[Applause]
So, I'm embarrassed that I have a career.
I talk about things like trust and
cooperation, and there should be no
demand for my work. But the fact of the
matter is, there is demand for my work,
which means that there's an opportunity.
It means that trust and cooperation are
not yet standard in our organizations,
and yet they should be, and we know that,
which is why we're looking for ways to
bring those things to our organizations.
So, I thought I would do something a
little different today. You know, when
you're speaking to tens of thousands of
people and you have the opportunity to
share a message, of course, most rational
people would say, "Let's go with something
I've talked about lots of times and I'm
really good at," but I'm not normal, so I'm
going to do something completely new, and I
hope this works out. There are two things
that I think that great leaders need to
have: empathy and perspective. And I think
these things are very often forgotten.
Leaders are so often so concerned about
their status or their position in an
organization they actually forget their
real job. And the real job of a leader is
not about being in charge, it's about
taking care of those in our charge. And I
don't think people realize this, and I
don't think people train for this. When
we're junior, our only responsibility is
to be good at our jobs. That's all we
really have to do. And some people
actually go get advanced educations
so that they can be really good at their
jobs--accountants or whatever. Right? And
you show up, and you work hard, and the
company will give us tons and tons of
training on how to do our jobs. They'll
show us how to use the software. They'll
send us away for a few days to get
trained in whatever it is that we're
doing for the company. And then they
expect us to go be good at our jobs. And
that's what we do, we work very hard. And
if you're good at your job, they'll
promote you. And at some point, you'll get
promoted to position where we're now
responsible for the people who do the
job we used to do, but nobody shows us
how to do that. And that's why we get
managers and not leaders. Because the
reason our managers are
micromanaging us is because they
actually do know how to do the job
better than us. That's what got them
promoted. Really, what we have to do is go
through a transition. Some people make it
quickly, some people make it slowly, and
unfortunately, some people will never
make that transition at all. Which is we
have to go this through this transition
of being responsible for the job and
then turning it to somebody who's now
responsible for the people who are
responsible for the job. And as I said
before, one of the great things that is
lacking in most of our companies is that
they are not teaching us how to lead. And
leadership is a skill like any other. It is
a practicable, learnable skill. And it is
something that you work on--it's like a
muscle. If you practice it all the days,
you will get good at it, and you will
become a strong leader. If you stop
practicing, you will become a weak leader.
Like parenting, everyone has the capacity
to be a parent. Doesn't mean everybody
wants to be a parent, and doesn't mean
everybody should be a parent.
Leadership is the same. We all have the
capacity to be a leader, doesn't mean
everybody should be a leader, and it
doesn't mean everybody wants to be a
leader. And the reason is because it
comes at great personal sacrifice.
Remember, you're not in charge; you're
responsible for those in your charge.
That means things like when everything
goes right, you have to give away all the
credit. And when everything goes wrong,
you have to take all the responsibility.
That sucks, right? It's things like
staying late to show somebody what to do.
It's things like when something does
actually break, when something goes wrong,
instead of yelling and screaming and
taking over, you say, "Try again." When the
overwhelming pressures are not on them,
the overwhelming pressures are on us. At
the end of the day, great leaders are not
responsible for the job, they're
responsible for the people who are
responsible for the job. They're not even
responsible for the results. I love
talking to CEOs and saying, "What's your
priority?" And they put their hands on
their hips all proud and say, "My priority
is my customer." I'm like, "Really? You haven't talked
to a customer in fifteen years."
[Audience laughing].
There's no CEO on the planet responsible
for the customer. They're just not.
They're responsible for the people who are
responsible for the people who are
responsible for the customer. I'll tell
you a true story. A few months ago, I
stayed at the Four Seasons in Las Vegas.
It is a wonderful hotel. And the reason
it's a wonderful hotel is not because of
the fancy beds. Any hotel can go and buy
a fancy bed.
The reason it's a wonderful hotel is
because of the people who work there.
If you walk past somebody at the Four
Seasons and they say hello to
you, you get the feeling that they
actually wanted to say hello to you. It's
not that somebody told them, "You
have to say hello to all the customers,
say hello to all the guests." Right? You
actually feel that they care. Now, in
their lobby, they have a coffee stand. And,
one afternoon, I went to buy a cup of
coffee, and there was a barista by the
name of Noah who was serving me. Noah was
fantastic. He was friendly and fun, and he
was engaging with me, and I had so much
fun buying a cup of coffee, I actually
think I gave a 100% tip. Right?
He was wonderful. So, as is my nature, I
asked Noah, "Do you like your job?" And
without skipping a beat, Noah says, "I love
my job." And so I followed up, I said, "What
is it that the Four Seasons is doing
that would make you say to me, 'I love my
job?'" And without skipping a beat, Noah
said, "Throughout the day, managers will
walk past me and ask me how I'm doing, if
there's anything that I need to do my
job better." He said, "Not just my manager,
any manager." And then he said something
magical. He says, "I also work at Caesar's
Palace." And at Caesar's Palace,
the managers are trying to make sure
we're doing everything right. They catch
us when we do things wrong. He says, "When
I go to work there, I like to keep my
head under the radar and just get
through the day so I can get my paycheck."
He says, "Here at the Four Seasons, I feel
I can be myself." Same person, entirely
different experience from the
customer who will engage with Noah. So, we
in leadership are always criticizing the
people. We're always saying, "We've got to get
the right people on the bus.
I've got to fill my team. I've got to
get the right people." But the reality is,
it's not the people. It's the leadership.
If we create the right environment, we
will get people like Noah at the Four
Seasons. If we create the wrong
environment, we will get people like Noah
at Caesar's Palace. It's not the people.
And yet, we're so quick to hire and fire.
You can't hire and fire your children. If
your kids are struggling, we
don't say, "You got a C at school,
you're up for adoption." So why is it that
when somebody has performance problems
at work, why is it that our instinct is
to say, "You're out?" We do not practice
empathy. What does empathy look like?
Here's the lack of empathy. This is
normal in our business world. You walk
into someone's office, someone walks into
our office and says, "Your numbers have
been down for the third quarter in a row.
You have to pick up your numbers,
otherwise I can't guarantee what the
future will look like." How inspired do you
think that person is to come to work the
next day? Here's what empathy looks like.
You walk into someone's office, someone
walks into your office and says, "Your
numbers are down for the third quarter
in a row. Are you okay? I'm worried about
you.
What's going on?" We all have performance
issues. Maybe someone's kid is sick, maybe
they're having problems in their
marriage, maybe one of their parents is
dying. We don't know what's going on in
their lives. And of course, it will affect
performance at work. Empathy is being
concerned about the human being, not just
their output. We have, for some reason, our
work world has changed in the past twenty
and thirty years. We are suffering the side
effects of business theories left over
from the '80s and '90s. And they are bad
for people, and they are bad for business.
Let me give you an example. The concept
of shareholder supremacy was a theory
proposed in the late 1970s. It was
popularized in the '80s and '90s. It is now
standard form today. You talk to any
public company, and you ask them their
priority, and they say, "Maximize
shareholder value."
Really? That's like a coach prioritizing
the needs of the fans over the needs of
the players. How are you going to build a
winning team with that model? But that's
normal today. We don't even perceive it
as broken or damaged or wrong or
outdated. Remember, the '80s and '90s were
boom years with relative peace and a
kinder, gentler cold war. Nobody was
practicing hiding under their desks in
school anymore. We are no longer in those
times. These are no longer boom years.
These are no longer peaceful times, and
those models cannot work today.
Here's another one: mass layoffs--using
someone's livelihood to balance the
books. Right? It's so normal in America
today that we don't even understand how
broken and how damaging it is, not only
to human beings but to business. You know,
companies talk about how they want to
build trust and cooperation, and then they
announce a round of layoffs. Do you know
the quickest way to destroy trust and
destroy cooperation in a business--
literally in one day? Lay people off. And
everyone gets scared. Right? Can you
imagine sending someone home to say,
"Honey, I can no longer provide for our
family because the company missed its
arbitrary projections this year?" And
forget about the people who lost their
jobs--think about the people who kept
their jobs. Because every single decision
a company makes is a piece of
communication. And the company
has just communicated to
everybody else: This is not a meritocracy.
We don't care how hard you work or how
long you've worked here. If we miss our
numbers and you happen to fall on the
wrong side of the spreadsheet, I'm sorry,
we cannot guarantee employment. In other
words, we come to work every day afraid.
And we're asking our youngest generation
to work in environments where how would
any of us ever stand up and admit, "I made
a mistake." We're constantly being told,
"You have to be vulnerable. Leaders are
vulnerable." What does that even mean? It
doesn't mean you walk around crying, "I'm
vulnerable," right? No. What vulnerability
means is you create an environment in
which someone feels safe enough to raise
their hand and say, "I don't know what
I'm doing.
You've given me a job, and I haven't been
trained to do it. I need help. I made a
mistake. I screwed something up. I'm
scared.
I'm worried." All of these things no one
would ever admit inside a company
because it puts a target on your head in
case there's another round. And so, we
keep it to ourselves. And how can a
company ever do well if nobody's ever
willing to a,dmit they made a mistake
that they're scared, or they don't know what
they're doing? And so, we've literally
created cultures in which every single
day, everybody comes to work and
lies, hides, and fakes. And we're asking
our youngest generation to work and
succeed and find themselves and build
their confidence and overcome their
addiction to technology and build strong
relationships at work. We're asking to do
this, and these are the environments we've
created. We keep saying to them, "You're
the future leaders. We're the leaders now.
We're in control." What are we doing? This
is what empathy means: it means if
there's an entire generation struggling,
maybe it's not them. It's like, you know,
the only thing that I, that, the common
factor in all my failed relationships? Me.
Same thing. "Well, we just can't get the
right, you know, the right
performance out of our people." Maybe it's
you. Right? It's not a generation. It's not
them. They're not difficult or hard to
understand. They're human beings like the
rest of us, trying to find their way,
trying to work in a place where they
feel that someone cares about them as a
human being. By the way, that's what we
all want. In other words, it's not even
generational. It's all of us. This is the
practice of empathy. That if we're
struggling to communicate to someone, if
we're struggling to help someone be at
their natural best, I'm tired of people
saying to me, "How do I get the best out
of my people?" Really? That's what you want?
They're like a towel, you just wring them? "How can
I get the most out of them?"
No. How do I help my people be at their
natural best? Right? We're not asking
these questions. We're not practicing
empathy.
We have to start by practicing empathy
and relate to what they may be going
through, and it will profoundly change
the decisions we make; it will profoundly
change the way we see the world.
Someone's driving to work, you're driving
to work, and someone wants to cut into
your lane. What do you do? If you pull
your car up, would you let them in? Most
of us pull our cars up and go like this,
"You wait your turn." Now, let's practice
empathy. I don't know, maybe they've been
out of work for six months. Maybe they
had trouble getting the kids out to
school this morning, and now they're
running late for a really important
interview, and they just have to get to
this interview, and they're going to cut
into our lane. Or maybe they're just a
bastard, I don't know. But that's the
point. We don't know. We don't know. And
the practice of empathy will say, "I'll
let them in, and I'll arrive to work one
car length late." Right? We don't always
have to be right. We do always have to be
in charge. We don't have to be the one
who succeeds. It's not about winning or
losing. And that's where I go to the
second point. After empathy comes
perspective, where it's not about winning
or losing. In game theory, there are two
kinds of games. There are finite games
and there are infinite games. And this is
how you're going to change your perspective.
Right? A finite game is defined as known
players, fixed rules, and an agreed-upon
objective. Baseball, for example, we know
the rules, we all agree to the rules, and
whoever has more runs at the end of nine
innings is the winner, and the game is
over. No one ever says, "If we can just
play two more innings, I know we can come
back." Doesn't work that way. The game is
over. Right? That's a finite game. Then you
have an infinite game. Infinite games are
defined as known and unknown players, the
rules are changeable, and the objective
is to keep the game in play, to
perpetuate the game. When you pit a
finite player versus a finite player,
this system is stable.
Baseball is stable. Right? When you pit an
infinite player versus an
infinite player, this system is also
stable, like the Cold War, for example,
because there cannot be a winner and a
loser, there are no winners and losers in
an infinite game. Right? It doesn't exist.
And because there are no winners or
losers, what ends up happening in the
infinite contest is players drop out
when they run out of the will or the
resources to play. But there's no winners
or losers. Problems arise when you pit a
finite player versus an infinite player.
Because the finite player is playing to
win, and an infinite player is to playing
to keep the game going. Right? This is
what happened to us in Vietnam. We were
playing to win, and the Vietnamese were
fighting for their lives. We were the
ones who got stuck in quagmire. This was
the Soviet Union in Afghanistan. They
were trying to beat the mujahideen, and
the mujahideen would fight for as long
as necessary. Quagmire. Now, let's look
at business. The game of business has
preexisted or has existed long before
every single company that exists on this
planet today. And it will outlast every
single company that exists
on this planet today. There's no winning
the game of business. And the reason is
is because we haven't agreed to the
rules. I get such a kick out of this. You
realize how many companies actually
don't know the game they're in. Right?
Listen to the language that the companies
use. "We're trying to beat our competition."
"We're trying to be number one." Did you
know that we were ranked number one? Look
at the listing. Based on what criteria?
Revenues? Profits? Market share? Square
footage? Number of employees? Based on
what time frame? A quarter? A year? Five
years? Ten years? Twenty years? Fifty years? A hundred
years? I haven't agreed to those
standards. How can you declare yourself
the winner?
How can you declare yourself number one
where no one else in the game has agreed
to the rules? It's arbitrary. There is no
winning because there's no end. In other
words, companies are playing finite games.
Listen to their language. They're trying
to beat their competition. What does that
even mean? It's the leaders and the
companies that understand the game that
they're in and organize their resources
and their decision-making around
the infinite contest that outlast and
frustrate their competition. All the
companies that we've referred to as the
exceptions--Southwest Airlines, Apple
Computers, Harley Davidson--they're the
exception. No. They're playing the
infinite contest. They frustrate their
competition is what happens. That's what
happens because they're not playing to
win.
Jim Senegal, the founder of Costco, which
is the only real company that
gives Walmart a run for its money.
He says, "Public companies are looking to
succeed for the quarter." He says, "We're
looking for the next fifty years." You can
hear him. He's playing the infinite
contest. I spoke at a leadership summit
for Microsoft. I also spoke at a
leadership summit for Apple. Now, at the
Microsoft summit, I would say 70% of the
executives, and this was under the Steve
Ballmer days, I would say about 70% of
the executives spent about 70% of their
presentations talking about how to beat
Apple. At the Apple summit, a 100%
of the executives spent a
100% of their presentations
talking about how to help teachers teach
and how to help students learn. One was
obsessed with their competition, the
other one was obsessed with where
they're going. So at the end of my
presentation at Microsoft, they gave me a
gift. They gave me the new Zune, which was
the competitor to the iPod Touch when it
was a thing. Right? And I have to tell you,
this piece of technology was spectacular.
It was beautiful. The user interface was
incredible. The design was amazing. It was
intuitive. It was one of the most
beautiful, elegant pieces of technology
I'd ever seen. Right? Now, they didn't work
with iTunes, which is an entirely
different problem. I couldn't use it.
[Audience laughing].
But that's something else. I'm sitting in
the back of a taxi with a senior Apple
executive, sort of employee number 12
kind of guy, and I decide to stir the pot.
And I turn to him and I say, "You know, I spoke
at a Microsoft summit, and they gave me
their new Zune, and I have to tell you, it
is so much better than your iPod Touch."
And he turned to me and said, "I have no
doubt." Conversation over.
[Audience laughing].
Because the infinite player isn't playing to be
number one every day with every product.
They're playing to outlast the
competition. If I had said to Microsoft,
"Oh, I've got the new iPod Touch, it's so
much better than your new Zune," they would have said,
"Can we see it? What does it do? How--We
have to see it." Because one is obsessed
with their competition, the other is
obsessed with why they do what they do,
the other is obsessed with where they're
going. And the reason Apple frustrates
their competition is because secretly,
they're not even competing against them.
They're competing against themselves. And
they understand that sometimes you're a
little bit ahead, and sometimes you're a
little bit behind. And sometimes your
product is better, and sometimes you're
not. But if you wake up every single
morning and compete against yourself, how
do I make our products better than they
were yesterday? How do I take care of our
customers better than we did yesterday?
How do we advance our cause more
efficiently, more productively than we
did yesterday? How do we find new
solutions to advance our calling, our
cause, our purpose, our beliefs, our why
every single day? What you'll find is,
over time, you will probably be ahead
more often. Those who play the infinite
game understand it's not about the
battle, it's about the war. And they don't
play to win every day, and they frustrate
their competition until their
competition drops out of the game. Every
single bankruptcy, almost every merger
and acquisition is basically a company
saying, "We no longer have the will or the
resources to continue to play, and we
have no choice but to either drop out of the
game or
or merge our resources with another
player so that we can stay in the game."
That's what that is. And if you think
about the number of bankruptcies and
mergers and acquisitions, it's kind of
proof that most companies don't even
know the game they're in. You want to be
a great leader? Start with empathy. You
want to be a great leader? Change your
perspective and play the game you're
actually playing. Thank you very much.
[Applause]