Building Companies on the Foundation of "What, Why, and How"
Mayur Potdar
Sales Lead @ Needl.ai | Sales, Outbound Sales, Growth Hacking, Customer Relationship, Partnership
Introduction
Every successful company starts with a strong foundation. This foundation can be encapsulated in three fundamental questions: What, Why, and How. Understanding and clearly defining these elements are crucial for guiding a company's strategy, aligning its team, and creating value for its customers. This article explores why companies should be built on this foundation, supported by examples, case studies, and research.
The "What"
The "What" defines the core product or service a company offers. It is the tangible output that the company produces or the service it provides. This is the starting point for any business, as it determines the company's value proposition to its customers.
Example: Apple Inc.
When Steve Jobs and Steve Wozniak founded Apple, their "What" was initially the Apple I computer. This product was the tangible offering that allowed them to enter the market and gain initial traction. Over time, Apple expanded its "What" to include a range of innovative products, including the iPod, iPhone, and iPad. Apple's ability to continually innovate and redefine its "What" has been a key factor in its sustained success.
Case Study: Tesla Motors
Tesla's "What" is electric vehicles (EVs) and energy storage solutions. The company’s clear focus on producing high-performance electric cars has set it apart from traditional automotive manufacturers. By defining its "What," Tesla has been able to innovate and capture significant market share in the EV industry. The introduction of the Model S, Model 3, and Cybertruck illustrates how Tesla's "What" continues to evolve and push the boundaries of the automotive sector.
Research Insight
A study by Osterwalder and Pigneur (2010) in their book "Business Model Generation" highlights the importance of clearly defining the value proposition (the "What") as a critical component of any business model. Companies that have a well-defined product or service offering are more likely to attract and retain customers. The clarity of "What" also helps in focusing the company's resources and efforts on delivering superior value.
The "Why"
The "Why" is the purpose or mission behind a company's existence. It explains why the company does what it does and why it matters. This aspect is crucial for motivating employees, attracting customers, and building a strong brand.
Example: Patagonia
Patagonia's "Why" is rooted in its commitment to environmental sustainability. The company’s mission statement, "We're in business to save our home planet," drives every decision it makes, from product design to supply chain management. This strong sense of purpose has earned Patagonia a loyal customer base and a reputation as a leader in corporate social responsibility. The company's "Why" is evident in initiatives such as the Worn Wear program, which encourages customers to repair and reuse products rather than buy new ones.
Case Study: TOMS Shoes
TOMS Shoes was founded with a clear "Why": to improve lives through business. The company's One for One? model, where a pair of shoes is donated for every pair sold, resonates deeply with consumers who want to make a positive impact. This purpose-driven approach has helped TOMS build a strong brand and achieve significant growth. TOMS has expanded its "Why" to include other products, such as eyewear, with similar social impact initiatives.
Research Insight
Simon Sinek's book "Start with Why" emphasizes that companies with a strong sense of purpose outperform their competitors. Sinek's research shows that people are inspired by the "Why" and that this inspiration drives loyalty and engagement. According to Sinek, companies that start with "Why" can inspire everyone involved, from employees to customers, creating a more passionate and committed community.
The "How"
The "How" refers to the processes, strategies, and operations that a company uses to deliver its "What" and fulfill its "Why." This includes everything from product development and marketing to customer service and supply chain management.
Example: Amazon
Amazon's "How" is characterized by its relentless focus on customer satisfaction and operational efficiency. The company's innovative logistics network, use of data analytics, and customer-centric approach have allowed it to become a global leader in e-commerce. Amazon Prime, with its promise of fast and reliable delivery, exemplifies the company's "How" in action. Additionally, Amazon Web Services (AWS) showcases how the company has leveraged its operational expertise to dominate the cloud computing market.
Case Study: Toyota Production System (TPS)
Toyota's "How" is defined by the Toyota Production System (TPS), a methodology that emphasizes continuous improvement, waste reduction, and respect for people. This approach has enabled Toyota to produce high-quality vehicles efficiently and become one of the world's largest automotive manufacturers. The principles of TPS, such as Just-In-Time production and Jidoka (automation with a human touch), have been widely adopted across various industries.
Research Insight
The Harvard Business Review article "Building a Learning Organization" by Garvin, Edmondson, and Gino (2008) highlights the importance of having robust processes and systems in place. Companies that focus on learning and continuous improvement in their "How" are better positioned to adapt to changes and achieve long-term success. The article emphasizes that a culture of continuous learning and improvement can lead to sustained competitive advantage.
Integrating "What, Why, and How"
Integrating the "What," "Why," and "How" creates a cohesive strategy that aligns the entire organization. Companies that successfully integrate these elements are better able to navigate challenges, seize opportunities, and drive sustainable growth.
Example: Starbucks
Starbucks' "What" is high-quality coffee and customer experiences. Its "Why" is to inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time. The "How" involves creating a welcoming store environment, ethically sourcing coffee beans, and providing excellent customer service. This integrated approach has made Starbucks a global coffeehouse leader. The company's commitment to ethical sourcing and community engagement further strengthens its "Why."
Case Study: Southwest Airlines
Southwest Airlines' "What" is affordable air travel. Its "Why" is to democratize the skies and make flying accessible to more people. The "How" includes operating a single aircraft model (Boeing 737) to simplify maintenance, focusing on point-to-point routes, and fostering a fun, employee-centric culture. This integration has allowed Southwest to become one of the most successful airlines in the industry. The airline's unique boarding process and emphasis on customer service exemplify its "How."
Research Insight
Research by Collins and Porras in their book "Built to Last" found that visionary companies that endure over time have a clear understanding of their core ideology, which encompasses their "What," "Why," and "How." These companies maintain a balance between preserving their core values and stimulating progress. The study highlights that a well-integrated approach helps companies adapt to changing environments while staying true to their mission.
Books for Further Reading
Conclusion
Building a company on the foundation of "What, Why, and How" is essential for long-term success. By clearly defining these elements, companies can create a strong value proposition, inspire employees and customers, and develop effective strategies and operations. Through examples, case studies, and research, we see that companies that integrate these elements are better positioned to thrive in today's competitive landscape. Understanding and aligning the "What," "Why," and "How" ensures that a company can deliver consistent value, foster loyalty, and achieve sustainable growth.