Chapter 19

The Authentic Leader

Bill George

In This Chapter

• The qualities of an authentic, principle-driven leader.
• The process by which leaders develop their leadership talents.
• Firsthand accounts of, and lessons from, my own experiences— as well as my contemporaries—as we have explored our own leadership styles.

The world was brought to its knees by the financial collapse of 2008. As politicians and corporate leaders scramble to put the pieces back together, we direly need authentic, principle-driven leaders to lead us back to prosperity. It’s precisely this kind of leader— honest, values-centered, purpose-driven, and disciplined—that I describe in this chapter on “the authentic leader.”

There is no how-to guide for leadership. Many are born with leadership talents, but authentic leaders must have a passion for leadership and work hard to develop their leadership characteristics to be effective. By citing personal successes and failures across my career, and highlighting examples from many of my contemporaries, I’ve compiled what I’m confident is an insightful look into what is demanded of our leaders today. The demands of true leaders are many, and the needs for true leadership in today’s recovering America are real.

Authentic leaders are those rare people who genuinely desire to serve others through their leadership. Because these leaders are more concerned with empowering those around them to make a difference than they are with power, money, or prestige for themselves, they are guided by qualities of the heart as equally as they are by qualities of the mind.

However, authentic leaders are not born this way—many have natural leadership gifts, but they must develop them over time to become outstanding leaders. Nor are authentic leaders above reproach or improvement—they are the first to recognize their shortcomings and work hard to rise above them. But by striving to lead with purpose, meaning, and values, they build enduring relationships with the people whom they lead, and with the other leaders from whom they continually learn. Authentic leaders are consistent and self-disciplined; when their principles are tested, they refuse to compromise, regardless of circumstance. Authentic leaders are dedicated to developing themselves because they know that becoming a leader requires a lifetime of personal growth.

Being Your Own Person

There is no such thing as the “ideal leader.” A prospective leader who attempts to emulate all the characteristics of a good leader is doomed to fail. I know because I tried to do so early in my career. It simply doesn’t work.

However, there is one essential quality that leaders must possess: They must be themselves, authentic in every regard. The best leaders are autonomous and highly independent. Those who are overly sensitive to others’ desires are likely to be whipsawed by competing interests, easily distracted from their chosen course, or incapable of making difficult decisions for fear of offending. When asked for advice on how to be an authentic leader, my advice to the people I mentor is simple: Be yourself.

Of course, this is much easier said than done. Being your own person is most challenging when you feel like everyone else is pressuring you toward a predetermined end, and you are standing alone. In my first semester of business school, we watched the film The Loneliness of the Long-Distance Runner. Initially, I did not relate to its message, because I had always surrounded myself with people to avoid being lonely. As I progressed in my career, I learned that coping with the loneliness at the top is crucial so that we are not swayed by the pressure. Being able to stand alone against the majority is essential to being your own person.

Shortly after I joined Medtronic as president, I walked into a meeting where it quickly became evident that a group of my new colleagues had prearranged a strategy to settle a major patent dispute against Siemens on the basis of a “royalty-free” cross-license as a show of good faith. Intuitively, I knew this strategy was doomed to fail, so I stood alone against the entire group and refused to go along. My position may not have made me popular with my new teammates, but it was the right thing to do. We later negotiated a settlement with Siemens for more than $400 million, at the time the second-largest patent settlement ever.

Developing Your Unique Leadership Style

To become authentic, each of us must develop our own leadership style, one that is consistent with our personality and character. Unfortunately, organizational pressures often push us to adhere to a preset normative style. But if you capitulate and conform to a style that is not consistent with who you are, you will never become an authentic leader.

Contrary to what much of the literature says, no one leadership style equates to success. Great world leaders in history—George Washington, Abraham Lincoln, Winston Churchill, Franklin Roosevelt, Margaret Thatcher, Martin Luther King, Jr., Mother Teresa, and John

F. Kennedy—all had very different styles, but each was an entirely authentic human being. There is no way any one of us could ever attempt to emulate any one of them without looking foolish.

The same is true for business leaders. Compare the leadership styles of the last three General Electric CEOs: the statesmanship of Reginald Jones, the dynamism of Jack Welch, and the forthrightness of Jeff Immelt. All are highly successful leaders with entirely different leadership styles. Yet GE has rallied around each of them, adapted to their styles, and flourished as a result. What counts is the authenticity of the leader, not the style with which he or she leads.

Over time, you will need to hone your style to be effective in leading different types of people and to be able to work in different environments. This is integral to your development as a leader. And to be effective in today’s fast-moving, highly competitive globalized environment, leaders also must adapt their styles to fit the immediate situation.

There are times to be inspiring and motivating, and times to be tough and realistic about employee-related and financial decisions. There are times to delegate, and times to become immersed in the details. There are times to communicate public messages, and times to have private conversations. The use of adaptive styles is not inauthentic, and is very different from people who are always playing a role rather than being themselves. Good leaders are able to adapt their styles to the demands of the situation, and to know when and how to deploy which style.

When I first joined Medtronic, I spent a great deal of time learning the business and listening to our customers. I also focused on inspiring employees to fulfill the Medtronic mission of restoring people to full health. At the same time, I saw many ways in which we needed to be more disciplined about decisions and spending, so I was very challenging in budget sessions and put strict controls on head-count additions. At first, some people found this confusing. Eventually, however, they understood my reasons for adapting my style to the situation. They realized that I had to do so to be effective as their leader on the issue, and they eventually came to appreciate my aggressive stance.

Being Aware of Your Weaknesses

Being true to the person you were created to be means accepting your faults as well as using your strengths. Recognizing your shadow side is an essential part of being authentic. The problem comes when we are so eager to win the approval of others that we try to cover our shortcomings and sacrifice our authenticity to gain their respect and admiration.

I, too, have struggled in getting comfortable with my weaknesses—my tendency to intimidate others with an overly challenging style, my impatience, and my occasional lack of tact are all shortcomings I’ve come to see in myself. Only recently have I realized that my strengths and weaknesses are two sides of the same coin. By challenging others in business meetings, I am able to get quickly to the heart of the issues, but my approach also unnerves and intimidates less confident people. My desire to get things done quickly leads to superior results, but it also exposes my impatience with people who move more slowly. And my penchant for being direct with others ensures that I deliver my message, but it also reveals that I sometimes lack tact. Over time, I have moderated my style and adapted my approach to ensure that people are engaged and empowered, and that their voices are fully heard.

I have always been open to critical feedback, but also quite sensitive to it. For years, I felt I had to be perfect, or at least appear that I was on top of everything. I tried to hide my weaknesses from others, fearing they would reject me if they knew who I really was. Eventually, however, I realized that they could see my weaknesses more clearly than I could. In attempting to cover them up, I was only fooling myself. As I have become more comfortable with myself, I have become more authentic in my interactions with others. It’s important that authentic leaders do the same.

The Temptations of Leadership

Former Congressman Amory Houghton, one of the more thoughtful politicians to have worked in the U.S. Congress, tells the story of his predecessor’s advice as he was taking over as CEO of Corning Glass: “Think of your decisions being based on two concentric circles. In the outer circle are all the laws, regulations, and ethical standards to which the company must comply. In the inner circle are your core values. Just be darn sure that your decisions as CEO stay within your inner circle” (quoted in George 2003).

We are all painfully aware of corporate leaders who pushed beyond the outer circle and got caught, either by the law or through the financial failures of their companies. More worrisome are the leaders of companies who moved outside their inner circles and engaged in marginal practices, albeit legal ones. Examples include cutting back your company’s long-term investments just to make the short-term numbers, bending compensation rules to pay executives in spite of marginal performance, using accounting tricks to meet the quarterly expectations of security analysts, shipping products of marginal quality, compromising security analysts by giving them a cut on investment banking deals, and booking revenues before they are shipped to pump up revenue growth. The list goes on and on, and unfortunately we saw the impact such short-term behavior can have on the world economy in the 2008 financial collapse—we’re still feeling its effects today.

All of us who sit in the leader’s chair feel the pressure to perform. As CEO, I felt it every day as problems mounted or sales lagged. I knew that the livelihood of tens of thousands of employees, the health of millions of patients, and the financial fortunes of millions of investors rested on my shoulders and those of our executive team. At the same time, I was well aware of the penalties for not performing, even for a single quarter. No CEO wants to appear on CNBC to explain why his company missed its earnings projections, even if it’s by a penny.

Little by little, the pressures to succeed can pull us away from our core values, just as we are reinforced by our success in the market. Some people refer to this as “CEO-itis.” The irony is that the more successful we become, the more we are tempted to take shortcuts to keep it going. And the rewards—compensation increases, stock option gains, myriad executive perquisites, positive stories in the media, admiring comments from our peers—all reinforce our actions and drive us to keep it going.

Novartis CEO Daniel Vasella once touched on these pressures during an interview with Fortune magazine:

Once you get under the domination of making the quarter—even unwittingly—you start to compromise in the gray areas of your business that cut across the wide swath of terrain between the top and the bottom. Perhaps you’ll begin to sacrifice things that are important and may be vital for your company over the long-term. . . . The culprit that drives this cycle isn’t the fear of failure so much as it is the craving for success. For the tyranny of quarterly earnings is a tyranny that is imposed from within. . . . For many of us the idea of being a successful manager is an intoxicating one. It is a pattern of celebration leading to belief, leading to distortion. When you achieve good results, you are typically celebrated, and you begin to believe that the figure at the center of all that champagne toasting is yourself. You are idealized by the outside world, and there is a natural tendency to believe that what is written is true (Vasella and Leaf 2002).

Like Vasella, who is one of the finest and most authentic leaders I know, all leaders must contend with these pressures while continuing to perform, especially when things are going south. The test I used with our team at Medtronic was whether we would feel comfortable having the entire story appear on the front page of The New York Times. If we didn’t, we went back to the drawing board and reexamined our decision.

Dimensions of Authentic Leaders

Let’s examine the essential dimensions of all authentic leaders, the qualities that true leaders must develop. I have determined through many experiences in leading others that authentic leaders demonstrate these five qualities:

1. Understanding purpose.
2. Practicing solid values.
3. Leading with heart.
4. Establishing enduring relationships.
5. Demonstrating self-discipline.

Acquiring these five dimensions of an authentic leader is not a sequential process; rather, leaders are developing them continuously throughout their lives.

Understanding Your Purpose

To become a leader, it is essential that you first answer this question: “Leadership for what purpose?” If you lack purpose and direction in leading, why would anyone want to follow you?

Many people want to become leaders without giving much thought to their purpose. They are attracted to the power and prestige of leading an organization and the financial rewards that go with it. But without a real sense of purpose, leaders are at the mercy of their egos and are vulnerable to narcissistic impulses. There is no way you can adopt someone else’s purpose and still be an authentic leader. You can study that which others pursue and you can work with them toward common purposes, but in the end the purpose for your leadership must be uniquely yours.

To find your purpose, you must first understand yourself, your passions, and your underlying motivations. Then you must seek an environment where there is a fit between the organization’s purpose and your own. Your search may take experiences in several organizations before you can find the one that is right for you.

The late Robert Greenleaf, a former AT&T executive, is well known for his concept of leaders as servants of the people. In his book Servant Leadership, he advocates service to others as the leader’s primary purpose. If people feel you are genuinely interested in serving others, then they will be prepared not just to follow you but also to dedicate themselves to the common cause.

One of the best examples of a leader with purpose was the late David Packard, cofounder of Hewlett-Packard. I met him in early 1969, when he was the new deputy secretary of defense and I was the special assistant to the secretary of the Navy. He had taken a leave from HP to serve his country. He was a big and powerful—yet modest—man, who immediately impressed me with his openness, sincerity, and commitment to making a difference through his work.

He returned to HP a few years later to build it into one of the great companies of its time. Through his dedication to the company’s mission, known as “The HP Way,” and to excellence in research and development and customer service, he inspired HP’s employees to incredible levels of commitment. At his death, he was one of the wealthiest people in the world, yet no one would have ever known it by his spending habits. Most of his money went toward philanthropic projects. Dave Packard was a truly authentic leader, a role model for me and for many in my generation.

Another example can be found in the experience of John Bogle. For 50 years, John Bogle has been a man with a mission: to transform the management of investors’ funds. He created the first no-load mutual fund in 1974 and founded Vanguard, the nation’s leading purveyor of index funds. Not only has he been a pioneer in financial services, but he has also been the leading advocate for financial funds acting as stewards of their investors’ money and long-term interests. His values and his integrity stand in stark relief against those in the financial community who seek to use investment funds for their personal gain.

Practicing Solid Values

Authentic leaders are defined by their values and character, which they shape according to personal beliefs and develop through study, introspection, consultation with others. This is a lifelong experience. These values define their moral compass. They know the “True North” of their compass and have a deep sense of what is right. After all, Ken Lay and Bernie Madoff did not set off seeking shame and disapprobation.

Although the development of fundamental values is crucial, integrity is the one value that is required in every authentic leader. Integrity is not just the absence of lying but also the consummate telling of the whole truth—as painful as it may be. Without complete integrity in your interactions, no one can trust you. If they cannot trust you, why would they ever follow you?

I once had a colleague who would never lie to me, but often he shared only positive parts of the story, sheltering me from the ugly side. Finally, I told him that real integrity meant giving me the whole story so that together we could make sound decisions. Rather than thinking less of him, I would have a higher opinion of his courage and integrity.

Most business schools and academic institutions do not teach values as part of leadership development. Some offer ethics courses, often in a theoretical context, but they shy away from the meat and potatoes of the issue. Others assume erroneously that their students already have well-solidified values. What they fail to recognize is the importance of solidifying your values through study and dialogue, and the impact that your environment has in shaping your values.

As Enron was collapsing in the fall of 2001, the Boston Globe published an article by a Harvard classmate of Enron CEO Jeff Skilling. The author described how Skilling would argue in class that the role of the business leader was to take advantage of loopholes in regulations and push beyond the laws wherever he could to make money. As Skilling saw the world, it was the job of the regulators to try and catch him. Sound familiar? Twenty-five years later, Skilling’s philosophy caught up with him, as the company he led tumbled into bankruptcy (quoted in George 2003).

One of my role models for values-centered leadership is Max DePree, the former CEO of the furniture maker Herman Miller. He is a modest man, guided by a deep concern for serving others, and is true to his values in every aspect of his life. His humanity can be seen through the exemplary way in which his company conducts itself. He describes his philosophy of values-centered leadership in his classic book Leadership Is an Art. He also subscribes to Greenleaf’s ideas about servant leadership and expands on them by offering his own advice: “The leader’s first job is to define reality. The last is to say thank you. In between the leader must become a servant and a debtor.”

DePree believes that a corporation should be “a community of people,” all of whom have value and share in the fruits of their collective labor. And he practices what he preaches. While he was Herman Miller’s CEO, his salary was capped at 20 times that of an hourly worker. In his view, tying the CEO’s salary to those of his workers helps cement trust in leadership. Contrast that with today’s CEOs, who are earning salaries 400 times that of their hourly workers. As DePree said recently, “When leaders indulge themselves with lavish perks and the trappings of power, they are damaging their standing as leaders” (George 2004).

Leading with Heart

During the last several decades, businesses have evolved from maximizing the physical output of their workers to engaging the minds of their employees. To excel in the 21st century, great companies will go one step further by engaging the hearts of their employees through a sense of purpose. When employees believe their work has a deeper purpose, their results will vastly exceed those who use only their minds and their bodies. This will become the company’s competitive advantage.

Sometimes we refer to people as being bighearted. What we really mean is that they are open and willing to share themselves fully with us, and are genuinely interested in us. Leaders who behave this way—like Wal-Mart founder Sam Walton and Metronic founder Earl Bakken—have the ability to ignite the souls of their employees to achieve greatness far beyond what anyone might imagine possible.

One of the most bighearted leaders I know is Marilyn Carlson Nelson, the chair and former CEO of the Carlson Companies, the privately held hospitality and travel services giant. When she became CEO, she inherited a hard-nosed organization that was driven for growth but not known for empathy toward its customers. Shortly after taking the helm, she had an epiphany. She was meeting with the group of MBA students who had been studying the company’s culture. In asking the students for feedback, she got a stony silence from the group. Finally, a young woman raised her hand and said, “We hear from employees that Carlson is a sweatshop that doesn’t care.”

That incident sent Nelson into high gear. She created a motivational program called “Carlson Cares.” As the company was preparing for its launch, her staff told her they needed more time to change the culture before introducing the program. She decided that she could not wait and opted to become the company’s role model for caring and empathy. She immediately set out to change the environment, using her passion, motivational skills, and sincere interest in her employees and customers. She took the lead on customer sales calls and interacted every day with employees in Carlson’s operations. Her positive energy transformed the company’s culture, built its customer relationships, accelerated its growth, and strengthened its bottom line.

Establishing Enduring Relationships

The capacity to develop close and enduring relationships is one mark of an authentic leader. Unfortunately, many leaders of major companies believe their jobs are to create the strategy, organizational structure, and organizational processes. Then they simply delegate the tasks to be done, remaining disconnected from the people doing the actual work.

This detached style of leadership will not be successful in the 21st century. Today’s employees demand more personal relationships with their leaders before they will give themselves fully to their jobs. They insist on having access to their leaders, knowing that it is in the openness and depth of the relationship with the leader where trust and commitment are built. Jeff Bezos of Amazon.com, Michael Dell of Dell Computers, and Indra Nooyi of PepsiCo are successful because they connect directly with their employees, who respond with a deeper commitment to their work and greater loyalty to the company.

In his book Eyewitness to Power, David Gergen writes, “At the heart of leadership is the leader’s relationship with followers. People will entrust their hopes and dreams to another person only if they think the other is a reliable vessel.” Authentic leaders establish trusting relationships with people throughout the organization as well as in their personal lives—and the rewards of these relationships, both tangible and intangible, are long lasting.

I always tried to establish close relationships with my colleagues, looking to them as a closely knit team whose collective knowledge and wisdom vastly exceeded my own. Many corporate leaders fear these kinds of relationships—as another CEO said to me, “Bill, I don’t want to get too close to my subordinates, because someday I may have to terminate them.” Actually, the real reason goes much deeper than that. Many leaders—men in particular—fear having their weaknesses and vulnerabilities exposed. So they create distance from employees and an aloofness. Instead of being authentic, they are creating a dispassionate persona they can hide behind.

Demonstrating Self-Discipline

Self-discipline is an essential quality of an authentic leader. Without it, you cannot gain the respect of your followers. It is easy to say that someone has good values but lacks the discipline to convert those values into consistent actions. This is a hollow excuse. None of us is perfect, of course, but authentic leaders must have the self-discipline to do everything they can to demonstrate their values through their actions. When we fall short, it is equally important to admit our mistakes.

Leaders are highly competitive people. They are driven to succeed at whatever they take on. Authentic leaders know that competing requires a consistently high level of self-discipline to be successful. Being very competitive is not a bad thing; in fact, it is an essential quality of successful leaders. But it needs to be channeled through purpose and discipline. Sometimes we mistake competitive people who generate near-term results by improving operational effectiveness for genuine leaders. Achieving operational effectiveness is an essential result for any leader, but it alone does not ensure authenticity or long-term success.

For example, Dick Fuld was a highly competitive and highly motivated leader when he held the reins at Lehman Brothers. But because he could not marry that competitiveness with discipline, he allowed the firm to gorge itself on mortgage-backed securities—and thus, when the financial crisis hit in 2007, Lehman Brothers was left overleveraged and strapped for cash. And eventually, it collapsed.

On the flip side, the most consistent leader I know is Art Collins, my successor as CEO of Medtronic. He is as competitive as any other CEO today, and his self-discipline is equally evident in every interaction. His subordinates never need to worry about what kind of mood he is in, or where he stands on an important issue. Nor does he deviate in his behavior or vacillate in his decisions. He never lets his ego or emotions get in the way of taking the appropriate action. These qualities make working with him easier and more predictable, enabling Medtronic’s employees to do their jobs effectively.

Mother Teresa is another compelling example of an authentic leader. Many think of her as simply a nun who reached out to the poor in Calcutta, yet by 1990 she had created an organization of 4,000 missionaries operating in 100 countries. Her organization, Missionaries of Charity, spread to 450 centers around the world. Its mission is “to reach out to the destitute on the streets, offering wholehearted service to the poorest of the poor.” Not only did she have a purpose, clear values, and a heart filled with compassion, but she also created intimate relationships with people and exercised self-discipline, all the dimensions of an authentic leader. I doubt that any of us will ever be like Mother Teresa, but her life is indeed an inspiration.

Authentic Leadership

The media often acclaim the “decisive” leader or the “strong” CEO. This superficial view of leadership fails to recognize the complexity of human relationships and the centrality of those relationships to business in the 21st century. It isn’t that enterprise resource planning software or Six Sigma don’t have a place in today’s enterprises—they are critical tools, as are strategy, organizational structure, and organizational process—but these tools are table stakes, and they are imitable. The disconnected manager who delegates tasks or implements operational tools is little more than a technician. The leadership demanded by today’s knowledge-based enterprises is more nuanced and more challenging. Yet, the most important for leaders to recognize is that you do not have to be Mother Teresa or Jack Welch or Marilyn Carlson Nelson to lead authentically. You only need to be yourself.

Further Reading

Max Depree, Leadership Is an Art. New York: Dell, 1990. Bill George, Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. San Francisco: Jossey-Bass, 2003.

———, 7 Lessons for Leading in Crisis. San Francisco: Jossey-Bass, 2009.

David Gergen, Eyewitness to Power: The Essence of Leadership, Nixon to Clinton. New York: Simon & Schuster, 2000.

Robert K. Greenleaf, Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness. Mahwah, NJ: Paulist Press, 1971.

References

Depree, M. 1990. Leadership Is an Art. New York: Dell.

George, B. 2003. Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. San Francisco: Jossey-Bass.

———. 2004. The Journey to Authenticity. Leader to Leader 31 (Winter): 29–35.

Gergen, D. 2000. Eyewitness to Power: The Essence of Leadership, Nixon to Clinton. New York: Simon & Schuster.

Vasella, D., and C. Leaf. 2002. “Temptation Is All Around Us.” Daniel Vasella of Novartis Talks About Making the Numbers, Self-Deception, and the Danger of Craving Success. Fortune. November 18.

About the Author

Bill George is a professor of management practice at Harvard Business School, where he has taught leadership since 2004. He is the author of four best-selling books: 7 Lessons for Leading in Crisis, True North, Finding Your True North, and Authentic Leadership. He is the former chairman and CEO of Medtronic. He currently serves as a director of ExxonMobil and Goldman Sachs. He received his BSIE with high honors from the Georgia Institute of Technology and his MBA with high distinction from Harvard University, where he was a Baker Scholar.