Speaker 1: 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, 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 tonnes and tonnes of training 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 a 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 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, 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 say, what's your priority? And they put their hands on their hips all proud and they say, my priority is my customer. I'm like, really? You haven't talked to a customer in 15 years. 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 that 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 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 to see 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 over the past 20 and 30 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 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 job. 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 said, 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 admit they made a mistake that's 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 them 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 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? Really? No. How do I help my people be at their natural best? Right? We're not asking these questions. We are 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? Do you pull your car up or do 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 don't always have to be in charge. We don't always 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, the system is stable. Baseball is stable. Right? When you pit an infinite player versus an infinite player, the 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 when a finite player is playing to win, and an infinite player is 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 is the Soviet Union in Afghanistan. They were trying to beat the Mujahideen, and the Mujahideen would fight for as long as is necessary, quagmire. Now let's look at business. The game of business has preexisted or has existed long before every single comedy 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 realise 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, 20 years, 50 years, 100 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 in the companies that understand the game that they're in and organise 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 50 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, 100% of the executives spent 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, it didn't work with iTunes, which is an entirely different problem. I couldn't use it. 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. 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? 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 belief, 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 to either drop out of the game 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. If you want to be a great leader, start with empathy. If you want to be a great leader, change your perspective and play the game you're actually playing. Thank you very much. Thank you. You