Knowledge@Wharton - Bill George: Authentic Leadership and Letting Your Strengths 'Bloom'
In an interview with Wharton management professor Michael Useem, George, who is now a professor of management practice at Harvard Business School, shares insights about his own path to leadership and offers some advice for aspiring leaders.
An edited transcript of the conversation follows.
Michael Useem: You ran one of the great medical equipment makers of the world, Medtronic, for a decade. You’ve been on the faculty at the Harvard Business School for a decade. You served on the boards of ExxonMobil, Goldman Sachs [and] the Mayo Clinic. Today, we’re going to talk about your own leadership at Medtronic and what you’ve been doing in more recent years to help others develop their leadership. Let’s start with a day at the office [at Medtronic]. When you walked in, the security person was happy to see you. You got a cup of coffee, sat down in your office – and then, some people might say, “it’s all downhill” from there. So, what was a day like? A week?
George: For me, I’d have to say it was all uphill. It just was an amazing time. I became very quickly engaged in the life-saving mission of Medtronic and how we were engaging with patients and what we were doing in our labs to try to save lives — whether it was cerebral palsy or with the drug pump or Parkinson’s disease. [It] took us 10 years to get there, Mike, but it was so exciting to see people who were just locked inside their brains with Parkinson’s disease, and all of a sudden they had their lives transformed by these miracle treatments.
Useem: I would add the pacemaker [to that list]. There are some people out there walking down the street today who [could not do] that without that particular product.
George: Right. But [with] the implantable defibrillator, we were locked out by patents. We had to go to the Supreme Court to get into the game. We had huge competition from Guidant, which was an [Eli] Lilly spin-off.
It was an amazing experience with the lives saved. My mentor in the last decade has been Warren Bennis (leadership expert and professor of business administration at the University of Southern California). I was with Warren last week, and he said he had his life saved six times by his Medtronic defibrillator.
Useem: Let’s talk about Warren Bennis a bit — an author and a well-known commentator on leadership. He’s written probably a dozen books on the topic. Bill, I’ve heard you say previously that you were not a natural born leader. You learned how to lead at Medtronic. You took the company from $1 billion to $60 billion in market cap over [your] 10 years [there]. What are some of the events, some of the people, some of the mentors, some of the books and some of the experiences that changed you from the person you were at age 20 to the chief executive of Medtronic?
“Sometimes you have to go against the grain. You have to go against what prevailing wisdom is telling you. And certainly go against what securities analysts are telling you.”
George: Part of it was having a negative experience at Honeywell before I came, where I’d felt like I’d hit the wall, so to speak. I wasn’t being myself. I was the heir apparent to become CEO of this giant company. But I just wasn’t happy. I wasn’t passionate about the business. [It had] great people, but it was so bureaucratic, and it wasn’t me. I had to face that in order to go to a smaller company. Like one of my mentors once said, “Sometimes you have to take the elevator down a floor to go up further.” That’s what I learned at Medtronic. It was like an open, free culture. You could breathe the air. I could be myself [and feel] the passion, the excitement. I saw 700 medical procedures [including] a defibrillator implant. I saw somebody’s life saved in brain surgery. [I saw] a stent put in their heart.
That’s where I really learned about the business. I then tried to integrate that into the company. Instead of the internal bureaucracy we had to bring much more of an external look. You’d sit around the lunch room and dream up new ideas. You’d sit in a business meeting and say, “Is this product good enough to go to patients — so 100% of all patients who get it are going to have their lives improved? If it’s not, we’re going to have to go back to the drawing board.”
Useem: Did you have a mentor along the way?
George: I’ve had a lot of mentors. Win Wall (Winston Wallin, former Medtronic CEO), my predecessor, was one of my mentors when I was CEO. And I’ve had a lot of mentors. My mentors are different today. Warren Bennis is one of them but also Nitin Nohria, our dean at Harvard Business School, [who] has shown me the ropes at Harvard. I look at them as wisdom people — wise people whom you can consult.
Useem: Let’s take you into a year or two at Medtronic. I’ve often heard it said that in the corner office, your day is just one darned decision after another, and all the easy decisions somebody else took care of at a lower level. Think back on your 10 years there. What was among the toughest decisions you made? What went into it? How did you resolve it? Looking back with the benefit of hindsight, what might you have done differently?
George: Well, there were some big decisions. The toughest one I had was in 1998. We’d had a growth front started by my predecessor [Winston Wallin] 1985. And so we had a 13-year unblemished run of 18% growth in revenues and 22% in earnings. Yet that year (1998), we weren’t growing. We had one business losing $50 million — a vascular business. We had a lot of people inside the company from the old line core business — pacemakers, defibrillators — that wanted me to pull back and not get into so many new businesses. We had a lot of ventures losing money.
We had to make the call because we weren’t growing. We had a 15% growth goal, and we were lucky if we were growing 7% that year. We were working hard to keep the earnings up, but you can only do that a while. We had two choices. We could pull back to what we were really good at, [where] we knew we could make a lot of money, but probably be acquired by a larger company like a GE or a Johnson & Johnson. Or we could go for it and take some risks, take advantage of our high priced earnings ratio and expand the company.
We chose the latter course. Even though a number of members of our executive committee were opposed to doing that, we decided to go out and expand the company. We did five acquisitions — $13 billion in sales that transformed the company. I remember having a problem after that. One of the acquisitions didn’t go well. The stock market beat us. [It was the] first time we’d missed quarterly earnings [forecasts] in 10 years. They beat us up pretty bad. I said, “Look, there’s a great company; it’ll come back.” And we did. Two years later, the market cap had tripled from $20 billion to $60 billion because we did the right thing.
But it could have gone the other way. The whole thing could have backfired on us, and we could have made some really bad deals and blown up the company.
Useem: You’ve got to take a risk. That’s what business is. [You’ve] got to live a little bit on the edge.
George: Sometimes you have to go against the grain. You have to go against what prevailing wisdom is telling you. And certainly go against what securities analysts are telling you.
Useem: The U.S. Army for long had a phrase abbreviated as AAR — the After Action Review. [It is] always good to look back when things have gone well or not well and ask what you might have done differently. Anything you would have done differently on that one with the benefit of looking back?
George: When something goes well, you wish you’d done it sooner. We did a pretty good job of integrating [acquisitions]. So, I don’t have a lot of regrets about that call. It’s interesting that the first acquisition Medtronic [made was] eventually spun off. It was interesting because it was not a fantastic [deal], but it opened the door to a lot of other things and put us in the game and gave us self-confidence. So, I don’t even regret doing that [one]. We were in chains and we had to bust loose from those chains. So I don’t have a lot of second thoughts about those deals.
Useem: Bill, when you became chief executive, you, like all first-time chief executives, were doing it for the first time. Thinking back about becoming chief executive, was there anything that was surprising, even shocking, that you didn’t anticipate until you got into that corner office? Was there anything that really seemed counter intuitive, [or] even shocking, as you took up the mantle of leader of the firm?
George: Well, I was fairly new to Medtronic at the time. I’d been with the company [for about] two years as president and chief operating officer. My predecessor stayed on as board chair. I always said he was one of my wisdom advisors. It took a while [to get] our whole team fully on board. A lot of them weren’t quite sure. A couple of them had wanted the job. [I had to] get them to fully embrace the company. Then what really shocked me was that [despite our company’s] great values, we ran into huge ethical problems outside the United States. I appointed the president of [Medtronic’s European operation] … and it turned out he was running a bribery fund. He’d come from a subsidiary company [and] was running it there. But still, he had to be fired. I had to admit my mistake and say, “I made the mistake [of] appointing this guy.”
It took a long time to get our team up to speed [while facing these] ethical problems around the world. [We had to] change out our manager in Italy. We had to change out people in China and Argentina and Brazil. [We] had to shut down every operation we had in Korea back in 1992 or 1993, because we ran into some significant ethical problems there, and just start over.
But I was shocked [at] how a company with such good values could tolerate such actions around the world. I think tolerate is the right word. One of my closest colleagues was a Frenchman who was head of international [operations]. He wasn’t unethical, but he looked the other way. He was passive. He had to be replaced so that we could take the lid of all these operations and make a lot of changes. But that took longer than I thought.
Useem: Bill, let me reference maybe one of the miracles of the modern universe. You come to work in the morning, but at that time another 5,000 people come to work.They’ve all got to get their job done [and] work together, pull together. That has to be aligned with where you’re going. If there was one thing you did to keep the 5,000 people working for you all over the world pointed in the right direction, above that ethical line, productive, [and] ultimately profit-producing, what was maybe the most important secret of your own leadership?
“Just be yourself. You can’t be something [else]. If you’re a tulip, be a tulip. If you’re a rose, and you’ve got some [thorns], it’s okay.”
George: Talk about the mission — every day, every minute, every hour — till you sound like a broken record. Travel around the world. Do mission and medallion ceremonies and give people that Medtronic medallion that says, “Our job is to restore people to full life and health.” You start to say, “My gosh, people must be really bored hearing this.” No, they want to hear it every time. Bring in role models. Bring in examples. They want to know why quality on the production line is so critical. It’s not to satisfy some quality inspector over there. It’s because we know a human life hangs on the end of this heart valve. Or when you’re in the operating room, you know that if you don’t provide the right product to the doctor at the right time, someone’s going to die. I watched somebody die in Paris in an operation once in a venture we had. Or he died later that night. [The message needs to] pervade every aspect of what you’re doing.
We turned down some very large acquisitions because in the end, there was not a coming-together around the mission and the culture — Boston Scientific, U.S. Surgical — companies we spent a lot time talking to, visiting with, talking to the CEO. But it was clear that there was not going to be a meeting of the minds around those points. That was what counted. That was the thing I always tested people for.
At the end of my tenure, I had to fire a chief information officer because he didn’t get it. He wanted to know where his reserved parking place was. We don’t have that. We don’t have any company planes. Get over it. He didn’t get the mission. He’d only been there a week or two. I said, “This isn’t going to work.” So he went away because it was clear I made a mistake. I’m not blaming him. I’m blaming myself.
Useem: You’ve written four books since you were there. Two of them have the following titles: Authentic Leadership — that’s the first book you did and [it] became a bestseller, [and], a little bit later on, True North. A question I’m often asked as I reference the concepts [in those books] is if you don’t feel that you’re being the authentic you, and if you don’t really have a North Star yet, how can you develop that authenticity?
George: When I first started writing, I was in Switzerland. I’d just given up being CEO of Medtronic about a year before. I [had] realized we were losing sight of what we were called to do. I thought that all the leadership literature was going the wrong way. It was talking about how we can pace the trade characteristics, competency and models, and all the HR community was going this way. I just felt it was wrong. I felt leadership has to be coming from who you are. You have to be authentic and the genuine you. You have to follow your true north. You have to be the real person that you’re called to be. That was the year of emulating Jack Welch. And how would you like to be a female executive emulating Jack Welch? It can’t be done.
You’ve got to be yourself. We’ve got to get away from this “great man” theory of leadership and get down to [the fact that] everyone has qualities of leadership, but they have to be developed. That was the whole thesis of everything that I did. That’s what I always told people: “Just be yourself. You can’t be something [else]. If you’re a tulip, be a tulip. If you’re a rose, and you’ve got some [thorns], it’s okay. You can produce beautiful buds. But you’ve got to be who you are. And then bloom from that position.”
Useem: Bill, you’re optimistic in that if we are being ourselves and we’re not performing to the level that we know we have to, we’ve got to take ourselves and we’ve got to build out what works, what’s strong. How should people go about doing that?
George: [The] first thing you have to do is accept yourself. You have to know yourself and have self-awareness. Then you have to accept yourself. That requires compassion for your weaknesses. You’ve got to realize that’s the core. A lot of people say, “I don’t want to deal with it.” [However, you] can’t be a leader until you do it. That’s who you are. You have to accept who you are. There’s nothing wrong with that. Until you can accept that you came from poverty, you came from a broken family or whatever it was, until you can gain that level, you can’t be a leader. Helping people walk through that process is just amazing in how it frees people up. It’s exciting.
Useem: Once we’ve got that, we need to go where we’re going … and that metaphor of a point of light that’s always there, your true north.
George: Your true north is, “What is your purpose in life? What are you called to do? I’m just one of seven billion people on the planet — how can I make a difference in the world? That’s what I’m passionately [exploring] today with young leaders coming in. How can each of us make a difference in the world through our work – [and it is] not that one is greater and one is lesser. [It is about] having a sense of your true north and what you really believe in, and following that. We all get pulled off course, but you have to find a way of coming back to true north, to what really is you.
“When you’re 97 years old and your granddaughter asks you, ‘What did you do to make a difference?’ What are you going to tell her? Think about that now when you’re 22.”
Useem: Somebody says, “I want to find my true north. I’m 22 years of age. I’m still trying to get that direction figured out. How do I go about figuring out what my true north should be?”
George: Very straight forward. First of all, let’s review your life story and the various phases. What are the high points and low points, really in depth? What is the greatest crucible of your life? What did you learn from that experience? Let’s understand. What do you believe [in]? What are your beliefs? What are your deepest held values? What are your principles [regarding] humankind and people? Put those things together, and now we’re ready to talk about the purpose of [a person’s] leadership.
I learned the hard way [that] you can’t start out talking about [true north]. People don’t know. Until you go through [this kind of questioning process], it doesn’t come into focus. “What are the gifts I have? What are my greatest strengths? What are the things I’m most motivated by?” That’s what we call your sweet spot — because it’s intrinsic motivation, not just money, fame and power, [which are] extrinsic. And it’s your greatest strength.
I had people trying to fix my weaknesses in previous jobs at Litton and Honeywell for 20 years. They were always unsuccessful because you couldn’t fix them. I’m still impatient. I’m still too direct. I still lack tact. I still have all those weaknesses I’ve had all along. I hope I’ve moderated them a little bit and they aren’t quite as strong, but they’re still there. They are part of who I am.
Useem: Bill, a question to shift gears ever so briefly here. You’ve been a chief executive who has had a board, and now you serve on the board of Goldman Sachs and ExxonMobil, among others. How does a chief executive go about getting the most from the amazing people in most board rooms — or if you’re a non-executive director, as you are at Goldman [Sachs] and ExxonMobil, how do you work to ensure that the board can give the chief executive and his or her team what they need — which is strategic guidance and much more?
George: Well, the best boards are made up of diverse people who’ve had a lot of experience. [At Medtronic] we had doctors on the board, we had business people — we [executives] just tried to have the dialogue and discussion and listen to what they had to say.
Sometimes [board members] get it wrong. Or sometimes they don’t say things quite right. That’s fine. But what insights can we get from our board and really use? …Make sure you’re getting everyone engaged and that you have private time to do it. You can’t do it with the whole management team in the room. Use your board, in the sense of gaining from their wisdom, knowledge and experience.
That’s the only reason I would serve on a board. The best board I was on was Novartis, where [former CEO] Dan Vasella really used the board and really appreciated our input. He would give us unformed decisions and say, “What do you think about this?” We’d give him inputs, and he’d come back a few months later and say, “Okay, now we’re ready to take the next step.” I’ve encouraged the boards I’m on to do the same thing.
Useem: What advice would you have for a young person just coming into their career in the light of what you’ve done?
George: Don’t do what I’ve done! (Laughs) You should do what you feel called to do. What turns you on? What are your passions? What gets you really excited? How do you want to make a difference in the world? When you get on your death bed and you’re 97 years old and your favorite granddaughter asks you, “What did you do to make a difference?” What are you going to tell her? Think about that now when you’re 22. How are you going to make your mark? There are seven billion people. How are you going to make a difference? What can you leave behind? What’s the legacy? Who is the real you? I guarantee you it’s not going to be how much money you make, because there will always be somebody who makes more money. What did you do to make a difference?
I found it really gets down to the lives you touch every day in your life … and people you don’t even know sometimes whom you’ve impacted by who you are, what you stand for, by being true to what you believe. If you can just do that — follow your own passions — you can fulfill every dream you have. It doesn’t matter what your title is and how much money you make. It doesn’t matter how famous you are. But what does matter is: Did you make a difference? Did you use your greatest gifts that your creator gave you to make a difference in the world — to make this a better place, to solve problems?
This article is reprinted with permission from Knowledge@Wharton.
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