April 5, 2023 | Podcast
By guest author Carolyn Dewar
The Harvard Business School professor and former CEO of Medtronic explains how young leaders can find their ‘true north’.
About the author(s)
Bill George is an executive fellow at Harvard Business School.
Carolyn Dewar is a senior partner in McKinsey’s San Francisco office.
In this episode of the Inside the Strategy Room podcast, Bill George, author of the best-selling book True North: Discover Your Authentic Leadership, talks about how to become the type of leader the world needs today. The former chairman and CEO of medical-device company Medtronic has written four books on leadership and has been lecturing on the topic at Harvard Business School since 2004. He recently published a new edition of True North that focuses on emerging leaders. He spoke with Carolyn Dewar, who co-leads McKinsey’s CEO Excellence Practice and is a co-author of last year’s bestseller CEO Excellence. This is an edited transcript of the discussion. For more conversations on the strategy issues that matter, follow the series on your preferred podcast platform.
Bill George: The emerging-leader edition is almost an all-new book. We are going through a massive generational change in leadership, from baby boomers to Gen Xers, millennials, and Gen Z, and this book is a clarion call to them to lead authentically and make contributions with a deep sense of purpose. We’re often asked where we went to school or what our title is, which tends to push us in the wrong direction—toward money, fame, and power rather than looking for careers where we can make people’s lives better. For the original book, we interviewed 220 leaders in business and nonprofits, and we learned that people’s life stories—their crucibles—help them understand who they are. People have to know who they are before they can make a difference in their professions.
Carolyn Dewar: This understanding is what determines your “true north”?
Bill George: Yes. Your true north is composed of your most deeply held beliefs and values. You need to decide who you are as a human being. What do you want out of life? That’s what I did when I made the change to Medtronic: What did I really want out of my life? I’m pleased to see corporations around the world are shifting to authentic leaders and moving away from the power-based command-and-control type leaders. Today, people don’t leave companies, they leave bad managers, so we need strong leaders at all levels—not just CEOs.
Carolyn Dewar: Why do you think we need to lead differently?
Bill George: In the past, we focused on CEO charisma, which led to command-and-control leadership. We also focused on shareholder value to a fault, which brought down many great companies. We need a different kind of leader now because let’s face it: we have a lot of intersecting crises. It started with the COVID-19 pandemic and its impact on well-being, followed by supply chain shortages, millions of jobs unfilled, a threat of recession, and inflation levels we haven’t seen for 40 years.
Carolyn Dewar: Some people have suggested that the pendulum has swung too far toward purpose and as belts tighten, we may see it swing back. Is that realistic?
Bill George: I think it’s mostly older leaders who hope the pendulum will swing back. We are just getting to where it needs to be. Yes, some things need to change. I hear phrases like “quiet quitting.” This is one of the worst ideas I’ve ever heard: “I’m going to do the minimum possible not to get fired and never come into the office.” This won’t fly, and it drains your soul. Human beings want to be together. We want to be stimulated. We want to create innovation and build things that matter. The reason for the Great Resignation is that people don’t feel a sense of purpose. Making money for shareholders is not a purpose. Saving lives, restoring people to health, addressing climate change, offsetting income inequality—these are valid purposes.
Carolyn Dewar: You wrote the iconic first edition of True North a decade and a half ago. Why did you publish a special edition for emerging leaders now?
The reason for the Great Resignation is that people don’t feel a sense of purpose. Making money for shareholders is not a purpose. Saving lives, addressing climate change, offsetting income inequality—these are valid purposes.
Carolyn Dewar: How did you build purpose as CEO of Medtronic, both for yourself and the organization?
Bill George: I went to Medtronic because it offered me a chance to restore people to full life. When I got there, it was a mid-sized company with $750 million in revenue; now it’s $32 billion. But the important thing was not the size but how we helped people. Our metric was how many seconds go by before another person is restored by a Medtronic product. When I started, that number was 100 seconds. When I left, it was seven seconds. Today, it’s two per second. Now, that’s a metric everyone can relate to. They can’t relate to $2.61 a share. Shareholder value is an outcome. If we create great value for our customers, we will increase market share, we will enter new markets, and we will expand our business and business models. But workers on Medtronic’s heart-valve line want to ensure every product is perfect because they know human life is at stake.
Carolyn Dewar: How can people gain that understanding of who they are?
Bill George: One method I use in my courses at Harvard Business School is to chart a lifeline from the day you were born to today. Look at the highs and lows and what you learned from them. You may discover lows that you didn’t consciously remember, such as being rejected, losing an election, being sick as a child, or your parents’ divorce. Sometimes we find ourselves repeating those patterns in our 30s and 40s. Next, try to process the most challenging time you faced, because through that you will discover what really matters to you. I have seen many people who suffered childhood illnesses or lost siblings devote themselves to healthcare. Others who grew up poor want to help overcome income inequality. That is how you will discover your passions, which lead you to what I call your “north star”—the purpose of your leadership.
My purpose has been to enable people to reach their full potential. I started when I was a freshman tutor helping people get through calculus at Georgia Tech and continued it by being an organisation builder. I was not the genius who invented the defibrillator, but I did try to build organism.
Carolyn Dewar: Based on what you’ve learned about your north star, what would you tell your younger self?
Bill George: I would say, “Don’t move so far so fast.” I was too eager to get ahead. I wanted to become a general manager by the time I was 30. I was fortunate enough to achieve that, but why? The second thing I’d tell myself is, “Don’t look at size as a criterion.” When I was nine years old, my father planted in my brain the aspiration to lead a major corporation, but smaller companies can grow into major corporations, so don’t worry about size—do what you want to do. Lastly, I’d say, “Find the right culture for you”—one where you feel you can flourish.
Carolyn Dewar: People often make trade-offs for a satisfying career, such as spending too much time at work or not maintaining their health. How does personal fulfillment link to the true north?
Bill George: Leaders are like Olympic athletes. You have to be healthy in mind, body, and spirit. You want to keep expanding your mind and be engaged outside of your work environment. You also have to be in good physical shape, and spirit is about building authentic, long-lasting relationships. Ask yourself, “Did I lead with my values? Did I help other people? Did I find fulfilment in my work?” Not every day is going to be perfect but take 20 minutes for reflection and introspection. My students sometimes say, “I will spend 12 years making money, then I will do what I really want to do.” This is nonsense. I have never seen anyone do that. I would say, find fulfilment now. Find joy. And you don’t have to change jobs—you can find it with the people you work with and a deeper purpose.
“My students sometimes say, ‘I will spend 12 years making money, then I will do what I really want to do.’ This is nonsense. I have never seen anyone do that. Find fulfillment now.”
Carolyn Dewar: You talk a lot about authentic leadership. What is that and how does it connect to the true north?
Bill George: Being an authentic leader is being who you are. Microsoft’s Satya Nadella, who I would say is as fine a leader as anyone in the world today, found that his late son Zain’s cerebral palsy taught him the value of empathy and compassion. He then used that to transform Microsoft’s culture from what he said was a group of know-it-alls to a group of “learn-it-alls”—people who cared about learning and helping others. You also need honest feedback from people who will tell you when you are going off track. This morning, I met with my men’s group, which has been meeting for 45 years. We talk about important issues. This morning we talked about where we find fulfilment and satisfaction in our lives. Having a group of truth-tellers helped me make the decision to move to a much smaller company called Medtronic.
Carolyn Dewar: You co-wrote this edition with Zach Clayton. How did you partner?
Bill George: Zach is a 37-year-old millennial, and I could not have written the book without him. I met him at Harvard, and we started working together in 2009 when he graduated. He taught me how millennials think. One thing we fell upon is that leadership has shifted from the director model of telling people what to do, then sitting back and evaluating them, to more of a coaching model. Many executives have coaches today, so why shouldn’t every leader be a coach? COACH is also an acronym, which starts with caring about people—people will not follow you unless they know you care about them. Second is organizing them in what we call their sweet spot, where they are using their strengths and are highly motivated. Next, we bring them into alignment around the purpose and values. Then we challenge them. Any good coach will challenge you. “Carolyn, you have incredible strengths, but here is where you are not at your best,” or, “Here is a way you could step up to the next level.”
The last letter in the acronym stands for help: let’s work with people. A Harvard study found that CEOs spend 72 percent of their time in meetings and only 5 percent with employees and 3 percent with customers. That’s a disaster. At Medtronic, I tried to be out with our employees and customers well over half my time.
Carolyn Dewar: Did you and Zach dispel any myths that baby boomers have about the younger generations?
Bill George: One myth is that millennials are slackers who will leave. I have heard that from many baby boomers, and I can tell you it’s not true. The reason they leave your company is that they don’t feel a sense of purpose, and with 11 million open jobs, it’s easy to be mobile.
Carolyn Dewar: Which emerging leaders excite you?
Bill George: One of the great emerging leaders during the COVID pandemic was Corie Barry, who had taken over as CEO of Best Buy from Hubert Joly. One of Hubert’s mantras was, “Layoffs are the last resort.” She took on the role the year before the pandemic and had to close a thousand stores and furlough 52,000 people, but she held off until the employees could access government unemployment subsidies. Stores re-opened a few months later and many of the employees got called back, but she had to make that tough call.
Another person I met is Aditya Mittal, CEO of ArcelorMittal. Aditya runs the largest steel company in the world and is focused on reducing steel’s environmental impact by investing in carbon sequestration and new fuels such as hydrogen.
Carolyn Dewar: There is much discussion about the role that companies should play in society and whether they should take public stands. How do you see that dovetail with authentic leadership?
Bill George: In a new CEO program I lead at Harvard, the number-one question I get is, “When should I speak out on public issues?” It comes down to whether the issue relates to the mission and values of your company. At Medtronic, we had to speak out on healthcare. In Minneapolis, every CEO had to take a stand after George Floyd was murdered. People remember what you do during crises. Did you step up, or did you duck?
Carolyn Dewar: How can executives other than the top leaders influence the corporate culture?
Bill George: Many mid-level managers who come to our classes have bosses who manage in the old style that creates friction. I tell them to keep their heads down and create the culture they want on their teams, then let the top management see the impact it has. Show them the outcomes, whether it’s productivity or higher revenues, but also tell them what you are doing to inspire people. For far too long, we have looked to the top to solve problems. In an article in the Harvard Business Review, I talk about the need to put the frontline people on top. They are the ones serving customers. So don’t wait for your boss to change—do it on your team, bloom where you’re planted, and you have an opportunity to stand out. The top CEOs I know are all looking for people like this, who are willing to change the culture and get results.
Don’t wait for your boss to change—do it on your team, bloom where you’re planted, and you have an opportunity to stand out.
Carolyn Dewar: What can emerging leaders do when they find their companies’ cultures changing in a way they don’t like?
Bill George: Has the culture changed because your business has changed or because someone is pushing it the wrong way? We saw the latter happen to MD Anderson, the cancer institute. John Mendelsohn built it, then a new CEO came in and took the culture the wrong direction, but he didn’t last. Dr. Peter Pisters came to MD Anderson from Toronto General and transformed it. Companies can lose their historical roots, but you may find that the leadership changes, so don’t jump too quickly. Instead, consider pushing back against some changes and be the calm, steady voice that stands for doing the right thing. You may also have to change yourself. Many people want everyone else to change, but they also have to adapt. With all the crises we have, one of the keys to being an authentic leader is being adaptable to constant change.
Carolyn Dewar: Many themes in True North speak to innovation. How can emerging leaders foster innovation?
Bill George: As organizations grow, they tend to become more bureaucratic and less innovative. It’s the CEO’s job to bust up that bureaucracy, and the way to do it is to work directly with the innovators. At Medtronic, we had our mainstream businesses, but we also had a business with our new ventures. I wandered into the labs regularly. They came up with the breakthrough ideas that sometimes created tension in the organization, but I had to support the innovators because they could easily be crushed by the mainstream organization.
Another approach is to talk to the front lines because that’s where you find out what’s going wrong. Richard Davis, who ran U.S. Bancorp, said, “I go out to the branches all the time and meet with the tellers. I don’t even talk to the branch managers; I learn everything I need to know from the tellers.” He had that personal touch of really listening. Hubert Joly spent his first week at Best Buy not at the headquarters but in St. Cloud, Minnesota. He put on a blue shirt that said “CEO in training” and met with customers and employees. He told me, “I learned everything I needed to know about our problems in that first week and got all the ideas for how to restore this great company from our own employees.”
Carolyn Dewar: What is the biggest message you want readers to take away from this new edition of your book?
Bill George: We need to develop moral leaders who are authentic, compassionate, and driven by a sense of purpose. I have been critical of some business schools for training too many managers and not enough leaders and not talking about the values that matter. Do you have the courage to do the right thing? My best example of that is Ken Frazier, former CEO of Merck. When he got the job, he had the courage to say, “If we continue on our guidance to Wall Street, we will continue cutting R&D and will never be successful,” so he abandoned the guidance, and he focused on research. Later, when he was confronted with the events [following the Unite the Right rally] in Charlottesville, he made the bold decision not only to resign from President Trump’s business council but to issue a statement saying that America’s leaders must be committed to the principle that all people are created equal. An amazing event occurred after that: 43 CEOs of America’s largest companies followed him out the door.
My message is, it’s easy to follow the person with courage out the door, but who has the moral courage to say, “We have to do the right thing”? The last chapter of my book is about that moral compass. Your true north keeps you from getting off track. I was getting off track, but I had enough of a moral compass to pull me back: “Bill, wake up. You’re going the wrong way.”