WEBVTT 1 00:00:08.501 --> 00:00:11.100 Okay, we've done the first two questions. 2 00:00:11.100 --> 00:00:12.700 First question, why do we do what we do? 3 00:00:12.700 --> 00:00:14.590 Getting at that core purpose. 4 00:00:14.590 --> 00:00:16.790 Second question, what does success look like? 5 00:00:16.790 --> 00:00:19.180 Really defining that vision for 6 00:00:19.180 --> 00:00:23.380 success, that if we are successful as a team, here's what we will create for 7 00:00:23.380 --> 00:00:26.280 our customers, stakeholders, employees and otherwise. 8 00:00:26.280 --> 00:00:28.670 Now time for the third question. 9 00:00:28.670 --> 00:00:33.460 This is potentially one of the most important questions that you have to to 10 00:00:33.460 --> 00:00:39.930 answer as a leader in your team, which is, how must we act to ensure success? 11 00:00:39.930 --> 00:00:43.770 This question is ultimately getting at the values that will guide the choices and 12 00:00:43.770 --> 00:00:48.550 behaviors for yourself, but even more importantly, your team members. 13 00:00:48.550 --> 00:00:53.610 One of your responsibilities as a leader, because you're not gonna always be there 14 00:00:53.610 --> 00:00:58.090 in the room when people are behaving, making decisions, and acting. 15 00:00:58.090 --> 00:01:00.640 You need to be able to provide what I call guideposts, 16 00:01:00.640 --> 00:01:06.260 the values that are going to guide decisions and guide actions. 17 00:01:06.260 --> 00:01:09.310 And ultimately these values have to be embedded 18 00:01:09.310 --> 00:01:13.420 in the vision that you are creating and communicating for your team. 19 00:01:13.420 --> 00:01:15.670 So let's again look at a few examples. 20 00:01:15.670 --> 00:01:20.670 This time I'm gonna show you some examples that maybe don't necessarily 21 00:01:20.670 --> 00:01:25.180 always have the intended impact that we might aspire, or want. 22 00:01:26.490 --> 00:01:27.480 Here's the first. 23 00:01:27.480 --> 00:01:30.820 This is a good example of what you might see, when you walk into an organization, 24 00:01:30.820 --> 00:01:32.390 up on the wall. 25 00:01:32.390 --> 00:01:36.570 These words of values, in this case they are respect, 26 00:01:36.570 --> 00:01:39.560 integrity, communication, excellence. 27 00:01:39.560 --> 00:01:44.310 With the quote that says we treat others as we would like to be treated ourselves, 28 00:01:44.310 --> 00:01:46.750 the golden and rule if you will. 29 00:01:46.750 --> 00:01:51.100 But what's interesting in this organization in the 90s the 1990s was 30 00:01:51.100 --> 00:01:56.630 a client of mine this organization had to add something to its value 31 00:01:56.630 --> 00:02:03.180 statement that was shared internally and ultimately the language they added 32 00:02:03.180 --> 00:02:09.420 was as follows we do not tolerate abusive or disrespectful treatment. 33 00:02:09.420 --> 00:02:15.790 Ruthlessness, callousness and arrogance do not belong here in this organization. 34 00:02:16.810 --> 00:02:22.440 Now, to be perfectly honest if you have to add that language formally 35 00:02:22.440 --> 00:02:27.060 to the value statements that you are communicating internally to your company. 36 00:02:27.060 --> 00:02:30.180 You can only imagine the actual culture and 37 00:02:30.180 --> 00:02:34.020 behavior that exists within the teams in that organization. 38 00:02:34.020 --> 00:02:38.460 Ultimately that organization was one that we now know as Enron, 39 00:02:38.460 --> 00:02:41.360 that no longer exists and the history is well documented. 40 00:02:42.570 --> 00:02:46.800 So let's look at other examples where they have defined the values. 41 00:02:46.800 --> 00:02:49.540 How must we act to ensure success so 42 00:02:49.540 --> 00:02:54.250 that we are able to achieve that vision that we aspire to? 43 00:02:54.250 --> 00:02:56.711 Let's look at an example, Johnson & Johnson. 44 00:02:56.711 --> 00:03:00.728 If you've ever been to a Johnson & Johnson office location, 45 00:03:00.728 --> 00:03:04.761 and this is true for many of their locations around the world. 46 00:03:04.761 --> 00:03:08.670 You will see something whether it be in the foyer. 47 00:03:08.670 --> 00:03:12.050 You'll see it throughout the organization, at people's desks, 48 00:03:12.050 --> 00:03:17.645 whether it be on a mouse pad, or an image somewhere around the office. 49 00:03:17.645 --> 00:03:22.510 A statement that Johnson & Johnson calls our credo. 50 00:03:22.510 --> 00:03:26.520 This credo is ultimately a statement of its values. 51 00:03:26.520 --> 00:03:30.020 A statement of not only if we're successful here's what our world looks 52 00:03:30.020 --> 00:03:33.970 like but it clearly communicates a set of values that guide choices and behavior. 53 00:03:35.160 --> 00:03:41.110 So here's the credo that is shared with every Johnson & Johnson employee and 54 00:03:41.110 --> 00:03:45.480 is reinforced in many different ways throughout the organization. 55 00:03:45.480 --> 00:03:47.120 And I'm not going to go into depth or 56 00:03:47.120 --> 00:03:52.260 detail and read all of the different sentences and paragraphs in the credo. 57 00:03:52.260 --> 00:03:56.680 This is the credo in it's entirety so you can read it on your own. 58 00:03:56.680 --> 00:03:58.640 But I wanna make one important point. 59 00:03:58.640 --> 00:04:00.780 I want you to look at the first paragraph. 60 00:04:00.780 --> 00:04:02.360 The first statement. 61 00:04:02.360 --> 00:04:06.190 We believe our first responsibility, now I have bolded and 62 00:04:06.190 --> 00:04:12.340 underlined first because I think that's a really important word in this credo. 63 00:04:12.340 --> 00:04:16.760 We believe our first responsibility is to the doctors, nurses, and patients, 64 00:04:16.760 --> 00:04:21.528 to mothers and fathers, and all others who use our products and services. 65 00:04:21.528 --> 00:04:25.560 Ultimately, Johnson & Johnson is articulating here, 66 00:04:25.560 --> 00:04:29.440 is their first priority, their first responsibility is to the customers, 67 00:04:29.440 --> 00:04:31.270 the people who actually use their products. 68 00:04:32.570 --> 00:04:34.610 Then skip to the second paragraph. 69 00:04:34.610 --> 00:04:36.880 We are responsible to our employees. 70 00:04:36.880 --> 00:04:39.810 Everyone must be considered as an individual. 71 00:04:39.810 --> 00:04:43.500 So the second paragraph is articulating that employees come next. 72 00:04:43.500 --> 00:04:47.920 Our customer becomes first, second paragraph our employees. 73 00:04:47.920 --> 00:04:49.950 Now jump to the third paragraph. 74 00:04:49.950 --> 00:04:52.970 We're responsible to the communities in which we live and 75 00:04:52.970 --> 00:04:54.946 work and to the world community. 76 00:04:54.946 --> 00:04:58.150 So Johnson & Johnson as a global organization 77 00:04:58.150 --> 00:05:02.440 is making a commitment to the communities in which they work and live. 78 00:05:02.440 --> 00:05:07.440 So again, customer comes first, employees come second, communities come third. 79 00:05:08.710 --> 00:05:13.690 Then look at the fourth paragraph, and again I bolded and underlined one word 80 00:05:13.690 --> 00:05:19.190 in the first sentence our final responsibility is to our stockholders. 81 00:05:19.190 --> 00:05:20.870 Business must make a sound profit. 82 00:05:20.870 --> 00:05:23.780 We must experiment with new ideas and so on. 83 00:05:23.780 --> 00:05:25.313 But think of the importance, 84 00:05:25.313 --> 00:05:28.540 the statement that's being made here by Johnson & Johnson. 85 00:05:28.540 --> 00:05:32.325 And again, go look at their stock performance over the course of history. 86 00:05:32.325 --> 00:05:35.615 It's one of the most successful organizations in the world in terms of 87 00:05:35.615 --> 00:05:39.085 financials, profit, and ultimately shareholder value. 88 00:05:40.155 --> 00:05:42.855 But what they're stating here is that our customer comes first, 89 00:05:42.855 --> 00:05:45.950 our employees come second our communities come third. 90 00:05:45.950 --> 00:05:47.420 And ultimately our stockholders, 91 00:05:47.420 --> 00:05:51.180 our shareholders, are our final responsibility. 92 00:05:51.180 --> 00:05:55.810 So what's the importance of this value hierarchy, or this value prioritization? 93 00:05:56.860 --> 00:06:00.350 Well, there will come times when you as leaders, and 94 00:06:00.350 --> 00:06:03.790 your teams, and your employees have to make choices. 95 00:06:03.790 --> 00:06:08.760 Because you can't always satisfy the needs of everybody. 96 00:06:08.760 --> 00:06:11.950 You can't always satisfy the needs of your customers, your employees, 97 00:06:11.950 --> 00:06:14.590 your communities, and your stock holders. 98 00:06:14.590 --> 00:06:15.490 There will come a time and 99 00:06:15.490 --> 00:06:20.690 there will come a day when you have to make really tough choices. 100 00:06:20.690 --> 00:06:25.130 And engage in behavior that satisfies one stakeholder, 101 00:06:25.130 --> 00:06:30.570 potentially a customer, over the benefit of one of the other stakeholders, 102 00:06:30.570 --> 00:06:33.490 whether it be an employee, a stockholder, or otherwise. 103 00:06:33.490 --> 00:06:37.430 So Johnson & Johnson has had this credo for decades. 104 00:06:38.490 --> 00:06:39.510 Why is that important? 105 00:06:39.510 --> 00:06:43.651 It's going to guide, again, decisions, actions, behavior. 106 00:06:43.651 --> 00:06:46.612 They've had this credo for decades, and 107 00:06:46.612 --> 00:06:50.341 in 1982 they were the prime target of an attack. 108 00:06:50.341 --> 00:06:55.930 And this attack put a lot of pressure on Johnson & Johnson. 109 00:06:55.930 --> 00:07:00.280 About what it was going to do and really put this credo to test. 110 00:07:00.280 --> 00:07:03.500 So let's look at that example, so 111 00:07:03.500 --> 00:07:08.120 what happened was an individual who has actually never been found, 112 00:07:08.120 --> 00:07:13.670 walked into a pharmacy, stole or shop lifted bottles of Tylenol. 113 00:07:15.260 --> 00:07:18.120 Laced those bottles opened them up and 114 00:07:18.120 --> 00:07:22.920 laced them with a poison called cyanide which is lethal or fatal. 115 00:07:24.420 --> 00:07:28.350 And then this person put this bottles of Tylenol back on 116 00:07:28.350 --> 00:07:30.180 the pharmacy shelf to be sold. 117 00:07:31.220 --> 00:07:35.180 Unsuspecting innocent people came bought those bottles of Tylenol, 118 00:07:35.180 --> 00:07:39.970 got a headache got sick, took the medicine and ultimately passed away. 119 00:07:39.970 --> 00:07:43.850 Seven people in total had died. 120 00:07:43.850 --> 00:07:48.100 You can imagine the crisis that now Jonson & Jonson is faced with. 121 00:07:48.100 --> 00:07:52.590 But if you go back to the credo, the question becomes, what do you do? 122 00:07:52.590 --> 00:07:55.280 As a leader within Tylenol, what do you do? 123 00:07:55.280 --> 00:07:59.000 So you have to remember, the first priority is to the customer, 124 00:07:59.000 --> 00:08:02.230 the people who use the products. 125 00:08:02.230 --> 00:08:03.590 So let me pause. 126 00:08:03.590 --> 00:08:07.120 If you were a leader within Tylenol, what would you choose to do? 127 00:08:08.620 --> 00:08:13.578 Ultimately, what the leadership of Johnson & Johnson did is they 128 00:08:13.578 --> 00:08:17.810 pulled every single bottle of Tylenol off the shelf. 129 00:08:17.810 --> 00:08:19.680 They recalled every single bottle. 130 00:08:20.970 --> 00:08:21.890 Was it free? 131 00:08:21.890 --> 00:08:24.919 No, it cost the north of one hundred million U.S. dollars. 132 00:08:26.900 --> 00:08:29.520 But that's a stockholder concern. 133 00:08:29.520 --> 00:08:32.922 Their first priority was to the people who use the product, 134 00:08:32.922 --> 00:08:37.890 thus resulting to recall the product or pull the product of the shelf. 135 00:08:37.890 --> 00:08:42.060 The financial implication, the stock price dropped over 17% in one week. 136 00:08:43.850 --> 00:08:47.360 Earnings estimates dropped 35% immediately. 137 00:08:47.360 --> 00:08:50.500 Wall Street certainly was penalizing the company. 138 00:08:52.840 --> 00:09:00.540 Their market share in the category dropped from 37% to 4% in as little as one week. 139 00:09:00.540 --> 00:09:04.700 Again, the financial implications were enormous. 140 00:09:04.700 --> 00:09:10.756 And for a company, a public company, that is responsible to its shareholders, 141 00:09:10.756 --> 00:09:14.060 this was a pretty risky move some might say. 142 00:09:14.060 --> 00:09:18.650 But if you have the credo if you have a very clear understanding of 143 00:09:18.650 --> 00:09:20.180 how do we have to act? 144 00:09:20.180 --> 00:09:25.851 What are the values that we have to act on in order for our company to be successful? 145 00:09:25.851 --> 00:09:30.791 And in the case of Johnson & Johnson and not to say that their credo is right for 146 00:09:30.791 --> 00:09:32.270 every organization. 147 00:09:32.270 --> 00:09:35.250 But in there case, they had articulated for 148 00:09:35.250 --> 00:09:40.290 themselves their values and their priorities that were gonna guide choices. 149 00:09:40.290 --> 00:09:42.290 And these were the choices they were making. 150 00:09:42.290 --> 00:09:44.855 Now remember, the second priority in that credo 151 00:09:44.855 --> 00:09:46.955 is to the employees of Johnson & Johnson. 152 00:09:48.575 --> 00:09:53.975 If you take that big of a financial hit due to this crisis many companies 153 00:09:53.975 --> 00:09:59.985 would respond by laying off employees who come from that organization. 154 00:09:59.985 --> 00:10:03.815 Johnson & Johnson saw it as their responsibility 155 00:10:03.815 --> 00:10:06.620 to keep all of those title and all employees. 156 00:10:06.620 --> 00:10:10.076 So they redeployed them to other product lines and so on, 157 00:10:10.076 --> 00:10:13.030 until they figured out what actually happened. 158 00:10:13.030 --> 00:10:16.973 Ultimately once Tylenol, the business was back up and running, 159 00:10:16.973 --> 00:10:20.710 they deployed those employees back to the Tylenol business. 160 00:10:22.229 --> 00:10:27.410 They ultimately, relaunched Tylenol. 161 00:10:27.410 --> 00:10:31.310 With what we now know today as that tamper-proof packaging, 162 00:10:31.310 --> 00:10:36.610 the seal that is at the top of any pill bottle. 163 00:10:36.610 --> 00:10:42.670 So ultimately, this crisis turned into an innovation, that we now all benefit from. 164 00:10:42.670 --> 00:10:46.660 Interestingly, they continued with their first priority being the customer, 165 00:10:46.660 --> 00:10:51.040 which is providing the customer a coupon for 166 00:10:51.040 --> 00:10:54.810 essentially free Tylenol, or free Johnson & Johnson products. 167 00:10:54.810 --> 00:10:57.490 And they did all of that within a 10 week period. 168 00:10:57.490 --> 00:11:01.231 But again, without this credo what choices would they make? 169 00:11:01.231 --> 00:11:03.640 It could go many different directions. 170 00:11:03.640 --> 00:11:07.773 In this case, they had very clear guidelines about in this time of crisis 171 00:11:07.773 --> 00:11:10.430 how are we gonna act in order to be successful? 172 00:11:10.430 --> 00:11:14.995 And that in many ways is attributed back to that clear statement of 173 00:11:14.995 --> 00:11:16.491 values in the credo. 174 00:11:16.491 --> 00:11:21.666 Let me share with you one more example and then I'll have you reflect on your values 175 00:11:21.666 --> 00:11:26.630 your teams values and how those serve as a guideline for choices and behavior. 176 00:11:28.010 --> 00:11:31.710 Here's a statement from a company that we all know today. 177 00:11:32.930 --> 00:11:35.660 We believe that we're on the face of the Earth to make great products and 178 00:11:35.660 --> 00:11:36.530 that's not changing. 179 00:11:36.530 --> 00:11:38.260 We are constantly focusing on innovating. 180 00:11:38.260 --> 00:11:40.240 We believe in the simple not the complex. 181 00:11:41.500 --> 00:11:44.100 But now pay attention to the next words. 182 00:11:44.100 --> 00:11:46.100 We believe that we need to own and 183 00:11:46.100 --> 00:11:50.450 control the primary technologies behind the products that we make, and 184 00:11:50.450 --> 00:11:53.650 participate only in markets where we can make a significant contribution. 185 00:11:55.020 --> 00:11:56.450 That is a value statement. 186 00:11:56.450 --> 00:11:58.840 That is a statement about how we must act. 187 00:11:58.840 --> 00:12:02.360 We must make tough choices in order to be successful. 188 00:12:02.360 --> 00:12:03.990 One tough choice is we're gonna own and 189 00:12:03.990 --> 00:12:07.100 control the technologies behind our products. 190 00:12:07.100 --> 00:12:11.470 Another tough choice is we're only going to engage in markets where we know 191 00:12:11.470 --> 00:12:14.270 that we can make a significant contribution. 192 00:12:14.270 --> 00:12:17.100 But again, this provides a set of guidelines, 193 00:12:17.100 --> 00:12:19.930 guide post for making tough choices. 194 00:12:19.930 --> 00:12:23.210 We believe in saying no to thousands of projects so 195 00:12:23.210 --> 00:12:26.810 that we can really focus on the few that are truly important. 196 00:12:27.810 --> 00:12:33.330 As my friend Adam Grant once said to me, you have to say no to many things, 197 00:12:33.330 --> 00:12:37.020 so you can say yes to the things that really matter in life. 198 00:12:37.020 --> 00:12:41.350 And this organization is embracing that value. 199 00:12:41.350 --> 00:12:43.880 As part of its company's vision. 200 00:12:43.880 --> 00:12:47.100 Ultimately, this company is one that we've talked about already in 201 00:12:47.100 --> 00:12:49.030 this course, Apple. 202 00:12:49.030 --> 00:12:50.990 And in this case, this is Tim Cook's 203 00:12:52.660 --> 00:12:57.680 articulation of the values that are embedded in this company. 204 00:12:59.070 --> 00:13:00.870 So we have our three questions. 205 00:13:00.870 --> 00:13:02.550 Why do we do what we do? 206 00:13:02.550 --> 00:13:04.300 What does success look like? 207 00:13:04.300 --> 00:13:07.870 And how must we act, to ensure success? 208 00:13:07.870 --> 00:13:11.370 I'd like to pause now and have you reflect on this third question. 209 00:13:12.720 --> 00:13:18.970 Have you clearly articulated for your team the values that are gonna shape and 210 00:13:18.970 --> 00:13:23.720 guide the choices that people make and the behaviors that they engage in. 211 00:13:23.720 --> 00:13:28.283 Take a few minutes on your own and write down what you see as the values and 212 00:13:28.283 --> 00:13:30.733 have you clearly articulated those.