Re:Focus

Two Types of Experts

There are two kinds of experts, academic experts and practical experts. One is not better than the other, but they are very different and each offers very different value. 

As its name conveys, the academic expert is just that - academic.  To become an academic expert takes years of studying. Academic experts are experts in how and what others have done. They use case studies and observation to understand a subject. Regardless if their expertise comes from quantitative or qualitative research, whenever they comment on a question they will reply with words like, "I have observed that..." or "in many cases..." or "the data shows."

The second type of expert is the practical expert. The practical expert gains his or her understanding for a subject by actually doing it. They didn't study what they did...they just did it.  When they answer questions, they often reply with words like "in my experience."

Academic experts may not be good at doing what they are experts in themselves, but they are good at explaining the subject matter to others. They write books,  teach courses and offer lessons and give steps others can follow.

Practical experts may be good at doing what they they know about, but they are not always good at explaining how or what they did in clear enough terms that others can can learn from or follow their lead. Listen to an interview with Richard Branson or Steve Jobs or Bill Gates and see if you can build a business based on the instructions they offer - it's damn near impossible.

Unlike academic experts, practical experts didn't set out to become experts, they set out to solve a problem and gained expertise in the process. Ironically,  most practical experts started with a total lack of experience in whatever they became an expert.   Just the three examples I offered - Branson, Jobs and Gates...as well as many other highly successful entrepreneurs...started their businesses when they were in their early 20's and knew very little about building a business let alone a huge corporation.  And that was their advantage.  Practical experts are unencumbered by what others have done or "the right way to do things." They were forced to figure things out themselves which is how they gained their practical expertise.

Constant observation is how an academic expert gains his or her expertise. They study those who have succeeded or failed. Practical experts, in contrast, try and fail more than they succeed, but their drive to never quit until they solve a problem is the defining factor that earns them their expert status.  Anyone else would simply be someone who tried and trying alone doesn't make you an expert.

The academic expert is not is not better than the practical expert, we need both.  The practical experts do the things that the academic experts can observe and translate into actionable lessons for others. But never has their been someone who was able to achieve great success by precisely following all the steps of any academic expert.  It just wouldn't be practical. The practical experts are driven by their gut. They trust their feelings and they "read" the situation and are driven by finding a solution. And whether they like to admit it or not, the work of the academic experts gives the practical expert lots of information to assimilate and adapt where they deem fit.  The difference is, the practical expert, as their name conveys, only takes or uses the parts that make sense them them.

Entrepreneurs must be practical experts. They needn't set out to be subject matter experts in what they do,  they must set out to solve a problem or pursue some cause or purpose greater than themselves. With a clear understanding of Why they are setting out they will take the practical steps to blaze new paths that others, with some academic help, may follow suit.

Don't Strive To Be A Leading Company, Strive to Lead

Dell is a leading company but Apple leads.  American Airlines is a leading company but Southwest Airlines leads. Kroger's is a leading company with over 2,400 supermarkets, but with only 270 stores both in the US and UK combined, Whole Foods leads.

There is a difference between being a leading company and being a company that leads.  A leading company may have the biggest market share or have the most revenues, but they don't lead the industry.  A company that leads sets the tone for all others to follow.  Though leading companies may be bigger, companies that lead are more innovative, more profitable and command greater loyalty.  

Companies that lead always know WHY.

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Do You Want To Be A Leading Company or A Leader?

There's a difference between being a leading company and a leader.  Leading companies sell more than everyone else.  Those who lead set the direction for the rest of the industry.  Here's what it takes to be a company that leads.

Visit msnbc.com for Breaking News, World News, and News about the Economy

To read more about what it takes to lead, read Start With Why.

And to be one who leads, give your copy away to someone you want to inspire...

Start With Why

Read an excerpt - http://bit.ly/L26zk

Twitter - @simonsinek

TED Talk - Simon Speaking at a TEDx Conference in Seattle

We make assumptions about the world.  More importantly, our behaviors are often governed by those assumptions. But what if our assumptions are incomplete or wrong? This doesn't necessarily only apply to things when they go wrong...what about when they go right? Do you know why things go right? Most people would say yes - but then why is it so hard to repeat great success?  If we know why Apple is so innovative, for example, why can't anyone else do it? Don't you want to know WHY?

This is what I talked about when I had the honor of speaking at a TEDx event in Seattle this year. It was such a privilege to share the stage with some remarkable and inspiring people. Ed Visteurs, the only American to scale the 14 highest peaks in the world without oxygen, and Erik Lindbergh, Charles Lindbergh's grandson and an amazing human being in his own right, to name but two. (Click here for other TEDx talks).

The vision is that everyone knows WHY. To learn more about why you do what you do, check out Simon's new book, Start With Why. If you order a copy, order two and give one away to someone you want to inspire. The goal is to share the WHY with as many people as possible.

How To Become A Legend

Usain Bolt knows why he needs to win races and shatter records. Though money and fame are nice additions, what drives him is something much, much bigger. It's even bigger than winning each individual race.

The 23-year old, gold-shoe wearing Jamaican track star became a household name after he shattered multiple world records at the 2008 Beijing Olympics. When asked what his secret is, he replies with surprising humility, "my secret's just hard work and dedication." Great advice, for sure, but it takes more than just hard work to become such a dominating force in sports...or in anything, for that matter. It takes a sense of purpose so big, it's  hard to measure. It may even sound like fantasy. And for Usain Bolt, he wakes up everyday to, as he puts it,  "become a legend."

It is this sense of purpose, the sense of WHY Bolt works as hard as he does that makes such a difference. Whereas other competitors train for a race or for an event, Bolt trains for something that he may not fully appreciate in his lifetime, because inherent in legend-status, is that it will outlive him.

Though each race he wins and each record he breaks matter, they are not the end goals. They represent the milestones he needs to pass to achieve his very big dream.

In our careers and in our businesses we often limit our ability to succeed because we set goals with relatively short time lines.  We work hard to achieve these goals, then set new goals the following year. But quarterly or annual goals are just too short. How many people or organizations are planning to achieve something that will be fully realized after they die?

A strategy of setting a goal, reaching it and working to achieve the next goal does not inherently prevent progress or success, but it limits the ability to make massive leaps. It also begs the question, why are those short-term goals important? "To be successful" or "to grow a business" are insufficient as answers. Everyone who races against Bolt is running to win races, but few, if any, are running to become legends.

Quarterly or annual goals should not be the goals, they should serve to mark the measurable progress we make on our way to something much grander.  The Wright brothers didn't set out to simply make a flying machine, they set out to change the world.  Steve Jobs didn't just want to build a successful computer company, he set out to, as he put it, "make a dent in the universe." That ability to see beyond the year, to see beyond the money and the profit, to see how the world will change because of what you achieve, is what makes legends.

Consider this analogy: If your goal is to drive 350 miles in one day, you may achieve your goal, you may even drive a little further. You'll be elated that you reached your goal or surpassed it.  Your victory may even encourage you to attempt to drive 400 miles the next day. But to become a legend, you need a lofty, almost unrealistic and quite bombastic vision of the final destination...not just one of the way points.  It's not about getting 350 miles in a day, it's about seeing yourself laying on the beach on an island in the South Pacific. In one single swoop, you see the 350-mile achievement as small and slow. You are instantly able  to see opportunities that others miss.  Where others see the need to drive faster, you see the need to jump on an airplane.

Usain Bolt doesn't run each race because he wants to win. He wins each race because he wants something so much grander. And it is this ability, to understand why each race matters towards achieving the grand plan, that he will indeed become a legend.

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The Best Leaders Show Up For The Cause Not The Result

Offering CEO's big money to come and run companies does not guarantee great leadership. In fact, the practice may attract the wrong leaders altogether.

With banks failing, the auto-industry in a mess and Steve Jobs returning to work after his secretive liver transplant, it's a good time to raise the subject of succession again.  

Wall Street was quite upset that Apple was so close to the vest about Jobs's health.  And well they should be, the last time Jobs left in 1985, the company slumped and didn't re-emerge as the powerhouse they are now until Jobs returned to the helm a decade later. But Jobs's health is irrelevant. Cancer or new livers aside, the fact is he can't lead the company forever and knowing how to find a good leader to succeed him is important.

But Apple is just one of many succession conundrums.  Many of the banks are sailing rudderless into the future as are companies like AIG, Chrysler and GM. Rick Wagoner, for example, was ousted from GM for mismanaging the company, only to be replaced by a man who, well, lets just say he's not much of an inspiring leader. And given the desperate need for real leadership these days, there is an ongoing debate in boardrooms and on Capitol Hill about how much we should pay these leaders for their contributions. 

The argument is that companies can not attract the best leaders, the leaders they need, unless they are very well compensated. And that, believe it or not, is actually the problem.  The flaw in the logic is that the best leaders do it for the money, which they don't.  Great leaders show up for the challenge or the cause. The bad leaders show up for the money.

Instead of finding someone with an impressive resume who is willing to help if you pay him or her enough, imagine if the Obama administration made this appeal:

The recent economic melt-down has taught us a valuable lesson - that the way we did things in the past is not the way we can do things in the future. We may have enjoyed the short term riches of the past decade or more, but we have done so by weakening the very foundations of our corporations and indeed our economy.

Now is the time for change.  Now is the time for new ideas and new leaders to emerge to rebuild our economy and our nation so that we may, once again, be the beacon of how a great free market economy should run.

We are looking for the men and woman who want to help shape the corporations of the future and help build the new American economy. The salary will not be big. The challenge will be great. And the opportunity to influence the future of our county is real.

Are you up for the challenge?  If so, please contact President Obama and tell him you want to lead.

Such an appeal does not mean that prior experience is ignored, it just means it is considered second to the leaders desire to help.  If a leader shows up for the cause, they will work with blood, sweat and tears and they will inspire those around them to do the same.  If the leader does not believe in the cause, then they will work for the money.  The very fact that got us into this mess in the first place.

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This blog also appeared in The Huffington Post

Why So Many Successions Don't Succeed

There were three words missing from Bill Gates’ goodbye speech when he officially left Microsoft in July of this year.  They are three words he probably doesn’t even realize need to be there.  Three little words:

“I’ll be back.”

After abdicating his role as the head of Microsoft to Steve Balmer in 2000, Bill Gates has completely relinquished influence over the company he built so he can lend more time and energy to the Bill & Melinda Gates Foundation.  But Gates forgot to do one thing that would allow his plan to work. This one oversight could have a devastating impact on Microsoft and will require him to come back in 3 to 5 years to right the ship.

 Bill Gates is special.  Not because of his brain or his management style.  Though important, those two things alone are not the formula for building a multi-billion dollar corporation from scratch.  Like all visionary leaders, Bill Gates is special because he physically embodies what he believes.

When Gates founded Microsoft just over 30 years ago, he did so to advance a higher cause.  A noble purpose.  He believes that technology is the great equalizer.  Give people the right tools, make people more productive, and everyone, no matter their lot in life, will have an opportunity to achieve their real potential.  “A PC in every home and on every desk,” he envisioned (which is remarkable from a company that didn’t make PCs).  He saw the PC as the great equalizer. Microsoft’s most successful software, Windows, allowed anyone to have access to powerful technology. Tools like Word, Excel and PowerPoint, gave everyone the power to realize the promise of the new technology – to become more efficient and productive.  Small businesses, for example, could look and act like big businesses.  Microsoft’s software are the tools that helped Gates advance his cause to empower the “every man.”  It was Gates who is responsible for the advancement of personal computer.  Gates put a PC on every desk and in doing so he changed the world. 

Gates is important to Microsoft because he physically embodies his vision.  He is the “every man.”  He dresses like you and me.  He drives his own car.  He is understated.  He his not flamboyant with his wealth. Bill Gates is the original vision of Microsoft.

So what happens now that he’s gone?

Such a departure is not without precedent among companies with equally visionary leaders.  Steve Jobs, a man who personifies the notion of challenging the status quo, who is the physical embodiment of “Think Different,” left Apple in 1985 to start Next.  He left the company in the hands of a capable executive, Pepsi’s John Scully.  The problem was, Scully ran the company as a business and not as a tool to achieve a higher purpose.  The company thrived on Jobs’s fumes for a few years and then it started to falter.  Not until Job’s return in 1996 did Apple reinstate it’s power for innovation, for thinking different and to, once again, redefine industries.

Michael Dell had a cause.  One he didn’t effectively communicate before he stepped down as CEO in July, 2004.  And when the company started to weaken with him gone, he came back in fewer than 3 years.  In 2000 Howard Schultz resigned as CEO of Starbucks.  And for the first time in it’s history, Starbucks started to crack.  Schultz returned in 2007 to put things right. 

Jobs, Dell, Schultz and Gates are not God’s gift to management.  Their companies are thousands of people deep and they alone can’t pull all the strings or push all the buttons to make everything work properly.  They rely on the brains and the management skills of teams of people.  In this respect, they are no different from any other executive.  But what they all have in common, something not all CEOs have, is that they physically embody the cause around which they built their companies.  Their mere existence reminds every executive and every employee why they show up to work.  Put simply: they inspire. 

Like Bill Gates, these inspired leaders failed to properly articulate their cause in words that others could rally around.  And as a result, they are the only ones who could lead their movement.  But they still have the same challenge – what happens when they leave again? 

  

The best thing Dell, Schultz and Jobs can do while they are back is to make sure that everyone knows why the company was founded in the first place.  What’s the cause they are there to champion?  What movement are they leading?  Why should anyone care? 

Schultz hasn’t done it yet. He is back at Starbucks talking about coffee.  There aren’t many employees at Starbucks who are truly inspired by coffee.  In fact, if you go back to the history of Starbucks, it wasn’t even coffee that originally excited Schultz, it was opening coffee shops.  It was the vision of building a space between work and home that allowed Starbucks to single-handedly drive a coffee-shop culture in the United States. Talking about coffee will not re-energize employees at Starbucks and it will not drive innovation.  And, more importantly, it will not prepare the company for when Schultz leaves again.  Schultz needs to refocus the company around the coffee shop experience, not the product they serve.

Gates made the same mistake.  As the company grew, he stopped talking about what he believed and how he was going to change the world and started talking about what the company was doing.  Microsoft changed.  Founded as a company that believed in making people more productive so they could achieve their highest potential they became a company that simply made software products.  Such a seemly subtle change impacts behaviors.  It alters decisions.  And it impacts how a company structures itself for the future.  Though Microsoft has changed since its founding, the impact was not as dramatic because at least Bill Gates was there, the physical embodiment of the cause that inspired his executives and employees.
But now he’s gone.

Gates left to do something else that also embodies his cause – to use the Gates Foundation to help people around the world wake up everyday to achieve their potential.  The only difference is he’s not doing with software anymore.  Steve Balmer, a smart man by all accounts, does not physically embody Gates’ vision of the world.  Balmer is not seen as a humble man.  He is not “one of us.”  He has an image as a powerful executive who sees numbers and not people.  Like John Scully at Apple, Jim Donald at Starbucks and Kevin Rollins at Dell – all the CEOs who replaced the visionary founders – Balmer might be the perfect man to work alongside a visionary but is he the perfect man to replace one?  The entire culture of all these companies was built around one man’s vision.  The only succession plan that will work is to find a CEO who believes in and wants to continue to lead that movement, not replace it with their own vision of the future. Balmer knows how to rally the company but can he inspire it? 

Successful succession is more than selecting someone with an appropriate skill set, it’s about finding someone who is in lock-step with the original cause around which the company was founded.  Great second or third CEOs don’t take the helm to implement their own vision of the future, they pick up the original banner and lead the company into the next generation.  That’s why we call it succession, not replacement.  There is a continuity of vision.

Gates’ departure from Microsoft is no different from the founder/CEO departures at Starbucks, Dell and Apple.  If Microsoft does not clearly articulate the cause around which the company was built, then no matter who takes over, Gates will have to come back in 3 to 5 years.  Like the other examples, he will need to return to remind everyone the cause by simply being Bill.  If that cause is not clearly articulated and if Gates doesn’t come back, then Microsoft probably only has about 5-7 good years left before it starts to look like AOL, Netscape or Yahoo – other once-mighty forces who, after the vision left with their respective founders, floundered about only to become irrelevant in the long-term shaping of an economy.

Have fun in Africa Bill and see you in a few years.


This piece also appeared in The Huffington Post.

It Takes More Than Repeat Business To Create Loyalty

Driving loyalty is very different from driving repeat sales. There are always reasons people will do business with you that have nothing to do with you -- timing, price, convenience, lesser of evils and force of habit are just a few. These things can help influence an initial sale and they can influence repeat business, but they do not influence loyalty. Just because someone buys from you over and over does not make them loyal.

Loyalty exists when an existing customer chooses to do business with you even when a cheaper, more convenient or even higher quality option is on offer from another company. Someone's decision to ignore a sale or promotion of another seems like irrational behavior. And that's because it is. The part of the brain that controls decision-making and behavior exists in the same part of the brain that controls feelings and emotions. The part of the brain that controls rational thought does not, in fact, control behavior. Someone's decision to stick with one company in the face of overwhelming rational proof of a better offer has more to do with the buyer than the seller. Loyalty is, in fact, not rational at all but a highly emotional state.

Lets look at Apple, for example. Well known for having a fiercely loyal customer base, the base model Macintosh laptop, the MacBook, starts at $1099. A Dell laptop with equivalent performance specs is $649. The Apple is 40% more expensive! And if you're willing to have a slightly smaller hard drive than the Mac, the cost for the Dell is only $499 - less than half the price! Everyone knows that Apples have less software available for them and fewer peripheral choices. And as a recent Mac convert, I can report that my decked out MacBook is slower than my old mid-level Dell. The decision to buy an Apple the first time is clearly far from rational. But the decision to remain loyal is a deeply personal and emotional decision. Owning a Dell says nothing about who I believe I am. But owning a Mac accurately reflects my self identity.

This means loyalty is more a factor of a company's ability to express a clear and honest sense of why they exist and what they believe about the world than simply the quality of what they do or make. The clearer that belief, the more attractive the company is to those with similar beliefs.

Apple is a company not built around a product -- it's build around a belief -- the desire to challenge the status quo. It is no accident that creative-types are drawn to the machines. Apple's ability to attract such a loyal customer base has less to do with their products and their "rational" benefits, and more to do with what the company stands for. Like a flag a loyal soldier follows into battle, Apple and their products stand as a symbol for a cause worth making sacrifices -- like paying a higher price.

My favorite example of loyalty is Harley-Davidson. There are people who tattoo Harley's logo on their bodies. Some who do don't even own their product. The decision to do such a thing -- clearly irrational -- has nothing to do with the quality of Harley bikes or their value as a company. Someone's decision to display that logo on their body is a symbol of a belief. They identify as independents in a world of conformity. Members of the rugged open-road.

Because loyalty is emotional and not rational, you don't actually need to have the best product or service - it needs to be good, but it doesn't have to be the best. Loyalty starts with clarity - your own clarity of what you believe - why you do what you do. This has nothing to do with money, this is about why your company was founded in the first place. Why does it exists? What do you stand for? If others believe what you believe, they will put up with all kinds of better offers to do business with you.

A company's challenge is to never veer from saying and doing the things they actually believe. The discipline to do so is called authenticity, and there aren't too many companies left who can claim to be truly authentic. Fickle customers are not the reason there is such little loyalty these days. It's hard for someone to be loyal when no one knows what you believe.

This article originally appeared on The Huffington Post on June 1st, 2008