Bill George: Action Steps To Turn Crisis Into Opportunity
World Business Forum Highlights
The crisis isn’t over. Just ask the 25 million underemployed or unemployed Americans. But a smooth sea never created a great mariner. Crisis is the real test.
In 2008, Bernake and Paulson had limited options. Bernake was a rock, and Paulson figured out how to save the system. I don’t think that anyone realized how close we came to the system imploding in September 2008. As the crisis impacts companies, who will step up? How will leaders in your organization act?
- Face Reality: As CEO of Medtronic, I appointed someone president of Medtronic Europe. Four months later I found out he was involved in Italian bribery scheme. This violated our values, so firing him wasn’t hard. What was hard was admitting that I had a role in this. I didn’t check out his values before I promoted him. I had to look in the mirror and admit that I was part of the problem.
- Get the World off your Shoulders: On the Target Board, we faced an attack from Pershing Capital. The CEO asked me to help, because while he was a great retailer he didn’t have a strong financial background. If you can’t ask for help, you can’t make it through a crisis. Meditation, jogging, and my relationship with my wife provide the support I need to lead.
- Dig Deep for the Root Cause: In medicine, if you diagnose a symptom –not the cause—you treat the wrong thing. In New York, the root cause of the problem is short-termism. Innovation takes years, not quarters. You have to move past the focus on “quick hits” if you’re going to create long-term value
- Get Ready for the Long Haul: In early 2007, the Goldman Sachs had managers come in to brief us on subprime mortgages. The traders had lost money and realized they had made a mistake. In August 2007, they had a problem with their quantitative funds. The exceeded their risk benchmarks three times in a week, so they focused on building short-term cash reserves. So in Fall 2008, they had the cash to withstand the crisis of confidence. Crisis often keeps happening.
- Never Waste a Good Crisis: The Chinese symbol for crisis is made of two symbols: danger and opportunity. A crisis can be turned into an opportunity. The Jack Welch focus on top performing business got rid of corporate politics… he made the culture about business performance. And by moving out underperforming managers, he gave ambitious young people a shot. The opportunity today is to invest in innovation.
- Follow Your True North: You can lose 30 great years in 30 minutes. The velocity of information has increased. You cannot control the distribution of your story. So be honest. Get out there. Tell your story.
- Focus on Winning Now: Steve Jobs changed the game at Apple. He had courage to go on offense, move past computers and try a music player… then try a phone. Indra Nooyi at Pepsi has gotten out in front of the game, and address the health implications of sugar-based drink consumption. Jeff Kindler at Pfizer is breaking up his research groups to increase innovation. I’m a director at Exxon. We’re putting $25 billion into capital projects now, even as oil has plummeted. But we’re looking towards the future.
Robert F. Kennedy said that few will have the greatness to bend history. The sum total of all our efforts will shape history. A small group of people are going to tackle the great problems of today: global health, energy, job creation, peace. What role will you pay?