how do you explainwhen 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? for example: why is apple so innovative?
the apple stock, year after year, after year, they're more innovativethan all their competition. and yet, they're just a computer company. they're just like everyone else.
they have the same accessto the same talent, the same agencies, the same consultants, the same media. then why is it that they seemto have something different? why is it that martin luther kingled the civil rights movement? he wasn't the only manwho suffered in pre-civil rights america, and he certainly wasn'tthe only great orator of the day. why him? and why is it that the wright brothers
were able to figure out controlled,powered man flight when there were certainly other teams who were better qualified,better funded -- and they didn't achievepowered man flight, and the wright brothers beat them to it. there's something 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, and it even profoundly changed the wayin which i operate in it.
as it turns out, there's a pattern. as it turns out, all the great inspiringleaders and organizations in the world, whether it's apple or martin luther kingor the wright brothers, they all think, act and communicatethe exact same way. and it's the complete oppositeto everyone else. all i did was codify it, and it's probablythe world's simplest idea. i call it the golden circle. why? how? what?
this little idea explains why some organizations and some leadersare able to inspire where others aren't. let me define the terms really quickly. every single person, every singleorganization on the planet knows what they do, 100 percent. some know how they do it, whether you call ityour differentiated value proposition or your proprietary process or your usp. but very, very few people or organizationsknow why they do what they do.
and by "why" i don't mean"to make a profit." that's a result. it's always a result. by "why," i mean: what's your purpose? what's your cause? what's your belief? why does your organization exist? why do you get out of bed in the morning? and why should anyone care? as a result, the way we think, we act, the way we communicateis from the outside in, it's obvious.
we go from the clearest thingto the fuzziest thing. but the inspired leadersand the inspired organizations -- regardless of their size,regardless of their industry -- all think, act and communicatefrom the inside out. let me give you an example. i use apple because they're easyto understand and everybody gets it. if apple were like everyone else, a marketing message from themmight sound like this: "we make great computers.
they're beautifully designed,simple to use and user friendly. want to buy one?" "meh." that's how most of us communicate. that's how most marketingand sales are done, that's how we communicate interpersonally. we say what we do, we say how we're different or better and we expect some sort of a behavior,
a purchase, a vote, something like that. here's our new law firm: we have the best lawyerswith the biggest clients, we always perform for our clients. here's our new car: it gets great gas mileage,it has leather seats. buy our car. but it's uninspiring. here's how apple actually communicates.
"everything we do,we believe in challenging the status quo. we believe in thinking differently. the way we challenge the status quo is by making our productsbeautifully designed, simple to use and user friendly. we just happen to make great computers. totally different, right? you're ready to buy a computer from me. i just reversedthe order of the information.
what it proves to us isthat people don't buy what you do; people buy why you do it. this explains whyevery single person in this room is perfectly comfortable buyinga computer from apple. but we're also perfectly comfortable buying an mp3 player from apple,or a phone from apple, or a dvr from apple. as i said before,apple's just a computer company. nothing distinguishes them structurallyfrom any of their competitors.
their competitors are equally qualifiedto make all of these products. in fact, they tried. a few years ago, gatewaycame out with flat-screen tvs. they're eminently qualifiedto make flat-screen tvs. they've been makingflat-screen monitors for years. nobody bought one. dell came out with mp3 players and pdas, and they make great quality products, and they can make perfectlywell-designed products --
and nobody bought one. in fact, talking about it now,we can't even imagine buying an mp3 player from dell. why would you buy onefrom a computer company? but we do it every day. people don't buy what you do;they buy why you do it. the goal is not to do businesswith everybody who needs what you have. the goal is to do business with peoplewho believe what you believe. here's the best part:
none of what i'm telling youis my opinion. it's all groundedin the tenets of biology. not psychology, biology. if you look at a cross-sectionof the human brain, from the top down,the human brain is actually broken into three major components that correlate perfectlywith the golden circle. our newest brain, our homo sapien brain, our neocortex,
corresponds with the "what" level. the neocortex is responsible for all of our rationaland analytical thought and language. the middle two sections make upour limbic brains, and our limbic brains are responsiblefor all of our feelings, like trust and loyalty. it's also responsiblefor all human behavior, all decision-making, and it has no capacity for language.
in other words, when we communicatefrom the outside in, yes, people can understand vastamounts of complicated information like features and benefitsand facts and figures. it just doesn't drive behavior. when we can communicatefrom the inside out, we're talking directlyto the part of the brain that controls behavior, and then we allow people to rationalize itwith the tangible things we say and do. this is where gut decisions come from.
sometimes you can give somebodyall the facts and figures, and they say, "i knowwhat all the facts and details say, but it just doesn't feel right." why would we use that verb,it doesn't "feel" right? because the part of the brainthat controls decision-making doesn't control language. the best we can muster up is, "i don't know.it just doesn't feel right." or sometimes you say you're leadingwith your heart or soul.
i hate to break it to you,those aren't other body parts controlling your behavior. it's all happening herein your limbic brain, the part of the brain that controlsdecision-making and not language. but if you don't knowwhy you do what you do, and people respondto why you do what you do, then how will you ever get people to vote for you,or buy something from you, or, more importantly, be loyal
and want to be a partof what it is that you do. the goal is not just to sellto people who need what you have; the goal is to sell to peoplewho believe what you believe. the goal is not justto hire people who need a job; it's to hire peoplewho believe what you believe. i always say that, you know, if you hire people just because they cando a job, they'll work for your money, but if they believe what you believe, they'll work for you with bloodand sweat and tears.
nowhere else is there a better examplethan with the wright brothers. most people don't knowabout samuel pierpont langley. and back in the early 20th century, the pursuit of powered man flightwas like the dot com of the day. everybody was trying it. and samuel pierpont langleyhad, what we assume, to be the recipe for success. even now, you ask people, "why did your productor why did your company fail?"
and people always giveyou the same permutation of the same three things: under-capitalized, the wrong people,bad market conditions. it's always the same three things,so let's explore that. samuel pierpont langley was given 50,000 dollarsby the war department to figure out this flying machine. money was no problem. he held a seat at harvard
and worked at the smithsonianand was extremely well-connected; he knew all the big minds of the day. he hired the best minds money could find and the market conditions were fantastic. the new york timesfollowed him around everywhere, and everyone was rooting for langley. then how come we've never heardof samuel pierpont langley? a few hundred miles away in dayton ohio, orville and wilbur wright,
they had none of what we considerto be the recipe for success. they had no money; they paid for their dreamwith the proceeds from their bicycle shop; not a single personon the wright brothers' team had a college education, not even orville or wilbur; and the new york timesfollowed them around nowhere. the difference was, orville and wilbur were driven by a cause,by a purpose, by a belief.
they believed that if they couldfigure out this flying machine, it'll change the course of the world. samuel pierpont langley was different. he wanted 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 believedin the wright brothers' dream worked with them with bloodand sweat and tears.
the others just worked for the paycheck. they tell stories of how every timethe wright brothers went out, they would have to takefive sets of parts, because that's how many timesthey would crash before supper. and, eventually, on december 17th, 1903, the wright brothers took flight, and no one was thereto even experience it. we found out about it a few days later. and further proof that langleywas motivated by the wrong thing:
the day the wright brothers took flight, he quit. he could have said, "that's an amazing discovery, guys, and i will improveupon your technology," but he didn't. he wasn't first, he didn't get rich,he didn't get famous, so he quit. if you talk about what you believe, you will attract thosewho believe what you believe. but why is it important to attractthose who believe what you believe?
something called the lawof diffusion of innovation, if you don't know the law,you know the terminology. the first 2.5% of our populationare our innovators. the next 13.5% of our populationare our early adopters. the next 34% are your early majority, your late majority and your laggards. the only reason these peoplebuy touch-tone phones is because you can't buyrotary phones anymore. (laughter)
we all sit at various placesat various times on this scale, but what the law of diffusionof innovation tells us is that if you want mass-market successor mass-market acceptance of an idea, you cannot have ituntil you achieve this tipping point between 15 and 18 percentmarket penetration, and then the system tips. i love asking businesses,"what's your conversion on new business?" they love to tell you,"it's about 10 percent," proudly. well, you can tripover 10% of the customers.
we all 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 youfind the ones that get it before doing businessversus the ones who don't get it? so it's this here, this little gapthat you have to close, as jeffrey moore calls it,"crossing the chasm" -- because, you see, the early majoritywill not try something until someone else has tried it first.
and these guys, the innovatorsand the early adopters, they're comfortablemaking those gut decisions. they're more comfortablemaking those intuitive decisions that are driven by whatthey believe about the world and not just what product is available. these are the people who stoodin line for six hours to buy an iphone when they first came out, when you could have bought oneoff the shelf the next week. these are the peoplewho spent 40,000 dollars
on flat-screen tvswhen they first came out, even though the technologywas substandard. and, by the way, they didn't do itbecause 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 buy why you do it and what you do simply proveswhat you believe. in fact, people will do the thingsthat prove what they believe. the reason that person bought the iphonein the first six hours,
stood in line for six hours, was because of what they believedabout the world, and how they wanted everybody to see them: they were first. 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 a commercial example. as we said before, the recipe for success
is money and the right peopleand the right market conditions. you should have success then. look at tivo. from the time tivo came outabout eight or nine years ago to this current day, they are the single highest-qualityproduct 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-junktime warner 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 40 dollars and then plummeted,and it's never traded above 10. in fact, i don't thinkit's even traded above six, except for a couple of little spikes.
because you see, when tivolaunched their product, they told us all what they had. they said, "we have a productthat pauses live tv, skips commercials, rewinds live tvand 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 of personwho likes to have total control over every aspect of your life, boy, do we have a product for you. it pauses live tv, skips commercials, memorizes your viewing habits, etc., etc." people don't buy what you do;they buy why you do it, and what you do simply servesas the proof of what you believe. now let me give you a successful exampleof the law of diffusion of innovation.
in the summer of 1963, 250,000 people showed upon the mall in washington to hear dr. king speak. they sent out no invitations, and there was no websiteto check the date. how do you do that? well, dr. kingwasn't the only man in america who was a great orator. he wasn't the only manin america who suffered
in a pre-civil rights america. in fact, some of his ideas were bad. but he had a gift. he didn't go around telling peoplewhat needed to change in america. he went aroundand told people what he believed. "i believe, i believe, i believe,"he told people. and people who believed what he believed took his cause, and they made ittheir own, and they told people. and some of those peoplecreated structures
to get the word out to even more people. and lo and behold,250,000 people showed up on the right day at the right timeto hear him speak. how many of them showed up for him? zero. they showed up for themselves. it's what they believed about america that got them to travelin a bus for eight hours to stand in the sun in washingtonin the middle of august.
it's what they believed,and it wasn't about black versus white: 25% of the audience was white. dr. king believed that there aretwo types of laws in this world: those that are made by a higher authorityand those that are made by men. and not until all the lawsthat are made by men are consistent with the lawsmade by the higher authority will we live in a just world. it just so happenedthat the civil rights movement was the perfect thing to help himbring his cause to life.
we followed, not for him,but for ourselves. by the way, he gavethe "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. because there are leadersand there are those who lead. leaders hold a positionof power or authority, but those who lead inspire us. whether they're individualsor organizations,
we follow those who lead,not because we have to, but because we want to. we follow those who lead, not for them,but for ourselves. and it's those who start with "why" that have the abilityto inspire those around them or find others who inspire them. thank you very much. (applause)
