Summary of ‘Start with Why – How great leaders inspire everyone to take action’ by Simon Sinek

Start with Why – How great leaders inspire everyone to take action by Simon Sinek

Summarised by Paul Arnold (Strategic Planner, Facilitator and Trainer) – paul_arnold@me.com)

Start with Why

THE BOOK IN A NUTSHELL

People don’t buy What you do nor How you do it. They buy Why you do it. Telling people our Why (i.e. our driving purpose, values and beliefs) connects with people at a deeper level than functional benefits ever can. It helps brands differentiate themselves and leads to greater loyalty, higher price points and more successful new product launches. For organisations, its Why helps attract the right type of people and keeps the organisation focused and on track. The leader’s Why inspires others to follow. It leads to greater commitment and the ability to withstand better the trials and tribulations of a team.

THE BOOK ITSELF 

There are four sections:

1) About Why

2) Brands

3)  Organizations

4)  Personal leadership 

1) ABOUT WHY

What is Why?

Every company in the world knows their What (it’s what they do). And they know How they do What they do. But most have lost touch with Why they do what they do. Why is their purpose, cause or belief. Why should people care? Why do you or your staff get out of bed in the morning? Why did you first start doing what you do? What’s your ‘cause’? What’s it all for? If the What and the How are externally focused, the Why is more internal. It’s this inner drive that is critical to success.

Why Why is so powerful

Why provides a point of human connection –  We want to be around people (/brands/organizations) that share our beliefs and values. The Why communicates their beliefs & values, providing a point of identification and connection.

Why stimulates emotional decision-making – The part of the brain that deals with feelings is also the area that controls our decision-making – so we often ‘feel’ a decision is right. When we try to explain we revert to the rational brain which often draws false conclusions. the rational brain quickly and easily becomes overwhelmed, often leading to lower quality decision-making. Decisions made by the emotional, limbic system tend to be faster and most of the time of better quality. Why stimulates emotional decision-making, What or How stimulates rational decision-making.

2)  Brands

Why plays a key role is helping to shape the long-term success of brands:

Influence versus Manipulation  There are two ways to influence human beings: inspire or manipulate. Manipulation is rampant in business because it works – but at a deep cost. Typical manipulations include price dropping, promotions, innovation, using fear or peer pressure. For example once people get used to paying a certain price they are reluctant to buy it at the higher price. To compensate the lost revenue, you need to sell more. and the quickest way to sell more is of course to lower the price again….and so the addiction to price reduction continues – for example General Motors made a net loss of $729 per vehicle built in 2007.

Manipulation always costs. The question is, how much is a brand prepared to pay for the money it makes? None of these drive loyalty. Their gains are short term. Business, like most addictions are focused on getting short-term highs and they are blind to its long-term effects. It just fuels an ever hungry addiction,  requiring new promotions, faster innovations, deeper price cuts, new guerrilla marketing tactics etc etc. Because they work, it has become the norm. However focusing on the Why can help shift the balance away from manipulation to inspiration.

Why reduces competitor obsession – When companies focus on their competitors activities,  they get distracted away from their own Why and instead focus on their Whats.  A company that is focused on its Why will be less influenced by the competition.

Why helps differentiate and lift a brand above its competition – There is barely a product or service on the market that someone else can’t offer an alternative. From law firms to politicians to cars, there is little real differentiation on which to make clear decisions.  Most companies believe people buy their products due to its superior quality, service etc – yet these are similar to the competition – i.e. they are deluding themselves.

Many brands are locked in trying to ‘outdo’ the competition rather than focusing on their own merits – hence the obsession with differentiation. In the fusion of speed and technology, brands are finding their points of differentiation in their Whats or Hows (The trouble with What and How companies is these elements are transient, easy to copy so its hard to provide long-term differentiation). These functional discriminators anchors the buyer in a rational decision-making mode.  This encourages decisions to be made on small (often irrelevant) points of distinctions, forcing choices made on the marginal differences rather than the bigger issues.

This creates an explosion of data points (cf buying a TV – pixels, flicker speeds, refresh rates etc etc..). Sadly, more information merely confuses and rarely leads to better decision-making.

The Why is often where a brand’s real point of differentiation lies. When a brand focuses on its Why they rise above that and are more focused on telling the world about their proposition. Furthermore, people more readily identify with a brand purpose as they are more relevant and meaningful than many What/How based points of differentiation.

People who buy an Apple Mac or a Harley Davidson are not comparing IBM’s Vs HP or Suzuki vs. Honda. They have stepped above the competition. There is only one Harley brand – the choice merely becomes which model. You can wait 6 months for a Harley. Apple PC’s cost 25% more for less functionality –  but people want these items at a much deeper level because owning them has a more personal connection with them. An HP, no matter what level of functionality it’s still just a computer. An Apple is an identity statement – a symbol of belief or purpose – “I am about individuality and challenging the status quo”.

Why ‘lighthouses’ out your brand’s values – We connect most powerfully through our shared values. When a brand espouses its Why its telling the world its values. Then people who share those same values are drawn to the brand. Many people choose brands that help express who they are.

Innovation – Why lasts for ever (Whats and Hows do not) – The Why (i.e. its purpose/driving beliefs and values) never changes. The What/How can (and should) change.  A company can get so lost in its What/How that it gets stuck in old technology (cf Railways, CD driven music industry, Floppy disk manufacturers, Coach builders etc etc).  However a brand’s Why is more permanent, has deeper resonance and is harder to copy.  People do not buy What you do, nor How you do it. They buy Why you do it.

Innovation – Why helps build acceptance – The Why helps consumer believe and trust in a brand.  Many brands have delivered superior Whats but because they have not been backed up by a powerful Why have failed to cut through. For example Microsoft’s Zune (the rival to the iPod) and TiVo both failed because they focused on their Whats and not their Why.

Apple did not invent digital music players (Creative technology had a device in the market almost 2 years before the iPod came out) but Apple’s greater reason Why helped provide the trust people needed to try new products. The same happened again with the iPad (Dell came out with a PDA in 2002 but no-one bought it because Dell was defined by its What).

Why helps a brand move on and expand logically – When you have a clear Why then the Whats and Hows can shift as technologies move on. Furthermore it’s also possible for a company with a strong Why to find other ways to service that purpose – cf Virgin or Apple).

Why helps support premium pricing – The goal of business is less about profit – not volume. Therefore it is often better to sell a smaller number to a group of people who are aligned by your Why as they will be willing to pay more for it. When a brand communicates its Why, its consumers have a deeper connection/meaning to it – and so is more valued. Brands that start with Why have higher levels of loyalty, and tend to be more profitable than others.

Why helps keep a brand focused and true –  When a brand has a clear Why it helps ensure the company makes decision that are consistent with the brand’s values and beliefs – e.g. Disney.  When Volkswagen launched the Phaeton, it was heralded by the press as a feat of German engineering. Yet it did not sell well because it went against the driving purpose of Volkswagen – the car for the people.  If a brand too many times goes against its Why it will lose its focus, its point of distinction, its consumers – and ultimately its market.

3)  Organizations

Employee attraction and engagementMuch like a brand attracts loyal customer, so when a company tells its Why story it attracts employees who share those beliefs, values and purpose. So in a market searching in the same pool of talent Why organisations have a greater competitive edge (other companies may have to ‘manipulate’ to gain the best, whilst Why companies inspire people to join them).

Why inspires engagement and loyalty – When employees share the organization’s Why it inspires at a deeper level than just ‘motivation’. They have a greater sense of belonging, are more engaged, more committed, have a greater sense of loyalty and are more productive. It was not Steve Jobs who came up with the iPod, iTunes or the iPhone – but people who shared his Why.

Why helps you persevere against the misfortunes – The Why is often a future driven goal. It acts like a ‘North star’ in not only guiding the organization, but also in helping to keep the company striving on against adversity.

Samuel Pierpont Langley had everything going for him: Intellect (he was a mathematics professor at Harvard), friends in high places, $50,000 grant, access to the best minds of the day, the best materials, and press coverage – all focused on winning the prized goal of being the first man to fly. A few hundred miles away Wilber & Orville Wright had non of these advantages (they ran a bicycle shop with no funding) and had no special education – but they had one thing Langley did not have – a burning purpose – a powerful reason why. Pierpont’s ‘Why’ was fame. The Wright’s was to fly. So even though the Wrights failed time and time again, their driving purpose kept them going. When the Wrights eventually took off on Dec 17th 1903, Langley gave up. Fame never comes to the person who comes in 2nd.

Why drives decision-making & direction – If you don’t know Why you can’t know How. The Why drives real focus in an organisation and can be used to help influence every decision made inside the company – it is this organizing force that propels the company forward in one cohesive and consistent direction. Knowing the Why helps people know the Whats and Hows.

Southwest Airlines did not set up with their intent to be a low-cost airline – they set up with a bigger cause. They set up to be champions of the common man. In the 1970’s air travel was expensive and exclusive. They wanted to make the whole of America more accessible to everyone (and that included making the whole traveling process as simple and enjoyable as possible). “You are now free to move about the country” said one of their first ads. Its focus was on serving the common man (the Why)  – not on the What/How e.g. the price of a cup of coffee on board. When Delta, United both launched a low-cost alternative they missed the Why and went straight for the What and How. Thus decisions were made that lost sight of the underlying Why (which was always present with Southwest). The result was both Delta and United abandoned their offering four years later having failed to cut through.

Why unites – Organisations are a collection of individuals united around a common purpose.  People who share these common values and beliefs will not only enjoy it better but will also thrive in such an organisation. It’s the cause we really come to work for – the ‘Who can I become’ is more powerful than the ‘What do I get paid?’.

Without a Why, manipulation drives the workforce – When you do not have a powerful Why that inspires and unites, then you have to manipulate (often by paying inflated salaries). Manipulating people will only hold them in place for so long, but a cause – a fundamental belief or value that they themselves own is much more enduring – loyalty comes from purpose not incentives.

Lose your Why and you can lose direction – Alongside the Why of the idea must come the How and the What. Sadly after a while a company gets so absorbed in its Whats and Hows that it loses sight of its Why. When this happens, they also lose their clarity and their customers (and start resorting to manipulation strategies).  

Often when the founder leaves, the Why gets lost. Also when a company grows so fast or so big it gets lost. The roles of individuals in a large organisation often become so specific that they have no clarity of the bigger purpose.  

When Bearings bank collapsed in 1995 after the Nick Leeson episode (with losses of £825m) it had lost its Why. The people who worked there were no longer inspired by a Why but instead motivated by their What. With a weak culture, a lack of clear values, every person became focused on personal greed with no regard for the consequences. 

Walmart’s What and How were no different from KMart and Target. But their Why was different. Sam Walton had a much bigger belief that drove him. He believed in people. He believed that if you looked after people they would look after him. So he created loyal staff, loyal customers and loyal local communities that Walmart regularly contributed to.  Sadly his driving purpose has been lost since he passed away.  As of December 2008, Walmart faced 73 class-action lawsuits related to wage violation. The greatest competition Walmart faces is its internal dysfunction.

AOL lost its Why.  Once people clamoured to work there like they do for Google today. It has lost its ‘mojo’ because it has lost its driving purpose – what it stands for. Dell lost its Why because it mistook its What (low cost) as its Why (PC power for all). At the beginning of the millennium, Starbuck lost its Why (= third space) and instead started focusing on the products and results and less on the experience (for example moving away from the ceramic mugs to drive cost efficiency). In 2008 Howard Schultz returned to restate the Why of the organisation (and got it back on track).

Set you KPI’s against your Whys – What’s are easier to measure than Why’s (as Whats are the tangible output of the organization). The trouble is the KPIs drive the behavioural focus of an organisation and so the Why can be left behind.  Thus it’s recommended that a company also include metrics for its Why.

At Bridgeport Financial, bonuses were not given out for the amount collected, but for how many ‘thank you cards’ the agents were sent. This focus on customer service actually drove the bottom line financial metrics better that any short-term focus on financial metrics could have done, lifting collection rates 300% above the industry average.

Honoré construction required everyone to clock on and clock off – stay any later and you are taken out of the bonus pool! 

4)  Personal Leadership

Leaders inspire – Successful leaders do not run companies – they lead movements.  Great leaders do something very special – they inspire us to act.  Leading means people want to follow (rather than have to follow).

Why inspires – We can all learn to lead if we start from our Why.  Steve Ballmer, the CEO of Microsoft was always highly enthusiastic and motivated through his emotional high tempo presentations. However he was less able to inspire his people than the quietly spoken Bill Gates. Energy motivates, but charisma inspires. All great leaders have a greater depth of personality that is part of their authenticity – it’s the clarity of their Why that inspires – an underlying belief and absolute conviction to a cause greater than who they are.

Leaders inspire and lead through the WhyThe leader’s job is to inspire the organisation with the Why.  If the CEO is the chief storyteller of the Why,  then the senior management are in charge of the How. Underneath that, is where the What is created.  It is the What that brings the Why to life. The Vision of a company is the Why. The mission (i.e. task) is the strategy to get there – i.e. the How.  A company needs both (that is why the book is called START with Why…).

Every Why person needs a How person to make the Why happen – Often it takes more than one person to make things happen. In Martin Luther King’s case, it was Ralph Abernathy that knew the How (e.g. “Don’t ride the buses”). Roy Disney was a How type whilst Walt was a Why type.  It was Roy who founded Buena Vista Distribution company and created the merchandising arm. Paul Allen was Bill Gates’ Why man. Rollin King was Herb Kelleher’s Why man, and Steve Wozniak was Steve Job’s Why man. Why types are visionaries and optimists. How types are more practical and live in the now. Why types can end up as starving visionaries without the aid of a How type. The Whys may have a vision, but its the Hows who turn it into a reality.  Most successful entrepreneurs are in fact How types as they make things happen.

Why drives authenticity and trust – The Why is the critical part in building any relationship.  Being authentic is increasingly important in a transparent world. It’s about consistency – where we do what we say and say what we do. Often it’s encapsulated in the stating of our values and beliefs (i.e. our Why). when we know a person is acting from a deeper sense of beliefs, then we are more likely to trust them. Their Why gives us an insight into the person – what is their driving motivation. When they do not reveal this, then we find ourselves mistrusting them (often applying more unscrupulous reasons for their behaviour).

When Gordon Bethune took over Continental in 1994, he knew “it was a crummy place to work”. He saw his first responsibility to look after his employees and build their trust and belief that they could turn the place around. He wanted it to be a family pulling together. Bethune said “You can’t lie to your own Doctor and you can’t lie to your own employees”. Happy employees lead to happy customers – and happy customers lead to happy shareholders – in that order. One of the key things he did was change the metrics as this shifts the behavioural focus of an organization (for example to be focused on planes running on time and away from just financial targets). He also concreted his words in actions. For example he instituted an open door policy and took away security on the 20th floor. He would help load bags, and he gave out a flat bonus to everyone of $65 every-time they hit their target (sent out as a separate cheque with an note attached saying “Thank you for helping make Continental one of the best”). In 1994 the airline lost $600m. The next year Continental posted profits of $250m and was soon ranked as one of the best companies to work for.

Why is where the passion liesEvery year a group of high performing entrepreneurs gather  at MIT’s Endicott House.  Only 20% said they felt they had been successful. They had lost their drive. They talked about the hard days when they first started up – and even though they had no money, they reminisced that it was the best of times. Then they had a real driving purpose which had been lost in the daily grind of managing the Whats of the business. Success comes from meeting one’s Why. It’s this never-ending pursuit of their Why – their purpose – that drives a person on. Achievements are just the milestones along the way.

New leaders. Same Why – One of the big problems when handing over the reigns of an organisation is that a new CEO may have a different view. Succession management is called that as the Why should remain unchanged.

CRITIQUE

After the success of his TED talk, I felt compelled to read the book. Whilst I am pleased I did, I think the TED talk did capture 80% of what you need to know.

The book is very readable, but there is a lot of repetition (as you will have seen above – you almost get brainwashed by the amount of times he uses Why, What & How!

A common flaw I find in authors who espouse their own theory is that they feel compelled to show its evidence everywhere! I find he pushed it too far for me when he started linking it to the ancient principle of the Golden ratio!

The theory lacks empirical evidence and is based on examples (I am sure we could all quote counter examples as well). He also has a habit of making broad sweeping statements – for example he claims that not a single ‘manipulator’ tactic breeds loyalty??? That soap powder manufacturers never asked the Why question!??? Or that the i-phone is function free??? Or TiVo nor Dell’s original Pad did not succeed because they focused on their What not their Why (whilst iPad made it – because of its Why)??? I am sure in the complex marketplace we live-in there are more than just one reason why TiVo and Dell did not take off.

In reality, it’s a good bit of marketing – i.e. new words on old themes. We have all known the importance of values and purpose for years. Indeed, the famous Quaker derived organizations (such as Quaker Oats, Reckitts, Cadbury, Rowntrees etc) were all values based organizations.

I would not want to read another 100 pages but it did raise a few questions for me:

-What happens when every company is shouting its Why?

-In the product life development model he suggests Why is very important for the early adopters. But what about the laggards?

-Does Why work better in certain categories than others?

Net – Watch his great Ted talk (see link below). Read my summary – and then save the time to visit your mum!

http://www.ted.com/talks/lang/en/simon_sinek_how_great_leaders_inspire_action.html

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About slooowdown

Consultant in the fields of Relationships and Change
This entry was posted in Advertising, Brands, Business strategy, Decision making, Innovation/NPD, Leadership, Management, Marketing, Team building, Transformational teams. Bookmark the permalink.

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