Bill George is the author of two books, True North and Authentic Leadership. He is the former CEO of Medtronic (NYSE: MDT). During his 10-year tenure, he instilled values, inspired employees, delighted customers, and led the company to a 60-fold increase in its value -- equivalent to 35% investment returns per year. Motley Fool CEO Tom Gardner interviewed Bill several months ago to get his thoughts on what makes for great leaders. This is part six of six in our interview series. Read Part 1, where you can also find links to the other parts of our interview.

Tom Gardner: You mentioned Howard Schultz leaving and then returning to Starbucks (NASDAQ:SBUX). Michael Dell, same thing at Dell (NASDAQ:DELL). What advice do you have for anyone who views one of their top responsibilities as CEO to be a good succession planner?

Bill George: Well, both of these people, as well as Steve Jobs, are founders, and so they are certainly in a different category than I was, where I was working as an employee of the company. I didn't found it. I think succession planning is absolutely critical, and I think if you want to look at a company, and whether it is going to be a good long-term investment, look at how effective they are at succession planning. Look at Johnson & Johnson (NYSE:JNJ). They always find the right person inside the company to come in.

GE's (NYSE:GE) succession planning is well known, too. The great companies build leaders from within. I think that is what A.G. Laffley is trying to do now at Procter & Gamble (NYSE:PG). He is trying to decide who is going to take over the company after he does. Succession planning is critical. Most boards do a poor job of it. They don't spend enough time. They are impressed with the wrong people, or they don't have enough lead time because it takes a long time. It has got to be done in advance. You have got to have multiple players. You need to talk about it all the time. CEOs need to be really thinking and focusing on who prospective successors are, not just for themselves, but two generations out. Who are the young people in their 20s and 30s who could take the top jobs in the company? I would say at any company that can't plan for internal succession, the top management has failed, and so has the board.

Gardner: Bill, here's my final question: Do you feel fully utilized in the world today as an authentic leader?

George: Ha-ha! Do I?

Gardner: Yes.

George: Well, I am in phase 3, as I wrote in my book, Tom. I am in that post-primary leadership role, where I am now hopefully in a period of generativity, where I am able to share my leadership with a number of different organizations on whose boards I serve, like ExxonMobil (NYSE:XOM), Novartis (NYSE:NVS), Goldman Sachs, and some nonprofits like the Carnegie Endowment for International Peace. Also, I have more time to write. And I am mentoring about four dozen young people right now, which is a very rewarding thing for me. There are also all the people I teach at Harvard, particularly the MBAs, but also in the executive education capacity. So I feel pretty fully utilized right now, but it is very rewarding to be able to go from being CEO of a company and feel like you have been successful, leaving your 50s, and then embarking on a new career or new phase of your career.

Gardner: So you have written two books, Authentic Leadership and True North. And you also have the workbook version of True North. Can I get that on Amazon?

George: You can get it on Amazon. You can get True North and the personal guide. The personal guide has about 60 exercises in it to help lead people through discovering their own leadership and their true north and what they really want to do with their life.

Starbucks and Dell are Motley Fool Inside Value recommendations. Starbucks is a Motley Fool Stock Advisor selection. Johnson & Johnson is a Motley Fool Income Investor pick. The Fool owns shares of Starbucks and Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. The Fool has a disclosure policy.