0:16How do you explain
when things don't go as we assume?
0:20Or better, how do you explain
0:23when others are able to achieve things
that seem to defy all of the assumptions?
0:27For example:
0:29Why is Apple so innovative?
0:31Year after year, after year,
0:33they're more innovative
than all their competition.
0:36And yet, they're just a computer company.
0:38They're just like everyone else.
0:40They have the same access
to the same talent,
0:42the same agencies,
0:43the same consultants, the same media.
0:45Then why is it that they seem
to have something different?
0:50Why is it that Martin Luther King
led the Civil Rights Movement?
0:54He wasn't the only man
who suffered in pre-civil rights America,
0:58and he certainly wasn't
the only great orator of the day.
1:01Why him?
1:02And why is it that the Wright brothers
1:05were able to figure out controlled,
powered man flight
1:08when there were certainly other teams
1:10who were better qualified,
better funded --
1:13and they didn't achieve
powered man flight,
1:16and the Wright brothers beat them to it.
1:18There's something else at play here.
1:21About three and a half years ago,
I made a discovery.
1:25And this discovery profoundly changed
my view on how I thought the world worked,
1:31and it even profoundly changed the way
in which I operate in it.
1:37As it turns out, there's a pattern.
1:40As it turns out, all the great inspiring
leaders and organizations in the world,
1:44whether it's Apple or Martin Luther King
or the Wright brothers,
1:47they all think, act and communicate
the exact same way.
1:51And it's the complete opposite
to everyone else.
1:55All I did was codify it,
1:57and it's probably
the world's simplest idea.
2:01I call it the golden circle.
2:12Why? How? What?
2:14This little idea explains
2:16why some organizations and some leaders
are able to inspire where others aren't.
2:20Let me define the terms really quickly.
2:22Every single person, every single
organization on the planet
2:25knows what they do, 100 percent.
2:29Some know how they do it,
2:31whether you call it
your differentiated value proposition
2:34or your proprietary process or your USP.
2:36But very, very few people or organizations
know why they do what they do.
2:41And by "why" I don't mean
"to make a profit."
2:43That's a result. It's always a result.
2:45By "why," I mean: What's your purpose?
2:47What's your cause? What's your belief?
2:50Why does your organization exist?
2:53Why do you get out of bed in the morning?
2:56And why should anyone care?
2:58As a result, the way we think, we act,
3:00the way we communicate
is from the outside in, it's obvious.
3:03We go from the clearest thing
to the fuzziest thing.
3:06But the inspired leaders
and the inspired organizations --
3:09regardless of their size,
regardless of their industry --
3:13all think, act and communicate
from the inside out.
3:18Let me give you an example.
3:19I use Apple because they're easy
to understand and everybody gets it.
3:23If Apple were like everyone else,
3:25a marketing message from them
might sound like this:
3:29"We make great computers.
3:31They're beautifully designed,
simple to use and user friendly.
3:35Want to buy one?"
3:37"Meh."
3:38That's how most of us communicate.
3:40That's how most marketing
and sales are done,
3:43that's how we communicate interpersonally.
3:45We say what we do,
3:47we say how we're different or better
3:48and we expect some sort of a behavior,
3:50a purchase, a vote, something like that.
3:52Here's our new law firm:
3:54We have the best lawyers
with the biggest clients,
3:56we always perform for our clients.
3:58Here's our new car:
3:59It gets great gas mileage,
it has leather seats.
4:02Buy our car.
4:03But it's uninspiring.
4:04Here's how Apple actually communicates.
4:08"Everything we do,
we believe in challenging the status quo.
4:13We believe in thinking differently.
4:17The way we challenge the status quo
4:19is by making our products
beautifully designed,
4:21simple to use and user friendly.
4:23We just happen to make great computers.
4:26Want to buy one?"
4:28Totally different, right?
4:29You're ready to buy a computer from me.
4:31I just reversed
the order of the information.
4:34What it proves to us is
that people don't buy what you do;
4:38people buy why you do it.
4:40This explains why
every single person in this room
4:44is perfectly comfortable buying
a computer from Apple.
4:47But we're also perfectly comfortable
4:49buying an MP3 player from Apple,
or a phone from Apple,
4:52or a DVR from Apple.
4:54As I said before,
Apple's just a computer company.
4:57Nothing distinguishes them structurally
from any of their competitors.
5:00Their competitors are equally qualified
to make all of these products.
5:04In fact, they tried.
5:05A few years ago, Gateway
came out with flat-screen TVs.
5:08They're eminently qualified
to make flat-screen TVs.
5:11They've been making
flat-screen monitors for years.
5:13Nobody bought one.
5:18Dell came out with MP3 players and PDAs,
5:23and they make great quality products,
5:25and they can make perfectly
well-designed products --
5:28and nobody bought one.
5:30In fact, talking about it now,
we can't even imagine
5:33buying an MP3 player from Dell.
5:34Why would you buy one
from a computer company?
5:36But we do it every day.
5:38People don't buy what you do;
they buy why you do it.
5:40The goal is not to do business
with everybody who needs what you have.
5:46The goal is to do business with people
who believe what you believe.
5:51Here's the best part:
5:53None of what I'm telling you
is my opinion.
5:55It's all grounded
in the tenets of biology.
5:58Not psychology, biology.
6:00If you look at a cross-section
of the human brain,
6:03from the top down,
the human brain is actually broken
6:06into three major components
6:07that correlate perfectly
with the golden circle.
6:10Our newest brain, our Homo sapien brain,
6:13our neocortex,
6:15corresponds with the "what" level.
6:17The neocortex is responsible
6:19for all of our rational
and analytical thought and language.
6:23The middle two sections make up
our limbic brains,
6:26and our limbic brains are responsible
for all of our feelings,
6:29like trust and loyalty.
6:32It's also responsible
for all human behavior,
6:34all decision-making,
6:36and it has no capacity for language.
6:39In other words, when we communicate
from the outside in,
6:42yes, people can understand vast
amounts of complicated information
6:45like features and benefits
and facts and figures.
6:48It just doesn't drive behavior.
6:50When we can communicate
from the inside out,
6:52we're talking directly
to the part of the brain
6:55that controls behavior,
6:56and then we allow people to rationalize it
with the tangible things we say and do.
7:00This is where gut decisions come from.
7:03Sometimes you can give somebody
all the facts and figures,
7:06and they say, "I know
what all the facts and details say,
7:09but it just doesn't feel right."
7:11Why would we use that verb,
it doesn't "feel" right?
7:13Because the part of the brain
that controls decision-making
7:16doesn't control language.
7:17The best we can muster up is,
7:19"I don't know.
It just doesn't feel right."
7:21Or sometimes you say you're leading
with your heart or soul.
7:24I hate to break it to you,
those aren't other body parts
7:27controlling your behavior.
7:28It's all happening here
in your limbic brain,
7:30the part of the brain that controls
decision-making and not language.
7:34But if you don't know
why you do what you do,
7:36and people respond
to why you do what you do,
7:39then how will you ever get people
7:42to vote for you,
or buy something from you,
7:44or, more importantly, be loyal
7:46and want to be a part
of what it is that you do.
7:49The goal is not just to sell
to people who need what you have;
7:52the goal is to sell to people
who believe what you believe.
7:55The goal is not just
to hire people who need a job;
7:59it's to hire people
who believe what you believe.
8:02I always say that, you know,
8:04if you hire people just because they can
do a job, they'll work for your money,
8:10but if they believe what you believe,
8:12they'll work for you with blood
and sweat and tears.
8:15Nowhere else is there a better example
than with the Wright brothers.
8:18Most people don't know
about Samuel Pierpont Langley.
8:22And back in the early 20th century,
8:24the pursuit of powered man flight
was like the dot com of the day.
8:27Everybody was trying it.
8:29And Samuel Pierpont Langley
had, what we assume,
8:32to be the recipe for success.
8:35Even now, you ask people,
8:37"Why did your product
or why did your company fail?"
8:39and people always give
you the same permutation
8:42of the same three things:
8:43under-capitalized, the wrong people,
bad market conditions.
8:46It's always the same three things,
so let's explore that.
8:50Samuel Pierpont Langley
8:51was given 50,000 dollars
by the War Department
8:54to figure out this flying machine.
8:56Money was no problem.
8:58He held a seat at Harvard
9:00and worked at the Smithsonian
and was extremely well-connected;
9:03he knew all the big minds of the day.
9:05He hired the best minds money could find
9:09and the market conditions were fantastic.
9:11The New York Times
followed him around everywhere,
9:14and everyone was rooting for Langley.
9:16Then how come we've never heard
of Samuel Pierpont Langley?
9:20A few hundred miles away in Dayton, Ohio,
9:23Orville and Wilbur Wright,
9:24they had none of what we consider
to be the recipe for success.
9:28They had no money;
9:30they paid for their dream
with the proceeds from their bicycle shop.
9:34Not a single person
on the Wright brothers' team
9:36had a college education,
9:37not even Orville or Wilbur.
9:39And The New York Times
followed them around nowhere.
9:42The difference was,
9:44Orville and Wilbur were driven by a cause,
by a purpose, by a belief.
9:48They believed that if they could
figure out this flying machine,
9:52it'll change the course of the world.
9:56Samuel Pierpont Langley was different.
9:58He wanted to be rich,
and he wanted to be famous.
10:00He was in pursuit of the result.
10:02He was in pursuit of the riches.
10:04And lo and behold, look what happened.
10:06The people who believed
in the Wright brothers' dream
10:10worked with them with blood
and sweat and tears.
10:12The others just worked for the paycheck.
10:14They tell stories of how every time
the Wright brothers went out,
10:17they would have to take
five sets of parts,
10:20because that's how many times
they would crash before supper.
10:24And, eventually, on December 17th, 1903,
10:28the Wright brothers took flight,
10:30and no one was there
to even experience it.
10:32We found out about it a few days later.
10:36And further proof that Langley
was motivated by the wrong thing:
10:40the day the Wright brothers took flight,
10:42he quit.
10:43He could have said,
10:45"That's an amazing discovery, guys,
10:47and I will improve
upon your technology," but he didn't.
10:50He wasn't first, he didn't get rich,
he didn't get famous, so he quit.
10:55People don't buy what you do;
they buy why you do it.
10:57If you talk about what you believe,
10:59you will attract those
who believe what you believe.
11:02But why is it important to attract
those who believe what you believe?
11:08Something called the law
of diffusion of innovation,
11:10if you don't know the law,
you know the terminology.
11:13The first 2.5% of our population
are our innovators.
11:17The next 13.5% of our population
are our early adopters.
11:23The next 34% are your early majority,
11:24your late majority and your laggards.
11:28The only reason these people
buy touch-tone phones
11:30is because you can't buy
rotary phones anymore.
11:33(Laughter)
11:34We all sit at various places
at various times on this scale,
11:37but what the law of diffusion
of innovation tells us
11:40is that if you want mass-market success
or mass-market acceptance of an idea,
11:45you cannot have it
until you achieve this tipping point
11:49between 15 and 18 percent
market penetration,
11:52and then the system tips.
11:55I love asking businesses,
"What's your conversion on new business?"
11:59They love to tell you,
"It's about 10 percent," proudly.
12:01Well, you can trip
over 10% of the customers.
12:03We all have about 10% who just "get it."
12:05That's how we describe them, right?
12:07That's like that gut feeling,
"Oh, they just get it."
12:10The problem is: How do you
find the ones that get it
12:12before doing business
versus the ones who don't get it?
12:15So it's this here, this little gap
that you have to close,
12:18as Jeffrey Moore calls it,
"Crossing the Chasm" --
12:21because, you see, the early majority
will not try something
12:24until someone else has tried it first.
12:28And these guys, the innovators
and the early adopters,
12:31they're comfortable
making those gut decisions.
12:33They're more comfortable
making those intuitive decisions
12:36that are driven by what
they believe about the world
12:40and not just what product is available.
12:42These are the people who stood
in line for six hours
12:45to buy an iPhone when they first came out,
12:47when you could have bought one
off the shelf the next week.
12:50These are the people
who spent 40,000 dollars
12:52on flat-screen TVs
when they first came out,
12:55even though the technology
was substandard.
12:58And, by the way, they didn't do it
because the technology was so great;
13:02they did it for themselves.
13:04It's because they wanted to be first.
13:06People don't buy what you do;
they buy why you do it
13:09and what you do simply proves
what you believe.
13:12In fact, people will do the things
that prove what they believe.
13:16The reason that person bought the iPhone
in the first six hours,
13:21stood in line for six hours,
13:23was because of what they believed
about the world,
13:26and how they wanted everybody to see them:
13:28they were first.
13:29People don't buy what you do;
they buy why you do it.
13:31So let me give you a famous example,
13:33a famous failure and a famous success
of the law of diffusion of innovation.
13:38First, the famous failure.
13:39It's a commercial example.
13:41As we said before, the recipe for success
13:44is money and the right people
and the right market conditions.
13:47You should have success then.
13:49Look at TiVo.
13:50From the time TiVo came out
about eight or nine years ago
13:53to this current day,
13:54they are the single highest-quality
product on the market,
13:58hands down, there is no dispute.
14:01They were extremely well-funded.
14:03Market conditions were fantastic.
14:04I mean, we use TiVo as verb.
14:06I TiVo stuff on my piece-of-junk
Time Warner DVR all the time.
14:10(Laughter)
14:12But TiVo's a commercial failure.
14:14They've never made money.
14:16And when they went IPO,
14:18their stock was at about 30 or 40 dollars
14:20and then plummeted,
and it's never traded above 10.
14:23In fact, I don't think
it's even traded above six,
14:25except for a couple of little spikes.
14:27Because you see, when TiVo
launched their product,
14:30they told us all what they had.
14:32They said, "We have a product
that pauses live TV,
14:36skips commercials, rewinds live TV
and memorizes your viewing habits
14:40without you even asking."
14:43And the cynical majority said,
14:45"We don't believe you.
14:47We don't need it. We don't like it.
14:50You're scaring us."
14:52What if they had said,
14:53"If you're the kind of person
who likes to have total control
14:58over every aspect of your life,
15:01boy, do we have a product for you.
15:04It pauses live TV, skips commercials,
15:06memorizes your viewing habits, etc., etc."
15:09People don't buy what you do;
they buy why you do it,
15:12and what you do simply serves
as the proof of what you believe.
15:16Now let me give you a successful example
of the law of diffusion of innovation.
15:21In the summer of 1963,
15:24250,000 people showed up
on the mall in Washington
15:28to hear Dr. King speak.
15:31They sent out no invitations,
15:34and there was no website
to check the date.
15:37How do you do that?
15:39Well, Dr. King
wasn't the only man in America
15:41who was a great orator.
15:44He wasn't the only man
in America who suffered
15:46in a pre-civil rights America.
15:48In fact, some of his ideas were bad.
15:50But he had a gift.
15:52He didn't go around telling people
what needed to change in America.
15:56He went around
and told people what he believed.
15:58"I believe, I believe, I believe,"
he told people.
16:01And people who believed what he believed
16:04took his cause, and they made it
their own, and they told people.
16:07And some of those people
created structures
16:09to get the word out to even more people.
16:12And lo and behold,
250,000 people showed up
16:15on the right day at the right time
to hear him speak.
16:20How many of them showed up for him?
16:25Zero.
16:26They showed up for themselves.
16:28It's what they believed about America
16:31that got them to travel
in a bus for eight hours
16:33to stand in the sun in Washington
in the middle of August.
16:36It's what they believed,
and it wasn't about black versus white:
16:3925% of the audience was white.
16:43Dr. King believed that there are
two types of laws in this world:
16:46those that are made by a higher authority
and those that are made by men.
16:50And not until all the laws
that are made by men
16:53are consistent with the laws
made by the higher authority
16:56will we live in a just world.
16:58It just so happened
that the Civil Rights Movement
17:00was the perfect thing to help him
bring his cause to life.
17:04We followed, not for him,
but for ourselves.
17:07By the way, he gave
the "I have a dream" speech,
17:10not the "I have a plan" speech.
17:12(Laughter)
17:15Listen to politicians now,
with their comprehensive 12-point plans.
17:18They're not inspiring anybody.
17:20Because there are leaders
and there are those who lead.
17:23Leaders hold a position
of power or authority,
17:27but those who lead inspire us.
17:32Whether they're individuals
or organizations,
17:34we follow those who lead,
not because we have to,
17:37but because we want to.
17:40We follow those who lead, not for them,
but for ourselves.
17:46And it's those who start with "why"
17:48that have the ability
to inspire those around them
17:53or find others who inspire them.
17:56Thank you very much.
17:58(Applause)