Re: Has capitalism run amok?
Bill George is professor of management practice at Harvard Business School, where he has taught leadership since 2004. He is the author of four best-selling books: 7 Lessons for Leading in Crisis, True North, Finding Your True North, and Authentic Leadership. With co-author Doug Baker he recently published True North Groups.
Mr. George is the former chairman and chief executive officer of Medtronic. He joined Medtronic in 1989 as president and chief operating officer, was chief executive officer from 1991-2001, and board chair from 1996-2002. Earlier in his career, he was a senior executive with Honeywell and Litton Industries and served in the U.S. Department of Defense.
Mr. George currently serves as director of ExxonMobil, Goldman Sachs, and the Mayo Clinic and also served on the board of Novartis and Target Corporation. He is currently a trustee of the World Economic Forum USA and Guthrie Theater and a former Trustee of Carnegie Endowment for International Peace. He has served as board chair for Allina Health System, Abbott-Northwestern Hospital, United Way of the Greater Twin Cities, and Advamed.
He was elected to the National Academy of Engineering in 2012. He has been named one of "Top 25 Business Leaders of the Past 25 Years" by PBS; "Executive of the Year-2001" by the Academy of Management; and "Director of the Year-2001-02" by the National Association of Corporate Directors. Mr. George has made frequent appearances on television and radio and his articles have appeared in Wall Street Journal, Business Week, Fortune, Harvard Business Review, and numerous publications.
Mr. George received his BSIE with high honors from Georgia Tech, his MBA with high distinction from Harvard University, where he was a Baker Scholar, and honorary PhDs from Georgia Tech, Bryant University, and University of St. Thomas. During 2002-03 he was professor at IMD International and Ecole Polytechnique in Lausanne, Switzerland, and executive-in-residence at Yale School of Management.
He and his wife Penny reside in Minneapolis, Minnesota.
Question: Has capitalism run amok?
Bill George: Well certainly when people are in there to take for themselves and are not concerned about the long-term histories of the institutions, they become totally focused on satisfying Wall Street – the quarterly earnings – and they wind up destroying companies. But they can’t think beyond Detroit, Michigan and these great automobile companies of the past that were the _______ of the American economy are going away. So it can operate in the United States. Why can’t General Motors? I think it’s been a real tragedy that people have been so short-sighted in their orientation and not look for the long term. How do you build an organization that can really contribute to society, not contribute to us as leaders. We recently saw the CEO of Home Depot take $210 million of the company for failing. Now that’s not capitalism; that’s capitalism run amuck. And too often compensation is paid to people not for success, but for failure. And that’s just wrong. Boards of directors who do that should be let go; should be turned down and we should get a new board of directors. And we’ve seen it obviously in the cases of the Enrons of the world where people actually corrupt in the way that the system . . . But beyond that, the law takes care of people like that. I’m much more concerned with the hundreds of CEOs that capitulated and played the short-term Wall Street game and destroyed their companies. They stopped investing in R&D. They stopped investing in people. They stopped investing in technology, and they wind up without a business. And they’re out of business now.
Recorded on: 7/6/07
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