The Forum was thrilled to have Bill George as our closing speaker on Day 3. Former Chairman and CEO of Medtronic, Senior Fellow at the Harvard Business School, and author of Discover Your True North, Bill discusses finding your own True North – the internal compass that sets one on a path toward their fullest potential as a leader. Today’s global business community calls for leaders who will change the world for the better and inspire others around them to do the same.
This content was originally posted to stthomas.edu on 05/19/16.
MPR News host Kerri Miller talks with Bill George, Senior Fellow at the Harvard Business School, and Washington University law professor Adam Rosenzweig about corporate tax inversions and why the issue seems to have taken a timid foothold in this year’s presidential election. With both Democrats and Republicans taking aim at companies who employ tax inversion, Kerri delves into the reasons why, what the concerns are with this sort of corporate maneuvering and what might be done to get at the root causes behind U.S. companies taking their operations overseas.
CNBC Contributors Jeffrey Sonnenfeld of the Yale School of Management, and Bill George, former Medtronic chairman & CEO, talk about the leadership challenges facing Alphabet with the various companies in the corporate structure.
This article was originally posted to CNBC.com on 3/29/16.
Bill George of Harvard Business School, and Jeffrey Sonnenfeld of Yale School of Management, discuss the proxy fight launched at Yahoo by Starboard Value and how the current and proposed boards could do.
This article was originally posted to CNBC.com on 3/24/16.
Bill George, Harvard Business School professor, former Medtronic CEO and CNBC Contributor, weighs in on the Valeant Pharmaceuticals leadership change and gives his pick for who should replace Michael Pearson as CEO.
They’re know-it-alls and braggarts. They rule with an iron fist. It’s their way, their idea, their direction – or nothing at all.
No doubt we’ve all encountered a dictator boss, or one with so little humility, we’re really not sure they had any to begin with. Is there any way to tame these characters at the office? It’s a topic several LinkedIn Influencers weighed in on this week. Here’s what two of them had to say.
Daniel Goleman, co-director of the Consortium for Research and Emotional Intelligence in Organizations and co-founder of the Collaborative for Academic, Social, and Emotional Learning
Is there any hope for a dictatorial leader? Goleman tells the story of a manager named Allen. Behind his back, his “staff called him ‘Mr. My Way or the Highway’… Allen ruled his department with an iron fist, making every decision big and small with little input from others.” Allen’s staff didn’t dare make suggestions, he wrote in his post How to Coach a Dictatorial Leader.
With so much evidence showing that dictator leaders negatively impact team performance, it’s not just a personality problem. Executive coaches say dictatorial leaders can be tamed, sometimes. Goleman cited the work of Daniel Siegel, author of Mindsight and executive coach and speaker who tries to understand what makes a person a dictator leader.
According to Siegel, people need three “S’s”: To be seen, to be soothed, and to be safe. “When you’re safe, soothed and seen in a reliable way, you get the fourth S, security.”
The bottom line, Goleman wrote, is that when people don’t have these three S’s, they lack a sense of security, a state of mind that can make them prone to acting like a dictator in an organisation.
But changing a dictator’s style only starts with understanding why they behave that way. Goleman would ask a dictator two questions — first, do they care, and second, do they want to change? If they do want to change, dictators have to see themselves the way others do, he wrote. Yes, the dreaded 360-review (where the employee’s closest workmates are asked to provide feedback on him or her) can be a useful tool for homing in on the problem, Goleman wrote.
Next, he wrote, find a positive career model for your dictator. This could be “someone in their own career they loved as a leader… a very positive model rather than the way they’re being. Then, help them practice steps that will make them that kind of person … where they see the value of a different form of leadership.”
Ready to give up on a stuck-in-his-ways dictatorial boss because you think it’s no use changing someone so set in their path? Not so, wrote Goleman. “It’s never too late.”
Bill George, former chief executive officer at Medtronic and professor at Harvard Business School
Every day, news headlines seem stuffed with examples of not-so-humble leaders.
“Listening to the media these days one would think that our leaders have lost all sense of humility, if indeed they ever had it,” wrote George in his post Are Our Leaders Losing Their Humility?“ Donald Trump brags that he used a $1m inheritance to create $10bn net worth” and chief executives “hype their quarterly results by focusing only on the positive aspects, only to see their company’s stock prices collapse at a later date.”
“Whatever happened to humility as a virtue for leaders?” George asked. The finest leaders, he wrote, “are keenly aware of their limitations and the importance of teams around them in creating their success. They know they stand on the shoulders of giants who built their institutions.”
They also exhibit humility, he wrote, not just in their interactions with others, but also in the actions everyone can see. Perhaps it’s the concept of humility that’s been lost, he added.
“The word humility is often misunderstood. Dictionaries define it as ‘a modest opinion of one’s own importance’, ‘the quality of not thinking you are better than other people’, and ‘self-restraint from excessive vanity’”. But most importantly, “humility derives from an inner sense of self-worth….Ultimately, they know to lead is to serve their customers, employees, investors, communities, and ultimately, society through their work.”
But, he wrote, leaders who lack humility don’t seem to have that sense of self-worth. “Leaders who brag and tout their achievements often do so from a deep sense of insecurity. Outwardly, they act like bullies and try to intimidate people, but inside they feel like imposters who may be unmasked at any time.”
This article was originally posted to BBC.com on 3/11/16.
At the World Economic Forum in Davos, Switzerland, a lot of people were palpitating about the decline in stock prices since the start of 2016, the precipitous drop in oil prices, the slowdown in China, war in the Middle East – even the prospects of Donald Trump or Ted Cruz in the White House. The stock market tends to overreact to perturbations like these, just as it did to Greek concerns in 2014 and 2015.
For the two dozen CEOs I talked to at Davos, it is “full speed ahead.” Not that they aren’t concerned about these geopolitical factors. Rather, they have already anticipated this kind of volatility and designed their corporate strategies to adapt rapidly to changing global conditions.
No doubt the slowdown in the global economy is a significant factor, but it certainly does not impact everyone equally. Rather, in Warren Buffett’s infamous words, “When the tide goes out, you find out who is swimming naked.” In my view, times like these separate the well-run companies from the short-term players that are caught unprepared.
Let’s look at contrasts in several industries between companies with the best leaders who have long-term strategies and those who choose to react to short-term events. Here are some of the winners where investors might place long-term bets:
Unilever vs. Procter & Gamble: Since becoming CEO in early 2009, Unilever’s Paul Polman has built a diversified strategy to pursue the world’s markets with vigor. He’s rapidly adapting to changing conditions using the banner of “sustainability,” which he sees as Unilever’s growth engine in spite of troubled markets. Meanwhile, archrival P&G struggles without a clear strategy. It seems focused mostly on paring back by selling off brands as new CEO David Taylor takes over. In 2015, P&G’s stock dropped 15 percent, while Unilever’s was up 4 percent.
PepsiCo vs. Coca-Cola: PepsiCo’s Indra Nooyi put her strategy in place even earlier than Polman. Soon after being named CEO in late 2006, she declared PepsiCo’s strategy of “Performance with Purpose” to focus on healthy foods and beverages. By 2020, PepsiCo plans to reach $30 billion in nutritional product sales, up from $10 billion in 2010. Pepsi’s archrival, Coca-Cola, led by CEO Muhtar Kent, elected to double down on sugar-based Coke. Initially, Coke appeared to be winning, but in the last four years, PepsiCo has steadily pulled ahead. Meanwhile, Kent has painted Coke into a strategic corner, appealing to a declining demographic as millennials eschew sugar-based drinks.
Exxon vs. British Petroleum: What will happen to oil companies as oil prices drop from over $100 to under $30 a barrel? Having served on Exxon’s board for a decade, I saw first-hand how veteran CEO Rex Tillerson prepares the company for major downturns. Exxon keeps its balance sheet flexible, which gives it the capacity to take advantage of financial stress. Meanwhile, BP’s balance sheet never recovered from the Deepwater Horizon incident in the Gulf of Mexico, and it lacks the cash to take advantage of current investment opportunities.
Delta vs. United Airlines: On the opposite side of the oil price decline, Delta is benefiting from lower fuel costs. It is using savings to invest in the higher-revenue business traveler and to reward its high-frequency travelers. CEO Richard Anderson has figured out the basics of appealing simultaneously to both the value-conscious traveler and the business market while achieving superior operational efficiency and high load factors. Meanwhile, United continues to struggle with both service and efficiency. Since 2012, it has ranked near the bottom in delays, cancellations, and mishandled bags. With newly appointed CEO Oscar Munoz recovering from a heart transplant, United may not be in a position to make necessary changes.
Starbucks vs. McDonalds: The growth that Starbucks has enjoyed since founder Howard Schultz returned as CEO in 2009 is nothing short of phenomenal. Meanwhile at McDonalds, new CEO Steve Easterbrook has made much needed changes and the stock market has hailed his initiatives. Nevertheless, it will be very difficult for McDonalds to return to sustained growth as it is trapped with a declining demographic. McDonald’s has yet to shake its reputation of serving unhealthy, highly modified foods, which is limiting its appeal to health-conscious consumers.
Target vs. Wal-Mart: Target’s new CEO Brian Cornell has moved rapidly to appeal to the younger generation. Cornell has focused on mothers, babies, families and wellness with an omni-channel strategy that is paying off in rising same-store sales. Wal-Mart is trapped with an old demographic and has yet to attract large numbers of millennials. It has too much space as many consumers shift to online purchases. If anyone can turn around giant Wal-Mart, it is new CEO Doug McMillon, a highly progressive leader who is making all the right moves and deserves a long runway to complete the turnaround.
Medtronic vs. Pfizer: Under CEO Omar Ishrak, Medtronic is on a roll. It has successfully integrated its $50 billion merger with Covidien, and its innovation pipeline is paying off in higher growth. Recently, Medtronic announced an additional $1.5 billion in high tech acquisitions. Recently, Pfizer purchased Allergan for $160 billion – more than five times Allergan’s revenues. Unlike Medtronic, Pfizer is financially strained and its pipeline is paltry. Allergan won’t help much in that regard as it too has a limited pipeline. Expect Pfizer CEO Ian Reed to reach the limits of financial engineering soon after he realizes the cost savings from consolidation of Allergan.
While I don’t expect these sharp comparisons necessarily to manifest themselves in the near-term stock performance, they will become evident over the next 3-5 years. In a challenging market, investors will be well advised to be highly selective in their investments and focus on the quality of leadership. It is in difficult times that leadership makes the largest difference and becomes evident. The winners above have leaders who have proven their capacity to take advantage of the current challenges and come out on top.
Commentary by Bill George, a senior fellow at Harvard Business School and the former Chairman and CEO of Medtronic and previously served on the board of Novartis. He is author of the book “Discover Your True North” (Wiley: August 17). Follow him on Twitter @Bill_George.
Disclosure: Bill George holds stock in Exxon and Medtronic, but none of the other companies listed above.
For more insight from CNBC contributors, follow@CNBCopinion onTwitter.
This article was originally posted to CNBC.com on 1/25/16
Bill George is professor of management practice at Harvard Business School, where he has taught leadership since 2004. Mr. George is the former chairman and chief executive officer of Medtronic. He is the author of the new book, Discover Your True North, an updated version of his bestseller True North. In this interview, we discuss how to become an authentic leader.
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