How Great Leaders Inspire Everyone To Take Action by Simon ...

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Start With Why

How Great Leaders Inspire Everyone To Take Action by Simon Sinek

The premise on which anthropologist Simon Sinek bases his first book, is, by his own admission, "probably the world's simplest idea." And when he explains that idea, it suddenly strikes you as glaringly obvious -- one of those things you wish you'd thought of.

In fact, when he thought of it, he had a sort of epiphany. It smacked him in the face and he abruptly changed the direction of his business, launching himself on a mission to spread his gospel. He realized that, just as individuals prefer to associate with others who think like them, consumers prefer to do business with organizations that share their beliefs and values. And employees prefer to work with and show greater commitment to organizations whose vision they also share.

He calls his concept the Golden Circle, and he says it explains, biologically, why some companies and their leaders stand head and shoulders above the vast majority of their peers, why they consistently outperform the market, and what makes their customers and employees loyal, seemingly to the point of becoming cult-like followers.

"The Golden Circle finds order and predictability in human behavior..." he declares." Put simply, it helps us understand why we do what we do."

Among many corporate examples, he cites the consistently outstanding performance of consumer electronics group Apple and the unprecedented success of Southwest Airlines, the only airline that has never had a loss, even during the recession. His simple explanation is this: These companies, and a handful of others, base their business activities on their beliefs -- their "why" -- and never lose sight of it, while most other businesses primarily focus on their product or service, in other words their "what."

Leaders who are able to not only articulate their "why" but also to keep their corporate philosophy consistently on-message, inspire loyalty and spur us to action as surely as did Dr. Martin Luther King Jr. with his famous speech.

With a commercial background in the world of advertising, Sinek "discovered" all of this while thinking through the reasons his own consultancy business and he himself were in the

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doldrums. And when he hit the bull's-eye, discovering his "why," the first thing he did was to apply it to himself. His raison d'?tre, it turned out, was "to inspire others to do the things that inspire them."

So that's what he set off to do, initially charging friends and acquaintances $100 a time to help them identify their "why" and then developing a program in strategic communications at Columbia University. One imagines his fee scale is rather different these days.

Inside The Golden Circle

Actually, it isn't a single circle. Graphically, and two-dimensionally, it comprises three concentric rings, with "what" in the outer segment, "how" inside this, and "why" in the center -- the bull's-eye. As the author explains later, three-dimensionally it is better represented as a cone, with "what" on the bottom, "how" in the middle and "why" on top.

The nub of his argument is that all businesses know "what" they do, many also understand "how" they do it (in terms of their business values and processes), but very few know "why" they do it -- that is, the organization's underlying purpose, cause or belief. That's because the "why" element is often bound up with the philosophy of the founder, which fades either when the founder disappears or when the company grows so big they lose sight of why they started doing what they're doing in the first place.

And, says Sinek, if they don't know why they're in business, they won't know why their customers buy from them, though they likely will assume it's because they like the product or are persuaded by the incentives or arguments offered to entice them to purchase. He refers to this process of persuasion as manipulation. Its principal components are:

Lowering prices Promotions such as rebates and so-called "employee pricing" Fear -- for example suggesting buying your product is the safest bet (Remember

that old saying: No one ever got fired for buying IBM.) Aspirational messages such as those used for diets or exercise equipment Peer pressure, like suggesting most consumers prefer your product, or using

celebrities to endorse it, and Novelty -- for instance a new feature added to an existing product.

Note that all of these features relate to the "what," of the product or service. And while manipulation undoubtedly works in eliciting a transaction, it doesn't buy customer loyalty. It has to be repeated to win repeat business, and that may turn out to be devastatingly costly, as US auto manufacturers discovered when they tried to finance the big-time incentives they were using to lure in buyers against their Japanese competitors.

By contrast, the author says, companies like Apple are driven by a higher purpose, their original inspiration. In their case, Apple's "why" is "challenging the status quo." That's how Steve Jobs and Steve Wozniak were thinking when they developed their line of devices that put

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computing, previously the preserve of big business, into the hands of home users. And that's how everyone in the company collectively still thinks today, enabling them to produce groundbreaking products and services, year after year.

Once you know "why" you're in business, you can develop a strategy that enables you to realize it -- the "how" (say, in Apple's case, innovation and design) -- and, finally, build that into "what" you produce.

In other words, consistently successful businesses work from the inside-out of the Golden Circle. The others work from the outside-in, saying, in effect: "We make or we're going to make such-and-such a product, and this is how we'll do it." They may never even get to the why. This blinds them to commercial opportunities that lie outside their own self-definition. They're focused on what they do or make, and when people no longer want that, they're sunk, or constantly forced to resort to the tools of manipulation to try to keep customers buying.

Think, for instance, of record companies, defined by their physical product and struggling to survive when the era of online digital music came along (which they notoriously fought). Perhaps if they had thought of themselves as exploiters of technology to deliver entertainment to the public, they would not have been eclipsed by Apple's iTunes services. Next up, newspaper publishers scrambling to catch up with those who spotted the potential of the Internet. Publishers defined themselves by their product, while online operators started from the "why" of delivering news as quickly, cheaply and easily as possible.

The solution to this dilemma is disarmingly simple, but it requires some out-of-the-box thinking. Instead of asking: "What should we do to compete?" says Sinek, companies should be asking themselves: "Why did we start doing what we're doing in the first place, and what can we do to bring our cause to life, considering all the technologies and market opportunities available today?"

It's All In The Brain

The biological basis for the working of the Golden Circle lies in the structure of the brain, which, for simplicity, the author divides into two components, the limbic system, which is responsible for our beliefs and emotions, including trust and loyalty, and is rooted in humans' primitive past, and the neocortex, which developed later and handles rational thought. Crucially, the limbic system has no language function, which explains why we often find it difficult to articulate our feelings, our "whys." We talk about "gut feelings" without being able to explain them -- but they're not coming from the gut! Language, on the other hand, is handled by the neocortex and used, in the commercial world, for communicating marketing messages, conducting research and, yes, manipulating consumers.

"This is what we mean when we talk about winning hearts and minds," says Sinek. "The heart represents the limbic, feeling part of the brain and the mind is the rational language center. Most companies are quite adept at winning minds; all that requires is a comparison of the features and benefits. Winning hearts, however, takes more work."

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He provides a fascinating illustration of the two functions through a survey of the characteristics consumers seek in a laundry detergent. What they said (using language via the neocortex) was that they wanted cleanness, whiteness, brighter colors. But what they judged as best (calling on their limbic feelings) were the products that made their laundry smell the freshest. In other words, we use rational statements in an attempt to articulate our preferences but tend to rely on our feelings when we actually make choices.

The interesting thing is that our behavior is a manifestation of our own "whys" -- the emotions and passions that drive us. Furthermore, the limbic system also nurtures another key human emotional characteristic -- the need to belong. Add these ingredients together and the key to the Golden Circle is revealed: we seek to belong or group with people and organizations that have the same "whys" as us.

If we like to challenge the status quo, the establishment, and we want others to know how we feel, we raise the lid of our MacBooks to display the Apple logo. It's like a primitive, tribal thing, a ritual display. At this very basic level, our ownership actually has little to do with the product, and more with what it says about us, our "why."

"Products with a clear sense of 'why' give people a way to tell the outside world who they are and what they believe," says Sinek.

But, of course, having a raison d'?tre, has little value to a company unless it is translated into a product by working from the inside-out of the Golden Circle. Once you have clarity of purpose -- your "why" -- you then need a set of values and a corporate culture that reflect that purpose or belief on which you establish your systems and processes. Collectively, these represent your "how," the way you do things.

In a sense, if we regard "why" as akin to a corporate vision then "how" relates to a mission statement. And it is most effective when built around values that use verbs rather than nouns, says Sinek. Thus, for example, rather than using the word "integrity" to declare a business principle, you should say "we do the right thing"; and rather than using a word like "innovation," your "how" value might be "we look at problems from a different angle."

Finally, you employ the principles of your "how" to establish processes to provide products and services that consistently reflect your values and beliefs. When this happens, says Sinek, your Golden Circle is in balance -- you base everything you say and do on what you believe. This, in the author's terms, is what we mean when we use the word "authenticity."

Trust and Belief

Successful application of the Golden Circle concept relies on finding and reaching out to those who believe what you believe and demonstrating your authenticity to them, so that they trust you. This is as much about the people you hire as those you sell to.

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For example, Sinek recalls how explorer Ernest Shackleton recruited the team for his Antarctic-crossing mission with a newspaper ad that read: "Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honor and recognition in case of success."

His "why," the reason he was an explorer, was a yen to challenge seemingly insurmountable odds and, by expressing it in this ad, so too was the passion of those who applied, with the result that every single member of his team survived when all seemed lost and his ship was crushed by ice.

The Wright brothers' passion to prove the notion of manned flight is another example. They had little money and no college degrees but a powerful belief that was shared by their entire team, enabling them to succeed where a team of supremely-qualified engineers -- backed by high finance, under the leadership of one Samuel Pierpont Langley -- simultaneously failed. Langley's motivation was self-gain, in this case fame and fortune, while the Wright brothers sought only to realize their beliefs that man could take to the air.

"Starting with 'why' when hiring dramatically increases your ability to attract those who are passionate for what you believe..." the author says. "Great companies don't hire skilled people and motivate them, they hire already motivated people and inspire them."

Similarly, the importance of recruiting fellow believers as your initial customers is key to your success. The notion is based on theories expounded over the past 50 years on the sequence of purchase-decision influences that pass down a chain of consumer types, a sort of domino effect that prompts one set of consumers to buy, which then tips over a new set of consumers to make the leap, and so on.

The Tipping Point's author Malcolm Gladwell refers to these groups as populations of connectors and influencers. Forty years earlier, Everett M. Rogers, in his book Diffusion of Innovations showed, via a bell curve, how successive groups of consumers buy in to new ideas, starting with innovators and early adopters, passing through what he called "early majority" and "late majority" groups and ending with "laggards," those who only buy because they have to.

Although the early and late majorities represent the mass market of consumers, they will not be moved to act until the innovators and early adopters -- the people who share your "whys" -- have bought in. They'll wait and see, and if you try to target them, you'll likely have only limited success.

An example of a great technical idea that has struggled to gain commercial traction for its founder because it was originally aimed at the mass market rather than early adopters is the TiVo TV recording system, says Sinek. Though we all know what TiVo is, and the word has become a euphemistic verb to represent timed recordings, the company that devised it has been, in the author's opinion, "a commercial and financial failure."

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Forecast in its first year, 1999, to reach 760,000 subscribers, the company sold only 48,000 units. Three years later, the magazine Advertising Age headlined: "More US Homes Have Outhouses than TiVos". As for its stock price, after peaking at $50 just after the initial public offering in 1999, the stock has never traded above $10 since 2001.

"While millions of viewers may say they 'TiVo' things all the time, unfortunately for TiVo, they aren't using a TiVo system," he explains. "Rather, they 'TiVo' shows using a digital video recorder provided by the cable or satellite company."

That "flop" happened because, he says, they focused on "what" their product was and aimed it at the center of the bell curve, instead of "why" they were in business -- to support people who wanted total control of every aspect of their lives, who they would have found among the early adopters.

In the same way, he suggests, satellite radio broadcasters have experienced only meager success. They offered a well-funded new technology that hasn't gained significant traction because there was no "why" behind their product, with the result that it has singularly failed to supplant commercial radio.

Even when the two main broadcasters, Sirius and XM Radio merged, stock in the combined business sold for less than 50 cents.

"When you start with WHY," he adds, "those who believe what you believe are drawn to you for very personal reasons. It is those who share your values and beliefs, not the quality of your products, that will cause the system to tip."

Rallying the Believers

In a way, Sinek seems to be suggesting that success flows from preaching to the converted, confirming and reflecting back to them their own beliefs. And of that there's possibly no greater example than the story of Dr. Martin Luther King Jr's legendary civil rights, "I Have a Dream" speech, to which the author frequently refers in this book. The 250,000 people who turned up to hear Dr. King were already believers; what they sought from him was inspiration to further their cause, their "why." And that's what he delivered. Or, as Sinek put it, they didn't attend that famous DC rally for Dr. King. They went for themselves.

And King didn't deliver a plan -- a "how" statement. He didn't declare "I have a plan." It was all about "I believe... I believe... I believe..." The plan, the "how," was left to his colleague Ralph Abernathy. And that situation hints at an important element of the conical representation of the Golden Circle. The "why" starts and resides at the top of an organization and flows down to a small group whose role is to create the structure that makes it tangible. In business, says Sinek, this would typically include a group of senior executives inspired by the leader's vision, with the knowledge and ability to bring it to life -- the know "how."

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Sometimes, as with King and Abernathy -- other good examples would be brothers Walt and Roy Disney, and Apple's Jobs and Wozniak -- you get a partnership of a visionary "why" person and a "how" implementer. But, of course, the dream and the plan, can only be realized "where the rubber meets the road" in the shape of those who produce the final outcome, whether that be a computer or civil rights legislation. Everyone, at all stages, must be imbued with the same beliefs that emanate from the center of the Golden Circle.

This process requires constant repetition and reinforcement of the message, or else it becomes diluted and lost. Consider retailing giant Wal-Mart, built from the ground up by Sam Walton on his belief in people -- whether they're customers or employees. Walton believed if you helped people, they would help you, and throughout his lifetime at the helm of the company, this guiding principle shone brightly, making Wal-Mart the world's largest retailer.

But after his death, his successors lost sight of that vision and, although the firm is still a major commercial success, this is because of a focus on the product and the process of manipulation -- rolling back prices -- rather than inspired loyalty. As a result, the author suggests, Wal-Mart has become loathed by parts of its workforce and by cities through the nation that fight to keep the retailer out of their area. Customers shop there because it's cheap, not because of any loyalty to the brand.

Finding and Keeping Your Why

As suggested earlier, finding your "why" is a backward looking process (assuming you're already in business). It's about going back to the early days to identify what inspired the originators of the business. Sinek believes every individual and every organization has a "why", the thing that motivates us and gets us out of bed each day. When you find it, you have to clarify it. Where did it spring from? What precisely does it mean? This may not be as easy as it sounds since, as the author has already told us, it resides in the limbic system, which has no language function. In a sense then, our "why" must be exemplified by our consistent actions and behavior and the inspiration of the leader.

Once found, the challenge leaders face is not only to communicate their "why", but also to ensure it is passed to their successors. Very few companies have done this. Indeed, Apple is a prime example, losing its direction when Jobs left the company in the hands of CEO John Sculley, an otherwise impressive businessman with an impeccable track record but no understanding of the "why" -- the passion that drove the founders. It was only after Jobs returned that the firm regained its footing, so it will be interesting to watch what happens in the wake of Jobs' withdrawal in early 2011.

Microsoft, Dell and Starbucks would be other examples. With the latter two, the original inspirers were also prompted to return to take their companies back to their founding vision. Sinek thinks it's not impossible that, at some time, Bill Gates might have to resume leadership of Microsoft.

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Southwest Airlines, however, provides a model for succession. Founder Herb Kelleher sought someone who shared his vision, rather than wanting to reinvent it or impose their own. He found it in Howard Putnam. According to one story, Putnam noticed that when Kelleher was interviewing him, Kelleher slipped his shoes off under the desk revealing that he had holes in his socks. Putnam recognized that this was the job for him -- he had holes in his socks too!

Do you know what your "why" is? Try the celery test. Standing in line at a grocery store you see a person carrying candy, cookies, rice milk and celery. You have no idea what they stand for in terms of preferences and nutrition. But if they just have lots of celery and rice milk, you have a pretty good idea. Does the way your company operates pass the celery test? Do people know what you believe in?

And can you transmit it to your company and your successors? In this instance, use the school bus test: if you were hit by a school bus tomorrow -- it's not clear why it has to be a school bus, by the way -- would your organization continue to be driven by the same beliefs?

Conclusion

The most enduringly successful businesses are those that are driven by their founding sense of purpose and beliefs, rather than the products they make. The products are merely the manifestation of those beliefs, brought to life by processes built on the underlying values of the organization.

Those beliefs must be shared and continuously reinforced throughout the organization. Those who share the same sense of purpose will become your loyal customers. They are the people who initiate your success by proclaiming their own belief and their trust in your products.

Even those who don't agree with you will know what you stand for. You don't need a logo that visually describes what you do. Any symbol will do when your sense of purpose is clear -- even a partially-eaten apple.

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