The BB&T Leadership Series: Discover Your True North Part 2

Posted on August 21, 2019 by Bill George | 0 Comments | Filed In: Press

The BB&T Leadership Series, a video series with CEO Kelly King presented by The BB&T Leadership Institute, was created to support our commitment to leadership development. The series shares insights on leadership topics from some of today’s best and brightest thought leaders. We hope you find these interviews and the perspectives they share inspiring and motivating as we strive to personally be our best every day.

The well-known author, Harvard professor and former CEO discusses how to stay grounded and make an impact on people.

KELLY KING: We’re in the middle of a really big merger, as you know.

BILL GEORGE: Yes.

KELLY KING: And my friend–

BILL GEORGE: Congratulations, by the way.

KELLY KING: Oh, thank you. My friend and partner, Bill Rogers, some of you don’t know. The CEO of SunTrust is here, I’m happy to say today. And I’m sure Bill has been asked the same question that I have, which is, what is the big deal?

BILL GEORGE: Huge.

KELLY KING: And how do you keep your sanity with all this going on? And what I say is balance.

BILL GEORGE: Yes.

KELLY KING: My priorities in life are clear. It’s my faith, my family, and work. And I tell the board that. If that’s not OK, I’m sorry, but that’s my priorities in life.

And sometimes with all the struggles [? a lot, ?] I had to kind of recenter. Sometimes in the middle of the day, I have to say, stop. Take a deep breath and say what’s important. And where should I focus my priorities?

BILL GEORGE: You just put your finger out. How do you stay grounded? You’re in a high level position. You’re doing a big merger. A lot of people involved, their lives are impacted by this.

How do you stay grounded? And I think that’s really important. I have been meditating for 40 years. But there’s something that brings you back to it.

You put away all the electronics. You take a little time out every day, whether you want to go pray or meditate, take a long walk in a beautiful setting like this. But it’s something where you can reflect. I think you spend your whole day working on a task list. And you’re worried about, I didn’t get that number nine task done today.

That’s not what it’s all about. So you can stay focused on the really important thing. And frankly, that’s where all my creative energy comes from. I get my most creative ideas.

But I think everyone needs to do that every day. I say a minimum of 20 minutes. So you take that time. It’s not very much. But if you don’t do that, you can really lose your bearings and start to get pretty high on yourself. And you’re just go, go, go all the time, and you don’t realize you’re driving everyone nuts.

KELLY KING: And then too, Bill, I find that it’s just easier, not easy, but easier, if what you are doing in life is aligned with your personal purpose and your personal why. And you talked to Warren Buffett about that. He said sweet spot, or something to the effect that the sweet spot is when your motivations line up with your greatest strengths. And he’s one of the greatest leaders of all times, and he’s apparently found that sweet spot and that balance and that integrated life.

BILL GEORGE: He can’t retire because he’s having so much fun. But he’s about– [? if you ever ?] spend any time with Warren, he’s about as natural a person as you’re ever going to meet. I mean, I had dinner with him once, and he’s just Warren Buffett. In fact, my wife sat on the other side. And she said, wow, this is Warren, yeah.

But why not? We’re all just human beings. And back to the purpose and your purpose in life, why are you here on this planet? And what are you going to leave behind? And when you get to the point where your memorial service, funeral, and they do eulogies, they’re not going to talk about you being CEO of this bank or this corporation.

They’re going to talk about, how did you impact people? How did you treat people? And it [? maybe ?] be your grandchildren talking about how you– so to me, it’s all only one life. It can’t be, oh, I’ve got this life over here, and I’ve got that life, and never the twain shall meet.

KELLY KING: Right. And I believe at the end of the day, the essence of your life’s journey will be, did you make a difference?

BILL GEORGE: Did you make a difference? And how do you make a difference? And who do you make a difference in? They may not remember what the revenues went up while you were the CEO. But they’re going to remember how you impacted people.

And were you there for them? Did you create an environment of trust so that I had– frankly, 10 years ago, the trust when I was on the board of Goldman Sachs, the trust went out of the banking balloon. How do we get it back and say– [? this ?] [? out of ?] BB&T. But how do you ensure you have trust? Because I’m giving you my money.

And if you look at it, that’s a sacred trust. And so it’s the same thing when you put a Medtronic product in your body, a Medtronic defibrillator. You don’t know. Even the doctor doesn’t really know if it’s going to work. You’re entrusting that the manufacturers said that’s got to be the highest quality product, because a life is at the other end of that. It can’t be 99%.

And I think that trust is something we lost sight of in a lot of businesses. We started thinking, oh, we’re playing to the stock market. And we lost sight of why we’re here.

KELLY KING: That is so true. I’ve said, to me, the ones that win in life in general and in business are the ones that produce the best value. But value is really about whoever creates the best trust.

BILL GEORGE: Well, I think you’re getting to kind of the idea of creating shared value. So if you do your job well, you’re creating value for me as your client. You’re creating value for your employees, because they have good jobs. They’re rewarded for doing a good job. They’re not paid minimum wage, but they’re rewarded for doing a good job. You’re creating value for your investors, your shareholders.

And I think, frankly, you’re in a lot of communities here. And are you creating value in the community? The bank has always been the center of the community. And sometimes the national banks lost sight of that fact of, we’re basically the essence of this community, whether it’s a large city like Charlotte or whether it’s a small town, rural town. That is really, I think, that’s shared value. And a lot of the short-term shareholders don’t like that notion, but I think we’re coming back to that.

KELLY KING: When you’ve read and taught at Harvard and other places and people use the word purpose and they use word why, do you think most people are viewing those as mainly the same? Or do you draw a distinction?

BILL GEORGE: I look at them as the same. And you talk about mission. At Medtronic, we talk about the Medtronic mission. It was the thing that drives the company. We’re trying to restore [? a beautiful ?] [? life ?] [? in ?] [? health. ?]

We had a metric. We actually measured ourselves by how many seconds go by until another person’s life is restored by a Medtronic [? patent. ?] One time when I got there, it was 90 seconds. Today, it’s two per second. So we’re helping a lot. We’re helping people.

And so that is, in many ways, to the employees, the 86,000 employees, that’s a more meaningful metric than saying, what were the profits last year? They can [? relate ?] to helping people. And if you create that kind of trust– and I think that’s the key.

So the why and the purpose become one and the same. My why is I’m here to help other people to have a secure financial future. I don’t know if you believe that or not, but if you are, that’s what I want from my financial institution, because that’s what I want. And it’s what I’d want for my kids or my grandkids too is that kind of sense of financial security.

KELLY KING: And in our industry, you know– and of course, you’re on the board of Goldman Sachs, so you’ve lived with this crisis these last 10 years– we lost a lot of the trust of the American public and globally as well. But you wrote in your book, which I happen to totally agree with, it was not the financial instruments. It was about failure of leadership that really created problem, wasn’t it?

BILL GEORGE: Yeah, it was all a leadership failure, honestly, because people lost sight of what– they got too excited with the hedge funds and the high money and the excess. There’s nothing wrong with derivatives per se, but if you don’t understand how they work and you don’t know what you’re– and obviously, the mortgage market went through extreme difficulties. So now we get back to basics.

It all starts with that customer. It’s what I call the last three feet, like three [? here ?] between you and me. You’re my banker. I’m your client. OK, can we have that trusting relationship?

And if I don’t trust you, I’m not going to do business with you. That’s just the way I look at the world. And so how do you create that trust in a large organization like this one that gets conveyed by people who maybe haven’t been here all that long but they have the same philosophy? And so that purpose is then shared.

KELLY KING: I think a lot of times all of us but certainly younger leaders get confused about having to be right all the time. And they make a mistake. They become the victim, and then they start giving up on life and giving up on being a good leader. But really, being a good leader is about making mistakes. The key is to learn.

BILL GEORGE: And if I can admit my mistakes, then the people who work with me at Medtronic can admit theirs too. I worked in an organization, the United States Department of Defense during the Vietnam War. No one could, because our secretary of defense said we never made a mistake. So we spent a heck of a lot of money and time trying to bail out of what was a mistake.

If I can admit my mistakes, then the people around me can admit theirs. Thinking, you’ve got a huge organization. How do you know what’s going on unless people tell you the truth?

And if they don’t, if they’re trying to tell you what you want to hear, you’re in trouble. You kind of get people that will tell you the truth. And that gets to admitting mistakes, admitting vulnerabilities, and saying, look, I’m not an expert in this.

When I went to Medtronic, I knew a lot about technology. I knew nothing about medicine. And so I had a partner who was a medical doctor. He was our vice chairman. He was fantastic.

And we teamed up, because I needed his help. And [? I needed ?] a terrific CFO we brought in. So I think you need people around you that are better than you are at what they do.

KELLY KING: On this learning thing, though, another one of my books that I’ve really enjoyed in addition to yours is Mindset by Dr. Carol Dweck. And for the audience that have not read Mindset, it’s really a really important read, because it’s all about helping us to understand the difference between a growth mindset and a fixed mindset.

Well, what I’ve found is that people that have a growth mindset can encounter failures and make mistakes and grow through it and go on and achieve more successes. But those that have the fixed mindset are the ones that become the victims. And that’s one of the problems we have in our country today, I think, is that we have too many people with a fixed mindset.

BILL GEORGE: Well, I think the growth mindset is the key to everything, because we’re constantly growing as people. When you stopped growing, then you’re kind of heading for the end. And I’d like to think I’ve been more creative and learned more and grown more and learned more in the last 10 years than I had at any point in time in my life. So if we’ve got to keep growing– and that’s part of being adaptive, flexible.

The world’s changing. So are we continuing to adapt ourselves? Do we have that growth mindset? I think it’s a wonderful concept.

The fixed mindset really conveys a rigidity, or rigid atmosphere. But you want all your people to be growing too. Everyone in your organization’s got to be growing. And you can expect that of them. When they stop growing, then I don’t know. Then you’ve got a problem. And I’ve seen that happen a lot where people are not continuing to grow. So we need to do that.

KELLY KING: So one of the mindsets that I’ve found in my own life that is important is to have an enthusiastic positive attitude. Managing our own mindset is important as a leader.

BILL GEORGE: But see, you convey that sense to everyone you interact with. You have a positive attitude. Hey, we got a problem here. Yeah, it’s a big problem. We can get all the best people around to help solve this problem.

It is a problem. But then we can have that attitude of, we can get it done. Let’s figure out how we’re going to solve this problem. I think you have to bring a positive attitude.

So it’s not bad, though, to have what I call truth tellers around you, someone who will come into your office and say, Bill, how do you think the executive committee went this morning? I had a general counselor who did that. And I said, I thought it went great.

We took a vote. Everyone agreed on what we were going to do. We got the new plan. We’re moving. He said, actually, three of the people that are back in their office are really mad at you.

I said, why? Because you were giving off signals to where you wanted the meeting to come out, and you just drove to that conclusion. And in the end, they said, yeah, we’ll go along, but they didn’t really believe it. So good for him to tell me the truth, because you need people around. I’d missed it that morning.

If you don’t have that sense of what’s really going on and people that will tell you– but I didn’t think of that person negative at all. He was very positive. And if I said, we got a legal problem, he wouldn’t say, no, Bill, you can’t do that. He said, no, let me.

You can’t do it that way. Let me go find the right way to do that, OK? And because we got a lot of regulation, you got to live with it. But just a naysayer, we can’t do this, can’t do that, you’ll never get anywhere.

But I think having people around us that can say, OK, let’s go find a way to get it done. And that, to me, is not negative. That honest truth teller, I love people like that.

KELLY KING: And that’s part of that self-awareness and that security to be willing to let people tell you the truth.

BILL GEORGE: Yeah.

KELLY KING: I know in my early journey in leadership, I finally figured out that you should be developing decisions by consensus building. So my early wrong version was, we’re going to talk about this as long as y’all want to talk about it as long as we get my answer.

BILL GEORGE: As long as we get my answer.

KELLY KING: But you quickly have to grow through to the idea that probably the best idea out there is not your own. It’s probably some form or fashion of what I call iterative thinking of getting everybody’s ideas.

BILL GEORGE: Yeah, because we’re talking about it. We’re having an honest discussion.

KELLY KING: Right, yeah. So you talked to 101 leaders, if I remember the number correctly. And I wonder if there are a couple of those you’d like to tell the group about that they may not have ever had the kind of experience you’ve had but a couple of leaders that you would talk about and any particular lessons you learned from them.

BILL GEORGE: Well, one of the most amazing people I ever met is a good friend of mine now, a man named Ken Frazier who is– believe it or not, he was born in South Carolina. His grandfather lived in South Carolina. He was a slave. So that’s 150 years ago his grandfather was born– more, actually.

And he moved. His father went to Philadelphia, and he was a janitor and never rose above that level. And Ken’s mother died when he was 12. And his father came in and said, son, your mother died this morning.

She is at peace today. It’s a good day. And he said, that is faith in action. And Ken never lost that sense of, OK, and I have a mission.

His father used to say, son, you have to be your own person. There’s drug gangs outside the door. You have to stay here and get your work done. There’s no daycare here. And he never lost sight of that.

He had a purpose in his life, and he followed that to the point he’s now CEO of Merck. And he’s just done a fantastic job. And he tried to represent the industry, keep prices down. But he’s revived the whole science about saving lives.

He said, I’m going to invest in products that may not come to market for 10, 30, 50 years. But he said, we’re making a difference in the lives of people. To me, that is a leader who has a real sense of who he is, his purpose.

I used to say to him, Ken– because he’s such a high level guy, you wouldn’t think anyone– hey, has anyone ever discriminated against you? He laughs. Yes, of course, all the time. But he said, if I get angry about that, I’m just playing into your own views. He said, I’m just going to ignore that. I’m going to do what I think is right, and I’m going to see if I can bring people together to get inspired to do it– a great leader.

KELLY KING: That was outstanding.

BILL GEORGE: Another leader I think is really outstanding is Mary Barra, who’s CEO of General Motors. She came to my classroom. Mary started to work on the production line at 18 General Motors. She didn’t go to school. And then they sent her to GM Tech, and I think eventually she went to Stanford Business School because they could see what an outstanding woman she was.

She’s a very modest person. But she’s got a really tough job. And she’s had to say, how do you navigate through everyone shifting from small cars to large cars? And we have a very complex supply chain. We’re having all these trade disputes.

She’s got a vision of where we’re going to go, and she’s going to stay the course and take the hard action, which she’s had to do. She’s had to lay off a lot of people. But on the other hand, she’s going to win in the marketplace to deliver cars people want. And it was all about quality.

And I remember that she went in front of Congress and was just getting beaten up because of their ignition switch situation that they had buried in the law department. They took their quality problems. They didn’t send them to the quality department. They sent them to the law department.

And so she didn’t know anything about this. She got beaten up by some female senators, which made my wife really mad and me too. But then finally they said to her, tell us about this switch problem. She said, look, we’ve got a much bigger problem here. We have a very unhealthy culture at General Motors, and we’ve got to fix that.

I’ll tell you today. I’ve met a lot of her people. That culture has changed dramatically, but all because she’s real. She owned the problem. She got to the root cause.

And I like that. In both cases, I like the fact people are really real, down to earth. Authentic, I call it.

KELLY KING: Authentic, for sure. So as we move towards wrapping up this video, Bill, I want to come back to something you alluded to earlier, because I think this is a message that needs to be more broadly shared. And that is the general obligation of business. There are some really good leaders beginning to talk about some changes that need to take place, even being bold enough to say capitalism maybe needs to be tweaked a bit, which I happen to agree with.

And so let’s talk a little bit about this notion of the broader role. Like at BB&T, we say our why is to make the world a better place to live. But a lot of companies have gone too far towards the pure profit, which ultimately never is the best long-term profit, is it?

BILL GEORGE: We’ve devolved down to maximizing short-term value. And a lot of those places blew up. I mean, that was the problem in 2008. Those are the short-term value producers.

So I’m a capitalist. I fervently believe in capitalism. [? Talking about ?] socialism, [? like ?] this is the best system ever created. It’s the greatest wealth system ever created. And frankly, if you’re in a community like, say, Winston-Salem, the wealth has come from business.

I love non-profits. I’ve served on the boards of a lot of them. But that money’s coming from the wealth created in business. Where does the government get its money? It gets its money from taxing people that make money in business whether they’re individuals or a corporation. That’s where it all comes from.

So if we look at creating value, that’s what it’s all about. So I like the notion of– and I’ve been writing about this lately– responsible capitalism. You have to have a sense of responsibility to your clients. You want them to do well. The best way for a bank to do well is to have a community where people are thriving and earning money and moving ahead and the companies are. And it’s a good place for small business to come.

And like Medtronic started out with two people. When I went there, it was 4,000. Now it’s 86,000. You’ve got to have a community that enables you to flourish.

And it creates a lot of jobs. That’s being a responsible capitalist. You can look yourself in the mirror and say, did we do the right thing by our clients, our employees, our shareholders, and our communities?

KELLY KING: I come back to the basics of this country was formed 250 or so years ago. And sometimes it’s helpful to me to remember, why was this country formed? It was formed by people who were brave enough to come here looking for opportunity and hope.

BILL GEORGE: Yes.

KELLY KING: They were trying to get away from being subdued and without opportunity and hope, coming here looking for that. And what we have to pay attention to, I think, as business leaders is, how can we make sure there is still opportunity and hope so there’s people that are willing to work hard and invest in the communities, take care of their shareholders and families and do all the things that are right? They can still have opportunity and hope in this country.

It’s not too late. We can still be– and I believe we are– the best country in the world. And we can even be better.

BILL GEORGE: Can you help people take that opportunity and turn it into a small business, a restaurant, a company that may grow up into something much bigger? Can you get behind me and kind of be the wind under my wings to get started? I think that is really key.

How do we give people that hope but then give them the capacity, the how, to get it done, to make it into something? And when you do that, then you have a thriving community, and everyone flourishes. That’s the way I look at it is you offer that.

KELLY KING: And if we go out every day and be authentic, self-aware, and be clear about where we’re going and what our true north is, we’ll be able to make a contribution.

BILL GEORGE: No doubt, absolutely.

KELLY KING: Bill George, thank you [? for the morning. ?]

BILL GEORGE: Thank you very much. You were terrific.

KELLY KING: [INAUDIBLE]

BILL GEORGE: Thank you. Thank you. That was terrific. Thank you very much. Thank you.

[APPLAUSE]

The BB&T Leadership Series: Bill George Discover Your True North Part 1

Posted on August 21, 2019 by Bill George | 0 Comments | Filed In: Press

he BB&T Leadership Series, a video series with CEO Kelly King presented by The BB&T Leadership Institute, was created to support our commitment to leadership development. The series shares insights on leadership topics from some of today’s best and brightest thought leaders. We hope you find these interviews and the perspectives they share inspiring and motivating as we strive to personally be our best every day.

The well-known author, Harvard professor and former CEO discusses why we need courageous and “authentic” leaders at all levels of an organization.

KELLY KING: Welcome to the BB&T Leadership Series. Bill, welcome.

BILL GEORGE: Thank you, Kelly.

KELLY KING: We’re delighted that you would join us. And I think you already know from what you know about Bill and what Will just said in the shortened biography. But Bill is an outstanding leader, and is an outstanding teacher and writer of leadership principles and concepts. And so we’re really honored to have you join us today.

BILL GEORGE: Thank you.

KELLY KING: And thank you so much for sharing your knowledge and experience with us. So let’s start right out with this True North idea. You wrote the first book, I think, in 2007, which was immediately a bestseller, True North. And now you’ve updated it. For the audience that have not read the updated version, it’s awesome, Discover Your True North.

Along the way, you’ve interviewed some 101 or so outstanding leaders around the world. And so I’m sure our audience, live and viewing the video, will love to learn more about that as we go through our discussions. But let’s center everybody on in your mind when you say true north, what does that mean?

BILL GEORGE: Your true north, Kelly, is who you are. It’s your essence. What are the things that you hold most dear? Your beliefs, the principles you live your life by, and the values you hold, that’s your essence. And I think understanding what are your greatest source of satisfaction, where do you find real joy in your life and fulfillment– and I think a lot of people are not speaking their like doing that. But if you are, then you can not only be very successful as a leader and you can inspire other people, but you can have a great life.

KELLY KING: You know, a lot of times I’ve found for myself and for others, they learn about these things by reading and going to seminars. But sometimes they learn about these things in their own life experiences. Was this something along the way that called Bill George to focus in on the true north?

BILL GEORGE: Part of it was failure. As a boy, my father wanted me to make up for his shortcomings and become the leader he never became. And so I thought I was going to be some kind of leader. And in high school I was never chosen to lead anything.

I was a good enough tennis player to play college tennis, but I wasn’t even co-captain of my high school tennis team. And I remember running for president of senior class and losing by a margin of two to one. And so I went off to Georgia Tech, in part because I wanted to find a whole new environment a long way away from where I’d lived. And I did everything the wrong way all over again.

And some seniors pulled me aside said, look Bill, no one’s ever going to work with you much less be led by you because you’re moving so fast to get ahead that you don’t have time for other people. And that was like, a blow to the heart because they were right. And so I had to really rethink my whole life back as a 19-year-old, and think about what was really important to me.

And that’s what I said, you know, I really want to help people to better their lives, and I want to make a contribution. You only get one opportunity to walk on this earth, and I want to use it to help other people. And I think if I could have lucky enough to be in a leadership role, I can help more people.

KELLY KING: That’s very interesting. We’re here at the BB&T Leadership Institute. And our core executive leadership program is called Managing Leadership Dynamics. And so in the chorus part of the exercise was you would be there with your team, who was our executive team, and you’d stand up in front of the room, and you would have a little dial in front of you with lights that could either be red or green.

And the audience would have a little toggle that they could either flip red or green. So you ask questions. And, of course, they could just toggle red or green, so they told the complete truth. And so I–

BILL GEORGE: Are we doing that here?

[LAUGHTER]

KELLY KING: This is not exactly that high pressure. But anyway, so I was getting all green lights, and I was feeling pretty good. You know, I’d been in banking about 10 years and moving up, and things looked good. But they made you ask one question. And the question was, would you feel comfortable screwing up around me.

I got all red lights, all red lights. It knocked me to my knees. It was the first time in my career I had gotten negative feedback.

BILL GEORGE: Wow.

KELLY KING: And so, make a long story short, I talked to some of my colleagues and I told them the truth. I said, I got all red lights, which you didn’t have to disclose. But I didn’t like that it made me feel horrible, that I was intimidating people, just like you had hit me in the gut. And I started a journey of changing the way I presented. Because I was climbing the ladder as fast as I could and wasn’t caring about anybody else. And it made me very sad. And I think all of us getting to that reality deep down inside of what we really want to do with our lives is really important.

BILL GEORGE: I think that’s key, is we only go around once in life. So what is it we want to do with our life? And how can we be on this earth and help other people?

KELLY KING: That brings me to one of my five great books, which is Man’s Search for Meaning by Viktor Frankl.

BILL GEORGE: Yes. Yeah.

KELLY KING: And I’m sure–

BILL GEORGE: Amazing.

KELLY KING: –most everybody knows. But one of the great quotes in there for me was, if you know your why you can endure any how. So how close is Viktor Frankl’s why and Bill George’s sense of true north?

BILL GEORGE: Very close. I think the why gets to why are we on earth, what are we doing here, and then what’s our purpose. What’s the purpose of our life? And what’s the purpose of our leadership? And a lot of people wait a long time in life– I think you do learn that the experience, though.

I mean Frankl learned it through very painful experiences. But I think we learned it through your sharing experience. I share experience. We learn through experience. We don’t learn out of a book. We don’t learn in the classroom. But an environment like this can kind of open us up to sharing those experiences.

And I can find out, oh, you went through some tough times, too. We all hit difficult times. And I think it’s that honesty– we connect at the heart, we don’t connect at the head.

KELLY KING: Right.

BILL GEORGE: And that’s why we really connect as human beings.

KELLY KING: Yeah. You said in your book something that’s pretty intriguing, and I think really true, that the hardest person you’ll ever have to lead is yourself. Tell us about that.

BILL GEORGE: Well, I’ve just experience that we get too high on ourselves and we get too sold on ourselves. And we don’t really understand how we’re impacting other people. And because we have these fears– fears of failure, fears of rejection– we tend to go off and lose sight of what we’re trying to do.

And we set ourselves above people. And leaders that do that are not going to be successful. Leadership is really changing from the kind of dominant, hierarchical leader to the person that really understands people at a deeper level.

And that’s how you inspire and empower people. Me, leadership is no longer about having power or people. It’s really about empowering them to step up and lead. And so I think that’s how we enable everyone to find out what their true north is, and what’s their why. Then we can figure out the how.

KELLY KING: And you talked a lot about this same concept in Authentic Leadership.

BILL GEORGE: Right.

KELLY KING: And so for our younger leaders out there that are listening in the audience and in the video, what would you say to a young leader that’s maybe struggling about how to get in touch with their authentic self?

BILL GEORGE: Yes. Well, I think it’s diving in and having the experience. I found in my classroom the best leaders are returning military veterans because they put their life on the line. It’s not just about money. They put their life on the line and they realize what it’s all about. And you realize you have to trust your colleagues.

Those who were second lieutenants in the army learned they had to trust their master sergeant that had their life in their hands. And so I would say young leaders, get the experience. And frankly I believe an experience on the ground.

Get somewhere you’re really in touch with people. Don’t just go and be a consultant or an advisor. Actually have the experience and get beaten up a little bit, get knocked down a little bit.

You can think of any sport. Have you ever thought of you never lost a match? Well, then you really don’t know what life’s about. And you learn much more through the tough times than you do for the good times.

KELLY KING: Here at the Leadership Institute in that same program I mentioned, we have a central part of it that’s about self-awareness.

BILL GEORGE: Right.

KELLY KING: And it’s about two days out of the five days where you are immersed with a group of people and really getting in touch, becoming self-aware. And I think you said in your book that you’ll never really become a true leader until you become self-aware.

BILL GEORGE: No one’s going to stand up there and tell you they’re not self-aware. I can tell you lots of times I didn’t have self-awareness, as my wife gently points out to me. But we created this compass for True North, and self-awareness is at the core.

Because until you gain that self-awareness– but I think you gain self awareness through interacting with other people and understanding how do you come across to people, do you know who you are, and getting honest feedback. Far too few people get really honest feedback, particularly the people they work with every day. That’s why that’s critical, is taking in that feedback to know who you are.

KELLY KING: Well, that’s what I had done in those early first 10 years. Because I came from kind of an impoverished background, and I was determined to succeed, to get away from that background. But in the course what I did, which a lot of people do, is I developed this shell of the Kelly King that I wanted to be like, but it wasn’t me.

BILL GEORGE: Wasn’t you. Yup.

KELLY KING: And that can create some real problems for us, can’t it?

BILL GEORGE: Well, you are fortunate to have that experience early. I had it early. And I think some people don’t have it until late because they’ve been the hero, if you will. And they start to get a hero’s complex. And they start thinking they’re better, and then they get knocked down maybe too late then.

And I think having that self-awareness and not having to feel like I’ve got to go into the office and wear the mask, and I’ve got to pretend I’m the man or I’m the person– and no, just say, hey– it’s got to be real.

KELLY KING: And this has changed over time. You talked about 21st century leaders versus 20th century leaders. What’s your observation? Now you’ve talked a lot of these leaders and got their views all around the world. What did you discern in terms of the change in the century about leadership?

BILL GEORGE: Well, it’s changed dramatically from the idea that leadership is about charisma, it’s about your style, it’s about your image. I don’t think it’s about any of those things. I think it should be about your character or your integrity or what do you bring to the job. Who’s the real you?

And so if you’re kind of faking it to make it and putting on this image, you’re not going to reach anyone. Today, particularly the millennials, they know who’s authentic and who’s not in about 30 seconds, maybe less. And if you try to maintain that distance from people, then you don’t really get to them as human beings. You’re just giving them orders.

And that’s where leadership has really changed away from this command and control environment to much more an empowering environment. You’ve got huge numbers of people here. How do you empower them to be excited about coming to work every day? Are they excited about their job? Are they excited about helping the client you’re serving? They’re trying to give them better secure futures.

And [INAUDIBLE] isn’t a lifesaving business, but here you’re trying to provide trust and security. But if that’s not what it’s all about– I used to say some bankers, particularly investment bankers, if you’re just trying to make money off of me, you know, I’m not going to do business with you. If you make money for me, then I’m happy to see that you do well, as well, at the same time.

KELLY KING: I still remember when I was an undergraduate school in the late ’60s. Back then we taught– everybody was taught the five steps to management. Plan, organize, staff, direct, and control.

BILL GEORGE: Right.

KELLY KING: Which made sense at that time, but it didn’t make any sense.

BILL GEORGE: No.

KELLY KING: Because you can’t really direct and control people, can you?

BILL GEORGE: Well, I think we need a lot more leaders and fewer controllers, if you will. A manager should control. Frankly, a lot of the stuff we teach in business schools is, I hate to say it, but it’s very old fashioned, very irrelevant. We’re teaching people to control for a fixed environment.

You can’t predict. I mean, who would have predicted 2008? Who’s going to predict what’s going to happen the next 10 years? I think only a fool would do that. So you’ve got to be prepared to adapt. As a leader, you have to be flexible and you have to have a vision of where you’re going.

You have to be running a bank, you have to know that’s where we’re going. There’s our end point. You don’t want to ever lose sight of that. But it’s like you’re a sailor and you’re going to get buffeted in the winds. You’ve got to tack back and forth. And if have the flexibility as a leader, and you’ve got to get your team with you to step up and lead. Not just a few of you at the top, but throughout the organization.

KELLY KING: And for sure, if you don’t know where you’re going when the strong winds start blowing, you can really get blown around. Can’t you?

BILL GEORGE: That’s right. And we’ve seen that happen.

KELLY KING: Yeah, a lot. A lot. One person that didn’t get blown around a lot in his life that you talked to and wrote about was Nelson Mandela.

BILL GEORGE: Yes.

KELLY KING: You talked about his transformation from I to we. I bet that must have been really interesting conversation.

BILL GEORGE: Well, he’s an amazing human being. I would say of all the leaders I’ve met in the last 50 years, he would be the greatest leader. Amazing. I mean, how could you be in jail for 27 years for a crime you didn’t commit? He was in jail for political crime.

But an amazing person, because you would’ve thought he would have come out of there literally to kill or go after all the people that put him in jail, and the apartheid system. Instead, obviously he wanted to get rid of apartheid. But he said, no, we have to have one South African. I’m not here to represent black South Africa, white South Africa.

He said this the night he came out of prison. He said, I want to represent all of South Africa and make it– to me he was a very soulful leader with a great vision. But he realized it was all about the we of South Africa, not me as the powerful new president of South Africa that’s taking over power.

And that’s the difference. Frankly, I wish we saw the kind of leadership you and I are talking about in the political world. Everyone asks me that, but we don’t see that today. But in the business world, we do. It’s moving this way.

KELLY KING: Now, you know, it’s interesting in our country. We’ve had some real experiences of being I versus we with segregation and different– over the course of our long, really good history. But we’ve hopefully learned some important lessons about how we all can do better for the world if we work together and respect each other. And I think that’s what Nelson Mandela saw early on. He could have a much greater South Africa if everybody wins.

BILL GEORGE: Sure. You love sports, I love sports. It’s all about the team.

KELLY KING: Right.

BILL GEORGE: And if I think I’m the one that’s got to score the goal, throw the winning pass or get the winning basket, it’s not going to work. We have to play together as a team. And whoever’s got the greatest opportunity– and I think that’s the big difference from the kind of dictatorial leader to the team-based leader that’s more of a coach today than is a dictator, and really is willing to coach people.

And I think the leadership essence is how do you get people inspired and empowered to. Give you their best. And sure, there are times you take people aside and said, look, you’re not bringing your best game here today. You can do a lot better.

But that’s actually an empowering message. It’s critical, but it’s empowering, that kind of feedback. So how do we have a whole organization of empowered people? I’ll guarantee if you have an organization of empowered people you’ll defeat the tops down hierarchical organization every time.

KELLY KING: Let’s talk about a different version of team that a lot of people don’t focus on that you spent some time in your book talking about. And that’s our team at home. You talked about how sometimes leaders are 100% focused on the company, on the business side of life and they’re not very integrated, they’re not very balanced. And as a result, they’re not as effective as they could be. Did most of the leaders you talked to really get they need to be integrated and balanced in life?

BILL GEORGE: I think they’re getting it. I think I’ve heard a lot of young people in my classrooms at Harvard talking about I work 100 hours a week. You can’t work 100 hours. First of all, you’re not going to be effective. Then they have something called face time.

I’ve got to be there just in case the partner or the senior person comes in at 10 o’clock at night. I mean, I think it’s a ridiculous notion. It should all be about– I think we need an integrated life. But an integrated life to me is there is no such thing as perfect balance. There are times you are going to work really long hours.

There are times like when my wife was going through breast cancer and I was taking her to chemotherapy, I had to cut back and ask other people to take over. But I think it’s having the integrity to be the same person in every setting. In your work life, in your home life, can you be that same person?

I remember someone said to me there’s no way I’d have the same kind of affect at home I have in the workplace. Well, why not? Can’t you be the same person when you’re in the community? Can you be real? And that’s what, to me, is being authentic.

But then it’s having a full life. And I think you’d be a better leader if you have a full life. If you have a home life, a good home life, you’re engaged in your community– one thing about the community is you get to see the lives of people that are not as benefited or socially advantaged, as economically advantaged as we are.

And I think it’s important to get out there and be with the real people. And whether you’re in a branch bank or whether you’re in a Starbucks store or whether you’re out in the factory or in a medical center, being with the people where the action is taking place.

True North by Bill George Selected as One of 25 Best Leadership Books of All-Time

Posted on July 26, 2019 by Bill George | 0 Comments | Filed In: Press, True North

We are very proud to announce that True North has been selected as one of the 25 Best Leadership Books of All-Time by Soundview. It is a privilege to be included with such great authors as Warren Bennis, Peter Drucker, Daniel Goleman, Sun Tzu, Jim Collins, Clay Christensen, Stephen Covey, John Kotter and Dale Carnegie. Here is the complete list: https://bit.ly/2JV0SEf

Discover Your True North – updated and expanded – is available from Amazon.com at a special price of $13.52 (58% discount off $32 list): https://amzn.to/2MiOFe8.

Georges Provide $5 Mil for Mayo Clinic Center for Women’s Health

Posted on July 10, 2019 by Bill George | 0 Comments | Filed In: Press

On June 25, 2019, Mayo Clinic announced its upcoming grant from The George Family Foundation to fund the all-new Center for Women’s Health. The center aims to combat some of the problems women face in receiving adequate healthcare, offering tailored health services for women of all ages.

Penny George, board chair of the George Family Foundation, accomplished psychologist, and renowned philanthropist, has spent her career championing reform for women’s healthcare.

“Our gift represents a significant investment in shifting the ways women interact with health care at Mayo Clinic, one of the premier health care institutions in the U.S.,” she says. “Mayo Clinic has long been known for its Executive Health Program. This program will mirror the success of that approach but take it a step further. The focus will be not only on women, but also on integrative health and healing practices that will go hand in hand with traditional medicine – an approach we’ve been advancing through our work over the past two decades.”

Bill George is an accomplished businessman and business leader, serving as a board member and executive leadership for a wide range of top companies. Today, he is a senior fellow at the Harvard Business School and serves as a board member at Mayo Clinic.

“It’s our hope that the Center for Women’s Health inspires other philanthropists to join in the mission to transform health care for women, ensuring its continued success and elevating women’s health as a priority at Mayo Clinic,” he says.

Stephanie Faubion, M.D., will serve as the Bill and Penny George Director at the Center for Women’s Health. “This transformative philanthropic gift from Bill and Penny George, and the George Family Foundation, will personalize the health care experience of women,” she says. “The Center for Women’s Health will lead by example to set a new national standard for women’s health care, providing personalized care that considers women as partners in their health care.”

The Center is the latest chapter in Bill and Penny George’s commitment to transforming healthcare in Minnesota and the United States.

In 2003, in partnership with Allina Health and the Ted and Roberta Mann Foundation, the George Family Foundation co-founded the Institute for Health and Healing at Abbott Northwestern Hospital in Minnesota. The Institute focuses on holistic healthcare that treats a person as a whole, not just their symptoms, and is the largest hospital-based integrative medicine program in the United States.

To honor Penny’s career and her successful battle with breast cancer, the Institute changed its name in 2008 to the Penny George Institute for Health and Healing. Today, the organization serves patients in 14 locations across Minnesota, North Dakota, and Wisconsin.

The couple also created a multi-year integrative health program as a new wing of their Foundation in 2014. The Catalyst Initiative‘s mission is to improve healthcare through a commitment to self-care, education, and Western medicine.

Catalyst is another significant example of the George family’s commitment to the holistic medical practices that form the cornerstone of the Center for Women’s Health.

Appointments at the Center will not just treat illnesses and symptoms, but will also seek to educate female patients about their bodies and their ability to improve their well-being at home. The Center will also be a home for research programs that investigate the links between sex, gender, and health.

“The center’s goal is to become a destination for women’s health care,” adds Stephanie Faubion. “Patients are not only treated for a specific condition, but also empowered with the tools and knowledge they need to improve their overall health and wellness: mind, body and spirit.”

“We are truly grateful to Penny, Bill and the George family for their friendship and incredible generosity,” says Gianrico Farrugia, M.D., president and CEO of Mayo Clinic. “The Center for Women’s Health furthers their visionary work to support lifelong, holistic care for women, and we are honored to partner with them to accomplish this goal.”

To learn more about the Center for Women’s Health, read the press release from Mayo Clinic and the George Family Foundation.

To learn more about the George Family Foundation and its healthcare initiatives, visit their website at www.georgefamilyfoundation.org.

This content was originally published on PhilanthropyWomen.org on 7/10/2019.

NPR: Top Reason For CEO Departures Among Largest Companies Is Now Misconduct, Study Finds

Posted on May 21, 2019 by Bill George | 0 Comments | Filed In: Press

Heads are rolling in the corner office.

For decades, the main reason chief executives were ousted from their jobs was the firm’s financial performance. In 2018, that all changed. Misconduct and ethical lapses occurring in the #MeToo era are now the biggest driver behind a chief executive falling from the top.

That’s according to a new study from the consulting division of PwC, one the nation’s largest auditing firms.

It is the first time since the group began tracking executive turnover 19 years ago that scandals over bad behavior rather than poor financial performance was the leading cause of leadership dismissals among the world’s 2,500 largest public companies.

“A lot of bad actors are being cleared out of the reaches of corporate American,” John Paul Rollert, a professor at the University of Chicago who studies the ethics of leadership, told NPR.

Thirty-nine percent of the 89 CEOs who departed in 2018 left for reasons related to unethical behavior stemming from allegations of sexual misconduct or ethical lapses connected to things like fraud, bribery and insider trading, the study found.

Executives are still being pushed out because of poor financial performance, but only about 35% of the time.

And that shift, the researchers say, is meaningful.

Increasingly, according to the study, corporate boards are approaching allegations of executive misconduct with a “zero-tolerance stance,” fueled in part by societal pressures since the rise of the #MeToo movement.

“For companies, they are recognizing that if they don’t get aggressive with this type of behavior, they are going to face exceptional liabilities when it comes to court cases,” Rollert said. “And so better to address these concerns now than to deal with multi-million-dollar lawsuit and the bad PR that comes with that sometime down the road.”

Some former CEOs say the study is proof that more women are feeling emboldened to share stories of alleged abuse or misconduct, and it is reshaping corporate America.

“Employees are starting to say, ‘how can you enforce a policy on us without holding CEOs accountable?’ ” said Bill George, a senior fellow at Harvard Business School and former chief executive of Medtronic, who has served on the boards of Goldman Sachs and Exxon Mobil. “The CEO’s behavior has to be beyond reproach. Boards are aware of this and are really feeling pressure around that now.”

Corporate boards, George said, realize “there’s a greater reputational hit of not acting than acting” to remove the executive.

Communication companies were hardest hit, reporting executive turnover around 24 percent, followed by materials and energy business. Health care companies logged the lowest rate of CEO attrition at around 11 percent.

Scores of CEOs were knocked down after allegations of sexual misconduct or impropriety in 2018. In July, the chief executive of Barnes & Noble was forced out. Two months later, Les Moonves, CBS’s chairman and chief executive, resigned after facing accusations from a dozen women.

The year also saw the chiefs of apparel company Lululemon and Intel exit after an internal findings of a violation of the company’s ethical guidelines.

The purge from the upper echelons of white collar jobs, Rollert predicts, will start to hit company leaders who may not be as well known as media executives and the heads of brands that are household names. Soon, he said, the movement that is forcing out top bosses will make its way down to smaller firms, and he said could even reach into blue-collar workplaces.

“The first wave of #MeToo took out some of the most high-profile figures,” Rollert said. “What we’re beginning to see in this second and now third wave is corporate America taking responsibility for itself,” he said. “There are clearly a lot of bad actors who are still hiding in the shadows that need to be swept out.”

WSJ: What Tops Kraft Heinz’s Menu? Cost Cuts or Mac ‘n’ Cheese?

Posted on April 24, 2019 by Bill George | 0 Comments | Filed In: Press

In three years since Kraft Foods and H.J. Heinz KHC -1.00% joined forces, the combined company has become as closely watched for the way it manages expenses as its ability to peddle foods that we’ve been consuming since kindergarten.

As Kraft Heinz Co.’s new chief executive, Miguel Patricio, prepares to take over at the food giant, he should ponder whether being better known for cost-cutting than for your ketchup or mac ‘n’ cheese is a recipe for failure. Mr. Patricio, a packaged-goods industry veteran, is replacing a CEO who let a culture of cost get in the way of revitalizing a kitchen-full of aging labels.

INC: 30 Life-Changing Questions From Harvard Fellow and Goldman Sachs Director Bill George

Posted on April 16, 2019 by Bill George | 0 Comments | Filed In: Press

This article was originally published on INC.com on 4/15/2019.

CNBC: Expect A Fiery Hearing On Capitol Hill Today Over The Role Of Pharmacy Middle Men In Drug Pricing

Posted on April 9, 2019 by Bill George | 0 Comments | Filed In: Press

Health care analyst Ipsita Smolinski and former Medtronic CEO Bill George discuss what to expect from today’s Senate hearing with pharmacy benefit manager executives.

This content was originally published on 4/9/2019 on CNBC.com.

CNBC: Elon Musk’s Behavior Will Hurt Consumer Confidence

Posted on April 4, 2019 by Bill George | 0 Comments | Filed In: Press

New York Times columnist Jim Stewart and former Medtronic CEO Bill George join “Squawk on the Street” to discuss the upcoming hearing in court for Tesla’s Elon Musk, and whether the company is as successful as he claims it will be.

This was originally posted on CNBC.com on 4/4/2019.

HBR Podcast: Can Mark Zuckerberg Rebuild Trust in Facebook?

Posted on April 3, 2019 by Bill George | 0 Comments | Filed In: Press

Facebook CEO Mark Zuckerberg faced a “crucible moment,” a point in his life that would test him and potentially shape him as a leader, in March 2018 when it was discovered that Cambridge Analytica had accessed data from 87 million Facebook accounts. Harvard Business School professor, and former chairman and CEO of Medtronic, Bill George discusses his case, “Facebook Confronts a Crisis of Trust” — why Zuckerberg handled the crisis as he did, the importance of earning and keeping user trust, the role of companies in protecting privacy, and the pros and cons of regulation.

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

TRANSCRIPT

BRIAN KENNY: Here’s a hypothetical for you, imagine you’re sitting at your favorite coffee shop when a teenager pulls up a chair and asks you to share a bunch of personal information. He wants to know your birthday, what kind of food you like, where you go on vacation, who you voted for, who you hang around with. He promises he won’t share that information with anyone. Really? Would you trust him? Well, 2.3 billion Facebook users around the world do, but one thing we know about trust is that it’s hard to earn and even harder to keep. According to the 2019 Edelman Trust Barometer, the public’s trust in traditional media is at its highest point in the past decade at 66%. But trust in social media platforms languishes at around 43%, and in this era of fake news, fixed elections and fraudulent data, regaining the public trust may be harder than ever. Today, we’ll hear from Professor Bill George about his case entitled, “Facebook Confronts a Crisis of Trust.” I’m your host, Brian Kenny, and you’re listening to Cold Call. Bill George is an expert on leadership, a topic that he teaches and writes about extensively, including numerous books, articles, and business cases. He’s also the former chairman and chief executive officer of Medtronic. Bill, welcome.

BILL GEORGE: Thank you. Good to be here.

BRIAN KENNY: To talk about a case that is literally ripped from the headlines. Headlines even today about Facebook and those have been sort of going on it seems for at least a year now. Just they’re present all the time.

BILL GEORGE: They certainly are and this has continued right up to the present moment.

BRIAN KENNY: I really appreciate you taking the time to talk about this case and we’re happy to have you today because you just taught the case this week. I’m sure we’ll hear some of the insights and observations that you have from discussing it with students, but maybe you could start just by telling us what led you to write this case.

BILL GEORGE: Well, the Guardian broke the story on Facebook being invaded by Cambridge Analytica and user data being compromised along with friends back in March. And at that time we were preparing for a program with a group of CEOs about 60 that came here in June and I wanted to prepare a case to help kickoff that one-day session. This seemed like one that was something that everyone should be interested in, and how do you protect data? There’s been so much talk about cybersecurity and breach and also, people are making a lot of money on use of information. So it became a very hot topic and that’s why I wrote the case.

BRIAN KENNY: Do you use Facebook yourself, Bill?

BILL GEORGE: I do. I have about 30,000 followers on Facebook, actually, I find the best site for me is LinkedIn because everyone discloses who they are in terms of their educational background and their companies and the fact that they are there more to talk about leadership because they want to advance their own leadership.

BRIAN KENNY: We’re all using one platform and another and we’re all giving away a lot of information about ourselves every day it seems in different ways. So I think this case is really timely as people are thinking about things like identity theft and leak of data and how their information is being used in different ways. So Facebook becomes front and center, an example, good or bad or indifferent about what people can learn about their responsibility as business leaders. And I think we’ll get into that more as the case goes on.

BILL GEORGE: I led off the class yesterday asking the question, “If they’ve got over 2 billion users, how many of those users know this information is being used and being sold?” They’re being profiled as we show in the case down right down to minutiae so that they can pretty much identify who you are.

BRIAN KENNY: Let’s go back to the beginning of the case. What was sort of the pivotal moment that you lead off with in the case?

BILL GEORGE: Well, it was obviously, the Guardian story, but really struck me about this, and I really want to ask students about that is Mark Zuckerberg is a very public figure. He’s on every newspaper, every day. TV shows, media. He wants to be that public figure. All of a sudden he gets perhaps the greatest challenge he’s ever faced in the media and he disappears for five days. Well, first of all, I’ve taught a lot. I wrote a book called “Seven Lessons for Leading a Crisis.” If you’re a leader and you’re in crisis, you go out right away. Instantly. Howard Schultz did this along with Kevin Johnson at Starbucks when they had the incident in Philadelphia; two African American men being escorted from the store. He flew out there that same day, “Let’s get on an airplane and go out to Philadelphia.” And yet, how could Mark disappear for five days? As did his partner, Sheryl Sandberg. And it even got worse because on the fourth day he had a town hall, which he goes to every single month. This a worldwide town hall. So it’s video streamed all around the world. He sent his deputy general counsel and I thought these things were odd. So not having answers. I wonder why the case to get people really talking about as a leader, why would you respond that way? Why would you go into hiding just at the time when everyone wants to hear from you? And why would you send your deputy general counsel?

BRIAN KENNY: Those are all great points. And I think some of this gets back to the reputation that Mark Zuckerberg has had over the years. He’s been, even though he likes the limelight on his terms, he’s been enigmatic as a leader. Let’s remind people Facebook has only been around, I think they launched in 2006 to the public. So it’s still a relatively young company and one that’s experienced tremendous growth. The case goes into some of the details of their growth over the years? Can you just recount some of that?

BILL GEORGE: Well, it was spectacular. He started out as a dating site here at Harvard when he was a freshman and then he saw an opportunity to move to the west coast to really expand his … Phenomenal success. I think there literally are millions of people who want to be the next Mark Zuckerberg. And a lot of companies have been founded since then and it’s remarkable. The financial success has been spectacular and they’ve been able to grow this advertising model in ways that have exceeded anyone’s possible expectation. And just think about it, what are there, seven and a half billion people on the planet and they have a third of them on Facebook? I mean. Wow. This is crazy.

BRIAN KENNY: What were some of the pivotal decisions that they made along the way?

BILL GEORGE: In terms of building the business, they expanded and gave everyone free access. What people didn’t know is that was in exchange for profiling the information. Now, Mark in his defense, in fact, he wrote a defense recently in the Wall Street Journal in which he said, “We don’t sell your information.” That’s actually true, but they profile you to the point where maybe they had some personality profile of the fact that you’re deemed as neurotic or you’re deemed as someone who’s very aggressive and you get profiled that way so that advertisers can buy it. Advertisers love it. They’ve now got a very narrow slice. They know exactly the kind of customer they’re looking at and they can go at him. Of course, this was subject then to other influences like the Russian influences, but I just felt like this goes way beyond Cambridge Analytica. It goes to the heart of his business model and what, of course, went through my mind when I was describing this is, “This is not about Cambridge Analytica, this is about the heart of Facebook’s business model.” That’s the only reason you would go into hiding for five days. He didn’t have an answer to that one.

BRIAN KENNY: What do you think some of the problems are with the business model?

BILL GEORGE: That people of the two plus billion people don’t know they’re being profiled. If you read all the details, one woman in class yesterday, “Well, I filled out all 12 pages of materials and read through all of this,” a lot of people are actually going to do that, particularly young people. They’re sharing all kinds of very personal information about personal relationships. It’s not like they’re going out and buying a new shirt or new coat. They’re sharing very, very personal information and maybe you don’t want that information profiled about yourself and yet people are doing it. And that’s the concern. Even if advertisers love it, is that the model, shouldn’t everyone explicitly know about that?

BRIAN KENNY: It’s a real lack of transparency.

BILL GEORGE: When I was writing the case, I was in Europe, in May, in Switzerland and the European regulations, GDPR General Data Protection Regulations came out and so we had to approve of all this that you people explicitly you had to approve. So I approved Google and you had to approve Facebook if you wanted to use the site. The Europeans moved way ahead on regulation because they sensed this problem.

BRIAN KENNY: It seems like the US is starting to move in that direction too, and this Facebook incident may have been the catalyst that moves the US down this path more quickly than they would have otherwise.

BILL GEORGE: Well, I absolutely think so. We tend not to like regulations here, but I thought what was particularly interesting and I feature that in the case is that Tim Cook, the CEO of Apple, came out and said, “This is wrong.” He actually said, “Privacy is a human right.” And I had the opportunity of meeting with him in a small group in June, sitting next to him, just like ten of us in the room. And he was very clear, very passionate about it, “We have all kinds of information from iPhones about you. We would never look at it. And anyone who does look at it is terminated.” So a whole different point of view they have. Now, you could argue Apple selling a product and the only product that Facebook has is its site. Back to where you started out, I would argue that the only product Apple has is trust, and if that trust is breached. So that’s why we called it “Facebook Confronts a Crisis of Trust” because if you lose that trust, you don’t have anything.

BRIAN KENNY: There are other companies that have sort of similar business models. If you look at Google, if you look at Amazon, they both have mounds and mounds of data about their customers, their users. They haven’t found themselves in the same kind of situation.

BILL GEORGE: Two things. We had Google people in the classroom yesterday and Amazon. First of all, if Amazon, I buy a lot of books on Amazon, if Amazon, there’re millions of books out there, they help curate the kind of books I might like, I actually like that service. And if I’m looking then back to my example, I’m looking online at a retailer for a particular shirt I don’t mind if they’re sending me ads for shirts because they know I’m in that business. That’s very, very different than I’m looking for a therapist or my child is very, very ill, or do I want my employer to know all these things that are going on? And that to me is in a whole different class of information.

BRIAN KENNY: Let’s talk a little bit about Facebook’s leadership model then. You’ve got Mark Zuckerberg, who is the founder and the CEO. He’s got Sheryl Sandberg. They’re probably the two most public figures in the company, but who else is kind of watching the store, as it were?

BILL GEORGE: Mark has absolute power. He has over 50% of the voting shares and you remember Lord Acton said, “Power corrupts. Absolute power corrupts absolutely.” And I think he has caught up in something called hubris. Very hard to define what that word means, but I think he got caught up in its own success and his own power and so he’s not really listening to other people. I had written in a book three and a half years ago. I thought he was listening to people like Don Graham of the Washington Post, but I think he shut out a lot of those voices right now and going off in their own way. And I think it grew too fast. A little bit like Frankenstein’s monster grew out of control and there’s so much out there, he’s in a defensive mode of trying to find the sites that have invaded rather than changing the business model. And I think he feels trapped, but I don’t think he’s really listening. It’s been said by board members at Facebook, former board members, that normally the board is the boss. They’re in charge. That’s what we teach here at Harvard Business School. But in this case, the board is an advisor because if Mark doesn’t want to do it there’s nothing the board can do. They can take a vote. It doesn’t mean anything because he controls over half the voting shares. He has two class of voting stock. So there’s questions being raised about that. And certainly, in his case, I don’t think it’s a good thing.

BRIAN KENNY: We’ve talked in the past because you’ve been on the show a couple of times and the Martin Luther King podcasts, we talked about crucible moments, which was one of the ideas that you’ve written about before. Is this kind of a crucible moment for Mark Zuckerberg?

BILL GEORGE: Huge. It’s his biggest crucible. He’s probably never experienced one like this before. It’s been up, up and away, and here he is down in his early 30s and all of a sudden he’s confronting something. And the question is, when will he acknowledge that he didn’t handle this well? That’s the question. A crucible is you can’t ever get through it until you acknowledge your own culpability and until you own you’re not … If you fire me from my job at a certain point in time, I got to look myself in the mirror and say, “What role did I have in getting fired?” Rather than blaming my boss. As long as I can blame outsiders and Mark in his CNN interview, which we show in class and is referenced in the case, which he did five days later, puts all the blame at the hands of Aleksandr Kogan, a Russian living in England, who did the invasion on behalf of Cambridge Analytica. And I just think that’s wrong. I think if you’re a leader, you have to take responsibility for everything that happens. You are responsible and you can’t just cast the blame elsewhere.

BRIAN KENNY: What kind of effect is this having on other people at Facebook? And it’s a big company. There’s a lot of people that work there. We know this is a generation of people and millennials that want to belong to something, to a company that has meaning and purpose. They probably felt like that’s what they were getting when they signed on with Facebook. But does this affect them in some way?

BILL GEORGE: Yes, absolutely. He’s lost some very visible figures, because you’re right, they were following the mission, the passion that Mark had, “Let’s connect everyone in the world.” That’s a valid mission, but if that becomes a mission turns into almost a cult-like thing, it’s very, very dangerous. I think maybe they haven’t done that, but they’re on the verge of it unless they pull back and they probably have to stop chasing stock price and shareholder value, which as of this week I think they’re still chasing and I think maybe they have to pull back. Maybe they shouldn’t have as many users. Maybe they have to expunge a lot of those users and clean up their site a lot more.

BRIAN KENNY: You go back and look at that decision to go public, which probably happened four or five years ago.

BILL GEORGE: It did.

BRIAN KENNY: Was that a mistake? Is that driving some of the behavior that we’re seeing?

BILL GEORGE: I teach governance and I serve on many, many corporate boards, and I can tell you once you make the decision to go from a wholly-owned private company to go public, you’re getting public money, you’re getting investor money, pension fund money, hedge fund, you’re getting all kinds of public money. You have an obligation to those investors and it’s not up to you just do what you want to do. You have a deep obligation that goes far beyond that.

BRIAN KENNY: Let’s assume that Facebook does want to regain the trust here. This is a great learning moment by the way. So I want to talk about the class in a second. Are there examples of other companies that you could think of. I’m thinking of Volkswagen and what they went through a couple of years ago with the emissions. The lies basically that they were telling about their cars’ emissions. Other companies that have been able to overcome something like this?

BILL GEORGE: Volkswagen hasn’t fully overcome it. One of my students worked for Volkswagen. He said that $27 billion dollars in fines. Billion, that’s a lot of money. I remember the CEO of Volkswagen US testifying in front of Congress that no one knew anything about this, it was just two rogue engineers. That’s simply not true. Everyone knew about these violations to the emissions test. So if you do the wrong thing, you better acknowledge it because the cover-ups going to hurt you a lot more and you’re going to lose the trust of the public. And it’s hurt Volkswagen sales tremendously. If you’re not upfront about these issues, it’s going to hurt you greatly. General Motors. Good example of one that went the ignition switch, Mary Barra takes over. She acknowledges and she said, “It’s not only a problem we have with safety, which we’re going to correct. We’ve got a cultural problem and we’ve got to correct it,” And she has. Here we are, five years after she took over. She has changed that place dramatically and now they’re getting great results because of leadership. I think it’s time for Mark Zuckerberg and Sheryl Sandberg to step up to leadership Industries do not do a good job of self-regulation, so we have regulatory bodies. We didn’t let Pharma regulate itself. They have to get FDA approval on every product. That’s a good thing. It protects the public, just like Medtronic had to get FDA approval on every product that helps protect the public. I think it’s time to have a regulation, a sound regulation about use of information. The problem is that the field is growing so fast, it’s moving much faster than the regulators can figure out what to do. With artificial intelligence, these issues are going to mushroom by several orders of magnitude to be much more serious. If these big companies want to keep going they’re going to have to act in a very responsible manner. So actually, regulation can work to help the strong companies.

BRIAN KENNY: It certainly seems like you need a balance. You need to have some balance regulation and also some independence for business so they can continue to thrive.

BILL GEORGE: Exactly.

BRIAN KENNY: Consumers, by the way, have a vote in this too. Nobody’s forced to be on Facebook, so people choose to be on that platform. And a lot of people did jump off of it after they started hearing about this issue. But over time these things seem to recede a little bit until they rear their heads again. You discussed it in class yesterday.

BILL GEORGE: Yes.

BRIAN KENNY: I assume probably everybody in that class has been on Facebook at some time or another? What were the kinds of themes that you saw emerging in the discussion?

BILL GEORGE: Some people were very really very angry that they felt really invasion of their privacy. Others were advocating for regulation. Others don’t like regulation, but acknowledged that had to take place. And some of them were generally perplexed how somebody as successful as Mark Zuckerberg could fail to step up and lead in such a crisis. We talked about that in depth and we were able to compare and contrast the leaders in some of these other high tech companies and why they’ve had different outcomes. We talked to a much broader basis about what is the public responsibility of corporations when they have that much power? Because in my experience, if corporations don’t behave in a responsible manner, they’re not only inviting regulations, they’re inviting monopolization, breakup and antitrust suits. And a lot of other things. We talked about the addiction factor, particularly for children. I see this in my own grandchildren. They want to be on those devices all the time, and what are the impacts? And we’re just starting to study this so it’s come on so fast. But on the other hand, I’m a huge believer, as I told you, I’m in social media. I have a total 180,000 people that I can connect with a push of a couple of buttons. I love to do that. I love sharing my leadership ideas and what I think’s important to be a good leader. So obviously, I shared a lot of things about Facebook, but I share a lot of other companies do good and bad because that’s the role I’m trying to play.

BRIAN KENNY: You mentioned the GM situation and how that’s been turned around, I mean fundamentally it turned around because a new leader came in and was able to change the culture there. Is that the only option that Facebook has? Is that the best option for Facebook?

BILL GEORGE: That’s a really good question. Are you going to have to have new leadership there? They certainly need a much stronger board. They need a real board, not a group of advisors. I think they should open up their shareholding so that Mark doesn’t have full power. I doubt he’ll do that. If Mark doesn’t step up to it, yeah, I think he’s going to have to bring in someone to run the company. I thought Sheryl could do that, but she’s faded into the background. I don’t know why.

BRIAN KENNY: Maybe there’ll be a B case on this one, Bill. We can talk about next year.

BILL GEORGE: Oh, I think there will be a lot of material for a B case, C case. It’s an ongoing saga. It’s not ending now. It’s just getting started.

BRIAN KENNY: Bill, thanks so much for joining us today.

BILL GEORGE: Thank you for having me. It’s a real pleasure.

BRIAN KENNY: If you enjoy Cold Call, you should check out HBR After Hours a podcast featuring Harvard Business School faculty dishing on the latest happenings at the crossroads of business and culture. Find it on Apple podcasts or wherever you listen. Thanks again for listening. I’m your host, Brian Kenny, and you’ve been listening to Cold Call.

This content was originally posted on HBR.org on 4/3/2019.