How do you explain
when things don't go as we assume?
00:16
Or better, how do you explain
00:20
when others are able to achieve things
that seem to defy all of the assumptions?
00:23
Why is Apple so innovative?
00:29
Year after year, after year,
00:31
they're more innovative
than all their competition.
00:33
And yet, they're just a computer company.
00:36
They're just like everyone else.
00:38
They have the same access
to the same talent,
00:40
the same consultants, the same media.
00:43
Then why is it that they seem
to have something different?
00:45
Why is it that Martin Luther King
led the Civil Rights Movement?
00:50
He wasn't the only man
who suffered in pre-civil rights America,
00:54
and he certainly wasn't
the only great orator of the day.
00:58
And why is it that the Wright brothers
01:02
were able to figure out controlled,
powered man flight
01:05
when there were certainly other teams
01:08
who were better qualified,
better funded --
01:10
and they didn't achieve
powered man flight,
01:13
and the Wright brothers beat them to it.
01:16
There's something else at play here.
01:18
About three and a half years ago,
I made a discovery.
01:21
And this discovery profoundly changed
my view on how I thought the world worked,
01:25
and it even profoundly changed the way
in which I operate in it.
01:31
As it turns out, there's a pattern.
01:37
As it turns out, all the great inspiring
leaders and organizations in the world,
01:40
whether it's Apple or Martin Luther King
or the Wright brothers,
01:44
they all think, act and communicate
the exact same way.
01:47
And it's the complete opposite
to everyone else.
01:51
All I did was codify it,
01:55
and it's probably
the world's simplest idea.
01:57
I call it the golden circle.
02:01
This little idea explains
02:14
why some organizations and some leaders
are able to inspire where others aren't.
02:16
Let me define the terms really quickly.
02:20
Every single person, every single
organization on the planet
02:22
knows what they do, 100 percent.
02:25
Some know how they do it,
02:29
whether you call it
your differentiated value proposition
02:31
or your proprietary process or your USP.
02:33
But very, very few people or organizations
know why they do what they do.
02:36
And by "why" I don't mean
"to make a profit."
02:41
That's a result. It's always a result.
02:43
By "why," I mean: What's your purpose?
02:45
What's your cause? What's your belief?
02:47
Why does your organization exist?
02:49
Why do you get out of bed in the morning?
02:53
And why should anyone care?
02:55
As a result, the way we think, we act,
02:58
the way we communicate
is from the outside in, it's obvious.
03:00
We go from the clearest thing
to the fuzziest thing.
03:03
But the inspired leaders
and the inspired organizations --
03:05
regardless of their size,
regardless of their industry --
03:09
all think, act and communicate
from the inside out.
03:12
Let me give you an example.
03:17
I use Apple because they're easy
to understand and everybody gets it.
03:19
If Apple were like everyone else,
03:22
a marketing message from them
might sound like this:
03:25
"We make great computers.
03:28
They're beautifully designed,
simple to use and user friendly.
03:31
That's how most of us communicate.
03:38
That's how most marketing
and sales are done,
03:40
that's how we communicate interpersonally.
03:42
we say how we're different or better
03:46
and we expect some sort of a behavior,
03:48
a purchase, a vote, something like that.
03:50
Here's our new law firm:
03:52
We have the best lawyers
with the biggest clients,
03:53
we always perform for our clients.
03:56
Here's our new car:
03:57
It gets great gas mileage,
it has leather seats.
03:59
But it's uninspiring.
04:03
Here's how Apple actually communicates.
04:04
"Everything we do,
we believe in challenging the status quo.
04:08
We believe in thinking differently.
04:13
The way we challenge the status quo
04:16
is by making our products
beautifully designed,
04:18
simple to use and user friendly.
04:21
We just happen to make great computers.
04:23
Totally different, right?
04:28
You're ready to buy a computer from me.
04:29
I just reversed
the order of the information.
04:31
What it proves to us is
that people don't buy what you do;
04:33
people buy why you do it.
04:37
This explains why
every single person in this room
04:39
is perfectly comfortable buying
a computer from Apple.
04:44
But we're also perfectly comfortable
04:47
buying an MP3 player from Apple,
or a phone from Apple,
04:49
or a DVR from Apple.
04:52
As I said before,
Apple's just a computer company.
04:54
Nothing distinguishes them structurally
from any of their competitors.
04:56
Their competitors are equally qualified
to make all of these products.
05:00
In fact, they tried.
05:03
A few years ago, Gateway
came out with flat-screen TVs.
05:05
They're eminently qualified
to make flat-screen TVs.
05:08
They've been making
flat-screen monitors for years.
05:10
Dell came out with MP3 players and PDAs,
05:17
and they make great quality products,
05:23
and they can make perfectly
well-designed products --
05:25
and nobody bought one.
05:28
In fact, talking about it now,
we can't even imagine
05:30
buying an MP3 player from Dell.
05:32
Why would you buy one
from a computer company?
05:34
But we do it every day.
05:36
People don't buy what you do;
they buy why you do it.
05:37
The goal is not to do business
with everybody who needs what you have.
05:40
The goal is to do business with people
who believe what you believe.
05:46
Here's the best part:
05:51
None of what I'm telling you
is my opinion.
05:52
It's all grounded
in the tenets of biology.
05:55
Not psychology, biology.
05:58
If you look at a cross-section
of the human brain,
06:00
from the top down,
the human brain is actually broken
06:03
into three major components
06:05
that correlate perfectly
with the golden circle.
06:07
Our newest brain, our Homo sapien brain,
06:10
corresponds with the "what" level.
06:15
The neocortex is responsible
06:17
for all of our rational
and analytical thought and language.
06:19
The middle two sections make up
our limbic brains,
06:23
and our limbic brains are responsible
for all of our feelings,
06:26
like trust and loyalty.
06:29
It's also responsible
for all human behavior,
06:32
all decision-making,
06:34
and it has no capacity for language.
06:36
In other words, when we communicate
from the outside in,
06:39
yes, people can understand vast
amounts of complicated information
06:42
like features and benefits
and facts and figures.
06:45
It just doesn't drive behavior.
06:48
When we can communicate
from the inside out,
06:50
we're talking directly
to the part of the brain
06:52
that controls behavior,
06:54
and then we allow people to rationalize it
with the tangible things we say and do.
06:56
This is where gut decisions come from.
07:00
Sometimes you can give somebody
all the facts and figures,
07:02
and they say, "I know
what all the facts and details say,
07:06
but it just doesn't feel right."
07:08
Why would we use that verb,
it doesn't "feel" right?
07:10
Because the part of the brain
that controls decision-making
07:13
doesn't control language.
07:15
The best we can muster up is,
07:17
"I don't know.
It just doesn't feel right."
07:18
Or sometimes you say you're leading
with your heart or soul.
07:20
I hate to break it to you,
those aren't other body parts
07:24
controlling your behavior.
07:26
It's all happening here
in your limbic brain,
07:28
the part of the brain that controls
decision-making and not language.
07:30
But if you don't know
why you do what you do,
07:33
and people respond
to why you do what you do,
07:36
then how will you ever get people
07:39
to vote for you,
or buy something from you,
07:42
or, more importantly, be loyal
07:44
and want to be a part
of what it is that you do.
07:46
The goal is not just to sell
to people who need what you have;
07:49
the goal is to sell to people
who believe what you believe.
07:52
The goal is not just
to hire people who need a job;
07:55
it's to hire people
who believe what you believe.
07:59
I always say that, you know,
08:02
if you hire people just because they can
do a job, they'll work for your money,
08:04
but if they believe what you believe,
08:10
they'll work for you with blood
and sweat and tears.
08:12
Nowhere else is there a better example
than with the Wright brothers.
08:14
Most people don't know
about Samuel Pierpont Langley.
08:18
And back in the early 20th century,
08:21
the pursuit of powered man flight
was like the dot com of the day.
08:24
Everybody was trying it.
08:27
And Samuel Pierpont Langley
had, what we assume,
08:29
to be the recipe for success.
08:32
Even now, you ask people,
08:34
"Why did your product
or why did your company fail?"
08:36
and people always give
you the same permutation
08:39
of the same three things:
08:41
under-capitalized, the wrong people,
bad market conditions.
08:43
It's always the same three things,
so let's explore that.
08:46
Samuel Pierpont Langley
08:49
was given 50,000 dollars
by the War Department
08:51
to figure out this flying machine.
08:54
Money was no problem.
08:56
He held a seat at Harvard
08:57
and worked at the Smithsonian
and was extremely well-connected;
09:00
he knew all the big minds of the day.
09:03
He hired the best minds money could find
09:05
and the market conditions were fantastic.
09:09
The New York Times
followed him around everywhere,
09:11
and everyone was rooting for Langley.
09:14
Then how come we've never heard
of Samuel Pierpont Langley?
09:16
A few hundred miles away in Dayton, Ohio,
09:19
Orville and Wilbur Wright,
09:22
they had none of what we consider
to be the recipe for success.
09:24
they paid for their dream
with the proceeds from their bicycle shop.
09:30
Not a single person
on the Wright brothers' team
09:33
had a college education,
09:35
not even Orville or Wilbur.
09:37
And The New York Times
followed them around nowhere.
09:39
The difference was,
09:42
Orville and Wilbur were driven by a cause,
by a purpose, by a belief.
09:44
They believed that if they could
figure out this flying machine,
09:48
it'll change the course of the world.
09:52
Samuel Pierpont Langley was different.
09:55
He wanted to be rich,
and he wanted to be famous.
09:57
He was in pursuit of the result.
10:00
He was in pursuit of the riches.
10:02
And lo and behold, look what happened.
10:04
The people who believed
in the Wright brothers' dream
10:06
worked with them with blood
and sweat and tears.
10:09
The others just worked for the paycheck.
10:12
They tell stories of how every time
the Wright brothers went out,
10:14
they would have to take
five sets of parts,
10:17
because that's how many times
they would crash before supper.
10:19
And, eventually, on December 17th, 1903,
10:23
the Wright brothers took flight,
10:27
and no one was there
to even experience it.
10:30
We found out about it a few days later.
10:32
And further proof that Langley
was motivated by the wrong thing:
10:36
the day the Wright brothers took flight,
10:40
He could have said,
10:43
"That's an amazing discovery, guys,
10:45
and I will improve
upon your technology," but he didn't.
10:47
He wasn't first, he didn't get rich,
he didn't get famous, so he quit.
10:50
People don't buy what you do;
they buy why you do it.
10:54
If you talk about what you believe,
10:57
you will attract those
who believe what you believe.
10:59
But why is it important to attract
those who believe what you believe?
11:02
Something called the law
of diffusion of innovation,
11:07
if you don't know the law,
you know the terminology.
11:10
The first 2.5% of our population
are our innovators.
11:12
The next 13.5% of our population
are our early adopters.
11:17
The next 34% are your early majority,
11:22
your late majority and your laggards.
11:24
The only reason these people
buy touch-tone phones
11:27
is because you can't buy
rotary phones anymore.
11:30
We all sit at various places
at various times on this scale,
11:34
but what the law of diffusion
of innovation tells us
11:37
is that if you want mass-market success
or mass-market acceptance of an idea,
11:40
you cannot have it
until you achieve this tipping point
11:45
between 15 and 18 percent
market penetration,
11:49
and then the system tips.
11:52
I love asking businesses,
"What's your conversion on new business?"
11:55
They love to tell you,
"It's about 10 percent," proudly.
11:58
Well, you can trip
over 10% of the customers.
12:01
We all have about 10% who just "get it."
12:03
That's how we describe them, right?
12:05
That's like that gut feeling,
"Oh, they just get it."
12:07
The problem is: How do you
find the ones that get it
12:09
before doing business
versus the ones who don't get it?
12:12
So it's this here, this little gap
that you have to close,
12:14
as Jeffrey Moore calls it,
"Crossing the Chasm" --
12:18
because, you see, the early majority
will not try something
12:20
until someone else has tried it first.
12:24
And these guys, the innovators
and the early adopters,
12:28
they're comfortable
making those gut decisions.
12:31
They're more comfortable
making those intuitive decisions
12:33
that are driven by what
they believe about the world
12:36
and not just what product is available.
12:40
These are the people who stood
in line for six hours
12:42
to buy an iPhone when they first came out,
12:44
when you could have bought one
off the shelf the next week.
12:47
These are the people
who spent 40,000 dollars
12:50
on flat-screen TVs
when they first came out,
12:52
even though the technology
was substandard.
12:55
And, by the way, they didn't do it
because the technology was so great;
12:58
they did it for themselves.
13:02
It's because they wanted to be first.
13:04
People don't buy what you do;
they buy why you do it
13:06
and what you do simply proves
what you believe.
13:08
In fact, people will do the things
that prove what they believe.
13:12
The reason that person bought the iPhone
in the first six hours,
13:16
stood in line for six hours,
13:21
was because of what they believed
about the world,
13:23
and how they wanted everybody to see them:
13:25
People don't buy what you do;
they buy why you do it.
13:28
So let me give you a famous example,
13:31
a famous failure and a famous success
of the law of diffusion of innovation.
13:33
First, the famous failure.
13:37
It's a commercial example.
13:39
As we said before, the recipe for success
13:41
is money and the right people
and the right market conditions.
13:43
You should have success then.
13:46
From the time TiVo came out
about eight or nine years ago
13:50
to this current day,
13:52
they are the single highest-quality
product on the market,
13:54
hands down, there is no dispute.
13:57
They were extremely well-funded.
14:00
Market conditions were fantastic.
14:02
I mean, we use TiVo as verb.
14:04
I TiVo stuff on my piece-of-junk
Time Warner DVR all the time.
14:06
But TiVo's a commercial failure.
14:12
They've never made money.
14:14
And when they went IPO,
14:16
their stock was at about 30 or 40 dollars
14:18
and then plummeted,
and it's never traded above 10.
14:20
In fact, I don't think
it's even traded above six,
14:22
except for a couple of little spikes.
14:25
Because you see, when TiVo
launched their product,
14:27
they told us all what they had.
14:29
They said, "We have a product
that pauses live TV,
14:32
skips commercials, rewinds live TV
and memorizes your viewing habits
14:35
without you even asking."
14:40
And the cynical majority said,
14:43
"We don't believe you.
14:45
We don't need it. We don't like it.
14:47
You're scaring us."
14:49
What if they had said,
14:51
"If you're the kind of person
who likes to have total control
14:53
over every aspect of your life,
14:58
boy, do we have a product for you.
15:01
It pauses live TV, skips commercials,
15:04
memorizes your viewing habits, etc., etc."
15:06
People don't buy what you do;
they buy why you do it,
15:09
and what you do simply serves
as the proof of what you believe.
15:11
Now let me give you a successful example
of the law of diffusion of innovation.
15:15
In the summer of 1963,
15:21
250,000 people showed up
on the mall in Washington
15:24
to hear Dr. King speak.
15:28
They sent out no invitations,
15:31
and there was no website
to check the date.
15:34
How do you do that?
15:37
Well, Dr. King
wasn't the only man in America
15:39
who was a great orator.
15:41
He wasn't the only man
in America who suffered
15:43
in a pre-civil rights America.
15:46
In fact, some of his ideas were bad.
15:47
He didn't go around telling people
what needed to change in America.
15:52
He went around
and told people what he believed.
15:55
"I believe, I believe, I believe,"
he told people.
15:57
And people who believed what he believed
16:01
took his cause, and they made it
their own, and they told people.
16:03
And some of those people
created structures
16:07
to get the word out to even more people.
16:09
And lo and behold,
250,000 people showed up
16:11
on the right day at the right time
to hear him speak.
16:15
How many of them showed up for him?
16:20
They showed up for themselves.
16:26
It's what they believed about America
16:28
that got them to travel
in a bus for eight hours
16:30
to stand in the sun in Washington
in the middle of August.
16:33
It's what they believed,
and it wasn't about black versus white:
16:36
25% of the audience was white.
16:39
Dr. King believed that there are
two types of laws in this world:
16:42
those that are made by a higher authority
and those that are made by men.
16:46
And not until all the laws
that are made by men
16:50
are consistent with the laws
made by the higher authority
16:53
will we live in a just world.
16:56
It just so happened
that the Civil Rights Movement
16:58
was the perfect thing to help him
bring his cause to life.
17:00
We followed, not for him,
but for ourselves.
17:04
By the way, he gave
the "I have a dream" speech,
17:07
not the "I have a plan" speech.
17:09
Listen to politicians now,
with their comprehensive 12-point plans.
17:15
They're not inspiring anybody.
17:18
Because there are leaders
and there are those who lead.
17:20
Leaders hold a position
of power or authority,
17:23
but those who lead inspire us.
17:27
Whether they're individuals
or organizations,
17:31
we follow those who lead,
not because we have to,
17:34
but because we want to.
17:37
We follow those who lead, not for them,
but for ourselves.
17:40
And it's those who start with "why"
17:45
that have the ability
to inspire those around them
17:48
or find others who inspire them.
17:53
Thank you very much.
17:56