The early part of this decade was a dismal period for business leadership. Enron, Adelphia, WorldCom, Xerox, Tyco, Global Crossing, Arthur Andersen -- all of these massive economic stalwarts were damaged or destroyed by leadership failures. A 2002 Gallup Poll found that the public had such a negative view of business that only 5 of 24 business and industry sectors were viewed positively. In 2003, a Gallup Poll reported that a mere 18% of the public rated the "honesty and ethics" of business executives as high or very high (in comparison, 25% said the same of journalists, 16% for lawyers, and 9% for HMO managers). (See "Health Care, Lawyers, Energy and Accounting Suffer in Public's Eye" and "Honesty, Ethics in Professions" in the "See Also" area on this page.)
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So when Bill George's book Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value came out in 2003, it felt like a breath of fresh air. The book asserted that sustainable business value is created by leaders with morals -- people who lead with vision, passion, motivation, and concern for customers and employees, not "golden boys" who leave a trail of dead in their wake. George had the credibility to make these claims: As the CEO of Medtronic, the world's leading medical technology firm, George increased the company's market cap by 35% a year, taking the company from $1.1 billion to $60 billion in 10 years. Currently, he is a professor of management practice at Harvard Business School and sits on the boards of some of the most successful companies in America: ExxonMobil, Goldman Sachs, and Novartis.
Meanwhile, the idea of authentic leadership was catching on. In fact, within a couple of years, so many successful companies had incorporated George's vision into their leadership strategies, it was hard to remember that it was ever a new idea. But George wasn't done. (See "Leadership Is a Process, Not a Role" in the "See Also" area on this page.)
Shortly after Authentic Leadership came out, George started interviewing more leaders. In the end, he spoke to 125 leaders in the realms of business, academics, politics, and social service -- all of them, he says, authentic, world-class leaders. He realized that there was more to authentic leadership than even he knew, and with the help of Peter Sims, George wrote True North: Discover Your Authentic Leadership, released by Jossey-Bass last month. The book covers the traits and development path of great leaders, how they became who they are, how they maintain their qualities, and how they empower others to lead.
In this interview, the first of a two-part series, George elaborates on the book and explains what he's discovered. He discusses what authentic leadership really is, the characteristics of great leaders, and how good leaders can lose their way and how they can come back -- and what happens if they don't.
GMJ: The idea of True North is based on authentic leadership. What is an authentic leader?
Bill George: Being an authentic leader means being true to who you are and what you believe in. You understand the purpose of your leadership, and you practice your values consistently. It's not just about having good values, but actually practicing them, especially under pressure.
It's about leading with your heart, not just your head -- so you're leading as a whole person. And when I talk about matters of the heart, I'm referring to qualities like empathy, compassion, passion, and courage.
GMJ: What do you mean by "true north"?
George: "True north" came out of the 125 interviews we did. We asked people what enabled them to become effective leaders. They told us that staying true to what they believed helped them, despite the pressures and seductions of the real world. They fully acknowledged that there are tremendous temptations out there. There are a lot of gray areas in business; it's not all black and white.
Most people know what their true north is. But the deeper questions are: Have you developed yourself as a leader? When you're under pressure and you start to deviate, does your inner compass click in and pull you back to your true north? Are you grounded enough to know that you're getting off track? Or do you get into trouble by not paying attention to your true north, little by little, bit by bit?
So many leaders who've gotten themselves into deep trouble started out with just a few minor deviations. We learned that the hardest person you'll ever have to lead is yourself. If you can lead yourself, leading others is easy.
GMJ:What do you mean by trouble? Bad stock price? Legal trouble?
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George: It's definitely not a bad stock price. It's the trouble that comes from looking for glory, seeking to aggrandize yourself at the expense of the organization.
This kind of trouble can be fatal. For instance, leaders who are under pressure from the stock market often rationalize their outcomes. They don't tell people honestly that they fell short, they made a mistake, they missed their numbers -- they tend to rationalize those things. Or they feel like they're imposters, and so they put on airs, [pretending to be] something they're not or totally on top of it all when they know they've had difficulties.
Or they may turn inward, and if they haven't developed a support team that will give them help and candid feedback, they may refuse to accept input from others. They may not use their own staff, isolating themselves from people in their organizations because they don't want to be criticized, don't want to hear bad news. They may surround themselves with sycophants who give them good news, so loyalty becomes more of a [valued] quality in that organization than meritocracy.
Authentic leaders form deep, long-term, connected relationships. They have self-discipline in their personal and professional lives and consistently deliver good results.
GMJ: What happens to people who head down this path?
George: Usually, they derail and wind up going off the track. They may destroy their companies in the process, unless the board sees what's happening and gets them out of there first. Whether you're talking Phil Purcell at Morgan Stanley or Bob Nardelli at Home Depot, the board has to act.
Sometimes people just lose their jobs and don't know why, and they have to go through a difficult time to recognize what happened. That's a key time, and they may come back stronger if they realize early on that they've been through a crucible -- and if they realize that leadership is not about them, but about serving other people.
GMJ: Explain how crucibles -- or any intense test or trial -- contributes to leadership growth.
George: We all have to develop ourselves. So the question is: Do we understand crucibles and use them to grow? Can we frame the events of our lives in such a way that they can become empowering experiences?
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I don't know of anyone who's gotten through life in a leadership role and not had significant problems. Some people have the advice of a great mentor or counselor, but even they have to go through a difficult period to gain self-awareness. Self-awareness is hard to gain, and we never stop learning it.
There are two kinds of leaders: takers and givers. That's why we wrote the chapter "Transformation From 'I' to 'We.'" You make this transition when you understand that leading is not about you. It's about serving other people.
That's the key transition people make. Often, it takes a crucible to enable them to realize what their leadership is all about. Am I here just to make money for myself? Or am I here to help develop other people and to serve other people? Givers understand their purpose, and they stay true to it. In spite of all the pressure, they do not bow or bend.
GMJ: What are the characteristics of a leader who's following his or her true north?
George: Leadership is not about getting people to follow you, but empowering other people to step up and lead. It's not like it was in the 1950s and '60s, when we'd all follow the great leader over the hill, and we'd wait in line for 20 years to get that promotion.
Today, leaders want to empower people at very young ages. One of the leaders from the book, Jaime Irick, wrote me today to tell me he was just made the general manager of a $50 million business at General Electric. That's an organization that wants to empower young leaders. GE knows in such a diverse business, it can't just have people on top who are really smart. It's got to have people throughout the organization who are empowered to step up and lead.
GMJ: What you're talking about sounds like the opposite of leadership by bullying.
George: Absolutely. Bullying is basically saying, "I've got the answers, and your job is to follow me." That form of leadership cannot be sustained. You can get short-term results by laying off tens of thousands of people, but you cannot get long-term results, nor can you sustain a great enterprise that way.
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GMJ: What would you say are the characteristics of a really great leader?
George: They really care about the people they're working with. They have the capacity to inspire and empower others around a common mission or purpose, like Jim Burke did at Johnson & Johnson, Sam Palmisano at IBM, and Anne Mulcahy at Xerox.
I think the best example I can give you of a truly great leader is Andrea Jung at Avon. She has more than five million people working for her, most of them Avon representatives. Jung's sole purpose is the empowerment of women. When the business went through a difficult time -- revenues grew 5% and earnings were flat; the market just killed Avon stock -- Jung said, "Look, we're not going to estimate earnings anymore. I'm going to reinvent myself as a leader and change the way things are run around here. We're going to reinvest everything in building the business for the future." Then she went out and got the first license for direct selling in China. They already have more than 100,000 reps there, and I wouldn't be surprised if they had a million reps in China in five years. That's the kind of leader I'm talking about -- one who is authentic, will acknowledge her shortcomings, and come back stronger.
GMJ: You interviewed 125 world-class leaders for the book. Did you learn anything you didn't already know?
George: Absolutely. I didn't have the idea of true north going in, and I hadn't thought as much about the idea of an inner compass. We learned a lot about how people think about building their support teams with their personal board of directors. (See "Building a Career on Your Strengths" and "What's in the Way?" in the "See Also" area on this page.) We learned a lot about how people stay true to their values under pressure and how they can deviate and pull themselves back into line.
We didn't know how important our life stories are. We learned that our life stories are so much more important than our traits, characteristics, leadership styles, or the training programs that companies teach about competencies and skills. Those pale by comparison with the importance of knowing your life story and being true to it.
GMJ: The life stories in your book were fairly dramatic. Some of them were just heart wrenching. But a miserable childhood inspiring great success is a classic American story. Now, what if you grew up in a nice neighborhood with decent parents and went to a good school? What can one draw from that?
George: That's the Wendy Kopp story. When she got to Princeton, she realized how few people have access to the kind of education she had. She realized how unfair it is that so many smart and capable people endure a truly bad educational system, and she got outraged by the inequities of that. So she started Teach for America.
As a matter of fact, some of the people who have the most difficulty grew up in wealthy families. I'm shocked at what a large percentage of my students at Harvard are "overcomers." You have no idea how high that percentage is. Even people who grow up in the kind of idyllic circumstances you describe have big issues: Did my father really love me? Can I live up to my parents' example? Do I want to?
That's when you have to take control of your own life and say, "I am who I am; this is who I am." That's how we develop self-awareness, and self-awareness is critical to leaders.
-- Interviewed by Jennifer Robison