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Intro (00:00:00) – Unchurned is presented by UpdateAI.

Bill George (00:00:04) – Classic Pyramid Parametal organizations are with the CEOs on top and everyone else. I think we ought to flip it upside down and put all the customer facing people in the frontline people on top, because they’re the ones that matter. You go into a retail store, you don’t see the ceo, you go into an airline, you don’t see the ceo, you see the frontline people, and that’s your impression. You can be a two-star Michelin restaurant, but the service is terrible. You won’t go back. So I think everyone needs to rethink reconceptualize the organization as being into business at customer service.

Intro (00:00:37) – Welcome to Unchurned, a show about the leaders and innovators of companies who have forged incredible customer relationships and stories you can use to advance your own career. Here’s your host, Josh Schachter.

Josh Schachter (00:00:50) – Hi everybody, and welcome to this episode of Unchurned. I’m Josh Schachter, host of Unchurned c e o, and founder of blog.update.ai, and I’m incredibly excited about today’s guest. Uh, today’s guest is Bill George. Bill is currently an executive fellow at Harvard Business School. And Bill, I wanna learn what Executive fellow means on this amazing title. He’s the author of the True North Series. It’s a series of books. And his latest one, uh, is about how to lead authentically in today’s modern workplace. He’s served on the boards of companies like Target, Novartis, ExxonMobil, Mayo Clinic, Goldman Sachs. He was the c e O of Medtronic. He’s been named one of the top business leadership luminaries, I’ll say, in, in the country. And he’s received several lifetime achievement awards. So, um, you know, kind of humble brag there. Bill, thank you so much for being on this episode.

Bill George (00:01:40) – Josh, I’m thrilled to be on with you. Thank you for inviting me.

Josh Schachter (00:01:43) – Did I miss anything, bill? The, the, the accolades were, were, you know, I I I’m sure I cut something off. I forgot something. No,

Bill George (00:01:48) – No. It’s not about the resume. It’s about, uh, who we are as people. So, uh, let’s go with that.

Josh Schachter (00:01:54) – Even better, even better. But what does an executive fellow at Harvard Business School do per se here?

Bill George (00:01:59) – Well, I was a professor of management practice Josh, for a long time than I went halftime. And more recently, I’ve kind just part-time with the faculty when I get called back. So I’ve kind moved away time things right now, now. And so that’s, well, I’ve had almost 20 years there and I’ve loved it and I’ve learned so much and having great colleagues and, uh, it’s been fantastic.

Josh Schachter (00:02:20) – Wonderful. And so you’ve developed this true North framework for leadership. I, I read your initial book, your original book in the series years ago. I’ve recently caught up on the new one. Oh. Which is also a wonderful edition. For those that are not familiar with the True North Framework, and though many are, uh, at, at this time, can you give us a quick little rundown of, of, of what it is,

Bill George (00:02:43) – Josh? Your true north is who you are at your core level. It’s your moral compass. And I think we focus too much on what we are. We live in an identity society, you know, what’s our race, religion, national origin, gender, sexual identity? I think we need to focus on who we’re as people. Cause all those external things don’t tell us much about it. But I think to do that as individuals, we have to process our life story, really dig deep into who are the influencers our parents, coaches, mentors along the way, experiences. And then I think one of the most significant things we talk about are crucibles. It’s that most difficult time in your life when all the pretense stripped away. You got fired from your job, or you had a healthcare threatened or you lost a sibling, your parents got divorced. Even something as simple as you got rejected by girlfriend or these things unfortunately become well for whatever. They become very important in life and they often shape your future career. Sometimes if you don’t process it, you’ll be repeating the same mistakes when you’re in your forties. So I think it’s important for everyone to process their, and realize there’s a pearl inside that, okay, that, that, uh, illness I had as a boy may lead me to a healthcare career, uh, or this loss I had. My sense being rejected and losing seven elections alone shock me. I had to think differently about leadership. And so that’s what I tried to do.

Josh Schachter (00:04:07) – And, and you share so many heartwarming stories and examples, including your own in the book, uh, of those crucibles and, and those narratives that you didn’t mention business a single time there, . And this is a business book, and you teach and taught at a business school. So what am I missing here? I’m

Bill George (00:04:24) – A fervent capitalist, and I really, that business has created more personal wealth for people, more jobs, more opportunities than all of their forms of, uh, activity in life combined. So I, I believe business does that, and that’s why I went into business. But one of the things I started about 20 years ago, the real problem we had, we got millions of managers business turned out million new last 20 years, but we lack are real leaders, leaders that lead with a moral compass, that have a good sense of themselves and aren’t out just for their own advancement. And so I think that’s the key to business, is getting more leaders. And I wrote this new book to encourage, uh, what I call emerging leaders that starts with Gen X. So that’s early fifties, all the way down to Gen Z and particularly the millennial generation because we’re going through a massive change right now in leadership from the baby boomers, which have been much more into charisma and ego and how much money they can make to the millennials that are much more focused on purpose and values and wanna make a difference, and they don’t wanna work for a company.

Bill George (00:05:30) – People say, why is there such high turnover in companies? Well, the reason there’s high turnover is cause company have no purpose. General Electric World’s greatest company in the 20th century destroyed in the 21st century, uh, only purpose making money and people, that’s not exciting to people anymore.

Josh Schachter (00:05:44) – What, what’s, what’s the catalyst for that change in the way that Gen Zers think about this? Well,

Bill George (00:05:50) – I think it, there’s, we’ve been leading through crises, if you think not just Gen Z, but millennials, one crisis after another from nine 11 to the financial meltdown in 2008 to, uh, more recently covid the murder of George Floyd, right? My hometown in Minneapolis. Uh, these things had a tremendous effect on people climate change, you know, the older generation aren’t so concerned about cause they aren’t gonna be around. And we see the effects of climate change here in California, which was under carrying a drought, uh, down in Mammoth, they had 870 inches of snow this winter scraped for skiing, if you can dig out. But, uh, the point is, it, uh, it really has, uh, uh, disrupted everything. So I think younger people, the millennials are really concerned about this and they see that the old style management, no, no one today wants to work for a power driven egomaniac type of leader who is just interested in, in having you do, make them look good. And, uh, you know, in the old days, we just wanted a job. Today young leaders are saying, no, I wanna do something meaningful. I don’t wanna spend my life just, uh, serving you. I don’t wanna actually serve, uh, you know, a greater purpose. Purpose.

Josh Schachter (00:06:57) – Yeah. Such an operative word there. So, um, the true North framework, you know, at a glance it doesn’t shout out to me that it has interaction with customers, but how do you apply the true North framework to how we, or how does it apply to how we as organizations, as companies interact with customers? And the reason I’m asking this is because as you know, this show caters to a lot of customer success managers, customer success leaders and executives, uh, whose whole job is being customer-centric. Yeah,

Bill George (00:07:26) – Well, actually the core idea, you know, we are servant leaders. Uh, we’re not there for people to serve us. We’re there to serve our customers. And I tell people in all my classes at Harvard or any talk I ever give, uh, unless you create greater value for your customers, uh, you’ll not sustain shareholder value. That’s the general electric story. That’s the Boeing story. Uh, sad stories, but people have created great customer values do in fact create, uh, great big value for their investors. That starts with, you can only be as successful as your customers. If your customers are going outta business, you’re not gonna be successful. So I think I can, Medtronic, let me give you an example. We shifted our whole focus

Josh Schachter (00:08:08) – And just, just for reference, you, you were, just so everybody knows this, you were, you were CEO of Medtronic for over a decade, right?

Bill George (00:08:13) – I was, and a couple years before that, as Chief Operating Officer, my focus was we need to get back to serving our customers. That’s the focal point. Not internal management, not only management processes and ideas, no, our job serve our customers. And so my idea of doing that was to work with the doctors where they were providing pacemakers, stents, defibrillators, uh, to their, uh, to their patients. And every doctor that I’ve ever met with, they’re nice people, are not so nice people. They have one goal and that’s to make sure their patients get restored to full life and health. And that was Medtronic’s mission. So we saw ourself as a junior partner to these doctors. And so if, if they did well, we would do well. And if we didn’t do well, I remember once, uh, we were trying to get into the catheter business and we had a catheter that fell apart in the doctor’s hands, and he was so angry he threw it across the table at me.

Bill George (00:09:04) – This is about three months after I went there, uh, had blood all, so I duck. But the point is, I saw between 700 and a thousand procedures where you go meet with a doctor, put on the greens, and uh, and go see the procedure. I wasn’t selling anyone anything, but I learned the business that way. So I tell people, say you’re into retail business, you are you out walking stores? Say you’re in the, say you’re General Mills and you’re providing cereals. Are you any food company, PepsiCo? Are you out walking stores every day? Do you get out and see where your customers are doing? Every time you make a trip, you get out and see what’s going on. If you don’t, you’re probably in the wrong job. If you’re sitting in your office trying to get information just from a lot of reports, you don’t get it.

Bill George (00:09:44) – You need to be out talking to your customers. And I don’t care what business you’re in, this is true, you need to be talking to your customers every day because that’s where you get the real information. That’s where I learned all the problems at Medtronic, but also learned the greatest innovative ideas that Medtronic came from our doctors. Now, they couldn’t design a defibrillator with very complex microprocessors in it, but they tell you the idea problem they had, go back and solve a problem for ’em, guess what? They’re gonna buy our products. And, uh, they’re quite happy to do that. And so we really turned that around and got our customers really deeply engaged with our people, our engineers.

Josh Schachter (00:10:21) – Yeah, I mean, what you’re saying to me sounds actually one of the reasons why customer success is so crucial. Because it is the, at the front lines of the customer. They’re, they’re having natural conversations with the customer and capturing feedback, the good, the bad, and the ugly every day to relay back to the team. And the important part is that you create mechanisms in ways for that feedback to actually percolate through the organization. So it doesn’t just get stuck at the front lines, which I see very often.

Bill George (00:10:44) – So Josh, you a nasty, we teach CEOs at Harvard and we got the CEOs to tell us what they did for every 15 minutes for 90 days. A whole large group of CEOs. This is shocking data to me. 72% of the time was spent in meetings with their direct reports or people up in their conference room in their office, 5% with employees and 3%, I wanna hit with that number 3% with customers. They actually spend 6% with consultants. They’re spending twice as much time doing consultants as they’re talking to their own customers. And so I confront CEOs of this. So with this data, and I say, you know,

Josh Schachter (00:11:21) – What’s the profile? What Bill, what’s the profile of those CEOs? Are we talking about like the the the monolithic com like companies, the old school GEs or, or is it across the board? Well,

Bill George (00:11:32) – It’s pretty much across the board. Uh, GE actually never deemed to come, but you know, all like all the retailers, food companies, you know, target came and Walmart and, and uh, you know, PepsiCo and people like that and Unilever. And so we’ve had CEOs, uh, great companies and it’s pretty, pretty cross section of American global industry. We get a lot of people outside the United States. Uh, but you know, this really upset me cause I keep saying, why are you not out with your customers? The CEO of one of the world’s largest food company, or excuse me, Frank, uh, retail food companies said he didn’t have time. I said, how do you have time not to, you can’t figure out what’s going on. Just looking at statistics, you know, it’s really critical that you’re out with your customers all the time.

Josh Schachter (00:12:18) – Well, 3%, only 3% of their time is spent talking directly to customers.

Bill George (00:12:23) – Josh, this is really shocking to me. I asked, he goes, how do you know what’s going on? The bigger the organization? Uh, Sears I saw used to get trapped in a hundred story tower in Chicago and they didn’t know what was going on. They weren’t, they had to be out with their customers like every day. So, you know, we have this classic pyramid parametal organization chart where the CEOs on top and everyone else, I think we ought flip it upside down and put all the customer facing people and the frontline people on top. Cause they’re the ones that matter. You go into a retail store, you don’t see the ceo, you go into an airline, you don’t see the ceo, you see the frontline people and that’s your impression. You can be a two-star michel in restaurant, but the service is terrible. You won’t go back.

Bill George (00:13:03) – So I think everyone needs to rethink reconceptualize the organization as being into business at customer service. See, when I talk to Medtronic employees, they’re not interested in company making $3 and 91 cents a share. They don’t get that they’re interested in serving customers if they can. And by the way, it’s the same for people in manufacturing. They know that the quality of a product, it’s defective. Someone’s going to die. And so they’re going to, uh, put the focus on why the quality of every product has to be purchased. Cause that is another form of customer service. The people in this service business at Best Buy that come into your home and, uh, help solve problems in your home. That’s, that’s key. They’re, they may not be buying anything, but they’re really the, the service people are the ones that are really making the difference. So, and same with engineers, same with the innovators, same with the people working at Apple to make a better iPhone. Yeah. You know, and I had a little problem with iPhone the day I went to an Apple store. They had the guy at the door fix it within 60 seconds and I didn’t know what it was. So why don’t companies think like this? I don’t get it. And I hope everyone on this call is thinking like this

Josh Schachter (00:14:07) – And that and, and that the guy at the store, the guy at the store is the face of the organization for you, right? It’s, it’s not the, yeah,

Bill George (00:14:15) – I, I admiration for Tim Cook, write him up in the book, but I didn’t see Tim Cook. I saw guy at the store, he’d probably been there nine months, you know what I mean? , he knew this stuff. I didn’t know my stuff. He knew it. Oh yeah, there’s a software thing here. You push these two buttons and it fixed. Now do the software update. Ok, we got it.

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Josh Schachter (00:14:58) – That all sounds nice in theory. Inverting the pyramid. Tactically, practically, how do you make this happen? And maybe how did you go about doing that with Medtronic? Well,

Bill George (00:15:07) – First of all, I role modeled it. Second of all, we put the emphasis on everyone on serving customers, being out there with them. And at every, every meeting say we had a new product meeting, uh, how is this gonna help our patients in this case help our doctors serve our patients? Is it gonna make their jobs easier? Can they be more effective? And in budget meeting corporate staff comes in and says, okay, we wanna add another, another person in regulatory, another person in quality. Really? Is that gonna help us serve our customers better? That was the question we always asked. Demonstrate to us how this will be better customer service. And that turned around the whole company. And as we, but we brought people along with us. Cause the company’s gone from like 4,000 up to 90,000 today. So you gotta bring a lot of new people along.

Josh Schachter (00:15:55) – When I, when I look at your book and when I read your book, you know, for me as the CEO o of a small company, I think to myself, oh, this is great. I can tell my founder’s story, my crucibles that I’ve gone through. I can set the tenor of, of of our, you know, moral compass and have that percolate through the organization. Um, so I get it as like business leader, so to speak, as if you’re an individual contributor or you’re the, you’re a team leader, but you don’t really have mandate over the entire organization. What can you do so that your true north has an impact?

Bill George (00:16:31) – Well you can, yeah. I, first of all, I think everyone in your organization, everyone in a large organization should think of themselves as a leader. And I know I’ve had people that worked on production lines at Medtronic, thought they were quality leaders cause they were the role model for everyone else. They did the training, no direct reports. So I think we need to get away from this notion, how many vehicle have under what are your revenue? I I really oppose that. And you can make a difference. You can make a difference with customers who are in contact with you can make a difference in the kinda es of your own organization. You can ask the right questions in a business meeting. Have we thought about is this gonna make our customers lives easier or harder? You can do that. You don’t have to have a management title to do that.

Bill George (00:17:14) – Uh, and that’s what really makes it. And you can, that’s, but that’s the mission of the company. Medtronic’s mission is basically to serve patients, uh, and restore them a full life and health and to partner with doctors who do that. Uh, and so, but every mission should focus externally, not internally. The problem we got in business, we’re too focused internally too. Focus on running spreadsheets and numbers and all the, that’s interesting. Customer, customer research is interesting, but you have to trust but verify and did it really work? And I said to the CEO one very large, uh, uh, retailer, I said, uh, you know, you’re, you say you don’t have time to be a customer. You ever go into the bathrooms in your stores? Cause I tell you, a lot of your customers go in there and they see how it looks. Uh, that’s what matters. You have to experience it yourself.

Josh Schachter (00:17:59) – And you’re saying even if your, your, your true north is not necessarily completely compatible or compatible might be the wrong word, but congruent, maybe that’s the same as compatible, but it’s not the same as the true north of the company. You can still establish your own true north and your own operating principles and morals that you stand by. And, and, and ideally those are customer-centric and external compasses.

Bill George (00:18:23) – You just hit the key thing is my purpose aligned with the purpose of my organization? And then I ask the question, if it’s not, what can I do to bring it in greater alignment? Don’t just quit. What can I do to get greater alignment? I find my place in this organization. But if you’re too far estranged from that, maybe I’ll go somewhere else. You know what I mean? If the, say you’re really committed to serving customers your company and you realize that’s the key to revenues, which in turn is key to profitability, but your company’s only interested in cutting costs and short term profitability, maybe you should go somewhere else. You know, we’re seeing this happen now. Organization like Meta where they’re laying off lots of people, but they’re gonna have a lot of good people to quit too. Cause they’re, they’ve lost sight of their purpose and they’re no longer serving customers.

Josh Schachter (00:19:09) – Okay, so what’s the first step in establishing my own personal true north? You, you give a little bit of a rubric for this in the book. Can you walk us through that?

Bill George (00:19:16) – Yeah, first step is to process your life story. And then second step is to go back and, uh, really understand the greatest crucible of your life. And I would say, uh, if you do those two things, then let’s move to self-awareness. How do I gain self-awareness and how do I increase my emotional intelligence? See today it’s not sufficient. In fact, it’s contrary to be try to be the smartest person in the room. That’s how you get in trouble. I think today you have to have a high level of emotional intelligence. And by that I mean you have to have passion for the business. Again, we’ve been talking about that the whole time. You don’t have passion for the business. You’re business. That’s why switch from Honeywell to Medtronic for Medtronic business, then you have to have compassion for your customers. Everyone’s gone through difficult times.

Bill George (00:20:04) – If you put out a low quality product, you better think about that. Now, what it’s gonna cost you, you better recall ’em all. Uh, and that’s critical. Third, I think you need to have real empathy for your employee. And I, you can inspire them around an external purpose like serving customers. If you just try to inspire them around the hours at work or the processes, it’s not gonna get there. And then finally, I think you have to have courage, courage to transform your business. Uh, because businesses change over time. Customers change over time. And that’s the quality that a lot of great leaders, a lot of great managers lack, so they never become great leaders. So if you have those qualities and realize today you have to, to do the analytics, you wanna look at the data, you wanna make critical decisions at the same time, you have to have all these qualities with the hearts.

Josh Schachter (00:20:55) – It’s so important. Bill, I wanna leave us with this last question. What’s your true north? My

Bill George (00:21:00) – True north is helping people reach their full potential. See, actually, I always thought of myself as a leader. I led organizations for 35 years, but then at a certain point in time, I completed my time Medtronic and said, you know, I wanna, I wanna help other people. And as someone said to me, you seem to get vicarious pleasure from the accomplishments to others. So I want your podcast to be great. I want the people I’m mentoring, I want their companies to do great and I want them to succeed. So that’s, but I see a lot of people not reaching their full potential. So I can be very challenging and ask, why don’t you step up and do this? Have you thought about that you could bring a better game to. So that’s my goal, reach their potential, do that. We’re great organizations.

Josh Schachter (00:21:43) – And, and, and I see that, I see that true north in you and, and obviously in your background and, and and all the people that that you’ve taught and, and just in your spirit and, and how you’ve interacted with me in this, in this, um, brief conversation. Uh, and I assume that also means that your true north can change over time, correct? Not

Bill George (00:21:59) – So much. Not so much. No. Okay. Have greater awareness of it. I was mentoring and helping people when I was in high school and tutoring people. I had to be good in math and you know, and, uh, in college I helped a lot of people. And so this, you know, I I changed organizations, changed my focal point that this true north of helping people reach their focal attention. I used to challenge people, uh, when I was in college, you know, freshman and sophomores, juniors, you can become a great leader. Step up and do it. Sometimes I put too much pressure on my head to learn not to do that. But hey, I’ve been doing that my whole life. So, uh, you know, I never, Medtronic, I was never the expert and how to design breakthrough new products, what I wanted to do, empower the people who had those qualities to go out and do it. So if I could do that, I felt we’d a great organization. So I felt like it really sound, how do we use, develop great leaders at all levels and frankly, professional people who don’t wanna be in leadership roles, but great for organization.

Josh Schachter (00:22:57) – Bill George, creator of the true North framework, a c e o ahead of his time. Absolutely. And you’ve done so much for the business world in, in your leadership, um, principles and, and I greatly appreciate being on the show.

Bill George (00:23:09) – Thank you. Thanks for having this great show and having me on. Josh.

Josh Schachter (00:23:13) – Hey guys, it’s Josh. Don’t hang up. If you enjoyed this episode, you know what? Even if you didn’t, I’d love for you to give us a rating in iTunes or Spotify. And after you do, email me josh blog.update.ai with the name of your favorite charity, and my company Update AI will make a donation on your behalf. I’d love to connect with each of our listeners. Send me a LinkedIn request and I’ll accept it immediately. Just go to www.blog.update.ai/linkedin and it’ll redirect my profile. Thanks.