The 21st-century definition of leadership has to be different from what we understood it to be in the 20th century. In the 20th century, we were influenced by two world wars and the Depression. “Follow the great man over the hill.” We should all be like Alfred Sloan running General Motors.
That attitude led us into a couple of dangerous areas. We dichotomized workers and managers. The managers were the leader class and the workers were a cost of doing business. We then got caught up at the end of the century in the idea of a charismatic, all-powerful leader who could leap tall buildings in a single bound and transform the company overnight. In today’s context, this is nonsense.
Even at Medtronic, I had to make this transformation myself. Just because the leader gets most of the publicity for Medtronic’s achievements doesn’t mean that he is the one creating the great innovation, the great product, the breakthroughs. Great organizations are made up of people empowered at all levels. It is leadership that makes the greatness sustainable. It’s the Howard Schultz formula at Starbucks. It’s the Target formula.
The leader’s job today, in 21st-century terms, is not about gaining followership. Followership is an outmoded notion. Leadership starts with gaining alignment with the mission and values of the organization: What are we about? What do we believe as a group? Goldman Sachs, where I serve on the board, has achieved solid alignment around its mission: “The clients’ interests always come first.” At Medtronic, we aligned around the idea of “alleviating pain, restoring health, and extending life.” It was clear that anyone who didn’t buy into that could work somewhere else.
Once we’ve achieved that alignment, we can be empowered to lead in our own way to fulfill the mission of the company. If you are a factory line worker in our Irvine, Calif., plant, that may mean that you set such a high-quality standard making heart valves that all your co-workers on the line emulate what you do. You may have no direct reports, but you’re a leader all the same.
An attitude that leaders serve customers first is especially vital to sustaining success. Employees are only empowered by serving customers. They’re not motivated by getting the stock price up, cutting the budget, or increasing the earnings. They don’t see tangible rewards from succeeding by those metrics, even if you make them shareholders. They get turned on about customers. In a Starbucks store, the barista gets excited about creating an environment that’s fun for the customer. I was at Starbucks earlier this morning and saw a barista greet a customer by saying, “Oh, Rick, nice to see you. Do you want the Rick special?” Rick comes there every morning because he has a relationship with that Starbucks employee.
S+B: So many values you describe seem to be timeless and not limited to business. Are values and business really so closely woven together?
GEORGE: They are, but we must recognize a few new realities. First, employees and organizations have changed. We don’t have an apprentice–craftsman model. Instead, we have knowledge workers who know more than their bosses.
Second, people have more options. When I was growing up, if you could just get a job with General Motors, you had it made for the rest of your life. Today, young people will work for seven or eight different companies during their lifetime. Instead of being viewed as hopping from job to job, they’re viewed as gaining great experience. Meanwhile, they want to step up and lead right now. They don’t want to wait 10 to 20 years to be a director or a vice president. That’s why so many people have formed their own companies.