it’s hard to have a discussion about
leadership when we don’t really have a
common definition of what a leader is
you know I read the same books as
everybody else you know a lot of them
tell us you sort of learn your style of
leadership how to adapt your style of
leadership to fit the situation at hand
that’s not leadership that’s management
to be a leader you need one thing and
one thing only followers that’s it
it has nothing to do with rank or
authority you are a leader when others
raise their hands and volunteer to go in
the direction you set the question is
why should anyone follow you there are
many ways to get people to do the things
that we want or to follow us in fact it
all boils down to two things you can
either manipulate people or you can
inspire them those are your options
we’re all familiar with manipulations in
the business world things like dropping
your price if you drop your price low
enough people will buy from you right
this is the concept behind a sale things
are priced to move
promotions two for one free toy inside
buy one get one free and in the
business-to-business space we call it
value-added the concept is the same it’s
giving stuff away for free to reduce
someone’s risk so they’ll choose you
over the competition it is inherently
manipulative fear wonderful manipulator
if any of you are parents you know
exactly what I’m talking about
peer pressure is another one I’m sure
we’ve all sat in our offices and had
someone tell us you know 70% of your
competitors are using our service why
aren’t you maybe 70% of my competitors
are idiots or maybe 70% of them were
offered a price so low they couldn’t
resist I don’t know the point is when we
hear that the majority is doing
something we eat a fear that we’re being
left out or that they know something
that we don’t and it influences our
behavior one of my favorite
manipulations is what companies like to
call innovation real innovation changes
the course of industries if not the way
we live our very lives the fax machine
the light bulb iTunes this is real
innovation adding a camera to your cell
phone is a wonderful feature but it is
not an innovation it’s the difference
between steps and leaps and what most
organizations like to call innovation is
in reality not
the little additions to their products
nothing earth-shattering ly different in
the 1970s do you know how many choices
of Colgate toothpaste there were take a
guess – June no matter how many there
are now 30 and that’s just Colgate which
means that their competition is offering
about the same number of products about
the same price about the same quality
about the same service and yet I have no
data to show that people are brushing
their teeth now more than they were
thirty or forty years ago what happened
was as annoying little thing called
globalization and markets opened up in
competition increased and the metrics
went down it doesn’t matter which one
market share revenue profits it doesn’t
matter the metrics went down and then to
combat that the company added a new
product this one has fluoride and people
in who shine II and they tried it and
the metrics went up but the problem with
competition is they compete and they
match the product about the same and the
metrics went down again will it work the
first time so we’ll do it again and
again and again and again until you have
30 different line extensions and what’s
one of their big complaints these days
like so many other companies how do we
differentiate ourselves
that’s hilarious to me how do we get out
of a problem that we created for
ourselves and they would so they resort
to any number of the other manipulations
now I cannot dispute that these and many
other manipulations work they absolutely
do that’s why we use them the problem is
none of them breed loyalty the problem
is none of them engender trust the
problem is over the course of time and
it costs more money because somebody has
to pay for all this stuff and over the
course of time it increases stress both
for the buyer and for the seller we live
in a world today in which most products
and most services b2b or b2c are sold
this way in other words people are being
bombarded with mitad and manipulations
from all sides for all reasons for any
number of products it is stressful to be
a decision maker these days it is
stressful to decide which product or
which service is right for me but it’s
equally as stressful to be on the
selling side in which we have to operate
in a world in which the vast majority of
things are sold through bombarding
people with manipulations and promotions
and value added and so it’s hard for us
if we truly have something special to
stand out in the crowd and be noticed
it’s called stress this is largely the
world we live in
today but there is an alternative that
alternative is called inspiration and
there are only a few leaders and a few
organizations that tend to rely vastly
more an inspiration than manipulation
and I’ll talk about some of the big ones
like Apple computers or harley-davidson
or Southwest Airlines but you see the
same pattern in great leaders like
Nelson Mandela or Martin Luther King or
John F Kennedy what I learned is that
regardless of their size and regardless
of their industry every single one of
these organizations every single one of
these leaders with the capacity to
inspire they all think act and
communicate the exact same way and it’s
the complete opposite to the rest of us
all I did was write it down and it’s
probably the world’s simplest idea I
call it the Golden Circle it’s quite
literally three concentric circles a
bull’s eye in the middle is why the
center ring is how and the outside ring
is what I always like to joke that
because I use a paper and a pen I don’t
have a V problems I have one let me
define the terms every single
organization on the planet knows what
they do these are the products we sell
the services we offer some know how they
do it whether you call it your
differentiating value proposition your
proprietary process your USP these are
the things you think make you different
or special or stand out from the crowd
but very very few people and very very
few organizations can clearly articulate
why they do what they do and by why I
don’t mean to make money that’s a result
by why I mean what’s your purpose what’s
your cause what’s your belief why does
your company exist I mean do we really
need another one why did you get out of
bed this morning and why should anyone
care as a result the way we think the
way we act the way we communicate is
from the outside in we go from the
clearest thing to the fuzziest thing we
tell people what we do we tell them how
we’re different or how we’re special and
we expect some sort of behavior a vote a
purchase support but not those leaders
and not those organizations with the
capacity to inspire every single one of
them regardless of their size regardless
of their industry thinks act and
communicates from the inside out let me
give you an exam
I use Apple frequently because they’re
easy to understand and we all get it if
Apple were like everyone else a piece of
communication would sound like this we
make great computers they’re beautifully
designed simple to use and user friendly
wanna buy one man this is normal this is
how most organizations communicate you
know here’s our new car it’s got tinted
windows great gas mileage leather seats
choose us here’s our law firm we’ve got
all the best lawyers we went to all the
best schools we win all of our cases we
work with some of the largest companies
hire us here’s how Apple II actually
communicates they start with why here’s
what they say everything we do we
believe we believe in challenging the
status quo the way we challenge the
status quo is by making our products
beautifully designed simple to use and
user friendly we just happen to make
great computers wanna buy one it’s
totally different it actually feels
different no trickery no manipulation of
celebrity endorsements all I did was
reverse the order of the information
what it starts to show us that it’s not
what you do that matters it’s why you do
it
and people don’t buy what you do they
buy why you do it and what you do simply
serves as tangible proof of what you
believe this is the reason why every
single person in this room is perfectly
comfortable with the idea that Apple
sells computers and DVRs and phones and
all these other products mp3 players
Apple is not unique every single one of
their competitors pick one it doesn’t
matter every single one of their
competitors is equally qualified to make
every single product that Apple makes
Apple does not have a lock on any of the
resources everybody has equal access to
the same talent the same consultants the
same agencies the same resources the
same media it’s a zero-sum game the
difference is their competitors have
defined themselves by what they do we
make computers Apple has defined
themselves by why they exist to
challenge the status quo to give the
individual the opportunity to stand up
to Big Brother to give the individual
that the ability to to do their own
thing and everything they say and
everything they do proves what they
believe a few years ago Dell a perfectly
good company that makes perfectly good
products came out with mp3 players they
are every little bit qualified to make
these products the difference is nobody
bought one
we couldn’t imagine buying an mp3 player
from a computer company but we do it
every day because it’s not what you do
that matters it’s why you do it and what
you do serves as the tangible proof of
what you believe for this little thing
to work you have to have three things
one you have to have clarity of why if
you don’t know why your company exists
how will anybody else – you have to have
discipline of how you have to hold
yourself and your people accountable to
your own guiding principles and your own
values and thirdly you have to have
consistency of what everything you say
and everything you do has to prove what
you believe at the end of the day we
live in the tangible world at the end of
the day the only way people will know
what you believe is if you say and do
the things you actually believe this is
the concept behind authenticity people
are always telling us people prefer to
vote for the authentic candidate they
prefer to buy from the authentic brand
what does that mean what that means is
those people those organizations say and
do what they actually believe that’s all
that authenticity means you have to say
and do what you actually believe and the
reason is simple the reason the human
race is so successful is not because
were the strongest and not because with
a smartest it’s because we’re social
animals it’s because we have the ability
to form cultures and communities
what’s a country it’s a group of people
with a common set of values and beliefs
you know what’s a culture it’s a group
of people that come and set of values
and beliefs what’s a neighborhood it’s a
group of people that come and set of
values and pleas what’s a company it
should be a group of people with a
common set of values and beliefs when
we’re surrounded by people who believe
what we believe something remarkable
happens Trust emerges make no mistake of
it Trust is a feeling trust is a human
condition simply do it saying everything
doing everything you say you’re going to
do does not mean people will trust you
it just means you’re reliable we all
have friends that screw up sometimes and
yet we still trust them
Trust is born out of a common set of
values and beliefs and it is absolutely
essential for our survival
because when we’re surrounded by people
we trust and who trust us who are more
willing to take risks were more willing
to explore we’re more willing to
experiment which requires failure all
with the confidence that if we turn our
backs go away or fall down someone from
within our communities will watch our
backs watch our stuff and help us up
when we
falldown absent trust we still have the
will to survive but absent trust it’s
every man for himself and it becomes
selfish and destructive when we act more
and more and more short-term great
organizations are not the ones that
outperform necessarily every quarter
great organizations are the ones that in
hard times people come together you want
to know why Lehman Brothers failed
Lehman was exceptionally good at what
they did they were exceptionally good at
how they did it but at the slightest
shimmy the whole thing collapsed not in
months not in weeks in days great
organizations and hard times come
together it’s like the quality of a crew
we cannot judge the quality of a crew
when the seas are calm we cannot judge
the quality of a company when the
economy is good just because they’re
making money is no indication of how
strong the organization and how strong
the cultures however when the seas are
rough how good is the crew did they run
to each other’s aids or did they jump
off the ship all with the same thing
every man for himself gotta look after
numero uno gotta pay the bills gotta
feed the family gotta survive great
organizations the people sacrifice
themselves for each other in the
military they give medals to people who
are willing to sacrifice themselves that
others may gain in business we give
bonuses to people who are willing to
sacrifice others so that we may gain we
have it backwards this is not my opinion
this is grounded in the tenets of
biology not psychology but by online
biology if you look at a cross-section
of the human brain the human brain
evolved into three major sections that
corresponds precisely with this little
idea the outside area is called our
neocortex it’s our homo sapien brain
responsible for all of our rational and
analytical thought and language the
middle two sections make up our limbic
brains and our limbic brains are
responsible for all of our feelings like
trust and loyalty it’s also responsible
for all human behavior all
decision-making and it has no capacity
for language this is why you can’t ask
your customers why do you do business
with us why do you love us they can’t
tell you because the part of the brain
that controls decision-making doesn’t
control language this is where gut
decisions come from there is no part of
your stomach that controls
decision-making and it’s not in your
blood and it’s not in your bones and
you’re not following your heart
we ascribe it to different parts of our
body because the part of her brain that
controls language doesn’t control
decision-making and it’s not an accident
that we use the verb to feel to describe
decisions I know all the data says we
should do that but it doesn’t feel right
that would be biologically accurate the
part of the brain that controls feeling
controls decision-making this is also
the reason why the question why do you
love your husband or why do you love
your wife is a difficult question why do
you love your wife I don’t know that’s
where most people start you’ve been
married for 15 years you don’t know why
you love your wife you know she’s smart
she’s fun I can trust her I’ve known her
forever you know sounds like a golden
retriever right and then we start saying
things that don’t even make sense right
she completes me don’t know what that
means right
I have a left arm and a left leg she’s
got a right arm and a right leg together
we make one I don’t even know what it
means what we’re attempting to do is
verbalize the feelings we have towards a
person or an organization with the part
of the brain that control language and
so we make things up we rationalize or
we actually say things that don’t make
sense how many of you love your
Macintosh computer or know someone who
loves their Macintosh computer okay you
can always put their hands up so quickly
that way so excited you can always tell
people who love their Macs
because we try to explain to them
rationally based on facts and figures
they actually bought substandard
computers they start foaming at the
mouth
right but rationally speaking that’s
exactly what happened rationally
speaking based on facts and figures max
or at least 25% more expensive than
their PC counterparts sometimes double
the price there’s less software there’s
fewer peripherals and they’re absolutely
slower I mean there’s nothing faster
about them I have one and I get that
spinning beach ball of death all the
time right the difference is Apple’s not
selling us one of these they’re selling
us one of these because Apple is so
clear about what they believe so
disciplined how they do things and so
consistent in what they do it gets the
point that their computers serve as a
symbol of a set of values and beliefs
those people who love their max didn’t
buy it just for the product based on the
irrational sensibilities and the
rational differentiators they bought it
to demonstrate something about who they
are this is why the Mac lovers love
opening their computers and airports
right people with PCs don’t open their
computers in airports they don’t care
it’s just a commodity it’s just a
computer and sometimes you see a PC with
an apple sticker that’s somebody telling
you my office gave me the computer this
is not really who I am it’s a symbol for
who they are because you see our
survival depends on our ability to find
people who believe what we believe and
because the part of the brain that
controls behavior doesn’t control
language we rely on stories and symbols
and all of these things to help
communicate who we are this is why
authenticity matters because if you say
and do the things you actually believe
you will attract people who believe what
you believe if you lie people we will be
drawn to the lie but we will start to
figure out that you don’t actually
believe those things and so we don’t
trust you this is why we don’t generally
trust politicians because when we sit
down and evaluate all the things they
tell us yes rationally speaking all of
their opinions happen to align
completely perfectly with all the
beliefs I have but we know that they’re
not telling us things that they actually
believe and so we don’t trust them Trust
is a very very important thing our
survival depends on it we’re highly
highly attuned to it I had the great
honor of visiting Quantico Marine base
from Quantico Virginia and on the day I
that was there this is where the Marines
select their officers who will then lead
their Marines into battle and the day I
was there the colonel in charge of OCS
was about to give me a presentation on
on about their selection process and how
they run things and there happened have
been an incident while I was there and
they were considering throwing one of
their Marines out of the Marine Corps
so of course curious Simon I said well
what what happened you know it must have
been serious if you’re considering
throwing him out of the Marine Corps and
they said we caught a guy falling asleep
on watch I said in Virginia like that’s
it you know it’s not like he was in
combat or something you felt you caught
a guy falling asleep on watch in the
woods of Virginia and you’re gonna throw
him out for that a little strict don’t
you think and the guy said no no you
don’t understand
he said when we questioned him about it
he denied it when we questioned him
about it again he denied it again and
only when we gave him irrefutable proof
that he had fallen asleep on watch did
he say and I quote I want to take
responsibility for my actions and the
we have in the Marine Corps is that you
take responsibility for your actions at
the moment you perform those actions not
at the point you get caught
you see integrity matters he said if I’m
gonna put him in charge of a group of
Marines in combat and they’re not a
hundred percent sure that every word
that comes out of his mouth is the truth
if there’s any doubt that he’s saying
things to cover his own skin it puts
people in danger and people will die
unless you’re completely completely
honest we cannot have you in our Marine
Corps and we cannot let you lead being
honest is a very very simple thing all
it means is you tell the truth
I would rather you disappoint with the
truth than appease with a lie and it
goes back to our survival instinct if we
sense for a moment that someone is lying
to us the question is will we be able to
go into a foxhole with them again
there’s a there’s a benefit to group
leaving leading living in an
anthropological sense it means that we
can fall asleep and trust that others in
our group will watch for danger and if
we don’t trust that we can fall asleep
and allow others to watch for danger we
fear they’re gonna take something from
us or not alert us to danger or not wake
us or not defend us then we will never
fall asleep and we’ll never trust
anybody and eventually we’ll all die
this is how powerful this stuff is we
all have the natural capacity to find
people to believe what we believe like I
said we’re hardwired for this if I asked
you to go out in the street and find the
people who believe what you believe you
know exactly what to do
you’re gonna strike up a conversation
this is why we say sales is about
relationships no kidding right
and we you know you have an exchange
with and sometimes there’s good
chemistry and sometimes there’s not
whatever that means right sometimes it’s
quick and sometimes it’s slow the point
is it’s not scalable it’s not scalable
but if I tell you to go outside and find
all the people wearing red hats it’s
easy there’s one there’s one there’s one
there’s one when you know what symbols
to look for it’s easy to find the people
who believe what you believe just like
all you Mac lovers and don’t lie to me
when you’re walking through the airport
and you see somebody else with their
laptop open you like them a little more
don’t you it’s because Apple is so clear
about what they believe so disciplined
about how they do things and so
consistent in what they do we’re using
these symbols we’re using these brands
we’re using these things to say
something about who we are in an attempt
to attract people who believe what we
believe
leadership is the ability to stand on
the street corner and simply talk about
your own red hat got a red hat here go
to red hat got a red hat and all the
other red Hatter’s whether they can see
their own your own red hat or not
whether they know their own wire or not
our yearly drawn to you
because you’re the one capable of
putting their values and beliefs into
words and they can use you to say
something about who they are people who
are most loyal to your company are the
ones who see their jobs as a reflection
of who they are and what they believe
they see your company as a reflection of
who they are and what they believe there
are people walking around with
harley-davidson tattoos on their body
this is a corporate logo some of them
don’t even own the product there’s
nobody walking around with Procter and
Gamble in their arm it’s because Harley
is so clear about what they believe so
disciplined about how they do it and so
consistent in what they do it gets the
point that everything they say and
everything they do serves as proof of
what they believe the reason this stuff
is important can be summed up in
something called the law of diffusion of
innovation and if you don’t know the law
you definitely know the terminology it’s
the old bell curve that standard
deviation and what it tells us is that
the first two and a half percent of our
population are our innovators the next
thirteen and a half percent of our
population are our early adopters then
you have your early majority your late
majority and the last 16% are your
laggards the only reason these people by
touch-tone phones is because you can’t
buy rotary phones anymore it’s my
parents what the law of diffusion tells
us is that this population the innovator
and the early adopter population are
very comfortable trusting their guts
they’re very comfortable making
intuitive decisions they’re willing to
pay a premium and go out of their way to
be a part of something that reflects
their own beliefs these the people who
stood in line for six hours to buy
iPhones when they first came out even
though you could go into the store and
just buy one off the shelf a week later
these the people who spent 40 or 50
thousand dollars to buy flat-screen TVs
when they first came out even though the
technology was substandard it had
nothing to do with the technology it had
to do with them the majority of the
population is more cynical and more
practical they absolutely care about
things like price and quality and
service and features the problem is is
they’re not willing to try something
until somebody else has tried it first
this is the reason we have to drop our
price and offer promotions all kind of
value-added because these people have to
these the ones we have to reduce their
risk these people happily pay a premium
and work with substandard products if it
reflects their beliefs and these people
won’t try something until of somebody
else’s tried at first in other words to
achieve mass-market success or long-term
stability it’s not about appealing to
these people it’s about appealing to
these people and if you can get 15 to 18
percent market penetration and I don’t
mean of the market I mean of the people
who believe what you believe and there’s
a social phenomenon the tipping point 15
to 18 percent of those who believe what
you believe
and it just tips and it goes Mass we all
get about 10 percent law of averages
says if you ignore everything I’m saying
you’ll get about 10 percent ten percent
of our customers love as 10 percent of
our employees love us but it’s not
enough to make it tip you see I’ll give
you two examples a famous failure and a
famous success first the famous failure
it’s a business example in the u.s. we
have a product called TiVo it’s a
digital video recorder when TiVo was
introduced into the marketplace about 12
or 13 years ago it was and continues to
be the single best product on the market
hands-down undisputed it is the best
technology out there and continues to be
this to this day right and if you ask
most organizations you ask most
companies why did your product fail why
did your company fail they usually give
you some combination of the same few
reasons undercapitalized didn’t have
enough money poorly executed wrong
people you know bad market conditions
okay that’s the recipe for success so
TiVo has the best product on the market
execution flawless venture capital up
the wazoo money no problem they hire the
best engineers money could buy people
not a problem and the market conditions
are incredible in the u.s. we use TiVo
as a verb the unaided awareness of the
brand is in the 90s 90th percentile it’s
common market conditions fantastic TiVo
is a commercial and financial failure
they’ve never made money and when their
company went public it launched at about
40 or 50 dollars and then very quickly
plummeted and except for a couple of
little blips has never ever traded above
ten bucks and the reason is because they
took this brilliant product brilliantly
executed brilliantly funded and they
told the mass market we have a product
that pauses live TV
commercials memorises are in your
viewing habits on your behalf and
records without you even asking and the
cynical practical majority said I don’t
believe you I don’t need it I don’t like
it I don’t want it you’re scaring me
they didn’t buy one there are a few
early adopters and to this day they love
their TiVo’s and have upgraded it every
year but it wasn’t enough to make it tip
now imagine if Teva had launched their
product to this population explaining
why it exists if you’re the kind of
person likes to take total control over
every aspect of your life boy do we have
a product for you it pauses live TV
skips commercials memorizers our viewing
habits and records in your behalf
without you even asking in this instance
what the product does serves as tangible
proof of why it exists it is not the
reason we make the choice in the first
place
people don’t buy what you do they buy
why you do it now give you my favorite
example of a law of diffusion Martin
Luther King in 1963 August of 1963 gave
his I have a dream speech and 250,000
people showed up on the mall in washing
Washington to hear dr. King speak no
invitations were sent out and there was
no website to check the date how many
emails did you get to show up here today
right it was seven eight five hundred
people here right nothing right dr. King
was not the only man in America who knew
what had to change to bring about civil
rights in that country he wasn’t the
only great orator of the day he wasn’t
the only man who suffered in a pre-civil
Rights America in fact he suffered less
than most because he was off at
university he wasn’t even the perfect
man he had his complexities and we just
don’t talk about that stuff the
difference is he had a gift he didn’t go
around telling people what we need to do
what we need to do how we’re gonna do it
he went around and told people I believe
I believe I believe and people who
believed what he believed took his cause
and made it their own and they told
people what they believed and those
people took that cause and made it their
own and they told people what they
believed and some built structures to
get the word out more efficiently and lo
and behold on the right day on the right
time a quarter of a million people
showed up on the mall to hear him speak
how many of them showed up for him zero
they showed up for themselves it’s what
they believed
it’s the America that they wanted to
live in it’s the America that they
wanted to raise their children and that
inspired them to get on
travefy eight hours stand in Washington
in the Sun in the middle of summer
simply to hear him speak simply showing
up was one of the things they did in
their life to prove what they believed
even dr. King
it wasn’t about black versus white dr.
King had a belief that there are two
types of laws in this world there were
the laws made by man and there are the
laws made by a higher authority and not
until the laws of man are consistent
with the laws of our higher authority
would we live in a just world the civil
mutt rights movement was the perfect way
for him to bring his cause to life oh
and by the way he gave the I have a
dream speech not the eye of a plans
Beach everybody’s got their
comprehensive 12-point plan these days
we’re not inspired by your plan we’re
inspired by what you believe and where
you’re going this is the remarkable
thing about human beings we can imagine
the future we can only see the things
that we have words for and this is what
great leaders do they can put these
things into words let’s imagine that
this room is empty and we’re standing
over here in the corner I give you a
very simple instruction I want you to go
to that corner in a straight line off
you go no problem and without telling
you I quickly put a chair in front of
you and what do you do you go around the
chair this is the remarkable thing about
human beings when we’re crystal-clear on
the place we’re going on the destination
on the vision our route is flexible even
though you just ignored what I told you
to do I told you to go in there straight
line this is the great thing about
people when we are clear in the
destination we are flexible in the route
reset let’s stand in the corner again
I’ll give you a simple instruction I
want you to go in a straight line to
some point in this room and you say well
where do you owe me to go I say I don’t
know you’re smart pick a place and so
you pick an arbitrary point in the room
you start walking there and without
telling you I quickly put a chair in
front of you what do you do you come to
a grinding halt or you make a sudden
sharp turn and I say to you what are you
doing you say well how can I go in a
straight line if you put a chair in
front of me in other words when we’re
not clearing the destination or the
destination is arbitrary we become
obsessed with the route and now you
think about how we do business these
days you know what’s your goal for the
end of the year to increase top-line
revenues by five hundred million dollars
why not four hundred million why not six
hundred million they’re arbitrary points
in the room and then we become obsessed
with the strategies that we’ve set to
get there as opposed to the great
leaders in the great organizations that
explain why their companies exist and
then leave it to their people to figure
out the route how to get there and
that’s how you get innovation
oops only responsibility is to point
north to point the direction to say
where we’re going and allow everybody
else to figure out how to get there this
is what we feel fulfilled about our
ability to contribute to the
organization this is exactly why Apple
is the most innovative company in the
world it’s not because Steve Jobs came
up with all the ideas do you know how
many ideas he actually came up with none
even Steve Wozniak was the one who built
the computer in the first place long
long ago before Apple even existed Steve
Jobs and Steve Wozniak were sitting in a
garage in Cupertino California and they
made something called a little blue box
which allowed people to avoid paying
long-distance rates on their phone bills
they were challenging the monopoly phone
company Ma Bell and then they started
Apple I challenged Big Blue the existing
monopoly computer platform IBM and then
they challenged Microsoft and then they
challenged the computer the phone
industry and then they challenged the
music industry and now they’re
challenging the publishing industry and
if you’re in television and movies
you’re next it’s just a repeating
pattern jobs told people that he
believed in making products that allow
people to have more control that we
shouldn’t be at the dictate of large
organizations that tell us how things
should work and he’ll add it to his
people to figure out ways how to get
there that’s what drives innovation a
clear sense a destination not an
obsession with the route there are
leaders and there are those who lead
leaders hold a position of power or
influence or rank but those who lead
inspire us and whether they’re
individuals or organizations we follow
those who lead not because we have to
but because we want to and we follow
those who lead not for them but for
ourselves this is for those who want to
inspire those around them this is for
those who want to find someone to to
how much I wanna it sounds very good
with all due respect very well for sense
it but then how can these executives
here be sure how do you know that when
they go back home and they start asking
themselves the question why that it is
actually going to change the way their
operation operate and and the the the
and the the profit that they make how do
I know I don’t but you know these things
these things are like it’s it’s like
having a family you know you as a parent
know that the right thing to do to raise
your children right is to get a Ford
them every ability to access to
education and you know that it’s your
responsibility to help them understand
their strengths and build on their
strengths and you know that it’s your
responsibility to encourage and push
them sometimes discipline them sometimes
help them up sometimes let them falter
by themselves all with the hope and
aspiration that they will achieve more
than even you could achieve
unfortunately you will not see the
results of your investment for thirty
years you know twenty years you’re not
gonna see it and yet we know that that’s
the right thing to do you know even at
the age of sixteen seventeen eighteen
you have no clue of everything you’ve
done as a parent will pay off right and
yet instinctively we still do what we
believe and know is the right thing to
do businesses are exactly the same you
have two families one at work and one at
home great leaders great bosses great
coaches great drill instructors it
doesn’t matter those that have the
responsibility for others act like
parents they take it upon themselves to
give their employees access to this much
education as much competence as much as
they can learn open the doors them allow
them to fail help them up all if the
desire and the want to see that they
succeed beyond even what we could hope
to achieve and this is what you see in
great rate ordinate organizations they
make it their complete obsession to help
their people grow as opposed to my
having one bad quarter and laying people
off you can’t lay off your children if
they have a bad report card you know and
so it’s it’s an investment so what if I
may try to pre rephrase you what you’re
really saying is that this is not
necessarily a thing that would lead to
more profit but it will give you a
feeling that you are doing something
good while at work oh no no it will lead
to more profit now the question you know
every single organization that obeys
these things is more successful than
those who don’t
more importantly if they can sustain
things like innovation they can sustain
things like profitability they can
sustain things like loyalty for the long
term you know I’m unimpressed by
organizations that are able to prove
that they’ve done something for one year
or two years let’s talk about 30 40 or
50 years 80% of the Dow indexes are
companies 35 years or younger that’s not
impressive
you know organizations that can last are
impressive and more importantly when you
have trust in your people and your
people have trust in you when your
people believe that you’re willing to go
to bat for them and protect them guess
what they’re will give everything they
will give blood sweat and tears to you
if they don’t believe that you’ll go to
bat for them then they just working for
your money and so for though if you have
the desire to be more innovative if you
have the desire for longevity if you
have the desire that during hard times
your people will be there for you and
won’t abandon you then these things were
helpful if you don’t really care and you
just want to play a quarterly game and
every single day is more stressful than
the last more power to you but Simon if
I may so I’m assuming that you also
actually selling some sort of product
here right now my question to you is so
where is this why taking you are you
where are you are you part of this are
you somewhere else I have nothing to
sell but that’s fine I come here I’ll
tell you why I’m here because I have a
vision of the world
I believe that fulfillment is a right
and not a privilege I believe it is not
for the chosen for you to love what they
do and enjoy going to work I believe
every single one of us has the right to
wake up every single morning to inspire
to go to work and come home fulfilled by
the work that we do I’m committed to
this vision and so I will play my small
part which is I have some tools and some
ideas on perspective that may help point
us that direction I play one piece of a
jigsaw puzzle the reason I come and do
work events like this is because you’re
actually building the companies you’re
the ones actually responsible for the
human beings that will be fulfilled and
so if I can give you some pieces that
will actually help your people love
coming to work and help you love coming
to work oh and by the way you’ll also be
more innovative more profitable and have
greater loyalty then so be it that’s
that’s my piece of the puzzle as for me
I’m living proof of this you know a few
years ago I went through a struggle in
my own business where I didn’t know why
I was doing what was doing I completely
lost my passion for what I was doing and
people gave me stupid advice
like do what you love you know it’s like
I’m doing the same thing I don’t love it
anymore you know and so when I learned
that every single organization on the
planet even our own careers always
function on these three levels what we
do how we do it and why we do it and if
one of those pieces is missing it’ll be
out of balance the system will be out of
balance I realized that I knew what I
did I knew how I did it but I didn’t
know why and I completely committed
myself to finding this for myself it
restored my passion to levels I’d never
experienced prior and I shared it with
my friends because that’s what we do we
share beautiful things with the people
we love they invited me to their homes
to share with their friends and so it
goes on and I’m the same idiot that I
was you know a few years ago I’m still a
moron when it comes to running a
business I haven’t learned anything new
and yet the life that I lead right now
where I get to advise ambassadors and
members of Congress and I work at the
highest levels of military and work with
you know CEOs of largest corporations
and get invited to nice places like this
to speak to the likes of you or not
because I’m smarter than I was it’s
because I made the conscious decision to
start from here as opposed to starting from here
leadership when we don’t really have a
common definition of what a leader is
you know I read the same books as
everybody else you know a lot of them
tell us you sort of learn your style of
leadership how to adapt your style of
leadership to fit the situation at hand
that’s not leadership that’s management
to be a leader you need one thing and
one thing only followers that’s it
it has nothing to do with rank or
authority you are a leader when others
raise their hands and volunteer to go in
the direction you set the question is
why should anyone follow you there are
many ways to get people to do the things
that we want or to follow us in fact it
all boils down to two things you can
either manipulate people or you can
inspire them those are your options
we’re all familiar with manipulations in
the business world things like dropping
your price if you drop your price low
enough people will buy from you right
this is the concept behind a sale things
are priced to move
promotions two for one free toy inside
buy one get one free and in the
business-to-business space we call it
value-added the concept is the same it’s
giving stuff away for free to reduce
someone’s risk so they’ll choose you
over the competition it is inherently
manipulative fear wonderful manipulator
if any of you are parents you know
exactly what I’m talking about
peer pressure is another one I’m sure
we’ve all sat in our offices and had
someone tell us you know 70% of your
competitors are using our service why
aren’t you maybe 70% of my competitors
are idiots or maybe 70% of them were
offered a price so low they couldn’t
resist I don’t know the point is when we
hear that the majority is doing
something we eat a fear that we’re being
left out or that they know something
that we don’t and it influences our
behavior one of my favorite
manipulations is what companies like to
call innovation real innovation changes
the course of industries if not the way
we live our very lives the fax machine
the light bulb iTunes this is real
innovation adding a camera to your cell
phone is a wonderful feature but it is
not an innovation it’s the difference
between steps and leaps and what most
organizations like to call innovation is
in reality not
the little additions to their products
nothing earth-shattering ly different in
the 1970s do you know how many choices
of Colgate toothpaste there were take a
guess – June no matter how many there
are now 30 and that’s just Colgate which
means that their competition is offering
about the same number of products about
the same price about the same quality
about the same service and yet I have no
data to show that people are brushing
their teeth now more than they were
thirty or forty years ago what happened
was as annoying little thing called
globalization and markets opened up in
competition increased and the metrics
went down it doesn’t matter which one
market share revenue profits it doesn’t
matter the metrics went down and then to
combat that the company added a new
product this one has fluoride and people
in who shine II and they tried it and
the metrics went up but the problem with
competition is they compete and they
match the product about the same and the
metrics went down again will it work the
first time so we’ll do it again and
again and again and again until you have
30 different line extensions and what’s
one of their big complaints these days
like so many other companies how do we
differentiate ourselves
that’s hilarious to me how do we get out
of a problem that we created for
ourselves and they would so they resort
to any number of the other manipulations
now I cannot dispute that these and many
other manipulations work they absolutely
do that’s why we use them the problem is
none of them breed loyalty the problem
is none of them engender trust the
problem is over the course of time and
it costs more money because somebody has
to pay for all this stuff and over the
course of time it increases stress both
for the buyer and for the seller we live
in a world today in which most products
and most services b2b or b2c are sold
this way in other words people are being
bombarded with mitad and manipulations
from all sides for all reasons for any
number of products it is stressful to be
a decision maker these days it is
stressful to decide which product or
which service is right for me but it’s
equally as stressful to be on the
selling side in which we have to operate
in a world in which the vast majority of
things are sold through bombarding
people with manipulations and promotions
and value added and so it’s hard for us
if we truly have something special to
stand out in the crowd and be noticed
it’s called stress this is largely the
world we live in
today but there is an alternative that
alternative is called inspiration and
there are only a few leaders and a few
organizations that tend to rely vastly
more an inspiration than manipulation
and I’ll talk about some of the big ones
like Apple computers or harley-davidson
or Southwest Airlines but you see the
same pattern in great leaders like
Nelson Mandela or Martin Luther King or
John F Kennedy what I learned is that
regardless of their size and regardless
of their industry every single one of
these organizations every single one of
these leaders with the capacity to
inspire they all think act and
communicate the exact same way and it’s
the complete opposite to the rest of us
all I did was write it down and it’s
probably the world’s simplest idea I
call it the Golden Circle it’s quite
literally three concentric circles a
bull’s eye in the middle is why the
center ring is how and the outside ring
is what I always like to joke that
because I use a paper and a pen I don’t
have a V problems I have one let me
define the terms every single
organization on the planet knows what
they do these are the products we sell
the services we offer some know how they
do it whether you call it your
differentiating value proposition your
proprietary process your USP these are
the things you think make you different
or special or stand out from the crowd
but very very few people and very very
few organizations can clearly articulate
why they do what they do and by why I
don’t mean to make money that’s a result
by why I mean what’s your purpose what’s
your cause what’s your belief why does
your company exist I mean do we really
need another one why did you get out of
bed this morning and why should anyone
care as a result the way we think the
way we act the way we communicate is
from the outside in we go from the
clearest thing to the fuzziest thing we
tell people what we do we tell them how
we’re different or how we’re special and
we expect some sort of behavior a vote a
purchase support but not those leaders
and not those organizations with the
capacity to inspire every single one of
them regardless of their size regardless
of their industry thinks act and
communicates from the inside out let me
give you an exam
I use Apple frequently because they’re
easy to understand and we all get it if
Apple were like everyone else a piece of
communication would sound like this we
make great computers they’re beautifully
designed simple to use and user friendly
wanna buy one man this is normal this is
how most organizations communicate you
know here’s our new car it’s got tinted
windows great gas mileage leather seats
choose us here’s our law firm we’ve got
all the best lawyers we went to all the
best schools we win all of our cases we
work with some of the largest companies
hire us here’s how Apple II actually
communicates they start with why here’s
what they say everything we do we
believe we believe in challenging the
status quo the way we challenge the
status quo is by making our products
beautifully designed simple to use and
user friendly we just happen to make
great computers wanna buy one it’s
totally different it actually feels
different no trickery no manipulation of
celebrity endorsements all I did was
reverse the order of the information
what it starts to show us that it’s not
what you do that matters it’s why you do
it
and people don’t buy what you do they
buy why you do it and what you do simply
serves as tangible proof of what you
believe this is the reason why every
single person in this room is perfectly
comfortable with the idea that Apple
sells computers and DVRs and phones and
all these other products mp3 players
Apple is not unique every single one of
their competitors pick one it doesn’t
matter every single one of their
competitors is equally qualified to make
every single product that Apple makes
Apple does not have a lock on any of the
resources everybody has equal access to
the same talent the same consultants the
same agencies the same resources the
same media it’s a zero-sum game the
difference is their competitors have
defined themselves by what they do we
make computers Apple has defined
themselves by why they exist to
challenge the status quo to give the
individual the opportunity to stand up
to Big Brother to give the individual
that the ability to to do their own
thing and everything they say and
everything they do proves what they
believe a few years ago Dell a perfectly
good company that makes perfectly good
products came out with mp3 players they
are every little bit qualified to make
these products the difference is nobody
bought one
we couldn’t imagine buying an mp3 player
from a computer company but we do it
every day because it’s not what you do
that matters it’s why you do it and what
you do serves as the tangible proof of
what you believe for this little thing
to work you have to have three things
one you have to have clarity of why if
you don’t know why your company exists
how will anybody else – you have to have
discipline of how you have to hold
yourself and your people accountable to
your own guiding principles and your own
values and thirdly you have to have
consistency of what everything you say
and everything you do has to prove what
you believe at the end of the day we
live in the tangible world at the end of
the day the only way people will know
what you believe is if you say and do
the things you actually believe this is
the concept behind authenticity people
are always telling us people prefer to
vote for the authentic candidate they
prefer to buy from the authentic brand
what does that mean what that means is
those people those organizations say and
do what they actually believe that’s all
that authenticity means you have to say
and do what you actually believe and the
reason is simple the reason the human
race is so successful is not because
were the strongest and not because with
a smartest it’s because we’re social
animals it’s because we have the ability
to form cultures and communities
what’s a country it’s a group of people
with a common set of values and beliefs
you know what’s a culture it’s a group
of people that come and set of values
and beliefs what’s a neighborhood it’s a
group of people that come and set of
values and pleas what’s a company it
should be a group of people with a
common set of values and beliefs when
we’re surrounded by people who believe
what we believe something remarkable
happens Trust emerges make no mistake of
it Trust is a feeling trust is a human
condition simply do it saying everything
doing everything you say you’re going to
do does not mean people will trust you
it just means you’re reliable we all
have friends that screw up sometimes and
yet we still trust them
Trust is born out of a common set of
values and beliefs and it is absolutely
essential for our survival
because when we’re surrounded by people
we trust and who trust us who are more
willing to take risks were more willing
to explore we’re more willing to
experiment which requires failure all
with the confidence that if we turn our
backs go away or fall down someone from
within our communities will watch our
backs watch our stuff and help us up
when we
falldown absent trust we still have the
will to survive but absent trust it’s
every man for himself and it becomes
selfish and destructive when we act more
and more and more short-term great
organizations are not the ones that
outperform necessarily every quarter
great organizations are the ones that in
hard times people come together you want
to know why Lehman Brothers failed
Lehman was exceptionally good at what
they did they were exceptionally good at
how they did it but at the slightest
shimmy the whole thing collapsed not in
months not in weeks in days great
organizations and hard times come
together it’s like the quality of a crew
we cannot judge the quality of a crew
when the seas are calm we cannot judge
the quality of a company when the
economy is good just because they’re
making money is no indication of how
strong the organization and how strong
the cultures however when the seas are
rough how good is the crew did they run
to each other’s aids or did they jump
off the ship all with the same thing
every man for himself gotta look after
numero uno gotta pay the bills gotta
feed the family gotta survive great
organizations the people sacrifice
themselves for each other in the
military they give medals to people who
are willing to sacrifice themselves that
others may gain in business we give
bonuses to people who are willing to
sacrifice others so that we may gain we
have it backwards this is not my opinion
this is grounded in the tenets of
biology not psychology but by online
biology if you look at a cross-section
of the human brain the human brain
evolved into three major sections that
corresponds precisely with this little
idea the outside area is called our
neocortex it’s our homo sapien brain
responsible for all of our rational and
analytical thought and language the
middle two sections make up our limbic
brains and our limbic brains are
responsible for all of our feelings like
trust and loyalty it’s also responsible
for all human behavior all
decision-making and it has no capacity
for language this is why you can’t ask
your customers why do you do business
with us why do you love us they can’t
tell you because the part of the brain
that controls decision-making doesn’t
control language this is where gut
decisions come from there is no part of
your stomach that controls
decision-making and it’s not in your
blood and it’s not in your bones and
you’re not following your heart
we ascribe it to different parts of our
body because the part of her brain that
controls language doesn’t control
decision-making and it’s not an accident
that we use the verb to feel to describe
decisions I know all the data says we
should do that but it doesn’t feel right
that would be biologically accurate the
part of the brain that controls feeling
controls decision-making this is also
the reason why the question why do you
love your husband or why do you love
your wife is a difficult question why do
you love your wife I don’t know that’s
where most people start you’ve been
married for 15 years you don’t know why
you love your wife you know she’s smart
she’s fun I can trust her I’ve known her
forever you know sounds like a golden
retriever right and then we start saying
things that don’t even make sense right
she completes me don’t know what that
means right
I have a left arm and a left leg she’s
got a right arm and a right leg together
we make one I don’t even know what it
means what we’re attempting to do is
verbalize the feelings we have towards a
person or an organization with the part
of the brain that control language and
so we make things up we rationalize or
we actually say things that don’t make
sense how many of you love your
Macintosh computer or know someone who
loves their Macintosh computer okay you
can always put their hands up so quickly
that way so excited you can always tell
people who love their Macs
because we try to explain to them
rationally based on facts and figures
they actually bought substandard
computers they start foaming at the
mouth
right but rationally speaking that’s
exactly what happened rationally
speaking based on facts and figures max
or at least 25% more expensive than
their PC counterparts sometimes double
the price there’s less software there’s
fewer peripherals and they’re absolutely
slower I mean there’s nothing faster
about them I have one and I get that
spinning beach ball of death all the
time right the difference is Apple’s not
selling us one of these they’re selling
us one of these because Apple is so
clear about what they believe so
disciplined how they do things and so
consistent in what they do it gets the
point that their computers serve as a
symbol of a set of values and beliefs
those people who love their max didn’t
buy it just for the product based on the
irrational sensibilities and the
rational differentiators they bought it
to demonstrate something about who they
are this is why the Mac lovers love
opening their computers and airports
right people with PCs don’t open their
computers in airports they don’t care
it’s just a commodity it’s just a
computer and sometimes you see a PC with
an apple sticker that’s somebody telling
you my office gave me the computer this
is not really who I am it’s a symbol for
who they are because you see our
survival depends on our ability to find
people who believe what we believe and
because the part of the brain that
controls behavior doesn’t control
language we rely on stories and symbols
and all of these things to help
communicate who we are this is why
authenticity matters because if you say
and do the things you actually believe
you will attract people who believe what
you believe if you lie people we will be
drawn to the lie but we will start to
figure out that you don’t actually
believe those things and so we don’t
trust you this is why we don’t generally
trust politicians because when we sit
down and evaluate all the things they
tell us yes rationally speaking all of
their opinions happen to align
completely perfectly with all the
beliefs I have but we know that they’re
not telling us things that they actually
believe and so we don’t trust them Trust
is a very very important thing our
survival depends on it we’re highly
highly attuned to it I had the great
honor of visiting Quantico Marine base
from Quantico Virginia and on the day I
that was there this is where the Marines
select their officers who will then lead
their Marines into battle and the day I
was there the colonel in charge of OCS
was about to give me a presentation on
on about their selection process and how
they run things and there happened have
been an incident while I was there and
they were considering throwing one of
their Marines out of the Marine Corps
so of course curious Simon I said well
what what happened you know it must have
been serious if you’re considering
throwing him out of the Marine Corps and
they said we caught a guy falling asleep
on watch I said in Virginia like that’s
it you know it’s not like he was in
combat or something you felt you caught
a guy falling asleep on watch in the
woods of Virginia and you’re gonna throw
him out for that a little strict don’t
you think and the guy said no no you
don’t understand
he said when we questioned him about it
he denied it when we questioned him
about it again he denied it again and
only when we gave him irrefutable proof
that he had fallen asleep on watch did
he say and I quote I want to take
responsibility for my actions and the
we have in the Marine Corps is that you
take responsibility for your actions at
the moment you perform those actions not
at the point you get caught
you see integrity matters he said if I’m
gonna put him in charge of a group of
Marines in combat and they’re not a
hundred percent sure that every word
that comes out of his mouth is the truth
if there’s any doubt that he’s saying
things to cover his own skin it puts
people in danger and people will die
unless you’re completely completely
honest we cannot have you in our Marine
Corps and we cannot let you lead being
honest is a very very simple thing all
it means is you tell the truth
I would rather you disappoint with the
truth than appease with a lie and it
goes back to our survival instinct if we
sense for a moment that someone is lying
to us the question is will we be able to
go into a foxhole with them again
there’s a there’s a benefit to group
leaving leading living in an
anthropological sense it means that we
can fall asleep and trust that others in
our group will watch for danger and if
we don’t trust that we can fall asleep
and allow others to watch for danger we
fear they’re gonna take something from
us or not alert us to danger or not wake
us or not defend us then we will never
fall asleep and we’ll never trust
anybody and eventually we’ll all die
this is how powerful this stuff is we
all have the natural capacity to find
people to believe what we believe like I
said we’re hardwired for this if I asked
you to go out in the street and find the
people who believe what you believe you
know exactly what to do
you’re gonna strike up a conversation
this is why we say sales is about
relationships no kidding right
and we you know you have an exchange
with and sometimes there’s good
chemistry and sometimes there’s not
whatever that means right sometimes it’s
quick and sometimes it’s slow the point
is it’s not scalable it’s not scalable
but if I tell you to go outside and find
all the people wearing red hats it’s
easy there’s one there’s one there’s one
there’s one when you know what symbols
to look for it’s easy to find the people
who believe what you believe just like
all you Mac lovers and don’t lie to me
when you’re walking through the airport
and you see somebody else with their
laptop open you like them a little more
don’t you it’s because Apple is so clear
about what they believe so disciplined
about how they do things and so
consistent in what they do we’re using
these symbols we’re using these brands
we’re using these things to say
something about who we are in an attempt
to attract people who believe what we
believe
leadership is the ability to stand on
the street corner and simply talk about
your own red hat got a red hat here go
to red hat got a red hat and all the
other red Hatter’s whether they can see
their own your own red hat or not
whether they know their own wire or not
our yearly drawn to you
because you’re the one capable of
putting their values and beliefs into
words and they can use you to say
something about who they are people who
are most loyal to your company are the
ones who see their jobs as a reflection
of who they are and what they believe
they see your company as a reflection of
who they are and what they believe there
are people walking around with
harley-davidson tattoos on their body
this is a corporate logo some of them
don’t even own the product there’s
nobody walking around with Procter and
Gamble in their arm it’s because Harley
is so clear about what they believe so
disciplined about how they do it and so
consistent in what they do it gets the
point that everything they say and
everything they do serves as proof of
what they believe the reason this stuff
is important can be summed up in
something called the law of diffusion of
innovation and if you don’t know the law
you definitely know the terminology it’s
the old bell curve that standard
deviation and what it tells us is that
the first two and a half percent of our
population are our innovators the next
thirteen and a half percent of our
population are our early adopters then
you have your early majority your late
majority and the last 16% are your
laggards the only reason these people by
touch-tone phones is because you can’t
buy rotary phones anymore it’s my
parents what the law of diffusion tells
us is that this population the innovator
and the early adopter population are
very comfortable trusting their guts
they’re very comfortable making
intuitive decisions they’re willing to
pay a premium and go out of their way to
be a part of something that reflects
their own beliefs these the people who
stood in line for six hours to buy
iPhones when they first came out even
though you could go into the store and
just buy one off the shelf a week later
these the people who spent 40 or 50
thousand dollars to buy flat-screen TVs
when they first came out even though the
technology was substandard it had
nothing to do with the technology it had
to do with them the majority of the
population is more cynical and more
practical they absolutely care about
things like price and quality and
service and features the problem is is
they’re not willing to try something
until somebody else has tried it first
this is the reason we have to drop our
price and offer promotions all kind of
value-added because these people have to
these the ones we have to reduce their
risk these people happily pay a premium
and work with substandard products if it
reflects their beliefs and these people
won’t try something until of somebody
else’s tried at first in other words to
achieve mass-market success or long-term
stability it’s not about appealing to
these people it’s about appealing to
these people and if you can get 15 to 18
percent market penetration and I don’t
mean of the market I mean of the people
who believe what you believe and there’s
a social phenomenon the tipping point 15
to 18 percent of those who believe what
you believe
and it just tips and it goes Mass we all
get about 10 percent law of averages
says if you ignore everything I’m saying
you’ll get about 10 percent ten percent
of our customers love as 10 percent of
our employees love us but it’s not
enough to make it tip you see I’ll give
you two examples a famous failure and a
famous success first the famous failure
it’s a business example in the u.s. we
have a product called TiVo it’s a
digital video recorder when TiVo was
introduced into the marketplace about 12
or 13 years ago it was and continues to
be the single best product on the market
hands-down undisputed it is the best
technology out there and continues to be
this to this day right and if you ask
most organizations you ask most
companies why did your product fail why
did your company fail they usually give
you some combination of the same few
reasons undercapitalized didn’t have
enough money poorly executed wrong
people you know bad market conditions
okay that’s the recipe for success so
TiVo has the best product on the market
execution flawless venture capital up
the wazoo money no problem they hire the
best engineers money could buy people
not a problem and the market conditions
are incredible in the u.s. we use TiVo
as a verb the unaided awareness of the
brand is in the 90s 90th percentile it’s
common market conditions fantastic TiVo
is a commercial and financial failure
they’ve never made money and when their
company went public it launched at about
40 or 50 dollars and then very quickly
plummeted and except for a couple of
little blips has never ever traded above
ten bucks and the reason is because they
took this brilliant product brilliantly
executed brilliantly funded and they
told the mass market we have a product
that pauses live TV
commercials memorises are in your
viewing habits on your behalf and
records without you even asking and the
cynical practical majority said I don’t
believe you I don’t need it I don’t like
it I don’t want it you’re scaring me
they didn’t buy one there are a few
early adopters and to this day they love
their TiVo’s and have upgraded it every
year but it wasn’t enough to make it tip
now imagine if Teva had launched their
product to this population explaining
why it exists if you’re the kind of
person likes to take total control over
every aspect of your life boy do we have
a product for you it pauses live TV
skips commercials memorizers our viewing
habits and records in your behalf
without you even asking in this instance
what the product does serves as tangible
proof of why it exists it is not the
reason we make the choice in the first
place
people don’t buy what you do they buy
why you do it now give you my favorite
example of a law of diffusion Martin
Luther King in 1963 August of 1963 gave
his I have a dream speech and 250,000
people showed up on the mall in washing
Washington to hear dr. King speak no
invitations were sent out and there was
no website to check the date how many
emails did you get to show up here today
right it was seven eight five hundred
people here right nothing right dr. King
was not the only man in America who knew
what had to change to bring about civil
rights in that country he wasn’t the
only great orator of the day he wasn’t
the only man who suffered in a pre-civil
Rights America in fact he suffered less
than most because he was off at
university he wasn’t even the perfect
man he had his complexities and we just
don’t talk about that stuff the
difference is he had a gift he didn’t go
around telling people what we need to do
what we need to do how we’re gonna do it
he went around and told people I believe
I believe I believe and people who
believed what he believed took his cause
and made it their own and they told
people what they believed and those
people took that cause and made it their
own and they told people what they
believed and some built structures to
get the word out more efficiently and lo
and behold on the right day on the right
time a quarter of a million people
showed up on the mall to hear him speak
how many of them showed up for him zero
they showed up for themselves it’s what
they believed
it’s the America that they wanted to
live in it’s the America that they
wanted to raise their children and that
inspired them to get on
travefy eight hours stand in Washington
in the Sun in the middle of summer
simply to hear him speak simply showing
up was one of the things they did in
their life to prove what they believed
even dr. King
it wasn’t about black versus white dr.
King had a belief that there are two
types of laws in this world there were
the laws made by man and there are the
laws made by a higher authority and not
until the laws of man are consistent
with the laws of our higher authority
would we live in a just world the civil
mutt rights movement was the perfect way
for him to bring his cause to life oh
and by the way he gave the I have a
dream speech not the eye of a plans
Beach everybody’s got their
comprehensive 12-point plan these days
we’re not inspired by your plan we’re
inspired by what you believe and where
you’re going this is the remarkable
thing about human beings we can imagine
the future we can only see the things
that we have words for and this is what
great leaders do they can put these
things into words let’s imagine that
this room is empty and we’re standing
over here in the corner I give you a
very simple instruction I want you to go
to that corner in a straight line off
you go no problem and without telling
you I quickly put a chair in front of
you and what do you do you go around the
chair this is the remarkable thing about
human beings when we’re crystal-clear on
the place we’re going on the destination
on the vision our route is flexible even
though you just ignored what I told you
to do I told you to go in there straight
line this is the great thing about
people when we are clear in the
destination we are flexible in the route
reset let’s stand in the corner again
I’ll give you a simple instruction I
want you to go in a straight line to
some point in this room and you say well
where do you owe me to go I say I don’t
know you’re smart pick a place and so
you pick an arbitrary point in the room
you start walking there and without
telling you I quickly put a chair in
front of you what do you do you come to
a grinding halt or you make a sudden
sharp turn and I say to you what are you
doing you say well how can I go in a
straight line if you put a chair in
front of me in other words when we’re
not clearing the destination or the
destination is arbitrary we become
obsessed with the route and now you
think about how we do business these
days you know what’s your goal for the
end of the year to increase top-line
revenues by five hundred million dollars
why not four hundred million why not six
hundred million they’re arbitrary points
in the room and then we become obsessed
with the strategies that we’ve set to
get there as opposed to the great
leaders in the great organizations that
explain why their companies exist and
then leave it to their people to figure
out the route how to get there and
that’s how you get innovation
oops only responsibility is to point
north to point the direction to say
where we’re going and allow everybody
else to figure out how to get there this
is what we feel fulfilled about our
ability to contribute to the
organization this is exactly why Apple
is the most innovative company in the
world it’s not because Steve Jobs came
up with all the ideas do you know how
many ideas he actually came up with none
even Steve Wozniak was the one who built
the computer in the first place long
long ago before Apple even existed Steve
Jobs and Steve Wozniak were sitting in a
garage in Cupertino California and they
made something called a little blue box
which allowed people to avoid paying
long-distance rates on their phone bills
they were challenging the monopoly phone
company Ma Bell and then they started
Apple I challenged Big Blue the existing
monopoly computer platform IBM and then
they challenged Microsoft and then they
challenged the computer the phone
industry and then they challenged the
music industry and now they’re
challenging the publishing industry and
if you’re in television and movies
you’re next it’s just a repeating
pattern jobs told people that he
believed in making products that allow
people to have more control that we
shouldn’t be at the dictate of large
organizations that tell us how things
should work and he’ll add it to his
people to figure out ways how to get
there that’s what drives innovation a
clear sense a destination not an
obsession with the route there are
leaders and there are those who lead
leaders hold a position of power or
influence or rank but those who lead
inspire us and whether they’re
individuals or organizations we follow
those who lead not because we have to
but because we want to and we follow
those who lead not for them but for
ourselves this is for those who want to
inspire those around them this is for
those who want to find someone to to
how much I wanna it sounds very good
with all due respect very well for sense
it but then how can these executives
here be sure how do you know that when
they go back home and they start asking
themselves the question why that it is
actually going to change the way their
operation operate and and the the the
and the the profit that they make how do
I know I don’t but you know these things
these things are like it’s it’s like
having a family you know you as a parent
know that the right thing to do to raise
your children right is to get a Ford
them every ability to access to
education and you know that it’s your
responsibility to help them understand
their strengths and build on their
strengths and you know that it’s your
responsibility to encourage and push
them sometimes discipline them sometimes
help them up sometimes let them falter
by themselves all with the hope and
aspiration that they will achieve more
than even you could achieve
unfortunately you will not see the
results of your investment for thirty
years you know twenty years you’re not
gonna see it and yet we know that that’s
the right thing to do you know even at
the age of sixteen seventeen eighteen
you have no clue of everything you’ve
done as a parent will pay off right and
yet instinctively we still do what we
believe and know is the right thing to
do businesses are exactly the same you
have two families one at work and one at
home great leaders great bosses great
coaches great drill instructors it
doesn’t matter those that have the
responsibility for others act like
parents they take it upon themselves to
give their employees access to this much
education as much competence as much as
they can learn open the doors them allow
them to fail help them up all if the
desire and the want to see that they
succeed beyond even what we could hope
to achieve and this is what you see in
great rate ordinate organizations they
make it their complete obsession to help
their people grow as opposed to my
having one bad quarter and laying people
off you can’t lay off your children if
they have a bad report card you know and
so it’s it’s an investment so what if I
may try to pre rephrase you what you’re
really saying is that this is not
necessarily a thing that would lead to
more profit but it will give you a
feeling that you are doing something
good while at work oh no no it will lead
to more profit now the question you know
every single organization that obeys
these things is more successful than
those who don’t
more importantly if they can sustain
things like innovation they can sustain
things like profitability they can
sustain things like loyalty for the long
term you know I’m unimpressed by
organizations that are able to prove
that they’ve done something for one year
or two years let’s talk about 30 40 or
50 years 80% of the Dow indexes are
companies 35 years or younger that’s not
impressive
you know organizations that can last are
impressive and more importantly when you
have trust in your people and your
people have trust in you when your
people believe that you’re willing to go
to bat for them and protect them guess
what they’re will give everything they
will give blood sweat and tears to you
if they don’t believe that you’ll go to
bat for them then they just working for
your money and so for though if you have
the desire to be more innovative if you
have the desire for longevity if you
have the desire that during hard times
your people will be there for you and
won’t abandon you then these things were
helpful if you don’t really care and you
just want to play a quarterly game and
every single day is more stressful than
the last more power to you but Simon if
I may so I’m assuming that you also
actually selling some sort of product
here right now my question to you is so
where is this why taking you are you
where are you are you part of this are
you somewhere else I have nothing to
sell but that’s fine I come here I’ll
tell you why I’m here because I have a
vision of the world
I believe that fulfillment is a right
and not a privilege I believe it is not
for the chosen for you to love what they
do and enjoy going to work I believe
every single one of us has the right to
wake up every single morning to inspire
to go to work and come home fulfilled by
the work that we do I’m committed to
this vision and so I will play my small
part which is I have some tools and some
ideas on perspective that may help point
us that direction I play one piece of a
jigsaw puzzle the reason I come and do
work events like this is because you’re
actually building the companies you’re
the ones actually responsible for the
human beings that will be fulfilled and
so if I can give you some pieces that
will actually help your people love
coming to work and help you love coming
to work oh and by the way you’ll also be
more innovative more profitable and have
greater loyalty then so be it that’s
that’s my piece of the puzzle as for me
I’m living proof of this you know a few
years ago I went through a struggle in
my own business where I didn’t know why
I was doing what was doing I completely
lost my passion for what I was doing and
people gave me stupid advice
like do what you love you know it’s like
I’m doing the same thing I don’t love it
anymore you know and so when I learned
that every single organization on the
planet even our own careers always
function on these three levels what we
do how we do it and why we do it and if
one of those pieces is missing it’ll be
out of balance the system will be out of
balance I realized that I knew what I
did I knew how I did it but I didn’t
know why and I completely committed
myself to finding this for myself it
restored my passion to levels I’d never
experienced prior and I shared it with
my friends because that’s what we do we
share beautiful things with the people
we love they invited me to their homes
to share with their friends and so it
goes on and I’m the same idiot that I
was you know a few years ago I’m still a
moron when it comes to running a
business I haven’t learned anything new
and yet the life that I lead right now
where I get to advise ambassadors and
members of Congress and I work at the
highest levels of military and work with
you know CEOs of largest corporations
and get invited to nice places like this
to speak to the likes of you or not
because I’m smarter than I was it’s
because I made the conscious decision to
start from here as opposed to starting from here
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