Episode #758 - The Making Of A Leader with Bill George

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell. So what did that give you? What, what, what's your biggest takeaway for you in terms of a preparation for future success? Because there was foundational elements were put in place, it seems like that, you know, are very useful for you.

Well, I had some wonderful mentors along the way. But let me say that when I went to, you know, when you're in engineering school and you're taking seven courses, you, you're pretty narrowly focused and you're looking at the technology and how to get your linear program to run and all those kind of things. When I went to Harvard Business School is the big picture. And I had a mentor there who was an associate dean. It took me under his wing and he really opened my eyes up to the bigger challenges in the world and how I could make a difference. And I give him, he passed away many years ago, but I give him enormous credit for helping me. He didn't do it himself. He was just there to help and encourage me, hey, look, you can do this and take it on. And so God bless him for doing that. And I was blessed along the way to have mentors. When I went, worked for the Secretary of the Navy, actually was the undersecretary I was closest to, and great opportunities. I learned so much. And these are all learning experiences. So I look at the things you do in your 20s and even early 30s are really learning experiences. You learn from working in different environments. You learn about good people, good leaders, bad leaders. You get a chance to play yourself off against and say, could I do that job? Could I not? How do I see that? Do I want to do it? And so that to me was a great gift that I was given early in my life.

What's the biggest risk you've taken? And especially early getting, getting started. And what's the biggest risk and what is the biggest boomerang you may have run into along the way?

Well, you know, clearly when I was working in the Defense Department, I was taking on the establishment because of that was during the Vietnam War. And a group of us felt that things weren't going well. And we did a lot of studying of that. And we also, I worked on major weapons systems that weren't going well. And I published some papers that got some criticism, but they were right. They proved to be right. It was just that People didn't. So when you take on an establishment, fortunately, I had a high level of support because I was working first for the CFO of the Defense Department and then for the Secretary of the Navy. And so you do have high level supporters. But, you know, you learn a lot in that process. You learn a lot about how do you move a huge organization. That's pretty tough. And I had a chance to do that early in my career. You know, it's not easy. It's hard today too. And so all my life I've been involved in large organizations and how do you move them forward? So I learned a tremendous amount watching other people and observing what they did and then taking it on myself. So that was a risk. You know, I could have gotten myself in a lot of trouble because we were taking on the establishment and that's not so easy.

And in the bureaucracies of the big corporations, I find the overwhelming tendency is for people to avoid taking it on and making a stand and making the suggestions and draw the line. And, you know, they like to hide, you know, they don't want the blame to come down on them. It's hard to find a lot of courage, courageous stands and like courageous leadership to happening in a lot of bureaucracies, big corporations. And it takes a special kind of person. So let's talk about how quick did you get into a position of major responsibility coming out of Harvard?

Well, let me just say I want to go back to your point. You made a very key point. I see a lot of leaders who lack courage all the way to CEOs of billion dollar corporation. They're presid fighters, Larry. They don't really take on challenges. And what happens, Things don't end well. Okay, and this happened at Boeing. We saw, and I wrote a couple of cases on the 737 Max and how Boeing should have designed a new aircraft. They're having problems again today, but they back then they should design a new aircraft. And they didn't have the courage to do that. So they made a quick fix. And in engineering terms, you make a quick fix, you learn this. It doesn't end well. And it didn't because they didn't have the courage to go do the right thing, to say, okay, we're behind Airbus, but we're going to do, we're going to create a plane to be far superior. So you do a quick fix on what you got and you take a 1968 plane and rework it. Can you imagine how the technology's changed? It's still backing him to the day. So I think, you know, courage is a key factor. So I got thrown into a big job, very young age. I went. When I left Defense department, I was 26 and went to work for Lytton Industries. And I got thrown into nine months later being general manager of the newly emerging microwave oven division. There were no consumer microwave ovens. My job is to build the consumer microwave oven business, which I did for 10 years. Nine years. But boy, that was very challenging. And we had problems of the fda. It was challenging radiation. And you know, I really learned kind of what I would call a baptism by fire. I got thrown in there. I had to go into the factory at three o' clock in the morning to see if we could meet radiation standards so we could start production when the workers came in at 7 or 7:30. So that was a big risk and I kind of jumped in. I'm kind of a glutton for punishment, so I'll jump into the risk. If there's a fire, I run to it. I've seen other people kind of cower and stay back, but if there's, if there's a challenge, I jump in and see how can we make it better? How can we fix this? And so I did. And we were very successful. But it was a huge.

How big did it get? I mean, you took it.

You don't got to realize we're dealing in $1970. So $1970, we went from 10 million to 200 million. And that was pretty good growth. We grew at 55% a year for eight, nine years. So we had a tiger by the tail and it challenges. We had quality problems, we had lots of issues, design problems, keeping up with competitors. Like we're just a little company competing like people like General Electric and Frigidaire and all these great Amanda, all these big prince companies. We had big challenges, but we took them on and it was great fun. It was one of the great joys of my life, you know, and I really had a great experience there now.

Now you, I guess, developed a reputation there and kind of set the stage for all kind of all kind of things to directions to go. What was the next big move?

Well, because of the success there and there were a lot of people writing about it. It was a new industry and we were the hot company. And so a man named Ed Spencer, who was CEO of Honeywell, based here in Minnesota, came to see me one day. The pretense was he wanted to learn about microwave ovens, but he really wanted to talk to me about joining the company. And I said here's I finally wanted to be head of a global company. Here's that global company I can be head of. And he gave me every opportunity, got one of those mentors that was wonderful to me. And I'd been there 18 months and he named me president of Honeywell Europe, Middle east and Africa. So I show up in that role in Brussels, Belgium with my wife and my wife takes a leave from her job for three years. As you know, a great opportunity. And I loved everything about it. It was fantastic. And I was 38 years old and I was serving on the board of a major French company that Honeywell had some ownership in the computer company Bull. And it was just great traveling all over. Our kids loved it, my wife loved it. And I thought I was going to be there five years. I got called back in three years to take a two step promotion. Worst promotion of my life. You may have inferred from this that I don't like bureaucracy. And it was a huge bureaucracy. And I had nine divisions, all of which had problems in totally different businesses. Everything from communications to medical technology to valves in the boiler room. And they all had issues and three groups. So there was this huge. And I love being with people. I think you do too. I love being out with in the marketplace. Let's, you know, I used to spend all the time I'd stand around an appliance store selling micromans watching what consumers did, you know, and how they responded. Or in medicine I saw 700 to 1000 procedure of Medtronic going and putting on the greens and watching someone do open heart surgery. I'd love to be with employees, but I found myself trapped and kind of chasing numbers where you're trying to make quarterly earnings but the changes you're making take three to five years to come to fruition. You don't do it overnight. You can do it overnight by cutting people. But I'm talking about getting caught up when the company's falling behind in technology. You don't do that overnight. And so that was a big challenge. And I would say that this is kind of immodest, but I was on my way to reaching that brass ring, probably grabbing for it too much to be the CEO of Honeywell. Job was not going to be open for another three years, let's say three, four years. But I was trying to be the guy and I found I was very unhappy. But I hadn't admitted it to myself. I hadn't looked myself in the mirror and say, you know, you're not really doing what you love. And I had this idea from my father, I've got to run a big company. And so I had turned Medtronic John for a job three times in my life, same job, number two, president, chief operating officer. And one day I looked at myself in the mirror and what I saw was a miserable person. Me. Now at the time, you know, I have to say immodestly, I was one of two leading candidates, maybe the leading candidate to be the next CEO of Honeywell. That's the signals. That's why they're giving me all these turnarounds. But you know, yeah, I like to build things. I'm a builder. And we were cut, cut, cut. I knew how to do that. No one else wanted to do it. I was happy to do it. But I like to build things and I wasn't really happy and I wasn't close to the action. I like to be close to the action. And so I went home to my wife. What I was feeling. She said, bill, I've been trying to tell you that for a year. You just refuse to listen. So I went to my men's group back. I met with my men's group this morning. We meet every once a week for 45, 75 minutes and talk about really important times of life. So I told him what I was always feeling so well, why don't you give Medronic a shot? And it was kind of a mid sized company in those days. I'm not putting it down. It was, had a lot of potential but it was still a mid sized company. So I did call back the CEO and says that job's still open. He said, yeah, we're about ready to fill it, but you can get line if you want. Well, I walked into the company four or five months later as the new number two president, chief operating officer was the best thing I ever did. The most important career move I ever made because I went from met. Honeywell's mission was making money. This is the old Minneapolis Honeywell and kind of like GE and we had a mission in Medtronic. We're going to restore people to full life and health. You know, we're going to alleviate pain, extend their lives and restore their health. Wonderful. And so I really embrace that mission and the values and that became the best step I ever made.

And so when you said they were a mid cap type company, let's put a number on that. When you got there, they were at what size?

1.1 billion, 750 million in revenues, 1.1 billion, 11 times earnings.

I remember when you left and you were there 10 years, nine years.

I was there 12 years plus another year as chair of the board. So 13 years in all, two years as COO, 10 years. I put a 10 year limit on being CEO and I actually carried that out to the day. And so. May 1, 2000. Yes, 1991. May 1, 2001. And so I turned over my successor because I felt like companies need new leadership every decade, particularly a high tech, creative company. You need to bring in new leaders and give them the opportunity to show what they can do. And so I put that limit. I was just in my late 50s, 58 at the time. So I wasn't retiring because I wasn't retiring. I wasn't when retiring for life, that's for sure.

But so how, how did Medtronic grow during that time?

Innovation. Innovation. And that's where my great focus was on what are the. What, what are the unmet medical needs people have and how can we develop products that will treat those needs? The early product was the defibrillator for people suffering from sudden cardiac arrest or heart failure. Very prominent diseases. But we did treated cerebral palsy, Parkinson's disease, all kinds of heart issues, opening up the arteries with stents and breakthroughs in the spine area and the neurological area. Just. And I took Medtronic from being a pacemaker company. I didn't take it, but Diwali was there. We moved from being a pacemaker company to being the world's leading medical technology company, involved in a lot of things, from incontinence to some things that didn't work out. But it was all about the innovation of our people. See, I'm not the innovator. I couldn't go down. You talk about being creative. I'm not the guy. I can't design a defibrillator if my life depends on it or a heart valve. But I could motivate and stimulate and challenge the people who did. And so I spent a lot of time with the innovators in the lab, spent a lot of time with the most innovative doctors, showing us that intersection between human life and a device that can restore someone's life. And that was the essence of what we did at Medtronic, and it still is. I was just out there last, just for Christmas. And that's the. Or I was out there last week, actually. That's the difference is that we understood that intersection between someone has an unmet medical need, say diabetes, say I have a child with type 1 diabetes. Medtronic can provide a pump and maybe your son, daughter doesn't take that insulin when they need it. We could provide a closed loop system to do that. And so we could provide it so it automatically feed the insulin in and they wouldn't have a problem with their diabetes. That's just an example. And so that's what I focused my energies on primarily. And we were fortunate because we learned that our stock price was directly correlated with innovations. When you have innovations, price is going to go up and you do very well because you're ahead of the game, frankly. You can keep the price, but if you keep innovating, keep ahead of your competitors. So we had shortened the lead times from four years down to 18 months on new products. And that put around the company, put a lot of pressure on people. But hey, we had to do it, stay ahead. It's a race when you're competing with people like at the time, Siemens, Eli Lilly, you know, Pacific Dunlop, all these giant companies. We were like a minnow against a bunch of whales. But sometimes a minnow moves faster than the whale, right?

Rowboat can turn quicker than a ocean liner.

So you got it. And so we learned at Honeywell we had trouble turning that ocean liner. And so at Medtronic we had to. The key though, Larry, and you've seen this happen at a great company like Hewlett Backer, which used to do that, then they slow down. How do you keep it innovating? How do you keep that intensity? How do you keep that ability to respond very quickly to needs and move fast and not let the bureaucracy creep in? You're probably inferring for this, your listeners are that I'm not big on bureaucracy. And that's true. I'm not. I don't deal well with bureaucracy because I think it just gets in the way of making things happen and taking calculated risks and doing good things. And if you run a huge bureaucracy, it doesn't end well in business.

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