How do you explain when things don't go as we assume? Or better, how do you explain when others are able to achieve thingsthat seem to defy all of the assumptions? Forexample: Why is Apple soinnovative? Year after year,after year, they're more innovativethan all their competition. Andyet, they're just a computer company. They'rejust like everyone else. Theyhave the same access to the same talent, thesame agencies, the sameconsultants, the same media. Thenwhy is it that they seem to have something different? Why is it that Martin Luther King ledthe Civil Rights Movement?He wasn't the only man who suffered in pre-civilrights America, and he certainlywasn't the only great orator of the day. Whyhim? And why is it that theWright brothers were able tofigure out controlled, powered man flight whenthere were certainly other teams whowere better qualified, better funded --and they didn't achieve powered manflight, and the Wright brothersbeat them to it. There'ssomething else at play here.
About three and a half years ago, I made a discovery. And this discovery profoundly changedmy view on how I thought the world worked, andit even profoundly changed the way in which I operate in it. As it turns out, there's a pattern. As it turns out, all the greatinspiring leaders and organizations in the world, whether it's Apple or Martin LutherKing or the Wright brothers, theyall think, act and communicate the exact same way. And it's the complete opposite toeveryone else. All I did wascodify it, and it's probably theworld's simplest idea. I call itthe golden circle.
Why? How? What? Thislittle idea explains why someorganizations and some leaders are able to inspire where others aren't. Let me define the terms reallyquickly. Every single person, everysingle organization on the planet knowswhat they do, 100 percent. Someknow how they do it, whether youcall it your differentiated value proposition oryour proprietary process or your USP. Butvery, very few people or organizations know why they do what they do. And by "why" I don't mean"to make a profit." That'sa result. It's always a result. By"why," I mean: What's your purpose? What'syour cause? What's your belief? Whydoes your organization exist? Whydo you get out of bed in the morning? Andwhy should anyone care? As aresult, the way we think, we act, theway we communicate is from the outside in, it's obvious. We go from the clearest thing to thefuzziest thing.But the inspired leaders and the inspired organizations -- regardless of their size, regardlessof their industry -- all think,act and communicate from the inside out
Let me give you an example. I useApple because they're easy to understand and everybody gets it. If Apple were like everyone else, a marketing message from them mightsound like this: "We makegreat computers. They'rebeautifully designed, simple to use and user friendly. Want to buy one?""Meh." That's how most of us communicate. That's how most marketing and salesare done, that's how wecommunicate interpersonally. Wesay what we do, we say how we'redifferent or better and we expectsome sort of a behavior, apurchase, a vote, something like that. Here'sour new law firm:We have the best lawyers with the biggest clients, we always perform for our clients. Here's our new car: It gets great gas mileage, it hasleather seats. Buy our car. But it's uninspiring
Here's how Apple actually communicates. "Everything we do, we believe inchallenging the status quo. Webelieve in thinking differently. Theway we challenge the status quo isby making our products beautifully designed, simpleto use and user friendly. We justhappen to make great computers. Wantto buy one?" Totallydifferent, right? You're ready tobuy a computer from me. I justreversed the order of the information. Whatit proves to us is that people don't buy what you do;people buy why you do it
This explains why every single person in this room is perfectly comfortable buying acomputer from Apple. But we'realso perfectly comfortable buyingan MP3 player from Apple, or a phone from Apple,or a DVR from Apple. As I said before, Apple's just acomputer company. Nothingdistinguishes them structurally from any of their competitors. Their competitors are equallyqualified to make all of these products. Infact, they tried. A few yearsago, Gateway came out with flat-screen TVs. They'reeminently qualified to make flat-screen TVs. They'vebeen making flat-screen monitors for years.Nobody bought one. Dell came out with MP3 players andPDAs, and they make great qualityproducts, and they can makeperfectly well-designed products -- andnobody bought one. In fact,talking about it now, we can't even imagine buyingan MP3 player from Dell. Whywould you buy one from a computer company? Butwe do it every day. People don'tbuy what you do; they buy why you do it. Thegoal is not to do business with everybody who needs what you have. The goal is to do business with peoplewho believe what you believe.
Here's the best part: Noneof what I'm telling you is my opinion. It'sall grounded in the tenets of biology. Notpsychology, biology. If you lookat a cross-section of the human brain, fromthe top down, the human brain is actually broken into three major components that correlate perfectly with thegolden circle. Our newest brain,our Homo sapien brain, ourneocortex, corresponds with the"what" level. Theneocortex is responsible for allof our rational and analytical thought and language.The middle two sectionsmake up our limbic brains, andour limbic brains are responsible for all of our feelings, like trust and loyalty. It's also responsible for all humanbehavior, all decision-making, and it has no capacity for language
In other words, when we communicate from the outside in, yes, people can understand vastamounts of complicated information likefeatures and benefits and facts and figures. Itjust doesn't drive behavior. Whenwe can communicate from the inside out, we'retalking directly to the part of the brain thatcontrols behavior, and then weallow people to rationalize it with the tangible things we say and do. This is where gut decisions come from. Sometimes you can give somebody allthe facts and figures, and theysay, "I know what all the facts and details say, but it just doesn't feel right." Why would we use that verb, it doesn't"feel" right? Becausethe part of the brain that controls decision-making doesn't control language. The best we can muster up is, "I don't know. It just doesn'tfeel right." Or sometimesyou say you're leading with your heart or soul. I hate to break it to you, thosearen't other body parts controllingyour behavior. It's all happeninghere in your limbic brain, thepart of the brain that controls decision-making and not language.
But if you don't know why you do what you do, and people respond to why you do whatyou do, then how will you everget people to vote for you, orbuy something from you, or, moreimportantly, be loyal and want tobe a part of what it is that you do. Thegoal is not just to sell to people who need what you have; the goal is to sell to people whobelieve what you believe. Thegoal is not just to hire people who need a job; it's to hire people who believe whatyou believe. I always say that,you know,if you hire people just because they can do a job, they'll work foryour money, but if they believewhat you believe, they'll workfor you with blood and sweat and tears. Nowhereelse is there a better example than with the Wright brothers.
Most people don't know about Samuel Pierpont Langley. And back in the early 20th century, the pursuit of powered man flight waslike the dot com of the day. Everybodywas trying it. And SamuelPierpont Langley had, what we assume, tobe the recipe for success. Evennow, you ask people,"Why did your product or why did your companyfail?" and people alwaysgive you the same permutation ofthe same three things: under-capitalized,the wrong people, bad market conditions.It's always the same three things, solet's explore that. SamuelPierpont Langley was given 50,000dollars by the War Department tofigure out this flying machine. Moneywas no problem. He held a seat atHarvard and worked at theSmithsonian and was extremely well-connected; heknew all the big minds of the day. Hehired the best minds money could find andthe market conditions were fantastic. TheNew York Times followed him around everywhere, and everyone was rooting for Langley. Then how come we've never heard ofSamuel Pierpont Langley?
A few hundred miles away in Dayton, Ohio, Orvilleand Wilbur Wright, they had noneof what we consider to be the recipe for success. They had no money; they paid for their dream with theproceeds from their bicycle shop. Nota single person on the Wright brothers' team hada college education, not evenOrville or Wilbur. And The New YorkTimes followed them around nowhere.
The difference was, Orvilleand Wilbur were driven by a cause, by a purpose, by a belief. They believed that if they couldfigure out this flying machine, it'llchange the course of the world. SamuelPierpont Langley was different. Hewanted to be rich, and he wanted to be famous. He was in pursuit of the result. He was in pursuit of the riches. And lo and behold, look what happened. The people who believed in the Wrightbrothers' dream worked with themwith blood and sweat and tears. Theothers just worked for the paycheck. Theytell stories of how every time the Wright brothers went out,they would have totake five sets of parts, becausethat's how many times they would crash before supper.
And, eventually, on December 17th, 1903, the Wright brothers took flight, and no one was there to evenexperience it. We found out aboutit a few days later. And furtherproof that Langley was motivated by the wrong thing: the day the Wright brothers tookflight, he quit. He could have said,"That's anamazing discovery, guys, and Iwill improve upon your technology," but he didn't. He wasn't first, he didn't get rich,he didn't get famous, so he quit.
People don't buy what you do; they buy why you do it. If you talk about what you believe, you will attract those who believewhat you believe.
But why is it important to attract those who believe what youbelieve? Something called the lawof diffusion of innovation, ifyou don't know the law, you know the terminology. The first 2.5% of our population areour innovators. The next 13.5% ofour population are our early adopters. Thenext 34% are your early majority, yourlate majority and your laggards. Theonly reason these people buy touch-tone phones is because you can't buy rotary phonesanymore.
We all sit at various places at various times on this scale, but what the law of diffusion ofinnovation tells us is that ifyou want mass-market success or mass-market acceptance of an idea, you cannot have it until you achievethis tipping point between 15 and18 percent market penetration, andthen the system tips. I loveasking businesses, "What's your conversion on new business?" They love to tell you, "It'sabout 10 percent," proudly. Well,you can trip over 10% of the customers. Weall have about 10% who just "get it." That's how we describe them, right? That's like that gut feeling,"Oh, they just get it."
The problem is: How do you find the ones that get it before doing business versus the oneswho don't get it? So it's thishere, this little gap that you have to close, asJeffrey Moore calls it, "Crossing the Chasm" -- because, you see, the early majoritywill not try something untilsomeone else has tried it first. Andthese guys, the innovators and the early adopters, they're comfortable making those gutdecisions. They're morecomfortable making those intuitive decisions thatare driven by what they believe about the world and not just what product isavailable. These are the peoplewho stood in line for six hours tobuy an iPhone when they first came out, whenyou could have bought one off the shelf the next week. These are the people who spent 40,000dollars on flat-screen TVs whenthey first came out, even thoughthe technology was substandard. And,by the way, they didn't do it because the technology was so great; they did it for themselves. It's because they wanted to be first. People don't buy what you do; they buywhy you do it and what you dosimply proves what you believe. Infact, people will do the things that prove what they believe. The reason that person bought theiPhone in the first six hours, stoodin line for six hours, wasbecause of what they believed about the world,and how they wanted everybody tosee them: they were first. People don't buy what you do; they buywhy you do it.
So let me give you a famous example, a famous failure and a famous successof the law of diffusion of innovation. First,the famous failure. It's acommercial example. As we saidbefore, the recipe for success ismoney and the right people and the right market conditions. You should have success then. Look at TiVo. From the time TiVo came out abouteight or nine years ago to thiscurrent day,they are the single highest-quality product on the market, hands down, there is no dispute. They were extremely well-funded. Market conditions were fantastic. I mean, we use TiVo as verb. I TiVo stuff on my piece-of-junk TimeWarner DVR all the time.
But TiVo's a commercial failure. They've never made money. And when they went IPO, their stock was at about 30 or 40dollars and then plummeted, andit's never traded above 10. Infact, I don't think it's even traded above six, except for a couple of little spikes
Because you see, when TiVo launched their product, they told us all what they had. They said, "We have a productthat pauses live TV, skipscommercials, rewinds live TV and memorizes your viewing habits without you even asking." And the cynical majority said, "We don't believe you. We don't need it. We don't like it. You're scaring us."
What if they had said, "If you're the kind ofperson who likes to have total control over every aspect of yourlife, boy, do we have a product for you. It pauses live TV, skipscommercials, memorizes your viewing habits, etc., etc." Peopledon't buy what you do; they buy why you do it, and what you do simplyserves as the proof of what you believe.
Now letme give you a successful example of the law of diffusion of innovation. In the summer of 1963, 250,000 people showed up on the mallin Washington to hear Dr. Kingspeak. They sent out noinvitations, and there was nowebsite to check the date. How doyou do that? Well, Dr. Kingwasn't the only man in America whowas a great orator. He wasn't theonly man in America who suffered ina pre-civil rights America. In fact,some of his ideas were bad. Buthe had a gift. He didn't goaround telling people what needed to change in America. He went around and told people what hebelieved."I believe, I believe, I believe," he told people. And people who believed what he believed took his cause, and they made it theirown, and they told people. Andsome of those people created structures toget the word out to even more people. Andlo and behold, 250,000 people showed upon the right day at the right time tohear him speak.
Howmany of them showed up for him? Zero. They showed up for themselves. It's what they believed about America that got them to travel in a bus foreight hours to stand in the sunin Washington in the middle of August. It'swhat they believed, and it wasn't about black versus white: 25% of the audience was white.
Dr.King believed that there are two types of laws in this world: those that are made by a higherauthority and those that are made by men. Andnot until all the laws that are made by men areconsistent with the laws made by the higher authority will we live in a just world. It just so happened that the CivilRights Movement was the perfectthing to help him bring his cause to life. Wefollowed, not for him, but for ourselves. Bythe way, he gave the "I have a dream" speech, not the "I have a plan"speech.
Listen to politicians now, with their comprehensive 12-point plans. They're not inspiring anybody.Becausethere are leaders and there are those who lead. Leaders hold a position of power orauthority, but those who leadinspire us. Whether they'reindividuals or organizations, wefollow those who lead, not because we have to, but because we want to. We follow those who lead, not forthem, but for ourselves. And it'sthose who start with "why" thathave the ability to inspire those around them orfind others who inspire them.
Thank you very much.
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