Discover your true north expanded and updated edition

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Discover Your True North

Expanded and Updated Edition

Bill George

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Copyright  2015 by Bill George. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

George, Bill (William W.) [Finding your true north.] Discover your true north/Bill George.-Second edition, Expanded and Updated Edition. pages cm

Revised edition of the author’s Finding your true north, 2008. Includes index. ISBN 978–1–119–08294–1 (hardback); ISBN 978–1–119–08297–2 (ePDF);

ISBN 978–1–119–08295–8 (ePub) 1. Leadership. 2. Organizational effectiveness. I. Title. HD57.7.G45814 2015 658.4’092-dc23 2015013574

Printed in the United States of America

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This book is dedicated to my family. First to my wife, Penny, whose love, passion for life, and counsel have enabled all the Georges to discover our True North. And to our sons, Jeff and Jon, and our daughters-in-law, Renee and Jeannette, who are making important contributions to the world as

authentic leaders.

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BEST-SELLING BOOKS BY BILL GEORGE

Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value (2003)

True North: Discover Your Authentic Leadership (2007) (with Peter Sims)

Finding Your True North: A Personal Guide (2008) (with Nick Craig and Andrew McLean)

7 Lessons for Leading in Crisis (2009)

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Contents

Preface The Remarkable Legacy of Warren Bennis vii

Foreword David Gergen xi

Introduction 1

Part One: Your Journey to Leadership 13

1. Your Life Story 15 Lead Story: Howard Schultz, Chair and CEO of Starbucks

2. Losing Your Way 41 Lead Story: Rajat Gupta, Worldwide Managing Director of

McKinsey

3. Crucibles 57 Lead Story: Daniel Vasella, Chair and CEO of Novartis

Part Two: Developing as an Authentic Leader

77

4. Self-Awareness 79 Lead Story: Arianna Huffington, Founder of The

Huffington Post

5. Values 103 Lead Story: David Gergen, Harvard Professor and Presidential

Advisor

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6. Sweet Spot 123 Lead Story: Warren Buffett, Founder and CEO of Berkshire

Hathaway

7. Support Team 142 Lead Story: Tad Piper, Chair and CEO of Piper Jaffray

8. Integrated Life 159 Lead Story: John Donahoe, CEO of eBay

Part Three: Your True North Meets the World 179

9. I to We 181 Lead Story: Nelson Mandela, President of South Africa

10. Purpose 199 Lead Story: Ken Frazier, Chair and CEO of Merck

11. Empowerment 219 Lead Story: Anne Mulcahy, Chair and CEO of Xerox

12. Global Leadership 243 Lead Story: Paul Polman, CEO of Unilever

Afterword Stakeholders in Society 265 Lead Story: Jack Ma, Founder of Alibaba

New Leaders Featured in Discover Your True North 275

Participants from the Original Research for True North 277

Where Are They Now? 279

References 287

About the Author 293

Acknowledgments 295

Index 297

vi CONTENTS

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Preface

The Remarkable Legacy of Warren Bennis

Warren Bennis was one of the great pioneers in the field of leadership. Small in physical stature, he was a giant in his intellect, his heart, and his spirit. Just as Peter Drucker was the father of management, Bennis was the father of leadership.

Bennis transformed our understanding of what it means to be a leader. He was the first scholar who said leadership is not a set of genetic characteristics, but the result of a lifelong process of self- discovery. Rejecting the notion that leaders are born with certain traits, he opened the door to the real source of leadership: within you. He wrote:

The most dangerous leadership myth is that leaders are born—that there is a

genetic factor to leadership. This myth asserts that people simply either have

certain charismatic qualities or not. That’s nonsense; in fact, the opposite is

true. Leaders are made rather than born.

He showed how leaders develop through their life experiences, are shaped by their crucibles, and emerge ever stronger to take on responsibilities of leadership. He said unequivocally, “Leadership is character,” adding,

It is not just a superficial question of style, but has to do with who we are as

human beings, and with the forces that have shaped us. The process of becoming

a leader is much the same as the process of becoming an integrated human

being.

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Bennis’s early life was deeply influenced by his association at Antioch College and later at the Massachusetts Institute of Tech- nology with Douglas McGregor, author of The Human Side of Enterprise. While in Cambridge, he connected with Abraham Maslow (creator of Maslow’s Hierarchy of Needs), Peter Drucker, Paul Samuelson, and Erik Erikson, whose theories on the eight stages of human development influenced Bennis’s own generativity in his later years. He went on to write 30 books. Many of today’s influential leadership authors, such as Tom Peters, Nitin Nohria, David Gergen, Jim O’Toole, Bob Sutton, Jeff Sonnenfeld, and Doug Conant are indebted to Bennis for their ideas.

As president of the University of Cincinnati, he realized his personal truth, “I was never going to be able to be happy with positional power. What I really wanted was personal power: having influence based on my voice. My real gift is what I can do in the classroom and as a mentor.” Following a heart attack in 1979, he found his home at the University of Southern California.

Bennis’s influence on business leaders was widespread and profound. Thousands of leaders who never knew him were inspired by his writings and adopted his approach to leadership. Many chief executive officers (CEOs) have told me personally what a profound influence he had on their leadership.

I first encountered his writing in 1989 when I readOn Becoming a Leader. It was a revelation: Finally, I had found a philosophy of leadership I could resonate with. Throughout my years at Medtronic and Harvard Business School (HBS), I have built on his philoso- phies in my work and teaching.

We first met at theWorld Economic Forum in the late 1990s. He suffered from heart problems, and had recently had a Medtronic defibrillator implanted. In December of 2000 I invited him as a guest patient to an annual Medtronic event, where he graciously thanked the employees who designed and manufactured his defibrillator in front of 10,000 people.

He was fond of saying he had Medtronic “in his heart” and then describing how his defibrillator saved his life half a dozen times. I once

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witnessed this in person in Cambridge. While he was speaking, his defibrillator went off, and he slumped to the ground, dropping his papers. Ever the gracious soul, he picked up his papers, apologized for the disruption, and continued his talk. When it went off a second time 10 minutes later, the Cambridge Fire Department escorted him to safety.

In 2002, my wife, Penny, and I attended a seminar Bennis and David Gergen led at the Aspen Institute. At the time I was eager to write a book on my experiences at Medtronic but was struggling to find a publisher. My intent was to offer practical approaches to leading and develop leaders that enabled people to be their authen- tic selves, rather than emulating others. With Bennis’s encourage- ment, Jossey-Bass published Authentic Leadership as part of the Warren Bennis Signature Series. Bennis served as executive editor and wrote in the foreword, “Timeless leadership is always about character, and it is always about authenticity.”

He became my mentor, friend, and intellectual colleague, and gave me the courage to become a writer. As executive editor for my four books in the Warren Bennis Signature Series, he generously shared his time and his insights. In the midst of writing True North, Peter Sims and I spent five days with him going over the conceptual ideas and stories used in the book. Unlike many great scholars who protect their ideas, Bennis genuinely wanted me to expand on his and make them fully accessible to the new generation of leaders, which he later called “the crucible generation.” We shared a common aim to influence the next generation to lead with clear purpose to serve others and make the world a better place.

Two months before he died, Bennis asked my wife and me to discuss leadership in the next-to-last class he ever taught. Although Bennis was beset with bodily ills, his mind and humanity were as sharp as ever.What other professors have you knownwhowere still teaching at age 89? Over dinner that evening Penny asked what he would like on his tombstone. He replied, “Generous Friend.” A generous friend is just what Bennis was to thousands of friends, students, scholars,

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and mentees whom he influenced with kindness, buoyancy of spirit, and wisdom.

Bennis’s last book, Still Surprised, has a photo of him walking barefoot on the beach with his pant legs rolled up, leaving behind large footprints in the sand. These footprints serve as a calling to incorporate his ideas in our leadership. Ultimately, this will become Bennis’s greatest legacy. They bring to mind a stanza from Henry Wadsworth Longfellow’s A Psalm of Life:

Lives of great men all remind us

We can make our lives sublime,

And, departing, leave behind us

Footprints on the sands of time.

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Foreword

When Peter Drucker was in his prime, CEOs often traveled across the country to California to seek his counsel on how to lead and manage their companies. He was an iconic figure in the business world, the father of management studies, whose 30 books were highly influential in shaping modern global companies. As I found in conversation late in his life, he had a wisdom about him that was spellbinding.

Upon his death 10 years ago, people naturally asked, “Who will carry on Peter’s work?” Soon it became apparent that the most obvious candidate was Warren Bennis, and once again, CEOs made the trek to California to meet quietly with one of the sweetest, wisest men I have been blessed to know. Warren was the father of leadership studies in American universities, the man who gave them academic legitimacy through his two dozen books, and the best mentor and friend one could possibly have.

Upon his death a year ago, the question naturally arose again: “Well, who will now carry onWarren’s work?”With the publication of his sixth and most important book, Discover Your True North, we may well have our candidate: Bill George. There are obvious differences: Bill himself would modestly point out that both Drucker and Bennis were lifelong scholars deeply schooled in theory; by contrast, Bill first made his mark as a highly successful CEO of a large company before becoming a major thought leader. Yet all three have been at the forefront in shaping leadership and management prac- tices of successive generations.

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By chance,Warren introduced me to Bill along with Dan Vasella of Novartis at a dinner in Davos, Switzerland, where we were all attending the World Economic Forum in 2001. Bill was coming off his years as CEO ofMedtronic and was beginning to pull together his thoughts and experiences about leadership so that he could share them with younger business leaders.

Soon Bill published his first book, essentially a memoir, titled Authentic Leadership, and it was quickly a best seller. Without realizing it, he had launched an entirely new career, one with even greater impact than his first. In reading Discover Your True North, you will find not only a distillation of his ideas about leadership but also revealing portraits of a galaxy of more diverse leaders and what they have learned on their own journeys toward a True North. This book bids to be a classic, standing alongside The Effective Executive by Peter Drucker and On Becoming a Leader by Warren Bennis. I am proud to call Bill a friend and trusted adviser— and to salute him on the completion of his best book.

Here’s what is essential for a reader to understand: Experience shows that Bill’s ideas not only work well in practice but also apply across the board, helping not only business leaders but those in the civic and public sectors as well. Most books that come from the academy are intended for a small audience of specialized scholars. That is the way advances in knowledge are often made. But non- scholars wonder how this progress applies to them.

Bill George’s work—like Warren’s and Peter’s—intentionally crosses the bridge between the academy and practice. Through writing, teaching, and mentoring, he is helping leaders become better at leading themselves and, in turn, their organizations. At present more than two dozen CEOs of major global companies are calling on him regularly for counsel and advice.

The evidence shows that leaders from across the world are hungry to discover their True North and to make it their polar star. After initial teaching stints at the International Institute for Management Development (IMD) in Europe and at Yale School of Management, Bill came to the Harvard Business School (HBS) as a

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professor of management. There in 2005, he introduced his course, Authentic Leadership Development, as a second-year elective. Students embraced it with growing enthusiasm, such that it has become one of the most popular courses at HBS and attracts a growing number in executive education.

Bill no longer teaches the master of business administration course but instead is focusing on executive education, where CEOs and senior executives focus on their leadership, including three courses each year for CEOs. Now there is a cadre of other faculty members who are devotees, led by Scott Snook (a retired army officer) and Tom DeLong and blessed by Dean Nitin Nohria.

Fortunately, Bill’s course has migrated to the Harvard Kennedy School (HKS), where I am a professor of practice and codirector of our Center for Public Leadership. Dana Born, a retired air force general and the first woman in any military branch to gain flag rank while at a military academy, has just started teaching the course, and once again students are responding with gusto. Moreover, Bill has introduced True North to an annual training program at the HKS for Young Global Leaders chosen by the World Economic Forum. Attendees love what the program offers, especially the deep-dive, small-group conversations every morning over breakfast.

Altogether, some 6,000men andwomenhavenowbeen trained at Harvard alone in Bill’s ideas about authentic leadership. Longitudinal studies are not yet possible onhowmuch hemay have shaped lives and leadership, but anecdotal evidence points to encouraging results.

One group that has had lots of exposure to Bill and his work is students who have pursued joint degrees at HBS and HKS and in their third year have received scholarships from Bill and Penny George. These George Fellows, typically in their late twenties, have a home at our Center for Public Leadership and meet frequently, often with Bill and Penny. Bill generously mentors a number of them and remains close long after they have graduated. Altogether, the George Fellowship now has 100 alumni.

To be sure, many had transformative experiences that strength- ened their leadership before they became George Fellows. Even so,

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their recent achievements have been impressive.Here are a fewwhom Bill continues to mentor: Seth Moulton won an upset victory in his campaign for Congress and has attracted a national following. Maura Sullivan is now serving as an assistant secretary at the Department of Veterans Administration. Nate Fick is CEO of Endgame as well as former CEOof theCenter for aNewAmerican Security and author of One Bullet Away. Brian Elliott founded Friendfactor, a lesbian, gay, bisexual, and transgender (LGBT) nonprofit for straight people that has been pivotal in winning battles for gay rights. Rye Barcott is running a venture fund for solar installations in North Carolina; was selected as a Young Global Leader at Davos; and is author of It Happened on theWay toWar. JohnColeman is a principal of Invesco in Atlanta and coauthored How to Argue Like Jesus. Stephen Chan is chief of staff for theBoston Foundation. Peter Brooks works for awater technology company and directs the Warrior-Scholar Project. Jona- than Kelly runs a private equity company based in Singapore. And Claude Burton is directing marketing for a rapidly growing informa- tion technology firm in Brazil. Can there be any doubt that the ideas here apply to emerging leaders from every sector of life and across national boundaries?

As this book is being published, the world is slipping ever more deeply into a leadership crisis. For people everywhere, life is becom- ing ever more volatile and unpredictable. Instead of putting a firm hand on the wheel, many leaders seem unable to steer toward safe ports in the storm. A survey of global opinion the World Economic Forum published in 2015 found that 76 percent believe we have had a serious loss of leadership. Business leaders have recovered some of their ground lost since 2008–2009, but they rank only modestly above political leaders.

This book can perhaps help us find our way. If individual leaders can recognize when they have drifted away from True North and make successful course corrections, as Bill George argues, nations can as well. Surely, authentic leadership beats what we have now.

David Gergen

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Introduction

Have you discovered your True North? Do you know what your life and your leadership are all about?

Leadership starts with being authentic, the genuine you. The purpose of Discover Your True North is to enable you to become the leader you want to be. In the process you will discover your True North—the internal compass that guides you successfully through life.

Your True North

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. Although others may guide or influence you, your truth is derived from your life story. As Warren Bennis said, “You are the author of your life.”

Discovering your True North takes a lifetime of commitment and learning. As you are tested in the world, you yearn to look at yourself in the mirror and respect the person you see and the life you are leading. Some days will be better than others, but as long as you are true to who you are, you can cope with the most difficult circumstances life presents.

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The world may have very different expectations for you than you have for yourself. Whether you are leading a small team or at the top of an organization, you will be pressured by external forces to respond to their needs and seduced by rewards for fulfilling those needs. These pressures and seductions may cause you to detour from your True North. When you get too far off course, your internal compass tells you something is wrong and you need to reorient yourself. It requires courage and resolve to resist the constant pressures and expectations confronting you and to take corrective action when necessary.

As CEO of Sara Lee Brenda Barnes said, “The most important thing about leadership is your character and the values that guide your life.” She added:

If you are guided by an internal compass that represents your character and

values, you’re going to be fine. Let your values guide your actions and don’t

ever lose your internal compass. Everything isn’t black or white. There are a lot

of gray areas in business.

When you discover your True North, you find coherence between your life story and your leadership. A century ago psychol- ogist William James wrote:

I have often thought that the best way to define a man’s character would be to

seek out the particular mental or moral attitude in which . . . he felt himself

most deeply and intensely active and alive. At such moments there is a voice

inside which speaks and says: “This is the real me!”

Can you recall a time when you felt most intensely alive and could say with confidence, “This is the real me”? Professionally, I had that feeling from the first time I walked into Medtronic in 1989 and joined a group of talented people dedicated to the mission to “alleviate pain, restore health, and extend life.” I felt I could be myself and be appreciated for who I was and what I could contribute.

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I sensed immediately that my values aligned with the organization’s values.

The Rise of Authentic Leaders

When I wrote Authentic Leadership in 2003, the most common question I received was “What do you mean by authenticity?” To me, being authentic was the natural way of leading, but many people in that era of charismatic leaders considered leading authentically a new idea.

Today authenticity is seen as the gold standard for leadership. No longer is leadership about developing charisma, emulating other leaders, looking good externally, and acting in one’s self-interest, as was so often the case in the late twentieth century. Nor should leadership be conflated with your leadership style, managerial skills, or competencies. These capabilities are very important, but they are the outward manifestation of who you are as a person. You cannot fake it to make it, because people sense intuitively whether you are genuine.

The hierarchical, directive leadership style so prevalent in the past century is fading fast in favor of today’s collaborative leaders, who believe in distributed leadership at all levels. The old notion of leaders as the smartest guys in the room—as Enron CEO Jeff Skilling typified—has been replaced by leaders with high levels of emotional intelligence (EQ).

Because of this move toward greater authenticity, we are blessed with much higher caliber leaders today. In discovering their True North, they have committed to leading with purpose to make a difference in the world and leave behind lasting legacies. The quality of today’s leaders is reflected in the lasting results they are achieving within their organizations.

For this all-new edition, my colleague Zach Clayton and I interviewed and studied 47 authentic leaders that represent the

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diversity of the new generation of global leaders—among them, Unilever’s Paul Polman, PepsiCo’s Indra Nooyi, Alibaba’s Jack Ma, the Huffington Post’s Arianna Huffington, Merck’s Ken Frazier, and Sojourners’ Jim Wallis.

Before writing True North in 2007, our research team of Peter Sims, Diana Mayer, Andrew McLean, and I set out to get definitive answers to the question of how to develop authentic leaders. We interviewed 125 authentic leaders to learn the secrets of their leadership. This research constitutes the largest in-depth study ever undertaken on how business leaders develop.

We circled back to most of the leaders interviewed for the first edition to get updated on their progress as leaders. Much to our pleasure, we found that the vast majority of them are doing excep- tionally well. Some have moved to new positions, some have retired from their organizations and taken on new challenges, but almost all of them continue to make vital contributions to business and society. Only a handful have failed.

In Discover Your True North, we retain the structure of the first edition, but go much deeper into what we have learned about leadership in the past decade. It includes many insights that my Harvard Business School colleagues and I, as well as practitioners and scholars around the world, have learned about leaders: how they discovered their True North, developed as authentic leaders, became global leaders, and stayed on the course of their True North throughout their lifetimes.

Although the 47 new leaders included in Discover Your True North are more international and more diverse than the first group, their stories and beliefs about leadership showed a high level of congruence with the earlier interviewees. (The back of the book contains the list of interviewees for this updated edition.)

Rather than waiting to get to the top to become leaders, they looked for every opportunity to lead and to develop themselves. Every one of them faced trials, some of them severe. Many cited these experiences, along with the people who helped them develop, as primary reasons for their success. Without exception,

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these leaders believed being authentic made them more effective and successful.

As the result of our research into these leaders, we have a clearer understanding of what constitutes an effective and authentic leader. We know that each leader is unique, just as each human being is. The reality is that no one can be authentic by trying to be like someone else. You can learn from others’ experiences, but you cannot be successful trying to be like them. People will only trust you when you are genuine and authentic.

If you create a false persona or wear a mask, people will quickly see through you. As Reatha Clark King, chair of the National Association of Corporate Directors, said:

If you’re aiming to be like somebody else, you’re being a copycat because you

think that’s what people want you to do. You’ll never be a star with that kind of

thinking. But you might be a star—unreplicable—by following your passion.

Amgen chairman and CEO Kevin Sharer, who gained priceless experience at the beginning of his career by working as JackWelch’s assistant, saw the downside of General Electric’s cult of personality in those days. “Everyone wanted to be like Jack,” he explained. “Leadership has many voices. You need to be who you are, not try to emulate somebody else.”

The Leadership Transformation

What has caused this dramatic change in today’s leaders? As CEO of Medtronic in the 1990s, I witnessed firsthand many

corporations choose the wrong people as CEO. Under pressure from Wall Street to maximize short-term earnings, boards of directors frequently selected leaders for their image, style, and charisma rather than their substance and character. Many of these leaders put their companies at risk by focusing on the trappings and spoils of leader- ship instead of building their organizations for the long term. When

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those who failed walked away with enormous financial settlements, confidence in business leaders further eroded.

These stock market pressures boomeranged in the fall of 2008 when many financial institutions became insolvent, forcing the U.S. government to intervene to save the economic system from complete collapse. In the deep recession that followed, millions of Americans depleted their savings and unemployment rose above 10 percent. The root cause of this crisis was not financial instru- ments, such as subprime mortgages, but failed leaders, just as it was in the early 2000s.

As a result, public trust in business leaders fell to its lowest level in 50 years. In business, trust is the coin of the realm. The success of any organization depends upon customers’ trust in the products they buy, employees’ trust in their leaders, investors’ trust in those who steward their funds, and public trust in capitalism as a fair and equitable means of creating wealth for all. More than seven years after the global financial crisis, the public still has low trust in business leaders.

The positive side of these crises is the high quality of leaders who have emerged in the new generation and how well they have learned the lessons of these debacles. These leaders lived through the corporate governance debacle of 2003, when Enron and WorldCom went bankrupt, and survived the global financial collapse of 2008.

From these negative experiences when many leaders went awry, today’s leaders learned what not to do. They saw many of their predecessors get caught in the trap of chasing money, fame, and power, and lose sight of their True North. They learned the perils of putting self-interest ahead of the institutions they were chosen to lead. Most important, they learned that being authentic is the most effective and sustainable way to lead.

As we will see through their stories, today’s leaders have dis- covered their True North and are pursuing it to the best of their abilities. And yet, leading an organization today is much more difficult than when I was CEO. Today’s leaders have to cope with vastly increased pressures for short-term results and far greater

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legal and regulatory compliance, all of which can pull them off the course of their True North.

In reading Discover Your True North, you may wonder why we focus so much on your life story and on developing yourself, as opposed to leading others. As we have learned from working with many leaders, the hardest person you will ever have to lead is yourself. Once you are fully comfortable with who you are—and feel good in your own skin—leading others authentically becomes much easier.

Authentic leaders who follow their True North have learned from their crucibles and setbacks. They have the resilience to resist pressures and seductions. They know they must be authentic to gain legitimacy with those with whom they work and the multiple stakeholders who have vested interests in their organizations. They are committed to building sustainable value for their institu- tions, while producing near-term results.

The fact that business today is far more global than it was a decade ago has significant implications for leadership throughout the world. As World Economic Forum USA chair Jean-Pierre Rosso reflected, “Today’s leaders are more global, more open, and more concerned about societal issues than their predecessors.”

The new generation of leaders introduced here are much more diverse than their predecessors, more global in their outlook and national origin, and more likely to be promoted from within. Many more women, people of color, and leaders who live and work outside their country of origin are among today’s authentic leaders. They have global visions and a desire to make lasting contribu- tions. As a result, authentic global leaders who understand today’s global business world are rising to the top of organizations around the world.

As Fortune’s Manager of the Century, Jack Welch has long been thought of as the prototypical leader of the twentieth century. Unilever’s Paul Polman is emerging as such a leader in this new century. Figure I.1 shows some of the ways this generation of leaders differs from its predecessors.

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What is an authentic leader?Authentic leaders have discovered their True North, align people around a shared purpose and values, and empower them to lead authentically to create value for all stakeholders.

Authentic leaders are true to themselves and to what they believe in. They engender trust and develop genuine connections with others. Because people trust them, authentic leaders are able to motivate them to achieve high levels of performance. Rather than letting the expectations of others guide them, they are their own persons and go their own ways. As servant leaders, they are more concerned about serving people than about their own success or recognition.

This is not to say that authentic leaders are perfect. Far from it. All leaders have weaknesses and are subject to human frailties and mistakes. Yet by acknowledging their shortcomings and admitting their errors, their humanity and vulnerability come through, and they are able to connect with people and inspire them.

Discover Your True North is written for anyone who wants to be an authentic leader and discover his or her True North. It is for leaders at all stages of their lives, from students aspiring to lead to those at the top of organizations. You are never too young, or too old, to take on leadership challenges and lead authentically. Discover Your True North is grounded in the hundreds of years of experience of

Figure I.1 Differences in Twentieth-Century and Twenty-First-Century Leaders

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the authentic leaders we interviewed as well as my own 50 years in leadership roles. For you, the reader, it is an opportunity to learn from authentic leaders and to create your own development plan to become an authentic leader.

The bottom line is this: You can discover your True North right now.

• You do not have to be born with the characteristics or traits of a leader.

• You do not have to be at the top of an organization. • You can step up and lead at any point in your life.

As CEO of Young & Rubicam Ann Fudge said:

All of us have the spark of leadership in us, whether it is in business, government,

or as a nonprofit volunteer. The challenge is to understand ourselves well enough

to discover where we can use our leadership gifts to serve others. We’re here for

something. Life is about giving and living fully.

Discover Your True North

Discovering your True North is hard work. You may take many years to find it, as was the case for me.

This book does not contain six easy steps to discover your True North or other simple formulas. It takes the opposite approach. Discovering your True North requires you to maintain your indi- viduality and retain your authenticity. This requires introspection, support, and feedback of friends and colleagues. Ultimately, you must take responsibility for your own development. Like musicians or athletes born with great abilities, you must devote yourself to a lifetime of development to realize your potential.

Part I of Discover Your True North examines the journey to authentic leadership. It begins with the leaders’ life stories, which are unique to them and more powerful than any set of characteristics or

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leadership skills they possess. Next, the three phases of the leader’s journey are dissected, looking at key steps in each phase of the journey. During their journeys, many leaders lose their way. To understand how derailment happens, we analyze five types of leaders who see themselves as heroes of their own journeys. Finally, by exploring the crucibles and life-changing experiences leaders have had, we see how they overcame setbacks and built the resilience to become authentic leaders.

Part II offers five elements of your internal compass that help you develop as a leader and get back on trackwhen you are at risk of losing yourway.This sectionprovides you the insights to stay true towhoyou are as you confront challenges in theworld around you. It includes five key areas of your development as a leader: self-awareness, at the center of your compass, and at the four points, your values and principles, sweet spot, support team, and integrated life (see Figure I.2).

Figure I.2 Book Map: Part I, Part II, and Part III

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Part III describes your transformation from an I leader focused on yourself to a We leader focused on serving others. Only when you make this transformation will you be ready to discover the purpose of your leadership and empower people around a shared purpose. Finally, as the world becomes truly global, you can develop the special qualities required to be an authentic global leader. In the afterword, we challenge leaders to serve society by making capitalism a force for solving the world’s most challenging problems.

After each chapter, you will find a series of exercises that you can use to build your leadership development plan. Better yet, purchase the companion workbook,The Discover Your True North Fieldbook: A Personal Guide to Finding Your Authentic Leadership, written with my colleagues Nick Craig and Scott Snook, which contains in-depth exercises corresponding to each chapter in this book.

By dedicating yourself to discovering your True North, you will become an authentic leader who can make a positive difference in the world and leave a legacy for others to follow.

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Part One

Your Journey to Leadership

In our interviews with leaders about their development, the most striking commonality was the way their life stories influenced their leadership. Your life story is your foundation. It shapes how you, as a human being, see the world. And in leadership, the most human of all endeavors, it can propel you forward or hold you back.

In Part I we examine three topics:

1. How you frame your life story. Your journey through life will take you through many peaks and valleys as you face the world’s trials, rewards, and seductions. Reflection and introspection will help you understand your life experiences, and in some cases reframe them.

2. The risk of losing your way. Everyone experiences pressures and difficulties in life, and all of us have to deal with fears and uncertainties. In your life journey, you will be confronted with seductions that threaten to pull you off course from your True North. We will examine five archetypes that can cause you to lose your way.

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3. The role crucibles play in shaping your leadership. The way you deal with your greatest adversities will shape your character far more than the adversities themselves. Much like iron is forged by heat, your most significant challenges and your most painful experiences present the greatest opportunities for your personal growth.

As you gain greater clarity and insight about your life’s journey, you will discover the focus of your True North.

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1 YOUR LIFE STORY

The reservoir of all my life experiences shaped me as a person and a leader.

—Howard Schultz, CEO, Starbucks

The journey to authentic leadership begins with understanding yourself: your life stories, crucibles, and setbacks. This knowledge gives you the self-awareness to discover your True North.

Howard Schultz’s Leadership Journey

In the winter of 1961, 7-year-old Howard Schultz was throwing snowballs with friends outside his family’s apartment building in the federally subsidized Bayview Housing Projects in Brooklyn, New York. His mother yelled down from their seventh-floor apartment, “Howard, come inside. Dad had an accident.” What followed has shaped Schultz throughout his life.

He found his father in a full-leg cast, sprawled on the living room couch.While working as a delivery driver, Schultz’s father had fallen on a sheet of ice and broken his ankle. As a result, he lost his job— and the family’s health care benefits. Schultz’s mother could not go to work because she was seven months pregnant. His family had nothing to fall back on. Many evenings, Schultz listened as his parents argued at the dinner table about how much money they needed to borrow. If the telephone rang, his mother asked him to tell the bill collectors his parents were not at home.

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Schultz vowed he would do things differently. He dreamed of building “a company my father would be proud to work at” that treated its employees well and provided health care benefits. Little did he realize that one day he would be responsible for 191,000 employees working in 21,000 stores worldwide. Schultz’s life expe- riences provided the motivation to build Starbucks into the world’s leading coffeehouse.

“My inspiration comes from seeing my father broken from the 30 terrible blue-collar jobs he had over his life, where an uneducated person just did not have a shot,” Schultz said. These memories led Schultz to provide Starbucks employees access to health coverage, even for part-time workers.

That event is directly linked to the culture and the values of Starbucks. I wanted

to build the kind of company my father never had a chance to work for, where

you would be valued and respected, no matter where you came from, the color

of your skin, or your level of education. Offering health care was a transforming

event in the equity of the Starbucks brand that created unbelievable trust with

our people. We wanted to build a company that linked shareholder value to the

cultural values we create with our people.

Unlike some who rise from humble beginnings, Schultz is proud of his roots. He credits his life story with giving him the motivation to create one of the great business successes of the last 25 years. But understanding the meaning of his story took deep thought because, like nearly everyone, he had to confront fears and ghosts from his past.

Brooklyn is burned into Schultz. When he took his daughter to the housing projects where he grew up, she surveyed the blight and said with amazement, “I don’t know how you are normal.” Yet his experience growing up in Brooklyn is what enables Schultz to connect with practically anyone. He speaks with a slight Brooklyn accent, relishes an Italian meal, dresses comfortably in jeans, and respects all types of people. He has not forgotten where he came from or let his wealth go to his head: “I was surrounded by people who

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were working hand-to-mouth trying to pay the bills, felt there was no hope, and just couldn’t get a break. That’s something that never leaves you—never.

“From my earliest memories, I remember my mother saying that I could do anything I wanted in America. It was her mantra.” His father had the opposite effect. As a truck driver, cab driver, and factory worker, he never earned more than $20,000 a year. Schultz watched his father break down while complaining bitterly about not having opportunities or respect from others.

As a teenager, Schultz clashed often with his father, as he felt the stigma of his father’s failures. “I was bitter about his underachieve- ment and lack of responsibility,” he recalled. “I thought he could have accomplished so much more if he had tried.” Schultz was determined to escape that fate. “Part of what has always driven me is fear of failure. I know all too well the face of self-defeat.”

Feeling like an underdog, Schultz developed a deep determina- tion to succeed. Sports became his early calling, because “I wasn’t labeled a poor kid on the playing field.” As star quarterback of his high school football team, he received a scholarship to Northern Michigan University, becoming the first in his family to earn a college degree. His fierce competitiveness never faded; it just shifted from football to business.

Working in sales at Xerox, Schultz felt stifled by the bureaucratic environment. While others thrived in Xerox’s culture, Schultz yearned to go his own way. “I had to find a place where I could be myself,” he said.

I could not settle for anything less. You must have the courage to follow an

unconventional path. You can’t value or measure your life experience in the

moment, because you never know when you’re going to find the true path that

enables you to find your voice. The reservoir of all my life experiences shaped

me as a person and a leader.

Schultz encountered Starbucks Coffee during a sales call at Pike Place Market in Seattle. “I felt I had discovered a whole new

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continent,” he said. He actively campaigned to join the company, becoming its director of operations and marketing. On a buying trip to Italy, Schultz noticed the Milanese espresso bars that created unique communities in their customers’ daily lives. He dreamed of creating similar communities in America, focusing on creating coffee breaks, not just selling coffee.

When he learned he could acquire Starbucks from its founders, Schultz rounded up financing from private investors. As he was finalizing the purchase, he faced his greatest challenge when his largest investor proposed to buy the company himself. “I feared all my influential backers would defect to this investor,” he recalled, “so I asked Bill Gates Sr., father of Microsoft’s founder, to help me stand up to one of the titans of Seattle because I needed his stature and confidence.”

Schultz had a searing meeting with the investor, who told him, “If you don’t go along with my deal, you’ll never work in this town again. You’ll never raise another dollar. You’ll be dog meat.” Leaving the meeting, Schultz broke into tears. For two frenzied weeks, he prepared an alternative plan that met his $3.8 million financing goal and staved off the investor.

If I had agreed to the terms the investor demanded, he would have taken away

my dream. He could have fired me at whim and dictated the atmosphere and

values of Starbucks. The passion, commitment, and dedication would have all

disappeared.

The saddest day of Schultz’s life came when his father died. Schultz shared with a friend the conflicts he has had with his father, and his friend remarked, “If he had been successful, you wouldn’t have the drive you have now.” After his father’s death, Schultz reframed his image of his father, recognizing strengths such as honesty and commitment to family. Instead of seeing him as a failure, he realized his father had been crushed by the system. “After he died, I realized I had judged him unfairly. He never had the opportunity to find fulfillment and dignity from meaningful work.”

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Schultz channeled his drive into building a company where his father would have been proud to work. By paying more than minimum wage, offering substantial benefits, and granting stock options to all its workers, Starbucks offered employees what Schultz’s father had never received and used these incentives to attract people whose values are consistent with the company’s values. As a result, the employee turnover at Starbucks is less than half that at other retailers.

Among Schultz’s greatest talents is his ability to connect with people from diverse backgrounds. He tells his story and the Starbucks story at special events and visits two dozen Starbucks stores per week. Each day he gets up at 5:30 AM to call Starbucks employees around the world. He said, “Starbucks gave me the canvas to paint on.”