Monthly Archives: September 2015

Warren Buffett: Finding His Sweet Spot

Warren Buffett sticks to his sweet spot — and the results speak volumes.

Warren BuffettThroughout Discover Your True North, successful individuals discuss how they became authentic leaders. This forum is a chance to delve deeper into the thoughts and journeys of these influential leaders. In this profile, we will talk about finding your sweet spot with Warren Buffett.

Thank you for your time, Warren. Your first job in investing was a far cry from where you wanted to be. What wasn’t right with your initial experience at an investment firm?

My first job as a stockbroker was all about networking and selling. That’s not where I felt comfortable. It’s not where I feel comfortable today. In that culture, because your commissions were based on trades, it was common practice to pressure clients to trade aggressively. You were supposed to encourage activity even when it worked against a customer’s best interests. But my values said that people were important, honesty was important. To this day, I say we should act in people’s best interest when we can.

After that experience, Benjamin Graham hired you at his firm. In Discover Your True North we learn you had read his book, The Intelligent Investor, at a young age and then were a student of his at Columbia. It sounds like you were drawn to Graham’s style. Why was that?

He was interested in the value of stocks and companies. You acted when you thought a valuable company was being priced low; you looked for opportunities. Plus, I knew what kind of person he was. When I moved to his firm, I felt comfortable. There, I knew that I could apprentice under someone I respected and focus on analyzing stocks. When Graham closed his firm, I felt I had learned what I needed to open a firm of my own.

You opened your firm back in Omaha at the age of 26. Were you nervous? That’s a bold move for someone of such a young age.

I had a philosophy and I wanted to practice it. I decided to focus on companies that I believed in and then I could feel confident in the stocks. I looked for quality leadership and decided to only do amicable acquisitions. I wanted partnerships, not assets. Starting a firm at 26 might have been bold, but if you’re focused on the right things it is not quite as risky as it sounds.

Every day you have to decide whether or not you’ll do business with a given company. What separates a company you want to work with and a company you don’t?

I ask potential business partners, “Do you love the business, or do you love the money?” I only want to work with people who love the business.

Traditionally, there is not a lot of transition in the boards of the companies you acquire. Is this intentional, maintaining continuity?

Of course. Some investors want to move the boards to get short-term results. I retain the leaders because, often, they are why I partnered with the company. I try to be as transparent as possible with the people I work with so everyone always knows where he or she stands.

It seems like your sweet spot is analyzing companies and judging leadership. Rarely do you venture into the day-to-day management. Does this allow you to avoid conflict?

As long as I have been in the business I have tried to avoid being a hands-on manager. Conflict is my weakness. I want to avoid it if I can. Of course, company leaders can always call me for advice. It’s just that I want the decisions to be theirs in the end. I prefer to focus on where my strengths are. I like to look at a company and its leaders and decide if it is a good combination, a good investment. Then I can leave the day-to-day operations to the people who are in place.

Is this appreciation for the fundamentals of a company’s strength how you avoided the Internet bubble in the 1990s?

Maybe. I stuck to what I understood to be true. I value companies that produce a valuable product, stocks that have a reasonable price. I saw some Internet stocks collapse because they were valued far beyond their earnings.

You also believe in your instincts and the information you gather. You are also candid about how much you trust people. Have you ever been betrayed and thought about changing your approach?

I believe in trusting people. Occasionally, someone will violate my trust, but on balance I am better off in continuing to trust others.

Thank you for speaking with us, Warren. Others will surely find your modest approach to business valuable as they pursue their own True North.

The Wacky World of Work: Northern Exposure to Leadership

No one ever said leading is easy. You hear about leading by example all the time, but what about examples of leading? On this edition of “The Wacky World of Work,” host James Tehrani talks to former Medtronic CEO Bill George about leadership and his recently updated book “Discover Your True North.”

Click on the link to watch the interview: http://www.workforce.com/media/videos/play/120


This article was originally posted 9/4/15 on workforce.com

2 New Books On Our Desk That Can Help You Live and Lead Better

At ConantLeadership we are continually pursuing the insights of smart leaders and thinkers who can help us improve our craft. An important part of the work of leadership is perpetual learning and growth and one of the best ways to grow is to read books written by our business and leadership contemporaries. Thankfully, there are a lot of wonderful books to celebrate and there are more and more worthwhile books being written every day. Here are two in particular, that recently crossed our desks, that can add tremendous value to your life and leadership.

Discover Your True North: Expanded 2 New Books On Our Desk That Can Help You Live and Lead Betterand Updated Edition | By Bill George

If you have not yet read Bill George’s seminal works, True North, and Authentic Leadership, the recent release of this expanded and updated edition of True North is your opportunity to read one of the most helpful and insightful books for leaders in the 21st century. Why is this book so impactful? It will help you make better decisions and deal more productively with adversity. As leaders, as we navigate the stormy seas of decision making, we will increasingly face more challenging situations and more morally dubious conundrums. Without a strong sense of who we are and what we believe, making these decisions while remaining true to ourselves is very difficult. George’s text is the preeminent guidebook for connecting with our true selves, learning how to lead authentically, and relying on our True North to guide us in all of our pursuits. What is our True North?

In George’s words:

True North is your orienting point — your fixed point in a spinning world — that helps you stay on track as a leader. It is derived from your most deeply held beliefs, your values, and the principles you lead by. It is your internal compass, unique to you, that represents who you are at your deepest level. Just as a compass needle points toward a magnetic pole, your True North pulls you toward the purpose of your leadership. When you follow your internal compass, your leadership will be authentic, and people will naturally want to associate with you.

As George reminds readers throughout the book, discovering our True North is not easy — it requires ongoing and steadfast commitment. But the hard work is worth it because, “as long as you are true to who you are, you can cope with the most difficult circumstances life presents.” This newest edition guides you through the journey of discovering your True North while providing over 100 real-world examples of authentic leaders. And the book offers interactive exercises at the end of each chapter that will challenge you to think about provocative questions to enhance your reading and comprehension. Definitely a must-read.

2 New Books On Our Desk That Can Help You Live and Lead BetterThe Genius of Opposites: How Introverts and Extroverts Achieve Extraordinary Results Together | By Jennifer Kahnweiler

Lennon and McCartney. Jobs and Wozniak. Sandberg and Zuckerberg. We’re familiar with these famous duos and the extraordinary things they accomplished together. But what’s the secret to their success? What allowed them to accomplish great feats together that they may not have been able to achieve apart?  In her new book, expert on introverted leadership,Jennifer Kahnweiler, explains the “secret sauce” to these dynamic partnerships.  Opposites — like introverts and extroverts — can create magic together by leveraging the unique strength that their differences create.  But only if they are armed with the tools to use their partnership productively and tap into the “genius” of their oppositional natures.

So how can we tap into the genius of our opposites to achieve success? The key, says Kahnweiler, “is to remember that these relationships are most successful when opposites stop focusing on their differences and use approaches that move them towards results.” Easier said than done. But she supports this big idea with an actionable process for all introverts to work better with their extroverted counterpoints, and vice-versa. Essentially, people in strong extrovert-introvert partnerships must:

  • Accept their opposite’s differences. Don’t try to change them
  • View disagreements as opportunities to arrive at better outcomes.
  • Use the other person’s strengths — and share the credit.
  • Treat each other with respect.
  • Know that each party can’t offer everything; work in harmony to provide their best selves to others.

The book provides plenty of interesting examples and tools to bring the insights to life. Whether you are struggling with a burgeoning partnership or you are just trying to better connect with and understand the many people you encounter in your workplace or your community  — Kahnweiler’s practical five-step process can help you tap into the genius you might be missing.


This article was originally posted 9/4/15 on conantleadership.com.

 

Authentic Leadership: An Interview with Bill George

iStock_000055166258_SmallShortly after its publication in 2007, Bill George’s renowned book True North became a go-to guide on leadership at a time of financial turmoil and misuse of power.

Today, a newly expanded and updated edition of the book comes at a time when leaders face increasing pressures and when public trust in leadership is at one of its worst lows.

We spoke with Bill George about leadership and about the second edition of the book called Discover Your True North. He is a senior fellow at the Harvard Business School and former chairman and CEO of Medtronic. Under his leadership, the company’s market capitalization grew from $1.1 billion to $60 billion.

Monster: Are today’s leaders facing significantly different challenges than they did a decade ago when you first wrote True North?

Bill George: Definitely I think they are. Back in the ’90s and early 2000s, leaders were revered and today I think everyone is somewhat skeptical and cynical about our leaders, and that’s because so many leaders in my generation dropped the ball and caused great harm first in the corporate governance crisis in the early 2000s and then in the financial crisis of 2008-09.

I’m convinced that the root cause of those problems was not corporate governance or credit default swaps or subprime mortgages but failed leadership.

I am very hopeful about this generation of leaders. I think we’re seeing very, very positive signs that they have learned a lesson from their predecessors and we have an outstanding group of new leaders coming up from the CEOs that have been elected in the last 7-8 years to the young leaders, the Millennials, taking on much more responsibility these days.

Monster: The new edition of the book features 47 new interviews with leaders. What stands out about them?

Bill George: In this new set, we tried to get a much more global set of leaders, much more diverse and spread across all age ranges.

Indira NooyiFor example Indra Nooyi, who is the chairman and CEO of PepsiCo, is an amazing, remarkable leader. Born in India, educated in India, she came to the United States, completed her education and eventually became head of PepsiCo.

She took a fierce challenge from the outside world because she said that she wanted to create healthy foods and beverages in addition to PepsiCo’s traditional line.

The stock market was critical, various consumers were critical. She even endured a withering challenge from an activist, but she stayed the course throughout this period. Now, all the things she predicted are coming to pass.

Kenneth C. FrazierAnother person I found really interesting in the interviews is Kenneth Frazier. Ken is now the head of Merck, the world’s leading pharmaceutical research company, 58 years old.

The interesting thing about Ken is his grandfather was a slave. He was born before 1863, so you can see a lot of years have transpired. Ken is still carrying out the mission and the narrative started by his grandfather, which is really remarkable, to be your own person and to try to use your life to make a difference in the world, carried through his father, who never professionally went above the level of janitor but had enormous influence on Ken.

Ken’s mother died when he was 12. Throughout his life, he has taken the wisdom of his father and grandfather and tried to carry that now into creating life-saving drugs for people. As he says, they may not come to pass for 10 years, 20 years, but they’ll have huge impact on human health for the next 50 years.

Those are just two examples of quite diverse leaders with remarkable life stories.

Monster:  So much of the book was really an eye-opener to me in the sense that true authentic leadership is defined by a capacity to look inward, understand your life story, understand what you call your crucibles, your challenges, and then figure out what are the values that come out of that.

Bill George: That’s the big change. I think back in the 20th century, we thought leadership was something that went from the outside in. We could patch it on with improving your leadership style , how you dressed, how you appeared, how you communicated outwardly. Honestly, I think those things are the outward manifestation of who you are as a person, but a lot of times we don’t understand ourselves, we don’t know what really motivates us.

I think it’s knowing who you are that enables us to be the person we were meant to be, not to try to emulate some other leader, but to be ourselves, that unique person, and the toughest part is to stay on course of our true north, not lose sight of what we’re called to do.

Monster: Are there instances where people do the work of finding or understanding what is their true north and the realization that this position that I’m in isn’t really aligning with what is my true north?

Bill George: Absolutely. A lot of us face that at one point in time. I faced that personally in the middle of my career. I thought I was on route to being CEO of Honeywell, and I may have been, but I was getting pulled off course. I was chasing the CEO title more than being the value-centered leader I was self-called to be. I was blinded by the big company idea and not seeing, hey, this is where I should be, with the kind of mission I can really resonate with.

Monster: There’s a wonderful expression that is in the business vernacular now, which is, “Vulnerability is power.”

Bill George: This is a whole new idea. For many years of my life I was afraid to be vulnerable for fear you’d think I was weak. I think that was the norm when I was coming up.

John Hope BryantI got the idea originally from a man named John Hope Bryant. John is one of the most interesting people I interviewed. John was actually a homeless man, and he came to my class at Harvard, believe it or not, a class for young global leaders of the world economic forum. He was selected to this because of the work he did with the poor and creating financial literacy and did some remarkable work, raised $500 million to help the poor overcome financial illiteracy.
John has used this phrase, and he wrote a book and I adopted it and used it in the classroom and found it had great resonance with people. If they could be willing to be vulnerable, they felt so much more comfortable because they could be who they were.

I think it is a new idea and one of the most powerful ideas in the book.

Monster: Do authentic leaders view their workforce and their position in the organization in a significantly different way than, say, someone who was a CEO 20-30 years ago?

Bill George: I think they definitely do. Before, we were so hierarchic and everything was honestly very bureaucratic. We were trying to manage the whole company by systems and procedures. Now, with humanity, today’s great leaders are really engaged with the people that work for them.

Leaders like Howard Schultz go to two dozen Starbucks stores a week just to hang out and see what’s going on and watch the relationship between the barista and the customers, because he knows that’s the essence of what Starbucks does.

Monster: You mentioned Starbucks CEO, Howard Schultz. I was really touched by the realization that he had after many years of having a tense relationship with his father.

After his father’s death, Schultz realized that his father never had the opportunity to find meaningful work. It seemed to me that then impacted Howard to go on and create a company culture that was really about helping workers find meaningful work.

Bill George: Exactly. I think Howard has done a brilliant job of that. He’s living his life story. There is a congruence for him of what it was like to grow up in the Bayview Housing Projects where he had nothing and there was a lot of crime and drugs and poverty around him and seeing his father lose 30 jobs, saying, “I don’t want that. I want to create great jobs for people.” People at Starbucks who work there really resonate with that. As a customer, you feel that.

Monster: I’m wondering, too, about applying these principles to leaders of smaller companies or companies that are growing – the start-ups. There’s a lot of energy in that space, and I would think it’s just as applicable for those people as well.

Bill George: Absolutely. One of the reasons I wrote the book is I believe there’s no greater vehicle for impacting society than corporations in a free enterprise system properly run. It can go off the rails if it gets too extreme, as well as non-profits, by the way.

I think leaders have such impact. Whether it’s a small business, it’s a mid-size business or startup, if they have a sense of mission, they’re going to attract people to their cause and to want to come there both as employees and as customers.

Good decisions are made collectively by people with diverse life experiences. If we just have someone at the top making all the decisions like command general, it’s not going to work.

Monster: That leads into this idea that’s in the book which I thought was very powerful, the importance of mentoring, both leaders who mentor others in the organization as well as the leaders having a mentor.

Bill George: All relationships are a two-way street, including mentoring. It’s got to be both ways. I think that’s really what mentoring is all about. I recommend to senior people now, CEOs, you need to have some young mentees.

I always had that when I was at Medtronic. I had young mentees in as running partners. I couldn’t understand how the company felt to somebody new coming in, so I had them as mentees and I would just ask them, “What’s it like to be a new employee or a younger employee of this company?” I wanted to see if there were rose-colored glasses as I saw it, but that wasn’t necessarily the way they saw it, so this became very, very important to me to do the job and trying to lead an organization of 30,000 people.

Monster: Would we be going too far to recommend that employers themselves obviously work to find their true north and encourage all of their employees, give them the means to find their true north, regardless of their role in the organization or their level in the organization?

Bill George: Absolutely not. I think we all have to do that, because if we don’t have a sense of where we’re going, why would I follow you? You don’t know what your true north is, why would I follow you?

Monster: How does one start this discovery process? How do you start this journey to becoming an authentic leader?

Bill George: Everything starts with your life story. We go out and we explore who we are as people. I think you have to do two things. You have to write it down and really think through who are the people that influenced me? What was the experience I have? Then get into the difficult times. I think you can’t ignore the difficult times, the crucibles, as I call them. Then as you’re telling your story to another person, actually you reframe it.

You asked earlier about Howard Schultz reframing his image of his father not as a failure but as a guy who never had a shot, never had a chance. Instead of being so hard on his father as he was earlier in life, he reframed it as his father was in a society that didn’t give people a chance, so Howard wanted to change that. His passion came out of that, and we find your passion comes out of your life story.

Monster: It goes back to that wonderful line in the book that really stood out to me, and that is, “The hardest person you will ever have to lead is yourself.”

Bill George: Yes. I created that phrase and at first, people thought, this is odd. What are you talking about? Leadership is not about leading yourself, it’s about leading other people.

In my study of leaders when I came to Harvard Business School 12 years ago, what I found in studying hundreds and hundreds of leaders, is the ones who fail all failed to lead themselves. It wasn’t that they weren’t smart enough. It wasn’t they couldn’t lead other people. It’s that they got off track. They lost sight of their true north and they got their ego tied up, they couldn’t deal with the possibility of failure, all the things we’ve been talking about.

We found that you had to do that first, then you become a great leader of other people, because people can’t ask more of you than who you are as a person. They can’t ask you to be a façade or something else, nor should you let them. You just have to be who you are, but that comes from the capacity to lead yourself.


 

This article was originally posted 9/3/15 on Hiring.Monster.com.