Transcripts

"Commentary"-What Should Be Corporate America's "Main" Concern

SUSIE GHARIB: Tonight's commentator says too many corporate leaders forget about Main Street and focus only on Wall Street. He's Bill George, author of "True North" and former chairman and CEO of Medtronic.

BILL GEORGE, AUTHOR, "TRUE NORTH": For the past decade, we've had a big problem in the corporate world, but no one will name it. The problem is that many leaders believe they are more responsible to Wall Street than to Main Street. But it's Main Street where the customers live and where the money is made. The only way to create long-term value for your shareholders is to create superior value for your customers.

That comes from motivating your employees to create great products and superior customer service. That's why companies like J&J and Target and PepsiCo have been so successful in sustaining their growth. But companies whose primary focus is on Wall Street and meeting its short-term goals are never going to create long-term value. Wall Street may focus on quarterly earnings, but it still takes five years to discover a drug, design a semiconductor, or create a breakthrough product like the iPod. You simply can't do it overnight.

If you don't stay focused on your true north, you'll get buffeted by the winds of change and wind up capitulating to the short-term gain. At Medtronic, it took a decade to create superior products that restored millions of people to health, but that's how we created $60 billion in shareholder value, not by responding to Wall Street.

Unfortunately, many corporate leaders don't have the patience or the vision to do that. They bow to short-term pressures, keep shifting strategies and wind up destroying their value. Authentic leaders stay focused on creating great value for customers. And that's how they create long-term shareholder value. Leaders who focus on Main Street will out- compete every time those who only worship Wall Street. I'm Bill George.