The overarching problem, they said, was to reestablish public trust in business. With tongue in cheek, George said that it's not possible to reestablish trust in politicians, and since there were no messiahs forthcoming from either party that business would have to continue to innovate and grow so that there would be a better economic future for all.
George made a very important distinction: he believes in, and lived his career in stakeholder-based capitalism, which history shows is the most sustainable model for economic and social development. He cannot abide what he rightly calls "crony capitalism," which is what ran rampant, especially in the global financial services sector.
He also had little use for a public company governance model which drives every decision on shareholder value, or what he called "the shareholder for the last five minutes." To paraphrase what I heard, the response of George and Baker is come up with a way to nurture, nourish and grow the current and future generation of leaders. Executive education programs, like that of the Harvard Business School, have quite a good business doing just this: of the 5,500 executives who have come through HSB executive programs, 63% have been in leadership track programs. So, the speakers were talking about another mechanism for achieving their goal.
Although George mentioned Enron, the parade of bad actors has continued and become even more toxic. Think about Bear Stearns, Lehman Brothers, AIG, Countrywide Financial, Washington Mutual,, IndyMac Bank, and FannieMae, to name a few. Speaking as a former CEO of a large global medical technology company, he believes that failed business leaders lose both self-awareness and a grounding to their core values.
George himself has incorporated ideas from the work of Dan Goleman on emotional intelligence (EI) versus IQ. Goleman, in turn, incorporates meditation techniques into some of his training for children and adults. So, George has developed a personal practice of meditating twice a day. He also keeps a daily journal. Finally, both George and Baker believe that it is critical for leaders, but I would say for most of us, to have a small, trusted group of people who are trusted advisors and confidants, with whom we can openly discuss our most important issues. These groups are called True North Groups, and the presenters talked about practical issues in forming, kicking off and maintaining a True North group, which would serve to nourish, sustain and ground its members according to shared values.
Here's a list of some ideas George and Baker discussed:
- The group should be composed of people whom you trust, like and are willing to learn from. This is an "HR issue" in the beginning, i.e. selecting members based on individual and team criteria;
- Every member has to commit time to attend, prepare for meetings, be open, always maintain confidentiality, and be ready to offer support at any time;
- All members sign a contract clearly stating required commitment and expectations and are held to it;
- Ethical behavior is something that has to be modeled by all members of the group, both inside and outside. A team can't have members who are excessively needy, because others will fall away over time.
- Early groups met weekly, but this may not be possible. Minimum commitment to have an effective group is 4-5 hours per month. A meeting should be about 1 1/2 hours.
- Have a prepared agenda set and circulated for every meeting; rotate this responsibility each meeting;
- Never stop challenging your assumptions about the world and about yourself;
- Everyone should initially tell the other members their life stories: where did you lose your way in your professional and personal lives? what were some of the crucibles in your life? if you could find a sweet spot where your professional and personal goals were perfectly aligned, what would that look like? what do you do to empower others?
- Stay away from newspaper issues.
- A True North group is not a spiritual group or a book club, although some early groups came out of spiritual groups.
- Active listening and the ability to give non-judgmental feedback are critical attributes of good team members.
I'm doing some research on the IndyMac Bank collapse as a possible business school case study, and in the research process I am really questioning something Bill George raised early in his talk. What if we are permanently in a "crony capitalism" model? If public figures can skim hundreds of millions in executive compensation based on bogus earnings and a share price which eventually collapses, without civil or criminal prosecution, by taking a plea and paying a fine/tax on your ill-gotten gains, why not do this as many times as you can? If you read some of the written material and testimony from some of the worst actors in the subprime mortgage lending meltdown, they don't believe they did anything wrong. Would having been in a True North group have changed Angelo Mozillo? Who would he have chosen to be in the group with him?
I guess that we are back to self-awareness, or the lack of it. But really, we are talking about the lack of a real moral foundation. Such a foundation cannot, it seem to me, rest on business values alone. There's the rub.