Mark speaks with Bill George. Bill George is executive fellow at Harvard Business School (HBS), where he has taught leadership since 2004. He is the author of: Emerging Leader Edition of True North, Discover Your True North and The Discover Your True North Fieldbook, Authentic Leadership, True North, Finding Your True North, 7 Lessons for Leading in Crisis and True North Groups. He was chair and CEO of Medtronic, the world’s leading medical technology company. He has served as a director of Goldman Sachs, ExxonMobil, Novartis, Target, the Mayo Clinic, and World Economic Forum USA. He has been named one of the Top 25 Business Leaders of the Past 25 Years by PBS, Executive of the Year by Academy of Management, and Director of the Year by National Association of Corporate Directors.
Today, Commander Divine speaks with Bill George. Bill is an author, speaker, fellow at Harvard Business School (HBS), where he has taught leadership since 2004, and leadership visionary. He received the 2014 Bower Award for Business Leadership and was elected to the National Academy of Engineering in 2012. He has received honorary PhDs from Georgia Tech, Mayo Medical School, University of St. Thomas, Augsburg College, and Bryant University. He and his wife, Penny, reside in Minneapolis, Minnesota.
“We’re talking about having a set of principles that you believe in, and, and beliefs and values that you live by, and that you’re willing to stand up and be counted. Right now the job of the CEO has changed dramatically. It used to be just run your business well, and report the numbers, you’d be fine. Today, you’re called upon to stand up and be counted on a whole series of issues. ” Bill George
“I found one of the best thing you do is send people outside their home country and develop in that way. Because then, you know, you really are who you are, you have to look at yourself in the mirror and figure out who you are.
” Bill George
“ I had a policy before we make a decision. You know, there are always people who are sitting in a decision making table, some are more vocal than others. And so I went around the table. I did that with our board of directors too, because there were some board members are quieter. I wanted everyone to express their opinion, and really listen to what they have to say, and to force that dialogue. So it’s not just the most powerful person in the room or the chattiest. But I think you’ve got to do that. And that’s also how you create a sense of inclusion that my opinion really mattered. ” Bill George
“ And so, communicating vision is working on the business versus in the business, right. And also developing your leaders is working on the business. ” Mark Divine
“ I feel everyone there needs to feel like they belong to the organization. I’m proud to work here. I’ll tell anyone, this is what I do. And so I create that sense of inclusion and belonging. And that’s the leaders job. So I think it’d be just fall back on statistics. That’s not sufficient.” Bill George
“ A common thing, though, in our corporate world, right, the rat race, everyone’s, you know, just climbing the ladder or spinning around in that rat cage, without actually stepping back and questioning why they’re doing things, or if it’s the right thing. ” Mark Divine
Mark Divine & Bill George 0:02
Coming up on the Mark Divine show, in every country and Middle East and Africa and throughout Europe, I learned so much more about myself that way and how you got to deal with this situation, and you learn the people, sensitivities you’ve learn leading with the heart and having the courage to make bold decisions, and dealing different cultures. And if you can’t do that today, I don’t think you’re gonna make a global business.
Mark Divine 0:28
I’m Mark Divine, and this is the Mark Divine show. On the show, I explore what it means to be fearless through the lens of the world’s most inspirational, compassionate, resilient leaders. I speak to folks from all walks of life, including meditation, monks, blockchain wizards, extreme adversity, survivors, and leading CEOs. And today I’m going to be talking with Bill George, the CEO of Medtronic, and now Harvard Business School teacher-leader to get insights about his views on leading from the heart. And true north leadership. As I mentioned, Bill is a former chairman and CEO of Medtronic and medical device company. He’s a senior fellow at Harvard Business School. He’s taught leadership there since 2004, he is the author of Discover Your True North and Discover Your True North Field Book, Authentic Leadership, Finding Your True North: Seven Lessons for Leading in Crisis. And his recent book which we talk about, True North for Emerging Leaders.
Mark Divine 1:32
Bill you were a chairman and CEO of Medtronic, and now your work at HBS. Give us a sense of what your formative years were like your career, where do you go to school? What were some of the influences that led you down this path to being a business builder?
Bill George 1:47
My father took me aside when I was like nine years old, and he said, son, I’ve been a failure. I thought he was a good consultant. He worked for Booz Allen. He said, I want you to become the leader I never became so he was even telling me you could be CEO son and he gave me the names of companies the first one was Coca Cola,the second was Procter and Gamble, and the third one was IBM. Of course, I didn’t know what any of these companies were, I drank Coca Cola.
Mark Divine 2:09
Bill George 2:10
But it’s kind of heavy trip. But I can tell you in junior high high school, I never got to lead anything. I joined a lot of organizations, never liked the lead never liked the student council. But I knew my senior I was good enough tennis player to play college tennis for a couple years. But I wasn’t even co-captain in my high school tennis team. So finding my senior I threw my hat in the ring to be president senior class. And when the votes came in, I lost by margin two to one. So it’s pretty clear I am no leader..and I went off to…
Mark Divine 2:38
Yet, you were not a leader yet.
Bill George 2:40
Not a leader, and I went off to Georgia Tech ran for office six more times, last all six. So now I was pretty depressed. And the best thing that happened to me, some seniors took me aside and said, Bill, no one’s ever going to work with you, much less be led by you, cause you’re moving so fast to get ahead. You never take time for other people. And they were 100%. Correct. It was all about me.
Mark Divine 3:02
Bill George 3:03
That was a painful lesson. But I kind of put my own self help leadership development plan together, and went off and went on to lead a number of organizations in college and graduate school, worked in the government for three years and then started the consumer microwave oven business, which very formative because it was, like I say it was an intrapreneur not an entrepreneur, we had a very small restaurant business. And we built up the consumer business a couple 100 million dollars, and which was a lot of money in those days. I was 27 years old when I started.
Mark Divine 3:36
So intrapreneur means you were working for another company.
Bill George 3:40
Mark Divine 3:40
And that gave you the leeway and the resources to start a company within a company.
A company in industries, which has later been acquired, but and yeah, they gave me tremendous amount of leeway for a 27 year old. And I learned a great deal. I’m hiring people twice my age with twice my salary. But we buildt a business. And that was very exciting. And I love that.
Mark Divine 4:00
What are some of the different qualities required of intrapreneurship as opposed to entrepreneurship?
Bill George 4:05
Well, I think, you know, we didn’t have to raise funds, we get funds from the corporation, although we kept sending themmore money, more cash, more profits, but anyway, entrepreneurs, you know, have ownership, we had no ownership other than a few shares of stock. And so it was a question of selling the corporation and funding this business funding new factories, you know, funding research programs. But that was a big difference. But we are able to build a very significant business there. But you know, I didn’t want to stay there. I had problems with the company’s values. They were kind of cooking the books, quietly, and eventually it all tumbled down. And so I went to work for Honeywell high caliber company mentor was the CEO and had great experiences. President Honeywell Europe and then they gave me a series of turnarounds and I hit three turnarounds. Since I told you earlier, I’m a builder and And each of those, I was cut, cut, cut. And there were businesses that hadn’t been invested in, so I had to straighten them out. And finally I looked at myself one day, I was on my way to be CEO.
And I think I was more into being CEO than I was passionate about the business. And it finally struck me one day, and I looked at myself in the rearview mirror, I’ve been there 10 years, and said, you know, I’m miserable on the outside and outside, I’m doing great. I’m one of the two candidates be the next CEO. But you know, in reality, I wasn’t happy. And I didn’t enjoy what I was doing. And I was traveling 80% of the time. And my wife is kind of all over me about, you know, not not really being around the house and taking care of things. And she worked, too. So uh…
Mark Divine 5:42
This is such a common thing, though, in our corporate world, right, the rat race, everyone’s, you know, just climbing the ladder or spinning around in that rat cage, without actually stepping back and questioning why they’re doing things, or if it’s the right thing. Right?
Bill George 5:56
Exactly. I think you hit it, you know, why are we doing this? And what’s the real goal here? Is it to have a title is to have money? And a lot of ways we make money, as you know, and but I think it was, it’s caught up in that rat race. And even if you win at it, do you really win? And that that finally decided I wasn’t going to enjoy it, so…
Mark Divine 6:16
Yeah, you have to redefine the win, right? It’s like..
Bill George 6:18
Mark Divine 6:19
Is winning just putting points on the board? Or is it is it you know, to feel good about yourself and to know that you made an impact in your life, you know?
Bill George 6:25
Well, you know, I thought about it. You know, since I was in high school and college, I’ve always tried to help people develop to their full potential, develop leaders, and help them realize what they could do. And I was doing a lot of mentoring back in college. And I thought, that’s what I really enjoy is building an organization, not just taking one down, I know how to do it, but it’s not what I wanted to spend my life doing. So that’s, I then kind of gave up my father’s image of running a big company went to a midsize company called Medtronic. And that was perfect for me. Great passion for the business, mission of restoring people to full life and health, great values.
Mark Divine 7:07
What do they do? I’ve heard the company name.
Bill George 7:10
Our founder invented the pacemaker. Now the company I, we kind of broadened it way beyond cardiovascular defibrillators, stents, vinyl therapy, diabetes, neurological products, Parkinson’s, you name it, just about anything implanted inside the human body or doing surgical instruments as well. So I loved it. And I was very engaged with the doctors and the business and the kind of life and death nature of what we were trying to do.
Mark Divine 7:35
Right. So in your, your tenure there, what did you find, really gave you the results and lead to the culture that you felt was was optimal for the company?
Bill George 7:47
Great question. Yeah, it’s really today, leading with the heart. Medtronic was all about that. Not just physical heart, but emotional heart. And yeah, you know, you’re gonna talk to him on a production line. And you know, you didn’t talk to him about making 391 a share, you know, you know, you talked to him about, you know, their work and how it made sure every product was perfect, because that that heart valve, that heart valve, and perfect, someone’s gonna die. And if you make 1,000 heart valves a year, well, do you want to live with one person dying.. you know. So to some people, 99.9% quality would be pretty good, not to people in that production line. Same with the engineers, they were very passionate. And I spent a lot of time I think I gound up and saw about 700 to 1000 procedures, in my 12 years there, where you go into the doctor in the morning, 6:30, put on the greens, he invites you in, talks to you for awhile, then he invites you into the operating room, and you get to watch what he’s doing. And it was incredible learning experience. I didn’t know anything about medicine. I knew a lot about high tech, but nothing about medicine when I went there. So it was a great learning experience. And I got to see that life and death literally.
Mark Divine 8:52
That’s fascinating. So as CEO, what did you consider to be your most important job as a leader?
Bill George 8:59
It was building the organization. Because when I went there, we had 4000 people when I left, it was like 26, it wasn’t just the numbers. Today, they got 100,000. But it was more building the caliber of the leadership team. Because we had a lot to learn. We had been a small company entrepreneurial, but we didn’t have the depth of leadership to ensure the quality regulatory standards, everything throughout and continuing to invest in new businesses, acquiring companies but then having to build a leadership in those businesses. And it was a tough race. I mean, it was a fast moving business. We grew it to 18% a year compounded for 20 years. So..
Mark Divine 9:35
Bill George 9:36
And that was all about innovation. It was all about getting first with the breakthrough innovation and getting people inspired about that. So if I had to make a contribution, I think it was bringing everyone together around the purpose of restoring people to full life and health and the values of the company.
Mark Divine 9:52
That really resonates with me and we’re hearing a lot more about vision and values and you know, that is the main job of the CEO of the owner entrepreneur CEO.
Bill George 10:01
Mark Divine 10:02
If you really clarify those and then just relentlessly communicate them. Right?
Bill George 10:06
Yeah, exactly, unless they communicate because about the time that you get bored, you get tired of saying it over and over is when people are starting to hear it and believe it, you know, and, you know, I’ve seen so many CEOs the other way, you know, it’s all about the earnings and get get the stock price up. Look, your employees don’t know how to do that, you know, they, they understand the mission. They think that’s someone else’s job. So, but the really, you know, if you think about it, shareholder value is just the result of what kind of value you’re creating for your customers.
Mark Divine 10:36
I’ve been reading a book written by a guy named Ari Whitesnake, who is building a company still called Zingerman’s, out of the Midwest. And they attribute a process called visioning to their success. And their claim is that creating the vision, both for the overarching organization, then, of course, each independent division, or company or team, and then even each project, and so they spent an enormous amount of time, literally writing out articulating the vision in a very visceral, emotional way. Like what did the client feel like when when they’re, you know, when they’ve got their heart valve replaced? Or, you know, their their device implanted? What does the doctor feel like? What is Medtronic’s team feel like? When did you do any process like that? Or how did you do the visioning process?
Bill George 11:23
Absolutely. Now, the mission was written by our founder and backed company, he was the entrepreneur that essentially was bankrupt, wrote the mission in 1960, he had invented the basement a couple of years earlier. And but that hasn’t changed one word today.
Mark Divine 11:37
No kidding. What’s that mission?
Bill George 11:40
The mission is: to use biomedical engineering to restore people to full health, alleviate pain, and extend life.
Mark Divine 11:48
Oh, It’s interesting.
Bill George 11:50
And everyone met trying employee knows those words. And we did, we did things to reinforce it, we gave everyone a medallion, I’ve got right here. And it shows the rising person coming off the operating table. The mission on the back is stated that the first steps of the mission, but the idea is that everyone understands you’re a part of that. And then each year, we had a holiday party. And we bring in six patients, and they would tell Medtronic and save their life and restore their life. And they have children, they play with their grandchildren via masters, government run a marathon, whatever. But that was pretty emotional. And you get all the employees together. Now, of course, they’re all over the world. So a lot of them coming in, on zoom. But the point is, it’s quite an emotional, so it is leading with the heart. It’s not just you know, the statistics.
Mark Divine 12:40
What strategies did you use to over communicate the mission and the vision, you showed that one, you have an artifact, you know, this coin or this medallion? What are the strategies you use? Because I think that’s another tricky one. It’s like, yeah, I get it. But you know, you’re so busy, you know. And so, communicating vision is one is like working on the business versus in the business, right. And also developing your leaders is working on the business versus and so your task saturated these days, like constantly, constantly, you know, with an over extended task list. So how did you find the time and force the organization to have these rhythms around communicating vision values and celebrating those?
Bill George 13:19
Well, I just went out and visited all our locations all around the world, all our divisions in the United States, which were based in different places, and talked about it, and we did our mission a ceremony forum and talked about what it was all about. And then asked them, you know, to playback what they were doing, how are you fulfilling this? How are you carrying this out? Here in India? And how’s it work here in India, things are obviously healthcare is different here, you know, how’s it work in, in China, or Germany, or wherever you are?
Really need to understand, that’s where people live. And that’s what they resonate with. And so that directs, you know, spending time and production lines, just to asking, you know, sitting down with good people, how’s the quality day? Whoa, Mr. George, our equipments not good enough, we can’t turn off quality product, we need better equipment, you know, and so you get right down to it. And I think too many CEOs be blunt marketers sitting in their offices, looking at reports, having big meetings of a couple dozen people. And going over the numbers. Yes, we went over the numbers, say the numbers are on the computer today. I don’t need to spend a meeting to quiz someone about every number. I can delegate that to the next level people, but getting out and touching the people and being there. So I tell CEO’s I teach CEO programs at Harvard now, and taught large company CEOs and we do in groups of 12. But we got about 400 come through the program. But I say to him, how much time are you spending mark out with your people? Are you in direct contact with them? And well, I don’t really have time. I talked with this one guy who had probably more retail food stores anywhere in the world. And so I don’t really have time to get out there and do that. So well. Look, I spent 30% of the time he didn’t believe me. I said I spent 30% of my time out there with customers, talking to them. But how do you know what’s going on? That’s the big question, in these big organizations. A lot of times they don’t know what’s going on. They think they assume but they don’t know.
Mark Divine 15:11
Yeah, the ground level truth can only be found at the ground level.
Bill George 15:14
That is very good.
Mark Divine 15:16
You learn that in the field, that’s for sure. Yeah. The further you get away, the more distorted the truth gets.
Bill George 15:21
Hey, yeah, I worked it a little side. I worked in a Defense Department during Vietnam, and Robert McNamara and Secretary defense, I went through the thing, and here’s quite a guy, I’ll tell you, they were looking at statistics, statistics were all systemically falsified.
Mark Divine 15:33
Bill George 15:34
No one was actually cheating. But they were, you know, body counting, they use body counts to measure how they’re doing. They were counting same bodies three times, say they were treating the enemy. You know, they never went to Vietnam, they never went on the ground. They didn’t know what’s going on. And I went to Vietnam later on, you know, the, the Vietnamese said, hey, where do you think we’re lying with the Chinese, we’re scared to death of the Chinese just see a million of them pouring over our borders? No, you don’t understand that at all. But if anyone ever met people, they would have found that out or listen to people on the ground.
Mark Divine 16:07
Right. It’s such an important lesson. Let’s talk about values. Because you know, it’s the people on the ground, you know, your culture is basically just the attitude and behaviors, right of your, of your customers and your employees.
Bill George 16:19
Mark Divine 16:20
And so then you want the employees to uphold the values of the organization or align with them. But it’s tricky. So how did you ensure that the behaviors of your staff slash team were in alignment with your values?
Bill George 16:36
Well, the toughest question is, what do you do relative to customers?
Mark Divine 16:39
Bill George 16:40
And in the US, we were very clean, so to speak. It turned out the company never put any God disciplines in internationally. And we had a lot of stuff going on. That was pretty crazy.
Mark Divine 16:48
Bill George 16:48
Like going to Sicily and leaving a BMW for a doctor and not bothered to pick it up. And, you know, I go to China, and they say, you know, Mr. George, we’re losing contracts cause we don’t pay, which is safe rides. And I said, That’s right, we don’t. So what you do is you sell the technology and the service we offer and win the order that way. Because no, we don’t. And we’re known for our integrity. And if you lose and order, you loose one, go get two. And you just keep talking to people and say, Hey, what’s going on here? Because I know what’s going I’m not naive. I know what’s going on in India, and I know what’s going on in Russia. But that’s not who we are. And we got to set ourselves apart from people and say, we don’t do business that way. So if you’d like to do business with us clean way, we’d love to do business. Okay.
Mark Divine 17:33
Bill George 17:34
But and we had, frankly had to terminate number of people. In fact the worst thing I did, I promoted a guy to be president Europe, who is very talented, very capable. Then six months after I promote him, I found out he’s running a bribery fund for Italian doctors. And so I had to hire him. But the hard part, I only been there a year and a half, dark bar was not firing. And that was easy. The hard part was going back to the board of directors as the new kid on the block and the executive committee and say, hey, you know, don’t look at him look at he didn’t change. Look at me. I didn’t check out his value. Shame on me for not checking. I said this last time. I’m gonna do that.
Mark Divine 18:08
Yeah, that’s interesting. I mean, sometimes it’s difficult to see those things because people hide it pretty well behind the outer veneer.
Bill George 18:16
Yeah, particularly when you’re, I mean, when you’ve worked in organization, you think of the US military, you don’t make it to general or admiral, but I having been and people know who you are. Sometimes people have slipped through the system. But not too often people know who they are, they know all about him, you go down and talk to him. And that’s what I made the policy Medtronic is I’m not gonna promote him until I find out he had a 360 on em, see how their subordinates feel about him. But also find out what’s what’s the word? How does this person operate and put them under pressure situations of pressure of crisis? So if we had outed people, put them into a crisis situation. You know, and I tell you, that’s where you really learn about they learn about themselves and that you really learn about them. How do they handle themselves that situation?
Mark Divine 19:05
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Mark Divine 21:23
There’s a term that we use with our corporate work: deliberately developmental organization. Where the the organization is where the staff goes to get their learning in their growth, right. It’s not like, Oh, I’m going to develop myself over here with these programs and this education and these challenges, and then I’m gonna go to work. And they’re two separate things. But it sounds to me that like you just intuitively knew that and did that right. And you set up opportunities for your at least your senior leadership team and then trickling down for the organization to be like the the growth or the leadership development petri dish.
Bill George 21:57
Absolutely. And I found one of the best thing you do is send people outside their home country and develop in that way. Because then, you know, you really are who you are, you have to look at yourself in the mirror and figure out who you are.
Mark Divine 22:09
Because why, because of the challenge of the culture and the language, and…
Bill George 22:14
Yeah, and you’re not the majority anymore, you are the minority.
Mark Divine 22:17
Bill George 22:17
And learning how to deal with different people in different cultures, people with different ways of doing business, you learn a lot, I learned more as president Honeywell Europe living in Belgium for three years. When I was 38 years old, then anything else I learned in my career, because I was, you know, in every country and Middle East and Africa and throughout Europe. I learned so much more about myself that way, and how you got to deal with this situation. And you learned that people sensitivities, you’ll learn, leading with the heart and having the courage to make bold decisions, and deal with different cultures. And if you can’t do that today, I don’t think you’re going to make a global business.
Mark Divine 22:53
Yeah, I agree with that. You um your book, True North, you talk about developing moral leaders. What does that mean to you?
Bill George 23:01
We’re talking about having a set of principles that you believe in, and, and beliefs and values that you live by, and that you’re willing to stand up and be counted. Right now the job of the CEO has changed dramatically. It used to be just run your business well, and report the numbers, you’d be fine. Today, you’re called upon to stand up and be counted on a whole series of issues. I mean, we’re right, three miles from where I am today, George Floyd was murdered. In any CEO in that town, we have a lot of big company CEO’s here that didn’t not only take a position on that, but also have a plan of what they’re going to do and realize that, yeah, there’s a heck of a lot of discrimination out there and maybe kind of rip the band aid off, and we got to see it, or a lot of cancer underneath, and we got to deal with it. So yeah, they had they had to deal with it. And you know, this is, you know, I got a guy, I didn’t read the book, Chip Berg, who is just a fantastic leader of Levi Strauss.
And he says, You know, I don’t believe in gun control, I believe in gun safety. So what are we going to have about gun safety? Well, that’s not his business. A lot of people are scared about somebody coming in with gun, what are we gonna do about it? So having the courage to speak out and say, here’s what I’m gonna do on behalf of my people. And kind of the worst example is the CEO of Disney that caught himself in a political maelstrom. He said, I’m not going to speak out. And anyway, it got very controversial. So I think you need to be clear about what you believe. And, you know, if you disagree with me, that’s fine. I respect your values. You know, I believe in a woman’s right to choose this or that goes against my religion. I respect that Mark, if that’s what you believe, great. Just stay true to what you believe, you know, we can have different beliefs, but you got to stay true to them.
Mark Divine 24:39
Bill George 24:40
And I think those are being called to stand up and be counted today’s in ways that can kind of slip by before and just worry about how much money they’re making, which is also another pet peeve of mine.
Mark Divine 24:51
Yeah, no, I agree with that. Are you also speaking about this in the vein of like multi stakeholder capitalism and ESG initiatives, and I guess, the question kind of the extension to that is be held accountable to who? Because you could make a claim that it’s not your shareholders who are holding you accountable to ESG. It’s, you know, it’s the activist or it’s the politics, politicians, right? And so who are you really beholden to?
Bill George 25:15
Well, I’m not a fan of the activist. First of all, you got to be accountable to your customers, if Medtronic put out a product that’s defective, we have to, you have to fix it and put it right, no matter what it costs.
Mark Divine 25:25
Bill George 25:26
You know, that’s obligation. Number one is to serve your customers, and to create more value for them however, you’re doing, maybe you have lower prices, like Walmart, you know, maybe do it to superior products, like we tried to do it at Medtronic. But that, to me, is what motivates your people. So you have an obligation to people, and I used to say to people, if you’re gonna hire someone, we’re gonna have him for life, let’s not think we’re gonna have him for a year what’s, what’s that? Are you prepared to support him through downturns, and that sale will lay off 10,000 people tomorrow. Which, and then take a big bonus. So that’s why I’m very cynical about that. And I think if you do that, if you have highly motivated people, you serve your customers better, you will serve your shareholders in the long run.
And if you if you make the investments in developing people in R&D, and capital equipment, and new ventures, you know, new entrepreneurial ventures, then you will serve your shareholders well, but over the long term, if you play the short term game and respond to the activists, no, you’re not gonna make it. So it is hard. It’s much harder today than when I was CEO.
Mark Divine 26:26
Bill George 26:27
Because there’s not a single metric, you can’t just look and say our stock price day is at $31 a share. And that may not mean anything, by the way. Just maybe a point today, how’s it gonna do for the next five years or 10 years?
Mark Divine 26:41
Yeah, this question that I’m keep popping in my head is really more for me to I’m curious about it already has been. And that has nothing to do with leadership. But did you ever participate in any stock buybacks? And what do you think of that idea of, of a stock using capital to buy back stock as opposed to investing in your people or investing in you know, new new capital equipment?
Bill George 27:02
Well, first of all, I think you have, if you have shareholders, you have an obligation to pay a dividend. A lot of your shareholders, your employees, their stockholders. In fact, in Medtronic, we made sure we gave everyone 100 shares of stock number of years ago, because we want to want them all to be shareholders, but that’s your first obligation to make the dividend. Then you’ve got to fund the business, research and development capital equipment, building new stores, if you’re in the retail business or hotel business. You’ve got to fund the business. And I think the only time you would ever do stock buybacks, buybacks, if you’re generating so much cash, you didn’t know what to do with. Yeah. Now today, I see companies take Boeing. Here’s the world’s greatest aviation company for 100 years since William Boeing, you know, really started aviation back to 105 years ago. You know what they do? They cut back in R&D so they can buy more stock back.
Mark Divine 27:54
Yeah. That’s didn’t make any sense to me. Yeah.
Bill George 27:57
And I can tell you for a fact people want to have an geist I really respect like at Alamo Ali, who went to Ford, but he wants to have a new single aisle aircraft there replace all their 1968-61 planes. If you don’t do that, man. Well, they wouldn’t do it. So they just kept modifying. That’s where the 737 max came from. And then they had to kind of cheat a little bit and not tell the pilots who was new. And of course, pilots are flying some they didn’t know what they had. And it took them down. They wanted to go up and it took them down. And you saw the results.
Mark Divine 28:28
Bill George 28:29
And but that was it started because they were not going to invest in it. They invested in stock buyback.
Mark Divine 28:36
Bill George 28:36
Jeff M.L. and GE finally sold the consumer finance business after he’d been there for CEO for 15 years, 15 years. And, and then he takes $50 billion and stock buybacks and he won’t invest in R&D. And oh, by the way, they couldn’t even meet the dividend.
Mark Divine 28:54
Oh, god geese…
Bill George 28:54
So crazy man, all these retirees, they’ve given them 401 K’s instead of a guaranteed pension, so they weren’t getting dollars, they’re getting dividends off their stock, and then they take the dividend down to a penny. To me, that’s just wrong. Period.
Mark Divine 29:10
That’s the epitome of like financial management as opposed to leading right.
Bill George 29:14
And honestly, Mark, a lot of people get to be CEO’s, financial managers, that really don’t know how to lead people. And that’s what I’m trying to speak against.
Mark Divine 29:24
Bill George 29:24
That’s why you got to get out and run a business. The idea get to be CEO, you just been in the finance area whole life and become CEO. It’s just wrong.
Mark Divine 29:31
It’s also usually the like, if you did a study, I’m sure they have it. That’s probably usually the death naill, right. Statistically speaking, when companies make bad decisions, standby, right, it’s the beginning of the end!?
Bill George 29:43
Go back to your Navy background. I can tell you when I worked in the department work for the Secretary of the Navy, I can tell you, the Navy captains there, they hated being there. They wanted to be on at sea. You know?
Mark Divine 29:52
Bill George 29:53
they didn’t want to be sitting in some office with three other captains and the best of them, they felt they had to do that tour, but they wanted to get out at sea.
Mark Divine 30:00
Bill George 30:00
And, frankly, anyone in the Navy who didn’t like being at sea price shouldn’t be in the Navy.
Mark Divine 30:05
That’s funny. Well, actually, as a Navy SEAL, I didn’t like being at sea, but I did like being out in the field.
Bill George 30:10
I hope you liked being out in the field.
Mark Divine 30:12
Same thing. Yeah. That’s awesome. You talk about turning your crucibles into inspiration to accomplish extraordinary things. What do you mean by that?
Bill George 30:21
Well, the difficult times, you know, I had an experience when I was in my early mid 20s, my mother died at 24. And I’m an only child, I’m very close to my mother, not close to my father. And I was just, you know, devastated by her death. And then 18 months later, I had fallen in love got engaged to be married, three weeks to the day, literally, before our wedding, my fiance dropped dead of a glioblastoma, brain tumor.
Mark Divine 30:45
Oh my gosh.
Bill George 30:47
And I was just, I can understand my mother’s death and the natural thing, parents die. It’s painful, but you know, parents do die. But why is a 25 year old who is doing great work die? And so that really caused me to think about what’s it all about? What What am I gonna do with my life? You know, none of us knows how long we have to live, I gotta have a heart attack and die tomorrow, die today. And so I think we really have to think, why are we here? What are we doing? How can we contribute to make this world a better place? So my whole calling in my new book for emerging leaders is to step up and lead and make this world a better place.
Mark Divine 31:23
Mm, I like that, speaking of making the world a better place. Talk about the dangers of not leading with your True North Leadership, which sounds like we’re really talking about moral leadership and emotional development leading from the heart and knowing your why that would be like my synopsis of True North leadership.
Bill George 31:42
You got it.
Mark Divine 31:43
The dangers of doing that. And I, one of the leaders you referenced is Mark Zuckerberg and I read today about an interview he just did with Joe Rogan, where he said that, for him waking up in the morning is like getting punched in the gut. And I though, how sad. Right? That is, yeah, because you just get hit with all these, this barrage or delusion of negative emails and problems you got to solve. And I’m thankful this poor guy has lost his true north, I mean, can you talk about some of your research around the dangers of leading without heart?
Bill George 32:14
Well, I mean, Mark’s just one example of someone who had never, you know, he, he’s chasing how many, how many people on his platform does he have because that’s gonna give him more higher stock prices and be worth more money. If that’s what you chase, you can never have enough. You know, always be somebody that’s wealthier than you are. And he never grounded himself. And what does Facebook stand for? First of all, I get outraged. The idea that they would take my data or your data and sell it to someone else without my permission.
Mark Divine 32:43
Bill George 32:44
I mean, this is supposed to be a social, private site where you’re talking to people. You’re gonna take the information off there and sell it to someone, you know, and it’s not just like, selling me a hotel room is not like hotels.com. No, they’re taking my healthcare information. They’re taking my personal relationships. Maybe I went to a therapist, and they’re taking, you know, that’s just wrong. And he never would clarify, he’s still to this day, when it’s a very simple thing to clarify, just say, either you opt into to letting us use your data or you opt out.
Mark Divine 33:11
Bill George 33:11
So that’s an example, but there are a lot of people out there today are kind of what I call faking it to make it. Elizabeth Holmes had a company. Take a finger prick of blood. Well, she never proved it could work. We knew it didn’t work. I started at the board at Mayo Clinic. We know, they know it wouldn’t work. But she was a phony. And but she built up a $9 billion evaluation. Adam Newman goes to WeWork. And you know, all it is is real estate played and everything you do with it, but the create this illusion. And so this very upsetting to me. People that really are, you know, fake basically, they’re fraudulent.
Mark Divine 33:46
Yeah. Well, it’s sad that they can snow, so many people so easily. Right, which is kind of a testament to kind of how far off track maybe our culture is in understanding.
Bill George 33:57
Mark Divine 33:58
You know, what’s real and what’s not real?
Bill George 34:00
And if I’m going to be honest, the media plays people like this up.
Mark Divine 34:04
Bill George 34:04
And sometimes they’ll get a lot of money from investors for whatever reason. And but, yeah, I find it very distressing, that, people like that. I mean, I like people that are grounded like people I have in my book.
Mark Divine 34:18
Yeah, no, I agree. We have a coaching practice, meaning we certified coaches in our methodology we call Unbeatable Mind, and then we put them out there, and we and one of the things that we’ve said is that coaching is probably the most important leadership skill of the day. Because that’s where you’re developing people. And so you use the term, coaching leader. What is a coaching leader? From your perspective…
Bill George 34:39
Oh, I think we got to get away from I’m a manager, I delegate the work, I measure you, and then we determine how you do and I sit back my office and look at statistics, see how you’re doing. I think any good coache is out with his or people they’re on the floor. And the first thing if you want to coach people, they have to know you care about them. Today, you deal with millennials, they think you don’t care about them, they’re never going to give you their hurts, they may do the work, but they’re never going to be all in.
Mark Divine 35:07
Bill George 35:08
To the mission and values. Second, you got to get them playing in their sweet spot. It’s like, um, you know, any sports team, the coach’s job to get everyone in the right position on the field and then getting to align them around a goal and getting to play together as a team. And but I do think, I think as coaches, it’s not soft at all, you challenge people to reach their full potential. Is it different for you? That’s your job. As a leader, as a coach, you challenge people, I know you can do better Mark, you’re not giving us your best game right now. And let me, and then the final thing is, let me help you do it. Okay. We’ll get some people to show you where you’re off base. And let’s, let’s see how you can step up your game. And that’s to me, what leaders in today should be doing. They should be coaching their people. And I look back at my life. That’s really what I’ve been doing all my life. I didn’t really think it through and call it that until recently. But that’s when I say I mentor, someone that really coaching them along those lines.
Mark Divine 36:04
And mentorship and coaching are very similar when you’re talking about internally, right and an internal organization. Do you advocate the employment of executive coaches, for key staff, as opposed to let’s say you coaching or your leadersship team coaching subordinates?
Bill George 36:22
Yeah, coaching has become a very, like a big profession. It was never one when I was CEO, it that was never a thing.
Mark Divine 36:28
Bill George 36:29
Kind of thing you did for immediate, you know, we need to get out to fix your weakness. Today, it’s become a big thing. I think coaches are good. But I think as a leader, you ought to be the coach.
Mark Divine 36:39
Bill George 36:40
Not just sit back. And oh, let’s look at the numbers. And let’s measure statistics and give you a formulaic bonus. No, I think it’s your job, my job to coach people every day, not just for performances. But I think every day we’re in contact, we can help. And by the way, you can help coach me be a better leader. So I need your feedback to. On every performance review I’ve ever had, I always ask people to give me feedback first.
Mark Divine 37:02
Yeah, it’s a two way street.
Bill George 37:04
And I can tell you when I teach at Harvard Business School, I learned more from my students than they do for me. Because then I get evaluated for every class I teach. And it’s good. You know, sometimes it’s painful, but it’s good.
Mark Divine 37:17
Mhmm, no doubt.
Bill George 37:17
That’s how you get better.
Mark Divine 37:19
Yeah, you need someone to hold that mirror up.
Bill George 37:21
I actually prefer a coach that’s actually done it, as opposed to one that’s just observed it.
Mark Divine 37:25
Bill George 37:25
You know what I mean, that that’s the difference. I see. Somebody’s actually been out there and been on the playing field. So they know, you know, they can really help you.
Mark Divine 37:35
Right, yeah, that makes sense. Now, diversity, equity, inclusion or DEI, is such a such a big thing these days. And it’s very important. So how would you recommend that a leader who’s attempting to be a true north leader really, really embrace that as opposed to pretending to embrace it, you know, for the media or for the virtue signaling aspect?
Bill George 37:58
Yeah, that turns me off. And also, what’s turns me off is statistics. Oh, we got you know, we went from 17.4% female managers to 18.1. Real.
Mark Divine 38:08
Bill George 38:08
I mean, what, why is your turnover so high of women between the ages of 34 and 42? I think, to me the job, yes, we have diversity, we have people, different national origins, races, religion, you know, sexual identity, and gender, obviously. But I think what’s really important is create a sense of inclusion. So I feel everyone there needs to feel like they belong to the organization. I’m proud to work here. I’ll tell anyone, this is what I do. And so I create that sense of inclusion and belonging. And that’s the leaders job. So I think it’d be just fall back on statistics. That’s not sufficient. By the way, I feel the same thing about ESG. I’m concerned, these things are becoming a checklist. Like, let me turn it over to our staff, we got an ESG staff, we got our diversity staff over here. They’ll do the checklist. No, no, that’s the leaders job, you got to do that. And you got to embrace people. And people, they’ll figure out pretty quick, whether you respect them for who they are, or what they are. Are you looking at the color of their skin or are you looking for the human being within?
Mark Divine 39:09
Right. I agree.
Bill George 39:09
And I say every leaders got to look at who the people are, and not what they are.
Mark Divine 39:14
How does a good leader ensure that inclusion isn’t just about having diversity on the payroll, but actually having everyone’s voice have a fair seat at the table?
Bill George 39:25
That’s very good. I had a policy before we make a decision. You know, there are always people who are sitting in a decision making table, some are more vocal than others. And so I went around the table. I did that with our board of directors too, because there were some board members are quieter. I wanted everyone to express their opinion, and really listen to what they have to say, and to force that dialogue. So it’s not just the most powerful person in the room or the chattiest. But I think you’ve got to do that. And that’s also how you create a sense of inclusion that my opinion really mattered. I remember I had, we had an 11 to one vote to do an acquisition and I went back and over the weekend and talked to the one who had voted against it, who actually knew a lot. And after listening to him, I called the whole thing off all the rest of the board.
Mark Divine 40:12
Oh no kidding. That’s fascinating. Why? What was it that that person saw that that when else didn’t?
Bill George 40:17
That we thought this was like a drug delivery business, it was actually like, a pill business, a pharmaceutical business he’d come from that industry, he knew. And he gave me his honest opinion, and one that he was stubborn, he was right. And I want to buy or vice chairman is pressuring me to do this deal. And it was not the right thing to do. Thank goodness, that he had the courage to stand up. So that brings up another point. Leaders today have to have courage. And I think people with big, big titles make a lot of money. Then when it comes to the clench, they have no courage.
Mark Divine 40:48
Bill George 40:49
I think you got to have courage. You got to have courage to go against the grain to make risky decisions to make bold decisions, and then rally people around them.
Mark Divine 40:48
Yeah, I totally agree. The book that you sent me True North, it’s a it’s a new edition. It’s your Emerging Leader edition. I think that’s awesome. Because, you know, it’s the next generation, right? He’s got to deal with a lot of the problems that were created by the last generation. And we’re heading into this, you know, what, you know, from the military term, VUCA, world, volatile, uncertain, complex and ambiguous. What’s your recommendation for Emerging Leader, you know, a 20-30 year old to navigate, VUCA? You know, how do we navigate in this like, extremely fast paced environment with massive disruption and upheaval and confusion and complexity?
Bill George 41:36
Well, part of the issue is a lot of the CEO’s today and the baby boomer leaders were trained at a very steady time, relatively speaking, 80s and 90s. We had 911, we had the.com crash, and Enron and we had the financial meltdown, we had COVID, we have Russia invading Ukraine, I bet you most people would never predicted what Russia would actually make through on some military deal with business people, you know. Supply chain shortages, gas prices. So we got intersecting crises. And I think that we need, I think it’s time for a big change in leadership that baby boomers have left us in kind of a mess. I think it’s time for these younger generation leaders. And by the way, the Gen Xers are now in their early 50s, it’s time for them to step up and take over, right, because they know how to lead in a crisis. So back to your VUCA. Yeah, if you’ve never lived through a crisis, you’ve never learned a volatile period, you think it’s gonna go back to being normal, or you’re off base, you have to plan. So you can’t have 5 or 10 year strategic plan, you’re gonna have one, but it doesn’t mean a lot.
Mark Divine 42:37
No plan survives contact with the enemy.
Bill George 42:39
Exactly. The battle plan goes out the window, and the first shot is fired, you know, but this is true. You know, most you know who’s expected 9% inflation rate, you know, we haven’t had that since the since the Jimmy Carter era, you know, and so, you know, people aren’t prepared for this. And they you got to learn how to lead in crisis. That’s how I see young leaders get out, just get out there. And don’t sit in the home office and do a PowerPoint, just get out and learn the business and get yourself in a crisis. And you learn that way. And I think they have and that’s what I think they’re ready to step up much better than some of the senior leaders.
Mark Divine 43:12
Are you an advocate for either a in person or hybrid work environments, as opposed to virtual?
Bill George 43:20
Well, I think hybrid, but I, this is a tough question. I have colleagues who say let’s go all virtual. We need human contact, we need mentoring. Mentoring is better than a person, but you can mentor me over over zoom, I suppose. But it’s not the same as let’s build, we need to go out and have a long talk. Let’s have a couple beers together and really talk about what’s going on with you. And that kind of personal context I’ve seen in my class at Harvard, people are so excited to be back together again. So I realize a lot of people can’t come into the office every day. That’s okay. But we need to have the innovation and creativity and things that come from the interaction. I learned more just wandering around the office getting out around the factories, the aren’t get more ideas go into the R&D lab. Hey, what are you working on today? Mark, people will tell you, they’re so excited about something you learned. So if you’re not out in the business, so you don’t frankly, half the world 56% of the workforce has got to be on the job, my son’s a surgeon, and he said sitting at home doing surgery, he’s got to be there. So I do think that, that we need flexibility in the workplace. We can have some form of hybrid, but I don’t think it can be all virtual. I don’t think it’s going to work.
Mark Divine 44:29
Yeah, I agree with you. And back to your earlier point. The only way to learn how to lead through a crisis is to lead through a crisis just get out there and do it. Be bold, be courageous.
Bill George 44:39
Yeah, but you know, facing that you interviewed so many leaders we call it crucibles in a book that have faced these real crises-crucible, and it’s where you know, everything gets stripped away all the pretenses I don’t know if I’m gonna make it. I got to figure it out. We got to figure a plan to get through this. You know, this is this is rotten, but we got to find a plan. We gotta get through the, I’m responsible. I remember telling them I’m okay at Zerox.. She said, Man, I don’t know, I may be driving the ship to the bottom of the sea and 96 thousand people were losing their jobs, we go bankrupt. But she was tenacious, and we’re gonna get this done. And will you help me and she pulled people around and said, Will you help me get this done? And they rallied around it. But I think that’s, that’s how you learn. And I think everyone needs to have those experiences. So they’re ready to lead when the big challenge comes.
Right. That’s awesome. This has been a fascinating discussion, Bill. I really appreciate your time. Where can people learn more about you and about your work and True North Leadership?
Bill George 45:36
Well, they can billgeorge.org/ I’ve got a website with everything on there. You can buy the book at amazon or portside books or at Barnes and Noble. It comes out on August 30. But I think that’s where you can learn the most, and I’m on LinkedIn. You can always google me if you want. But it’s not hard to find. I hope everyone listening in Mark will read the book because I think it’s I all I’m doing is sharing the wisdom I heard from other leaders.
Mark Divne 46:04
Bill George 46:05
It’s not just my wisdom. It’s really sharing the wisdom I hear from some pretty terrific leaders.
Mark Divine 46:10
Yeah, it’s a great book and I’m a passionate about leadership. I’m actually in my doctoral program in leadership at Pepperdine Global Leadership, actually.
Bill George 46:15
Congratulations, awesome. We need by the way, there aren’t many schools that give a doctorate in Leadership.
Mark Divine 46:22
Bill George 46:23
Given management, but they weren’t given I, I, very critical of them for not doing that. They’re like we got millions of managers, we need more leaders.
Mark Divine 46:31
We need more leaders, yeah. Well, thank you very much for your contribution, and also the CEO program you have at Harvard that’s open for anybody. Is that like a professional program?
Bill George 46:40
Mark Divine 46:40
How do people learn more about that?
Well, just got hbs.org. And all the executive education programs are laid out there. So we got a plethora program. You don’t have to be a CEO to come. We got a lot of programs for people that are aspiring leaders, emerging leaders.
Mark Divine 46:55
I need to get my way over there.
Bill George 46:57
Good. Well, you know, you’re doing it. So…
Mark Divine 47:00
Bill George 47:01
I learned from you. So thank you.
Mark Divine 47:03
Thank you very much, Bill. I really appreciate your time. Hooyah! And we’ll let you know when this goes live. And it’s been an honor to talk to you.
Bill George 47:09
Yeah, please do. I’d love to make sure more people hear it. Thank you.
Mark Divine 47:14
Well, that was a fantastic episode. I love talking to leadership experts and CEOs, something near and dear, from my experience as a business leader and entrepreneur, and also a budding PhD in leadership. So we have a fantastic conversation. So thank you very much, Bill shownotes are up at MarkDivine.com. You can find the video at our YouTube channel. Go to Mark Divine.com/youtube. You can reach out to me @Mark Divine on Twitter and @real Mark Divine on IG and Facebook. Or you can find me on my LinkedIn page. quick plug for our new newsletter Divine Inspiration, which comes out every Tuesday with a synopsis of the week’s podcast, my blog, and other inspirational and interesting things that I think you would find valuable. If you’re not on that list, go to MarkDivine.com to subscribe. Shout out to my awesome team, Geoff Haskell and Jason Sanderson and Jeff Torres, and Q Williams, who I’ll bring these guests like Bill to you every week, and help produce this amazing show. Reviews and ratings are very, very helpful. My goal is to get 5000 5 star reviews, at least at Apple. So if you haven’t reviewed or at least consider doing so. And I appreciate that very much. I also appreciate you for following the Mark Divine show and for sharing it with your friends and family. And for being part of the change that you’d like to see in the world. That change will happen one person at a time. But today for the first time in history that we know we can be that change at scale, which is my mission. So appreciate you being on the team. Till next time. This is Mark Divine. Hooyah!
Transcribed by https://otter.ai