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Authentic Leadership

Featured Guest: Bill George, Harvard Business School professor and author of True North: Discover Your Authentic Leadership.

ANNOUNCER: Hello, and welcome to the HBR IdeaCast from Harvard Business Online. In this week’s program, Harvard Business School’s Jim Aisner speaks with Bill George, Professor of Management Practice at Harvard Business School, and author of True North: Discover Your Authentic Leadership. And in our HBR In Brief segment, beware the busy manager.

JIM AISNER: Bill, thanks for coming in today.

BILL GEORGE: It’s great to be here, Jim.

JIM AISNER: Bill, what exactly do you mean by authentic leadership?

BILL GEORGE: An authentic leader is someone who is genuine and true to what they believe in. They understand the purpose of leadership, they lead with very consistent values, and with their heart, as well as their head. They have courage, compassion, empathy– qualities like that– and they build long-term connected relationships. And they have the personal self discipline to deliver extraordinary results from their teams.

JIM AISNER: So does that mean there is such a thing as inauthentic leadership?

BILL GEORGE: Unfortunately, yes. There are a lot of personas out there that are trying to emulate someone else or trying to be what you want them to be, or they turn out to be jerks, but they are not the person that you would hope they truly are.

JIM AISNER: There was a lot of talk in the decade of the last century about charismatic leadership. Does that category fall into the inauthentic side of things?

BILL GEORGE: It sure does. Unfortunately, many boards of directors were looking for a charismatic leader can who could come in from the outside and save the company. Most of these people, with two exceptions, destroyed much more value than they ever created. And boards looked more for charisma than character. They looked more for style than substance, and they looked more for image than integrity. And if you choose charisma and image and style instead of character, substance, and integrity, you’re going to get a leader that does not do the job for the long term.

JIM AISNER: Parsing again, the title of your book, how does true north factor into a leader’s life? What does that actually mean?

BILL GEORGE: Jim, we went out and interviewed 120 leaders in all walks of business and nonprofits from age 23 to 93. Half of them are CEOs, but many of them are young leaders just starting out their careers or mid-career leaders facing dilemmas. And what they told us, what came out of these interviews is how important it was to be authentic, to stay true to what they believed in, to stay consistent with their inner compass, if you will, or what we call true north. Especially when they got hit with the pressures of the outside world, trying to satisfy Wall Street’s need or trying to satisfy a difficult boss, or the seductions of making a lot of money by just deviating a little bit from your values. And so we came to this notion of true north, of how you could discover your authentic leadership by staying true to what you believe in, in spite of these pressures and seductions.

JIM AISNER: Now, you put a lot of emphasis on the environment in which these 125 five authentic leaders grew up, the kind of experiences they had, even as children. Can you give us an example or even two examples of some of these life stories that had an impact on the leaders’ later life?

BILL GEORGE: The thing that stood out from all the interviews was not the leader’s characteristics or their traits or their particular style. What stood out was their life story, because that became like a tape playing in their head and gave them the power and the passion to step up and lead. A good example is Howard Schultz. Howard grew up in the Bayview Housing Projects in Brooklyn, a very difficult place. He came home one day at 7 and found his father on the sofa in a body cast. He had lost his job, he lost his health care, lost his suspension. The Schultz’s had no money, mother couldn’t work because she was seven months pregnant. Howard had to fend off the bill collectors.

Well, years later– in fact, it was the same year his father died– he had seen his father lose 30 jobs in this life. And Howard went out and founded a company, as he said, that his father would be proud to work at. And that’s why he put together Starbucks, and a few years later it became the first American company to offer health care to all of its employees, including part-timers.

JIM AISNER: What about Anne Mulcahy? That’s another interesting story. This is a woman who wasn’t groomed at all and apparently had no intention of becoming the CEO of Xerox.

BILL GEORGE: Ironically, the New York Times called Anne the accidental CEO. I actually don’t like that because she was destined to be CEO, it’s just no one recognized it. And her boss failed. In fact, he almost destroyed the place. She takes over, $18 billion in debt, facing bankruptcy attorneys and bankers who want to put them out of business. And she says, you know, this company means so much– I’ve worked here the last 25 years– I may not know a lot about finance or numbers, but I know how to restore this to a great company. And she called together the top 100 people in the company and said, will you support me? Well, the first to quit, but the other 98 stayed with here.

Anne’s great strength is she brought the relationships. She built up over that period time trust and passion to create Xerox as a truly great company once again. And she’s carried through, the debt is less than half, and she’s in good shape now. But it’s that strength of character and staying true to her true north that enabled her to succeed.

JIM AISNER: And this is part of the empowerment that you think leaders give to the workers, the alignment of the workers’ needs with the goals of the company– that’s an important part of your thesis, as well.

BILL GEORGE: Absolutely. In the 20th century, we had this idea, Jim, of following the great leader over the hill. Well, this is a flawed notion. People today are not interested in following– they want to step up and lead. And I think leaders that can empower people to do that and to set the context, to be sure– know the mission and purpose of the company, know the values we hold dear– but then people can be empowered all over the organization, even if they don’t have direct reports, to step up and lead. And it’s the empowering leader that’s going to get the most, if you will, out of people today. Because people today know more than their bosses, they don’t want to wait in line for 10 to 20 years, they don’t want to live in a bureaucracy. They want to have the opportunity to lead, and why shouldn’t they have that opportunity to find meaning and significance in their work?

JIM AISNER: Let’s go now to the other side of the coin. In recent years, unfortunately, we have seen a number of high profile CEOs who have headed due south instead of the north. Is it greed? Wall Street pressures? What do you think are the main causes of this, Bill?

BILL GEORGE: This may seem oversimplified, but I think you can divide leaders into two groups: takers and givers. The takers are in it for themselves. They want you to support them to get more. Frankly, as long as they make a lot of money, they don’t care if the organization fails or succeeds, and they destroy much more value than they ever create, but they get a lot of attention because they appear to be very powerful, very charismatic people.

The givers, who I would call authentic leaders, know their role is to serve. They’re there to serve all their constituents– their customers, their employees, their shareholders, and their communities, and they do it all simultaneously. Those are the kind of true north leaders that I think are going to be effective in the 21st century and that we need to be selecting to head up companies.

JIM AISNER: Now, these CEOs, a number of them are working with huge pay packages. A CEO now makes about 400 times what the average worker does. There a golden parachutes. Is there any way to make CEOs more accountable? Right now, it seems to me, it’s tails, I win, and heads, you lose.

BILL GEORGE: Unfortunately, we’ve seen cases where people who fail make a lot more money than people who succeed. There doesn’t seem to be a correlation between CEO compensation and performance. This is wrong. I think the pay packages, I think you should make a lot of money if you’re very successful. No one resents what Mike Dell or Bill Gates has made. And I think higher CEOs, like I was, if the company is highly successful, should be beneficiaries, but so should everyone else in the company. The only way to do that I think is to put the vast majority of the money that the person can earn at risk over the long term. Maybe they don’t get it until they retire. Maybe 3/4 of the money is withheld until they retire.

JIM AISNER: The book has a developmental aspect to it, as well, to explain to readers how they can develop into leaders. So leaders can be made– they don’t have to be born.

BILL GEORGE: I think leaders definitely are made. I really wrote the book in response to the question I got from my first book: how can I become an authentic leader? And that’s why we talked to these 125 outstanding leaders who were so open with us. And from that, and my students here at Harvard who are younger leaders, we created a series of exercises to help you develop and discover your authentic leadership. Because I don’t think you have to be on top.

As Stephen Covey has said, leadership is your choice, not your title. Well, you can step up and lead now, but these exercises help you find your passion to lead and where that comes from, and how do you practice and test your values under pressure? How do you balance your motivations for money, fame, power and glory with making a difference in the world? All of these things come through in the exercises, because the hardest person you’ll ever have to lead is yourself. If you can lead yourself, leading others becomes a lot easier.

JIM AISNER: What are a few of the steps? There are excesses in the book, as you say, that people can follow to help them down this road. But what are a few of the steps that a person can take to become an authentic leader? How important is it, for example, to have a mentor, or whatever?

BILL GEORGE: I think that it starts with having self-awareness, knowing yourself. But that’s hard to do unless you get feedback. And so I think feedback, getting feedback from others about how you’re seen– so you can see yourself as others see you– is very important. Testing your values under pressure. Not standing on the sidelines, but getting into the game and seeing, how are you going to respond under pressure? Learning how to balance your motivations and finding your sweet spot where you’re using your greatest motivations and your greatest capabilities.

And, as you mentioned mentors, build a support team. My wife Bennie is the best adviser I could ever have, but you need at least one person like that with whom you can be totally honest. But I believe in having a six person support team, if you will. A support group where we support each other. You need that because leadership can be very, very lonely.

And then finally, something that doesn’t seem intuitive, is having a fully integrated life– your work life, your home life, your personal life, and your community life. That will make you a better leader if you can achieve an equilibrium in your life and be the same person in all those environments. Then becoming an empowering leader becomes much easier.

JIM AISNER: These are all good lessons. Let’s hope that the lessons that are in your book prevail as we go forward. Bill, thanks again for talking to us.

BILL GEORGE: Thank you, Jim.

ANNOUNCER: Up next, Beware the Busy Manager. First, the idea in brief.

Surprisingly, only 10% of your managers could be moving your company forward. The rest may look busy, but they’re probably just spinning their wheels. That special 10%, your purposeful managers, make the seemingly impossible happen. Ask anyone at German airline Lufthansa. Its purposeful managers saved the company from near bankruptcy, recouping 750 million deutschmark loss, and achieving a record profit of 2.5 billion deutschmarks.

Purposeful managers embody two elements essential for driving meaningful change. One, focus. Zeroing in on goals and seeing them to completion, weighing options before acting, and concentrating on key projects. And two, energy. Vigor fueled by intense personal commitment and the capacity to tackle heavy workloads to meet tight deadlines.

One element without the other isn’t enough. It’s possible, even likely, that 90% of your managers could lack one or both. Here’s how to identify your company’s purposeful managers and help the rest join their ranks.

Next, the idea in practice: purposeful managers. Why are purposeful manager so productive? With their focus and energy, they carefully orchestrate their time– e.g. building think time into their schedules, answering emails during specified periods of the day, and so on. They also are crystal clear about their intentions, demonstrate unrelenting willpower, pick their battles carefully, and feel personally responsible for their company’s fate. Most important, they refused to let others, including bosses and peers, or organizational constraints like job descriptions and salaries, limit their agendas. Instead, they define their goals, then control their environment to meet their objectives, cultivating influential relationships, independently accessing resources, and so on.

In short supply. Managers short on focus and or energy can have damaging consequences for your company. Here are three examples. First, the procrastinators who have low focus and low energy, dutifully perform routine tasks, but fail to take initiative, raise performance levels, or engage with strategy. Next, the disengaged, who have high focus but low energy, are exhausted and unable to commit to tasks that hold little meaning for them. They approach their work half-heartedly, deny a problem exists, or refuse to act even when it’s critical. And the distracted, who have low focus and high energy, comprise most managers. Shortsighted and over-committed, they feel a desperate need to do something, anything, when pressure mounts. But short on reflection, they have trouble developing strategies and adjusting their behavior to new realities.

Creating purposeful managers. How to boost your managers’ energy and focus? Give them meaningful challenges, then let them decide how to meet them. Empower them to turn compelling visions into reality. Stress how essential their contributions are.

Here’s an example: embattled Lufthansa CEO Jurgen Weber realized only a network of purposeful managers could save the company. Gathering 20 senior managers plus the board, he presented the facts about the company’s plight and declared he didn’t have the answer. He gave the managers three days to devise solutions, then he and the board left. The managers embraced the challenge. Deciding that Lufthansa was worth fighting for, they committed themselves to ambitious goals, eventually defining 130 radical changes and implementing 70% of them. The rest of Lufthansa’s turnaround is history.

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Thanks for listening.

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