[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:10.89,0:00:12.60,Default,,0000,0000,0000,,Thank you very much.
Dialogue: 0,0:00:14.15,0:00:19.51,Default,,0000,0000,0000,,The world is, in many ways,\Norganized in a nested system.
Dialogue: 0,0:00:20.16,0:00:22.06,Default,,0000,0000,0000,,And so we have nations,
Dialogue: 0,0:00:22.50,0:00:24.30,Default,,0000,0000,0000,,within those we have industries;
Dialogue: 0,0:00:24.30,0:00:26.72,Default,,0000,0000,0000,,within industries we have corporations;
Dialogue: 0,0:00:27.40,0:00:29.84,Default,,0000,0000,0000,,within those we have business units;
Dialogue: 0,0:00:30.08,0:00:32.86,Default,,0000,0000,0000,,within those we have teams;
Dialogue: 0,0:00:33.40,0:00:35.52,Default,,0000,0000,0000,,within the teams we have people;
Dialogue: 0,0:00:36.06,0:00:38.44,Default,,0000,0000,0000,,and within people we have our brains.
Dialogue: 0,0:00:39.42,0:00:40.95,Default,,0000,0000,0000,,We are nested.
Dialogue: 0,0:00:41.71,0:00:43.06,Default,,0000,0000,0000,,It turns out that,
Dialogue: 0,0:00:43.06,0:00:49.98,Default,,0000,0000,0000,,as I have and my colleagues have tried\Nto understand how business works,
Dialogue: 0,0:00:51.08,0:00:53.54,Default,,0000,0000,0000,,we've developed a set of theories.
Dialogue: 0,0:00:53.97,0:00:58.75,Default,,0000,0000,0000,,And when I say a theory,\Nwhat I mean is a statement of causality,
Dialogue: 0,0:00:59.11,0:01:03.32,Default,,0000,0000,0000,,an understanding\Nof what causes what and why.
Dialogue: 0,0:01:03.89,0:01:08.47,Default,,0000,0000,0000,,Some of you know some of the theories.\NDisruption is a theory.
Dialogue: 0,0:01:09.16,0:01:15.31,Default,,0000,0000,0000,,What it asserts is that the mechanism\Nthat causes successful companies to fall,
Dialogue: 0,0:01:15.86,0:01:20.87,Default,,0000,0000,0000,,it's not that they're not at their work,
Dialogue: 0,0:01:21.14,0:01:25.02,Default,,0000,0000,0000,,but rather somebody comes in at the bottom\Nof the market and moves up.
Dialogue: 0,0:01:25.73,0:01:30.33,Default,,0000,0000,0000,,And it's that the mechanism, the pursue\Nof profit from at the bottom of the market
Dialogue: 0,0:01:31.14,0:01:34.13,Default,,0000,0000,0000,,that makes success so hard to sustain.
Dialogue: 0,0:01:34.49,0:01:36.19,Default,,0000,0000,0000,,There's another theory,
Dialogue: 0,0:01:36.19,0:01:42.20,Default,,0000,0000,0000,,called the theory\Nof the preservation of modularity.
Dialogue: 0,0:01:43.07,0:01:48.65,Default,,0000,0000,0000,,The theory of the preservation\Nof modularity
Dialogue: 0,0:01:49.08,0:01:53.95,Default,,0000,0000,0000,,explains among the other things\Nwhy the euro doesn't work
Dialogue: 0,0:01:54.56,0:01:59.61,Default,,0000,0000,0000,,and why SAP implementation systems
Dialogue: 0,0:01:59.99,0:02:06.52,Default,,0000,0000,0000,,are so difficult and complicated.
Dialogue: 0,0:02:06.92,0:02:12.18,Default,,0000,0000,0000,,There's another theory\Ncalled jobs-to-be-done,
Dialogue: 0,0:02:12.93,0:02:17.20,Default,,0000,0000,0000,,and what it asserts is that,\Nyou know, here's Clay;
Dialogue: 0,0:02:17.99,0:02:22.83,Default,,0000,0000,0000,,I have characteristics:\NI'm unfortunately 60 years old now,
Dialogue: 0,0:02:23.21,0:02:25.93,Default,,0000,0000,0000,,I live in the suburbs, five children,
Dialogue: 0,0:02:25.93,0:02:31.24,Default,,0000,0000,0000,,and unfortunately, have all left\Nand are living independently,
Dialogue: 0,0:02:31.24,0:02:34.16,Default,,0000,0000,0000,,and life has become boring.
Dialogue: 0,0:02:34.16,0:02:36.28,Default,,0000,0000,0000,,(Laughter)
Dialogue: 0,0:02:36.28,0:02:39.77,Default,,0000,0000,0000,,But the fact that I have\Nthose characteristics
Dialogue: 0,0:02:39.77,0:02:43.73,Default,,0000,0000,0000,,doesn't cause me to go out\Nand buy The New York Times.
Dialogue: 0,0:02:44.84,0:02:47.86,Default,,0000,0000,0000,,There might be a correlation\Nbetween my characteristics
Dialogue: 0,0:02:47.86,0:02:50.66,Default,,0000,0000,0000,,and the propensity to buy\NThe New York Times,
Dialogue: 0,0:02:50.67,0:02:54.89,Default,,0000,0000,0000,,but the characteristics\Ndon't cause me to do anything.
Dialogue: 0,0:02:55.51,0:02:57.50,Default,,0000,0000,0000,,What causes us to do something
Dialogue: 0,0:02:57.50,0:03:03.36,Default,,0000,0000,0000,,is there's a job that arises in our life\Nand we have to get the job done,
Dialogue: 0,0:03:03.72,0:03:06.66,Default,,0000,0000,0000,,and what causes us\Nto buy a product or service
Dialogue: 0,0:03:06.66,0:03:08.69,Default,,0000,0000,0000,,is we have to reach out and find something
Dialogue: 0,0:03:08.69,0:03:12.23,Default,,0000,0000,0000,,that can do the job\Nand pull it into our lives.
Dialogue: 0,0:03:12.54,0:03:15.96,Default,,0000,0000,0000,,That's the causal mechanism\Nbehind a purchase,
Dialogue: 0,0:03:15.96,0:03:19.61,Default,,0000,0000,0000,,is understanding what's the job,
Dialogue: 0,0:03:19.62,0:03:24.38,Default,,0000,0000,0000,,and the insight there is that the customer\Nis the wrong unit of analysis,
Dialogue: 0,0:03:24.38,0:03:27.00,Default,,0000,0000,0000,,it's the job that we need to understand.
Dialogue: 0,0:03:27.00,0:03:29.27,Default,,0000,0000,0000,,So these are all theories,
Dialogue: 0,0:03:29.27,0:03:34.18,Default,,0000,0000,0000,,and some of you know those,\Nand a number of others from our research.
Dialogue: 0,0:03:35.22,0:03:39.94,Default,,0000,0000,0000,,What we have learned,\Nand inadvertently in many ways,
Dialogue: 0,0:03:39.94,0:03:42.66,Default,,0000,0000,0000,,is that these statements of causality
Dialogue: 0,0:03:43.22,0:03:47.57,Default,,0000,0000,0000,,apply at every stage\Nin this nested system,
Dialogue: 0,0:03:48.16,0:03:50.75,Default,,0000,0000,0000,,and so, the theories help us understand
Dialogue: 0,0:03:50.75,0:03:54.96,Default,,0000,0000,0000,,why nations lose their competitiveness,
Dialogue: 0,0:03:55.27,0:04:01.06,Default,,0000,0000,0000,,why Japan was so successful\Nand then died, for example;
Dialogue: 0,0:04:01.59,0:04:07.16,Default,,0000,0000,0000,,and why America finds it so hard\Nto regain our momentum;
Dialogue: 0,0:04:07.72,0:04:11.14,Default,,0000,0000,0000,,- and that goes all the way down\Nto the point of teams -
Dialogue: 0,0:04:11.94,0:04:17.41,Default,,0000,0000,0000,,a number of years ago, in my course\Nat the Harvard Business School.
Dialogue: 0,0:04:17.66,0:04:20.75,Default,,0000,0000,0000,,In this course, we study these theories,
Dialogue: 0,0:04:20.76,0:04:22.30,Default,,0000,0000,0000,,try to understand them,
Dialogue: 0,0:04:22.30,0:04:24.92,Default,,0000,0000,0000,,then put these theories on a set of lenses
Dialogue: 0,0:04:24.93,0:04:31.74,Default,,0000,0000,0000,,and examine companies,\Nor economies, or industries
Dialogue: 0,0:04:32.17,0:04:33.54,Default,,0000,0000,0000,,and try to understand
Dialogue: 0,0:04:33.55,0:04:37.77,Default,,0000,0000,0000,,can we understand why things\Nare happening the way they are happening,
Dialogue: 0,0:04:37.78,0:04:41.93,Default,,0000,0000,0000,,and what actions\Nwould lead to what results.
Dialogue: 0,0:04:42.63,0:04:44.94,Default,,0000,0000,0000,,At the end of the course, on the last day,
Dialogue: 0,0:04:44.94,0:04:46.70,Default,,0000,0000,0000,,rather than asking them
Dialogue: 0,0:04:46.98,0:04:51.39,Default,,0000,0000,0000,,to just put on these lenses\Nand examine yet another company,
Dialogue: 0,0:04:52.13,0:04:54.40,Default,,0000,0000,0000,,I asked them to look in the mirror,
Dialogue: 0,0:04:54.81,0:04:56.33,Default,,0000,0000,0000,,and ask them,
Dialogue: 0,0:04:56.72,0:05:02.59,Default,,0000,0000,0000,,"Can you explain why your life\Nis the way it is today
Dialogue: 0,0:05:02.97,0:05:05.20,Default,,0000,0000,0000,,because of these theories?",
Dialogue: 0,0:05:05.49,0:05:09.62,Default,,0000,0000,0000,,and "Can you predict\Nwhat will happen in your life
Dialogue: 0,0:05:09.62,0:05:13.06,Default,,0000,0000,0000,,if you continue to do\Nwhat you are now doing?"
Dialogue: 0,0:05:13.21,0:05:15.54,Default,,0000,0000,0000,,And it's been a remarkable experience
Dialogue: 0,0:05:15.55,0:05:20.38,Default,,0000,0000,0000,,to see the students come back\Non the last day of class
Dialogue: 0,0:05:20.38,0:05:25.47,Default,,0000,0000,0000,,and with causal theories\Nas the explanation,
Dialogue: 0,0:05:25.95,0:05:28.49,Default,,0000,0000,0000,,what they need to change in their lives
Dialogue: 0,0:05:28.49,0:05:34.20,Default,,0000,0000,0000,,so that their life will be the life\Nthat they hoped to live.
Dialogue: 0,0:05:34.67,0:05:37.14,Default,,0000,0000,0000,,And I thought, I just offer\Na couple of these
Dialogue: 0,0:05:37.14,0:05:41.69,Default,,0000,0000,0000,,in the hopes that as entrepreneurs
Dialogue: 0,0:05:41.72,0:05:44.66,Default,,0000,0000,0000,,and ambitious people
Dialogue: 0,0:05:45.27,0:05:48.82,Default,,0000,0000,0000,,you end up living the life\Nthat you hope you will live.
Dialogue: 0,0:05:49.100,0:05:52.80,Default,,0000,0000,0000,,So one of the things\Nwe observed, as I mentioned,
Dialogue: 0,0:05:52.80,0:05:56.55,Default,,0000,0000,0000,,is that what kills successful companies
Dialogue: 0,0:05:56.55,0:05:59.69,Default,,0000,0000,0000,,is somebody comes in\Nat the bottom of the market.
Dialogue: 0,0:05:59.69,0:06:03.53,Default,,0000,0000,0000,,So if you go back a few years ago\Nin telecommunications,
Dialogue: 0,0:06:03.53,0:06:07.22,Default,,0000,0000,0000,,the Darwins of the industry\Nwere Lucent and Nortel,
Dialogue: 0,0:06:07.94,0:06:10.68,Default,,0000,0000,0000,,made circuit switching technology,
Dialogue: 0,0:06:10.84,0:06:14.78,Default,,0000,0000,0000,,and this rusty, little or small company
Dialogue: 0,0:06:14.78,0:06:19.82,Default,,0000,0000,0000,,not very consequential\Ncalled Cisco emerged.
Dialogue: 0,0:06:20.87,0:06:24.77,Default,,0000,0000,0000,,And their technology, the router,\Nwasn't good enough to be used in voice,
Dialogue: 0,0:06:25.20,0:06:28.66,Default,,0000,0000,0000,,but they deployed it at the bottom\Nof the market with data,
Dialogue: 0,0:06:28.66,0:06:33.55,Default,,0000,0000,0000,,and then went up market,\Nand ultimately, killed Lucent and Nortel.
Dialogue: 0,0:06:34.27,0:06:38.85,Default,,0000,0000,0000,,The reason why is\Nthat when they look down at the router,
Dialogue: 0,0:06:38.85,0:06:42.23,Default,,0000,0000,0000,,the router on every dimension\Nwasn't as good.
Dialogue: 0,0:06:42.23,0:06:45.18,Default,,0000,0000,0000,,So they kept making better and better
Dialogue: 0,0:06:48.16,0:06:49.95,Default,,0000,0000,0000,,circuit switch devices.
Dialogue: 0,0:06:50.81,0:06:53.27,Default,,0000,0000,0000,,And we ask ourselves,
Dialogue: 0,0:06:53.27,0:06:56.70,Default,,0000,0000,0000,,"I wonder who decided at Lucent
Dialogue: 0,0:06:56.70,0:06:59.08,Default,,0000,0000,0000,,that they should go out and get killed?"
Dialogue: 0,0:06:59.08,0:07:00.82,Default,,0000,0000,0000,,(Laughter)
Dialogue: 0,0:07:00.83,0:07:05.16,Default,,0000,0000,0000,,"And when was the date on\Nwhich they decided they would get killed?"
Dialogue: 0,0:07:05.16,0:07:08.04,Default,,0000,0000,0000,,And the answer, of course,\Nis that nobody made the decision.
Dialogue: 0,0:07:08.04,0:07:11.19,Default,,0000,0000,0000,,In fact, what happened\Nis all the individual people
Dialogue: 0,0:07:11.19,0:07:15.17,Default,,0000,0000,0000,,in a very successful organization\Ndid everything right,
Dialogue: 0,0:07:15.37,0:07:18.52,Default,,0000,0000,0000,,but because they did\Nall of these things independently
Dialogue: 0,0:07:18.52,0:07:21.80,Default,,0000,0000,0000,,and what made sense\Nin those circumstances,
Dialogue: 0,0:07:21.80,0:07:25.98,Default,,0000,0000,0000,,when it summed up,\Nit summed up to disaster.
Dialogue: 0,0:07:26.79,0:07:31.35,Default,,0000,0000,0000,,The reason why it sums up to disaster
Dialogue: 0,0:07:31.90,0:07:36.20,Default,,0000,0000,0000,,is they're trying to maximize\Ntheir profitability
Dialogue: 0,0:07:36.41,0:07:39.92,Default,,0000,0000,0000,,and typically, the way\Nyou calculate profitability:
Dialogue: 0,0:07:40.43,0:07:43.59,Default,,0000,0000,0000,,tomorrow's investments\Nthat pay off tomorrow
Dialogue: 0,0:07:44.43,0:07:45.82,Default,,0000,0000,0000,,go to the bottom line
Dialogue: 0,0:07:45.82,0:07:49.78,Default,,0000,0000,0000,,and are much more tangible than investment\Nthat pay off ten years from now.
Dialogue: 0,0:07:50.70,0:07:55.74,Default,,0000,0000,0000,,When I go back to my graduating classes,
Dialogue: 0,0:07:55.74,0:08:01.60,Default,,0000,0000,0000,,I graduated from the MBA program\Nat Harvard in 1979,
Dialogue: 0,0:08:02.22,0:08:04.98,Default,,0000,0000,0000,,we have a reunion every five years.
Dialogue: 0,0:08:05.99,0:08:10.34,Default,,0000,0000,0000,,When we came back for a fifth reunion,\Nman, everybody was happy;
Dialogue: 0,0:08:10.78,0:08:12.99,Default,,0000,0000,0000,,most of our classmates had married
Dialogue: 0,0:08:12.100,0:08:16.40,Default,,0000,0000,0000,,people who are much better looking\Nthan my classmates
Dialogue: 0,0:08:16.40,0:08:17.53,Default,,0000,0000,0000,,(Laughter)
Dialogue: 0,0:08:17.54,0:08:19.58,Default,,0000,0000,0000,,they're doing well in their career,
Dialogue: 0,0:08:19.58,0:08:24.22,Default,,0000,0000,0000,,but as we hit the tenth, the 15th, 20th,\Nand then the 25th anniversaries,
Dialogue: 0,0:08:24.66,0:08:27.94,Default,,0000,0000,0000,,oh my gosh, my friends were coming back
Dialogue: 0,0:08:28.67,0:08:31.34,Default,,0000,0000,0000,,not happy with their lives.
Dialogue: 0,0:08:31.34,0:08:34.54,Default,,0000,0000,0000,,And very many of them\Nhave gotten divorced,
Dialogue: 0,0:08:34.54,0:08:37.88,Default,,0000,0000,0000,,and their spouses had remarried,\Nand they were raising
Dialogue: 0,0:08:37.88,0:08:41.88,Default,,0000,0000,0000,,their - my classmates' - children\Non the other side of the country
Dialogue: 0,0:08:41.88,0:08:43.88,Default,,0000,0000,0000,,alienated from them.
Dialogue: 0,0:08:43.88,0:08:47.57,Default,,0000,0000,0000,,I guarantee that none of my classmates
Dialogue: 0,0:08:47.58,0:08:50.96,Default,,0000,0000,0000,,ever planned when they graduated\Nfrom the business school
Dialogue: 0,0:08:50.96,0:08:53.13,Default,,0000,0000,0000,,to go out, and get divorced,
Dialogue: 0,0:08:53.14,0:08:55.78,Default,,0000,0000,0000,,and have children who hate their guts,
Dialogue: 0,0:08:55.78,0:08:58.36,Default,,0000,0000,0000,,and are being raised by other [parents],
Dialogue: 0,0:08:58.75,0:09:02.22,Default,,0000,0000,0000,,and yet, a very large portion\Nof our my classmates
Dialogue: 0,0:09:02.22,0:09:04.30,Default,,0000,0000,0000,,actually implemented a strategy
Dialogue: 0,0:09:04.30,0:09:06.62,Default,,0000,0000,0000,,that they never planned to do.
Dialogue: 0,0:09:06.63,0:09:08.20,Default,,0000,0000,0000,,(Laughter)
Dialogue: 0,0:09:08.21,0:09:10.58,Default,,0000,0000,0000,,It turns out that the reason\Nwhy they do that
Dialogue: 0,0:09:10.58,0:09:15.80,Default,,0000,0000,0000,,is the very same mechanism\Nand that is that pursuit of achievement.
Dialogue: 0,0:09:16.33,0:09:21.07,Default,,0000,0000,0000,,So, we all, everybody here,\Nis driven to achieve,
Dialogue: 0,0:09:21.71,0:09:26.75,Default,,0000,0000,0000,,and when you have an extra ounce\Nof energy or 30 minutes of time,
Dialogue: 0,0:09:26.75,0:09:29.79,Default,,0000,0000,0000,,instinctively and unconsciously,
Dialogue: 0,0:09:29.79,0:09:33.54,Default,,0000,0000,0000,,you'll allocate it\Nto whatever activities in your life
Dialogue: 0,0:09:33.54,0:09:37.45,Default,,0000,0000,0000,,give you the most immediate\Nevidence of achievement.
Dialogue: 0,0:09:37.77,0:09:42.42,Default,,0000,0000,0000,,And our careers provide\Nthat immediate evidence of achievement:
Dialogue: 0,0:09:42.42,0:09:45.19,Default,,0000,0000,0000,,we closed a sale, we ship a product,
Dialogue: 0,0:09:45.19,0:09:47.11,Default,,0000,0000,0000,,we finish a mid-presentation,
Dialogue: 0,0:09:47.11,0:09:52.04,Default,,0000,0000,0000,,we close a deal,\Nwe get promoted, we get paid.
Dialogue: 0,0:09:52.76,0:09:57.85,Default,,0000,0000,0000,,Our careers provide the most,\Nvery tangible, immediate achievement.
Dialogue: 0,0:09:58.67,0:10:00.28,Default,,0000,0000,0000,,In contrast,
Dialogue: 0,0:10:00.82,0:10:05.78,Default,,0000,0000,0000,,investments in our families\Ndon't pay off for a very long time.
Dialogue: 0,0:10:06.14,0:10:08.08,Default,,0000,0000,0000,,In fact, on a day-to-day basis,
Dialogue: 0,0:10:08.08,0:10:11.52,Default,,0000,0000,0000,,our children misbehave\Nover and over again,
Dialogue: 0,0:10:11.79,0:10:16.67,Default,,0000,0000,0000,,and it really it isn't until 20 years down\Nthe road you can look at your children
Dialogue: 0,0:10:16.67,0:10:20.43,Default,,0000,0000,0000,,and be able to put your hands\Non your hips and say,
Dialogue: 0,0:10:20.43,0:10:22.88,Default,,0000,0000,0000,,"We raised great children."
Dialogue: 0,0:10:22.88,0:10:28.87,Default,,0000,0000,0000,,But on a day-to-day basis,\Nachievement isn't at hand
Dialogue: 0,0:10:28.87,0:10:30.97,Default,,0000,0000,0000,,when we invest in relationships
Dialogue: 0,0:10:30.97,0:10:35.03,Default,,0000,0000,0000,,with our family, their children,\Nand our spouses.
Dialogue: 0,0:10:35.03,0:10:40.68,Default,,0000,0000,0000,,And as a consequence, people like you\Nand I who plan to have a happy life,
Dialogue: 0,0:10:40.68,0:10:43.62,Default,,0000,0000,0000,,because our families truly are
Dialogue: 0,0:10:43.62,0:10:47.26,Default,,0000,0000,0000,,the deepest source\Nof happiness in our lives,
Dialogue: 0,0:10:47.26,0:10:49.51,Default,,0000,0000,0000,,find that although that's what we want,
Dialogue: 0,0:10:49.51,0:10:53.82,Default,,0000,0000,0000,,the way we invest our time,\Nand energy, and talents
Dialogue: 0,0:10:54.29,0:10:59.26,Default,,0000,0000,0000,,causes us to implement a strategy\Nthat we wouldn't at all plan to pursue.
Dialogue: 0,0:11:00.23,0:11:02.80,Default,,0000,0000,0000,,And so I wanted to just offer that one;
Dialogue: 0,0:11:03.13,0:11:05.53,Default,,0000,0000,0000,,is something to think about.
Dialogue: 0,0:11:06.11,0:11:10.16,Default,,0000,0000,0000,,The reason why successful companies fail
Dialogue: 0,0:11:10.64,0:11:13.62,Default,,0000,0000,0000,,is they invest in things that provide
Dialogue: 0,0:11:13.62,0:11:17.71,Default,,0000,0000,0000,,the most immediate\Nand tangible evidence of achievement,
Dialogue: 0,0:11:17.71,0:11:21.67,Default,,0000,0000,0000,,and the reason why they have\Nsuch a short time horizon
Dialogue: 0,0:11:21.67,0:11:25.72,Default,,0000,0000,0000,,is that they are run\Nby people like you and I.
Dialogue: 0,0:11:25.72,0:11:30.78,Default,,0000,0000,0000,,We then apply\Nthat very same thinking process
Dialogue: 0,0:11:30.78,0:11:34.84,Default,,0000,0000,0000,,in our personal lives with sad results.
Dialogue: 0,0:11:35.93,0:11:41.20,Default,,0000,0000,0000,,Let me just offer another thought\Nthat might be useful.
Dialogue: 0,0:11:43.72,0:11:47.94,Default,,0000,0000,0000,,I was driving to work\Na number of years ago early,
Dialogue: 0,0:11:48.96,0:11:53.12,Default,,0000,0000,0000,,and when I was\Non Huron Avenue in Cambridge,
Dialogue: 0,0:11:53.52,0:11:55.28,Default,,0000,0000,0000,,I just had a feeling
Dialogue: 0,0:11:56.10,0:12:00.62,Default,,0000,0000,0000,,that something important was going\Nto happen to Clay Christensen,
Dialogue: 0,0:12:00.62,0:12:02.47,Default,,0000,0000,0000,,that I was going to be given
Dialogue: 0,0:12:02.47,0:12:07.45,Default,,0000,0000,0000,,a much more consequential\Nbusiness opportunity
Dialogue: 0,0:12:07.45,0:12:10.45,Default,,0000,0000,0000,,than I have just as a plain,\Nold professor.
Dialogue: 0,0:12:10.69,0:12:13.93,Default,,0000,0000,0000,,A couple of weeks later,
Dialogue: 0,0:12:13.93,0:12:17.36,Default,,0000,0000,0000,,somebody who was in that position\Nannounced that he was leaving,
Dialogue: 0,0:12:17.36,0:12:19.98,Default,,0000,0000,0000,,and I put two and two\Ntogether and decided,
Dialogue: 0,0:12:20.60,0:12:23.30,Default,,0000,0000,0000,,"Gosh! Sounds like, for whatever reason,
Dialogue: 0,0:12:23.30,0:12:28.12,Default,,0000,0000,0000,,I just had this feeling\Nthat I'm going to be his replacement."
Dialogue: 0,0:12:29.23,0:12:33.48,Default,,0000,0000,0000,,So the day came,\Nand they chose another person.
Dialogue: 0,0:12:33.92,0:12:37.76,Default,,0000,0000,0000,,I wondered why did I have that feeling
Dialogue: 0,0:12:37.76,0:12:40.96,Default,,0000,0000,0000,,that an important thing\Nwas going to happen to me.
Dialogue: 0,0:12:41.29,0:12:45.16,Default,,0000,0000,0000,,Did the people kind of lose guts?\NOr... I don't know.
Dialogue: 0,0:12:45.90,0:12:49.59,Default,,0000,0000,0000,,But I wrestled with
Dialogue: 0,0:12:50.96,0:12:54.24,Default,,0000,0000,0000,,how will they measure\NClay Christensen's life?
Dialogue: 0,0:12:54.24,0:13:00.18,Default,,0000,0000,0000,,If they're going to not make me\Nthe leader of a large institution,
Dialogue: 0,0:13:01.49,0:13:04.94,Default,,0000,0000,0000,,how do I know whether my life\Nhas been worth living?
Dialogue: 0,0:13:04.94,0:13:07.64,Default,,0000,0000,0000,,And again, how I measure my life?
Dialogue: 0,0:13:08.34,0:13:13.87,Default,,0000,0000,0000,,I realized that I studied this\Nfor a long time,
Dialogue: 0,0:13:14.63,0:13:16.99,Default,,0000,0000,0000,,and I reached the strangest conclusion:
Dialogue: 0,0:13:17.64,0:13:24.06,Default,,0000,0000,0000,,that God doesn't employ\Naccountants or statisticians.
Dialogue: 0,0:13:25.19,0:13:31.94,Default,,0000,0000,0000,,And what I mean by that is,\Nbecause you and I have finite minds,
Dialogue: 0,0:13:32.36,0:13:36.27,Default,,0000,0000,0000,,when we try to understand\Nwhat's going on in the world,
Dialogue: 0,0:13:36.54,0:13:39.22,Default,,0000,0000,0000,,we have to aggregate things.
Dialogue: 0,0:13:39.22,0:13:40.75,Default,,0000,0000,0000,,So in your companies,
Dialogue: 0,0:13:40.75,0:13:44.25,Default,,0000,0000,0000,,you can't keep track\Nof every individual invoice,
Dialogue: 0,0:13:44.25,0:13:47.02,Default,,0000,0000,0000,,and so you have\Nto aggregate all those up,
Dialogue: 0,0:13:47.02,0:13:50.02,Default,,0000,0000,0000,,so that you have receivables,\Nand payables, and revenues.
Dialogue: 0,0:13:50.92,0:13:54.33,Default,,0000,0000,0000,,You can't keep track\Nof every element of cost,
Dialogue: 0,0:13:54.33,0:13:58.74,Default,,0000,0000,0000,,and so you have to aggregate\Nall that up into total cost categories,
Dialogue: 0,0:13:58.74,0:14:02.90,Default,,0000,0000,0000,,and then you subtract that from this,\Nand there's a number,
Dialogue: 0,0:14:02.91,0:14:08.10,Default,,0000,0000,0000,,and that's the way we try\Nto understand the world;
Dialogue: 0,0:14:08.11,0:14:12.26,Default,,0000,0000,0000,,is because we have limited minds,\Nwe have to aggregate things up.
Dialogue: 0,0:14:12.26,0:14:16.42,Default,,0000,0000,0000,,And then we'll look at that number\Ncompared to last year's number,
Dialogue: 0,0:14:16.70,0:14:19.91,Default,,0000,0000,0000,,and if it's better, then we say\Nwe're doing better.
Dialogue: 0,0:14:19.91,0:14:25.50,Default,,0000,0000,0000,,That's the way we look at the world\Nbecause of our but minds.
Dialogue: 0,0:14:26.05,0:14:29.03,Default,,0000,0000,0000,,It has then another\Ninteresting effect on us,
Dialogue: 0,0:14:29.03,0:14:32.04,Default,,0000,0000,0000,,and that is,\Nbecause we have to aggregate,
Dialogue: 0,0:14:32.04,0:14:35.82,Default,,0000,0000,0000,,we get a sense of hierarchy in the world.
Dialogue: 0,0:14:36.31,0:14:37.60,Default,,0000,0000,0000,,In other words,
Dialogue: 0,0:14:38.10,0:14:44.65,Default,,0000,0000,0000,,people who are higher up\Nin larger organizations
Dialogue: 0,0:14:44.65,0:14:46.27,Default,,0000,0000,0000,,are more important
Dialogue: 0,0:14:46.27,0:14:49.05,Default,,0000,0000,0000,,than people who preside
Dialogue: 0,0:14:49.05,0:14:52.40,Default,,0000,0000,0000,,over fewer numbers of people\Nand fewer numbers
Dialogue: 0,0:14:52.40,0:14:54.68,Default,,0000,0000,0000,,down the road, down the bottom.
Dialogue: 0,0:14:54.68,0:14:57.44,Default,,0000,0000,0000,,So we tend to this, we get this sense
Dialogue: 0,0:14:57.44,0:15:02.22,Default,,0000,0000,0000,,that people who achieve\Nin a hierarchical sense,
Dialogue: 0,0:15:02.43,0:15:07.12,Default,,0000,0000,0000,,their lives will be judged\Nsomehow as better
Dialogue: 0,0:15:07.72,0:15:11.48,Default,,0000,0000,0000,,having lived than those below.
Dialogue: 0,0:15:11.85,0:15:15.39,Default,,0000,0000,0000,,We measure sometimes\Nhow high we go or how successful we are
Dialogue: 0,0:15:15.39,0:15:18.12,Default,,0000,0000,0000,,by how much money we make.
Dialogue: 0,0:15:18.12,0:15:23.51,Default,,0000,0000,0000,,But these are all the result\Nof our having limited minds,
Dialogue: 0,0:15:23.51,0:15:27.55,Default,,0000,0000,0000,,and their having to aggregate\Nmeasures of success.
Dialogue: 0,0:15:30.31,0:15:33.33,Default,,0000,0000,0000,,This choice of measurement
Dialogue: 0,0:15:33.33,0:15:36.33,Default,,0000,0000,0000,,is actually a big deal;
Dialogue: 0,0:15:36.33,0:15:39.33,Default,,0000,0000,0000,,in a company, for example,
Dialogue: 0,0:15:39.53,0:15:45.26,Default,,0000,0000,0000,,if you measure profitability\Nby return on net assets,
Dialogue: 0,0:15:46.19,0:15:48.13,Default,,0000,0000,0000,,that's a ratio,
Dialogue: 0,0:15:48.13,0:15:50.49,Default,,0000,0000,0000,,and sure, you could be innovative,
Dialogue: 0,0:15:50.49,0:15:53.62,Default,,0000,0000,0000,,develop successful, new products,
Dialogue: 0,0:15:53.62,0:15:58.67,Default,,0000,0000,0000,,and take that profitability and stick it\Ninto the numerator of the ratio,
Dialogue: 0,0:15:58.95,0:16:02.56,Default,,0000,0000,0000,,but you can also reduce\Nthe denominator of the ratio
Dialogue: 0,0:16:02.56,0:16:04.94,Default,,0000,0000,0000,,by outsourcing everything,
Dialogue: 0,0:16:04.94,0:16:06.80,Default,,0000,0000,0000,,and the ratio doesn't matter
Dialogue: 0,0:16:06.80,0:16:10.40,Default,,0000,0000,0000,,whether you build it from the top\Nor subtract from the bottom;
Dialogue: 0,0:16:10.41,0:16:14.90,Default,,0000,0000,0000,,if profitability is measured\Nby return on net assets,
Dialogue: 0,0:16:14.90,0:16:18.90,Default,,0000,0000,0000,,it causes us to manage it\Nin a particular way.
Dialogue: 0,0:16:18.90,0:16:20.83,Default,,0000,0000,0000,,And in a similar way,
Dialogue: 0,0:16:20.83,0:16:24.67,Default,,0000,0000,0000,,if we follow our professor's\Nadvices from finance,
Dialogue: 0,0:16:24.67,0:16:28.18,Default,,0000,0000,0000,,and we measure\Nprofitability on innovation
Dialogue: 0,0:16:28.18,0:16:32.11,Default,,0000,0000,0000,,in terms of internal rate\Nof return or IRR,
Dialogue: 0,0:16:32.11,0:16:33.51,Default,,0000,0000,0000,,it's a ratio,
Dialogue: 0,0:16:33.51,0:16:39.63,Default,,0000,0000,0000,,and sure, you could get the ratio up\Nby being successful with innovation,
Dialogue: 0,0:16:39.63,0:16:43.16,Default,,0000,0000,0000,,but you also could get that measure up
Dialogue: 0,0:16:43.16,0:16:47.03,Default,,0000,0000,0000,,by only investing in short-term projects.
Dialogue: 0,0:16:47.03,0:16:52.07,Default,,0000,0000,0000,,And it's just the long way of saying,\Nbe careful in how you measure
Dialogue: 0,0:16:54.25,0:16:56.85,Default,,0000,0000,0000,,profitability in your company.
Dialogue: 0,0:16:56.85,0:16:59.55,Default,,0000,0000,0000,,So how do you measure
Dialogue: 0,0:17:00.07,0:17:02.100,Default,,0000,0000,0000,,the success of your life?
Dialogue: 0,0:17:02.100,0:17:06.38,Default,,0000,0000,0000,,As I mentioned, it's\Nbecause we have to aggregate,
Dialogue: 0,0:17:06.38,0:17:10.62,Default,,0000,0000,0000,,we have this sense\Nof hierarchy, wealth, and so on.
Dialogue: 0,0:17:10.100,0:17:16.42,Default,,0000,0000,0000,,But the reason I concluded that God\Ndoesn't employ accounts
Dialogue: 0,0:17:16.96,0:17:19.75,Default,,0000,0000,0000,,is he has an infinite mind,
Dialogue: 0,0:17:19.75,0:17:22.84,Default,,0000,0000,0000,,and what that means\Nis he doesn't have to aggregate up
Dialogue: 0,0:17:22.84,0:17:25.84,Default,,0000,0000,0000,,above the level of individual people
Dialogue: 0,0:17:26.63,0:17:32.92,Default,,0000,0000,0000,,in order to have a perfect understanding\Nof what's going on in this world.
Dialogue: 0,0:17:33.78,0:17:35.88,Default,,0000,0000,0000,,When I realized that,
Dialogue: 0,0:17:35.88,0:17:41.90,Default,,0000,0000,0000,,that he doesn't have to aggregate up\Nabove the level of individuals,
Dialogue: 0,0:17:41.90,0:17:44.42,Default,,0000,0000,0000,,then I realized, "Oh, my goodness!
Dialogue: 0,0:17:45.25,0:17:49.07,Default,,0000,0000,0000,,When I have my interview\Nwith God at the end of my life,
Dialogue: 0,0:17:49.07,0:17:52.41,Default,,0000,0000,0000,,he's not going to show me
Dialogue: 0,0:17:52.41,0:17:57.43,Default,,0000,0000,0000,,how high I went\Ninto anybody's org-chart,
Dialogue: 0,0:17:57.43,0:18:01.63,Default,,0000,0000,0000,,or how much money I left\Nbehind in the bank when I died,
Dialogue: 0,0:18:01.63,0:18:07.04,Default,,0000,0000,0000,,but rather he's going to say,\N'Oh, Clay, I put you in that circumstance.
Dialogue: 0,0:18:07.04,0:18:09.94,Default,,0000,0000,0000,,Now, can we talk\Nabout the individual people
Dialogue: 0,0:18:09.94,0:18:13.38,Default,,0000,0000,0000,,whose lives you help\Nto become better people,
Dialogue: 0,0:18:13.38,0:18:17.21,Default,,0000,0000,0000,,because you worked with them,\Nor they were members of your family,
Dialogue: 0,0:18:17.21,0:18:21.06,Default,,0000,0000,0000,,or you just met them,\Nand they needed your help.
Dialogue: 0,0:18:21.06,0:18:23.72,Default,,0000,0000,0000,,And then Clay,\NI stuck you in this situation.
Dialogue: 0,0:18:23.72,0:18:29.50,Default,,0000,0000,0000,,Let's talk about the individual people\Nwhose lives you blessed
Dialogue: 0,0:18:29.50,0:18:33.26,Default,,0000,0000,0000,,because you use the talents\NI gave you to help them.'"
Dialogue: 0,0:18:33.41,0:18:37.11,Default,,0000,0000,0000,,And I realized that that's\Nthe way God will measure my life;
Dialogue: 0,0:18:37.11,0:18:41.30,Default,,0000,0000,0000,,is the individual people\Nwhose lives I blessed.
Dialogue: 0,0:18:42.07,0:18:46.34,Default,,0000,0000,0000,,I just want to offer that\Nas the second takeaway
Dialogue: 0,0:18:46.34,0:18:51.01,Default,,0000,0000,0000,,from at least, what Clay Christensen\Nis thinking about,
Dialogue: 0,0:18:51.01,0:18:53.50,Default,,0000,0000,0000,,and that is it's actually\Nreally important
Dialogue: 0,0:18:53.50,0:18:56.76,Default,,0000,0000,0000,,that you succeed at\Nwhat you're succeeding at,
Dialogue: 0,0:18:56.76,0:19:00.24,Default,,0000,0000,0000,,but that isn't going to be\Nthe measure of your life.
Dialogue: 0,0:19:00.24,0:19:04.46,Default,,0000,0000,0000,,God doesn't count, he doesn't aggregate;
Dialogue: 0,0:19:05.05,0:19:07.65,Default,,0000,0000,0000,,he's just going to assess you
Dialogue: 0,0:19:07.65,0:19:12.77,Default,,0000,0000,0000,,on the basis of how well\Nyou helped other people be better people.
Dialogue: 0,0:19:12.77,0:19:14.06,Default,,0000,0000,0000,,Well, God bless you,
Dialogue: 0,0:19:14.06,0:19:17.08,Default,,0000,0000,0000,,I hope that some of these ideas\Nwill be helpful to you
Dialogue: 0,0:19:17.08,0:19:19.26,Default,,0000,0000,0000,,and that you all will be successful
Dialogue: 0,0:19:19.26,0:19:22.51,Default,,0000,0000,0000,,in the way that God will measure success.
Dialogue: 0,0:19:22.87,0:19:24.08,Default,,0000,0000,0000,,Thank you.
Dialogue: 0,0:19:24.08,0:19:25.45,Default,,0000,0000,0000,,(Applause)