Start with Why
This book is by Simon Sinek. In this book Sinek talks about finding the elusive - “why” - which is the primordial reason for developing brand loyalty, making friends, selling, and all other aspects of our life.
Great leaders are able to inspire other people to act and make a difference. Leaders give their following a sense of purpose and belonging - making people do the work for themselves - without an external benefit to be gained.
Apple, Disney, Harley Davidson, and Southwest airlines are prime examples of companies whose leadership inspires the employees, customers and even the stock holders to align with their WHY.
A world that doesn’t start with why
It is important to start with the basics - like a Japanese car manufacturer that has focused on each part being perfect, unlike an American car manufacturer that employs a person at the end of an assembly line who uses a mallet to make the assembly perfect. Working inside out - bottoms up - helps with coming with a a clean message, a focused outlook and a more refined product.
If the WHY (or purpose) isn’t very well defined, people resort to alternatives of manipulation to get customers to take action. Some of these are:
- Price: Reducing price to attract customers
- Promotions: Running promotions - such as rebates to gain an edge over competition
- Fear: Fear of the alternative if item is not purchased. (fear motivates to move away from something horrible)
- Aspiration: Showing a shiny object to move towards (Aspiration motivates to move towards something desirable)
- Peer Pressure: Friends, family, competition or celebrity using a product
- Novelty: New and interesting features in a given product
Manipulation techniques do not inspire repeat business or loyalty. It is a short term transaction oriented approach to sales. Having loyal employee and customer base not only reduces costs but also provides massive peace of mind.
Manipulations work, but they are not sustainable and do not drive loyalty. There is an alternative.
An alternative perspective
As an alternative to manipulation Sinek suggests inspiring rather than manipulating. In order to inspire one needs to know their purpose.
Sinek introduces the concept of Golden Circle
WHAT: Every company knows what they do and can describe the service they provide HOW: Some companies know HOW they do WHAT they provide. This is often known as the differentiator WHY: Very few companies know WHY they do WHAT they are doing. This defines the purpose, cause or belief that people can associate with. This is the belief that resonates with customers, employees and even investors.
Sinek illustrates how starting marketing or advertising with the WHY helps the consumer connect with the brand and provides the reason to buy, and the actual product is just proof of the WHY.
People do not buy WHAT you do, they buy WHY you do it.
More qualified and products often fail, when up against people and products that have a much better defined WHY. E.g. Wright Brothers were the first people to build an airplane, even though Samuel Langley was much more qualified and funded to build an airplane. Other examples include Creative Technology Ltd. which was much more better positioned to sell a music player as compared to Apple - which was largely a computer brand at that point.
Companies that have a clear sense of WHY never worry about competition. They don’t think of themselves as being like everyone else and they don’t have to “convince” anyone of their value.
Having good quality products (or WHAT you sell) is ofcourse very important, but when the WHY is clearly defined, the WHAT sells much more easily.
If a customer feels inspired to buy a product rather than manipulated, they will be able to verbalize the reasons why they think what they bought is better and inspires loyalty in the product and brand.
Knowing your WHY is not the only way to be successful, but it is the only way to maintain a lasting success.
It is all biological It is biological for humans to feel belonged. Our desire to feel like we belong is so powerful that we will go to great length and do irrational things.
Such gut decisions don’t happen in your stomach. The limbic brain is responsible for making these gut decisions and feelings of trust and loyalty. However the limbic brain has no capacity for language - which is why it cannot quite describe the actual reasons for making the decision.
Figuring out the WHY is hard work. e.g. laundry detergent manufactures took a long time to discover that people resonated with the WHY of smelling fresh laundry rather than the “whiteness” of their clean laundry.
Clarity, discipline and consistency To understand the WHY - clarity is most important. In order to get to HOW to achieve your WHY one needs discipline.
Make HOW actionable - Nouns are not actionable, verb are actionable. E.g. instead of “integrity” say “always do the right thing”.
Consistency between WHAT and WHY - When the why is well defined, and the message is authentic, there is clear consistency between the product and the purpose of the product.
Leaders need a following
Leads can inspire a following if there is trust. With trust comes value - real value, not just value equated with money.
To inspire trust, we need to find employees who connect with your WHY, so that they cab believe in what you believe. When you fill an organization with good fits, people who believe what you believe, success just happens - everyone is moving towards the same goal.
Everyone in the planet is passionate about something, but it is not the same things that we are all passionate about - so it is important to find the right people who are passionate about the same things are you are.
Great companies don’t hire skilled people are motivate them, they hire already motivated people and inspire them.
Average companies give their people something to work on. In contrast, the most innovative organizations give their people something to work towards - that way people are achieving their own personal WHY while in alignment with the company’s WHY.
Trust comes from knowing how good someone is at what they do. It also comes from influence of others and their recommendations.
Law of Diffusion
According to law of diffusion, the entire population is made up of 5 segments:
- 2.5% are innovators
- 13.5% are early adopters
- 34% are early majority
- 34% are late majority
- 16% are laggards
When you have a new product, it is always good strategy to first market to the early adopters, rather than the majority. The early adopters offer loyalty and a following, which can be used to target the early and late majority of the market. Tivo is a company that was perfectly positioned, but made the grave mistake of targeting the majority, before building their loyal customer base and eventually did not succeed.
According to the Law of Diffusion, mass-market success can only be achieved after you penetrate between 15% to 18% of the market.
Building a loyal customer base means the the people are willing to suffer some inconvenience or pay a premium in to do business with you. They perceive value in what you do, and have trust and belief in what you do. They are the ones who, on their own volition, will tell others about you. These are the people who share your beliefs and what to incorporate your ideas.
How to rally those who believe
Energy of leaders excites, but charisma of leaders inspires. The goal is to amplify the source of inspiration. Figure out a way to amplify the WHY of the CEO to the HOW that is implemented by the next level of people.
Those who know WHY need those who know HOW. Just having an idea and purpose doesn’t help, one needs to know how to bring it to reality.
HOW-types doesn’t need WHY-types to do well. But WHY-types for all their vision and imagination, often get the short end of the stick. Without HOW-type people to complement them WHY-types might end up as starving visionaries.
Being authentic is the core of communicating the WHY. Say it only if you believe it.
The ability of some companies not to just succeed but to repeat their success is due to the loyal following they command, the throngs of people who root for their success.
Greatfulness is repeatable - for instance look at Ron Bruder.
When a company is small, it revolves around the personality of the founder. There is no debate that the founder’s personality is the personality of the company. As the company grows, the CEO’s job is to personify the WHY. To ooze it, to talk it, to preach it. E.g. There is no difference between Sir Richard Branson’s personality and that of Virgin’s personality. Similarly there is no difference between Steve Jobs’ personality and Apple’s personality.
The struggle that so many companies have to differentiate and communicate their true value to the outside world is not a business problem, it is a biology problem. Like people struggle with putting words to emotions, companies also struggle with that aspect of communication. We rely on metaphors, imagery and analogies to communicate how we feel.
The goal for any business - Communicate clearly and you will be understood.
Celery test is a simple test to evaluate exactly the WHAT and HOW is aligned to your WHY. E.g. people might suggest you to buy Oreo cookies, cake, coconut milk and celery to help your business. However, if your WHY is to eat healthy - Oreo cookies and cake will not pass the celery test.
Using the celery test to evaluate your choices will help in making the right choices for the business. The more celery you use, the more trust you can build.
The biggest challenge is success
The single greatest challenge any organization will face is success. All companies start out small, and as they grow the founders use their gut to make the decisions for their company. As the company grows, it becomes virtually impossible for the single person to make all the right decisions for the company.
School Bus Test If the founder or a leader were to be hit by a school bus, would the organization continue to thrive at the same pace without them?
To pass the school bus test the founders WHY must be extracted and integrated into the culture of the company. A strong succession plan should aim to find a leader inspired by the founding cause and ready to lead it into the next generation.
Figuring out what to measure - the right KPI’s - is what defines goals and what gets done. E.g. Christina Halbridge changed the business of debt collection from being aggressive to building a connection with the recipient. She measured the effectiveness based on the number of thank you cards her employees sent. They were incredibly successful not only because of the WHY, but also because she found the right way to measure the WHY.
Discovering WHY is hard work. One can discover WHY by looking back and analyzing the reason behind why some projects wok and others don’t.
If you follow your WHY, others will follow you. When you compete against others, no one wants to help you. But when you compete against yourself, everyone wants to help you.
Leadership requires two things: a vision of the world that does not yet exist, and the ability to communicate it. Leaders inspire action.