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 exceptionally 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, 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 Jack Welch'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.”
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 leadership instead of building their organizations for the long term. When 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 instruments, 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 discovered 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 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 institutions, 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 contributions. 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.
Figure I.1 Differences in Twentieth-Century and Twenty-First-Century Leaders
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
