Former Medtronic CEO Bill George joins Yahoo Finance Live to discuss corporate leadership, where Meta CEO Mark Zuckerberg went wrong, the generational shift from Baby Boomers to Gen X and Millennials, and challenges CEOs face today.

Video Transcript

BRIAN SOZZI: Former Medtronic chairman and CEO Bill George is doubling down on leadership wisdom in his new book "True North, Emerging Leaders," which include stories from 220 interviews spanning from emerging to senior leaders. He joins us in studio now to discuss.

Bill, good to see you. Welcome back.

BILL GEORGE: Thank you.

BRIAN SOZZI: It's been a while. Good to see you. So take us through this book. What made you write it? And who is getting leadership right now in corporate America?

BILL GEORGE: Well, we're going through a massive change in leadership right now from the Baby Boomer generation, which have ruled the roost with command and control for the last 30 years, to the emerging leaders, Gen X, Millennials, Gen Z. I think it's overdue. We're overdue for a change because today's employees, young leaders, and customers are looking for a different style of leadership.

They want to be empowered. They want to find some kind of alignment between their purpose and the company's purpose, the values. They don't want to work in an organization that discriminates against anyone for any reason. And they're concerned about issues like climate change.

And if the senior leaders and the old Baby Boomer generation are just going to direct them and tell them what to do, they'll leave. We've seen that with the great resignation. So that's why I wrote the book and interviewed a lot of emerging leaders and also some forerunners of the new way of thinking, people like Mary Barra, General Motors, and Paul Polman at Unilever, who's the advocate for sustainability.

So I'm very excited about the book. I think it's honestly, modestly speaking, I think it's my best book yet.

BRIAN SOZZI: That's great. It's been a pleasure to follow your career the past 15 years. And what I've always liked about you, you tell it like it is. So I went on your Twitter account this morning. And I think you said that Mark Zuckerberg doesn't get it. What doesn't he get from a leadership perspective? And what does he need to change?

BILL GEORGE: Facebook and Mark are not grounded in values. So he's all over the map. As Jim Burke once said, when you don't know your true north, you'll swim in chaos. And they are. So he's over here one day, over there the next. I think an organization needs to clearly say, this is what we stand for. You may disagree, but this is what this company stands for.

And I think he really has hurt a lot. And frankly, young people are moving away from Facebook.

BRIAN SOZZI: Does he need to listen to his team more? Is that one of the things that he could do to fix it?

BILL GEORGE: Yeah. Mark Got rid of his team.

BRAD SMITH: Got rid of his team.

BILL GEORGE: I mean, he has Sheryl there. He had some senior mentors on the board. He pushed them all out. He's got a group of young people that are more like Mark's followers. So I think it's too bad that Mark really is derailing right in real time. And I think, frankly, the wealth went to his head.

Once you start chasing money being the wealthiest guy around, we've seen the dangers of that. So he's got to realize, he's got to have a site. This was a site for social connections. And now he's going to take it away and be like TikTok. I mean, give me a break, you know?

BRAD SMITH: Yeah. I would wonder as well, your perspective and what you've also studied around where diversity can also make, especially at the executive level in companies that are now understanding the range of customers that they serve, the range of employees that they have as well, where that needs to also be prioritized within organizations.

BILL GEORGE: Well, you have to have diversity, but that's not sufficient. You have to have an inclusive organization. And if people don't feel like I'm fully included, my opinions are just-- you're not looking at me for the color of my skin, my gender, my national origin, my sexual identity, no, I am who I am. And I want to be who I am in this organization. And so I want to be accepted for that. And if I don't feel included, I'll leave, OK?

And a lot of Baby Boomer leaders didn't get that. They're kind of looking to people for the externals. And I think that's all got to change. So I think the key is not-- we have diversity. And frankly, the young people I know-- I mean, they accept people for who they are. They say, that's your thing. This is mine.

BRAD SMITH: Absolutely.

BILL GEORGE: It's OK, you know? I love you for who you are. And you can have different points of view. And that's what organizations have to do. And they have to change radically in that regard, not just a little but a lot.

BRAD SMITH: Absolutely

BRIAN SOZZI: Full disclosure, I'm an aging Millennial. I'm always looking to improve my leadership. My career is changing. I'm in a different place now than I was 10, 15 years ago. What should I be doing to become a better leader so that I'm in a different chair, different spot 20 years from now?

BILL GEORGE: Well, I'm assuming you have a pretty good idea who you are, what's your values, your principles, and your beliefs are. And then share those with people. Be open, be empowering of other people. Realize they don't want you to exert power over them. They want you to be empowering, that you appreciate them for what they contribute.

Build a team around you. You don't have to have a title to build a team. And I think the new model of leadership is a coach model. People won't work with you unless they know you care about them. And then you've got to organize them into where they're best, their strengths, just like a coach would, and align them around a common purpose and values.

And if you can do that-- but there's nothing wrong with challenging people. I believe-- I'm very challenging. I believe in challenging everyone to reach their full potential. You can do better. You can keep growing. Don't stop growing now.

And then finally, get out there and work with your people. I think too many CEOs are sitting up in their offices on the top floor with their C-suite people having meetings. We found a study at Harvard Business School, they spent 68% of their time in meetings. Why? Get out on the front lines.

Who was it that saved us from COVID? It was the front line people. Your front line, those are the people that count. We flipped the organization chart upside down and put the front line on top. And everyone there is to support them.

BRAD SMITH: When you think about the environment right now and the number of macroeconomic conditions that have been cited from leadership, from executives, whether that's earnings-related, or whether that's just how their business is doing right now, there's also this larger question of where they also have to keep in mind the fiduciary duty that they have to investors and acting in good faith there. But at the same time, what would your messaging be if you were still leading a company through this time?

BILL GEORGE: We have to serve the needs of all of our stakeholders, first of our customers. And that's what motivates our employees. At Medtronic, people are not motivated by making $391 a share. They're motivated by restoring people to full life and health. That's what excites them.

And so that's where the innovators come from, the people in the production line, where quality is everything. People supporting the doctors, get everyone motivated around that. And then you'll create sustainable shareholder value, not the kind of stuff we've seen in some of these organizations that go up and down like a yo-yo kind of like AMC Entertainment.

I mean, have sustainable-- and then meet-- and I think that's what it takes. And be an organization that cares about your community and the people you serve.

BRAD SMITH: Since you mentioned that, I wonder what you do think about the CEOs that are cozying up to the new cohort of investors that are hopping into the fray, that are chatting about their shares all the time.

BILL GEORGE: Well, I think they ought to be cozying up to their customers and focusing more on that. I think hyping your stock is a real danger. I've seen Jeff Immelt try to do that. He buys back $50 billion of stock, and they can't make the dividend. I think just focusing on short-term shareholder things, that's what caused General Motors to go into bankruptcy.

So you've got to focus on the long term. And yeah, I want to have a broad, diverse investor base. I love retail investors. I want them to come and buy Medtronic's stock but only because they're looking for a long-term gain. Playing that market is really dangerous stuff, I tell you.

BRAD SMITH: A lot of wisdom here on the desk this morning. Bill George, who is the former Medtronic chairman and CEO joining us here. Thanks so much for the time.

BILL GEORGE: Thank you for having me, guys. It's great to be with you.

BRAD SMITH: Definitely good to have you back.