-
[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]