Author Talks: Bill George sets a course for ‘true north’

Former Medtronic CEO Bill George guides emerging business leaders through the management transition of a lifetime.

In this edition of Author Talks, McKinsey Global Publishing’s Rick Tetzeli chats with Bill George, Harvard professor and former Medtronic CEO, about his new book, True North: Leading Authentically in Today's Workplace, Emerging Leader Edition (Wiley, August 2022), co-written by Zach Clayton. In this follow-up to his original best seller, George issues new advice for maintaining what you stand for, your “true north,” amid the most disruptive era in recent history. To survive compounding crises and create long-term shareholder value, he says businesses need emotionally intelligent leaders who don’t just uphold their stakeholders’ principles but truly share them. An edited version of the conversation follows.

Why did you write this book now?

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The reason is because we’re seeing a massive change in leadership from the baby boomers to the Gen Xers, millennials, and Gen Zers. It’s a very different leadership style, moving away from command and control to authentic leadership, from self-interest to being focused on purpose, making a difference, and having an impact—managing not just with the head but, if you will, with the heart as well.

It’s kind of a shift from IQ leaders to EQ [emotional intelligence] leaders. You still need to be very smart, but it’s a combination of the two: head and heart. This is, I think, the largest shift we’ve ever seen in my lifetime by far, maybe all the way back to the Greatest Generation. It’s a big shift.

Today’s crises are demanding a different kind of leader. Many of the baby boomer leaders were trained in fairly stable times, relatively speaking, in the ‘60s through the ‘90s. The last 20 years have been one crisis after another, from 9/11 to COVID-19, the war in Ukraine, and now high inflation, which we haven’t seen for 40 years—just massive changes. We need leaders who can adapt to that rapid rate of change and lead differently with people. The demands of people are totally different today. Employees now have agency.

Are today’s emerging leaders truly more authentic than leaders from the past?

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You never can speak too generally about leaders, but I think today’s leaders are more authentic. I saw a lot of it in my “growing up” era: leaders leading with charisma—more for show—and with how they dressed.

People don’t care about that now; they want to know who you are. Are you the real deal? Can I trust you? If I can’t trust you, I’m not going to work with you, much less follow you. Millennials are very discerning about this. They’re quite rejecting of phonies.

Do you feel like the millennial search for authenticity is part of the reason we’re seeing so much job turnover right now?

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Millennials today are trying to lead with a sense of purpose. If there’s no deeper purpose, and there’s no clarity about the values that are expected, they’re going to leave and find someplace where they can align their personal purpose with the company’s.

Millennials today are trying to lead with a sense of purpose. If there’s no deeper purpose, and there’s no clarity about the values that are expected, they’re going to leave and find someplace where they can align their personal purpose with the company’s.

Many baby boomers have dismissed the millennials and say, “Oh, they can’t handle this.” Well, the reason they’re leaving is that you haven’t given them clarity over how their purpose aligns with the company’s purpose. The companies that do that well are flourishing.

What is the relationship between developing your sense of purpose as a leader and developing your company’s purpose?

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Before you can become an authentic leader, you have to know who you are. That’s your true north: your most deeply held beliefs, your values, the principles you lead by, and what inspires you. Where do you find fulfillment? Until you define your true north, you won’t know what your purpose is.

Your purpose is your “North Star”—that’s that constant point in your life that your true north points you to. You carry that purpose throughout your life, and you want to find a company where you can align with that, where you feel a sense of purpose inside the company. Today, emerging leaders are looking for a place where they can carry out their purpose with a company that’s also committed to purpose.

How have crises taught emerging leaders lessons on what not to do?

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Crises are teaching leaders today that you can’t just rely on what you learned in business school, that everything is going to be long-range planning and process controls. Those things are important, but you have to be able to adapt very rapidly to changing conditions as a leader today.

I tell young leaders, ‘Go put yourself in a situation where you learn how to lead in crisis. Don’t just lead in stable times, because you’ll never know what to do when the big crisis comes along.’

I tell young leaders, “Go put yourself in a situation where you learn how to lead in crisis. Don’t just lead in stable times, because you’ll never know what to do when the big crisis comes along—like COVID-19, where everything shut down, and you had to adapt your entire business model like Corie Barry did at Best Buy.” When that happens, you have to change everything, so if you don’t have that sense of adaptability, if you’re just waiting for the stable times to return, you’re not going to get there.

Looking back over your career, does this seem like an extraordinarily unpredictable time to you?

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There’s no question that this is a very disruptive and unpredictable time. I’ve never seen anything like this in my entire lifetime, where all these crises are converging and interacting.

You have to be clear about where you’re going. You never want to lose sight of your organization’s vision or its values, but you need to bring people in very close with you and have contingency plans and adapt rapidly to what’s happening in the marketplace. Today, it requires us to be much closer to the market on a rapid-change basis so that we know what our customers are thinking, we know what consumers are thinking, and we have a sense of their needs so we can tailor our goods, services, and offerings to their needs.

That takes a very different kind of leader. For the emerging leaders that I wrote this book for, it’s both a guide and an inspiration of how you lead through a crisis and how you stay true to what you believe and have the moral courage not to back off.

Is leading with the heart inherently better suited for disruptive times than leading with the head?

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In my day, the thinking was, “Who’s the smartest person in the room? They’re going to make the best leaders.” We know now that’s not the case; it’s simply not true. You have to have qualities of the heart that we tended to dismiss in the past.

For instance, you have to have passion for the business, compassion for the people you’re serving, empathy for your employees, and most of all, you have to have courage. If you think about those qualities—passion, compassion, empathy, and courage—those are all matters of the heart. The interesting thing is that your IQ really doesn’t change between the ages of ten and 60—either you can handle rapid changes in numbers or computation or you can’t—but your EQ, which is those qualities I mentioned, does change, and you can develop it. You develop a self-awareness.

You have to have passion for the business, compassion for the people you’re serving, empathy for your employees, and most of all, you have to have courage. If you think about those qualities—passion, compassion, empathy, and courage—those are all matters of the heart.

You can only have courage by working in situations where you’re thrown into it and learning courage; you’re not born with courage. People are looking to leaders today that have those personal qualities because without that, they’re not going to follow them, and they’re certainly not going to give their full selves—their hearts as well as their brains.

Why are the world’s problems the problems of corporations?

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Businesses are chartered by society to serve society, and we’ve lost sight of that in thinking it’s all about serving the shareholder. Businesses have to go beyond that today. That’s a big reason people want to work for them.

In the Edelman Trust Barometer today, business is the most trusted element in society. I think the reason is that people have given up on politicians who seem to be out for themselves and gridlocked. Most of the top-ranking politicians are in their 70s and 80s, and they really aren’t in touch with what people need. I think people are looking to business to help solve problems like climate change, healthcare, income inequality, food shortages, and supply chain.

Government is not set up to deal with those things. They can pass laws, but they can’t really address them, which is why I think everyone’s looking to business. That’s the challenge for today’s leaders: if they won’t address today’s problems, they won’t be good leaders, I can tell you.

How optimistic are you about what business can do over the next ten years?

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I’m very optimistic about what businesses are doing today. Today’s leaders are really terrific. In my book, I feature who I consider to be role models of the new way of leading, many of whom are baby boomers. They are the ones that the emerging leaders are looking to.

Let’s take Satya Nadella at Microsoft: he totally transformed that company. Mary Barra brought General Motors out of bankruptcy and is making it into a new company. Hubert Joly was very committed to purpose at Best Buy, and now his successor, Corie Barry, is doing a great job. These are the forerunner leaders. Those kinds of leaders are influencing the younger leaders who are coming along that I feature in the book as well.

We need role models. We need quality role models. We don’t need people who are just out for themselves.

What are the responsibilities of baby boomers now?

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The baby boomer role models that I mention have to, frankly, be the ones to help develop, guide, and groom the next generation of leaders. That’s what Paul Polman—who’s been an advocate for climate change—has done, what Indra Nooyi did in nutrition, and now, what her successor at PepsiCo, Ramon Laguarta, is doing.

People like these leaders have a responsibility to provide guidance to younger leaders coming along, be role models, stay true to their values and sense of purpose, and to also say, “Here’s how our organization can make a difference in the world. Here’s how we can have an impact.” They should move on to the next stage of leading and turn the leadership over to the younger leaders coming along. It’s time.

Is it hard to convince leaders to explore their personal journey and sense of self in order to lead effectively?

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In working with many leaders over the years, I find many of them want to jump into leadership roles and get the power too quickly. Maybe I fell into that trap, too. Today, you have to know yourself first before you can be a great leader.

You can’t go out and change the world before you know yourself, and until you do, you’re always subject to what I call the adulation trap, where people on the outside are saying, “You’re terrific. You have this great title” or “You have all this power, all this money.”

I’ve gotten a lot of critical feedback over the years, and it’s the best thing that ever happened to me because the hardest thing you have to do is see yourself as others see you.

We need to have leaders today who take the time to know themselves, have good mentors, have good people, and take honest feedback—those who surround themselves with truth tellers who will tell them what they don’t want to hear. I’ve gotten a lot of critical feedback over the years, and it’s the best thing that ever happened to me because the hardest thing you have to do is see yourself as others see you.

Do you feel like you led by example?

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I’ve tried to lead authentically throughout my career, but there have been times when I got pulled off course. In my Honeywell days, I was moving up in the company rapidly. I was one of the two leading candidates to be the next CEO, and I started to try to impress other people.

I’d wear cufflinks, which I don’t wear, and I’d say just the right things. It wasn’t me, and everyone else could see it, but I couldn’t see it. One day, I was driving home and looked at myself in the rearview mirror, and I realized I was miserable because I was pretending everything was fine when it wasn’t fine.

Are you hoping that your book will inspire those kinds of moments for some leaders?

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Every leader in their lifetime goes through a crucible. I think leaders have to deal with their difficult times. That’s when you deal with your dark side. That’s when you find yourself and come face to face with the real you. You have to accept your weaknesses.

Back then, I had trouble accepting that I’m an impatient person, that I lack tact and sometimes say the wrong thing at the wrong time. I had to accept those qualities of mine before I could become a better leader. I think all leaders have to go through that transformation, and they need people around them who will support them, encourage them, and give them honest feedback. When you do that, then you can evolve as a great leader. It’s a long journey.

How can external disruptions challenge self-worth and sense of purpose?

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The crises we’re going through have forced people to look externally at problems instead of measuring themselves by internal metrics. In measuring themselves by external metrics—or what’s happening around them—people have had to take a real look at what they stand for. Crises force you to do that—personal crises as well as external crises. So, I’m not saying crises are a good thing, but they sure sharpen the mind and the heart.

Will this series of crises strengthen the new generation of leaders?

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I have no doubt that the crises we’re experiencing have strengthened the new generation of leaders. Let’s face it: their business time started with 9/11 when, for the first time in anyone’s lifetime, America was under direct attack. Then, we got to the financial meltdown of 2008, followed by the more recent crises like COVID-19. That strips away all pretenses.

Let’s face it: people have risked their lives on the frontline to serve us, to stock shelves in grocery stores, to service hospitals, to deliver food to our homes. I think that showed leaders that you have to be with your people. If you’re not a person of the people, you’re probably not going to be a good leader today.

Are there qualities of baby boomer leaders that emerging leaders should emulate?

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With respect to the baby boomers, there are a lot of qualities that emerging leaders should not emulate, but there are a number of baby boomer leaders I cite in the book that are fantastic role models, and emerging leaders should look to people like that.

The other thing I would say is that today’s world is much more diverse in terms of leadership, and that’s a good thing. Women are finally able to step into key roles. In my era, when I grew up, there weren’t many female role models because they weren’t given the opportunities.

BIPOC [Black, Indigenous, and People of Color] employees are contributing so much, and LGBTQ employees as well, because they are now able to be who they are. If you don’t represent all of your employees as a leader today, you’re not going to make it. You’re never going to be accepted.

Should companies pay more attention to the shareholder or to a wide group of stakeholders?

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For years, I’ve been arguing against the, if you will, “shareholder only” model. I even gave a talk about it at the American Academy of Management back in 2001 after I gave up the CEO role at Medtronic. I think adaptation of the stakeholder model—of course, shareholders are stakeholders—is a major change in business that we’ll look at in 30 to 40 years as having a huge impact on putting customers’ and employees’ needs first, along with those of shareholders.

My view is you can’t sustain shareholder value over time unless you take care of your customers and give them superior service and more innovative products. Your employees today don’t resonate with just making money, with “We’re going to make $3.91 a share.” What they resonate with is meeting customer needs. That’s what gets them excited.

You can’t sustain shareholder value over time unless you take care of your customers and give them superior service and more innovative products. Your employees today don’t resonate with just making money, with ‘We’re going to make $3.91 a share.’ What they resonate with is meeting customer needs. That’s what gets them excited.

If we do those two things well—motivate our employees and serve our customers—we will create a lot of shareholder value. That is self-evident and it’s sustainable—not a short-term thing. You can’t focus on short-term shareholder value and create a sustainable enterprise. Many of the great enterprises, like Kodak, focused so much on the short-term that now they’re just gone. We need to have that long-term view of how we achieve shareholder value.

Is there anything else you’d like to mention?

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I’d like to make another comment about diversity. For years, we have not given people of diverse backgrounds—women, BIPOC, LGBTQ+ employees—the full opportunities they deserve. Today they have those opportunities, and you see people stepping forward and leading spectacularly.

The key is not just having diversity, though, it’s creating an inclusive organization where everyone feels a sense of belonging. When you create that kind of organization, you’re going to be very successful. I think leaders today are recognizing they need to create not just diversity but inclusion within their organization.

The key is not just having diversity, though, it’s creating an inclusive organization where everyone feels a sense of belonging. When you create that kind of organization, you’re going to be very successful.

I would like to think that every leader today has a sense of purpose. At the end of the day, they can make a difference in their short time on Earth in how they’re impacting human beings. I think we do this largely through our work and our organizations. If we get committed, we can change the whole world.

When you get committed to making a difference in an area like climate change, like inclusive organization, like healthcare, like income inequality, then you can feel, when you get into your 60s or 70s, like you’ve really made a contribution. Now you can help other people make contributions that they’re passionate about.

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Bill George on leading authentically in today’s workplace

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