Interview: Bill George

Bill George

George is a Professor of Management Practice at Harvard Business School where he teaches leadership and leadership development. He is the author of two best-selling books, True North: Discover Your Authentic Leadership and Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. George is the former chairman and CEO of Medtronic and also serves as a director of Goldman Sachs, Novartis, ExxonMobil, the Carnegie Endowment for International Peace, and the World Economic Forum USA.

Here is a brief excerpt from my interview of George. If you wish to read the entire interview, please contact me at interllect@mindspring.com.

Morris: In your PBS Commentary (on July 19, 2007), “Wall Street versus Main Street,” you explain why so many companies fail to create long-term value for their shareholders. What do you suggest?

George: The only way to create long-term value for shareholders or at least the best way, in my opinion, is to create superior value for your customers, not by hyping your stock price. Sustainable customer value comes from motivating your employees to create great products and superior customer service. That’s why companies like Target, Johnson & Johnson, and PepsiCo have been so successful in sustaining their growth. All of their focus is on creating great value for their customers, and they train and motivate their employees to do just that. They know that shareholder values come from customer value and motivated employees, not the reverse.

But companies whose primary focus is on Wall Street, and meeting its short-term goals, are never going to create long-term value. Wall Street may focus on quarterly earnings, but it still takes five years or more to discover a drug, design a semiconductor, or create a breakthrough like the i-Pod.

You simply can’t do it overnight. If you don’t stay focused on your True North, you’ll get buffeted by the winds of change, and wind up capitulating to playing the short-term game. At Medtronic, it took a decade to create breakthrough products that restore millions of people to health, but that’s how we created $60 billion in shareholder value– not by responding to Wall Street.

Unfortunately, many corporate leaders don’t have the patience or the vision to do that. They bow to Wall Street, keep shifting strategies, and wind up destroying their value. Authentic leaders stay focused on creating great value for Main Street customers. And that’s how they create long-term shareholder value. Authentic leaders who focus on Main Street will out-compete every time those who only worship Wall Street.

If you wish to read the entire George interview, please contact me at interllect@mindspring.com.