Spring 2011 Commencement Address
Values-Centered Leadership: the Key to Success in the 21st Century
President Dease, Dean Puto, St. Thomas trustees and faculty, and graduating students: I thank you for this great honor of the Doctor of Laws degree (honoris causa) from St. Thomas University. I have long had a deep admiration and affection for St. Thomas as a university focused on values. I have watched its business school become one of the nation's finest, especially now that it has been awarded full accreditation by the AACSB. As other business schools adapt their curriculums to increase focus on values and ethics, it is worth noting that St. Thomas has been a leader in this arena for over a decade and now boasts the largest ethics faculty in the country.
St. Thomas is a special place for my family. My wife Penny, to whom I have been happily married for 41 years, received her doctorate in psychology here in 1995. Medtronic was also a beneficiary as hundreds of employees received their degrees here, many while working as full-time employees. And I have had the opportunity to teach and speak here on numerous occasions.
This evening I would like to talk about “Values-Centered Leadership: the Key to Success in the 21st Century.” Let me begin by sharing a defining moment in my career and how it is influencing my activities since I left Medtronic.
When I received my M.B.A., I had two goals: to be a values-centered leader of an organization making significant contributions to society, and to have some modest influence on other business leaders as values-centered leaders.
My defining moment came in the fall of 1988, driving home around Lake of Isles, when I looked in the mirror and saw a very unhappy person. Outwardly, I was doing well: Penny and I had been married for nearly 20 years, our sons Jeff and Jon were thriving in school, and we had been part of the Twin Cities community since 1970. I was one of the leading candidates to become Honeywell's next CEO.
But in that “flash in the mirror,” I recognized I was striving so hard to become CEO by trying to impress others that I was losing sight of my True North – my inner moral compass – and failing to be that values-centered leader. I wasn’t passionate about my work, and I was even less happy with myself. I drove home and told Penny, who concurred with my critical self-assessment. She recommended I reconsider the offer to join Medtronic as president I had recently turned down. Months later, when I walked through Medtronic’s door for the first time, I felt like I was coming home – home to a place where I could be that values-centered leader, working with the remarkable people of Medtronic to make significant contributions by restoring millions of people to fuller life and health.
My 13 years at Medtronic were the capstone of my 33 years in business. When I retired, I felt I had been relatively successful in attaining my first goal, but acknowledged I had no influence on leaders outside my immediate sphere. So I decided to shift my focus to helping develop the next generation of leaders – from MBA students to newly appointed CEOs. Focusing on teaching, writing and mentoring the last nine years, I have become confident that the new leaders are far better, more values-centered and authentic than my generation was.
Tonight I ask you to think about your leadership and consider three important questions that will impact your leadership and your career:
As graduates, what can you anticipate lies ahead in the business world and where should you devote your leadership gifts?
What will be required to fulfill your dreams as leaders in the world of business?
How can you sustain your leadership?
What Lies Ahead for You
In business, the era in which you live shapes the leadership and values of the new generation. In your case we have just come out of “Leadership’s Lost Decade.” It started with the dot.com crash and the fall of Enron and dozens of other companies and ended with the economic meltdown of 2008 followed by the Great Recession. While many attribute these problems to faulty accounting, too much leverage and failure to enforce regulations, in my opinion the root cause is a series of leadership failures – not all leaders, of course, but enough leadership failures that the general public has lost a great deal of trust in business leaders. That’s the bad news.
The good news is from these failures we have collectively learned our lessons as leaders. We learned that maximizing shareholder value ultimately destroys the short-term value created. The short-term pressure on corporate leaders is relentless still, but the new leaders have learned from their predecessors that playing the short-term game will never lead to sustainable long-term value.
We have also learned that “rock star” CEOs selected for their charisma, style and image, especially those from outside the organization, result in choosing the wrong leaders. Today’s leaders are being selected for their character, substance and integrity, over 80 percent from inside the company. These new leaders are focusing on achieving high performance by being values-centered and customer-centric, rather than catering to short-term shareholders. They do so by recognizing that their job, as Unilever CEO Paul Polman has said, is to serve their customers, not their shareholders, by empowering their employees to step up and lead rather than attempting to exert power over them.
The leaders of your era will not be U.S.-centric as my generation has been, but global in their orientation. With developing markets growing at 8-10 percent per year, and developed markets at only 2-3 percent, business leaders must have a keen understanding of global markets and the ability to align people from diverse cultures around the organization’s mission and its values.
We live in an era of rapidly changing technology that connects us with people around the world, anywhere, anytime, and lead fuller, more active and healthier lives. The rate of technological change is inexorable – often imperfect, but always unstoppable. The same is true for the globalization of labor markets. In the future jobs will follow markets, and organizations will go around the world looking for the highest quality, most skilled workers, not the cheapest. In the U.S. our competitive advantages are innovation, entrepreneurship and adaptability. No nation in the world can match us in this regard. As you think about your career and your leadership, I urge you to develop not only the skills to succeed in this global era, but the “can do” attitude that goes beyond embracing change, to seek it out as opportunity for success.
In the future, organizations will need far fewer traditional managers who serve as budget controllers, planners and information conduits, and vastly more working leaders – people at all levels who lead teams of people creating things, making things and selling things. Organizational spans of control will go from four to eight direct reports to 15-20 or more, as successful leaders engage directly in the business itself, rather than presiding over it, controlling numbers and reporting on outcomes. The latter will be done by computers in real time, but computers and processes can never replace the vitality of dynamic human interactions to accomplish mutual goals.
Fulfilling Your Dreams as a Leader
The second question is more personal: how to fulfill your dreams as a business leader? To answer this question, you have to know yourself and be genuinely honest with yourself. What is really important in your life? Where are your passions? What motivates you at a deeper level? What's your purpose as a human being and leader?
Steve Jobs has a habit he uses every day. He looks in the mirror and asks, "If today is my last day on earth, am I doing what I really love?" Of course, at times the answer will be "no," and some days are naturally better than others, as we all have to do things we don't especially like. As Jobs says, "If there are too many days where the answer is "no," then it's time to take a deeper look at yourself and rethink what you are doing with your life.
Poet Mary Oliver puts it this way, "Tell me, what is it you plan to do with your one wild and precious life?" Life is indeed precious, and if you let yourself go free and explore what excites you, it can be a wild ride.
I tell my students, "Never sell your soul to the Man." By that, I mean be your own person and never, ever let someone else own you or control your life. The danger, of course, is that you get on a slippery slope where you enjoy the money, power and recognition for what you're doing, but it doesn't stir your passions. If you follow that course, you may wake up some day and find yourself so far away from the real you - and what you really want to do with your life - that you feel trapped, in a box, and don't have the courage to give it all up and do what you want to do. Ten years later, you ask whatever happened to the person who dreamed the impossible dream? I've dreamed that impossible dream many times in completely different situations. At first, I feel like I am climbing through solid rock; but if I stay the course, the dream not only comes true but goes far beyond anything I ever imagined. . . like being on this stage tonight with this robe on.
As Jesus asks, "For what will it profit (people) if they gain the whole world, yet forfeit their life?" It may take years of soul-searching and introspection to discern the purpose of your leadership, but that's no reason not to keep searching. Without doubt, you will become a leader as we are all called to lead and use our gifts to serve others. If you know where you're going – and it isn't just about you, but for a greater purpose – then people are naturally going to follow your lead.
Sustaining Your Leadership
My final question is, "How can you sustain your leadership throughout your lifetime in spite of all the barriers, pressures, and seductions without getting off course of your True North?" This certainly isn't easy.
Sustaining your leadership over a long period of time takes genuine hard work in developing yourself as a leader - the same level of discipline that it takes to become a great athlete or superior musician. This requires developing your emotional intelligence, or EQ. Much of your formal education is based on building your knowledge and IQ. In my experience, I have not witnessed leaders fail for lack of IQ, but have seen many, many leaders fail for lack of EQ. The recent cases of Berkshire Hathaway's David Sokol and the IMF's Dominic Strauss-Kahn remind us how easily outstanding leaders at the peak of their careers can destroy 30 years of good work in 30 minutes by losing their way.
The core of EQ lies in self-awareness, an essential quality for all authentic leaders. This week I heard Ford CEO Alan Mulally talk about how he had turned Ford from billions of losses into rapid growth, escalating market share and leading to billions in profits. In the past four years, Mulally engineered one of the greatest corporate turnarounds, yet here is a man who is highly authentic and extremely humble, constantly demonstrating high levels of self-awareness.
Being self-aware is easier said than done. Four thousand years ago the Oracle of Delphi told us, "Know thyself." All too often we see ourselves through our own rose-colored glasses. Becoming a self-aware leader requires three things: 1) having real-world leadership experiences, 2) reflecting on those experiences through habits like meditation, prayer, yoga, long walks, and 3) having a support group to give you that honest feedback.
The latter could take the form of a loved one, close friend, mentor or small group of peers. In my leadership journey, I have done all of these things. Penny is always there to give me that support and candid feedback, as are my mentors and close friends. For more than 25 years I have had the privilege of being part of a men's group and a couple's group. These groups have been there to guide me when I faced difficult decisions like joining Medtronic or when Penny was diagnosed with breast cancer. I can't encourage you enough to build your support team now. When you find yourself in a crisis – something that can happen when you least expect it – it's too late to build your team. Plus it will enrich you greatly as a person and help you develop as a self-aware, authentic leader.
Finally, sustaining your leadership means leading an integrated life. In this era there is no such thing as perfect balance between work and home life. There are always sacrifices to be made, like coming to St. Thomas to earn your M.B.A. But you can be the same person in all aspects of your life – your family, work, community and personal lives – thereby maintaining your integrity as a whole person by being fully present in all these situations.
Let me close by asking you to think about the end of your life: You're in your nineties and have only a few hours to live. Your adult children and grandchildren are gathered around you. Your favorite granddaughter – I'm thinking of our granddaughter Dylan, who turned four this week – asks you, "Grandpa or Grandma, what did you do to make a difference in the world?" I hope you won't tell her that you made so much money she never has to work a day in her life, like you did. I hope you will tell her what's important in your life. The time to think about that is now, because you're building your legacy every day.
As Robert F. Kennedy once said, "Few will have the greatness to bend history itself, but each of us can commit to a series of actions to make the world better, and the sum total of all those actions will write the history of your generation." Maybe there is one of you who will bend history, but all the rest of us have the opportunity to make a difference – right here, right now.
My hope for each of you as you receive your diploma is that you will make a vow to use your leadership gifts to make this world a better place. I feel confident tonight not only that your future is bright indeed, but that the history of your generation will be written to say that this was a generation of leaders who led with their values and made the world a better place.
Address to the graduate business class of spring 2011, May 21, 2011, by Bill George.