PART ONE: AUTHENTIC

LEADERSHIP, BILL GEORGE AND DANIEL GOLEMAN

Authentic Leadership

Daniel Goleman: I want to try to get an eagle-eye view of your work and thinking on leadership, which is quite vast and deep at the same time. You come from a business background, you’re best known for having been the CEO of Medtronic, and bringing it from a billion dollar cap to a sixty billion cap over your tenure, and now at Harvard being a professor of management in the Business School. I think what’s most intriguing to me is your work on authentic leadership—what you call ”True North Leadership”—and the several books you’ve written along those lines, starting with your book about being CEO at Medtronic, and then about Authentic Leadership and True North—now True North Groups—and I think right at the outset I’d like to know: What do you mean by that phrase? What is an authentic leader?

George: Someone who’s genuine and real—where you know that you’re dealing with the real person. They’re comfortable in their skin, and you can sense that in dealing with them. They’re open. They’re willing to be vulnerable, so it’s like the genuine article. And you may have characteristics that some people do not consider authentic. You may have a certain ego. You may have a certain motivation, but I don’t think that’s inauthentic.

I think that’s all part of the whole package. Like, I’m a very impatient person. Do you consider me inauthentic because I’m impatient? No, I’ll say I’m impatient. I don’t like driving in traffic, or waiting in line. I’m not proud of the characteristic, but it’s part of who I am. So there are downsides, and the negative sides.

Or being proud of where we come from, instead of ashamed. Even if I come from abject poverty, or a difficult family situation, that’s part of who I am, and so I can’t deny that is who I am. So I think that’s all integral to being authentic, but I think it’s most simple to say: just being comfortable in your skin—knowing who you are, not what you are. You know, I’m a professor at Harvard but that doesn’t describe anything about who I am. There are thousands of those people out there.

Goleman: So, you also urge people to develop their unique leadership style—not to try to copy someone or to read a book about it, or find a template and then try to fit that—but to be your own leader. Why is that so important?

George: That’s the only way you can be authentic—having your own unique style. How could I emulate someone else? How could I be like Jack Welch? Jack Welch was known as the CEO of the century—not a decade, but the 20th century. How could you be like Jack Welch? And a lot of people have tried to emulate that style. We used to have what we called the “great man” theory of leadership, in which you would try to emulate a great president, for instance. Well, then I’d be a total phony. And think how the women leaders felt about that. So, I think it’s key to remember that style is not what’s important, any more than the way you look, your physique. None of these things are important. This is all the external stuff. What’s important is what’s inside you. Who are you? Not what are you, not how you look, what appearance do you give. That comes later. That should be a natural outgrowth of who you are.

Goleman: What happens if a leader is inauthentic?

George: Well, this is how I got into the field, because I was in business 33 years. I’ve always been fascinated with leadership. When I was a little boy, I had summer jobs. I was studying the top leaders of a company. That wasn’t my job, but I was fascinated with it. At Medtronic I focused mostly on the contacts I had in the business, and then I saw my whole generation of leaders and those a few years older going down, like Enron, WorldCom—this whole fiasco back in 2002. And so what happened? See, it wasn’t just the people who went to jail. In every life, there’s always people who are going to be deviant, but they were supposedly good people that lost their way, and the reason they did is they got caught up playing the game, somebody else’s game, being something different than they were, and they took their companies down with them because when it came to the crunch, they couldn’t make the numbers. Had a problem, they did the wrong thing. I thought, what happened to my generation of leaders? How did it lose its humanity, its authenticity? How did it become a façade? How did they try to become rock stars when they were just normal, average people? So that’s why I decided somebody has to speak out on this, and I thought it needed to be somebody who’s actually walked in those shoes, who had actually been in leadership roles. And that might have been a little uncomfortable, because I was critical of some people in my generation and their leadership.

Goleman: How does the concept of True North play into this?

George: Well, we went out and did interviews. We interviewed 125 people face-to-face for an average of 75 minutes. We learned a lot about people, and my colleagues at Harvard Business School said, “Bill, I hope you’ll find what are the real characteristics of successful leaders.” So I’d ask someone that. No one would answer that question. They’d say, “I don’t want to talk about that. Let me tell you how I learned to lead.” One of the most successful commercial bankers of our generation, Dick Kovacevich of Wells Fargo said, “Bill, I went to Stanford Business School, and I didn’t learn anything about leadership there. You know where I learned it? In the corner grocery store, and on the athletic field.” And then he went on to describe why: “I was a good quarterback. But if we had 11 quarterbacks, we’d lose every game. We needed a diversity of people around you. At the corner grocery store, I learned about the last three feet between the customers and me. That customer feels good about coming here.” And so, we got this time and time again.

Howard Schultz wanted to talk about what it was like growing up as a kid. Anne Mulcahy wanted to talk about pulling off the road because she couldn’t go home. She couldn’t go home because her company was falling apart and she was afraid they were going in to bankruptcy. She said, “I felt like the driver of the Titanic. I saw 96,000 families.” She didn’t say people, she said 96,000 families. “I could take them down. I was the leader, and they were all counting on me. I didn’t know what to do.” But she had to be honest about that, and now she’s an extremely authentic leader.

It’s about staying true to a moral compass or an internal compass. Someone used the phrase “true north.” So we used that as a way of capturing the idea of staying true, following the North Star, staying on course, not deviating because someone is going to offer you millions of dollars, not deviating from what you believe because the pressures are so great you just say, “OK, I’ll go along with what they want to do.” That takes a lot of courage, and I think a lot of people aren’t prepared for that. They’re prepared for a lot of things. They have the skills, but they haven’t done their inner work.

The Inner Work of Leaders

Goleman: You say that you have to do a certain kind of inner work to find your true north, to be an authentic leader. What is that inner work, and where does it lead?

George: I think it starts with your life story, knowing where you came from, who you are, what really is important. What has shaped you along the way. And what we found was everyone wants to talk about that, but about 80% of the people want to talk about the crucible—the most difficult time of their life. Think of the crucible where the refiner’s fire tests you, and that’s where you’re really tested. We aren’t tested by success; we’re tested by going through a very difficult time and saying, “If I can get through this, I can get through anything.” You don’t deny that you went through that, and I think that’s what shapes you, but the key is: How do you frame that crucible?

Goleman: The crucible can be a job loss, a disaster, a business going under?

George: A rejection by good friends, not being cool in school. I lost seven elections. Was I a failure? Yeah, but I had to learn from that experience. I wanted to be a leader and I was being rejected, seven times in a row.

If you aren’t willing to live it, if you go into denial and say, “well, that didn’t happen”—actually it did happen. It’s part of who you are, so it’s how you frame it. Can you frame yourself as a victim? “Those kids didn’t like me, so that was the problem,” or do you see how that was a great learning experience, and ask yourself, “how do I learn?” And so that then shapes what we call your true north, your most deeply held values and beliefs. What do you really believe, at your core? Do you believe people are inherently good, or basically not good? What are the values you live by, and then what are the principles you translate into leading or interacting with people?

And people know what those are. I’ve rarely encountered anyone who didn’t know. The question is: “Can I stay on course? Can I be successful? They’re going to kill me. If they knew who I really was, they wouldn’t be interviewing me.” Well, actually, they might! It’s a cathartic experience to share who you are, and not be rejected. I think that’s so important, because otherwise you’re living a lie. You’re hiding parts of you--that you got fired from a job, that you had problems. But that’s part of who we are. If that’s what has shaped you, it’s a good thing.

Goleman: What’s the role of self-awareness in finding your authentic self?

George: There’s been a lot of work—and you’ve done a lot more work than I have on this—but one of the things that I’ve observed in leaders is beyond a certain level of IQ. Leadership is not defined by IQ, it’s defined by emotional intelligence. And at a certain level of IQ, I actually think it’s inverse, so if your IQ is so high that you won’t listen to anyone else, you’re not going to be a very good leader. And so it can actually work against you.

Goleman: Although, I would say it may not be your actual IQ. It sounds like you’re talking about a narcissistic leader.

George: Exactly. That’s a person who has to be the smartest person in the room, no matter what the question is, what the field is, or whether it’s his area of expertise or not.

But to me, the essence of emotional intelligence is self-awareness. How can I have great relationships with other people if I don’t know who I am? And that is the key factor of why people are successful in leadership. They may achieve, they may get to this point, but they may fail too. Better to fail early than to fail when you get the big responsibility.

What I’ve been wrestling with is how do you gain self-awareness? I feel that you have to have real-world experience. I think you have to have a way to process experiences internally. Call it reflection, introspection. I have to meditate regularly. Some people like to pray. Some people have an intimate person, a spouse, or someone with whom the can share everything. You have to have some way to process that experience. Just having the experience doesn’t do it, because you’ll repeat the same mistakes and you just find the mistakes get bigger and bigger. I also think you need to have a way to process it through feedback—honest feedback with other people that you trust, not feedback from people you don’t trust. Having a group of people with whom you can share on an intimate level, not at a superficial level. So many of our societal interactions are superficial today. They don’t allow us to be truly authentic.

Goleman: Well I think, Bill, one of the things that you’re doing that strikes me as extraordinarily valuable is setting up True North groups—places where you can tell your story and know who you are as you listen, explain, and bounce ideas off other people. What is a True North group?

George: These are six-to-eight-person peer groups that allow for two-way street relationships. In these groups, we gain feedback, deal with tough problems, share tough decisions. We all have tough decisions. Who do you share your most difficult decisions with? I can guarantee you, when my wife, Penny, had breast cancer, and I was scared, I’m not going to put that on Facebook. I’m not going to the media and proclaim it. I’m not going to expose her like that, but I’m scared. And the reason I’m so scared that I can hardly talk to her about it, is because I’m telling her she’s going to heal, but what I’m really scared of is that she’s going to die, like my mother did of cancer, and like my fiancée did. So I go into denial, but I don’t see that.

I have blind spots, and so I go to my group—this is a true story—and they say, “Bill, don’t you think this has to do with what happened with your mother and your fiancée?” And I thought about that. You know, they helped me understand my own denial. They helped me see through that blind spot that I had, so then I could go back and have a different relationship with my wife, where we could be equally scared. You see what I mean? Now, I’m not saying it’s really fair to say equal, because it’s her life—but still, you could share at that deeper level, and so how do you get through your blind spots?

Goleman: What are the ground rules that create that safe space?

George: Ah, the key is ground rules. Without ground rules, you can’t do it. Number one: confidentiality. You cannot have a group unless there’s total confidentiality. Second: you go into the group trusting the other people. Third: I think there has to be openness. If we have six people in the group, five people are open and the sixth is not, the group won’t work. It’ll take the group up to the most superficial level. We’ve now had 1500 people here at Harvard go through these groups, including mid-careers, and I’m stunned by the impact they’ve had. I’ve only had one case I know of where somebody wasn’t open, but everyone else was open. But I think there’s something going on here that’s different, because I think it has to do with the peer nature of the groups—the two-way accountability.

You know, there’s precedent for these kind of groups—affinity groups like Alcoholics Anonymous, or certain kinds of prayer groups where it tends to be an affinity around a given subject. But, you know, alcoholics hold each other accountable in ways that a treatment center cannot, and in a group like this we hold each other accountable across a whole range of things. Maybe it’s your career. Maybe you’re thinking of retiring, maybe you’re changing jobs, you’re so unhappy. The dialogue might be, “Well, Dan, you keep saying you’re unhappy. What are you going to do about it? What’s holding you back? There must be something keeping you from doing what you want to do.” It’s your life, and so people talk about that openly, whereas in all of our groups we have at work, in our communities, even our families, we aren’t necessarily that honest. And so I think it’s that gut level honesty.

Goleman: Say more about being non-judgmental. Don’t we always judge as we listen?

George: Can I tell you something horrible about me? I lost seven elections in a row. I was a skinny little kid in seventh, eighth, and ninth grade. I ran for leadership positions seven times in a row.

Goleman: In school?

George: Yeah. I wanted to be a leader. My father said, “Son, you should be a leader.” And with those losses, I thought, I am a failure, and I’m being rejected. So even today—I walk into a classroom of 27-year-olds, and I’m scared to death they’re going to reject me, because I was rejected. But every one of us has a story like that somewhere, you know? And the question is: Can I tell you that? One of my students had gotten thrown out of Harvard for plagiarism. He’s a wonderful young man. He learned more from that experience than all of his successes combined, because he owns it. He’ll tell you that. Another person said, “I got fired from my job. I deserved to get fired because I was going the wrong way. They did me a favor.” So it’s that owning of it. If you’re not judgmental you sit there and listen, you don’t think, This guy isn’t the person I thought he was; he’s not such a good guy after all. No! We all have that. So that non-judgmental quality is where I don’t feel like I’m being judged by you, that you’re not just going to put me down, or you’re not going to go tell your friends that Bill George is not the guy you thought he is.

Goleman: So if we’re not being judged, that does make it safe to be honest.

George: Isn’t that what we all want? Don’t we all want to tell our story and not be judged? Don’t you want to tell your story and not feel like somebody is sitting on high saying, “Oh, no.” The problem is that so much of our early lives, we were trying to do well in high school so we’d get into the best colleges, the best universities, and we were judged. Are we judged on our humanity? Most of the time we’re judged on our SATs, GPAs, the clubs we belong to, and whether or not we’re world-class clarinetists.

Goleman: Why would a True North group make someone a better leader?

George: Because the key to leadership is understanding who you are in situations. If I know that I need help in these areas, I will surround myself with these people. If I can’t be honest about how afraid I am, maybe the company will tumble, and I’ll be accountable. Who do I talk to about that? It makes you better, because you see yourself as another sees you. You know your impact on others, you gain that level of self-awareness, and you test your values. If I can get through that and my values stay intact, they are my true values. I was with a CEO today. He likes racecars. Does that mean he’s losing his true north? No! He likes racecars. He’s open and upfront about it. He likes cars. He’s embarrassed because he has a Ferrari in his garage. It’s not the car he drives. He drives a Volkswagen bus. But the group gave him feedback on that. “Hey! What’s happening to you? Why do you have a need for all these houses?” We had a guy in our group that wanted to leave his wife, and he went over and over how she didn’t meet this need, that need, and they said, “Really? OK, tell us more,” and so we talked about this over a year and a half. He even went off and lived in a different state for a while—turned out it wasn’t the wife’s issue, it was his issue. He had some things he had to work through, and he did, and they’re back together and they’re happy now. But it was important that he had a group—a safe place to come. It took a year, but he had to have a safe place to come and deal with it.

Goleman: Could you imagine a company or an organization having True North groups at every level for everybody? And what would be the advantage or disadvantage?

George: This gets to a deeper question, Dan. See, if you believe, as I do, that leadership is not about, like the Marines say, a few great people at the top, but if you’re going to go to a flat organization, a global organization, you’re not going to have a hierarchical structure. You need hundreds if not thousands of leaders in the big companies. You can’t afford these fancy leadership programs like we have at Harvard where they come, spend eight weeks, and go on to the Advanced Management Program. You can only do that for a handful. So it’s not about finding the next CEO. It’s about all those hundreds, if not thousands, of people who are leading every day, who are great people working in creating, innovating, producing quality, and providing great service. It’s all of those people. So how do we develop them? We can’t afford to put them all through leadership programs, so I think the whole field of leadership development is going to change radically, and this group work is a vehicle. Don’t think of it as the only vehicle, but it is a vehicle that corporations should use to develop hundreds of leaders. Especially leaders at early ages. We don’t want to wait until they’re 40, let’s start when they’re 25. Let’s get in a group.

But remember, there has to be a non-political environment in which there is trust. You cannot have people in the company spreading rumors about someone because she got fired from her last job. There has to be that confidentiality.

Goleman: But it seems to me that there might be a particular kind of obstacle, putting a True North group together from within the same organization, because of the nature of organizational life—politics, rivalries, resentments, and so on. So how would you deal with that in an organization?

George: First of all, you have to decide: Is that inherent? See, I would say it’s typical, and it’s not a good thing, so as a CEO I want to root out the politics and the internal rivalries. There’s plenty of work here for all of us to do. We can all have great careers. We have to flatten out the incentive structures.

But it is harder, and so I’ll concede that it’s much harder inside a single organization, but it could also be very powerful. It can be a very powerful tool to do this. So my particular group I’ve been meeting with now for 35 years, and I have a couples group, we’ve been meeting for 28 years. These are people whom I know well and travel with, but not people I work with. The group work gets tougher, particularly the higher up you go, but we’re doing it now for one company and they’re going from the Top 100 to Top 500, being in these groups. They find it’s a very powerful tool, and they’re talking about very intimate things, their life stories, their crucibles. At work! The company is paying for them to come to a group and learn about how to do this.

Goleman: Well, what’s the benefit for the company? What’s happening there?

George: Developing leaders. What kind of leaders do you want? The head of this company said he believes that the only differentiator in the long run is leadership. In other words: patents, products, and ideas will equalize out. In fact, the company’s leadership will encourage more of those ideas to flourish, so that’s the only differentiator you can have. So the benefit to his organization—and it’s got 175,000 people, we’re not talking about some small organization—he said people start interacting in a different way. So when I call you and you’re in India, and I need your help, you say, “Sure, I’ll help, if it’s for the good of the company,” and not, “Well, is that going to hurt my incentives? Does that mean you’re going to get ahead, you’re going to get promoted while I’m back in India, toiling in the trenches?” No. We have to, because I believe collaboration is the key to organizations.

Goleman: And so this kind of connection with people must be a great lubricant for collaboration.

George: It is, and do you believe collaboration is important or do you prefer hierarchy? I prefer collaboration, clearly, and actually I’m fairly aggressive in saying, “You know, if you want to be political, then there’s the door.” I mean, there are lots of places you can make more money. If your only goal is to make money, go for it, but you’re not going to do it here.

Leading with Ethics

Goleman: What’s the connection between authentic, ”true north” leadership and ethical leadership?

George: I think they’re basically one and the same.

Now, we have to be clear that some people with a legal background define ethics very close to the law, which I do not. To me ethics is about being truly honest—ethical relationships, ethical dealings. I think if you’re true to who you are, you’re going to tend to be much more ethical. You will deviate, which we all will, or we’ll make values tradeoffs. I’ve heard people say, “I have two values I hold most dear: my integrity and my loyalty,” but if I’m so loyal to you, will I value my integrity if I saw you doing the wrong thing—stealing from the company? Would I turn you in? So you’re always going to have those times when you deviate from your own values. You have to think, I’m not proud of this, but I will own that I did it. I think we have to own those things, and then we can become ethical leaders when we own who we are. And at any time we could lose sight of our true north, of our ethics, and not follow our own principles. If the pressure mounted so great, would you deviate just a little? That’s how you get on the slippery slope. Or if the temptations were so great—someone is going to pay you a lot of money to do something and you knew it wasn’t right, but well, you know, I’ll borrow from the future on my company, and I’ll pay it back next year. Well, actually you don’t—it just makes the mountain higher. So all those things form ethical leadership, but nothing is more important than how you have business dealings with people where there’s monetary gain, such as a customer. Do you have an ethical relationship with a customer? Are you going to do the right thing by the customer, even though it costs your company hundreds of millions of dollars?

Goleman: Bill, what’s your prescription for the epidemic of distrust of leaders these days?

George: Trust takes a long time to gain, and it can be lost very quickly. You can spend 30 years building trust and you can lose it in 30 minutes. Take business, the field I know most about. We have lost the trust of people because so many of our leaders violated it. They did things that I consider cardinal sins. They put their self-interests ahead of their institution’s interests. Even the economists argue this is good, you know. And self-interest is all about money, and that’s why you’re motivated. No, this is not good. This is not the market operating. This is terrible, and I think we’ve allowed leaders to do that, and then all the people that work for them, work with them, depend on them—the shareholders, the customers, the communities—they say, “How can we trust you? You say one thing, you do another. We thought you were a good person, all of a sudden you’re out doing this. You’re insider trading, or you’re dealing behind our backs, and you destroyed a whole enterprise.” I think that is a cardinal sin, because to me, if you’re privileged enough to be in a position of leadership—I consider leadership a great privilege—nothing is more important than maintaining the trust of the people for whom you have a responsibility. And if you violate that, then you have failed as a leader. Now, we all fail. We can come back, but we have to own that.

Goleman: So you’re saying owning it is one way of repairing the distrust?

George: Yes. But it takes time. I used to say the values you practice when things are going well don’t matter. People are watching what you do, but the real tests are when things aren’t going your way, or going against you. They say we’ll see what he does or what she does under that great pressure. If you can stay true to your values then, people will believe you. If you violate them, then it’s going to take you a while to get that back.

Goleman: Are there particular leaders who you see as exemplars of authentic leadership, whose results reflect that this is good for business?

George: Yes. In fact, today you’re seeing a much more widespread belief that these things are directly correlated: being an authentic leader and getting great results. I’ll give you an example, a story Alan Mullaly told about being president and CEO at Ford. He had a huge mega-office overlooking the Rouge Plant, where Henry Ford created the Model T, and he said, “I’d like to go down and see the Rouge Plant and meet the people.” And they said, ”Oh, Mr. Mullaly, those are not your kind of people there.’” He said, “We’re going to the Rouge Plant.” He’s a down-to-earth guy, but he also took some hard action. He borrowed 30 billion dollars, avoided bankruptcy, pushed for major changes to fuel efficiency. You know, the average car is in the low twenties, and they don’t know how to get there, but they’ll figure it out. For 40 years, automobile executives have avoided more efficient automobiles. So he said, “We’ll take it all the way up to 54 ½ miles per gallon.” So did the head of General Motors and Chrysler, so you could say it was collusion with the government, but hey, it’s a good thing. It takes that kind of authentic leadership, saying, “If we can’t create the technology, shame on us. We’ll do it. We’ll take on that goal.” That’s what real great leaders do.

Anne Mulcahy of Xerox, faced with bankruptcy—overwhelming, 96,000 employees, just traumatized, never asked to be CEO, thrown into the job because her successor failed, and she knew nothing about finance—she goes out and reconfigures the whole company and makes some very courageous decisions to focus on employees. They had to trim up and have fewer employees in the end, but they came back. She said, “We’re going to invest in the long term. I’m not going to cut R&D. I’m not going to cut our customer support. We’re going to keep those going.” And they came back and achieved great success, but only because she’s so authentic. She’s so real, you know, and she was willing to hang in through tough times and not deviate, not take any of the short cuts.

Goleman: Could you hone in microscopically and give an example or two of what an authentic leader does that is both effective and comes from that authenticity? What would it look like in action?

George: It looks like you want to be out there with the people doing the work, and that you honor those people—not just give speeches, not just put out press releases or do video—you’re actually with the people doing the work. The former head of UPS tells the story, and it’s true today: Every executive in UPS, starting with the CEO, drives a truck for a week a year. Not rides with the driver—drives a truck. Because that’s the essence of their business—driving a truck, delivering the mail—they want to see what that life is like. When I was in Medtronic, I gowned up and saw between 700 and 1,000 procedures—putting on the greens, going in and meeting the doctor at 6:30, going in and watching an open-heart surgery or a neurological surgery or a pacemaker implant. And that’s how I learned the business. I wasn’t selling them anything, but you have to be out there with the business. I was on the board of Target Corporation and the former CEO, Bob Ulrich, told the story—he walked about 14 store floors a week. He didn’t tell them he was coming. He just put on a sweatshirt and went into the store and walked in and saw, watched the interactions. Howard Schultz does the same thing in Starbucks—he’s watching the interaction between his people and the customers, and that’s how he knew Starbucks was off track because they lost that interaction. Take Dan Vasella at Novartis. He’s down in the labs all the time with the researchers. He’s not with the vice presidents and executives, he’s down in the lab asking, “What are you working on? What are the barriers?”

Roy Vagelos did the same thing at Merck. You’re out with the essence of your business. You’re not flitting around to some fancy CEO event in Washington, and you’re not going off to security analyst conferences in New York, you’re actually with the business. You care about it, you love it, because you want to be out there. But you have to love it! If you don’t love it, don’t do it. But I think that’s what people see.

Back to Alan Mullaly at Ford. His predecessor had his secretary print up all his emails because he didn’t use a computer, and Mullaly said not only do I want to see all my emails, I’m responding to every one. So he announced this to the whole company and the first day he got 1,500 emails. He came back and said “Now, you may only get a six-word response: ‘Thanks so much for your idea. Alan.’” But it was actually him and not a staff person. He could easily afford to hire a staff person, but people want to know: Is this a real person? Does he have a life like we have? Does he care about us? Does he know what it’s like for us to drive a truck? Does he know what that life is like?”

Feeling the Mission

Goleman: When did you realize that a moral compass was so essential for leadership? Can you tell about a time while you were at Medtronic that it made a difference for you?

George: Well, it certainly didn’t start at Medtronic, Dan, but I knew at Medtronic it did make a difference, and we had some very difficult times. Shortly after I arrived at the company, I promoted an outstanding person to be president of Europe. I held that position at Honeywell. We never had a president of Europe, and so a very capable guy—came from some subsidiary company, a Dutchman—and a few people gave me some signals that well, this guy was pretty tough, and I said, you know, “We’re undisciplined. We need somebody who’s pretty strong. He knows the business well. He was doing great.” Four months after I appointed him, our general counsel comes to my office, closes the door. Now, you know you’re in trouble when the general counsel closes the door, and brings the chief internal auditor. They uncovered a bribery ring this person had been running, and it turned out he ran it for 10 years with the subsidiary company, and they had all the data.

So I called him up and said, “Hey, come on over, fly over from Belgium, let’s sit down and talk.” I showed him a statement. He wouldn’t even look at the statement. He signed it and said, “Don’t you follow these ethical standards? That’s the problem with you Americans. You’re always trying to impose your values on us Europeans. Business is different here.” And I said to him, “No. These aren’t American values. These are Medtronic values. They’re the same the world over, in China, in Russia, in Europe, and in the United States.” So that wasn’t the problem. Terminating him was easy. We put out a press release. We called the SEC and said, we may have a violation of foreign practices, which they said, no you don’t, but you self-disclosed, thank you. We had to go to the board of directors. We were very transparent, but the issue was that people were watching because I was new to the company then. They weren’t looking at him. They knew what he was. They were looking at me. “So, well, Bill George, you talk about having values and you promote someone like this? So, how does that square?” See, you’re known not just by what you do, but by the people you surround yourself with. And so the toughest part for me was going back to the board of directors and saying I made a mistake, and saying to the executive committee I made a mistake. But the first thing you have to do is face reality. Starting with yourself. It’s not, “He made a mistake.” It’s, “I made a mistake.” He didn’t appoint himself; you appointed him! And I think so often we don’t want to own it.

Goleman: Bill, I think I remember that one of the unique aspects of your tenure at Medtronic was bringing into that industry the standards of the aviation industry, where any worker could stop a flight if they suspected there was something wrong. How did that work at Medtronic?

George: Normally the people making the product had ownership of the quality. They could get advice and counsel from a quality department. They could bring in the engineers. Normally they were responsible. They actually signed their name to the product. I remember visiting a heart valve plant where this woman looked at me with great passion, and she said, “I make heart valves that save people’s lives. That’s what I do; and I make a thousand of these heart valves a year—and if one of these valves is defective, someone is going to die. I could never live with that. To you, 99.9% quality is very good. But I could never live with that. I have this criterion: Is this valve good enough to go in my mother, or my aunt, or my child? If it’s not, it doesn’t get away from me. It doesn’t go out of here.”

Goleman: Do I remember that you used to bring in patients who had your pacemakers and so on, to meet the people who were making those things?

George: Most important day of the year. We brought in six patients—one of them was my mentor, Warren Bennis, who came in, who got a Medtronic defibrillator. He went out and met all the people on the production line. What did he do? He thanked them for the quality of their work that was helping, keeping him alive, and then he came in front of, you know, several thousand—3,000 people on our atrium, but also at that time another 20,000 watching on webcasting—telling his story. So we have patients come in and tell their story, and it’s so powerful, Dan, because that story resonates much more than a doctor telling a story or any kind of statistics we can give you. A person saying, “I had no life. I couldn’t even play with my grandchildren. I had no hope. I was confined to a wheelchair. I was going straight down. I was thinking about suicide because I had cerebral palsy, and your pump, my friendly ally here, gave me hope for the future. Now, I’ve graduated from high school, I graduated from college, I’m getting married. I have hope. I still have cerebral palsy, by the way, but I have hope for my life. You didn’t cure me, but boy! I have life.” And that’s what thrills people in Medtronic. Not just people on the production lines, but in the R&D labs. This thrills the people working in the accounting department. Everyone can resonate with that. That’s the business we’re in: restoring people to full life and health. But it doesn’t have to be about saving lives. It could be a Starbucks where we’re trying to put out a good experience. Or why else would you pay four dollars for a cup of coffee? You feel like, this is like my home away from home. I feel good. I can work at my computer. These people are nice to me. You see what I mean?

Goleman: So it’s really about making the mission meaningful to the people who are fulfilling that mission?

George: Yes, it’s got to come alive. Whether it’s a teller in a bank that’s not just giving you a loan to get you through, or give you a second mortgage, or trying to sell you something, they’re saying, “Oh! You have a couple of children, don’t you? Do you have a college fund? No? Can we help you do that? Here’s how we can help you set up that.” You know, a person genuinely concerned. Now, these are the lowest-paid people, typically, in the enterprise, but they may be the most important. We misunderstand that because they’re the ones interacting with the customers. They’re the ones making the quality decisions.

Goleman: So to the extent they feel the mission as part of their true north, then it will really connect with them?

George: Yes, like the heart valve worker who says, “I’m not putting just valves together.” You know what she said to me? She said, “You know what makes me proudest? When I go home at night, I’m thinking about there are 5,000 people alive and well and walking around leading fuller lives because of the heart valve I made.” Now she has a mission for her own life. We’ve aligned. She’s aligned her work with her own values, she goes home and she says, “I worked hard. I make 23 dollars an hour. I’m not going to get rich on that, but I have a life that means something.” You know? I think everyone wants that at the end of the day. Everyone wants to look back and say, “My life had meaning.” Not just, “I made a lot of money.” What are they going to do with it anyway?

Today’s Leaders

Goleman: Have you seen leaders become more alive, or show that they’ve gotten some special energy from finding true north? How does it change a leader?

George: I think what changes leaders is getting in touch with who they are. I had someone tell me, “You know, I went through this ordeal of processing my life story and processing my crucible, and I realized I had been cutting my father slack all this time, saying he was a good person, and I realized he was not a good person, and he really abandoned my mother and it’s okay to be angry at him. So I let that anger come out for the first time and saying, “Boy, I’m going to be a good father to my kids. I’m going to be true to my wife.” So it just freed him up, you know what I mean, from trying to run from his father to owning that that’s part of who I am. Howard Shultz at Starbucks talks about going back to the projects in Bayview, a pretty tough place. He takes his daughter there to say, “This is where your dad grew up.” Not, “I’m ashamed of that, and now I live in a nice house in Seattle,” but rather, “This is where I grew up. This is who I am.” So it becomes real. Everyone wants to capture their essence, or where they came from.

Goleman: But how does that change a leader in terms of their leadership?

George: Their leadership changes because they’re authentic with the people that they deal with, who know that, and consequently want to follow them. The toughest job of a leader today is not getting the numbers right. That’s the easy part. The tough part is how do you get an alignment between the mission and values of your company and the thousand or tens of thousands of people who work there. That’s hard. And you can only do that if people believe that you really care about them. And the leader is not the person on top, but the person there supporting them, and I think it changes a leader because they then become real to the people. They recognize who’s really doing the work, and who’s really important—not the people sitting in fancy meetings, but the people actually doing the work.

Goleman: Do you ever get pushback in the business community from people who say, “This is touchy-feely, it doesn’t really matter? Can you show us that it makes a business difference?”

George: I got a lot of pushback from around 2002 through 2006, mostly from the economists, the financial people, who had only these elements of truth. It’s extremely painful now, but if we can take a step back, one of the healthiest things that ever happened to our society was the meltdown of 2008, because it told us we were going the wrong way. We thought money was the most important thing, and we were going the wrong way. We got so caught up in that, and telling people that they’re only motivated by money. You’re not just motivated by money. There are lots of things that motivate you, but they were telling us money is the only incentive that matters. That self-interest over the institutional interest is okay. We were going the wrong way, and we needed a huge shock. It’s like the frog that gets thrown into a boiling pot of water is more likely to jump out than the frog that you boil a degree at a time.

Goleman: Do you think that collectively the leadership community has metabolized that experience? Have they really found it to be a crucible, and do you see true north leadership emerging from that, or are some people going one way, some people going another way?

George: I’ve seen an enormous change in CEOs in the last several years. Enormous. I’ve mentioned several of them. I could mention dozens if not hundreds more on the corporate side. I haven’t decided about Wall Street and the financial community, whether they’ve really changed. I’m quite sure in dealing with the elected leadership that the system is still as negative and debilitating as it ever was. So I don’t see any changes yet there—in fact it’s getting worse in elected life. I think the finance community is going through a reassessment, but at the corporate side, absolutely! It’s been an enormous change. Company after company, people have really come around to this as the right way. This is the way they know they want to lead. They were being pulled off course. They’re now getting back on course, and they’re happy. This new generation, they see the problems of people of my generation and they’re in a much more authentic place.

Goleman: So you think the next generation of leaders, the coming generation, will take more naturally to being ethical leaders?

George: No doubt about it. But I think the current generation is, too. The current generation of CEOs, the people who’ve just come into the job three or four or five years ago clearly are doing that, and I think the people coming up underneath them are as well. Also boards of directors are now testing for authenticity, to see if we really do have authentic leaders—not “are we putting someone in who can spin a lot of numbers.”

Goleman: I know that there’s a real revaluing of ethical leadership, and I see these as different halves of the same coin—do you?

George: Absolutely. But I think you have to start with, “What are we looking for in leaders?” We’re looking for emotional intelligence, and boards are wising up. They’re not looking for somebody that’s slick, that does a great PowerPoint presentation, Mr. or Mrs. Perfect. They’re looking for someone that is really real, and knows who they are, and can be honest to admit that. That’s how we connect. We connect at the heart level. We don’t connect at the head level. We don’t connect because you’re a lot smarter than I am or I’m going to worship at your feet. That’s not how we connect. We connect at a humanity level.

Goleman: Does becoming aligned with your true north as an individual, as an employee, necessarily align you with the company’s direction?

George: Well, that’s a good question. That’s why I say it’s such a hard job for leaders. How do you get these people all over the world, in China, India, South Korea, Alabama, and Germany, aligned or on a common mission? Actually, you know what the great leaders in the big companies are saying now? They’re not aligned by a rulebook, or a set of ethical standards, or a set of compliance rules. They’re aligned around a sense that is something we all share, in the common view. And frankly people that don’t share that will move on, or be asked to move on, because they don’t get it. If they don’t understand that this is the essence of what we are, and we really care about this—and people that don’t, then they can move on—but I think it’s important that you gain that alignment.

Goleman: What’s the relationship between authenticity and accountability in the business sense?

George: Great question. I think authenticity is holding each other accountable as well. I made a commitment to you to come here at five o’clock today. “Oh, I got busy, tied up, sorry I forgot all about it, Dan, I didn’t show up.” Now, we all make mistakes like that, but I have to be accountable to you, as well as to myself, to show up, to be here, and I think there is a direct relationship. If you are authentic, you’re going to do your best to be accountable. You’re still going to make mistakes. You’re still going to let people down. You can’t do everything for everyone, but you can be authentic. You can say, “You know what? I just can’t write that foreword for your book,” or, “I’m sorry, I just don’t have time to do an endorsement.”

But that’s authentic. So I think when you lack accountability, you don’t have a closed loop. It’s a model of empowerment. You can’t have empowerment without accountability. People say, “Let me do this, I want to take this project on.” OK, great, they’re empowered, but then they have to be accountable to deliver, you know? Woody Allen says, “80% of success is showing up,” and it’s true. You’ve got to be there for people, and part of it is counting on people to show up. You don’t want to deal with people you can’t count on—that don’t show up for you.

Goleman: So the authentic person owns their mistakes, as you said. So they’re fully accountable.

George: It’s a key thing we’re learning now: Vulnerability is power. Actually, inside that person that appears to be invulnerable is a very insecure person that doesn’t want to let you know who they are, and they’re dealing with their own insecurities. So vulnerability is power. This is who I am. Sometimes I say the wrong thing. I lack tact. I’m too direct. I can be intimidating in my style. I regret that I’m that way, but that’s actually who I am. I am an impatient person, but what I find is that when you own it, it doesn’t go away, but it dissipates. For instance, if I get a call to go on CNBC—as I did three of the last four nights—and tonight at 10 o’clock, I’m going to go do it. Now is that about ego? There’s some ego involved there. You know, is it about having an opportunity to speak my truth about what’s going on in the financial markets and leadership? Yes. Is it an opportunity to spread the message? Yes. Is there ego in there? You bet. So if I disown that by saying, “No, it’s not about me. I’m trying to help the rest of the world,” then that’s dishonest. We have to own these characteristics about ourselves.

So, do I want my book to sell well? Of course. I mean I’m always disappointed everyone doesn’t want to read it, but that’s part of just who we are, of being honest, and that’s not bad. Humility is wonderful, but having a healthy sense of your self is essential to do great things in leadership. We haven’t written much about that, but I do think having a healthy sense of yourself, knowing who you are, but also saying, “I want to make a difference. I can’t make a difference if I’m not there, if I don’t have an opportunity, if I don’t have a place to go do this.”

Spotting Authenticity

Goleman: How can you spot authenticity? When you’re hiring, when you’re promoting people, when you’re developing people, what are the tip-offs? What do you look for?

George: We know authenticity. It’s actually spotting the inauthenticity, because many people in their forties and fifties—even people in their twenties—have become pretty clever at hiding inauthenticity. You can tell when you’re dealing with a real person. You can tell that’s the genuine article, but some people have a pretty good façade to convey that, so you have to ask them tough questions. “Tell me about a time you failed. What are your weaknesses?” “Oh, my weaknesses: I wasn’t very good in English. I was really good in math. So I majored in English, and, you know, I actually became really great at English.” That’s not weakness; that’s not owning it. If a person can’t tell you about a time in his life that he failed, then you’re dealing with an inauthentic person.

Goleman: So that’s one of the questions that you would automatically ask?

George: Yes, because one of the dangers in corporate life is not accepting responsibility. You hear, “The team let me down. The team didn’t deliver. It’s all those guys. By the way, I’ve fired two people because they didn’t deliver.” And I’ve seen a lot of CEOs do that instead of saying, “The buck stops at me. I was responsible. The strategy didn’t work. We’re going back and reconsidering. I’ll take accountability for that.” But a lot of people don’t do that. They deny. This is the most dangerous thing in business, because that destroys trust faster than anything else. Take the blowup in the gulf for British Petroleum. You don’t learn from it until you take ownership. It’s easy to fix somebody else’s mistakes. You and I can go fix a lot of other people’s mistakes. Fixing my own, that’s hard. I hired the wrong person. I made a bad decision. I actually was unkind to someone and I think of myself as a kind person.

Goleman: You know, there’s such a paradox in what you’re saying, because there’s a kind of norm that you’re valued for telling a story of success about yourself, and yet you’re saying you would value, say, in an interview situation, someone who was candid about their failures.

George: Right. In fact, I say don’t promote someone to a high level position until they’ve actually failed—until they can fail, until they know what it’s like, to confront that, to confront themselves, to look at themselves in a mirror and say, “I failed.” Because they now know they have tested their limits and know they can still be true to themselves. Say I started a company that failed. I took the lessons from that, started another company, and I’m successful but only because I know what caused me to fail here.

Goleman: So, what you’re also saying is that a failure is an opportunity for resilience?

George: Absolutely. And if you don’t have that resilience, that’s the biggest test. What if you don’t have resilience? What if you’re not adaptable? What if you’re just going to stay the course, and you hit a detour? You hit a block in the road. You have to adapt, but you have the resilience. To come back to the Anne Mulcahy story—you have to pull off the side of the road. She came back the next morning, lots of resilience, but she had to have that resilience. She couldn’t say, “I’m out of here. Find yourself another CEO.” We actually do a lot of resilience training right now to ensure people have the resilience in their lives to come back, because life is hard.

Goleman: How do you train resilience? How do you encourage that?

George: The exact kind of thing we’re talking about: getting people to talk honestly and openly about the challenges they face and how they’re going to deal with them. Feeling like they have a support group in their lives, which we call a True North Group. They have tools they can use—the introspection tools, the meditation tools. When I get under pressure—it sounds like I’m weak, but I consider it strong—I go off and meditate, and I process that. You start thinking about it, and all of a sudden it’s kind of like a cleansing experience, because you start to say things to yourself coming out of the meditation: “Well, it’s not that big a deal. We’ll just go figure out how to deal with it. It’s not the end of the world.”

You’re not so caught up in the moment that you’re worried about all those little things. We say, “This, too, we’ll deal with.” We won’t say it’ll pass, but we’ll deal with it. Or to say, “I need some help. Would you come help me solve this really tough problem? I’m over my head. I can’t handle this one. I need your help. Together we can solve it.” That’s collaboration, that’s teamwork, and that’s the wave of the future. It’s not “I can do it myself. Just leave me alone. I’ll get it done. I’ll go into my office, come up with a solution, be back tomorrow.” It never works. Not in business at least.

Goleman: Bill, you wrote something I like very much. You said, “In the twenty-first century, the most successful leaders will focus on sustaining superior performance by aligning people around mission and values, and empowering leaders at all levels, while concentrating on serving customers and collaborating throughout the organization.” Could you unpack ”aligning,” ”empowering,” “serving,” and “collaborating?”

George: I’d love to. Aligning is the toughest job we have to do. Getting people aligned around the mission and values of the organization—there’s no tougher job of a leader. It’s far easier to go get the numbers right. That’s easy. Just lay off a lot of people and take some write-downs. That’s easy. Getting people aligned is really hard. As we become more global, how do we align people who have grown up in a Chinese culture the first 40 years of their life with a set of values from midwestern America? How do you get that alignment? You get it around the essence—you have to get to people’s hearts, because we’re all people of one heart. And so, I think it’s really hard that you have to be out talking about it, you have to be out understanding the lives of those people. People at Harvard teach courses called “Power” and “Influence”—how we exert power over others. I think this is a very old-fashioned notion. In the future, leaders will be people who give their power away. We call it empowering other people. How else can it be? I’ll guarantee you—take an organization of empowered people, they will overcome a hierarchical power-driven organization every single time. So how do we empower people? Give them the opportunities. We say we value what you do. You set the quality standards on the line. You’re responsible, and we empower you to make that call. We’re not going to come in and check you. We know you’re going to do the right thing. And it’s that kind of empowering leadership that I think leaders at all levels need. So as we flatten out leadership and don’t have all these middle managers and everything in the way, we get to empower people, and I guarantee you that you out-perform.

Leadership at its essence is about serving. But it’s not only people serving you. You’re serving them. We’re joined together to serve the customer. At Medtronic, we’re trying to serve the patient. We’re trying to restore people to full life and health. Everyone that I know wants to do that job well, and so we need to re-conceptualize how we in management serve the employees who are doing the work, who are closest to the customers, and make their jobs and their lives easy. We’re serving them; they’re not serving us.

Leadership today—and in the future—is going to require very flat organizations, without so many layers in between. It’ll be all about collaborating within the organization, not about competing. The organizations that compete internally will not be successful in the future. Successful organizations are going to compete externally, and they’re going to learn how to collaborate, even with competitors and customers. They’re going to learn how to collaborate with partners. And it’s very important to build that collaborative basis, because how else can you have non-political relationships? These relationships are where the real power of an organization is. For example, if I’ve just been sent by my company to India, where we’ve acquired a company, but a lot of the talented people are back in Great Britain, and I call them to say “I need your six top people. Here are the six people I want,” and they tell me, “Oh no, they’re all tied up on projects here. I can’t do it.” No. If they’re willing to collaborate, they say, “This is all about the company, of course I’ll send them over to you.”

That’s the whole spirit of collaboration within an organization, and that’s the only way an organization can have a healthy dynamic. We’re built on individuals coming together around aligned mission and values, and then collaborating towards a common goal.