Dr.

Stephen Covey Interview

Featuring Jay Abraham May 11, 2005
!"#A$ #% Welcome, ladies and gentlemen, to todays conference call with Dr. Stephen Covey. Now, here to interview him is business growth expert ay !braham. JA& A'#A(AM% "han# you, "iffany. Welcome all of you. "his is going to be fast paced, no$nonsense, and % thin# extremely enriching. %m very, very honored to have Dr. Stephen Covey on the line with us for &' minutes. %m even more honored by the fact that he has agreed to allow me to probingly challenge him to ta#e some of his very, very brilliant and inspired business theories and principles, and allow us to translate them to very actionable and specific elements that people owning, running a business, a professional practice, a startup( and people in larger corporations with )*+ responsibility can really ta#e to heart and do something with immediately. ,efore we begin -and %m purposely spea#ing rapidly because %ve got a lot of ground to cover. those of you who arent /ust vividly familiar( Stephen is probably one of the most influential thin#ers in the entire business community. 0is first boo#, Seven Habits of Highly Effective People, sold 12 million copies. 0is new boo#, The 8th Habit, is groundbrea#ing. "hats all % can say. % dont want to give away the store until we get into it about halfway through the call. ,ut its transcending the limitations of merely being effective, and its taught people how to be great and achieve greatness for themselves, their organi3ation, certainly in a business, and also in their lives. ,ut hes influenced more people on a worldwide basis, % thin#, than almost anyone % #now, and his boo# has been recogni3ed by Chief 4xecutive 5aga3ine as one of the most influential boo#s of the 6'th Century. 0es been recogni3ed in Time maga3ine as being one of the most influential people. 0es been given more awards( %ve got a litany of awards here, Stephen. %f youll respectfully allow me to /ust say it is so impressive and daunting that % could read it for an hour. 7nly because %ve got so much ground to cover( 0es a remar#able man whos got one of the most powerful, agile, halogen$bright minds, and today were going to tap into it in ways % hope and thin# hes never allowed to be really harnessed before. So with that stated( Stephen8 0ello8 D#. S$"!(") C *"&% 0ello. 5y mother also li#es me9 JA&% :+!;<0S= "his is going to be very fun. !nd theres a disclaimer % want to start with. Stephen teaches that you should be diagnostic first, and not prescriptive. !nd % have as#ed him to basically do what %ll call a >)areto )rinciple? for us today, #nowing that its going to be not absolutely the most accurate for all of you. 0es going to do his

very best at my direction and assistance and prevailing to give you some of the most universally actionable and primary activities you might consider, and he can disclaim it as much as he can. So what were going to do today, Stephen, is were going to go through a lot of ground fast. @ouve agreed to let me challenge you, ma#e parenthetical comments, and comment continuously. Were going to go through specific actionable ideas, recommended strategies that business owners, entrepreneurs, professionals, startups and )*+$oriented managers ali#e can use to ta#e a needed action. So with that stated, are you ready8 D#. C *"&% Sounds good $$ than#s. JA&% 7A. !nd hes given me permission to insinuate my bad self occasionally, clarify and maybe step on him, because %m your advocate and %m your champion, those of you listening. So Stephen, would you start with a clear definition of what you define and thin# greatness means as it applies to a business versus a large organi3ation8 !nd % would love any implications $$ what it means to a leader, what it means to the team, what it means to the relationships. ,ut youre really at a brea#through area when you tal# about greatness. ,ut what do you define it as8 D#. C *"&% Well, % would say that a great organi3ation would be one that has sustainable impact on all of its sta#eholders for good. "hat includes the whole supply chain, obviously the customers( !nd the culture would be extremely empowered to use a lot of initiative in ma#ing great things happen. !nd also, % thin# another characteristic would be that the people are constantly growing and improving their s#ills, their #nowledge base, and their capacities to become even greater in the future. % thin# one of the biggest problems is sustainability $$ that many people are li#e cotton candy. %t tastes good, and then within a short period of time it /ust is worthless, essentially, and nothing happens. ,ut to ma#e it sustainable, to me, is one of the great #eys. JA&% We had offline, prior to the beginning to this, some discussion. !nd % said that %ve done much of my wor# with entrepreneurs, with smallBmedium businesses, professionals, even a number of startups. !nd their mindset, even their ideology is different. !nd % thin# that what youre saying to them is, >0ey, youve got to have a meaningful, sustaining impact on everybody at a higher level than anyone else, and its got to be a lifelong commitment. @ouve got to want to see everybody grow, because if they dont, you dont. %f they dont, your mar#etplace doesnt. %f they dont, your clients or customers dont.? %m going to try to interpret you. %s that correct8

D#. C *"&% "hats right, because its an interdependent reality, and most entrepreneurs have a tendency toward independence. "heyre running away from dependence, obviously, but they #ind of li#e to do things on their own. ,ut % go to these 4ntrepreneur of the @ear meetings every year, and if you see those who win, consistently, over all these years, its always those that win as a team. !nd every persons strength gets to be made productive, and their wea#nesses made irrelevant through the strength of another person on the team. JA&% Stephen, %m going to interrupt for a minute, because $$ and were getting ahead. ,ut later in this interview -time allowing. were going to tal# about creative, you call it >cooperation.? %ll call it >collaboration.? ,ut % thin# that what you have probably recogni3ed, uncovered and really beat over peoples heads almost incessantly is that you cant do it yourself. @ou need the leverage through other peoples efforts, other peoples perspectives, other peoples paradigms, other peoples intellectual capital. !nd % thin# more than ever before its critical. !nd for little, medium$si3ed entrepreneurs and business owners, % thin# its vital, dont you8 D#. C *"&% % thin# that the expression you made >more than ever before? is so true, because in a #nowledge economy, which were in now, C'$ to D'E of the value added to goods and services comes from #nowledge wor#. %n the industrial age economy it was only about F'E that came from #nowledge wor#. "he rest came from manual wor# and from machinery, and thats why the industrial age model of top down control, on strong independence at the top, and driving things, and using accounting which ma#es people an expense, rather than an investment, and then putting the responsibility on the so$called >leader? to become the external motivator is an absolutely flawed paradigm. %f you study the great organi3ations, small and large, that are ma#ing the brea#throughs, youll find that it involves a high level of interdependency, empowerment, team building( all the way along. %ts a different world today, and this is only ta#en place in 6' years. JA&% "hats powerful. !nd what % want to challenge you to #eep doing as we get deeper, because were going to >put our toe in the entrepreneur water? a little deeper, and maybe get up to our #nees. ,ut % want you to #eep challenging the business owner, the small or medium entrepreneur, the professional, to relate. ,ecause youve got the good fortune of seeing corporations that at least have the capability and the mindset of investing forward, building a recurring compound growth asset. ! lot of entrepreneurs, -in my humble opinion. a lot of business owners are very tactical. -Well get into this later.. "hey are more interested in lifestyle, or more episodic. !nd %d li#e, and my hope is that you will inspire and haunt them favorably forever with some commentary that youll ma#e parenthetically as we go. So let me get to the next Guestion. % loo# at tens of thousands of businesses and entrepreneurial enterprises every year. %n my humble opinion, few of those are really on a meaningful, sustainable growth path. 4ven fewer are solidly strategic in their thin#ing,

their actions, and their transactions. What instant or immediate, then mid$range or long term changes or shifts would you recommend any leader $$ and #eep in mind, weve got them all on here. We have a lot of entrepreneurs and business owners. What changes or shifts would you recommend they ma#e to convert their enterprise from tactical, reactive, episodic, to strategic, enduring, and basically a geometric growth machine8 D#. C *"&% % would say a couple of things. 7ne would be % would ma#e sure that % surround myself with people who are different than me $$ who thin# differently, who challenge $$ so that you can get the spirit of synergy in producing a strategic plan that everyone gets emotionally connected to. !nd % would try to get them very involved in this development of this strategic plan so that they really have a clear sense of what the most important goals are, and also what the values are. ,ecause if you have commonality on the values which never change, then you apply those values in getting synergy and developing strategic goals and plans to achieve those goals. "hen youve tapped into as much wisdom as possible. 5y experience with most entrepreneurs is that theyre very strong people that are #ind of independent. "hey want to be interdependent, but their strength #ind of causes a >#iss up? culture to surround them, where people tell them what they li#e to hear $$ and what they need to hear often gets neglected. JA&% !nd Stephen, /ust so we can translate it to the more entrepreneurial amongst our listeners( When you say >synergy,? youre tal#ing about this collaborative creativity, this collaborative cooperation, this melding of perspectives, of s#ills sets in an integrated form. !m % right8 D#. C *"&% "hats right. ,ut it creates a third alternative that is higher than the other two positions. %ts not a compromise position. !nd it comes when people get very vulnerable and authentic, and they overlap their vulnerabilities. !nd all of a sudden, you see this magical thing where they start building on each others ideas. "hey get excited, and #ind of a natural, spontaneous enthusiasm starts to form. !nd that gets people emotionally connected. % remember one time when % was setting up my own business, % developed this beautiful mission statement, perfectly phrased and everything. We went on an off site, and % was basically going to present it to the team. %t was a very small team of about six people. !nd a couple started to push bac# a little, and % could feel my ego #ind of being suc#ed into it a little, but % did start to listen. "he more % listened, the more % could see a different perspective, and the wisdom that resulted was ama3ing to me. !nd within two days we had an altogether different mission statement than the one % had proposed. !nd %m telling you, it created a sustainable culture that lasted for years and years, that was truly exciting. JA&% "hey were more invested. %t was part of( ,asically theyd all given birth to it together.

D#. C *"&% 4xactly. JA&% "hats great. Stephen, a simple $$ well, not a simple Guestion, but on my list its a simple sentence. %ts a fractional sentence. 0ow do you feel a smaller enterprise can best and most effectively, and greatest, compete today8 What one or two factors, actions, shifts, more than any other, can a small entrepreneur $$ and >small? can be I1 million to I2' million. % dont really care, however you want to define it. ,ut its a very brutal, competitive world. What can they do more than anything else right away to ma#e them competitive. D#. C *"&% % would say there so much slip between cup and lip that you have to be very careful to get good data and research on your value proposition to ma#e sure that you really have a product or a service that has tremendous appeal to people, and that youre not seduced by your own autobiography, and by a few friends that have told you youve got the greatest thing in the world. % would also say get synergy on your team so that you ma#e sure that if youre not strong in finance, someone is. %f youre not strong in mar#eting, someone is, so that there isnt so much slip between cup and lip. ,ecause as you #now, most of the new startups dont last two years. "heyre gone, and yet they all started with excitement and enthusiasm and >Weve got the greatest thing going.? ,ut its not sustainable over time, because they didnt do the research and the competitive landscape research, loo#ing at the bold realities of life. !nd then they didnt get synergy in compensating for their own wea#nesses. JA&% "hats good, thats good. "his is a very interesting one. %m going to give you a little of my own belief system prior, and %m going to let you challenge, confirm, or springboard. % want you to compare the differences, pro and con, between entrepreneurs and a corporate mindset. !nd because %ve done so much wor# with entrepreneurs and private business owners, my ta#e on them is this -and % want to see if you confirm or if you refute it.. % thin# number one, many of them are far more passionate because its their progeny. Number two, many of them are more lifestyle oriented. "heyre not really trying to build an asset that will #eep compounding, growing, surviving, thriving( Number three, most of them up to I2' million that %ve seen, are tactical. Number four, they dont really appreciate the relevance of mar#etings #ey role, and they dont do the eGuivalent of research and development, and they themselves obsolete before their competitors do. Number five, they dont reinvest in themselves in training, and reinvest in their team. Now thats /ust my ta#e. "hats a Guic# ay !braham. What do you thin# the differences are8 D#. C *"&% Well, my experience is along the same lines, because % find that there is more a sense of ownership on the part of the entrepreneurs, and real commitment. % find a lot of them, though, get into very distorted lifestyles. "hey get so consumed by it that

oftentimes they neglect their family, and their health, and sometimes their integrity. "hat also happens in large organi3ations, particularly if they get seduced by a >#iss up culture.? !nd % also agree with your comments regarding the tendency to get tactical, and not to thin# strategically, and to do the necessary investment in people, and in J*D to ma#e sure that they really are on a wise, sustainable path for the long haul. % thin# that sometimes they are benefited by not being so political. "heyre a little more creative, and they get passionate, attach into their passion. % find a lot of that is /ust drummed right out of big organi3ations, and theres such profound disempowerment that most people find their satisfactions off the /ob, and then it creates #ind of a dispirited culture, where often youll find a wise entrepreneur will create a very enthusiastic, fired up culture of people who #ind of buy into the same, particularly if theyre psychologically and financially involved as well. "hey buy into the same sense of which way north is. JA&% "hats great. % was thin#ing about the entrepreneur between proactive and impetuous. "heres this very gossamer$thin line of demarcation. D#. C *"&% @eah. JA&% "he next Guestion $ you tal# a lot about the difference between proactivity and reactivity. Can you share(8 % dont care what number $$ one, three, five, ten critical proactive things that great leaders do continuously, predictably, that average, ordinary business owners dont seem to understand8 !nd then maybe translate what the lesson in each of these is for the people listening to learn and embrace. D#. C *"&% Well, % would say one proactive thing is that they decide what their mission is, and what their values are in the context of a larger vision. !nd % thin# that most reactive people tend to /ust #ind of live out old programs that have been given to them by other people and by other models that theyve had. % thin# another thing is that they start investing in people and in the building of high$trust relationships, where the reactive people #ind of hope that trust will result. "hey dont proactively nourish the relationship. !nother one is they really get invested in the growth and development of people $$ for instance, the very thing were doing here. %f theyre learning things from this, they would want to immediately share this with the people around them that might have an interest so that they create a #ind of a learning ethic $$ not /ust a hard wor# ethic, but a learning ethic $$ so that people say, >,oy, hes really interested in my growth and development, and in my career.?

% thin# another one is they strive for a lifestyle that has some balance in it so that they dont neglect the thing that theyre going to tal# about on their death bed, which is their loved ones. "hey ta#e time for it. % thin# another one is they set up empowerment agreements with people so that they dont have to hover over, chec# up, follow through, and #ind of micro$manage people according to the way they normally would clone someone. ,ut they reali3e that every personality is different, will often ta#e a different tac#. ,ut as long as there is a common agreement on the overall strategic purpose and goals, thats the important thing. !nd therefore, you allow other people to express themselves. Jeactive people tend to be firefighters that are impulsively running to and fro and trying to solve problems. "hey almost get addicted to urgency, rather than being addicted to focusing on that which is important, the )areto )rinciple, where D'E of the results come from the 6'E of the #ey activities that produce those results. !nd % thin# that what % call >Luadrant "wo? $$ that which is important but not urgent $$ is the basic thrust of proactive people. JA&% "hats where they live. D#. C *"&% @eah. "hey live more there, and the data shows from research thats where they live. 4ven the Deming data, those who won the Deming pri3e -and this is both public and private organi3ations. against two criteriaM economic performance over time, and high mar#s from all of the sta#eholders. !nd these people are living in Luadrant "wo $$ that which is important, but not urgent $$ where most people are drowned by the urgent, and the important often gets neglected because the urgent acts on you. %ts right in front of you. %ts pressing. %ts li#e a ringing phone. !nd they get so addicted to it they almost feel guilty if they focus on long term, strategic thin#ing and listening in depth to other people because theyre frantic. "heyre /ust driven by action and by constantly wanting to ma#e things happen. "hey dont ta#e time to reflect, and to gain a deeper understanding of what the real needs are, and to also deeply understand another person and to find out what their voice is... what is uniGue about that person(that they have certain talents and passion. "hey dont do that. "hey tal# more than they listen. "hey should reali3e they have two ears and one mouth, and use them accordingly. JA&% "hats great. @ou remind me of two things $$ one %m not going to tal# about now, but remind me. Deming was a client of mine, and % learned a powerful way to ta#e Deming )rocess %mprovement and translate it to the revenue generating, selling, mar#eting side. !nd this is really interesting, and well tal# about that sometime. ,ut % was thin#ing about $$ remember % shared with you that document called the Strategy of )reeminence8 % was very intrigued with the leaders who fell in love, not with their company, but with their clients, with their team, with the impact they were having on growing them, on nourishing and nurturing them. "hey were able to transactionally see

themselves enriching and improving their circumstance in life. "hose people seem to so remar#ably outperform others. % thin# its a really interesting mindset. D#. C *"&% %t is, and if you study im Collins boo#, Good To Great, he shows that in every case without an exception of organi3ations that were good, but then became sustainably great, over a long period of time the number one Guality was humility $$ the absence of ego $$ combined with professional will. "hey had tremendous, fierce will. ,ut it wasnt about them and their career and their reputation. %t was about the people, the cause, the wor#, and it became obvious to other people. "hey werent necessarily charismatic people, either. "heyre often Guiet, sometimes even introverted, but genuinely caring. "heyre sincere, and theyre caring about other people and about the cause, and not loo#ing for recognition and attention and so forth. %t was a very interesting finding, and %ve always believed that humility is the greatest of all virtues, because % thin# through the humble person can come all other virtues. JA&% Can % embellish, and say humility connected with humanity, because % thin# that transcends it and gives you this real impact. D#. C *"&% Jight. % thin# that the essence of humility is humanity $$ that is, profound respect and reverence for people and for their potential. JA&% % agree. !nd how much more they can be, do, and the impact. D#. C *"&% !nd particularly if you invest in them, and dont see them as an expense. ,ecause the psychology behind our accounting system is stupid. %ts that people are an expense. "hings are an investment, and assets are essentially machinery and other things. !nd that psychology drives external motivation. %t drives the >Sandwich "echniGue? of performance appraisal, where if you say a few nice words, slip in the #nife $$ areas for improvement $$ a few nice words on the other end. 5ost people are buried in this #ind of thin#ing, this paradigm. %t is becoming, little by little, obsolete. )eople who want to get at the vanguard, at the cutting edge, better wa#e up and smell the coffee about the movement toward a #nowledge economy. JA&% "hats great. %ve got so many provocative Guestions. 7ne of my most, certainly favorite, but % thin# most impactful of all your beliefs is beginning with the end in mind. % thin# its a very powerful reali3ation. "o me its probably the most powerful single element you teach, and it parallels a lot of the things that % teach. ,ut how many different, specific ways, areas, have you found it applies that most people dont thin# about8 !nd %ll start you off with, when %m trying to teach people how to grow, not /ust to great, but the optimal business or enterprise for them, % say, >Well, lets figure out what its got to loo# li#e.? ,ecause if you continue the way youNre going( !nd you #now that %

teach >"hree Ways "o <row ! ,usiness.? %f you dont ma#e people more profitable and get them coming bac# more, you might want to have to grow it very, very, very much harder and longer than other alternatives. !nd % try to engineer bac#wards what its supposed to loo# li#e( what has to happen if theyre going to get people buying ten times, three times( and get them to challenge. What are all the different ways you have found that people can translate this end of the mind8 ,ecause it goes to structure, si3e, culture, impact, mar#ets, optimal buyers, clients( <ive me a couple of the distinctions that youve seen, and that many people listening may never have thought about. D#. C *"&% Well, % totally agree that all things are created twice. 4ven the house that youre in was created in every detail before the earth was touched. "he building that youre in( everything was created. !nd thats what it means to begin with the end in mind, is that you ta#e charge of the first creation. "hen, the second creation is governed by that first creation. 4very decision that you ma#e tells you what to do and what not to do. %t #eeps you from getting distracted by things that will consume your energies and your time away from it. Oor instance, % was in a meeting the other day, and % said to a group that was #ind of torn apart with different political issues and so forth, >Why dont we begin with the end in mind of ending up with a decision that we all feel is best( better than what anyone has brought8 !nd that also, the other end in mind is that we are bonded more closely together. "he trust goes up.? Well %m telling you, as soon as they emotionally bought into those two things, the whole meeting changed. 4very interaction was more respectful and civil, more empathic, until eventually the negative, defensive energy was replaced by creative energy. "hey came up with solutions that were better. "hey literally were bonded. "hey were enthusiastic about what they came up with. !nd thats because at the beginning of the meeting we agreed on two ends that we wanted to end up with, and that guided everything else. % thin# you can do the same thing in your every day, and in your interaction with your loved ones, or with every person. @ou /ust see an end in your mind where it comes out better, with a better relationship than the way it is now, not that your egos satisfied, because you got your way or because you had all the say, or something li#e that. ,ut rather, where you actually produced a result that was beautiful and sustainable. % thin# literally, ay, that you can apply it in every aspect of your life and your $$ JA&% %m going to ta#e that, but %m going to challenge, not you $$ %m going to use you as a reflective beam to challenge the business owners, the entrepreneurs, the professionals here. @ou really do get out of your life, you get out of your business, you get out of your career, you get out of your psychic or your financial investment pretty much what you want it to produce for you. !nd that starts with, what do you want it to loo# li#e8 !nd then what has to happen bac#wards in reverse$engineered steps to achieve it8

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% thin# that theres so much opportunity here that many people dont( % thin# its a very profound and a very powerful area, but % dont thin# most people avail themselves of it in as many ways and applications $$ personally, business, self $$ as they really could, dont you agree8 D#. C *"&% @eah. % thin# that you have to be proactive to do it. %n other words, you have to ma#e it happen. %t wont happen to you. !nd this is also the way that you can get free of victimism in your life, so that you dont let yesterdays bad experiences hold tomorrow hostage. @ou literally can reinvent yourself through the power of your mind and imagination to see a different future. % was presenting the other day in !urora, the second largest city in %llinois, and this was to a group of young people. "he president of the university who sponsored this thing, this large group of young people -mostly high school #ids. started interviewing them. >What is it that youre most impressed with that you learned tonight8? !nd the basic answer was, >% can become the leader of my family.? !nd most of their families were dysfunctional. "hey were bro#en. !nd these #ids began to get the sense that they could begin with the end in mind of developing the #ind of moral authority that they could literally become the leader in their own dysfunctional families. % find the same thing when % wor# with organi3ations, that if you can /ust get anyone at any level( "hey dont have to have position. +eadership is not position. +eadership is a choice, and its based on moral authority. When people envision themselves serving other peoples needs, and increasing their own circle of influence through solving problems $$ even if its not in their own /ob, but its inside their circle of influence $$ little by little people honor those people. "hey have a reputation. "hey produce results, and results gives you so much more freedom with people. "hey #now that youre interested in them and in their progress, not /ust in you and what youre saying. +ittle by little, that person can become what % call a >trim tabber? $ the small rudder that turns the big rudder that turns the whole ship. So youre no longer a function of some bad boss, or some bad systems, or a bad economy. %ts not a function of the environment at all. %ts a function of your own decisions based on a lot of wisdom that is not ego$centric, but which really tries to add value to others. JA&% Stephen, %m going to pounce on something, because again, %m the advocateBchampion of everybody here. !nd there are people representing huge corporations, but there are a lot of them here from medium and small and entrepreneurial type sorts. !nd % want to challenge you to challenge them. @ou tal# constantly and impressively about being a great leader. ,ut % want to #now why must a business owner, large or small, professionals ali#e, entrepreneurs, startups, even one$person businesses( be leaders too8 !nd what does that level of leadership loo# li#e8 <ive me an example. <ive me absolutely $$ absolutely $$ a picture. ,ecause % want to try to help people not have to extrapolate( not have to con/ure up( not have to try to

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grasp and grapple with an image. Whats it loo# li#e8 -!nd if you can tal# a little louder( %ve been told that youre a little soft on a couple of the peoples phones.. D#. C *"&% 7A, % appreciate that feedbac#. %ll try to spea# a little louder. JA&% "han# you very much. D#. C *"&% Now, first of all, leadership is the enabling power to everything else that ta#es place. Oor instance, if you have bad leadership and youre in a school, youre going to get bad education. %f you have bad leadership and youre in a health care organi3ation, youll get bad health care. %t is the enabling profession to all other professions. %t is the highest art of all $$ literally. 4ven artists need leadership( need some #ind of vision( some #ind of strategic directioning( some system of accountability, of nurturance, of a servant leader. !nd thats what leadership provides. !nd the essence of it is that these people dont necessarily have a position. +i#e <andhi $ he was never elected, never appointed. 0e brought 4ngland to its #nees, liberated F'' million %ndians. %ts the second largest country in the world today $$ one billion people $$ and the largest democracy. !nd he was the founder of it, and never held a position. "he industrial age model ma#es leadership a position. "he #nowledge economy $ leadership is a choice. % mean, loo# what <4 did in distributing leadership throughout all of their different areas. "hey became number one or number two in every category that they entered into because they focused primarily on the process of developing and distributing leadership all throughout their entire culture. +oo# at Southwest !irlines. +oo# what theyve done to nurture leadership in every area, and the modeling done even by the top people of being willing to be servant leaders( to assist other people( to empower them so that that one organi3ation is worth more, probably, than all of the other airlines put together. %ts the most successful of any airline weve ever seen, and its because of the #ind of leadership. %t isnt the #ind of rah$rah, charismatic leadership of someone up in front leading the charge up the mountain at all. %ts the one that confirms to everyone, >@ou matter. @ou ma#e a difference. % want to listen to you. % believe in you. Oind your voice, and then align your voice with the voice of your department or your team so that theres harmony there, and lets put forth the best low$cost airline in the history of the world.? !nd thats what theyve done. JA&% !nd Stephen, %m interrupting $$ apologies. ,ut entrepreneurs, small business owners, medium business owners, startups, professionals( they feel sometimes so competitively marginali3e, so commoditi3ed, so beleaguered. 0owBwhy must they $$ and can they $$ transform themselves into leaders within their community, their group, their business, their industry8

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D#. C *"&% Well, % thin# they first of all should reali3e that it is an inside$out process. "heyve got to literally wor# on themselves( ta#e more initiative to bring the people together to come up with a strategic direction, with values, and with a vision that people can emotionally connect to. !nd that is almost the first activity that such people do. 7nce they get that going, then their spirit is #ind of a servant leader, to >0ow can % remove obstacles for you8 What can % do to help you further what youre trying to do8? Jather than in a sense, ta#ing over and continuing to provide all of the direction. "hat way it starts to distribute the spirit of moral authority, or living by principles, throughout a culture. !nd so these are very practical things that an entrepreneur or startup person can do. 4ven if theres only two or three people, get together with those people and say, >What is it thats really important to us, and how are we going to execute on that8 !nd who will do what role to ma#e that execution8? !nd that way % thin# it causes a feeling that everyone is important( that no one is any more important than anyone else( that everyone is special because of the Guality of humility and the Guality of respect that is shown by this ownerBmanager toward everyone. JA&% % thin# youll agree( @ou may not, but % thin# that when you transform yourself into a true leader it animates your spirit. %t stretches your sense of possibility, and it really renews your passion and purpose for what youre doing, dont you thin#8 D#. C *"&% %t does feed on itself. %ts also a magnetic in the impact it has on others. ,y the way, am % spea#ing loud enough8 JA&% @ou are, and % thin# % was too. So % hope everyone can hear. "iffany, not to be rude and breach the integrity of our interview, but % want to ma#e sure everyone listening can hear clearly. !re we fine now8 !"#A$ #% @es, sir. JA&% 7A, than# you. "here we are, Stephen. Were good. D#. C *"&% 7A, good. JA&% +ets see. %m going to move rapidly along here. @ou tal#ed in % thin# both of your boo#s about the difference between doing things right and doing the right things. !nd again, % challenge you so that while theres no true prescriptive be$all and do$all, help me help the people on this call, particularly the ones that arent running trillion$dollar corporations $$ the ones that are struggling with a I2 million, I1' million, a startup( help them see what are the real categories theyve got to deal with right away, and why, and whats the flaw in their current thin#ing8 D#. C *"&% % would say the two big categories are strategic and relationship.

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JA&% Can you describe strategic8 ,ecause %m always( D#. C *"&% "he strategic means that youre focusing upon what are the over$arching purposes youre trying to serve8 !nd what is your basic value proposition, or your basic good or service that can serve that in the mar#ets that youre going after8 So that you have to thin# through what those big goals are, and the main plans to accomplish those goals. 5ost people dont thin# strategically. "hey thin# more tactically in terms of >What am % going to do today to put out this fire, or to build that one relationship? or something of that nature. ,ut you need a context in which to operate in which everyone can operate. )eople should be on the same page about that strategic context. "he second thing is they focus on relationships. % remember one organi3ation % wor#ed with, % said, >%f you were to do one thing that you #now would have the greatest impact on your store, your operation, what would that be8? "hey thought about it, and to a person -they were all department heads. they said, >Spend more time with our big customers, the ones that we sell the most to, and really get to #now them, to understand them, and to serve them so that their loyalty is so strong toward us they thin# no one else.? % said, >What percent of the time are you spending on doing that8? "hey concluded no more than 2$ to 1'E of their time. Why8 ,ecause they were buried by firefighting, by reports, by meetings, by little minutiae, with oftentimes the D'E of the customers that really were consuming their energies and their best time. So they came up with an agreement. "hey were going to spend one half their time with the big customers. "hat really involved a lot of proactive, courageous action on their part. Within about six months theyd got up to about a third. @ou cannot believe the impact that had on results $$ and on their spirit, li#e you say, ay. "he moment you get this momentum going, and this enthusiasm going, it becomes contagious and it fires them up to not only #now what they should do, but also to have a >not$to$do? list that they stay away from that consumes them, that if you neglect would ma#e no difference at all anyway. % find thats a very useful Guestion to as# people, ay, and that is $$ ,ecause usually people #ind of inwardly #now what is the one thing that if they attend to it can ma#e a huge difference. "hey usually #now what it is, but theyre /ust so reactive that oftentimes all of the other things drill away their energy. JA&% !nd you #now this $$ %ve done lots of very fascinating and powerful research and experimentation. Weve found with certain #inds of businesses where the leader can, on some freGuency, interact with the best clients $$ or even prospects $$ businesses have grown H'$2'E. %ts li#e an instantaneous exponential leverage.

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D#. C *"&% Wow. JA&% ,ut they dont thin# about that, because youre right. "heyre so immersed and beleaguered in the day$to$day and the alligators. +et me continue, because %ve got so many Guestions, and % #now youve got to go to a plane when were done. +ets see( this is good. @ou tal# a lot about problem minded versus opportunity minded. % tal#ed about ethical opportunistic mindset. +ets reconcile and define the differences, not necessarily in mine, but your two differences. %llustrate them with some very specific reference examples so theres no Guestion in the minds of our listener what the two loo# li#e, and where theyre diametrically different, and what the different impacts and outcomes can be. "hen re$examine a few of them $$ maybe great opportunity$minded leaders, thin#ers, or organi3ations youve seen, wor#ed with, or admired. !nd maybe -time allowing. give us a lesson or two we can each ta#e from that, or any part thereof, 7A8 D#. C *"&% 7A. % wor#ed with one the other day that is a fantastic organi3ation because they focus on opportunities, and they #ind of relegate their problems to their mentee. "hey all have a >mentee? $$ someone that theyre trying to train to #ind of ta#e over part of their business. %t gives the mentee opportunities to also ma#e opportunities out of some of those #inds of small problems. ,ut they essentially /ust push them off to these mentees, these people that theyre trying to train to get into the business, and to learn the business. "hey literally are focusing almost all of their energy where the new opportunities are coming $$ the new technologies that are coming, or the new changes in the competitive landscape where a competitor is using a strong relationship$building approach. !nd so they not only go into the relationship thing, but they also go into it synergistically so that they dont /ust have a good relationship. "hey actually become very open to the customer and very aware of the new forces that are operating on that customer to where they #now what the customers customers are thin#ing about. "hey begin to see what these trends are li#e, and so they organi3e themselves to focus on these trends. @ou cant believe the impact to this organi3ation. %ts now a IK billion organi3ation, but its made up of small operations of no more than two or three people $$ well, sometimes it may be up to six or ten people at the most $$ in different offices. "hey have 1',''' offices, and their goal is to ma#e 62,''' in the next few years. ,ut this is their approach that they use, and that is that top people of each office attend to the opportunities, the changes that are ta#ing place in the mar#etplace, where the big customers are, and whats happening to those customers customers, their businesses, and so forth. "hen the rest of it theyre delegating to these trainees. "heyre helping them to learn the business, and to get involved. %ts one of the best models %ve ever seen. JA&% "hats great, thats great. % #now we could tape you for two hours on any sub/ect, so respectfully, if % move on, #now that its not $$

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D#. C *"&% No, thats fine. JA&% <ood. "hen this is $$ time management is obviously important to everybody, and your corporations very deeply ensconced in it. ,ut % did a program years ago called >"he eP9 Oactor? and % culled the minds of experts in every distinction. !nd % wanted them to give me in five minutes or less the most highly leveraged single transactional approach that somebody could use to master one big impact point that even if they executed marginally, it would have a profound difference. "hat stated, because no one has more than 6H hours in a day, or seven days in a wee#( What, if your life depended on it, and you had, in three, or four, or five minutes, to give a system for ma#ing each and every one listening at least 1', 6', maybe more percent more productive, effective, impactful in either time management or productivity, whats the one thing you would tell them above everything else8 D#. C *"&% Well, % would say first of all, write a personal mission statement that embraces the totality of your life. Second, % would say, thin# through each of the important roles of your life, such as your business roles, your family role, your community service role, your personal welfare, and health, and growth role, and your church role $$ whatever. "hen, never thin# in terms of a day. "he smallest unit would be a wee#, and that is in the larger context of long term thin#ing over several years, or maybe a year, or a Guarter, or something li#e that. ,ut always thin# in terms of a wee# as the smallest unit. @ou can still be flexible and adapt spontaneously to changing circumstances, but that way you can attach #ey goals $$ li#e one or two $$ to every role and schedule it. @oure still not hung up on the schedule. %ts more your conscience that drives it. ,ut you will find that about D'E of the goals that youve established under those #ey roles will be achieved. !t the end of the wee# you loo# at what youve not accomplished and then plan the next wee# so that you dont neglect anything that is truly important. 7therwise, what % find, ay, is that people truly do climb ladders of success, get to the top rung, loo# around, and reali3e its leaning against the wrong wall because they have neglected some #ey roles in their life. >7f all of the words tongue and pen, the saddest of theseM N%t might have been.? "his can often happen to entrepreneurs particularly because the nature of the wor# can be so consuming, not /ust time$wise, but in terms of their attention and orientation, that they can often neglect the more important things that they #now in their heart are more important. !nd they neglect it not only through this constant pounding of the surf out there, but also because they dont empower other people to compensate for their wea#nesses. "hey dont #now how to empower them, so that theyre too dependent upon their own individual action, and they end up neglecting the most important things.

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So % would say mission statement, then roles, then goals, and #eep the smallest unit on a wee#ly basis. "hose people who plan on a daily basis, %m telling you, they are buried in the thic# of thin things, and theyre going to spend their time putting out fires until they develop a problem orientation, not an opportunity orientation. JA&% % had a person at one of my seminars who was very, very interesting. 0e wor#ed with C47s in Silicon Qalley, and we as#ed him a similar Guestion, and % want to throw this out to you because his answer is going to be a real softball for you to hit out of the par#, % thin#. 0e said, >)ic# out the three most important functions you do for your company, even if youre a one$person business. ,rea# them down to the six or seven most relevant processes. udge your relative proficiency at it.? !nd this is going to be very interesting to you, and %m going to put some funny words in it. 0e had a different criteria, but he said, ><oing from imbecilic to terrible is pretty linear. <oing from good to great, or spectacular, or extraordinary is geometric. Do what youve got the greatest leverage in, and dont do what you dont.? Now, % dont #now if you agree with that or not. D#. C *"&% No, no. % thin# that these are what % call >"he Oour Disciplines of 4xecution.? "he first one is to decide what those two or three superbly important goals are. +i#e, to a flight controller, is to ma#e sure that that plane lands safely, otherwise you close the airport down. "o a surgeon, that guy lives. @ou should have two or three, and thats all. @ou still will have other things, but those are your, what % call >W%<s? $$ Wildly %mportant <oals. "hen, by involving people not only in developing the W%<s, but also the scoreboard that reflects that so that everyone #nows how that would be measured. "hird, you then have opportunity for everyone to be creative in coming up with new and better behavior in accomplishing those things against the scoreboard. Oourth, that you have open accountability, so that everyone has awareness of exactly whats happening $$ its published, its open to everyone $$ against the scoreboard. % was wor#ing with the <overnor down in <eorgia, and we set up a control group of five departments and a training group of five departments, and applied these four disciplines of execution in the five departments. %n a matter of six to eight months the results were so astounding that the <overnor adopted it for the entire state. 0e said, >Were going to be the best$managed state in this country.? % said, >@our goal is too small. @ou have to be the mentoring model for the other H& states.? ,ut these people did this on their own. %ts not something we did to them. "hey came up with the W%<s. "hey came up with the scoreboard. "hey held everyone accountable. Do you #now what they had before8 6' or F' goals( the distraction( no one on the same page about what really is terribly important. "hey didnt have the scoreboard that

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they developed. %t was more handed to them by someone else, and their whole culture was in a sense disparate and split apart. "he same thing with the small operation $$ to decide the two or three truly significant things, and the scoreboard, and then hold everyone accountable to come up with new and better ways to accomplish that. JA&% %m going to pic# up on that, and %ve /ust had to shuffle some notes, so bear with me. % did a lot of research in the highest$performing companies in F'' to H'' fields, and % was fascinated. "hey, to me -and this is my interpretation. were the companies that engineered the maximum Guality, consistency, and significant brea#throughs in the area of strategy, mar#eting, innovation and management $$ those four things. @ou tal# about the four primary management practices $$ strategy, execution, culture( whats the fourth one8 %s it people8 D#. C *"&% @eah. No, that would be culture. % guess the other one is modeling $$ your own example. JA&% !nd you want to tal# about any one of them8 %m trying to give leverage thats actionable. % want no one on this call not to be able to hang up and say, >%m going to do that starting today,? and they #now what >that? means $$ at least as a starting point. %t may not be, as you said, prescriptively the ultimate, but its better than groping for what to grab. D#. C *"&% % would say four things. 7ne, be sure youre a good example yourself of what you are trying to illustrate in your principles( that you yourself have this integrity, and this trustworthiness, and this openness to being influenced by others, and humility as well as tremendous willpower. Second, % would say get people on the same page about this vision and these overall goals and the value system. "hird, % would, once you have a buy$in to those strategic criteria li#e vision, and strategy, and values, then loo# at your structures, systems and processes to ma#e sure that they are in harmony. ,ecause usually theyre not in harmony. "heyre obstacling. %ts what % call the >aligning role,? and that is one tough activity. !nd then fourth, empower people to be creative, to have autonomy within the context of the agreed$upon criteria. "hose, to me, are the four roles of leadership, and the people on this call could say, >%m going to be a better model starting with myself. %m going to involve others in coming up with the strategic criteria. "hird, %m going to use those criteria to loo# at every structure,

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system and process to ma#e sure that they are nurturing and in alignment. !nd fourth, all of this is done so % can help people find their voice and really use their own uniGue talent and passion in coming up with better, more creative ways of accomplishing these wildly important goals.? Now, those are four very practical things to do. JA&% <reat, those are great. !nd again, %m very respectful of your time. %m going to get to the 8th Habit boo#, and then were going to tal# about voice in about three minutes. % have one other really important Guestion, because % thin# it transcends the bridge between effective and greatness, and most people in small$ or medium$si3ed businesses and professionals dont get this at all. %d li#e you to give us a three$minute short course primer, complete, if you can, with at least one reference example on empathic listening, hearing, and ac#nowledgment, and why its so relevant. ! few years ago % was training %ndian chiefs that run %ndian nations in North !merica. !t the end of three days of training they gave to me a gift. %t was called the %ndian "al#ing Stic#, and they even had my name on the bac# side, >,ald 4agle.? Well, the %ndian "al#ing Stic# is the greatest single communication tool % have ever learned. "hey taught this to the founding fathers of our country $$ the %roGuois Oederation did. %t basically is thisM Whoever has the "al#ing Stic# alone can spea#. No one else can spea#. !ll they can do is try to understand, and to reflect their understanding of the other persons point. "hat reGuires empathic listening $$ that is, you listen within the frame of reference of the other person. Qery few people have been trained how to do it, and thats the power of the "al#ing Stic#. %t is a physical discipline that if people will exercise it, it will literally train them how to listen empathically. ;nless you listen empathically $$ that means within the other persons frame of reference $$ you never really understand why your customers dont buy your products and services. "hey /ust tell you whats safe, but not what really is driving their buying behavior. @oull never really understand what the uniGue talent and passion of your own people are, because if you have formal authority, theyll #iss up and tell you what you li#e to hear. !nd then, youll read your autobiography, and youll prepare your reply. @oull be patient in preparing that reply and call it listening, but its not. @oure still in your own autobiography, your own frame of reference. @oull never really understand how to build your supply team li#e Dell does, or li#e "oyota does. "hats why theyre eating Detroits lunch, because they have put their suppliers on the same basis as their own employees. "heyre all part of the team, and

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they give so much #nowledge about the industry, about the competitive landscape, about the company( ,ut anyone can close down that line, and so theyre all committed to the Guality youre thin#ing about $$ and also to being innovative. ,ut this comes from this deep, empathic listening, which is a s#ill that very few people have had more than two wee#s of training in. % as#ed a group today -there were 2'' there. how many have had two wee#s of training in empathic listening. "here were twelve people that raised their hands. !nd yet, were spending % would say 6BF of our wa#ing hours in some form of communication $$ reading, writing, spea#ing and listening. Jesearch tells us that H'E of that time is spent listening. ,ut most people are pretending to listen. "heyre preparing their reply, and they dont really use the %ndian tal#ing stic# li#e they could use it. !nd %m telling you, once you start, the whole nature of the relationship is altered. )eople start getting more creative, less defensive, less protective. @ou dont agree with them. @ou dont disagree with them. @ou dont read your autobiography. @ou dont even as# them Guestions, because the moment you as# them Guestions, you control the visit $$ your Guestions do. Well, what if these people have tender feelings inside theyd li#e to get out, and then someone else intellectually directs them by as#ing them Guestions when in fact, the thing thats controlling their behavior is something theyre hesitant to spea# about unless someone else basically can read with their eyes and with their heart. >"here is something going on inside that customer, or inside that employee, or inside that supplier that %m not in touch with. % want to listen.? "hey communicate the desire to listen, and they do listen and reflect accurately. %ts /ust ama3ing, ay, how open people can become, and how authentic they become. When that happens, bonding ta#es place. When bonding ta#es place, people dont bad mouth each other behind each others bac#. "heyre very authentic and genuine, and integrity begins to ta#e the place of duplicity, and pretending to listen, and playing pseudo$democratic games, and calling it involvement. JA&% "hats great. %m trying to remember $$ one of the really profound 4astern philosophers -and %m going to paraphrase it. said that the #ey to everything was your ability to not necessarily agree, but to respect, understand, empathi3e, ac#nowledge, embrace, and really understand. !nd you tal# really profoundly about this. ,ut % thin# most people dont recogni3e how important it is to hear and ac#nowledge the other sides point of view or perspective. D#. C *"&% %ts the eGuivalent of air to a body. JA&% !nd its probably the greatest power tool youve got, and it feels so good to slow down and hear what people say, dont you thin#8 D#. C *"&% )articularly if you do it genuinely and sincerely so that you are influenced. !s they sense that you understand $$ not necessarily agree, but that you

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understand, and that youve been impacted, they become extremely open to your influence. JA&% !nd /ust so were clear, thats not abstract rhetoric here. %t translates totally to your ability to communicate, in your selling communications, in your management communications, in your buyingBnegotiating communications( %ts really the secret weapon, dont you thin#8 D#. C *"&% % do. % was with a person the other day in Chicago, and we had them report on their experiences in practicing this. !nd this man said, >%ve been selling to this one customer to where % had no other customers. !ll my eggs were in this one bas#et, and we were reaching the point where it loo#ed as if she was going in another direction. % /ust inwardly panic#ed, and said to myself, N@ou #now, maybe % should /ust try what Stephen has been teaching me today. ,ecause it loo#s li#e all the ways %ve tried to pull this thing out of the fire are not wor#ing.? So he said to her, >@ou #now, let me see if % can understand, really, what your concerns are.? !nd he did the best he could to restate her concerns. 0e did this for /ust a few minutes. She interacted a little, and he continued to restate it. !nd then she said, >4xcuse me a minute.? She went over, pic#ed up the phone, tal#ed to her husband, turned and said, >@ouve got the deal.? !nd he said to me, >% couldnt believe what happened.? % said, >Do you #now what the dynamic behind that is8 !s soon as she felt that youd paid the price of showing that depth of respect and understanding, she became open to the fact that you have been spending all these months wor#ing on her case, and that other things being relatively eGual, it was going to go in your direction. ,ut if you had not $$ if you had /ust #ept coming forth with your logic, and your persuasion, then you would be on the same footing as anyone else. !nd if the other person seems to be a little better in some technical aspect, its going to go in their direction.? JA&% "hats great. !nd a case in point, /ust in my role as advocate, youre doing that exactly. @oure hearing very precisely what %m saying. @oure being very sensitive to the needs of the listener, and youre ac#nowledging them through your response, and its very resonating. %m going to move, because % feel li#e a #id in a candy store. %ve got pages of Guestions that if % had more time %d li#e to as#. ,ut %ve got 12 or 1D minutes, and %ve got to be very selective, so %m going to move to your newest strata of thin#ing and direction. % want to tal# about The 8th Habit a bit. !nd before we tal# deeply about it, % want to as# you /ust a straightforward GuestionM Why an eighth habit8 D#. C *"&% Well, it wasnt until % became aware of the movement from the industrial to the informationB#nowledge wor#er age that % even had the idea of The 8th Habit. % had a leadership boo# pretty well already developed. ,ut as soon as % discovered how dynamic this movement was( %ts as dynamic as the movement from the agricultural

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age. "he impact is so tremendous( !nd % thin# that most people do not have any clue of the impact of this informationB#nowledge wor#er age( how it will literally improve productivity, not /ust ten times, but 2' or 1'' times. %n software development it is 1',''' times. !s soon as % got hold of the idea of the importance of intellectual property and of intellectual and social assets $$ and >social? means the Guality of the trust between people. !s soon as % got hold of that, % had to rewrite the whole boo#. !nd then it was >"he Dth 0abit,? because its li#e the third dimension to the other seven. % sometimes as# audiences to close one eye and loo#, and you see, in a sense, one dimension of life. !s soon as you open the other eye you get three dimensions. !nd thats what it is. The 8th Habit is a personali3ation of general truths. %ts #ind of li#e coming to your own personal truth. %t happened to me. When % was a young man % was going to go into a family business. % was geared that way. 5y dad put me through the 0arvard ,usiness School to do it. ,ut someone got me involved in teaching and training leaders, and % found a level of satisfaction that gave me the rest of my life. !nd % remember saying to my dad, who had always, % could remember, said, >%f you can do it, you do it. %f you cant do it, you teach it.? !nd % always said within myself, >% dont #now how my dads going to respond to this.? !nyway, % told him after the 0arvard ,usiness School, % wanted to become a teacher. !nd he said to me, >@ou #now, % never found my voice in business either. % found my voice in developing visitors centers in my basement, and % had to develop a Jenaissance mind to do that.? % find that most people have a deep hunger for greatness in their life. "hey really do. "hey want to ma#e a truly significant impact for good. "hey want to optimi3e their talents for good. "hey want to be more than /ust being effective. % find thats a deep hunger, and that most people $$ % can as# any group, >0ow many agree the vast ma/ority of the wor# force have a lot more intelligence and capability than their /obs even allow them to use8? "heyll all raise their hands. "heyve lost their voice. "he #nowledge wor#er age reGuires people to use their voice if theyre going to succeed. "he industrial age drowns out their voices and disempowers them, because its based on a control model. %ts not based on an unleashing of human talent. "hats how % got into all this material, and since %ve gotten into it, %ve had so much affirmation from so many sources, ay, as to the power of it( of people who have said, >@eah, it was this teacher, or this boss, or someone that believed in me when % didnt believe in myself. "hats what made all of the difference in my life.?

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JA&% Now %m going to try to do /ustice to the real impact that % thin# the boo# has made, and is ma#ing. ,ut if % dont as# the Guestion with clarity, you amend it for me. So the first thing $$ and youve gotten into it, but specifically, lets tal# about what peoples different personal significance can be. ,ecause % thin# that particularly with the entrepreneur, with the professional, youve got a very beleaguered group of people in our society. "hey go out and they slug it out, and theyre feeling beleaguered instead of feeling great. "heyre feeling passionless instead of passionate. "heyre feeling somewhat purposeless, and theyre tactical, and theyre( !nd % thin# that you have the genesis there of what will transform more people to not /ust greatness in their performance, but greatness in their fulfillment, dont you8 D#. C *"&% % thin# if you as# four Guestions of yourself( What is it % really am good at8 What is it % really love to do8 What need can % serve8 !nd what is life as#ing of me, where a person listens to their conscience. "hat is, youve tapped into your mind, your talent $$ that is, what am % good at8 @our heart, your passion $$ what do % love doing8 "he physical side is the economic need that youre serving in society that can drive your economic engine. !nd the spiritual side has to do with, what does your conscience tell you to do in this circumstance, or this situation8 %f you can overlap those four things, % thin# a person can find their voice. 5y experience is with most entrepreneurs that they have found their voice in that way. Sometimes they havent. Sometimes theyre beleaguered and beat up. ,ut % thin# that my experience is that they are so turned on( "he problem is they dont often surround themselves with people who thin# differently, and who can compensate for their wea#ness to where they appreciate their voice, so that you create #ind of a harmonious chorus, as it were, of people that really #now how to wor# together in the use of their voices. JA&% Now, % want to amend what % said. % agree with you, but % also want to clarify. % thin# that entrepreneurs start out, by and large, with a great vision. D#. C *"&% @eah. JA&% %ts abstract. % thin# that because they dont understand how to harness what %ll call the >/et stream,? -and %ll use your principles as a vehicular vessel to do it. that their lac# of validation, sometimes( their lac# of control( their lac# of impact( their lac# of fulfillment $$ hardens or /ades them of the extraordinary might of that passionate( that lava thats waiting to explode below. !nd % thin# letting it out, if it can be channeled, is incredible.

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D#. C *"&% @eah, and thats been my experience as well. !nd it is, and you dont have to motivate these people, because you tap into something. Sometimes people get seduced by their present s#ills, and their s#ills may not be where their real native talent is. % believe that when we were born, that our wor# was born with us( JA&% "hats interesting. D#. C *"&% ( !nd that a big part of that wor# will ta#e place $$ probably the most important part $$ in the four walls of our own home. "hats why % give such emphasis to ma#ing sure that you have a lifestyle where people are empowered around you so that you have life balance, and you #eep your foot on solid ground in the #ey areas of your life, and that you dont /ust lose something because of the sheer pressure of firefighting in another area. "hats why you need to have a complementary team. ,y the way, in every one of the 1K chapters in this 8th Habit boo# there is a video. %ts on a DQD in the bac#. ! lot of people are visual learners today, and if they will watch the video, the essence of it, and also their emotional connection to the material often ta#es place even more than the content of the particular chapter. %ts ta#en us many years to produce those videos, and % had Guite an uphill fight with the product department, because these are their training films that they often sell. )lus, we had a problem with Simon Schuster, the publisher. "hey didnt see the vision, necessarily, of this. "hey cant see readers doing a DQD as well, but thats( JA&% %ts very impressive. D#. C *"&% ,ut its happening, and some of these are really outstanding films that illustrate whats happening. JA&% @oure right. 4ach one denominates a different chapter. %ve got to reconcile an implied, not a problem, but an issue in those four points you made earlier. So conventional management and business growth wisdom says you basically, nose to the grindstone, go forward with vim, vigor and alacrity. %s doing those four functions going to potentially reveal that youre in the wrong business, or is it going to liberate even more and multiply even more productively and intensely all that power and energy that resides within you8 D#. C *"&% % thin# you could go either direction. %f you have really a complementary team, where people will spea# up and do research, you may find youre in the wrong business. %f you find out that you are in the right business, and you create a complementary team, so that you have peoples strengths being utili3ed, and their wea#nesses made irrelevant, % thin# youve got a real leverage factor there that can ma#e your business tremendously successful. "hey should be tied in. "hey should have a

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sense of ownership, psychologically and financially, so that theyre really part of this thing. JA&% %ts interesting, and %ve got to point this out. % do -and you #now this. programs all over the world training business owners how to be greater in performance and profitability and dominance. ,ut they all come to me with a business they want to grow. "hey dont come to me and say, >Should % stay in this business8? !nd its a real interesting dilemma, because you see people with different s#ill sets, with different challenges, who have not set themselves up necessarily with a business that can be maximi3ed either in its asset value( %ts very interesting, and people thin# theres shame in reevaluating the direction of the rest of their lives. % thin# its probably one of the most strategic things you could do. What do you thin# about that8 D#. C *"&% % #now. % totally agree. Why is it that over &'E dont ma#e it to the second year8 ! lot of that is operations, but %d say most of it is they got seduced by their own enthusiasm. % can tell whether a boo# will wor# right off the bat $$ whether that boo# is written for the reader, or written /ust to have the writer get across convictions. @ou can tell almost instantly whether itll wor# or not. JA&% @eah, and % thin# theres a real interesting relevance there. +et me $ %ve got about five more, and % #now youve got to go. D#. C *"&% 7h, thats fine. %m happy to visit. JA&% @oure very gracious, you really are. % want some specifics so that theres some reference examples, even if its /ust modeling, or poster boys or girls for us to see. <ive me a couple of examples $$ very Guic#ly, because %ve got about seven more Guestions %d love to as# before you have to leave $$ about where youve seen others ma#e the biggest difference. !nd if you could use an actual little case study, a scenario, an illustrative example( %m loo#ing for highly specific examples that the listeners, whether they are the manager of a billion$dollar company, division( whether they are an ophthalmologist( whether they are a I6' million distributor of products, services( whether they are a software company( ust some examples that they can use to vector or calibrate their sense of what greatness might be li#e for them. %t can be either companies, individuals, team members. D#. C *"&% Jight. Well, % had an interaction with the 0uman Jesource Director the other day with Jit3 Carlton, and she had been pretty much beat up in her growing up years. ,ut she got into a very empowered culture. !nd % as#ed her what impact this has had. She said, >Not only has it changed my professional life $$ its changed my personal and family life. % have learned how to have the attitude, N%ts my pleasure. %ts a pleasure to serve another person. "hat spirit has so influenced my opportunity that % can literally get an audience in the throne room anytime % want with the top decision ma#ers.?

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!nother one was a person that accidentally #illed someone and was found guilty of manslaughter, but got this proactive muscle going, and in a matter of about six months $$ in /ail $$ changed the /ail, and the culture inside that /ail. !nother one $$ this was a person that was setting up a new business in the field of insurance. "hey /ust started building a team of three people who had totally different strengths. "his was contrary to what his natural tendency was, but he #new he needed to have a complementary team. So he found that by the two or three of them going to their clients to show the team power of selling to these clients, that they developed a huge business based on team selling that he otherwise never would have done. !nother one $$ % went to a service station -because it became a fast foods store.. So % went to another service station and said to the guy, >0ow would you li#e a special deal8 @ou ta#e care of all my cars, and %ll give you all my business.? !nd he said, >5r. Covey, %ll ta#e care of your cars as if they were my own.? !nd he does. "hen he decided to go to his neighborhood, and he got 6' other families to do the same, exact thing. 0e has to compete against the ma/ors, and he cant do it when theres price wars because the margin is so small on gas. ,ut he ma#es so much in services, and on the bac# end. % /ust find that anyone whos proactive, and whos creative and innovative, if they will /ust learn to empathi3e with the mar#et and with the people, they can, in a short period of time have a much, much larger circle of influence, and have a very profitable operation. JA&% "hats great. Now, let me as# you, /ust so %m respectful( how much more time do you have, respectfully8 ,ecause %ve got about seven more Guestions. D#. C *"&% +ets /ust go at Nem. JA&% 7A, youre gracious. @ou tal# a lot about universal, immutable principles in both your boo#s. D#. C *"&% Jight. JA&% !nd % spend a lot of time loo#ing at events, results, outcomes, good or bad, and % always #now that theres a principle at wor# driving it. %d li#e to #now if you could give me a list of your top two, three, five, ten $$ whatever $$ universal principles that we must all learn to understand, respect, honor, harness, and use constantly, or not abuse, and /ust some examples. ,ecause % thin# theyre principles that apply( % dont want to be prescriptive, but they are principles that are immutable for all of us. What would they be8 D#. C *"&% 7A, %ll give you an illustration. "heres four parts to our natureM our body, mind, heart and spirit. So theres a principle associated with each one. Oor the body, the principle is fairness. Oor the heart, the principle is #indness and respect. Oor

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the mind, the principle is developing and using talent. Oor the spirit, the principle is meaning and also integrity. "he other day % did a satellite to China. % #now were going to do one on une 12th around this country to F' different mar#ets. Well, they said to me, >Dr. Covey, how does all this stuff pertain to Confucius country8? !nd % /ust said, >Do you believe in the importance of fairness8? >@eah, uh huh.? >What about treating people with #indness8? >7h yes, certainly.? >What about the development and use of their talent8? >!bsolutely.? >What about having need for wor#, where you add real value8? >@eah.? >What about integrity8? >7h, thats central to Confucius.? % said, >"hose are the principles. Same thing in the Aoran. Same thing in the ,hagavad <ita. "hese are timeless, universal principles.? So what does it mean for a person setting up a /ob8 >)ay me fairly, treat me #indly, involve me creatively in doing meaningful wor# in principled ways.? "hose are the principles. JA&% "hose are great, those are great. %ve got so many good ones. "his is a very interesting one. @ou tal# in the new boo# $$ % believe its the new boo#. %f %m wrong, apologies. "heres a whole section on the speed of trust, and its a very powerful, and a very, very subtle, but important recognition factor that we can all really harness and capitali3e on. Jather than spending a lot of time, can you give us the bottom line of the impact, the relevance, and what it really means8 D#. C *"&% Well, you thin# about it. "rust is the glue of life, and if there is low trust because of past duplicity, or a lac# of being authentic and transparent, youre going to end up affecting the decisions, the relationships, and all of the taxes that you pay wont even begin to eGual the cost of that low$trust culture. @ou get a high$trust culture, where you live by principles and people #now it, you can ma#e mista#es, and theyll forget the mista#e. %t ma#es no difference. %ts faster than the %nternet. %n an %nternet, you cant ma#e a mista#e without the thing suffering. With a person, you ma#e a mista#e $$ >% #now what you mean. Dont worry about it, Stephen. % #now you. % #now what youre li#e. % #now what your motive is.? "his #ind of trust has very practical, hard$edged economic conseGuences. % have a son, Stephen $$ 5.J. $$ who is really drawing down on this sub/ect, and is coming up with ama3ing information $$ hard$edge information $$ on the speed and cost of high or low trust. JA&% %ts very powerful. % thin# youve gone a long way today to denominate the upside leverage $$ and the down $$ in a lot of very intangible elements that we dont really thin#

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about very carefully, and certainly dont capitali3e or really embrace, and thats a great one. !nother one $$ in The 8th Habit you tal#ed about path finding. % love that word. %t con/ures up very exciting, moving thought, but it is abstract. Can you give me a tangible, illustrative example that clearly defines not /ust what it means, but what it can and has loo#ed li#e for some others8 ,ecause % love path finding. D#. C *"&% %t basically means, what is your purpose, and what are your goals and plans to achieve those goals8 So based on your profession or your business, youd say, >5y purpose, or my value proposition -li#e in this call today. would be to try to communicate some basic elements of moving toward true greatness. 7A8 !nd then what are some of the main goals8 Well, the goal of covering the sub/ect of trust, li#e we /ust did very briefly( the goal of how you set up a complementary team( the goal of how you empathically listen to somebody else( So essentially, thats what path finding means. %n fact, in <ermany, do you #now that path finding means leadership8 JA&% No, really8 D#. C *"&% @eah. % didnt reali3e that. JA&% % thin# its a profoundly good mental reference frame for people to sort of indelibly embed and deepen their mind and use as a reference. D#. C *"&% @eah. JA&% %ve got three more, and % thin# youre going to li#e them. 7A8 "heyre different. "he first one is, whoBwhat has influenced you the most in your wor#, specifically, and what was or were the biggest single insight, revelation, reali3ation( that you got from it or them, and what might be a lesson that we all can ta#e from that8 D#. C *"&% % would say one of them was !braham 5aslow. 0e taught, >0e that is good with a hammer tends to thin# everything is a nail.? %n other words, you have to as# the Guestion, >%s this an independent or an interdependent issue8? %f its an independent issue, thin# independently. %f its interdependent, thin# interdependently. %n other words, you have to learn to be bilingual. @ou cannot /ust ta#e one success formula and apply it across the board. @ou have to first understand and diagnose what the situation is, then come up with the best answer. % thin# another powerful influencer was )eter Druc#er. 0es the one that got me into this whole difference between effectiveness and efficiency( between opportunism and problem solving( between yesterday and today. 0e has a very powerful influence.

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!nother one is that man that got me into teaching and training leaders, to where % decided to become a teacher and eventually set up a business dealing with empowerment of teachers. Now we have over 2',''' trained teachers inside organi3ations teaching what %m tal#ing about today $$ 2',''' all around this world, and its because we got them to teach, and to be certified as teachers inside their own organi3ations. !nd theyre turned on by teaching, and the best way to learn something is to teach it. JA&% "hats wonderful. Next, and the second to the final GuestionM What boo#s, other than your own, do you urge everyone $$ !nd by the way, these boo#s are so invaluable, and so central, and so vital, % commend everyone to read them many times, if you havent, including The 8th Habit, which is going to really springboard you to such a loftier level of thought and action. ,ut what other boo#s would you urge everyone here to read, why, and whats the biggest single message theyll get out of them8 D#. C *"&% % would say Mans Search For Meaning, by Qi#tor Oran#l. JA&% <reat boo#. D#. C *"&% )rofoundly influential boo#. !nother one is A G ide For The Perple!ed by Schumacher. %t teaches you about the four levels of being, and how the human being has uniGue gifts and talents that can enable us to reinvent our life. %d say another one would be the Scriptures. % prayerfully ponder the Scriptures every morning and every night. % cant tell you the impact that has. 7ther people will study the literature that inspires them, or theyll get alone and meditate. 4veryone does it differently, but to me, it helps me to get centered on that which seems to be infinite, and seems to have the source of eternal wisdom. % also en/oy reading a lot of these new boo#s. % en/oy your boo#s, ay, immensely. % thin# youre one of the great business and mar#eting minds %ve ever #nown, and %ve en/oyed that time that we had together in Qegas. JA&% @oure very gracious. "han# you. D#. C *"&% So %m a constant reader, and %m sent all #inds of boo#s for endorsement purposes. !nd % can tell right off the bat whether theyll wor#, as % mentioned earlier $$ whether theyre written for the reader, or /ust to let the writer get convictions out. JA&% "hats great. "han# you very much. "he last, and probably in many ways, the most significantM @ouve invested very graciously. @ou had a time schedule you subordinated your own needs for the betterment of these people. Were very appreciative. ,ut now that youve invested ninety$some minutes in us, and in hopefully impacting, challenging and transforming our lives, whats the biggest single implication, reali3ation, or recognition you want us to ta#e away from the time youve invested in our lives today that we can ta#e home and act upon8 !nd whats the most important single

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step youd li#e to see each and every one of us ta#e immediately8 !nd finally, why8 !nd thats it. D#. C *"&% % would say educate and obey your conscience. @our conscience gives you a #ind of peace different than peace of mind. )eace of mind means youve paid your mortgage off. )eace of conscience means youre true to your promises, to your vows. @oure honest in all your business dealings. !nd % find that people that strive for peace of conscience have an internal source of courage, and great strength. % would also say thisM !s % mentioned earlier, the most important wor# well ever do is in the four walls of our own home. So dont neglect your children and your grandchildren. 0ave special personal relationships with every one of them so that you can leave a legacy that is sustainable. 4ven 5aslow himself on his deathbed renunciated his Need 0ierarchy "heory, and most people dont #now that because they havent read the material that has come since his passing. 0e basically said that self transcendence is much greater than self actuali3ation( that youre focused on higher purposes and higher goals that benefit other people, not /ust the enhancement of yourself. So to me, that is a very practical ta#e home thingM Develop transcendent mission statements, and have one for your family that focuses upon serving other families. We would stri#e the death blow to &'E of the social problems in our society if every functional family would adopt psychologically one dysfunctional one, or one #id that has been abused and neglected. 5y wife has adopted so many of these, and % admire her enormously for what she has done in blessing their lives. JA&% Stephen, will you allow me to as# one more8 D#. C *"&% @ou bet. JA&% 7A. "his is truly it. What one Guestion did % not as#, should % have as#ed you, wish % would have as#ed, and that needs to be as#ed and answered before youre done with us8 D#. C *"&% 7h, %d say youre pretty comprehensive, ay9 !nd %m trying to thin# of one Guestion right now( JA&% %s there anything that you $$ D#. C *"&% %f % would as# one Guestion about what % would put at the center of your life, my answer would be <od. JA&% 7A. D#. C *"&% So thats my personal belief. ,ut % want to say than#s to you, ay, and also to the listeners for your enduring this hour and a half, and hope someday that our

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paths will cross. !nd % wish all of you all of the best, for you, and for your families, and for your organi3ations. % really have en/oyed this immensely. JA&% @oure gracious. @ouve certainly made my day, and youve impacted me in ways youll never #now. "han# you very much. @oure a remar#able man. D#. C *"&% Well, than# you ay, very much. !nd than#s to everyone. JA&% <oodbye. D#. C *"&% ,ye. JA&% "han# you, everybody. Were done. % hope that this has challenged your thin#ing, stretched your sense of possibility, animated your spirit, given you some renewed and expansive direction. We will be giving to everybody a summary review of the Guestions, the answers. % am very impressed with the mind and the thin#ing of Dr. Covey. 0es a very remar#able man, and % hope this will have a profound and a tangible impact of the highest magnitude on each and every one of your business lives, your personal lives, and will impact and transcend bac# to all the reaches. "han# you all. %t has been my great honor and pleasure to hopefully draw a bit more of the greatness out of a very great man and translate it.

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