I recently had the opportunity to meet with Bill George, former chairman and chief executive of Medtronic, Inc., the world's leading medical technology company, and author of the best-selling book, Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value.
Bill George speaks boldly against the ?shareholders are king? philosophy that has created many of the problems facing businesses today. With corporate accounting scandals rampant and CEOs being handsomely rewarded even while their companies are rushing headlong to failure, George believes that leaders must reexamine their values and principles and refocus their companies on the things that create true sustainable value: satisfied customers serviced through valued employees.
In the pursuit of shareholder ? not customer ? value, CEOs have been driven to pursue quick riches ? almost always at the expense of long-term growth and customer service. Worse, this misguided pursuit of shareholder profits has led some ? as evident in Enron, WorldCom, Adelphia, and others ? to create the illusion of profitability and growth.
Where's the leadership? In many cases, the leadership is as vaporous as the long-term profits.
Bill George calls on all of us to demonstrate authentic leadership, to return to the core values of sound business. He argues that taking good care of employees and customers will result in a higher stock price than focusing on shareholder value. And his arguments are persuasive. During his tenure as CEO at Medtronic, revenues grew from $750 million in 1989 to $5 billion in 2001. The company's market capitalization rose from around $1 billion to more than $60 billion ? a 37.5% growth rate compounded annually.
Bill George has faced many of the same pressures all leaders face: the CEO cult of personality, the 24/7 workday, the passionate pursuit of earnings, the excesses of ego, and the breach of trust by far too many corporate leaders in the 1990s. In his book, Mr. George draws from his rich experiences ? as well as from those of leaders he admires and disdains ? to illustrate his five dimensions of authentic leaders:
