Start With Why: How Great Leaders Inspire Everyone to Take Action by : Simon Sinek

Summary of the Summary

Purposeful leadership, in any field of human endeavor, begins with a clear WHY. The clear WHY of a visionary person will attract the HOW-types to help actualize it, and produce “fruits” ― which are the WHATs.

Also, an organization or a movement will succeed only to the extent to which its founder’s WHYs remain clear, even after he or she is no longer around to personify it.

This is nature’s natural template for success in any endeavor. Attempting to tweak this template will only result in failure.

Our rational way of thinking, in which we rely on a lot of data, cannot yield us 20/20 foresight

The tension between our instincts and our logical decision-making process is a constant we live with. The question then is how we can have 20/20 foresight, take a specific course of action, succeed and repeat our successes over and over again?

We make assumptions about our world, and those assumptions become our truths and influence our behavior. For example, we once believed the earth was flat. This prevented us from exploring far and wide because we feared we would drop off the edge of the earth. And when that truth changed, and the earth was proven to be round, the behavior changed too. Explorers began crisscrossing the earth. Trade routes between far-off ends of the earth were established.

When corporations meet and exceed their business goals, it is because they took the right decisions. That implies that the underlying assumptions that informed those decisions are true. But do they know what these assumptions are? Are they able to repeat their successes year in, year out?

At our individual levels, how do we ensure that our decisions, based on assumptions we make, yield the best results for us?

It would be helpful if we considered factors external to our rational way of thinking. An example would be that point in time when you followed your instinct and took a decision, and things worked out fine.

Businesses lose in the long-run when they manipulate their customers’ buying behavior

Corporations must influence customer-buying behavior if they must succeed. They do this by inspiring or manipulating.

Most corporations default to manipulating their customers’ buying behavior through any of price dropping, promotions, using the instrumentality of fear, peer pressure or by aspirational messages; etcetera. They do this because they have no clear understanding of why the customers they have is theirs.

Price dropping is one example. Retail corporations crash their prices toward the end of every retail season to clear out their shelves for new merchandise. They gain in the short-term; but once their customers get used to paying below average prices for the goods that they stock, it becomes hard subsequently to get them to pay more. This means that they need to sell more in the next retail season to cover their costs and earn some profit; again, by crashing the prices. In the end, they lose, because all of the merchandise they have becomes a commodity.

Corporations also use promotions to manipulate customer behavior. In 2007, Toyota captured 16.3% of the US market share, up from 7.8% in 1990. During the same period, GM’s share of the market dropped from 35% to 23.8%. Then in 2008, US consumers bought more foreign-brand automobiles than their locally-manufactured counterparts. US automobile manufacturers responded to the threat by using promotions.

GM, for example, offered its customers cashback incentives of between $500 and $7,000 on every automobile they bought. The promotion worked for a while, but profit margins reduced. When GM reduced the cashback incentive so as to conserve its profits, sales dropped.

Manipulations don’t build customer loyalty; and over time, both the buyer and the seller would get stressed out by a manipulative system.

An individual or a corporation can command a loyal following by communicating from the core to the periphery of the golden circle

The golden circle explains how individuals or corporations achieve success and consistently repeat the successes they achieved. The golden circle is three concentric circles drawn together. The outermost circle is the “WHAT,” the middle circle is the “HOW” and the innermost circle is the “WHY.”

WHATs are a corporation’s products or services. HOWs are a corporation’s value propositions, the unique attributes that make it different from its peers in the same industry. WHYs stand for the reasons corporations do WHAT they do.

The typical corporation communicates from the outside of the golden circle toward its core. It would first state WHAT it does, maybe state HOW it does WHAT it does, and rarely state WHY it does WHAT it does. Then a call for action would follow.

Inspired corporations or individuals communicate differently. They communicate from the core of the golden circle to its periphery. First, they let you know WHY they do WHAT they do; then they state HOW they do WHAT they do and then tell you WHAT results from their WHYs and their HOWs.

When corporations communicate from the core of their golden circle to its periphery, they are able to inspire a loyal following because people buy into WHYs, not WHATs.

Apple, Inc. is a good example. Apple’s WHY — to challenge the status quo and empower the individual, shows in all it says and does. Its products, which are its WHATs, are tangible proofs of its cause. This is why Apple commands a loyal following.

We become loyal to a brand when it connects with our gut

We have a biological need to belong. It makes us feel connected and safe. This makes us trust the brands we perceive to share our beliefs; and we would go to great lengths, including spending good money to get that feeling.

When corporations communicate WHAT they do by pointing out all the great features about the products they sell, they appeal to, but do not inspire us.

For other corporations that communicate WHY they do WHAT they do, we take them to be symbols of our values and beliefs and go to great lengths to include their products in our lives.

The natural need to belong also makes us good at spotting products that don't belong. Dell once tried selling the mp3 players it manufactured. It didn't fly because “Dell selling mp3 players” didn't "feel" right. Apple, on the other hand, manufactured a promotional mp3 player, the iPod, with U2. Now, that made sense. Apple is on a mission to push boundaries, U2 is consistently pushing boundaries in its genre of music. It was a perfect tie-in.

Our brains have a structure similar to that of the golden circle. We process rational and analytical thoughts, as well as language in the neocortex area. It corresponds to the "WHAT" area. The inner recesses of our brains, the limbic section, is where we process our feelings, including those of trust and loyalty. It is the root of our behaviors and all of our decision-making. It corresponds to the "WHY" area.

Corporations seeking to command a loyal following have to connect with people’s limbic brains, because gut decisions happen there. They can do that by structuring their customers’ buying decisions in an order that takes the customer from the limbic to the neocortex parts of his or her brain.

For a brand to be authentic; there must be clarity, discipline and consistency respectively around its WHYs, HOWs and WHATs

The golden circle requires a balance which happens when there is a balance of the WHY, the HOW and the WHAT.

The WHY has to be clear. Why does the corporation or individual do WHAT it does? What big issues, beyond its products or services, are at stake?

There has to be discipline around the HOW. If the WHY, the cause, is clear, how will the corporation or individual chase after it? The HOWs are the values and principles that give flesh to the WHY. The HOW is the totality of the systems and processes within the business that helps it to manifest its WHY. Discipline is required to stay the course and not deviate from the HOWs, because of long-term success, the kind guaranteed by the golden circle, requires short-term costs.

The WHATs have to be consistent. They are the evidence of all the corporation or individual stands for, its WHYs and HOW the corporation or individual has gone about actualizing them. If the WHATs are consistent, it will be easy for people to hear the WHYs and give it the authenticity it requires.

When a brand becomes authentic, it means its golden circle is finally in balance. It means that all that the brand or the person envisioning the cause says and does arise from heartfelt beliefs. No product or service can stand the test of time in the markets without authenticity.

Apple's WHY is to challenge the status quo and empower the individual. Its WHATs — the Macs, the icons, the iPads, iTunes; etcetera all do exactly that. Its WHYs, its HOWs, and its WHATs are all in balance.

We trust a brand when its golden circle is in balance

Corporations or individuals inspire us when we trust them. We trust them when we know that they are motivated beyond personal gain — when their golden circles are in balance.

Trust resides in the limbic areas of our brains. It is not rational; it is a feeling. For example, we trust some corporations or some individuals even when things go wrong and don't trust others even when things go as planned.

Trust is built or earned through the consistent communication and demonstration of shared values and beliefs. The WHYs are clear, the HOWs are disciplined and the WHATs are consistent. The golden circle is in balance and thus, trust is built. And where there is trust, there is a sense of value — a transference of trust.

Gordon Bethune rebuilt Continental Airlines, the "worst airline in the industry" in the 1980s to a ranking as one of the best corporations to work for in America by the mid-1990s. He turned the airline around principally by working on rebuilding the employees’ trust in the system. He rallied Continental Airlines’ employees around the airlines’ golden circle.

Trust allows us to rely on others. The only people we go to for advice are the ones we trust. Trust advances lives, families, businesses, societies and humanity. If there was no trust, no one would take any risk. There would be no going off to far-flung places of the earth to explore or experimentation. Civilization would ground to a halt.

Great corporations are built on trust; and when, if ever, the trust erodes, the corporations break down irretrievably.

A brand or a cause reaches a tipping point when it diffuses across to the majority of the population

Any population can be “diffused” over a bell curve, broken into five distinct segments, beginning from the left side of the curve — innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%).

Innovators and early adopters sit on the left side of the diffusion curve. Together, they make up 16 percent of the general population. They trust their guts. They will suffer some inconvenience, for example, fronting some extra cash, to own a product or subscribe to a service or follow a cause that “feels” right. For example, they will stand in line for six hours, to be amongst the first to buy the latest iPhone. They do this because of who they are, not because of the product. For them, it's all about the WHYs.

The early majority and the late majority occupy the middle of the diffusion curve. They are very practical and rational in their buying decisions. For these groups of people; the quality, the price, the features and so on; in other words, the WHATs, of the product or service or the cause, matter.

A business that wants its product or service to “tip” — to capture the mass market — should aim its marketing resources at the innovators and early adopters. Apart from suffering some inconvenience to own the product or service, they will, of their own volition, spread the word about the product or service to the early and late majorities, who will not buy the product or service until they hear a word-of-mouth recommendation from an innovator or early adopter. However, once the early and late majorities adopt the product or service, they will tip the point for any corporation trying to penetrate the mass market.

On August 28, 1963, when Dr. Martin Luther King Jr. gave his famous “I Have a Dream” speech from the steps of the Lincoln Memorial in Washington D. C., in the presence of some 250,000 people, he tipped the civil rights movement in the US by rallying the whole nation around his cause. He was able to this by, first, marketing his “cause” to the innovators and the early adopters; who then went on, after “buying in” to “spread the word” to the early and late majorities.

WHY-type leaders need HOW-type followers around them if they must succeed at their cause

Charismatic leaders have WHYs that are very clear; hence, they are able to inspire people effortlessly.

But having a clear WHY is not enough to make a purpose or a cause happen. The WHY might inspire and start the process, but energy is required to drive the movement and that energy is definitely not charisma. So where does the energy come from?

It comes from HOW-type followers.

A WHY-type leader will meander inefficiently through life without HOW-type followers around to help him or her to chart a course towards the destination — the vision. The WHY-type Dr. Martin Luther King Jr. would articulate his vision of an American where all would be treated equally, regardless of race; but it was always the HOW-type Ralph Abernathy who would “break it all down” for Dr. King's audiences. For instance, he would tell Dr. King's audiences not to ride the buses the following day as a way of peacefully protesting the continuing segregation in American society. The WHY-type Walt Disney had the HOW-type Roy Disney, and the WHY-type Bill Gates had the HOW-type Steve Balmer.

The bulk of the people living in the world, 86%, if we follow the diffusion curve's leading, are HOW-types. HOW-types will do well in the world, maybe make a lot of money in several millions of dollars; but it is the WHY-types who will build the billion-dollar businesses and change the world.

An organization can project its WHYs into its marketplace through the use of consistent imagery and analogies

Once an organization has its golden circle in balance, it needs to consistently project it's WHYs to its marketplace, if it is to succeed. But there is a disconnect because all the marketplace sees and hears of the organization are its WHATs — its products and services; and maybe some of its HOWs — its marketing and advertising.

For a fact, organizations of all sizes struggle to communicate their differentiating value propositions, their WHYs, to the marketplace. This is so because their WHYs are intangible emotional feelings, unlike their WHATs, which are tangible.

The way to resolve this is for the organization to resort to the use of imagery and analogies to project its WHYs into the marketplace. Apple, Inc. does this consistently. If you recall, Apple, Inc’s WHY is to “challenge the status quo and empower the individual.” So, in all of its advertising, you will never find any group of persons using its product. What you will always see, is the individual, the rebel, challenging the status quo. Its "Think Different" campaign is particularly instructive. The campaign showcased several rebels who "thought differently" in their fields of endeavor — Pablo Picasso, Martha Graham, Jim Henson, Alfred Hitchcock; etcetera — and challenged the marketplace to “think differently” like these “rebels.”

An organization degenerates when its WHYs becomes unclear

There’s a difference between success and achievement. What most people count as success is nothing more than an achievement. This is why they don’t “feel” successful.

An achievement is a goal one reaches, for example, a financial goal. An achievement is tangible, clearly defined and can be measured. An achievement happens after you chase and attain a WHAT.

Success, on the other hand, is a feeling; a state of being. Success is when you chase after and attain a WHY or several WHYs.

So achievements are the milestones on the journey to success. A corporation begins to mistake one for the other and degenerates when its WHYs become unclear.

After Sam Walton’s death in 1992, Wal-Mart lost sight of its founder's WHY, to serve humanity, and focused instead on its WHATS, to sell low-priced goods. That naturally shifted the corporation's focus from serving the communities in which it operated and its peoples to manipulating them so it could sell more.

The shift came at a cost.

Soon enough, Wal-Mart became embroiled in several scandals and class-action litigation. It has paid out several hundreds of millions of dollars to settle some of the legal cases against it in several courts. Several communities and their legislators now actively collaborate to block the corporation from building new stores because of its reputation for unfair labor practices.

The more complex an organization gets, the higher the risk that a split between its WHYs and WHATs will happen

Every multimillion dollar corporation started small — Wal-Mart, Disney, Apple, Microsoft, General Electric, Ford; and their likes. They all started out with an idea, its founder and a small group of persons who helped actualize the founder's vision.

As the corporation grows, it becomes more complex as it adds on systems and processes to keep the founder's vision going. Because of the corporation's increasing complexity, a split between its WHYs and its WHATs happens. The corporation's WHYs become unclear.

To prevent this, corporations must extract the founder's WHYs and make it part and parcel of the corporation's culture; by finding a way to measure and incentivize them. For example, Bridgeport Financial, a Collections Agency, pays bonuses based on the number of “thank you” cards its Collection Agents send out to debtors. Because their bonuses are tied to the liveliness and friendliness of the conversations they will have with the debtors they are to collect on, which is the agency founder's WHY the agents have no choice but to create the conversational environment in which such would thrive.

Succession planning will also help prevent the split and keep a corporation's WHYs alive. The person at the helm of affairs needs to be the personification of the corporation founder's WHYs after the founder is no longer around. Such a person needs to focus on amplifying the founder's WHY, not creating his or her own WHY, to the detriment of the corporation's culture.