Being a leader in innovation has motivated the employees of 3M to be creative throughout the company’s history. Intel employees are unwavering in their efforts to keep their company on the forefront of technology and to use that technology to serve their customers. Microsoft employees are inspired by integrating all the software their users need into a single, highly functional system.
Even in an industry in which managing money is the purpose of the business, one can see stark differences between the mission-driven and shareholder value–driven approaches. Two major U.S. banks, Wells Fargo & Company and U.S. Bancorp, have roots in Minnesota. For the past 10 years, Wells Fargo has focused on providing superior customer service, expanding its network of branch banks throughout the Midwest and West. U.S. Bancorp, on the other hand, has concentrated on cost cutting and centralizing services. At first, it appeared U.S. Bancorp had the superior strategy, because its stock soared when cost cutting led to large profit increases. But lack of attention to the customer and problems with employee morale eventually caused revenue and earnings growth to stall. Its stock lost over half of its value, leading to the company’s sale to a smaller Milwaukee banking group. In contrast, Wells Fargo’s growth was steady, even during the recent recession. Its shareholder value is now double that of U.S. Bancorp.
Authentic leaders know that only by having a meaningful mission — and pursuing it with passion — will companies survive and increase the value they can deliver to customers, employees, and their shareholders.
Bill George ([email protected]) is the author of Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value (Jossey-Bass, 2003) and the former chairman and CEO of the U.S. medical technology firm Medtronic Inc. Currently, he is Executive in Residence at the Yale School of Management and serves on the boards of Goldman Sachs Group Inc., Novartis AG, and the Target Corporation.