0:00:00.000,0:00:21.070 [Applause] 0:00:23.779,0:00:28.020 So, I'm embarrassed that I have a career. 0:00:28.020,0:00:31.919 I talk about things like trust and 0:00:31.919,0:00:34.230 cooperation, and there should be no 0:00:34.230,0:00:37.410 demand for my work. But the fact of the 0:00:37.410,0:00:39.540 matter is, there is demand for my work, 0:00:39.540,0:00:41.210 which means that there's an opportunity. 0:00:41.210,0:00:44.250 It means that trust and cooperation are 0:00:44.250,0:00:46.650 not yet standard in our organizations, 0:00:46.650,0:00:48.180 and yet they should be, and we know that, 0:00:48.180,0:00:49.769 which is why we're looking for ways to 0:00:49.769,0:00:52.760 bring those things to our organizations. 0:00:52.760,0:00:54.570 So, I thought I would do something a 0:00:54.570,0:00:56.339 little different today. You know, when 0:00:56.339,0:00:58.650 you're speaking to tens of thousands of 0:00:58.650,0:01:00.390 people and you have the opportunity to 0:01:00.390,0:01:02.549 share a message, of course, most rational 0:01:02.549,0:01:03.989 people would say, "Let's go with something 0:01:03.989,0:01:06.060 I've talked about lots of times and I'm 0:01:06.060,0:01:10.140 really good at," but I'm not normal, so I'm 0:01:10.140,0:01:12.240 going to do something completely new, and I 0:01:12.240,0:01:15.509 hope this works out. There are two things 0:01:15.509,0:01:16.920 that I think that great leaders need to 0:01:16.920,0:01:20.280 have: empathy and perspective. And I think 0:01:20.280,0:01:21.720 these things are very often forgotten. 0:01:21.720,0:01:24.359 Leaders are so often so concerned about 0:01:24.359,0:01:26.100 their status or their position in an 0:01:26.100,0:01:27.539 organization they actually forget their 0:01:27.539,0:01:30.570 real job. And the real job of a leader is 0:01:30.570,0:01:33.030 not about being in charge, it's about 0:01:33.030,0:01:36.390 taking care of those in our charge. And I 0:01:36.390,0:01:38.130 don't think people realize this, and I 0:01:38.130,0:01:40.200 don't think people train for this. When 0:01:40.200,0:01:43.049 we're junior, our only responsibility is 0:01:43.049,0:01:44.850 to be good at our jobs. That's all we 0:01:44.850,0:01:46.859 really have to do. And some people 0:01:46.859,0:01:49.399 actually go get advanced educations 0:01:49.399,0:01:51.539 so that they can be really good at their 0:01:51.539,0:01:53.579 jobs--accountants or whatever. Right? And 0:01:53.579,0:01:55.979 you show up, and you work hard, and the 0:01:55.979,0:01:58.409 company will give us tons and tons of 0:01:58.409,0:02:00.630 training on how to do our jobs. They'll 0:02:00.630,0:02:02.249 show us how to use the software. They'll 0:02:02.249,0:02:04.170 send us away for a few days to get 0:02:04.170,0:02:06.240 trained in whatever it is that we're 0:02:06.240,0:02:07.770 doing for the company. And then they 0:02:07.770,0:02:09.990 expect us to go be good at our jobs. And 0:02:09.990,0:02:11.850 that's what we do, we work very hard. And 0:02:11.850,0:02:15.930 if you're good at your job, they'll 0:02:15.930,0:02:19.650 promote you. And at some point, you'll get 0:02:19.650,0:02:21.120 promoted to position where we're now 0:02:21.120,0:02:22.709 responsible for the people who do the 0:02:22.709,0:02:25.230 job we used to do, but nobody shows us 0:02:25.230,0:02:27.330 how to do that. And that's why we get 0:02:27.330,0:02:29.489 managers and not leaders. Because the 0:02:29.489,0:02:30.410 reason our managers are 0:02:30.410,0:02:31.760 micromanaging us is because they 0:02:31.760,0:02:33.860 actually do know how to do the job 0:02:33.860,0:02:35.510 better than us. That's what got them 0:02:35.510,0:02:39.110 promoted. Really, what we have to do is go 0:02:39.110,0:02:41.150 through a transition. Some people make it 0:02:41.150,0:02:43.130 quickly, some people make it slowly, and 0:02:43.130,0:02:44.390 unfortunately, some people will never 0:02:44.390,0:02:46.670 make that transition at all. Which is we 0:02:46.670,0:02:48.110 have to go this through this transition 0:02:48.110,0:02:50.120 of being responsible for the job and 0:02:50.120,0:02:51.950 then turning it to somebody who's now 0:02:51.950,0:02:53.930 responsible for the people who are 0:02:53.930,0:02:56.180 responsible for the job. And as I said 0:02:56.180,0:02:57.680 before, one of the great things that is 0:02:57.680,0:03:00.050 lacking in most of our companies is that 0:03:00.050,0:03:03.640 they are not teaching us how to lead. And 0:03:03.640,0:03:06.980 leadership is a skill like any other. It is 0:03:06.980,0:03:10.160 a practicable, learnable skill. And it is 0:03:10.160,0:03:11.720 something that you work on--it's like a 0:03:11.720,0:03:13.690 muscle. If you practice it all the days, 0:03:13.690,0:03:15.710 you will get good at it, and you will 0:03:15.710,0:03:17.600 become a strong leader. If you stop 0:03:17.600,0:03:19.250 practicing, you will become a weak leader. 0:03:19.250,0:03:22.760 Like parenting, everyone has the capacity 0:03:22.760,0:03:25.910 to be a parent. Doesn't mean everybody 0:03:25.910,0:03:28.010 wants to be a parent, and doesn't mean 0:03:28.010,0:03:29.590 everybody should be a parent. 0:03:29.590,0:03:32.480 Leadership is the same. We all have the 0:03:32.480,0:03:35.180 capacity to be a leader, doesn't mean 0:03:35.180,0:03:37.010 everybody should be a leader, and it 0:03:37.010,0:03:38.330 doesn't mean everybody wants to be a 0:03:38.330,0:03:40.850 leader. And the reason is because it 0:03:40.850,0:03:44.260 comes at great personal sacrifice. 0:03:44.260,0:03:47.090 Remember, you're not in charge; you're 0:03:47.090,0:03:49.330 responsible for those in your charge. 0:03:49.330,0:03:51.650 That means things like when everything 0:03:51.650,0:03:53.180 goes right, you have to give away all the 0:03:53.180,0:03:54.800 credit. And when everything goes wrong, 0:03:54.800,0:03:56.810 you have to take all the responsibility. 0:03:56.810,0:04:01.040 That sucks, right? It's things like 0:04:01.040,0:04:03.290 staying late to show somebody what to do. 0:04:03.290,0:04:06.110 It's things like when something does 0:04:06.110,0:04:08.120 actually break, when something goes wrong, 0:04:08.120,0:04:10.130 instead of yelling and screaming and 0:04:10.130,0:04:14.330 taking over, you say, "Try again." When the 0:04:14.330,0:04:16.040 overwhelming pressures are not on them, 0:04:16.040,0:04:19.370 the overwhelming pressures are on us. At 0:04:19.370,0:04:21.529 the end of the day, great leaders are not 0:04:21.529,0:04:23.060 responsible for the job, they're 0:04:23.060,0:04:24.230 responsible for the people who are 0:04:24.230,0:04:26.180 responsible for the job. They're not even 0:04:26.180,0:04:28.340 responsible for the results. I love 0:04:28.340,0:04:30.200 talking to CEOs and saying, "What's your 0:04:30.200,0:04:31.820 priority?" And they put their hands on 0:04:31.820,0:04:33.380 their hips all proud and say, "My priority 0:04:33.380,0:04:35.419 is my customer." I'm like, "Really? You haven't talked 0:04:35.419,0:04:37.890 to a customer in fifteen years." 0:04:37.890,0:04:39.360 [Audience laughing]. 0:04:39.360,0:04:41.949 There's no CEO on the planet responsible 0:04:41.949,0:04:43.539 for the customer. They're just not. 0:04:43.539,0:04:45.969 They're responsible for the people who are 0:04:45.969,0:04:47.680 responsible for the people who are 0:04:47.680,0:04:49.779 responsible for the customer. I'll tell 0:04:49.779,0:04:51.729 you a true story. A few months ago, I 0:04:51.729,0:04:55.719 stayed at the Four Seasons in Las Vegas. 0:04:55.719,0:05:00.039 It is a wonderful hotel. And the reason 0:05:00.039,0:05:01.539 it's a wonderful hotel is not because of 0:05:01.539,0:05:04.569 the fancy beds. Any hotel can go and buy 0:05:04.569,0:05:05.919 a fancy bed. 0:05:05.919,0:05:07.960 The reason it's a wonderful hotel is 0:05:07.960,0:05:09.460 because of the people who work there. 0:05:09.460,0:05:11.319 If you walk past somebody at the Four 0:05:11.319,0:05:12.789 Seasons and they say hello to 0:05:12.789,0:05:14.529 you, you get the feeling that they 0:05:14.529,0:05:16.479 actually wanted to say hello to you. It's 0:05:16.479,0:05:17.710 not that somebody told them, "You 0:05:17.710,0:05:19.090 have to say hello to all the customers, 0:05:19.090,0:05:20.740 say hello to all the guests." Right? You 0:05:20.740,0:05:23.680 actually feel that they care. Now, in 0:05:23.680,0:05:27.250 their lobby, they have a coffee stand. And, 0:05:27.250,0:05:29.289 one afternoon, I went to buy a cup of 0:05:29.289,0:05:31.060 coffee, and there was a barista by the 0:05:31.060,0:05:33.659 name of Noah who was serving me. Noah was 0:05:33.659,0:05:37.779 fantastic. He was friendly and fun, and he 0:05:37.779,0:05:39.639 was engaging with me, and I had so much 0:05:39.639,0:05:41.050 fun buying a cup of coffee, I actually 0:05:41.050,0:05:43.210 think I gave a 100% tip. Right? 0:05:43.210,0:05:46.150 He was wonderful. So, as is my nature, I 0:05:46.150,0:05:49.389 asked Noah, "Do you like your job?" And 0:05:49.389,0:05:51.759 without skipping a beat, Noah says, "I love 0:05:51.759,0:05:54.669 my job." And so I followed up, I said, "What 0:05:54.669,0:05:56.409 is it that the Four Seasons is doing 0:05:56.409,0:05:59.830 that would make you say to me, 'I love my 0:05:59.830,0:06:02.529 job?'" And without skipping a beat, Noah 0:06:02.529,0:06:04.810 said, "Throughout the day, managers will 0:06:04.810,0:06:07.300 walk past me and ask me how I'm doing, if 0:06:07.300,0:06:08.919 there's anything that I need to do my 0:06:08.919,0:06:11.050 job better." He said, "Not just my manager, 0:06:11.050,0:06:14.379 any manager." And then he said something 0:06:14.379,0:06:18.460 magical. He says, "I also work at Caesar's 0:06:18.460,0:06:20.889 Palace." And at Caesar's Palace, 0:06:20.889,0:06:22.300 the managers are trying to make sure 0:06:22.300,0:06:23.710 we're doing everything right. They catch 0:06:23.710,0:06:26.500 us when we do things wrong. He says, "When 0:06:26.500,0:06:28.060 I go to work there, I like to keep my 0:06:28.060,0:06:30.250 head under the radar and just get 0:06:30.250,0:06:32.520 through the day so I can get my paycheck." 0:06:32.520,0:06:35.889 He says, "Here at the Four Seasons, I feel 0:06:35.889,0:06:42.009 I can be myself." Same person, entirely 0:06:42.009,0:06:44.560 different experience from the 0:06:44.560,0:06:46.959 customer who will engage with Noah. So, we 0:06:46.959,0:06:48.819 in leadership are always criticizing the 0:06:48.819,0:06:50.529 people. We're always saying, "We've got to get 0:06:50.529,0:06:51.260 the right people on the bus. 0:06:51.260,0:06:53.240 I've got to fill my team. I've got to 0:06:53.240,0:06:54.950 get the right people." But the reality is, 0:06:54.950,0:06:56.930 it's not the people. It's the leadership. 0:06:56.930,0:07:00.650 If we create the right environment, we 0:07:00.650,0:07:02.900 will get people like Noah at the Four 0:07:02.900,0:07:04.970 Seasons. If we create the wrong 0:07:04.970,0:07:06.950 environment, we will get people like Noah 0:07:06.950,0:07:10.460 at Caesar's Palace. It's not the people. 0:07:10.460,0:07:12.790 And yet, we're so quick to hire and fire. 0:07:12.790,0:07:15.710 You can't hire and fire your children. If 0:07:15.710,0:07:18.230 your kids are struggling, we 0:07:18.230,0:07:20.150 don't say, "You got a C at school, 0:07:20.150,0:07:25.100 you're up for adoption." So why is it that 0:07:25.100,0:07:26.960 when somebody has performance problems 0:07:26.960,0:07:29.240 at work, why is it that our instinct is 0:07:29.240,0:07:33.220 to say, "You're out?" We do not practice 0:07:33.220,0:07:35.810 empathy. What does empathy look like? 0:07:35.810,0:07:37.460 Here's the lack of empathy. This is 0:07:37.460,0:07:39.470 normal in our business world. You walk 0:07:39.470,0:07:40.880 into someone's office, someone walks into 0:07:40.880,0:07:42.620 our office and says, "Your numbers have 0:07:42.620,0:07:44.210 been down for the third quarter in a row. 0:07:44.210,0:07:46.340 You have to pick up your numbers, 0:07:46.340,0:07:48.290 otherwise I can't guarantee what the 0:07:48.290,0:07:50.510 future will look like." How inspired do you 0:07:50.510,0:07:52.250 think that person is to come to work the 0:07:52.250,0:07:54.650 next day? Here's what empathy looks like. 0:07:54.650,0:07:56.540 You walk into someone's office, someone 0:07:56.540,0:07:57.680 walks into your office and says, "Your 0:07:57.680,0:07:59.510 numbers are down for the third quarter 0:07:59.510,0:08:03.050 in a row. Are you okay? I'm worried about 0:08:03.050,0:08:03.620 you. 0:08:03.620,0:08:06.860 What's going on?" We all have performance 0:08:06.860,0:08:08.900 issues. Maybe someone's kid is sick, maybe 0:08:08.900,0:08:09.950 they're having problems in their 0:08:09.950,0:08:11.780 marriage, maybe one of their parents is 0:08:11.780,0:08:14.000 dying. We don't know what's going on in 0:08:14.000,0:08:16.070 their lives. And of course, it will affect 0:08:16.070,0:08:18.650 performance at work. Empathy is being 0:08:18.650,0:08:21.050 concerned about the human being, not just 0:08:21.050,0:08:25.250 their output. We have, for some reason, our 0:08:25.250,0:08:28.070 work world has changed in the past twenty 0:08:28.070,0:08:31.310 and thirty years. We are suffering the side 0:08:31.310,0:08:34.309 effects of business theories left over 0:08:34.309,0:08:37.580 from the '80s and '90s. And they are bad 0:08:37.580,0:08:41.799 for people, and they are bad for business. 0:08:41.799,0:08:45.110 Let me give you an example. The concept 0:08:45.110,0:08:48.290 of shareholder supremacy was a theory 0:08:48.290,0:08:52.670 proposed in the late 1970s. It was 0:08:52.670,0:08:56.540 popularized in the '80s and '90s. It is now 0:08:56.540,0:08:59.680 standard form today. You talk to any 0:08:59.680,0:09:01.910 public company, and you ask them their 0:09:01.910,0:09:02.990 priority, and they say, "Maximize 0:09:02.990,0:09:04.050 shareholder value." 0:09:04.050,0:09:07.149 Really? That's like a coach prioritizing 0:09:07.149,0:09:09.130 the needs of the fans over the needs of 0:09:09.130,0:09:10.870 the players. How are you going to build a 0:09:10.870,0:09:13.089 winning team with that model? But that's 0:09:13.089,0:09:14.860 normal today. We don't even perceive it 0:09:14.860,0:09:16.870 as broken or damaged or wrong or 0:09:16.870,0:09:20.410 outdated. Remember, the '80s and '90s were 0:09:20.410,0:09:23.980 boom years with relative peace and a 0:09:23.980,0:09:25.959 kinder, gentler cold war. Nobody was 0:09:25.959,0:09:28.029 practicing hiding under their desks in 0:09:28.029,0:09:31.569 school anymore. We are no longer in those 0:09:31.569,0:09:34.209 times. These are no longer boom years. 0:09:34.209,0:09:36.850 These are no longer peaceful times, and 0:09:36.850,0:09:39.569 those models cannot work today. 0:09:39.569,0:09:45.370 Here's another one: mass layoffs--using 0:09:45.370,0:09:47.860 someone's livelihood to balance the 0:09:47.860,0:09:51.009 books. Right? It's so normal in America 0:09:51.009,0:09:53.319 today that we don't even understand how 0:09:53.319,0:09:55.630 broken and how damaging it is, not only 0:09:55.630,0:09:58.089 to human beings but to business. You know, 0:09:58.089,0:09:59.410 companies talk about how they want to 0:09:59.410,0:10:00.610 build trust and cooperation, and then they 0:10:00.610,0:10:02.139 announce a round of layoffs. Do you know 0:10:02.139,0:10:04.300 the quickest way to destroy trust and 0:10:04.300,0:10:06.009 destroy cooperation in a business-- 0:10:06.009,0:10:09.399 literally in one day? Lay people off. And 0:10:09.399,0:10:12.189 everyone gets scared. Right? Can you 0:10:12.189,0:10:14.199 imagine sending someone home to say, 0:10:14.199,0:10:15.850 "Honey, I can no longer provide for our 0:10:15.850,0:10:17.439 family because the company missed its 0:10:17.439,0:10:20.769 arbitrary projections this year?" And 0:10:20.769,0:10:22.149 forget about the people who lost their 0:10:22.149,0:10:24.160 jobs--think about the people who kept 0:10:24.160,0:10:26.290 their jobs. Because every single decision 0:10:26.290,0:10:27.790 a company makes is a piece of 0:10:27.790,0:10:29.829 communication. And the company 0:10:29.829,0:10:31.750 has just communicated to 0:10:31.750,0:10:34.350 everybody else: This is not a meritocracy. 0:10:34.350,0:10:37.060 We don't care how hard you work or how 0:10:37.060,0:10:39.550 long you've worked here. If we miss our 0:10:39.550,0:10:41.199 numbers and you happen to fall on the 0:10:41.199,0:10:44.290 wrong side of the spreadsheet, I'm sorry, 0:10:44.290,0:10:46.420 we cannot guarantee employment. In other 0:10:46.420,0:10:48.490 words, we come to work every day afraid. 0:10:48.490,0:10:51.579 And we're asking our youngest generation 0:10:51.579,0:10:53.470 to work in environments where how would 0:10:53.470,0:10:56.110 any of us ever stand up and admit, "I made 0:10:56.110,0:10:58.480 a mistake." We're constantly being told, 0:10:58.480,0:11:00.310 "You have to be vulnerable. Leaders are 0:11:00.310,0:11:02.079 vulnerable." What does that even mean? It 0:11:02.079,0:11:03.950 doesn't mean you walk around crying, "I'm 0:11:03.950,0:11:07.820 vulnerable," right? No. What vulnerability 0:11:07.820,0:11:09.290 means is you create an environment in 0:11:09.290,0:11:11.810 which someone feels safe enough to raise 0:11:11.810,0:11:14.120 their hand and say, "I don't know what 0:11:14.120,0:11:14.840 I'm doing. 0:11:14.840,0:11:17.030 You've given me a job, and I haven't been 0:11:17.030,0:11:20.420 trained to do it. I need help. I made a 0:11:20.420,0:11:23.930 mistake. I screwed something up. I'm 0:11:23.930,0:11:24.710 scared. 0:11:24.710,0:11:27.440 I'm worried." All of these things no one 0:11:27.440,0:11:29.390 would ever admit inside a company 0:11:29.390,0:11:31.310 because it puts a target on your head in 0:11:31.310,0:11:33.950 case there's another round. And so, we 0:11:33.950,0:11:35.600 keep it to ourselves. And how can a 0:11:35.600,0:11:37.760 company ever do well if nobody's ever 0:11:37.760,0:11:38.870 willing to a,dmit they made a mistake 0:11:38.870,0:11:40.460 that they're scared, or they don't know what 0:11:40.460,0:11:42.140 they're doing? And so, we've literally 0:11:42.140,0:11:43.730 created cultures in which every single 0:11:43.730,0:11:45.320 day, everybody comes to work and 0:11:45.320,0:11:49.130 lies, hides, and fakes. And we're asking 0:11:49.130,0:11:51.740 our youngest generation to work and 0:11:51.740,0:11:54.170 succeed and find themselves and build 0:11:54.170,0:11:56.330 their confidence and overcome their 0:11:56.330,0:11:58.520 addiction to technology and build strong 0:11:58.520,0:12:00.590 relationships at work. We're asking to do 0:12:00.590,0:12:01.850 this, and these are the environments we've 0:12:01.850,0:12:04.550 created. We keep saying to them, "You're 0:12:04.550,0:12:08.680 the future leaders. We're the leaders now. 0:12:08.680,0:12:14.660 We're in control." What are we doing? This 0:12:14.660,0:12:17.210 is what empathy means: it means if 0:12:17.210,0:12:19.520 there's an entire generation struggling, 0:12:19.520,0:12:22.580 maybe it's not them. It's like, you know, 0:12:22.580,0:12:25.040 the only thing that I, that, the common 0:12:25.040,0:12:29.620 factor in all my failed relationships? Me. 0:12:29.620,0:12:32.480 Same thing. "Well, we just can't get the 0:12:32.480,0:12:33.440 right, you know, the right 0:12:33.440,0:12:35.390 performance out of our people." Maybe it's 0:12:35.390,0:12:39.560 you. Right? It's not a generation. It's not 0:12:39.560,0:12:41.930 them. They're not difficult or hard to 0:12:41.930,0:12:44.330 understand. They're human beings like the 0:12:44.330,0:12:45.980 rest of us, trying to find their way, 0:12:45.980,0:12:48.260 trying to work in a place where they 0:12:48.260,0:12:50.750 feel that someone cares about them as a 0:12:50.750,0:12:53.840 human being. By the way, that's what we 0:12:53.840,0:12:57.110 all want. In other words, it's not even 0:12:57.110,0:13:01.040 generational. It's all of us. This is the 0:13:01.040,0:13:02.840 practice of empathy. That if we're 0:13:02.840,0:13:04.910 struggling to communicate to someone, if 0:13:04.910,0:13:06.890 we're struggling to help someone be at 0:13:06.890,0:13:09.140 their natural best, I'm tired of people 0:13:09.140,0:13:10.610 saying to me, "How do I get the best out 0:13:10.610,0:13:12.050 of my people?" Really? That's what you want? 0:13:12.050,0:13:13.880 They're like a towel, you just wring them? "How can 0:13:13.880,0:13:16.880 I get the most out of them?" 0:13:16.880,0:13:18.530 No. How do I help my people be at their 0:13:18.530,0:13:21.680 natural best? Right? We're not asking 0:13:21.680,0:13:22.760 these questions. We're not practicing 0:13:22.760,0:13:23.330 empathy. 0:13:23.330,0:13:25.250 We have to start by practicing empathy 0:13:25.250,0:13:27.410 and relate to what they may be going 0:13:27.410,0:13:29.240 through, and it will profoundly change 0:13:29.240,0:13:30.710 the decisions we make; it will profoundly 0:13:30.710,0:13:34.300 change the way we see the world. 0:13:34.300,0:13:37.190 Someone's driving to work, you're driving 0:13:37.190,0:13:39.020 to work, and someone wants to cut into 0:13:39.020,0:13:41.180 your lane. What do you do? If you pull 0:13:41.180,0:13:44.150 your car up, would you let them in? Most 0:13:44.150,0:13:45.680 of us pull our cars up and go like this, 0:13:45.680,0:13:49.100 "You wait your turn." Now, let's practice 0:13:49.100,0:13:50.600 empathy. I don't know, maybe they've been 0:13:50.600,0:13:52.040 out of work for six months. Maybe they 0:13:52.040,0:13:53.300 had trouble getting the kids out to 0:13:53.300,0:13:54.410 school this morning, and now they're 0:13:54.410,0:13:56.180 running late for a really important 0:13:56.180,0:13:57.680 interview, and they just have to get to 0:13:57.680,0:13:58.910 this interview, and they're going to cut 0:13:58.910,0:14:01.580 into our lane. Or maybe they're just a 0:14:01.580,0:14:07.070 bastard, I don't know. But that's the 0:14:07.070,0:14:11.030 point. We don't know. We don't know. And 0:14:11.030,0:14:13.370 the practice of empathy will say, "I'll 0:14:13.370,0:14:17.060 let them in, and I'll arrive to work one 0:14:17.060,0:14:20.840 car length late." Right? We don't always 0:14:20.840,0:14:23.660 have to be right. We do always have to be 0:14:23.660,0:14:25.910 in charge. We don't have to be the one 0:14:25.910,0:14:27.920 who succeeds. It's not about winning or 0:14:27.920,0:14:30.290 losing. And that's where I go to the 0:14:30.290,0:14:33.490 second point. After empathy comes 0:14:33.490,0:14:36.350 perspective, where it's not about winning 0:14:36.350,0:14:41.240 or losing. In game theory, there are two 0:14:41.240,0:14:43.340 kinds of games. There are finite games 0:14:43.340,0:14:45.890 and there are infinite games. And this is 0:14:45.890,0:14:47.230 how you're going to change your perspective. 0:14:47.230,0:14:51.110 Right? A finite game is defined as known 0:14:51.110,0:14:54.200 players, fixed rules, and an agreed-upon 0:14:54.200,0:14:58.160 objective. Baseball, for example, we know 0:14:58.160,0:14:59.690 the rules, we all agree to the rules, and 0:14:59.690,0:15:01.790 whoever has more runs at the end of nine 0:15:01.790,0:15:03.350 innings is the winner, and the game is 0:15:03.350,0:15:05.210 over. No one ever says, "If we can just 0:15:05.210,0:15:06.680 play two more innings, I know we can come 0:15:06.680,0:15:09.470 back." Doesn't work that way. The game is 0:15:09.470,0:15:12.560 over. Right? That's a finite game. Then you 0:15:12.560,0:15:15.110 have an infinite game. Infinite games are 0:15:15.110,0:15:18.800 defined as known and unknown players, the 0:15:18.800,0:15:21.710 rules are changeable, and the objective 0:15:21.710,0:15:24.170 is to keep the game in play, to 0:15:24.170,0:15:26.990 perpetuate the game. When you pit a 0:15:26.990,0:15:28.790 finite player versus a finite player, 0:15:28.790,0:15:30.920 this system is stable. 0:15:30.920,0:15:34.910 Baseball is stable. Right? When you pit an 0:15:34.910,0:15:36.710 infinite player versus an 0:15:36.710,0:15:38.660 infinite player, this system is also 0:15:38.660,0:15:40.760 stable, like the Cold War, for example, 0:15:40.760,0:15:42.890 because there cannot be a winner and a 0:15:42.890,0:15:44.600 loser, there are no winners and losers in 0:15:44.600,0:15:46.850 an infinite game. Right? It doesn't exist. 0:15:46.850,0:15:48.650 And because there are no winners or 0:15:48.650,0:15:50.210 losers, what ends up happening in the 0:15:50.210,0:15:52.640 infinite contest is players drop out 0:15:52.640,0:15:54.830 when they run out of the will or the 0:15:54.830,0:15:57.230 resources to play. But there's no winners 0:15:57.230,0:16:01.220 or losers. Problems arise when you pit a 0:16:01.220,0:16:03.110 finite player versus an infinite player. 0:16:03.110,0:16:05.000 Because the finite player is playing to 0:16:05.000,0:16:07.460 win, and an infinite player is to playing 0:16:07.460,0:16:09.830 to keep the game going. Right? This is 0:16:09.830,0:16:11.720 what happened to us in Vietnam. We were 0:16:11.720,0:16:14.030 playing to win, and the Vietnamese were 0:16:14.030,0:16:16.340 fighting for their lives. We were the 0:16:16.340,0:16:18.140 ones who got stuck in quagmire. This was 0:16:18.140,0:16:20.180 the Soviet Union in Afghanistan. They 0:16:20.180,0:16:22.130 were trying to beat the mujahideen, and 0:16:22.130,0:16:23.690 the mujahideen would fight for as long 0:16:23.690,0:16:27.170 as necessary. Quagmire. Now, let's look 0:16:27.170,0:16:31.130 at business. The game of business has 0:16:31.130,0:16:32.960 preexisted or has existed long before 0:16:32.960,0:16:35.030 every single company that exists on this 0:16:35.030,0:16:38.480 planet today. And it will outlast every 0:16:38.480,0:16:40.370 single company that exists 0:16:40.370,0:16:42.920 on this planet today. There's no winning 0:16:42.920,0:16:45.290 the game of business. And the reason is 0:16:45.290,0:16:46.820 is because we haven't agreed to the 0:16:46.820,0:16:49.850 rules. I get such a kick out of this. You 0:16:49.850,0:16:51.470 realize how many companies actually 0:16:51.470,0:16:53.720 don't know the game they're in. Right? 0:16:53.720,0:16:55.040 Listen to the language that the companies 0:16:55.040,0:16:56.750 use. "We're trying to beat our competition." 0:16:56.750,0:16:59.300 "We're trying to be number one." Did you 0:16:59.300,0:17:00.980 know that we were ranked number one? Look 0:17:00.980,0:17:03.339 at the listing. Based on what criteria? 0:17:03.339,0:17:05.959 Revenues? Profits? Market share? Square 0:17:05.959,0:17:08.030 footage? Number of employees? Based on 0:17:08.030,0:17:09.920 what time frame? A quarter? A year? Five 0:17:09.920,0:17:11.689 years? Ten years? Twenty years? Fifty years? A hundred 0:17:11.689,0:17:13.310 years? I haven't agreed to those 0:17:13.310,0:17:15.140 standards. How can you declare yourself 0:17:15.140,0:17:15.980 the winner? 0:17:15.980,0:17:17.720 How can you declare yourself number one 0:17:17.720,0:17:19.579 where no one else in the game has agreed 0:17:19.579,0:17:23.630 to the rules? It's arbitrary. There is no 0:17:23.630,0:17:27.230 winning because there's no end. In other 0:17:27.230,0:17:29.720 words, companies are playing finite games. 0:17:29.720,0:17:31.820 Listen to their language. They're trying 0:17:31.820,0:17:33.710 to beat their competition. What does that 0:17:33.710,0:17:37.280 even mean? It's the leaders and the 0:17:37.280,0:17:38.840 companies that understand the game that 0:17:38.840,0:17:40.550 they're in and organize their resources 0:17:40.550,0:17:42.120 and their decision-making around 0:17:42.120,0:17:44.630 the infinite contest that outlast and 0:17:44.630,0:17:47.940 frustrate their competition. All the 0:17:47.940,0:17:49.470 companies that we've referred to as the 0:17:49.470,0:17:52.500 exceptions--Southwest Airlines, Apple 0:17:52.500,0:17:55.290 Computers, Harley Davidson--they're the 0:17:55.290,0:17:57.360 exception. No. They're playing the 0:17:57.360,0:17:59.910 infinite contest. They frustrate their 0:17:59.910,0:18:03.150 competition is what happens. That's what 0:18:03.150,0:18:04.440 happens because they're not playing to 0:18:04.440,0:18:05.450 win. 0:18:05.450,0:18:08.520 Jim Senegal, the founder of Costco, which 0:18:08.520,0:18:10.050 is the only real company that 0:18:10.050,0:18:11.490 gives Walmart a run for its money. 0:18:11.490,0:18:13.940 He says, "Public companies are looking to 0:18:13.940,0:18:15.870 succeed for the quarter." He says, "We're 0:18:15.870,0:18:17.400 looking for the next fifty years." You can 0:18:17.400,0:18:18.870 hear him. He's playing the infinite 0:18:18.870,0:18:22.610 contest. I spoke at a leadership summit 0:18:22.610,0:18:25.890 for Microsoft. I also spoke at a 0:18:25.890,0:18:28.740 leadership summit for Apple. Now, at the 0:18:28.740,0:18:31.140 Microsoft summit, I would say 70% of the 0:18:31.140,0:18:33.030 executives, and this was under the Steve 0:18:33.030,0:18:35.429 Ballmer days, I would say about 70% of 0:18:35.429,0:18:38.220 the executives spent about 70% of their 0:18:38.220,0:18:40.830 presentations talking about how to beat 0:18:40.830,0:18:45.720 Apple. At the Apple summit, a 100% 0:18:45.720,0:18:47.429 of the executives spent a 0:18:47.429,0:18:48.870 100% of their presentations 0:18:48.870,0:18:51.030 talking about how to help teachers teach 0:18:51.030,0:18:53.700 and how to help students learn. One was 0:18:53.700,0:18:56.010 obsessed with their competition, the 0:18:56.010,0:18:57.390 other one was obsessed with where 0:18:57.390,0:18:59.550 they're going. So at the end of my 0:18:59.550,0:19:03.120 presentation at Microsoft, they gave me a 0:19:03.120,0:19:05.370 gift. They gave me the new Zune, which was 0:19:05.370,0:19:07.230 the competitor to the iPod Touch when it 0:19:07.230,0:19:09.450 was a thing. Right? And I have to tell you, 0:19:09.450,0:19:12.320 this piece of technology was spectacular. 0:19:12.320,0:19:15.540 It was beautiful. The user interface was 0:19:15.540,0:19:18.000 incredible. The design was amazing. It was 0:19:18.000,0:19:20.220 intuitive. It was one of the most 0:19:20.220,0:19:21.840 beautiful, elegant pieces of technology 0:19:21.840,0:19:24.390 I'd ever seen. Right? Now, they didn't work 0:19:24.390,0:19:25.710 with iTunes, which is an entirely 0:19:25.710,0:19:28.211 different problem. I couldn't use it. 0:19:28.211,0:19:30.980 [Audience laughing]. 0:19:30.980,0:19:36.450 But that's something else. I'm sitting in 0:19:36.450,0:19:38.370 the back of a taxi with a senior Apple 0:19:38.370,0:19:40.169 executive, sort of employee number 12 0:19:40.169,0:19:43.730 kind of guy, and I decide to stir the pot. 0:19:43.730,0:19:48.390 And I turn to him and I say, "You know, I spoke 0:19:48.390,0:19:50.820 at a Microsoft summit, and they gave me 0:19:50.820,0:19:53.520 their new Zune, and I have to tell you, it 0:19:53.520,0:19:57.590 is so much better than your iPod Touch." 0:19:57.590,0:20:01.890 And he turned to me and said, "I have no 0:20:01.890,0:20:04.683 doubt." Conversation over. 0:20:04.683,0:20:10.020 [Audience laughing]. 0:20:10.020,0:20:13.530 Because the infinite player isn't playing to be 0:20:13.530,0:20:16.169 number one every day with every product. 0:20:16.169,0:20:18.030 They're playing to outlast the 0:20:18.030,0:20:20.190 competition. If I had said to Microsoft, 0:20:20.190,0:20:21.600 "Oh, I've got the new iPod Touch, it's so 0:20:21.600,0:20:22.890 much better than your new Zune," they would have said, 0:20:22.890,0:20:24.480 "Can we see it? What does it do? How--We 0:20:24.480,0:20:26.789 have to see it." Because one is obsessed 0:20:26.789,0:20:28.260 with their competition, the other is 0:20:28.260,0:20:30.000 obsessed with why they do what they do, 0:20:30.000,0:20:31.890 the other is obsessed with where they're 0:20:31.890,0:20:34.380 going. And the reason Apple frustrates 0:20:34.380,0:20:35.970 their competition is because secretly, 0:20:35.970,0:20:38.159 they're not even competing against them. 0:20:38.159,0:20:40.590 They're competing against themselves. And 0:20:40.590,0:20:43.470 they understand that sometimes you're a 0:20:43.470,0:20:45.480 little bit ahead, and sometimes you're a 0:20:45.480,0:20:47.520 little bit behind. And sometimes your 0:20:47.520,0:20:49.770 product is better, and sometimes you're 0:20:49.770,0:20:51.929 not. But if you wake up every single 0:20:51.929,0:20:54.929 morning and compete against yourself, how 0:20:54.929,0:20:56.730 do I make our products better than they 0:20:56.730,0:20:58.679 were yesterday? How do I take care of our 0:20:58.679,0:21:00.150 customers better than we did yesterday? 0:21:00.150,0:21:02.250 How do we advance our cause more 0:21:02.250,0:21:05.010 efficiently, more productively than we 0:21:05.010,0:21:06.690 did yesterday? How do we find new 0:21:06.690,0:21:08.880 solutions to advance our calling, our 0:21:08.880,0:21:10.830 cause, our purpose, our beliefs, our why 0:21:10.830,0:21:12.870 every single day? What you'll find is, 0:21:12.870,0:21:16.950 over time, you will probably be ahead 0:21:16.950,0:21:19.230 more often. Those who play the infinite 0:21:19.230,0:21:20.760 game understand it's not about the 0:21:20.760,0:21:23.880 battle, it's about the war. And they don't 0:21:23.880,0:21:27.480 play to win every day, and they frustrate 0:21:27.480,0:21:29.010 their competition until their 0:21:29.010,0:21:31.200 competition drops out of the game. Every 0:21:31.200,0:21:33.210 single bankruptcy, almost every merger 0:21:33.210,0:21:35.130 and acquisition is basically a company 0:21:35.130,0:21:36.720 saying, "We no longer have the will or the 0:21:36.720,0:21:38.549 resources to continue to play, and we 0:21:38.549,0:21:39.990 have no choice but to either drop out of the 0:21:39.990,0:21:40.809 game or 0:21:40.809,0:21:42.519 or merge our resources with another 0:21:42.519,0:21:44.259 player so that we can stay in the game." 0:21:44.259,0:21:46.570 That's what that is. And if you think 0:21:46.570,0:21:47.769 about the number of bankruptcies and 0:21:47.769,0:21:49.539 mergers and acquisitions, it's kind of 0:21:49.539,0:21:51.669 proof that most companies don't even 0:21:51.669,0:21:54.309 know the game they're in. You want to be 0:21:54.309,0:21:56.259 a great leader? Start with empathy. You 0:21:56.259,0:21:58.899 want to be a great leader? Change your 0:21:58.899,0:22:01.149 perspective and play the game you're 0:22:01.149,0:22:05.029 actually playing. Thank you very much. 0:22:05.029,0:22:08.199 [Applause]