125 leaders,  we believe we understand why previous studies have not been successful: Leaders are highly complex human beings, who have distinctive qualities that cannot be sufficiently described by lists of  traits or characteristics.

Your Leadership Emerges from Your Life Story
In reading the 3,000 pages of transcripts from these interviews, we were surprised that these leaders did not identify any characteristics, skills or styles that led to their success. Rather, they believed their leadership emerged from their life stories. By constantly testing themselves through real world experiences and by reframing their life stories to understand who they are, they unleashed their passions and discovered the purpose of their leadership.

I vividly recall my interview with Dick Kovacevich, CEO of Wells Fargo, who has established the most successful track record of any commercial banker for the past twenty years. When I asked Dick what made him so successful, he surprised me with his answer. Instead of lauding the bank’s success, he spent twenty minutes telling what it was like growing up in a small sawmill town in western Washington, where no one had ever gone to college. Dick said he learned to lead not at Stanford Business School, where he graduated at the top of his class, but on his hometown athletic fields and at the corner grocery store where he worked from age eleven to eighteen. Every day Dick played sports for three hours, raced home to grab a sandwich, and then worked three hours in the grocery store. Sports taught Kovacevich that “a group of people can perform so much better as a team than as the sum of their individual talents.”

Kovacevich’s story is just one of hundreds we heard from our interviewees. The stories covered the full gamut of life’s experiences. One of the most powerful came from Starbucks’ founder Howard Schultz, whose father’s loss of his job and health care benefits from slipping on the ice led Schultz to create a company like Starbucks where his father would have been proud to work. For Schultz, Starbucks is about a creating a community of empowered employees and satisfied customers.

Andrea Jung, now CEO of Avon Products, was a rising star at Neiman-Marcus as executive VP in her early thirties. She decided she did not want to spend her life selling high-fashion designs to upper class women, so she resigned without another job. Joining Avon Products and later becoming CEO, she changed the mission of the company from selling cosmetics to the empowerment of women. Under her leadership Avon has gone from 1.5 million to 5.5 million people working for the company and achieving economic independence and success through their efforts. She and Schultz have remained true to their life stories to fulfill their personal missions and enhance the lives of tens of millions of people.

Most of the leaders we interviewed have been profoundly shaped by crucibles in their lives. These traumatic experiences enabled them to realize that leadership was not about their success or gratification, but rather about serving other people and empowering them to lead. In my experience – perhaps oversimplified – you can separate all leaders into two categories, those for whom leadership is about their success and those who are leading to serve others. The latter group finds inspiration in their life stories and the crucibles of their lives to make the transformation from “I” to “We.”  The former group never makes that transition. Although many of them disguise their intentions with “we” language, their actions under pressure often reveal they are out for themselves.

One of the most moving crucible stories came from Novartis chairman and CEO Dan Vasella, whose early life traumas of spending a year in a sanatorium at age eight and the subsequent deaths of his sister and his father motivated him to become a compassionate physician who could lead a global healthcare company that could help millions of people every year. Oprah Winfrey talked openly about her experiences of being sexually abused, starting at nine years old. Reframing her experiences enabled her to become not just a television celebrity, but a caring leader whose mission is to help people take responsibility for their lives.

In my case it took a series of crucibles before I learned that my mission was not to become CEO of a global company, but to build an organization that could help other people through its life-saving products. In my teenage years, I was trying so hard to be a leader that I lost seven elections in a row. Thanks to a caring group in my college fraternity, I learned that my ambitions and selfish ways were blocking my ability to use my leadership gifts. Understanding that was the easy part; much more difficult was developing into a leader that truly cared about serving other people. In my mid-twenties the back-to-back deaths of my mother and my fiancée brought me to the depth of loneliness that caused me to explore deeply what life is all about. But it was not until I “hit the wall” in my career at Honeywell in my mid-forties that I finally recognized the deeper purpose of my leadership. It was not just to be CEO, but to join a unique company like Medtronic whose mission was to restore people to full life and health. Had it not been for the counsel and advice of my wife Penny, my close friend Doug Baker, my men’s group, and my couple’s group, I might never have come to that realization.

Over the past decade I have learned from Penny’s experience with breast cancer in 1996the power of a leader who leads from behind and inspires others to lead. Penny never saw herself as a leader, nor was she encouraged to become one by her parents. Through her healing from breast cancer, she discovered the power of integrative medicine. As a result, she has stepped up to lead because she is so determined to change the course of medicine to make it more humane and patient-centered, both locally and nationally.

New Leadership for the 21st Century
All of these very human stories lead to the unmistakable conclusion that we need a new kind of leader to lead our institutions in the 21st century—a leader who can empower and inspire others to lead. The 20th century vision of a leader who commands the troops to follow him over the hill to build his glory is dead—or it should be!

Coming out of two world wars in the 1950s, we idolized all-powerful leaders like General George Patton, in spite of their evident flaws and abusive tendencies. We dichotomized leaders and workers, with the latter being mere cogs in the wheels of production. As a nineteen-year-old industrial engineering student in the 1960s, I used my stopwatch to study the motions of 55-year-old machine tool workers, without ever asking them how to make their work more effective and meaningful. That was the nature of the assembly line in those days. In the last two decades of the 20th century we developed a national obsession with the all-powerful charismatic leader at the top.

It is high time that we cast off these images of the all-powerful leaders who dominate their subordinates with power, intimidation, and a directive style. We do not need leaders who treat the people as a cost of doing business rather than the basis for the business’ success. No longer can we tolerate leaders who increase earnings by eliminating what has made the organization successful, while they personally reap millions in compensation. Employees, customers, investors, and the public at large have every reason not to trust these vestiges of failed 20th century leadership.

Leadership in this new century must change precisely because the nature of people in organizations has changed. People today are more knowledgeable about their jobs than their bosses are. They are demanding meaning and significance from their work, and are not willing to toil away just for someone else’s benefit. They want to lead now, not wait in line for ten to twenty years until they are tapped for a leadership role.

Why shouldn’t they expect and demand this level of respect and meaning?  Why shouldn’t you?

You can discover your authentic leadership right now.
You do not have to be born with the characteristics or traits of a leader.
You do not have to wait for a tap on the shoulder.
You can step up to lead at any point in your life.
You are never too young – or too old.
As Stephen Covey has said, “Leadership is your choice, not your title.”

I would like to offer a new definition of successful 21st century leaders. They are: authentic leaders who bring people together around a shared mission and values and empower them to lead, in order to serve their customers while creating value for all their stakeholders.

From reading the press these days, one gets the impression that most leaders are greedy people out to feather their own nests. For all the negative publicity they generate, I am pleased to say such leaders these days are the exception, not the rule. There is a new generation of authentic leaders stepping up to lead our organizations. Locally, we are blessed with outstanding leaders like Marilyn Nelson of Carlson, Brad Anderson of Best Buy, Bob Ulrich of Target, Doug Baker, Jr. of Ecolab, Steve Rothschild at Twin Cities Rise! and my successor at Medtronic, Art Collins.

Nationally as well, a new generation of leaders is leading our corporations in an entirely different manner than their predecessors. These leaders recognize the value of bringing people together around a shared mission and values and empowering leaders at all levels. Standouts among the group of leaders who have stepped into top roles since the fall of Enron, include Jeff Immelt of GE, Anne Mulcahy of Xerox, A. G. Lafley of Procter & Gamble, Sam Palmisano of IBM, and Andrea Jung of Avon, as well as non-profit leaders like Wendy Kopp of Teach For America and Nancy Barry of Women’s World Bank. These leaders of major organizations are setting the new standard, enabling their people, young and old alike, to take on important leadership roles.

Let me make this prediction: successful organizations in the 21st century will be those that get the best out of people by motivating them with an inspiring mission and empower people at all levels of the organization. This is why for-profit organizations like Target, P&G, Best Buy, J&J, and Wells Fargo are able to sustain their success, year after year. On the other side, lack of inspired leadership is the reason why organizations like General Motors, Sears, Home Depot, and Ford are struggling.

True North: Discovering Your Authentic Leadership

I wrote True North to answer the question, “How do you become an authentic leader?”  The answer is that it takes years of hard work and development. The key is knowing the True North of your internal compass, and preparing yourself to stay on course in spite of the challenges and seductions that cause so many leaders to go astray.

Your True North represents who you are as a human being at your deepest level – your fixed point in a spinning world that helps you stay on track as a leader. True North is based on your most cherished values, passions, and motivations. When you follow your True North, your leadership will be authentic, and people will naturally want to associate with you.

Discovering your True North takes a lifetime of commitment and learning. Each day, as you are tested in the real world, you yearn to look in the mirror and respect the person you see and the life you lead. As long as you are true to who you are, you can cope with the most difficult circumstances that life presents.

In reality, other people may have very different expectations for your leadership than you have for yourself. You will be pressured by external forces to respond to their needs and seduced by rewards for fulfilling them – pressures and seductions that may cause you to detour from your True North. When you get too far off course, your internal compass tells you something is wrong and you need to reorient yourself. It requires strength of character, courage, and resolve to resist these pressures and take corrective action when necessary.

As Sara Lee CEO Brenda Barnes told us, “The most important thing about leadership is your character and the values that guide your life. Everything in business isn’t black and white; there are a lot of gray areas. But if you let your values guide your actions and don’t ever lose your internal compass, you’re going to be fine.”

When you are aligned with True North, there is coherence between your life story and your leadership. As psychologist William James wrote a century ago, “The best way to define a person’s character is to seek out the time when he felt most deeply and intensely alive; when he could hear his inner voice saying, ‘This is the real me.’”

Can you recall a time when you felt most intensely alive and could say, “This is the real me”?  When you can, you are aligned with True North and prepared to lead others authentically. In my own case I had just that feeling the first time I walked into Medtronic in 1989 and felt I could be myself and be appreciated for who I was.

Developing as an Authentic Leader
Becoming an authentic leader is a long journey that takes hard work on your part, just as it does to become a virtuoso violin player or a champion athlete. As GE’s Jeff Immelt told us, “Leadership is one of those great journeys into your soul. It’s not like anyone can tell you how to do it.”

In studying leaders who have failed, I realized that their failure resulted from their inability to lead themselves. As we discerned from our interviews, the hardest person you will ever have to lead is yourself. When you can lead yourself through the challenges and difficulties, you will find that leading others becomes relatively straight-forward.

We learned that there are six principal areas required to lead yourself:

1 Gaining self-awareness
2 Practicing your values and principles under pressure
3 Balancing your extrinsic and intrinsic motivations
4 Building your support team
5 Staying grounded by integrating your life
6 Understanding your passions and purpose of your leadership

It may take a lifetime to gain complete awareness of yourself, but your self-knowledge can be accelerated by honest feedback from others.

In his mid-thirties Doug Baker, Jr. was a rising star at Ecolab who had taken over the company’s newly acquired subsidiary in North Carolina. Through his early success, Baker told me he had become arrogant and self-centered. Then he got some tough feedback from his subordinates who told him all of this and more. Baker calls getting the unexpected criticism “a cathartic experience.”  He explained, “It was as if someone flashed a mirror in front of me at my absolute worst. What I saw was horrifying, but it was also a great lesson. After that, I did a lot of soul-searching about what kind of leader I was going to be, talked to my Ecolab team about what I had learned, and asked for their help.”  Baker’s self-awareness is a critical factor in his success in becoming CEO of Ecolab nine years later.

Practicing Your Values:
The key to your values is not what you say you believe, or even how you behave when things are going well. You find out what your values really are when you are under pressure or things are not going your way.

Today Jon Huntsman is the successful founder of Huntsman Chemical, leader of a 73-person family, and a bishop in his Mormon church. In 1973 he was a young staffer working for President Nixon’s notoriously powerful chief of staff, Bob Haldeman. One day Haldeman directed him to carry out an undercover sting operation involving illegal immigrants that was designed to embarrass a Congressman opposing Nixon’s initiatives. At first, Huntsman went along with the game, calling the plant manager to give him instructions. He recalled, “There are times when we react too quickly and fail to realize immediately what is right and wrong. This was one of those times when I didn’t think it through. After fifteen minutes, my inner moral compass kicked in and I told the plant manager, ‘Forget that I called. I don’t want to play this game.’”  Huntsman recognized that rejecting the orders of the second most powerful person in the country would be viewed as disloyal and his White House career was over. “So be it,” he said, “I quit in the next six months.”

Balancing Your Motivations:
Not surprisingly, leaders like promotions, pay increases, and recognition from their peers and the media. But if these motivations dominate their passions, they are at risk of derailing, sooner or later. Authentic leaders recognize their intrinsic motivations like helping others, making a difference in the world, and building organizations with purpose and meaning.  The important thing is not to deny your extrinsic motivations, but to balance them with intrinsic motivations.

Kevin Sharer was a rising star at General Electric at age 41 and on Jack Welch’s “high potential list.”  When a search firm proposed that Kevin join MCI for a faster route to the top, he jumped at the opportunity, leaving Welch unhappy with his sudden departure. Once at MCI, Kevin learned quickly that the COO was in line for the top slot and didn’t welcome the new hotshot from GE. His “know-it-all” attitude didn’t help either, especially when he proposed reorganizing the company. Sharer’s crucible at MCI proved invaluable to him: caught up in the glamour of being a rising star, he was brought down to reality and forced to recognize what really motivated him. When the opportunity arose to become COO of Amgen, a chastened Sharer recognized the importance of Amgen’s work in saving lives. He earnestly studied biology and the biotech business for seven years before becoming CEO. By then, he was able to balance his extrinsic motivations with the intrinsic satisfactions that Amgen’s mission provided him.

Building Your Support Team
An essential element of staying focused on your True North is to build a support team to help you stay on track. Your team starts with having at least one person in your life with whom you can be completely open and honest. It could be your spouse, best friend, mentor, or therapist. In my case, that person is my wife Penny, who is largely responsible for whatever success I have enjoyed. She keeps me on track, especially when I get caught up in selfish desires. Your family, friends, and mentor also help you stay grounded, especially when you most need their help.

I also believe in having a support group of peers with whom you can share openly and who will be there for you when you need them. I have been blessed with having a men’s group with whom I have been meeting every Wednesday morning for the last thirty years, as well as a couples group that Penny and I helped form twenty years ago. These two groups of people, most of whom are here today, have been there for me when I most needed their support. When Penny was diagnosed with breast cancer eleven years ago, they were there to support both of us through the difficult times that followed.

But you cannot wait to build your support team until you are facing difficulty. The time to do it is now, because long-term, deep relationships and shared life histories take decades to build.

Staying Grounded by Integrating Your Life
Every leader I know is facing the challenges of meeting all their commitments in life – their jobs, their families and their communities as well as preserving time for their personal life. I can assure you, this isn’t getting any easier, as the work week increases and the demands of families and communities are rising. How do you stay grounded with all the pressures coming at you?  The key is maintaining your integrity by being the same person in all these environments, and not letting work commitments pull you away from the fullness of life. This isn’t easy, but it can be done by making choices and setting boundaries, and not selling your soul to your job. If you don’t do these things, you may become a shooting star who burns out before you have the opportunity to fulfill your dreams.

Your Passions Reveal the Purpose of Your Leadership
Finally, when you understand the passions that emanate from your life story, you will discover the purpose of your leadership – in other words, your True North will become clear. Let’s look at how Ellen Breyer, CEO of Hazelden, the nation’s leading chemical dependency organization, discovered her purpose. In her 1960s college years, Breyer was a student activist, protesting the Vietnam War, joining civil-rights marches, and leading voter registration drives. Although she never violated the law, the Nixon administration viewed her as subversive and rescinded her student loans.

For the next thirty years Breyer worked in the corporate world and focused on her family as she followed her husband’s career. When her youngest son left for college, she took a sabbatical in Aspen, where she realized she was most interested in her non-profit activities. When the top position at Hazelden opened, Breyer stepped up from the board to become CEO. Here she has rekindled the passions of her youth: working for a cause she believes in as she helps thousands of people recover from addictions.

Empowering People to Lead
Developing yourself to gain self-awareness, solidify your values, balance your motivations, build your support team, integrate your life, and understand your purpose is not an easy task. But as you do so, you will find that leading others is relatively straight-forward. By leading authentically, you can unite people around a common purpose and empower them to step up and lead. That’s what the best 21st century leaders are doing, and the reason why their organizations over the long-term far outperform organizations still operating in the 20th century mold.

An example of such an empowering 21st C. leader is Marilyn Nelson, CEO of the Carlson Companies. When she took over leadership, she recognized Carlson’s culture had to change dramatically if it was going to succeed in the future. She decided to reinvent Carlson as a company that cared for customers by creating a caring environment for its employees. To build the new culture, Nelson went on a personal crusade to bring her message of empowerment to Carlson employees around the world. In her personal interactions she carried with her the memories of her daughter’s tragic death in an automobile accident years before as she vowed to “give back and make life better for people.”

Your Call to Experience the Fulfillment of True North Leadership
When we examine organizations that are led by authentic leaders, we recognize there is no shortage of leaders. In every organization there are many, many leaders just waiting for opportunities to lead. My advice to you is, don’t wait to be asked. You can step up and lead right now, and your organization will be better off because you did. In thinking about whether to take on leadership challenges, ask yourself these two simple questions,

If not me, then who?  If not now, then when?

You are capable of leading, and the experience is worth any risks you may take or criticism you may endure. As President Theodore Roosevelt said,

It is not the critic who counts. The credit belongs to the person in the arena, whose face is marred by dust and sweat and blood; who knows the great enthusiasm, the great devotions; who spends himself in a worthy cause; who at the best knows the triumph of high achievement and who if he fails, at least fails while daring greatly; so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

Are you prepared to enter that arena, to dare greatly, and to spend yourself in a worthy cause?  If you are, you will know the triumph of high achievement and you will experience the fulfillment of leadership.

You will know the joy of working with a passionate group of people toward shared goals, of confronting challenges and overcoming barriers, and of leaving a legacy to the world through your leadership. There is nothing that can compare to this sense of fulfillment.

You will have the satisfaction of knowing that you followed your True North, you discovered your authentic leadership, and the world is a better place because of you. You will have become a True North leader.