Episode #759 - A New Vision For Leadership In Business 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.

What I would imagine you're talking about is extra layers of overlapping management.

Yeah.

And you know, as far as bureaucracy, you've got these layers and layers. You got too many officers and very few, you know, actually soldiers. And like in peacetime now they said like in. So there was somebody who was explaining like the problem with the military and the decision they made about Afghanistan. They said, well, you got all of these in World War II. At the end there was four four star generals. Four. Now there's 400. In peacetime, what happens is everybody keeps getting promoted up and they've got 404 star generals. And they all are experts and they probably are, but you got 400 different expert opinions. So as a result, no wonder everybody's confused about what you should do.

Well, I teach at leading business school. Let me say, Larry, we have in business today, we have way too many managers and not nearly enough leaders. And I'd like to eliminate a lot of those middle managers business schools teach. The things they're teaching were effective in the 90s, but that's not what the role is today. We need leaders. Okay. Leaders step up when there's a crisis. Managers kind of do the same thing they've been doing and they maintain everything the way it was and they slow things down. So why is it all these tech companies are starring. Why is it I visited Nvidia a number of years ago, a tech company, why are they doing so? Because a small company that maintains that small company feeling, you know, and I think we just, it's not working with these big lumbering companies that can't innovate. I mean, you know, the last 20 years or 15 years, GE lost its ability to innovate. Used to be a great innovator, lost all that. And you see it. I mentioned Boeing, you mentioned a number of companies. Sadly, they got so bureaucratic that they really didn't do anything, any breakthrough. But they also weren't training leaders or training managers. And unfortunately our business goals turned out in the last two decades since I started teaching a million managers. But they're actually not really oriented toward taking risks. You know, they want to get real rewarded for kind of doing what they're doing. And to me, that's not the way you do it. That's why the entrepreneurs have done so well.

Yeah. And that's the whole idea of manager is you're maintaining, you know, you're not growing. And would you agree that the difference between a leader and a manager, which is what you're pointing out, the result, I mean, the difference has to show up primarily in results, don't you think? Because a leader is going to get results, huh?

Yeah. Here's the problem is we give people short term incentive and they'll make the numbers. I had this problem at Honeywell, you know, they would, the first thing they would do, Larry, is they start missing the revenue numbers. And so they would cut the R and D. Okay, because it wasn't going to affect them this year and then they do it next year and next year. And by the way, there's no R and D left. That's that Boeing story. Put a fine point. This goes back about three or four CEOs, not Dave Calhoun, it's guy named Harry Stonecipher that said, you know, we're, this is no, we, Boeing have been the world's leading aviation company for like 100 years. And the new CEO comes in from McDonnell Douglas and he says, you know, we're just an engineering lab, we got to run this like a business. Well, that to him meant giving more money back to the shareholders in cash and cutting R and D. So a very prominent person I know well went into him and said, we need to design a new aircraft, what's called a single aisle aircraft, to replace our 727, 737, 757. And they said, no, no, that'll cost 3 billion. We're going to put that money in buying back stock. Well, that made the shareholders happy for about a quarter, you know, about three months. And then the next thing you know, you lose out to Airbus, who's been investing in nuclear. And you say, oh, we're behind, so we make a quick fix. You can't quick fix in engineering terms. Like it'd be like you want to be an architect and you're going to take some lumbering old house that's got very bad foundations and you try to make it nice, you're better off knocking it down. Start with a new house, you know, start with a new design. But I think that's what's happened in business. We've gotten so bureaucratic and so focused on short term results. And look, if you got excess cash, give it back to shareholders. But never cut R and D. You never cut R and D. To me, you never cut the dividend, you never got R and D. And that's I had a policy of Medtronic. No matter how bad things were, two things we're never going to cut. One was R and D and the other was the sales force. Look, I could cut out the layers in the sales organization. The middle, right, yeah, we had way too many of those and you had to keep going because the bureaucrats want to add more. And I had to go back and I had a guy who was a vice chairman to go around with a meat ax and take out some of those bureaucracy. But, you know, it just kind of grows on you and you got to go back and. But you got to reward your leash. You've mentioned the frontline people. Get to the. Who are the people, the sales people that are making the difference of those top customers. Who are the engineers? Like, they're like serial innovators. And these people, they have labs at home, they got all kinds of innovation. But if you make them vice president engineering, they're going to fail because that's not what they'll love to do. They want to go invent. So. But you got to reward those people. You know, you can't treat them like, oh, you're kind of low on the totem pole. And this person who's got title director, you know, well, we always found, you.

Know, coming up, we always found that so many of the big companies eventually became run by accountants or attorneys or something who had no idea of the importance, had never made a sale, never been around the sales force. And they just looked as a sales force as someplace to cut costs.

No, you're right.

Territories. And cut commissions and then they cut their own throat in the process.

Well, Larry, watch who they cut. They don't cut the managers. They cut the first line people. Right. They cut back on the compensation of the people. You know, to me, quality is not come. Doesn't come from the quality department. Quality comes from the people who design the product and who produce it. They're the ones that do it. And you know, then we cut back on their resources and cut back on what we pay them and we leave them high and dry. So we. And in those cutbacks. And we have fewer workers, just like you're talking about the generals. We have all officers and no, no, no troops. And I wanted to promote the troops, you know, the people doing the work. The people are in a theater doctor's office every day. Say, doctor, we can help you. Let me help you here. We got a solution for your patient.

The word authentic leadership. What does that mean to you?

Being genuine, being yourself, being who you are. And it's interesting. When I came out with my book 20 years ago, Authentic Leadership, which became a modest bestseller, everyone asked me, what's it mean to be authentic? And I just said what I said to you, it means genuine being real. But it was interesting. They wanted to make it more complicated. You know what I decided it was? People felt like they had to wear a mask when they went to work. If you knew who I was, Bill, I would never make it if I could. No, you got to be real. Oscar Wilde once said, you know, just be yourself, Larry. Everyone else is taken, and I can't be Jack Welch, you know, and all those people trying to be, you know, you got to be who you are, you know, you got to use the gifts you've been given and build your gifts, not trying to be like someone else. Hey, I'd like to be a great athlete. I would want. Love to win the national football champion. I played tennis, and I'd love to win Louisville. I'm not a great athlete. You know, I'm good athlete, but I'm not great, you know, So I got to do what I'm great at, or not great, but I can do I'm really good at, use all my skills.

Well, the way I've tried to explain that to people, Bill, is over the years is like, if you're trying to be like someone else, you're trying to copy or whatever, you know, like, am I doing it right? So you're going to be cautious, you're going to be tentative. And the only way you can be great is to be yourself, because then you're not worried about, am I doing it right? No, that's how I am.

But see, a lot of people go into big companies and it's all for show. How they dress, how they present PowerPoints, how they look, you know, and the bosses at Medtronic. I made a couple of mistakes in promotion. We had a policy. I would never promote anyone unless I had data on 360 from the frontline people, the people who work for them. Hey, what's it like working for Larry? You know?

Yeah.

And I learned a lot from that, because there are people that. It's a little crude, but the. The cliche is kiss up and kick down. They look great to the bosses, then they can fool you, but they kick their people out. They go back and they take credit for other people's work. They have toxic leaders. Frankly, if I could get rid of all the toxic managers, I would do so because business would be a lot better off if we just clean out all the toxic managers.

Well, I think, you know, it's amazing how widespread the toxicity is, how ingrained and how many places, you know, you go. It's almost like you could turn around every company by getting rid of the, the toxic people, creating the toxic environments and just let people flourish. You know, take the lid off, basically.

So Larry, let me ask you this. Why do we tolerate that? And I asked CEOs this, why are you tolerating? Well, these people are producing results. I said, are they really? Take them out. You'll find out they're people producing results. Okay? And you know, like that kid at Michigan, he knew that, hey, you know, he, he couldn't throw a decent pass if he didn't have those big linemen blocking for him as somebody was going to sack like they did the Washington. He didn't have, you know, people opening up holes or running back. What good is a run? You know, it's true. But that same analogy applies to business. You know, you can't do it without the people on the front lines really caring about quality. You know, they're the ones that build it in. You know.

Now people that have, that are listening to this and maybe in their organization for saying this. Well, if, you know, what I would point out is if their growth is started to get, become sluggish and they just know the company can do more. A couple of things we just been hitting on is you might look at those layers of management and see if you've started to get, you know, you've allowed yourself to get over overstuffed with the management layer. And you might ask yourself if you give it enough respect and not just income, but, you know, respect basically and appreciation for the frontline people. And the other thing is look for toxicity and get rid of it. You know, know.

And I first I did a medtronic. We had too many layers in our safe. I took out three layers. Things got a lot better. We all got a lot closer to the action. And I also said to all those lawyers and accountants, everyone else, you got to go out and see procedures. You need to ground, gown up, go in and see what a doctor is actually doing, see what we're doing. So get out of this staff role. Because I think the problem with big corporations is the staff start thinking their job is to control the people doing the work. And I keep saying, no, it's just the exact opposite. Your job is not to control the people doing the work, it's to enable them take the barriers out of the way. You're creating barriers. Take the barriers out of the way for the people doing the work. Free your salespeople, free your engineers, Free your production people to do their job. They're dedicated. They want to do that. You ever meet a salesperson doesn't care about making the sales and you get rid of them, but, you know, they want to do the right thing by their customers. And so that's.

Well, you know, Bill, I wonder how much you talk about, you know, saying things and people don't receive it. They ought to pay attention to you. In 2014, you won the Franklin Institute Award for the Bauer Award for Business Leadership. You were elected to the National Academy of engineering. In 212, you named one of the top 25 business leaders of the past 25 years by PBS executive. The year 2001 by the Academy of Management. Director of the year 2001, 2002 by the national association of Corporate Directors. It seemed like with these kind of credentials and endorsements that people would want to hear, but I guess there's still some closed minds out there, I guess.

Well, fortunately, I think there are a lot of people that really want to do a good job. I really do. I don't want to put them down. And I think we just need to help them because a lot of the things they've been taught are contrary to that. They're taught to just maintain a strategic plan. Larry, we're living in an era of multiple intersecting crises. Who predicted that Hamas was going to attack Israel? Who predicted that Russia is going to attack Ukraine? Who knew 911 was coming? Who knew that I sat on the front line of Goldman Sachs and the board, and we had 16 board meetings that fall of 2008, when the whole market collapsed, I thought the whole world. So the issue is, you know, I think we just need to encourage those people to lead in today's environment. It's a rough world out there. It's much tougher than when I was CEO. But we need to help people do that. But, you know, the people who are. I wrote a book called Seven Lessons for Leading in Crisis. I didn't say for managing in crisis. I said for leading in crisis. So a person can manage through very difficult. Lead through very difficult times is much more important than somebody who can manage in stable times and get all these awards, because it's not a stable time. I mean, you can't tell me what's going to happen in 2024, because no one knows, you know, and so we just have to lead in the best way we can. And Deal with the resources we have and make things happen and go address problems and go solve them and don't let anyone get in your way. Probably problem is there a lot of people get in the way.

Talk about the, how the. You know, when we write books, one of the big thing ordeals you go through is what am I title it. And you know, you came up with the, the concept, basically a concept, True north, right. And Emerging Leader. You know, Emerging Leaders are, you know.

I'm very, my best book I'm very proud of though.

And so talk about. And then that's expanded into workshops and the other books and everything that caught on. Talk about how that's cut on and what feedback you've got from people that have gone through the book and the courses and those things.

Well, I think in the idea True north is basically who you are. It's your, the moral compass that guides your life. It's your beliefs, your values, your principles you lead by that's unique to you. And where do you find satisfaction and joy in your life. And I think a lot of people were trying to get the adulation of the outside world, trying to impress everyone else by being something they weren't. And my work has always been just be who you are and that's pretty good. And then you can focus on then making a difference from where you are, from the gifts you have. And that's all my books are really built around that essential theme, the idea of True north. If you follow your true north, you know, but if you don't, you get pulled off course. And I've seen people that wound up obviously the people like Jeff Skilling and others that, you know, that people said they had true self but you know, they're trying to impress the whole outside world. Is the richest guy the smartest guy? You know, we had this thing about people used to think in the 90s the smartest person made the best leader. That's just. Larry, that's just not true. You saw in the people who graduated from Georgia Tech, the people doing the best are not the people that had the top grades. They're the people that really understood other people that really understood how do we get something done.

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