1. The 555 output is brought HIGH
2. The 4017 turns the first output pin to HIGH(the LED turns on).
3. Then the 555 goes LOW( the first output on the 4017 is still HIGH).
4. Next, the 555 output is HIGH again.
5. The 4017 sets output one LOW and sets output two HIGH.
6. Repeat until output 10, then restart at 1 again.
As it counts from one to ten, the ten output pins are also turned on and off. Each time clock pin is brought HIGH, it turns off the previous output and turns on the next. When it reaches "10" in its count and then the 555 output is HIGH again, the 4017 will restart at the first output pin.