[Applause]
my entire passion in life is helping
people to create an extraordinary
quality of life that means life on your
terms and one of my obsessions for the
last 38 years has been business and the
reason is because most of us spend more
time in our work in our business than we
do with our children even what do we do
with a spouse a boyfriend a girlfriend
or those that we love
a business becomes an extension of a
person's identity and so I found that if
you can help someone transform their
business to a great extent you transform
their life because it's the place that
causes them to grow and expand and to
find a way to add value and my passion
for business is really simple I love
seeing people take control of their own
lives and create the life that they
deserve by finding way to do more for
other people than anyone else does so
this podcast has one purpose to truly
help you create business breakthroughs
the psychological insights that can get
you to go to the next level
anything that's usually a choke hold on
the growth of your business 80% of that
is the psychology of the owner and 20%
of the mechanics or the strategies and
I'm a strategist and this podcast will
have both I'm going to share with you
some of the best insights and strategies
that I'm aware of in the field but if
you're going to really make progress
it's going to take more than just
information or listening a podcast
that's gonna require some real change
and everybody wants things to be better
but nobody wants to change if you really
want to take control if you want to make
real progress then let's begin the
journey with this business podcast now
[Music]
Netflix Starbucks
Apple Amazon Costco what do these
companies all have in common strategic
innovation all of these companies
rewrote the rules for competition within
their industry they found unique ways to
provide more value than anyone else and
that's why they're dominating but
strategic innovation is different than
constant never-ending improvement while
you can't run a successful business
without making improvements its
strategic innovation that will help you
reshape the landscape of your business
and ultimately take over your entire
industry because the market will always
be searching for something new and you
not your competitor must be the one to
give it to them you must always be
looking for ways to create something
more new or better than what currently
exists consumers are no longer impressed
with any one new feature or service for
very long they expect a constant
evolution of improvement or they will
simply go elsewhere
that's exactly why Steve Jobs for
instance held weekly meetings with his
operational heads at Apple that would
focus on the latest new product that the
company was developing and envision the
next steps for each product line Apple
was absolutely committed to strategic
innovation and they redefined each
market they entered by creating
brilliant products that put the
competition to shame consider Starbucks
known for its in-store innovations like
the reverse French press clover coffee
or handmade sodas Starbucks is
constantly finding ways to cater to
their clients they're even testing out
smaller express stores in high-density
areas to reduce wait times and many
shops even have smartphone charging
stations available for their customers
strategic innovation is about standing
apart and staying one step ahead it's
about ensuring sustainability and
success in short strategic innovation is
power
now let's hear more about what Tony has
to say about it are you ready to rock
and roll
while we're excited because this morning
what I want to talk to you about briefly
is this concept of creating strategic
innovation innovation everybody thinks
about yeah we got to innovate our
product we got to innovate our service
but remember I said all business really
is not me instructor said this is
marketing an innovation or innovation
and marketing you're creating something
innovating something bringing something
at the table that's more new alive a
reason for people to do business with
you today that gives you a competitive
advantage because there's more added
value for them to buy your product or
service than anybody else then you got
to market it those two forces have to be
institutionalized in your organization
it used to be you could come up with a
killer service you come up with a killer
product and you can run or promote or
market that product for five 10 15 years
as long as a great product you could own
the marketplace special if you were
first today market cycles I mean I
remember for example in the early 90s
Sony used to have a market cycle where
they build a product and they would have
about a four and a half year market
cycle so in the good days let's say even
the 80s when they're building like a
Sony Walkman well they built Sony
Walkman in those days their market
cycles in the 70 year frame then we went
in the 90s to four and a half years
anybody know what the market cycle is
now no there's a creative product before
they know they got to replace it and
improve it and sell it in that business
six months six months they know that if
they are going to hold on a customer
every six months they have to find
someone to take it to the next level and
by the way Sony used to do that and they
own the marketplace who replaced them in
a sense of innovation when it comes to
technology quick Apple Sony was the
Apple but interestingly enough so when
he got to the point where they stopped
doing the same level of innovation they
started coming out with products that
look different but there was no real
innovation innovation isn't just looking
different innovation by the way can be
looking different looks can be an
innovation believe it or not but it
can't be the only innovation over and
over and over again or customers just
get used to it it doesn't mean anything
there's not enough added value so what
is strategic innovation it means
training everyone
organization to think we have two jobs I
don't care if you answer the phone or
you work in the stockroom or your
marketing and sales or your head of
accounting I don't care who you are we
do two things here we innovate and we
market anything you can figure out
anything you can bring to the table that
can help us to innovate make our product
or service better in some way for
consumers to meet their needs the more
we can know about their needs and the
more we can find to meet those needs and
anything you can tell us they can get us
out there to educate people about why
ours is better anyway we can get our
message out in a unique way we all need
to know you need to reward within your
organization
now strategic innovation is different
than just constant never-ending
improvement can I constantly improving
is a very very important principle if
you're not constantly improving you're
definitely going to be passed up by the
competition but if you're thinking about
strategic innovation what it really
means to me is Rinat rewriting the rules
for competition within an industry
within an area when you change how
people compete when you change the rules
you take over that industry you shift
completely the game so in my industry
the vast majority people spoke and still
do for one to three hours which many of
you yesterday wish I was one of those
people but that's usually it because
what it was is about inspiration right
it's inspired people and what's happened
for me has 90 percent of an hour 90
minutes and I was like it's wonderful
that's a useful tool but you know
inspirations like motivation motivation
is nice and it's like a bath you know it
doesn't last me you still take a bath
every day but my view is how do I get
people into immersion how do I put
people in experience where their life
really changes and so I change the game
and people never even considered saying
we're going to do three or four days and
nights where you gotta go 50 hours no
one will system they won't sit for a
three-hour movie that someone spent 200
million dollars on but I changed the
game I changed the rules because once
people got the results even if in the
beginning it was tough on them by the
end the level of transformation was so
huge it changed the rules change the
game it changed the size it gave me a
brand let me dominate an industry
because when people walk up to me
throughout my life the number one phrase
you see anywhere in the world
sometimes a day not in December I'm just
walking around is oh my god Tony Robbins
you changed my life it's like I always
say you change the tanks for the credit
I'm glad I helped but they'll say that
like clockwork every single time that's
different than I like your product
that's different than I enjoyed your
seminar you changed my life that changes
the rules for competition I created a
different way of competing I didn't do
it to compete I did it because my person
was I love people and I don't want them
just to be inspired for the moment I
want to make sure they really have the
tools the skills the ability to shift
that creates a lasting change in their
life and I wouldn't settle for anything
else so you love to do it to compete you
strategically innovate because you're
obsessed with meeting the needs of your
clients that's the difference now who's
done this well Sony did it in a really
simple way Sony didn't come and say
let's do some research and let's figure
out what product people need next
because when they came out with a Sony
Walkman the entire focus of the music
business was on making things a lot
bigger or smaller no when they came out
with Sony Walkman the entire industry is
about making things bigger bigger
speakers bigger woofers bigger
everything nobody was asking for smaller
bigger equal better bigger equal more
money bigger he was more status so what
these people did is they innovated
strategically that's the ability to
reinvent the basis of competition within
an existing industry or invent an
entirely new industry that's what Sony
did
Morita said wouldn't it be wonderful if
you could have the same quality music
that when you're sitting here in your
chair of these giant speakers when
you're walking around he did not get
that from a focus group he not get that
by someone telling him he just try to
figure out what do people need that they
don't even know they need that's a
different game that's when you start to
reinvent things otherwise you're just an
extension of everything else what do
they really need they don't even know
they need he really walked around he
talked to people and they talked about
much they loved music and so forth and
he just thought gosh people are
traveling more and more people are
mobile more and more I'm going to come
up with this idea and so now you know
since the Walkman it's like this ancient
dinosaur right there's giant thing in
your hand
you know compared to this little tiny
you know the newest iPod they've got
that you know it's like the size of your
fingertip but the point of the matter is
he reinvented he created the industry
now Sony eventually lost out to Apple
for a lot of reasons and most of them
are strategic innovations that Apple
didn't so he stopped doing it's that
simple
so there are a perfect example of that
process so think of this way if you and
I are going to really be effective the
secret is don't just improve change the
rules of the game change the rules of
the game you do that the game changes
overnight and I'll give you an example
most of you probably make use of
Starbucks did Starbucks change the rules
of what a coffee shop was yes or no a
little are completely what was a coffee
shop before Starbucks it was a place
that you got coffee and what else what
else yeah you got bacon and eggs and
sausage and I mean you Nick pancakes
that was a coffee shop true and people
got their coffee what they did is they
came along and they said you know what
people I notice the world's changing
people used to go out to work to the bar
and they don't go to the bar before work
it's like people need a place to go
between work and home to decompress
before they deal with what's at home and
they said you know you want to be social
sometimes sometimes going to be by
themselves and then this man had even
create this right how did he have it
Howard finder come up with Starbucks he
went overseas he was in Italy he saw
these little coffee shops little Bistro
seems like wow I think that could work
all he did was model it and come bring
it here but he changed the game of
competition he wasn't competing with
Dany's he wasn't competing with these
normal coffee shops
he was as high-end super expensive you
got an identity by going there you got a
social experience by going there you had
a place to be able to go between your
life to decompress they changed the
entire rules of competition and by the
way he was first the first one not ever
make one the first one to get in
consumers hearts and minds and once he
was first and a bunch of people to try
to copy it they might even have better
coffee but once their first as a brand
he innovated first any branded first and
they own the market and by the way how
much have they grown
how many stores that they have in 1998
100 stores how many I have now last year
they ended with 15,000 stores in 10
years that's what happens when you
strategically innovate he could never
have made a coffee and like meet his
product better and then souls and
growing like that easily grew like that
as he created a whole new category that
he was the leader in that's what you
have to be able to look at that's what I
mean when I talk about strategic
innovation Nike we gave the example of
yesterday also about what Nike really
did along the way
first he sold you know somebody else's
shoes meaning feel Knight then he lost
the contract which looked like the worst
thing in his life I'm losing my product
but what did it make him do it mean
creating a product of his own a total
what a shit or a must come on guys a
shit or a must by the way that's what
the value is of the marketplace right
now for many of you your worst nightmare
is if you find the way to use it the
demand to strategically innovate and if
you do that it could be the greatest day
of your life even if right now you're
scared out of your mind take that fear
as energy and there's not a big
difference between fear and excitement
same kind of Drive one just has a sick
feeling to it the other has a little
excitement attached to it all right but
if you get that thing and just go this
either spot the meaning here this is the
gift and I gotta figure I'm going to use
this gift this is demanding your change
so what does he do he innovates he comes
up with a product like nobody's ever
done before and it creates him on this
explosive growth now as he wasn't
supposed to growth other people start to
copy what he's doing and now I need to
innovate again and he doesn't really
come up with much innovation for a while
until suddenly his innovation is way
marketed he changed the game he no
longer sold shoes he made Nike first of
all a sports company he was the first
one to sell $50 shoes but he's able to
do that because he was also selling
clothing it was an integrated look and
feel and that evolved into selling were
a lifestyle just what right and all of a
sudden this lifestyle the lifestyle had
all these members of the community
Michael Jordan right Tiger Woods now
they started building that and grab
they built from a sports company that
sponsored events everything else too now
there are community how many of you use
Nike Plus some of you run and use Nike
Plus I'm curious Nike Plus have you not
seen it you go online you type in you
get this little device in your shoe and
now when you go running you can hear
your music it tells you how far you've
been running you have Lance Armstrong
going hey nice job you broke your record
yeah that's happened to the end total
reinforcement you plug it in your
computer and boom attracts everything
and you can compete with other people or
you can track yourself you want to play
three on three basketball they've all
community who want anywhere in the world
click on you'll find people who will go
play with you that day what they're now
doing is they're in your life every day
they're no longer a product you're no
longer a service or a community that
you're a part of that we invents the way
they compete so guess what Nike does not
spin these ads they got millions of
people to log on every single day
because it's a part of the ritual of
their life
that's reinventing the rules of
competition try that now come out a
little company called scooby-doo shoes
and see how well you do so maybe if you
well by finding a niche but you're not
going to take over Nike all right they
constantly found a way to strategically
innovate not just you'll make something
a bit better that's the difference when
I'm talking about
harley-davidson harley-davidson after
you know before World War 2 after World
War two rather became his giant
incredible you know arm of marketing
because all these guys you know that
were GIS came back for tuning through
them in these Harley's and they wanted a
Harley and a lot of them want an
identity for themselves that they were
still a badass and they were coming back
to just being a normal person and they
built the culture and I cultured became
very loyal and the culture was promoted
in movies it was an identity right all
right born to be wild this crazy
outrageous person who's totally
independent owns himself as tough as
nails totally masculine now they went
through this tremendous growth period
and then all of a sudden in the 80s the
Japanese started building much better
bikes
lighter faster cheaper stronger and
Harley started just drop through the
absolute floor
Harley was on the verge of bankruptcy
after being around since the earliest
days of motorcycles and what turned them
around strategic innovation somebody
came in the new management team
leadership came to see
gets a lot of credit but we're really a
team they say you know what if we're
going to innovate we got to say what
business are we really in that's another
way you can find how to innovate you
keep thinking you know what business
you're in you think you're the person
that builds casinos that's only one way
to look at your business there's a much
broader version of what business you're
in and I start looking around and saying
who are customers really what are our
customers really buy from us are they
buying a motorcycle no they're buying an
icon they're buying an identity they're
buying legacy I mean these are not just
bikes these are legends and gradually
they began to realize what we really
sell at this stage we've been around so
long we're really selling a heritage
we're selling a legacy we're selling a
lifestyle we're selling way to live
we're really selling nostalgia a mindset
because baby boomers they found guess
who buys the most number of motorcycles
what age today do you think 38 to 50
it's somebody about to have or in the
middle of their midlife crisis
who says I'm still badass even I'm old
and they begin to realize that's where
80% of these motorcycles are sold so I
said here's what we're going to do we're
going to sell this identity not only to
these people if we want to stay in the
market between 38 and 50 year olds we're
still nostalgia some people are going to
ride a bike but they want the identity
and guess how they grew their business
like crazy and explain all their
marketing started selling all the
clothing like crazy the market became
create identity so I can remember I I
never rode a motorcycle
growing up mine one of my cousin's you
know was on a motorcycle we had no money
so I couldn't afford one but also he
actually crushed his leg and had stunted
growth more like little shorter and
longer than the other so I never one of
the motorcycles I'm going to fly
helicopters later on in life and things
like that was my idea of really kick-ass
flying and then I need sage and she says
do you mind a motorcycle hang on no she
goes Oh
like I fly helicopters come here you
know rip the doors off we're going to be
helicopter surfing let's stream it down
in the water just as the curls coming
and pull up as the wave goes underneath
it but of course you got motion sickness
and threw up so that's work real well so
I decided I got this woman I'm in love
with her you know she likes motorcycles
and her dad always a tarly's so I
reluctantly go to Harley store thinking
what the hell I got to do because I
didn't have those iconic images in my
mind trying to be a badass with leather
and all these good things so I get on
this motorcycle and it's like wow it's
like flying I mean this is really cool
it's a lot like flying is incredible
feel so I don't have a license I Drive a
motorcycle for 20 minutes and a guy I
said if I want to see the best
motorcycles all at once because I always
want the very best how would I do and he
said well you'd go on this incredible
rally they do this rally and South
Dakota North Dakota what they call
Sturgis and he said it's happening this
weekend so this weekend they go yeah
they're gonna be like you know 400,000
bikes there so I said can you get me a
ticket he goes you need a ticket you
just drive in that's a bit of a
motorcycle and I don't know license see
that's the problem
I said listen can you arrange for
someone who can let me a bike heals well
if you don't know the license like oh
come on man let's make a deal so sure
enough he arranges I fly in my private
jet so I can get on Harley so I can feel
cool right
so I fly the sturgis a bring stage I'm
only doing these things for 20 minutes I
never had anybody on the back of it I
have no license but I'm going to Sturgis
baby and I got my leather jacket and my
chaps it was the full thing ready to
rock so I get there the guy gives me
this thing I'm trying to figure out
orienting on come on hundred on the
basket jeez we're gonna be like can you
really do this and we did just drive
unbelievable Drive and without not
Rushmore and it was just incredible and
then we got there
that night and he said they're gonna be
all these bikes and we got there and
they're probably 15,000 bikes which
sounds like a lot but that's not for
and by the way surgeons this little tiny
town I think all there's a lot of bikes
but it's not terribly exciting your
third evening in the only place that's
the nicest place in town is the Best
Western so I took in the Best Western
which is probably normally $99 a night
and it's six hundred dollars a night
that week and so I wake up the next
morning and there's a half a million
bikes on the road they all ride that
morning you can't move and I'm out of my
mind
and I bought everything you can imagine
you know it was the first time I life
you were going up doing with a camera
garden excuse me sir and like shows like
no can we take a picture of your lady
it's a different world
but what Harley did they got a half
million people now that are showing up
to these things I mean they transform
their business the business exploded
because they innovated they said we're
not in the motorcycle business right
we're in the business of nostalgia so
that's the reinvention that I'm really
talking about and you can do this in a
smaller level and there's McKenzie River
the name of the company wide honestly
it's not a big name you wouldn't
recognize him anyway but I met a guy in
New Jersey kept telling me about him
which his wife loved shopping at this
place but it blew me away as I was this
house and a car showed up to pick her up
from the store and what happens is they
don't compete on price they know
everything about their customers and
they don't even just send this up to
your house they send a limo to pick
people up and bring them shopping I mean
they have no problem with price
competitions they're not worried about
you know recession/depression not at all
because they just reinvented the entire
way of competing if you look over here
at of the Wynn Hotel see Steve Wynn's
interestingly enough kept building his
hotels and he sold them all to MGM and
then he went built the wind and the wind
was supposed to be the highest and what
she did 2.3 billion was the first one
the encores 2.7 billion and he changed
the entire way of competing he's decided
what kind of service is what he was
going to do and he wanted to own the
high-end you know I found out one of his
trip with him and I found out something
interesting he began to realize that all
the money 80% of the money is made in
Bacharach and there are 50,000 players
in the world that will make 80% of his
profit all those other things you do are
minor
tiny compared to the sales that they
make from 50,000 big whales that they
take care of and he want to have the
richest most exclusive most
extraordinary place on earth to them to
go you will do this model in that crack
has the best ratio does advantage you
know the house has the advantage but
it's tiny the smallest so as a them as a
gambler you've got the best opportunity
but that's if you play once if I have
the advantage even by 1/10 of a percent
you keep playing the longview play but
the odds are my side
see so either bed anyway you know we're
gonna build the most incredible place
even everything else is down look at
those giant where else to come here
because we're the place to be reinvented
the way of competing you didn't have to
go volcanoes and things like that no
something really cool really magnificent
but really made for a different market
he said not only who is my customer who
do I want my customer to be that's the
question you need be able to answer if
you're gonna really be effective because
many of you looking at your current
customers your current customers not
buying as much and you going oh my god
what do I do
well maybe I need to get them to buy
more maybe I need to get more customers
or maybe I need to get a from different
kind of customer this is when we start
to strategically innovate as opposed to
just improve what we have right now to
make something happen so let me very
quickly give you this there are three
points I want you to know I think about
what you think about strategic
innovation the first one is you really
ideally want to be in a position where
it's at all possible I don't care you
know what your approach is you put
yourself in a place where you want to be
ahead of the curve you want to be
slightly ahead of the trend you want to
at least be on trend but if you really
want to do the innovator it's going to
be the front of a trend the initiator if
you can of a trend because when you're
first and you create a trend you become
branded and that branding if you do your
job is hard to get rid of I give you an
example what was the first University
that was ever built in the United States
Harvard what was the first for example
rental car company in the United States
Greg Hertz what was the first soft drink
in the United States coke by the way I
guess who's still number one in each of
those categories all three of those
that's been more than one
years 150 years 200 years simple
situations see when you step in and you
become the innovator and you create the
category everybody else has to fight for
second place or third in fact Ava's
finally figured away so they can
strategically compete they said we're
never going to be number one so they
said we're number we're not number one
we're what we're number two but we try
harder they create a new category to try
harder category one number one and to
try harder category they may be number
one go-to been around forever but we're
going to please you we're going to do
something in a different way that's the
way that you differentiate and produce
something you know you also if you're
there first I give another example a
friend of mine the gentleman Knight
financial person who I coached for about
17 years he reduced me to a man and
we're having lunch one day he goes here
is my friend and we start talking I said
what does this year and he said bottled
water but I'm about to get out of it I
said oh nothing sting it was this is
like Annie I think early 90s if I
remember late 80s by the early 90s we
had this conversation here yeah I said
wow what a trend the idea that people
could get us to pay for these bottles of
water you know two dollars three dollars
though everybody used to drink for free
I mean that's the ultimate marketing
fact coca-cola people like that were
making more money some of them were
charging more per ounce for water than
for coke or things were beer or Borden's
milk it was just water
that's amazing marketing yeah I was
really lucky though he said I got in the
mineral water business right as a trend
happen I said what was that we said when
people started saying it was okay not to
drink and even started promoting
designated driver I thought this is a
trend that I think is gonna stick you
know I think people are going to take
advantage that you only have to drink
enough to feel pressured to drink I
think they're going to look for an
alternative all their in the bar and he
said I thought the alternative with this
little company I bought for $500,000
called pair yet he bought it for
$500,000 it was making a hundred
thousand a year he kept that company for
15 years and sold it for 2.2 billion
dollars because he was ahead of a trend
all right he was there by the way if you
don't say give me a mineral water most
the time they'd say give me a pair yeah
in fact Pepsi hates that people still
often say can I have a
coke cuz they're first all right and so
in any industry you can do that you know
a my industry the greatest problem I
gotta speakers came up saying you know
gosh you know guess what I had these
people tell me you know you remind me of
Tony Robbins I think well I'm really
complimented I'm also gone great I want
you to be like Tony Robbins that's a
great compliment for me a great
compliment to you but it also comes
because I was your first baby and I did
my job
I delivered to the category no one's
ever done thing like that's how you
strategically innovate and own something
see you got two choices try to go sell
everybody or have people when they think
of the best they think of something they
want and they figure the best they think
of you very very different game very
very different approach now you want to
be first ideally but if you can avoid it
you don't want to be the ultimate
pioneer in some distances because the
pioneer the Indians usually put arrows
in their back so it's nice to know the
trend as real as possible it's not
always possible but I dealing you delete
the other thing you want to do ideally
is get in the game with infinite upside
get in the game with instrument upside
if you're going to strategically
innovate you create this new product or
service this new approach to things you
don't want to be in a situation where
you spend all this time and energy great
something new that has a limited upside
it's going to have a three month outside
a six month upside or didn't really do
so much now I didn't do this because I
didn't enter business and go where can I
go get the largest margin possible as a
business owner this is my mission so I
didn't do that I didn't go where on your
business that I can go sell for ten
times twenty times three times women get
the largest multiple I didn't do that I
didn't look for internet outside in my
case it was just driven by wanting to
serve but today is it businessman
entering the business is like going
what's a trend that's just beginning
that I think has real legs is there a
place is there a way to partner where
we're the leader in that trend but also
what that trends not going to be
short-lived it's got infinite growth and
upside but there's a real opportunity
then you start to think in a more
strategic way is this making sense okay
so now you might say okay Tony this is
all cool but how do I do it here's what
I'm going to get so damn easy five
little areas that if you go into these
areas you will automatically get the
ideas for strategic innovation in other
words if innovation needs to be a part
of your
life and you're saying okay Tony I want
to innovate how do I do it if you do
these five things or even a couple these
five things you're going to find
yourself in a position immediately where
innovation will start to happen because
your goal is not to be the innovator
your goal is to have an organization
they constantly innovate because if
you're the innovators then the entire
business is still dependent upon you but
if you're the person that's creating
innovation you know by a system you've
created then the people can change the
environment can change the innovation is
going to keep occurring so here's the
first of the five I want you to drop
these down and then afterwards I'm going
to have you jot down how you can use
these five so the first one is you need
to get new voices you need to get new
voices no what does this mean well I
know companies one of my friends is a
guided about 6 and 1/2 billion dollars
he's a very private man he's in New York
City most people would even know his
name
because everything he does he's he's in
the background of I have enormous
respect for him because he gives away
about a hundred million dollars a year
anonymously each year to organizations
that he thinks makes the largest
difference in the quality of human
beings lives like master he did one for
a mentoring organization sister
wonderful God totally private man how
does this guy who's very quiet he
frankly when you're in a room you don't
know he's there at the end of meeting
when everybody's talked he might say
something he says real quietly people
kind of lean in like EF Hutton in the
old days listen but he has this
incredible ability to take companies to
another level and the reason is he just
told me so Tony when the first things I
do take over an organization is I figure
out what that organization is what the
trends are and then I go find somebody
else a group of leaders to bring they're
not to run it but because I know they're
going to bring a completely different
voice to the organization and one
example I'll give you that I know about
that he told me about from a friend of
his is remember when IBM grew like crazy
they managed to give away the most
valuable thing in their entire life the
software to the IBM PC to Windows I mean
think about it here's a man you know
runs Microsoft this little company this
young boy who's creative and cut scene
he leaves college Bill Gates and he
calls the guys at the Altair
computer and says he got this computer
he had no software I've written software
for it which by the way he hadn't
written one line of code and he didn't
even have access to an altar computer he
just believed he could and he sold them
and he got together and start writing
code writing code and he figured how to
do it he got the thing going and then
what was his big breakthrough did he
write ms-dos no how'd he get em I saw
someone tell me emma sauce which is the
basis of making all his money before he
copied apple's windows it was ms-dos he
bought it how much anybody know fifty
thousand dollars he bought ms-dos then
words IBM and license with IBM to have
to be exclusive software for all their
computers and then for when everybody
knocked off IBM pcs clones became the
basis of that think about that because
most of you think of him you think of
this incredible coding genius which he
is but he made all his money basically
just by finding way to reinvent the
rules for competition
you know IBM sell everybody razors and
he sold the razor blades and so IBM
didn't make much money in fact IBM at
one point remember they were in deep
deep deep trouble they brought in a
series of new CEOs to turn things around
and they probably went to announce his
name was cassette nerd the gentleman who
came in it was like the major turnaround
guy wasn't gertner thank you and gertner
comes in and sure enough when Grunder
came in the first thing Gartner did was
brilliant as he realized that for IBM to
change somebody interviewed him in an
article as I saw it and they said we'll
IBM be able to turn things around will
they be able to come back will he be
able to become a force in computers or
computer services or any of that nature
he said I had the same question when I
came on board they said here's how I
address that I asked the question of our
executive team our leadership team our
management team our marketing team I
said this how many people do we have
under the age of 40 who are based on the
left coast in Northern California on our
core teams
I was only questioning else and he went
none he said and the answer is we will
fail
he said because 85% of the innovation
that's happening in the world if
coming from the location called Silicon
Valley in Northern California and it's
my people under the age of 40 what we
have to do right now if we're going to
transform this company metadata is we
need new voices we need people have a
completely different voice they have a
completely different life experience
they will naturally cause us to what
innovate but we can't do this if we're
like going to visit them once in a while
proximity is power whenever you're
around something day in and day out it's
going to have an impact on you and you
need to go get new voices so my friend I
told you not from New York what he's
consciously doing is each year even in
companies eons he deliberately brings in
some new key executives constantly if
for no other reason but make sure he
gets new voices new voices will cause
innovation to occur it will happen very
very rapidly for you here's the second
way or place you can get innovation new
questions new questions give you new
what my friends answers see a lot of
times you're starting out with a pre-sub
position like last night when the
gentleman raised his hand again and you
know what will came over to me initially
and said well you know how do I do this
when it's impossible how do I do this
when no one is buying right now casinos
you know not building casinos how do I
presuppositions his question guaranteed
he couldn't give all the answer the
quality big question creates the quality
your answer so I'll give you one example
that's real fast and you can think of
some your own ideas here new questions
would be Bill Gates I talked with some
people knew Bill Gates and I'm trying to
dig underneath and some of you've been
to my programs and use them to date with
destiny buddy you're gonna date with
Leslie Wow quite a few so I've been date
with destiny know all of us as human
beings are controlled by what we focus
on whenever you focus on you're gonna
feel it even though it's not true so if
you focus on the world's ending you
imagine the whole world is going to come
to an end we're never going to ever be
you know happy times again you see it
you imagine you focus on your feeling
but what controls our focus more than
anything else is questions because if
somebody asks you a question even if you
don't to answer it if you keep asking
that person just to understand what
you're saying they have to imagine it
they have to go under hat they have to
change what they focus on well human
beings tend to
and what I call a primary question one
question you ask more often than
anything else on earth and you ask it
subconsciously all the time and people
in today with si discover it that's why
some people for example might go out in
life and they make all these great
changes and it never lasts because the
primary question they have is you know
why do I always screw things up
that's an unconscious question why can't
I have succeeded or sustained success or
how do I make everybody happy all the
time
ain't it going to happen but see they're
constantly asking the questions it's
unanswerable or moves them in a negative
location you change that question and
you change what they focus on their
whole life changes so they change the
question - how can I appreciate even
more all the gifts God's giving me right
now and I think it's a primary question
they walk around in gratitude all the
time subconsciously so questions control
the way we think whenever you see
someone successful they come up with a
new answer is because they asked a new
question what question Bill Gates asked
there was different than other people
building software he did not ask the
question of himself in his team how
could we build better software here's
the question he asked the exact question
he asked us repeatedly again again by
people on his core partnership and came
he said how can I become the
intelligence that runs all computers
worldwide how can I become the
intelligence that runs all computers
worldwide and we asked that he realized
all computers have one thing in common
and that is if we're going to have a
computers we will communicate to each
other we're going to have common
software hardware maybe different some
software and that's why I got that by
the way that question is also why he was
late to the internet because even it's
not about controlling computers it's a
different question with a different
answer about networking so you got to
ask yourself what are some new questions
because new questions by the way will
start new conversations and if you do it
with new people new voices innovation is
going to go crazy it's going to be
institutionalized third question or
third new thing for you as new
perspectives new perspectives only
happen if you get yourself in a new
environment you know there's a company
called Nokia many of you know who's got
a Nokia phone in this room I'm curious
look at those rude group of hands nokia
was dominating the market place prior to
the iPhone complete domination of the
marketplace for many many years
Nokia was not a dominant source where's
Nokia base who knows yeah it's in a very
very cold dark place in Scandinavia on
the edge of the Adriatic Sea and they
were trying to figure out what customers
wanted by working with engineers who are
working there in Finland and guess what
they weren't doing so well
but so many the group got smart and said
you know what we can't make it more and
more technical phones and we keep
innovating the technology like they used
to with VCRs when all of us are kids and
it may make so much innovation you can
use any of it so they said you know we
got to do if we're going to really
innovate we got to know what our
customers want but the customers we want
who do we want our customers to be we
want our customers to be leading-edge
people we want the kind of people to
influence other people to people today
don't just want a phone they want an
identity they want to feel different so
they sent their engineers these guys are
not marketing guys because they knew
they kept telling them change this but
they couldn't do it it sent them to
three places in the world King's Cross
Australia the east of London and Venice
California and they said go live there
for six months interact with as many
human beings and customers as you can
and then come back and we're going to
redesign our phones and you know what
they all did they all came back and they
found the most important changes they
could possibly make you the phone guess
what it was color same thing that they
did with Apple originally they came out
with the first ones with a red phone in
a purple phone and then a way in which
you could print out off of your computer
a cover for your phone mmm a came up
with ringtones so you can have a special
unique identity that's what the
engineers end up coming with because
they were given a new perspective again
proximity to the customer in a radically
different environment automatically
created new answers so there are new
innovations for them and then fourthly
new passions new passions listen when
you're passionate don't you tend to
innovate by your own nature because
you're doing something you love you're
doing something you're excited about and
probably the best example of passion
driving a company is Virgin with Richard
Branson most of what Richards s crew
in his companies was something that he
experienced a product service eat
experiencing disliked immensely and said
this is what I want he was really
passionate about it from where you get
to stay when you go at the home you know
to the airport and you're transitioning
he's I want a place where I can play
pool I want to place where there's a
swimming pool I want to be able to have
you know massage I want some great
drinks and so he reinvented it you know
I would have a bar on the plane I mean
that's what he did everything he's done
all the innovation that have set him
apart has been because he's thought
about something that he's so passionate
about that if he had it woulda light him
up like a Christmas tree and he felt
that he's a representative of a
generation he really is and he's not
incredibly well invited - when I Drive
down for you as new experiments if
you're going to innovate many of you
don't innovate because you go damn what
if it doesn't work right I mean I only
got so much time when we have so much
energy we can only get so much money we
start to work on this and it right now
we've got a great business right here
I want to mess with my core business you
don't have to keep your core business
where you're rebuilding you know these
casinos but then create for yourself a
couple skunk works projects a couple
experiments almost all the innovation
happens at Apple what happened the Mac
came from a skunkworks group a group of
people they say you know what we're
building the Lisa all our money is going
to the Lisa the computer they're
building at that time but we're gonna
take the small group of people and
they're going to go work and see if they
can reinvent something we've scotch on
their own if it doesn't work we don't
care we're gonna try it at Google many
of you know people have about 20 to 25%
of their time design for skunk works to
work on some project they think is
worthwhile Google Maps came out of that
Twitter came out the company is building
these great resources the usable side
stupid the project called Twitter and
now it's growing at what 8,000 percent
you know they've already been offered I
think 300 million bucks or 3 to 50
million dollars right Facebook wants to
buy them and they're at the beginning of
the beginning of the beginning what's
happening with Twitter the total
innovation you can use these same
resources you know Twitter's in this
example I thought to myself so much tell
me why you gotta do this Twitter thing
I'm like Twitter I mean get a life
what I want to type what I'm doing when
I'm doing a said first of all my wife
would kill me because we have a private
life if I said oh yeah here we are at
Sun Valley and also people start showing
up right I said what second of all it's
like who wants to read what I'm doing or
what other people are doing have no
interest whatsoever so everybody goes I
use it differently so what are you doing
cuz I use it to give me answers so what
do you mean he goes watch this he goes
20 Robbins is here with me right now
beside me it wants to know I use Twitter
and click the button and in the middle
second later there were 35 people
respond a Tony and what's your salmon
others here's what you should do and
like all these cool ideas I was like wow
maybe I'll put a Turk out so I was gonna
get without my name and I did it and I
barely ever used it because since my
name wasn't on interact with anybody and
I didn't put it on there it's like what
am I to broadcast yes I'm doing a
seminar right
yeah that's new information for me right
but then one day I thought you know
there's all these people out there and
people kept coming up to me saying you
know would you do something to inspire
me every day and I'm like you know
another product another service you know
I don't want to commit to that night you
know what I'll just put a quote on my
Twitter each day for some it's just a
simple quote not just mine other peoples
it'll make me look for one he stayed to
that I like I'll just share it if I find
cool clubs every now and then I share
with my friends I'll share them as well
and I did that ten weeks ago and this
morning about three hundred thousand
people there's 8 million people on
Twitter we're number 35 it's like wow
this blows my mind it's just a fun cool
little tool so it wasn't much of a
strategic innovation for me somebody
else created the innovation but
sometimes you can use the innovation for
your core business as well and I use it
again to look at okay here's this little
experiment I'm doing you know gosh if
this continues maybe well but it's going
to use half a million people that I
could send a message to three months
from now four months in it at the
current growth rate stays there it stays
longer of it I like the idea of done
it's not my really impassionate about I
want to send a message to people a
million people like that that's a great
tool and you know there's a business
application you're somewhere for it most
people haven't figure it out yet I'm
sure Twitter will find theirs it'll be
advertising or something but yeah it'll
be a great tool for keeping people
informed and what's great is I actually
read them all but I've respond them all
like email oh my
God another 300 messages Twitter is like
our fun we get people put clicked in I
don't see what they're doing it's a very
cool thing so again you want to look at
this and say I don't have to change my
business maybe there's some experiments
I want to do on my business and then
here's some questions 9 questions for
you to consider here's what they are
just I'll read them out for you real
quick what business are we what really
and that's the course you got to keep
asking yourself why are we really
successful many do you think you're
successful for one reason but you're
successful for something completely
different it's worth taking the time
with your team to ask this question who
is our customer what really or who's our
customer really need to be in the next
five years if you're going to start a
business today from scratch and maximize
impact leverage and profitability what
would you do some of you you may be
starting a business within your business
to compete in this new world
what distribution channels are we not
maximizing or using what technology are
we not using or maximizing that's why I
mentioned Twitter to you what identity
you want people to associate to your
business who do they become by doing
business with you and if you're going to
create another industry from scratch if
you were going to create an industry
within your industry or somewhere else
what would it be so here's what I like
you to do let's just take five minutes
literally to brainstorm how are you
going to get new voices into your
business by the way you have to hire
somebody then for them to be your new
voice yes or no so if you're brand new
you're an army of one or two or three or
ten you could go get people you can do
it through a variety of sources you can
do focus groups you can sit with a group
of friends you can get a group of your
customers if you use a service like
Twitter you can do all kinds of things
how are you going to get new voices but
be specific what kind of voices do you
want together who would help you
innovate what kind of person could you
bring to the table
ideally somebody on your team but also
workers new voices what are some new
questions that you need to ask I gave
you these nine as a Sam point what are
some questions you need to ask to
innovate in your business where could
you get a new perspective maybe after
you hear Tony speak today from Zappos
maybe some of you while you're still
here in Vegas might see if you might
make an arrangement to go tour it take
the hour tour and just go get the
perspective out of business go
zero million really runs if I were you I
would do it I took the turn myself
incredibly worthwhile um where can I go
right now to get tap into new persons
maybe not even my passion maybe on my
team I got some really bright people and
they are passions I don't even know what
they are maybe their passions are the
origination the place that we get a
Genesis for a new product a new service
or a new way to you know change the
rules of competition and what are some
new experiments we could do what are one
two three four or five max new
experiments we could try this program
here was result of an experiment I was
watching television listening to all the
mock talking to people coming up to me
telling me I don't know what to do in
their business and then I saw the figure
I'd noted intellectually and back to my
head but it emotionally hit me 70% of
all new jobs are created by small
businesses I picked up the phone
immediately I called my office I said
you know we're going to do I want to
coach five I said 15 business people who
have small businesses zero 200 million I
want a variety hundred million dollar
businesses 15 10 five just starting your
business I said I want to coach them for
90 days and I said we'll make it really
easy we'll do only some kind of
immersion so we did a version like this
instead of five days we did in a day and
a half so I basically killed everyone
and I said then we're gonna work on
online twice a month for about an hour
and a half I'll keep taking different
pieces of information refine it and I'm
ceramic we're going to transform their
lives and we're gonna create a system
and once we have that system it won't be
limited me and my throat it would be
something that people can do in
immersion on their own over and over
again so they get the training effect
and I said and we'll find the right
partner we'll market it together we're
looking for ways of transferring the
business we will just teach him we'll
give them tools so we'll team up and
partner with the right people all this
came out of being stimulated by
something I'm passionate to make a
difference in and doing an experiment
and then I got some new questions and
new voices and now we're laying the
foundation here this week for something
that we're going to be launching that I
think will be as big as anything we've
done in a and more other companies
[Music]
well what'd you think listen the purpose
of a podcast like this is not just to
inform not just to educate you to get
you to take some action so one of the
most important commitments I've learned
is anytime you learn anything and you
find it has any form of value the most
important thing you want to do is while
you're still in state while still
important while still in your mind you
want to take some form of action whether
that's as simple as saying these are
three principles that I want to really
educate the rest of my team on at my
company or I want to take action on this
today I'm going to create this format
today for my marketing or for my
anticipation or for using the strategies
that you've learned here so before you
turn this off as a final moment just
write down two or three key eater
principles you want to remember or
action items and ideally do something to
share it or do something to act on it
today remember so knowledge is not power
knowledge is potential power really
truly if you really look at what makes
someone successful versus not it all
comes down to execution execution
Trump's knowledge every day of the week
so go out and execute and I'll see how
the next podcast
[Music]
you
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