[Music] [Applause] and I'm going to talk about the simple truth in leadership in the 21st century in the 21st century we need to actually look at and what I'm going to actually encourage you to consider today is to go back to our school days when we learned how to count but I actually think it's time for us to think about what we count because what we actually count truly counts let me start by telling you a little story this is Van quash she came to this country in 1986 from Vietnam she changed her name to
Vivien because she wanted to fit in here in America her first job was in an inner city motel in San Francisco as a maid I actually happened to buy that Motel about 3 months after Vivian started working there so Vivian and I have actually been working together for 23 years with the youthful idealism of a 26-year-old in 1987 I started my company and I called it ziv a very impractical name and uh because I actually was looking to create Joy of life and this first hotel that I bought Motel was a pay by the hour
notel motel in the inner city of San Francisco as I spent time with Vivien I saw that she had sort of aat of Eve in how she did her work made me question and curious how could someone actually find joy in actually cleaning toilets for a living so I I spent time with Vivian and I saw that she didn't find joy in cleaning toilets her job her goal and her calling was not to become the world's greatest toilet scrubber what counts for Vivian was the emotional connection she created with her fellow employees and our guests
and what gave her inspiration and meaning was the fact that actually she was taking care of people who are far away from home because Vivian knew what it was like to be far away from home that very human lesson more than 20 years ago served me well during the last uh economic downturn we had uh in the wake of theom Crash and 911 San Francisco Bay Area Hotels went through the largest percentage Revenue drop in the history of American hotels we were the largest operator of hotels in the Bay Area so we were particularly vulnerable
but also back then remember we stopped eating french fries in this country well not exactly of course not um we actually started eating Freedom fries and we actually started boycotting anything that was French well my name of my company so I started getting these letters from places like Alabama and Orange County um saying to me that they were going to boycott my company because they thought we were a French company and I'd write them back and i' say wait a minute we're not French we're an American company we're based in San Francisco and I'd get
a t response oh that's worse so one particular day when I was feeling a little depressed and not a lot of ziv I ended up in the local bookstore around the corner from our offices and I initially ended up in the business section the bookstore looking for a business solution but given my befuddled state of mind I ended up in the self-help section very quickly and that's where I got reacquainted with Abraham maso's hierarchy of needs I took one psychology class in college and I learned about this guy Abraham maslo as many of us are
familiar with his hierarchy of needs but as I sat there for 4 hours the full afternoon reading maslo I actually recognize something that is true of most leaders and one of the simplest facts in business is something that we often neglect and that is that we're all human and each of us no matter what our role is in business actually has some hierarchy of needs in the workplace so as I started reading more maslo what I actually started to realize is that actually maslo later in his life wanted to take this hierarchy for the individual
and apply it to the collective to organizations and and specifically to business but unfortunately he died prematurely in 1970 and so he wasn't really able to live that dream completely so I realized in that do crash that my role in life was to channel Abe maslo and that's what I did a few years ago when I actually took that five level hierarchy of needs pyramid and turn it into what I call the transformation pyramid which is survival success and transformation it's not just fundamental in business it's fundamental in life and we started actually asking ourselves
the questions about how we were actually ing the higher needs these transformational needs for our key employees uh in the company these three levels of the hierarchy needs actually relate to the five levels of maso's hierarchy of needs but as we started asking ourselves about how we were addressing the higher needs of our employees and our customers I realized we had no metrics we had nothing that actually could tell us whether we were actually getting it right so we actually started asking ourselves what kind of less obvious metrics could we use to actually evaluate our
employees sense of meaning mean or our customer sense of emotional connection with us for example we actually started asking our employees do they understand the mission of our company and do they feel like they believe in it can they actually influence it and do they feel that their work actually has an an impact on it we start asking our customers did they feel an emotional connection with us in one of seven different kinds of ways miraculously as we ask these questions and start giving attention higher up the pyramid what we found is we created more
loyalty our customer loyalty rocket our our employee turnover dropped to one3 of the industry average and during that 5year bust we tripled in size now as I went out and started spending time with other leaders out there and asking them how they were getting through that time what they told me over and over again was that they just manage what they can measure and what we can measure is that tangible stuff at the bottom of the pyramid they didn't actually even see the intangible stuff higher up the pyramid so I started asking myself the question
how can we get leaders to start valuing the intangent if we're taught As Leaders to just manage what we can measure and all we can measure is the tangible in life we're missing a whole lot of things at the top of the pyramid so I actually went out and studied a bunch of things and I found a survey that showed that 94% of Business Leaders worldwide believe that the intangibles are important in their business things like intellectual property their corporate culture their brand loyalty and yet only 5% of those same leaders actually had a means
of measuring the intangible in their business so as leaders we understand that intangibles are important but we don't have a clue actually how to measure them so here's another Einstein quote not everything that can be counted counts and not everything that counts can be counted I hate to argue with Einstein but if that which is most valuable in our life and our business actually can't be counted or valued are we going to spend our lives just mired and measuring the mundane it was was that sort of heavy question about what counts that led me to
take my CEO hat off for a week and fly off to the Himalayan Peaks fled off to a place that's been shrouded in mystery for centuries a place some folks called shangrala that's actually moved from the survival base of the pyramid to becoming a transformation role role model for the world I went to Bhutan the teenage king of Bhutan was also a curious man but this was back in 1972 when he ascended to the throne two days after his father passed away at age 17 he started asking the kind of questions that you'd expect of
someone with a beginner's Mind on a Trip through India early in his reign as as king he actually was asked by an Indian journalist about the bhes GDP the size of the bhese GDP GDP and the King responded in a fashion that actually has transformed us four decades later he said the following he said why are we so obsessed and focused with gross domestic product why don't we care most about more about gross national happiness now in essence the King was asking us to consider an alternative definition of success what's what has come to be
known as g& or gross national happiness most world leaders didn't take notice and those that did thought this was just Buddhist economics but the King was serious and this was a notable moment because this is the first time a world leader in almost 200 years had suggested that that in tangible of happiness again that that leader 200 years ago Thomas Jefferson with the Declaration of Independence 200 years later this King was suggesting that intangible of happiness is something we should measure and it's something that we should actually value as government officials for the next three
decades next three three, years as king this King actually started measuring and managing around happiness in Bhutan and including just recently taking his country from being an absolute monarchy to a constitutional monarchy with no Bloodshed no coup and Bhutan for those of you who don't know it is the newest democracy in the world just two day two years ago so as I spend time with leaders in the g& movement um I got to actually really understand what they were doing and I got to spend some time with the Prime Minister over dinner I asked him
an impertinent question I asked him how can you how can you create and measure something which evaporates in other words happiness and he's a very wise man and he said listen bhutan's goal is not to create happiness we create the conditions for happiness to occur in other words we create a habitat of Happiness wow that's interesting and he said that they have a science behind that art and they've actually created four essential pillars nine key indicators and 72 different metrics that actually help them to actually measure their g& in fact one of those one of
those key indicators is how do the Banes feel about how they spend their time each day it's a good question question how do you feel about how you spend your time each day time is one of the scarcest resources in the modern world and yet of course that little intangible piece of data doesn't factor into our GDP calculations so as I spent my week up in the Himalayas actually started to imagine what I call an emotional equation and it focuses on something I read long ago from a guy named Rabbi Heyman shakel how many know
him anybody 1954 he wrote a book called the real enjoyment of living and he suggested that happiness is not about having what you want instead it's about wanting what you have or in other words I think the botines believe happiness equals wanting what you have imagine gratitude divided by having what you want gratification the botines aren't on some aspirational treadmill constantly focused on what they don't have uh their religion their isolation their deep respect for their culture and now the principles of their g& movement all have actually fostered a sense of gratit gratitude about what
they do have how many of us here as tedsters in the audience spend more of our time in the bottom half of this equation in the denominator we're we are a bottom heavy culture in more ways than one um the reality is in western western countries quite often we do focus on the pursuit of happiness as if happiness is something that we have to go out an object we're supposed to or maybe many objects uh actually in fact if you look in the dictionary many dictionaries Define happy Define pursuit as to chase with hostility do
we pursue happiness with hostility good question but back to Bhutan bhutan's actually bordered on its North and South by 38% of the world's population could this little country like a startup in a mature industry be the spark plug that actually influences a 21st century of middle class in China and India bhutan's actually created the ultimate export a new Global Currency of well-being and there are 40 countries around the world today that are actually studying their own g& you may have heard uh this last fall Nicholas sarosi in France announcing the results of an 18-month uh
study by two Nobel economists focusing on happiness and wellness in France sarosi suggested that world leaders should stop myopically Focus fusing on GDP and consider a new index what some French are calling aiv index I like it co-branding opportunities and just three days ago three days ago here at Ted we actually had a simal cast of David Cameron potentially the next prime minister of the UK actually quoting one of my favorite speeches of all time Robert Kennedy's poetic speech from 1968 when he suggested that we're myopically focused on the wrong thing and that GDP is
a misplaced metric so it suggests that the momentum is Shifting I've taken that Robert Kennedy quote and actually turned it into a new balance sheet for just a moment here this is actually a collection of things that Robert Kennedy said in that quote GDP counts everything from air pollution to the destruction of our redwoods but it actually doesn't count the health of our children or the Integrity of our public officials as you look at these two columns here doesn't it make you feel like it's time for us to actually start figuring out a new way
to count a new way to actually imagine uh what's important to us in life certainly Robert Kennedy suggested at the end of the speech exactly that he said GDP measures everything in short except that which makes life worthwhile wow so how do we do that well let me say one thing we could just start doing 10 years from now at least in this country why in the heck in America are we doing a census in 2010 we're spending 10 billion on a census and we're asking 10 simple question it is Simplicity but all of those
questions are tangible they're about demographics they're about where you live how many people you live with and whether you own your home or not that's about it we're not asking meaningful metrics we're not asking important questions we're not asking anything that's intangible Abe maslo said long ago something you've heard before but you didn't realize it was him he said if the only tool you have is a hammer everything starts to look like a nail we've been fooled by our tool um excuse that expression um we've been fooled by our tool GDP has been our hammer
and our nail has been a 19th and 20th Century industrial era model of success and yet 64% of the world's GDP today is in that intangible industry we call service the service industry the industry I'm in and only 36% is in the tangible industries of manufacturing and agriculture so maybe it's time that we get a bigger toolbox right maybe it's time we actually get a toolbox that doesn't just count what's easily counted the tangible in life but actually counts what we most value uh the things that are intangible I guess I'm sort of a curious
CEO I was also a curious economics major as an undergrad and I learned that economists measure everything in tangible units of production and consumption as if each of those tangible units is exactly the same they aren't the same in fact as Leaders what we need to learn is that we can actually influence the quality of that unit of production by actually creating the conditions for our employees to live their calling and in fact in Vivian's case her unit of production isn't the tangible hour she works it's the intangible difference she makes during that one hour
of work this is Dave arringdale who's actually been a longtime guest at Vivian's Motel he stayed there a hundred times in the last 20 years years and he's loyal to the property because of the relationship that Vivian and her fellow employees have created with him they've created a habitat of happiness for Dave and he tells me that he can always count on viven and his staff and the staff there to make him feel at home why is it that Business Leaders and investors quite often don't see the connection between creating the intangible of employee happiness
with creating the tangible of financial profits in their business we don't have to choose between inspired employees and sizable profits we can have both and in fact inspired employees quite often help make sizable profits right so what the world needs now in my opinion is Business Leaders and political leaders who know what to count we count numbers we count on people what really counts is when we actually use our numbers to truly take into account our people I learned that from a maid in a motel and a king of a country what can you start
counting today what one thing can you start counting today that actually would be meaningful in your life whether it's your work life or your business life thank you very much
