college basketball in general with the college basketball analyst for espn. a former duke player and a lawyer. >> i didn't see a whole bunch of upsets. i have michigan state and north carolina and syracuse. so he was declared for the

tournament i thought ohio state would win that bracket and then obviously kentucky and then i have kentucky beating north carolina in the final. i think it opens up the entire bracket for north carolina state if you were to tell at the beginning of the tournament to go the foo t final four you have to beat ohio, well, the 13th seed or you have to beat north carolina i would.

>> he tendered his resignation as c.e.o., somebody was gloating on the board, somebody you know, actually, about how the tabloids at hooup had given up the tablet and its personal computer business and he said "let's not gloat, bill hewlett gave me my pirs job. he and dave packard tried to create a company that would last for generations and these bozos have screwed it up. let's try to remember the lessons that you need to keep a great company alive for generations. >> rose: we conclude with "new york times" reporter charles duhigg who has written a fascinating new book called "the power of habit: why we do what we do in life and in business." >> our understanding of habit formation has been transformed because for the first time we've been able to understand how

habits form in the brain and that's helped us know how to change habits and when i started learning that you have these tools, that's when i realized smfs something that could help people in a profound way. >> rose: jay bilas, walter isaacson, charles duhigg when we continue.

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: the n.c.a.a. basketball tournament is in full swing. a field of 68 teams is down to the sweet 16. the games will be played

tomorrow and friday in arenas across the country. all four of the top seeds remain in contention. they are kentucky, north carolina, syracuse, and michigan state. kentucky has dominated all year, the wildcats look to avenge an early season loss to indiana on friday night in atlanta. north carolina enters week two with a big concern at point guard. its top play maker kendall marshall broke his wrist in the second round last weekend. his status is uncertain. joining me from charlotte, jay bilas, he is a college basketball analyst for espn and a world-class attorney. i am pleased to have him back on this program for march madness. welcome. >> thank you, charlie. great to be with you, as always. >> rose: what do you think of the tournament so far as predicted with a couple of exceptions, missouri, duke, and a few others. >> yeah, it's been a little bit volatile in spots. this is the first time 11 years we've had a number-two seed upset. there have only been four of those leading into this year's tournament since 1985 and then we have to in the same

tournament with both missouri and duke going down to 15 seeds. we've never had a 15th seed win a game after that in the history of the tournament. no 16 has ever won and the margin of victory in those games keeps growing. i think over the last several years it's over 29 points per game, the one beating the 16. we've had a couple upsets here and there. ohio is a great story making it into the second weekend but really as we head into the sweet 16 there are 14 teams from the traditional power conferences, the b.c.s. conferences, and only two teams outside those, ohio being one and the other being xavier which has made it to four out of the last five sweet 16. so xavier is the usual suspect of the non-b.c.s. conferences. so it's been a more powerful year even though, charlie, this hasn't been a good year for basketball. the game overall is down, scoring is down to the lowest level it's been in 15 years. the quality of play has not been good generally as it... has not been as good as it has been and

i think the game has been in a little bit of a three-year lull and if we don't as a game do something about it i think we're going to continue to see sort of this level of play which, frankly, just has not been as good as we've been used to over the years. >> rose: so what do you have to do to make sure that changes? >> i think there are a number of things that we can do. one is officiating. we've talked a little bit about the culture of skipping steps and players leaving early. there's nothing we can do about that. that's an n.b.a. issue. if the n.b.a. doesn't do anything about that, that's their problem. it may impact college basketball but it's really not so many players that we should be seeing this kind of drop in scoring and having these 50-point clutch-and-grab slug fests that we've been having where charges are handed out like halloween candy. if the games aren't officiated to where freedom of movement is the highest priority, the n.b.a. has this problem years ago and

they took care of it. their game deaboved into a clutch-and-grab jordan rules type bumping-and-grinding game and they decided this is the product we're trying to sell, we need to fix this. the n.f.l. did it with receivers. they don't let you chuck receivers like they used to. we need to do that in college basketball and clean the game up because it's become far more physical than the n.b.a. and not only has defense been rewarded, it's almost like in baseball if we said "tie goes to the defense." everything is in favor of the defense in college basketball and as a result we've got a low-scoring frankly boring game we need to fix. >> rose: and you see in the attendance in crowds? >> i think we do. there's... i'm not smart enough to be able to figure out where all of the digital media we've got and all of the different options are part of that. i think it these do with what i'm talking about the that the quality of play has dipped a little bit. but there may be a variety of factors. that needs to be studied in

greater detail because i'm big on database decisions rather than going on what you think. but i can... i've said over the last three years and i felt like i was a little bit alone in 2010 when i was saying, look, college basketball is in a bad place right now. this is not good and it's getting worse. i said it a lot last year and now people are starting to... seems like they're starting to catch on and there's a lot of people saying it now. it's obvious. it's obvious to look at it. when you look at the data and see scoring is at its lowest level and this is with a shot qlok and three-point shot and scoring is continuing to go down. that... i think that should be troubling to the powers that be in college basketball but the problem... one of the major problems, nobody's in charge. who do you go see? there's no commissioner. there's nobody in charge of college basketball and it's a multibillion dollar property that we're trying to sell and the n.c.a.a. is selling and they are selling it like crazy.

it's a commercial enterprise and nobody's home with regard to how to manage the game and that's a shame. >> rose: okay. but so who will change it? >> well, i think the first thing that can be done is there are rules committee within the n.c.a.a. structure, officiating committees, and i think they need to take it on and take some initiative going forward and really work to improve officiating. i think the officials... it sounds like the striped shirts are making the mistakes, i'm not saying that. the officials need to be mandated what to call. that's how the n.b.a. did it. the n.b.a. officials are mandated. it's not like "hey, we hope you this." they are mandated or they're fired. they're going to be out. and we have to give the officials the cover to make the calls that are best for the game and have the game officiated properly instead of the way it... the way i see it the way it's officiated now is just frankly improper. it's against what's written in the rule book and we need to fix

it is. i think some committees can do that but i think whole structure of the n.c.a.a. has to change. we've got to get somebody in charge of basketball because it's the revenue driver of the entire organization. the n.c.a.a.'s revenues are over 90% come from the n.c.a.a. basketball tournament. and we've made this tournament into the holy grail. if we don't do a better job of managing the game that we're trying to sell through this tournament structure, i think ultimately it's going to hit the bottom line and it's going to hurt us at some point. now, i don't know when. it hasn't really hurt monetarily yet. but as soon as it does, people are going to start asking "well, why didn't we do something about this before?" and i'm trying to be as vocal as i can about it because the product i see on the floor is not what it should be. it's not what it was in 2008, 2009, 2007. it's been in a steady decline from 2010 until now and the numbers prove it. >> rose: let me talk about this final four, this sweet 16.

>> (laughs) okay. >> rose: (laughs) i'll get back to the horse race as we say in politics. >> exactly. >> rose: kentucky is your prediction. how good is this team? >> i think they're really good. kentucky has the most talented team in the country. they have a number of freshmen that were top recruits led by anthony davis. the 6 '10 shot blocker, shot changer. he's the most... he's the best prospect for the future. he's had an extraordinary season and, charlie, you don't see defensive players like anthony davis very often. he just covers the basket up from 12 feet and in teams don't get layoff in kentucky when they're against the game. when you're going against the shot blocker you have to get into his body, go right into him to draw fouls and take up that space that a shot blocker needs to block shots and he doesn't let you do that. he's quick, he covers a ton... he's got great range as a defender but their whole team is talented and i think it's going

to take... they're beatable but it's going to taken a extraordinary effort, whether it's by indiana or anybody else to beat them because they're... kentucky's better than they were in december when indiana got them in assembly hall. indiana hit nine 3s in that game and shot the ball extraordinarily well. they'll have to do that again if they want a chance to win. >> rose: could a healthy carolina beat them? >> yes. carolina played them to a one-point game in early december december 3, i think it was. anthony davis blocked a shot by john henson to preserve the win for kentucky but if care mine from is playing without kendall marshall or with kendall marshall limited that diminishes their chance. i don't see that happening. i think that is such a... one thing... i applaud roy williams and his players for fighting back against people like me saying that, boy, their chances are diminished that competitiveness i love, that sort of winning spirit. but it's undeniable that kendall

marshall's one of the... if not the best point guard, he's one of the two best point guards in the country and without him it's like the patriots playing without tom brady or last year the colts playing without peyton manning. it's a lot to overcome to lose your quarter back. especially this late in the year when they've also lost their backup point guard dexter strickland earlier in the year in a game they played against virginia tech so they've got very few options for handling the ball and playing the way they're capable of playing. >> rose: so you think marshall will play or not play? >> well, i don't know. the doctors i've spoken to-- and i'm clearly not a doctor-- but the doctors i've spoken to are dubious that a player can come back and be effective without w that kind of injury and wearing a cast with a pin in the wrist but if there's any way he can play it, it makes him a one-handed player. he's left-handed so he broke the

wrist on his right hand. it's possible he could play but it makes him so much more limited and makes north carolina so vulnerable. anybody this this tournament can get beat but you put out a one handed point guard and it makes it tougher to be able to win. it's a shame because marshall is not only a fine young man, he's a great player. that is an outstanding team that i thought was going to get to the final for the whole thick. it's a horrible blow for them. >> rose: is john cal pair tri greatest salesman in the world? calipari is not only one of the best salesmen, he's one of the best coaches in the world. i don't know if this would surprise you or not but i have no problem with the way john calipari runs his program. he brings in players and sales the fact that they can chase their dream to the n.b.a., they can get an education at the same

time but if their goal is to get to the n.b.a. after a year he doesn't have a problem with that. i don't honestly is a problem with that, either. it's not like he's got players that have these pipe dreams and can't make it. these guys are lottery picks and the ones who aren't lottery picks have not been going early, they've stayed and he's won with it. he doesn't hide it. other coaches are doing the exact same thing, charlie. they're going into a kids' living room and talking about the n.b.a. when they're in high school. they say they're not. other coaches, the most respected coaches in the country have had players leave after one year. everybody is dealing with this issue and it is... we don't seem to have a problem with it when it happens, a, in other sports and, b, in other avenues. the thing i think we're making a mistake in-- and when i say "we" i mean the whole n.c.a.a. structure-- is we're trying to pretend like the dream to play in the n.b.a. is a bad thing. it's not a bad thing. what we should be doing in my judgment is encouraging players,

chase that dream, that's fine. we applaud that. being an athlete is a noble thing. it's worth pursuing. we're spending all that money providing all these facilities. it's a good thing. let's encourage them knob school instead of taking the stance that, wait a minute, that dream is bad and if you have that dream, there's something wrong with you. if you're not going to be a full-time student and student first and athlete second we don't want you at all. i... that's the undertone of this and i don't think that's right. and for schools that say, you know what? i would never take a one player like kentucky state, i'd never do that. my response is well, you don't have them, then. you don't have to worry about it they're not going your school, you don't have them. >> rose: i can't imagine that if kyree irving, now have a spectacular rookie year, i can't imagine if he today mike kryzewski "coach, i've dreamed of being in the n.b.a., i'm qualified to go to duke, i would

love to play with you but i'm out after a year if i have a good season, i want you to understand that." i don't believe mike kryzewski would say "you should go to kentucky and not come to duke." >> that's exactly right. that's exactly right. and i think chai ree irving and players like him have benefited from being in college. they're more likely to come back and that's an institutional decision. that's a decision each school has to make on who they're going to admit, who they're going to educate and how they'll do it and whether they'll give that young man or woman a uniform and have him play. i think that's fine. when we get into the business of saying well some... for me personally i've always disliked it when somebody says there's some people who don't belong in college. well, they may not belong at your school, that's fine, but we've got thousands of colleges and universities in this country. there's a place for everybody and we should encourage these young people go to school and to pursue their education and if they can be pros, that's great. we're not telling musicians... i watched the oscars with my wife

the other night and i didn't look at the podium saying "i wonder if that guy finished his education? i wonder if that woman finished her education?" >> rose: (laughs) >> it's so absurd the way we processed all this. i think it's unfair to the players. >> rose: give me who you think will be in the final four. >> i actually thought the number one seeds were going to make it but last time i chose the number one seeds to make the final four was in 2008 and it was the first and only time that that had ever happened and i didn't see a whole bunch of upsets in this tournament. so i have michigan state and north carolina and syracuse. i had syracuse on sunday after fab mellow, their center, was declare ineligible. i thought ohio state would win that. and then obviously kentucky and then i had kentucky beating north carolina in the final. having kendall marshall injured changes everything for north carolina.

it opens up that entire bracket for north carolina state. if you were to tell at the beginning of the tournament to bill self and mark godfrey, the coaches of kansas and north carolina state respectively that to go to the final four you have to beat ohio out of the mack-- a good team but a 13-seed-- or you'll have to beat north carolina without kendall marshall they would have raised their hands and said "i'll take that. i'll take that one." >> rose: (laughs) always great to have you here. thank you. >> great to be here, charlie. thanks for having me. >> rose: walter isaacson is here. he is the c.e.o. of the aspen institute. before that he was president of cnn. before that he was editor of "time" magazine. before that he was a reporter. before that he was a rhodes scholar. he's published a number of biographies. last fall an extensive biography of steve jobs. today that book remains near the top of the "new york times" best-seller list. six months after jobs died, he's written an article for the "harvard business review" explaining tac pheestrt ticha every c.e.o. can try to follow.

it is called "the real leadershipless sons of steve jobs." i'm pleased to have waltere4jzpp isaacson back at that this table. welcome. >> great to be back, charlie. >> rose: this is "harvard business review," the real leadership lessons of steve jobs. why do you need to write this article when you just wrote this book which is this big? >> good question. the harvard business review the bible for entrepreneurs and business and when i wrote this book it was a narrative, just a story telling and i let people draw the lessons they wanted out of it. all sorts of people drew different lessons. i was joking with somebody about the book in china how it's selling and that i've now helped teach a new generation of chinese students a way to succeed in business is to drop out of college, take acid and defy authority. >> rose: (laughs) that's right. >> but there was something interesting and it was written about in "time" magazine that business leaders read the book differently than people who haven't been in business. especially young entrepreneurs read the book differently.

and, you know, sort of the older people think gee, he was a jerk who drove people crazy. yet if you're a younger entrepreneur you say, no, he was inspiring and he drove people to do insanely great things. so i wanted to say all right, i've written the book, i've given you what steve said, here are the lessons i want to draw. and harvard business review and as you probably know it's become a great magazine, but it's real place to try to be serious about business lessons and since so many people are using the biography as a business book i wanted to say well, here's my take on what the business lessons are. >> rose: i would say it's not just for business or being a c.e.o., it's really for approaching any kind of issue or problem where you want to achieve something it's a matter of looking at challenge and going about successfully attacking challenge >> thinking different, as steve would say. i think any leadership lessons

you have apply to any part of your life. >> i think he said this to you. he viewed apple as his life's work. that's what he felt most strongly about. >> he wanted to make great products. he said you have to put products ahead of profits, that's where companies make a mistake. but he said it's easy for somebody to make one or two great products. the difficult work is making a company that always connects innovation with engineering. always connects engineering and deswine the technology. he said i hate it when people call themselves entrepreneurs and sell out once they do a product. you've got to do the hard work which is to make the business >> and larry page came over to see him. >> he told larry paige the same advice. one of the lessons in my harvard business review piece is the one he told larry paige which is focus, don't be all over the map. when steve jobs came back to

apple in 1997 they were making about 60 computers. he finally said stop and drew a grid and said laptop, desktop, home, office. that's it. four computers and he said to larry when larry page came over from google from the neighborhood in palo alto he said what leadership business lessons do i need? he said you've got to focus, you're making products all over the place. he said kind of rudely "all your products will be like microsoft, they'll be junky." >> rose: he also said microsoft is being driven by marketing and sales rather than products. >> he said once you let the salesperson... and it happens when you have a great innovator, does great products and you get a leg up in the market then the salespeople, the ones you can move the profit needle, he says you dough that because you care more about profits than you care about the product. then the product people become disenchanted. the engineers, the designers,

they sort of feel less valuable and he said every great company should always be driven first by how good of a product we can make. >> rose: this is nicely done in terms of "the harvard business review." just key off of what he meant in terms of these as you have separated them out. focus we talked about. simplicity, simplify. take responsibility end to end. >> if you look at what microsoft did when they were competing in the '80s with apple, they licensed out windows. so hewlett-packard, dell, compaq i.b.m., everybody could do it and if it didn't work they said it's the software person's problem. steve said no, it's got to be integrated. from the silicon in the microchip to the icon on the screen, from the hardware to the software all in one, we have to take responsibility and he got so into taking responsibility end to end that when the product was finished it was big sold at a big box store like best buy

and that drove him nut he is said "we have to make our own stores." from the moment we get that microprocessor working to the moment the person sells it to you in a store we control everything because we're going to be responsible. we're not going to say "that's not our fault, that's the software makers' fault." >> rose: behind leapfrog. >> it was really amusing. fy company staying ahead of the game is the way to do it. the one time steve falls behind. he was sofa gnat i can about design he didn't want the i mack to have a tray drive... you're old enough to remember like me the d.v.d.s. he wanted those beautiful slot drives like enough a nice car and the people said well, that will mean people can't burn their own music on it because only the try drive that works at the moment. anyway, they did it and other computer makers for the first time jumped ahead of apple on something very important which is burning music disks. and instead of saying "let's just put the tray drive in so we

can do it" he said "no, we'll leapfrog. we'll create the ipod, the itunes, the itunes store. and end to end with the hardware and software and suddenly you forget that other companies were helping you make music. >> rose: put product before profits. we talked about that. product, product, product. >> insanely great products and i think john scully was the one who came in, he came from the 1980s. >> rose: jobs brought him in. >> because jobs knew that jobs was not a great manager. it ends up with jobs leaving, scully runs it and because scully is pricing the mac at $2,500, trying to milk it for the profits, trying to make more and more versions of the mac for the profit line instead of knowing-- because he was not an engineer, he came from pepsi, he didn't worry about how the dorito... how you make the

dorito" so he didn't worry about the detail of the product. he worried about profits. >> rose: don't be a slave to focus groups. this is one i like a lot. don't go to somebody and see what people want. >> the very first macintosh retreat in the early 1980s when they're building the great mac, one of the people said "shouldn't we have a focus group to find out what we should put it n it?" and steve looks at him stunned and said "how do people know what they want in the machine until we've shown them." >> rose: he also quoted i guess henry ford who said "if i asked people what they want they would have said a faster horse." >> (laughs) exactly. >> rose: bend reality. that's interesting. >> his reality distortion field. wasn't he tough on people and some people say they read the book and he was too tough on people. from the very beginning when he and steve wozniak were working at atari and they have to do a game and woz says "that will take me a month to write the code." and steve says "you can do in the four days." it was a reality distortion

field. woz says no, i can't. and he said "he distorted reality, i did the impossible." >> rose: is that where he added listen, if i can save a life could you make it... >> so when they're doing the macintosh, soon after, same sort of thing he says to larry kenyon doing the bootup of the mac, shave ten seconds off. it's doing 80 seconds, it's taking too long. he said "look at this code, it's..." "you can do it." finally steve jobs said "if you could save a human life would you shave the ten seconds? " and kenyon says "i guess so." so jobs writes out "there will be a million macintoshs ten seconds every time it boots up within one year that would save 50 human livesment" or whatever the math does. larry kenyon says "i went back to my cubicle and shaved off 28 seconds. and your friend when cal weeks he told him you can make gorilla glass.

corning glass. corning had never done the process before. >> rose: he didn't want aluminum he wanted something else. >> he wanted really good glass everyone in china they couldn't make it but corning came up with this process but had never done it so steve goes to the c.e.o. and says you can do it. we can't do it this year, we don't have factories and steve says you can do it. the reality distortion. wendall weeks said to me "i thought about it, i called the plant in kentucky i said start using this process tomorrow. make this glass." and that's why every iphone you have the ipad, everyone you have has glass made in america by corning. >> push for perfection. >> he wrote no compromise. >> rose: tolerate only a-players. >> when you talk about him being tough and i talk about yes, but it inspired people. but if he'd been mean people would have left but he had a loyal team. i said why were you so tough on people?

he said good players, a-players, like to work with only a-players. i'm the only person who can prevent the bozo explosion. if i'm not brutally honest to people and tell them when they're not doing a good job... there were four letter words for that sentence. then you can end up having the company lauded like most other companies are with b-players sew that's why i have to make sure that a players work with a players. >> rose: i like this one, too. engage face to face. don't simply send e-mails. >> he loved building headquarters. the pixar headquarters. with a big atrium so people would have to run into each other. meet face to face and when nrp a meeting with him if you tried to use powerpoint he'd go ballistic, no powerpoint, no slides. he fed is you know what you're talking about, you don't need to

present slides or powerpoint, let's engage. so every monday he had his executive team meeting. every wednesday he had his marketing team meeting. every afternoon when he could he'd go to the design studio and walk around because unless you were engaging face to face you weren't exchanging ideas and being creative. >> rose: we talk about knowing the big picture and the details. combine... this is good, the humanitys with the sciences. >> that's the essence of who steve jobs was. with he was a hippy dropped acid dropped out of college. when he drops out of college, he stays there to take dancing and calligraphy. what apple does unlike any other company was steve jobs connected the arts to the sciences, the beauty to the technology. every product launch he did from the ipod onward ended with a screen showing the intersection of the liberal arts and the

sciences street. he said that's where i like to stand. >> rose: stay hungry, stay foolish. >> it was so beautiful as you say. if he were listening that's the one he gave at the stanford speech. it was line, as you know, on the back cover of the last edition of the whole earth catalog. stay hungry, stay foolish. what steve did was he never got into a rut. when the ipod was successful, instead of... he said what could kill us? if people put songs on their phone so let's make the iphone. and in being staying hungry staying foolish, it was thinking different. here's to the crazy ones. he loved that line at the end of his think different ads which is the people who are crazy enough to think they can change the world are the ones who do. >> rose: roll tape, this is the famous stanford speech. here it is, steve jobs'

commencement speech which he wrote himself. he asked aaron sorkin to do it but then he said i have to do it and i will do it by telling three stories. >> this is what i tried to do in the book. if you just tell stories the lessons emerge and that's... roll tape, here it is. >> when i was young there was an amazing publication call the whole earth catalog which was one of the bibles of my generation. it was created by a fellow named stewart brand not far from here in men low park and he brought it to life with his poetic touch. this was in the late '50s before personal computers and desktop publishing so it was all made with typewriters, scissors and polaroid cameras, it was like google in paper back form 35 years before google came along. it was idealistic, overflowing with neat tools and great notions. stewart and his team put out several issues of the whole earthuuhíz catalog and then whet had run its course they put out

a final issue. it was the mid-1970s and i was your age. on the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. beneath it war the words "stay hungry, stay foolish." it was their farewell message as they signed off. stay hungry, stay foolish. and i have have always wished that for myself. >> you believe he belongs in the pantheon of the great innovators in american business history like edison, like ford. >> well even more than... i think building the great company not just puts hit in the pantheon with innovators but innovators who created a lasting business and this is why i wanted knob the harvard business review which is walt disney creativity connected to technology and two generations

later, three generations that still is part of the business. henry ford did it. even it disson with general electric comes out of it. so they create companies that do it. the very last board meeting steve attended when he attended his resignation of c.e.o., somebody wiz gloating on the board, somebody you know, actually, about how the tabloids at h.p., how hewlett-packard had given up the tablet and he said let's not gloat. bill hewlett gave me my first job. he and dave packard tried to create a company that would last for generations. and these bozos have screwed it up. let's try to remember the lessons that you need to keep a great company alive for generations. >> i had on this program one of steve's friends, the guy who was the creative genius behind pixar >> john lassiter. >> rose: and this is what he said. roll tape. >> in 1996 at this table you asked a question of him about

apple and he dodged it gracefully. right? the tape shut off, we were done, microphones were taken off, we were getting up and we were leaving the table and he turned back to you and he said this. he said i know how to save apple but they just are not listening to me yet. and he walked out. and i was like oh, steve, that's interesting. but he told that to you in this room just as we were exiting when the cameras were off and it gave me chills and it's interesting now looking back to what, of course, when he went back to apple, before he made the final decision he came to see me privately in pixar and he asked me for my permission. i was so touched because pixar meant so much to him. he asked permission of ed, too.

and i was so touched by that. i said if you don't want me to do it i won't. but he said the why i'm going back is i think the world is a better place with apple in it and they're not going to survive and i was like steve you have my permission. and he went back and it's so interesting to see, of course, like the rest is history what he did at that country it's interesting. on this slow is what i first heard he had been thinking about it. >> rose: tell me why they came on the show. >> well, you know, toy story had just come out and when toy story came out the "new york times" praised the movie and said "in the the tradition of great disney movies." disney had distributed toy story they had done in the partnership. and steve was serious, he wanted it to be known as a pixar movie not a disney movie so he said he and lassiter... steve never

agreed to do shows. they agreed to do your show and over and over in that show they say it's a new studio that's come along, this is a pixar movie. >> rose: a remarkable story. steve jobs, this biography is a book that everybody's talked about when it came out, talked about on the best-seller list. now from the harvard business review walter isaacson goes back and looks at things people are attracted to about steve jobs. back in a moment. stay with us. >> rose: charles due chicago a reporter, he's a reporter for the "new york times." he recently investigated working conditions in the chinese factories that make apple's iphones. his findings became the basis for a front-page series on the globalization of hih-hechte industries. he's also tchhe author of a new book called "the power of habit: why we do what we do in life and in business." i am pleased to have him here at this table for the first time: welcome. >> thank you so much. >> we'll talk about hablt and

then china and apple. what is this about? tell me how you came to want to explore this idea of how much of our life is habit. >> it started about nine years ago when i was a reporter in iraq and i went down to the city named kufa, about an hour south of baghdad frankly because i was looking far way to report in iraq without getting shot at. >> rose: right. >> turns out it's much less eneyeable to get shot at than i thought it was. i didn't think it was going to be that much... >> rose: churchill may not have been right. >> right. so i heard about that army major doing an experiment in kufa. his job was to stop the riots. there had been a number of riots in the city and so when he arrived he talked to the mayor of the town and he said a laundry list of requests and his last one was "can you take all the food vendors out of the plazas. and the mayor who's dealing with suicide bombers and war said sure, i'll take food vendors out, no problem. >> rose: that's what we can do as mayor.

so a couple weeks later a crowd starts forming in one of the plazas by the moss and the local police radio it had base and they say looks like as riot is going to form and hours go by and this is typical when riots happen it takes a long time for the crowd to grow and it gets to about 5:30 and there's all these spectators, people getting riled up and people getting hungry and they look for the kebob sellers so they would normally get dinner from and they're not there because they removed them. so they go home and the people at the periphery of the crowd who see the people leaving, they leave, too. and eventually everyone just goes home and there's no riot. and i asked the major how long it had been and he said it had been nine months since a riot happened in the city. and i asked him how he knew that removing the vendors would cause this and he said that the military is this huge habit experiment that everything he's learned in the military is about how to diagnose habits, how to get along with people he can't

stand, how to think under fire, how to deal with your wife when you're overseas. and that once someone explains to you how to diagnosis habits, how to look at the worlds through this lens of habits that it transforms how you see everything. so i was just totally fascinated when i came back. i started looking up studies and wrote a book. >> rose: did you think this was a book when you first heard him tell this story to say this is a big idea, not a small idea. >> i actually thought i wonder if i can use this to lose weight. (laughter) because i would like to lose some weight. so. >> rose: you did. looks like you lost some weight. >> i lost 30 pounds since i started writing the book. i didn't realize it was a book but when i started talking to particularly neurologists what they told me was that our understanding of habit formation has been transformed in the last ten or 15 years because for the first time we have been able to understand how habits form in the brain and that's helped us know how to change habits and when i started learning you have

these tools that's when i realized smfs something that could help people in a profound way. >> rose: how do you change habits? >> every habit has three components. we know this from neurological experiments. there's a cue, a trigger for the automatic behavior to start, a routine, which is the behavior itself, and then a reward. and most people when they think about that they think about the behavior, the routine. but changing habits is all about understanding and diagnosing the cue and the reward. once you know what's causing the habit and one what craving is driving the habit, what rewards you want then you can start changing them. we refer to it as the golden rule of habit change which is if you try to change everything at once it's too much. we know this from behavioral experiments but if you keep the same cue and keep the same reward and find a new routine, a new behavior triggered by something old and delivers a reward you're used to then the

change becomes sustainable. we've seen this in experiment after experiment. it's how you can stop people from smoking and one of the things we have learn is if you use the right tools anyone can change their habit. it doesn't matter how old you are or how ingrained that behavior is. people in their 60s and 70s lose 100 pounds, they start exercising. >> rose: it's fundamental common sense. or it's more than that? >> i think it's more than that. and once someone explains it to you it seems like common sense in retrospect but you don't necessarily come to it on your own. >> rose: yeah. >> there has been a lot of science in the last decade. take, for instance... smoking is a great example. or exercise. let's take exercise because a lot of people want to exercise so there's been a series of experiments that have shown that if you give someone a small piece of chocolate after they exercise it's more likely to become a habit. that's totally counterintuitive because most people start exercising in the first place because they want to lose weight. so they don't think to

themselves i need this reward, i enjoy it. now we know you need an obvious cue, put on your running shoes before breakfast, or put your workout clothes next to your bed. >> rose: that's the cue. >> that's the cue. and then you need a reward. at first your neurology doesn't know you enjoy exercise, righting? after a couple weeks endorphins, endocan bidz, you have neurochemicals that reward exercise but your neuroradiologist doesn't know it your brain hasn't learned it. so if you give yourself a piece of chocolate after the exercise workout that's this... it tricks your brain. but unless some... and this makes sense. you need to associate xer swiz something you enjoy, some type of immediate reward. >> rose: if it's so easy, why don't more people do it? >> i think more people don't do it because first of all no one's ever broken it down for them. the first step is the hard step. >> rose: tell me about the brain process that affects habit. >> what's going on inside your

brain when a behavior becomes a habit is that it's moving from the prefrontal cortex which is where the most evolutionary new part of our brain. where we make decisions. it's moving into the basal ganglia. that's a very old structure inside our brain where we store patterns. it's involved also in memory and other functions. but at some point evolutionarily our brain came up with this new technique which was to say it's hard to make decisions about everything so i want to take those things that i do every single day that i can basically not have to worry about and i want to put them in a part of my brain that doesn't work as hard. it doesn't feel like we're thinking. in fact it's related to the parts of brain that allow us, for instance, to breathe and when we sleep walk we're relying on parts of our brain that are awake while the rest of our mind is asleep. and what's important about this is that because of this capacity your brain stops working so hard when you're in the middle of a

habit. that's why it feels so hard to control this behavior is because your brain has, in a sense, gone to sleep or started thinking about something else. >> rose: what habits because have you changed because you got smart about habits? >> i changed my eating habits. >> rose: how did you change? >> by looking at cues and rewards. i had a bad cookie habit that i would eat a cookie every everyone. >> rose: was that a bad habit? >> i put on a couple pounds, my wife felt like it was a bad habit. so when i was talking to skolgsz i asked them how do i change this? they said well, figure out what the cue is. and all cues fall into one of five categories, time of day, a certain place, the presence of certain other people, a particular emotion or sort of a ritual of behavior. so i wrote down each of those five things when the cookie urge hit. it always hit between 3:15 and 3:45. then i tried to figure out what the reward was. and i thought it was the cookie but rewards are complicated. when i started looking at i i

thought maybe i'm hungry so i ate an apple one day instead or maybe i need a sugar boost so i drank a cup of coffee. maybe i need a break so i took a walk. but i figured out that when i went upstairs i could stoshlize with my colleagues. it was the socialization i was craving. once i figured that out, time of day is a cue, socialization is a reward, i came up with a new routine and everyday at 3:30 i stand up and look for someone to gossip with and we gossip for ten minutes and the cookie urge is gone. >> rose: wow. >> if i can offer just one other way it's changed my life-- this is what most of the book is about-- organizational habits. how habits work within companies and institutions i'm a business reporter at the "new york times." it's transformed how i look at companies. companies that are successful are companies where c.e.o.s take organizational habits seriously and design them.

so in the story... in the book we told the story of paul o'neill taking over alcoa before he became treasury secretary. he comes into alcoa and rather than saying-- largest aluminum company in the world at the time. rather than focusing on profits or efficiency he says "i'm going to focus on worker safety habit which is causes shareholders to worry a little bit." but he realized that was a keystone habit for the organization that if he changed habits around worker safety it would start a change reaction that would transform the culture of the entire company and that's what happened. within captioning sponsored by

>> changing these basic organizational habits about how you approach things and the culture shifts as a result. >> what did you find in china when you went there? >> what we found was that

conditions in apple factories for a number of people were fairly harsh. and apple has been... apple has been one of the biggest sources of information about what conditions are like inside the factories to put this in the right perspective the one thing i should say is in the last few months, particularly since january, including january apple has changed significantly in terms of its transparnsy and they've always taken these issues seriously. they've taken the issues of explosions and death and people being poisoned seriously. it's a company that takes its commitment to its employees seriously. under tim cook, again, it seems to be changing fast in terms of how open they are and how they continue to be active and... >> rose: when you lose someone

of steve jobs' genius and not suffer... how can you lose someone of that genius and not suffer? >> i asked that question and just yesterday i asked the people with firsthand knowledge of apple and what they say is jobs would say his biggest legacy was building a system. >> rose: he did say that. >> that he built a company. sometimes we refer to executives we have sources who request anonanymorety and we refer to them as former apple executives or current apple executives. people are... people within the company are upset when we do so because they say there's only... i can't remember if it's seven 120r, i think 12. there's only 12 executives at apple. there's only 12 people who sit down once a week and make all the decisions that 65,000 people are bound by. i defend our use of the word "executive" but their point remains it's a uniquely

centralized company and that was because steve jobs designed it that way. >> rose: let me talk about apple and its future. have you used the ipad 3? >> for the first time yesterday i have an ipad and saw it yesterday for the first time and played with it a bit. >> rose: it's amazing that apple has become this largest by market cap company in the world. and had $100 billion so they decided that hay had to offer a dividend. when you look at the power of american enterprise there it is. not a natural resource, something that came out of the brain of steve jobs and his colleagues. >> yeah. and it's astounding how much it shapes culture. the article we did about china is part of a series that focuses on apple and says... folks within apple have been critical of this. we say we think you can compare apple today to g.m. 40 or 50

years ago. when g.m. held this role in the nation's business imagination that they could do no wrong. that's apple today. it's this relatively small company that makes these devices that change everything. they're not like ghe a thousand different industries. they make them relatively small number of things and yet yet they are the north store for the american business psyche and will be for years. >> rose: the book is called "power of habit, why we do what we do in life and in business." charles duhigg, thank you. >> thank you, i really appreciate it. >> rose: thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org