Start With Why

In Start With Why the author shows his leadership approach that focuses on the why behind products, services, or movements.

While the author makes good points in Start With Why, the book was too repetitive for my taste. Most of the examples I already knew from somewhere else. And they also smelled a bit of confirmation bias and hindsight bias, respectively.

My notes

Introduction: Why Start With WHY?

Great leaders [...] are able to inspire people to act. Those who are able to inspire give people a sense of purpose or belonging that has little to do with any external incentive or benefit to be gained. Those who truly lead are able to create a following of people who act not because they were swayed, but because they were inspired. For those who are inspired, the motivation to act is deeply personal. They are less likely to be swayed by incentives. Those who are inspired are willing to pay a premium or endure inconvenience, even personal suffering. Those who are able to inspire will create a following of people – supporters, voters, customers, workers – who act for the good of the whole not because they have to, but because they want to.

A World That Doesn't Start With WHY

Assume You Know

We make assumptions about the world around us based on sometimes incomplete or false information. [...] This is important because our behavior is affected by our assumptions or our perceived truths. We make decisions based on what we think we know.

Not only bad decisions are made on false assumptions. Sometimes when things go right, we think we know why, but do we really? That the result went the way you wanted does not mean you can repeat it over and over.

You have to be careful what you think you know. Assumptions, [...] even when based on sound research, can lead us astray.

Carrots and Sticks

There's barely a product or service on the market today that customers can't buy from someone else for about the same price, about the same quality, about the same level of service and about the same features. [...] But if you ask most businesses why their customers are their customers, most will tell you it's because of superior quality, features, price or service. In other words, most companies have no clue why their customers are their customers. This is a fascinating realization. If companies don't know why their customers are their customers, odds are good that they don't know why their employees are their employees either.

There are only two ways to influence human behavior: you can manipulate it or you can inspire it. When I mention manipulation, this is not necessarily pejorative; it's a very common and fairly benign tactic.

From business to politics, manipulations run rampant in all forms of sales and marketing. Typical manipulations include: dropping the price; running a promotion; using fear, peer pressure or aspirational messages; and promising innovation to influence behavior – be it a purchase, a vote or support. When companies or organizations do not have a clear sense of why their customers are their customers, they tend to rely on a disproportionate number of manipulations to get what they need. And for good reason. Manipulations work.

Many companies are reluctant to play the price game, but they do so because they know it is effective. [...] Drop your prices low enough and people will buy from you.

Playing the price game, however, can come at tremendous cost and can create a significant dilemma for the company. For the seller, selling based on price is like heroin. The short-term gain is fantastic, but the more you do it, the harder it becomes to kick the habit. Once buyers get used to paying a lower-than-average price for a product or service, it is very hard to get them to pay more.

I cannot debate that dropping the price is not a perfectly legitimate way of driving business; the challenge is staying profitable.

Businesses also use fear to agitate the insecurity we all have in order to sell products. The idea is that if you don't buy the product or service, something bad could happen to you.

If fear motivates us to move away from something horrible, aspirational messages tempt us toward something desirable.

Though positive in nature, aspirational messages are most effective with those who lack discipline or have a nagging fear or insecurity that they don't have the ability to achieve their dreams on their own (which, at various times for various reasons, is everyone).

When marketers report that a majority of a population or a group of experts prefers their product over another, they are attempting to sway the buyer to believing that whatever they are selling is better. The peer pressure works because we believe that the majority or the experts might know more than we do. Peer pressure works not because the majority or the experts are always right, but because we fear that we may be wrong.

There is a big difference between repeat business and loyalty. Repeat business is when people do business with you multiple times. Loyalty is when people are willing to turn down a better product or a better price to continue doing business with you. Loyal customers often don't even bother to research the competition or entertain other options. Loyalty is not easily won. Repeat business, however, is. All it takes is more manipulations.

Manipulations are a perfectly valid strategy for driving a transaction, or for any behavior that is only required once or on rare occasions. [...] In any circumstance in which a person or organization wants more than a single transaction, however, if there is a hope for a loyal, lasting relationship, manipulations do not help.

It's in the tough times that loyal customers matter most.

Knowing you have a loyal customer and employee base not only reduces costs, it provides massive peace of mind. Like loyal friends, you know your customers and employees will be there for you when you need them most. It is the feeling of "we're in this together", shared between customer and company, voter and candidate, boss and employee, that defines great leaders.

An Alternative Perspective

The Golden Circle

WHAT: Every single company and organization on the planet knows WHAT they do. This is true no matter how big or small, no matter what industry. Everyone is easily able to describe the products or services a company sells or the job function they have within that system. WHATs are easy to identify. HOW: Some companies and people know HOW they do WHAT they do. Whether you call them a "differentiating value proposition", "proprietary process" or "unique selling proposition", HOWs are often given to explain how something is different or better. Not as obvious as WHATs, many think these are the differentiating or motivating factors in a decision. It would be false to assume that's all that is required. There is one missing detail. WHY: Very few people or companies can clearly articulate WHY they do WHAT they do. When I say WHY, I don't mean to make money – that's a result. By WHY I mean what is your purpose, cause or belief? WHY does your company exist? WHY do you get out of bed every morning? And WHY should anyone care?

When most organizations or people think, act or communicate they do so from the outside in, from WHAT to WHY. And for good reason – they go from clearest thing to the fuzziest thing. We say WHAT we do, we sometimes say HOW we do it, but we rarely say WHY we do WHAT we do. But not the inspired companies. Not the inspired leaders. Every single one of them, regardless of their size or their industry, thinks, acts and communicates from the inside out.

[...] people don't buy WHAT you do, they buy WHY you do it.

Any company faced with the challenge of how to differentiate themselves in their market is basically a commodity, regardless of WHAT they do or HOW they do it.

Having good-quality products is of course important. No matter how clear your WHY, if WHAT you sell doesn't work, the whole thing falls flat. But a company doesn't need to have the best products, they just need to be good or very good.

This Is Not Opinion, This Is Biology

[...] we want to be around people and organizations who are like us and share our beliefs. When companies talk about WHAT they do and how advanced their products are, they may have appeal, but they do not necessarily represent something to which we want to belong. But when a company clearly communicates their WHY, what they believe, and we believe what they believe, then we will sometimes go to extraordinary lengths to include those products or brands in our lives. This is not because they are better, but because they become markers or symbols of the values and beliefs we hold dear. Those products and brands make us feel like we belong and we feel a kinship with others who buy the same things.

We are drawn to leaders and organizations that are good at communicating what they believe. Their ability to make us feel like we belong, to make us feel special, safe and not alone is part of what gives them the ability to inspire us. Those whom we consider great leaders all have an ability to draw us close and to command our loyalty. And we feel a strong bond with those who are also drawn to the same leaders and organizations.

Products are not just symbols of what the company believes, they also serve as symbols of what the loyal buyers believe.

If a company does not have a clear sense of WHY then it is impossible for the outside world to perceive anything more than WHAT the company does. And when that happens, manipulations that rely on pushing price, features, service or quality become the primary currency of differentiation.

Clarity, Discipline and Consistency

If people don't buy WHAT you do, they buy WHY you do it, so it follows that if you don't know WHY you do WHAT you do, how will anyone else? If the leader of the organization can't clearly articulate WHY the organization exists in terms beyond its products or services, then how does he expect the employees to know WHY to come to work?

To inspire starts with the clarity of WHY.

Once you know WHY you do what you do, the question is HOW will you do it? HOWs are your values or principles that guide HOW to bring your cause to life. HOW we do things manifests in the systems and processes within an organization and the culture. Understanding HOW you do things and, more importantly, having the discipline to hold the organization and all its employees accountable to those guiding principles enhances an organization's ability to work to its natural strengths. Understanding HOW gives greater ability, for example, to hire people or find partners who will naturally thrive when working with you.

For values or guiding principles to be truly effective they have to be verbs. It's not "integrity", its "always do the right thing". It's not "innovation", it's "look at the problem from a different angle".

Everything you say and everything you do has to prove what you believe. A WHY is just a belief. That's all it is. HOWs are the actions you take to realize that belief. And WHATs are the results of those actions – everything you say and do: your products, services, marketing, PR, culture and whom you hire. If people don't buy WHAT you do but WHY you do it, then all these things must be consistent.

The only way people will know what you believe is by the things you say and do, and if you're not consistent in the things you say and do, no one will know what you believe.

You can't ask others what you have to do to be authentic. Being authentic means that you already know.

Authenticity cannot be achieved without clarity of WHY.

It is a false assumption that differentiation happens in HOW and WHAT you do. Simply offering a high-quality product with more features or better service or a better price does not create difference. Doing so guarantees no success. Differentiation happens in WHY and HOW you do it.

The goal of business should not be to do business with anyone who simply wants what you have. It should be to focus on the people who believe what you believe. When we are selective about doing business only with those who believe in our WHY, trust emerges.

Leaders Need a Following

The Emergence of Trust

[...] if a company mistreats their people, just watch how the employees treat their customers.

Trust begins to emerge when we have a sense that another person or organization is driven by things other than their own self-gain.

Leading is not the same as being the leader. Being the leader means you hold the highest rank, either by earning it, good fortune or navigating internal politics. Leading, however, means that others willingly follow you – not because they have to, not because they are paid to, but because they want to.

Those who lead are able to do so because those who follow trust that the decisions made at the top have the best interest of the group at heart. In turn, those who trust work hard because they feel like they are working for something bigger than themselves.

[...] the goal is not to hire people who simply have a skill set you need, the goal is to hire people who believe what you believe.

The goal is to hire those who are passionate for your WHY, your purpose, cause or belief, and who have the attitude that fits your culture. Once that is established, only then should their skill set and experience be evaluated.

Great companies don't hire skilled people and motivate them, they hire already motivated people and inspire them. People are either motivated or they are not. Unless you give motivated people something to believe in, something bigger than their job to work toward, they will motivate themselves to find a new job and you'll be stuck with whoever's left.

When people inside the company know WHY they come to work, people outside the company are vastly more likely to understand WHY the company is special.

The role of a leader is not to come up with all the great ideas. The role of a leader is to create an environment in which great ideas can happen.

Companies with a clear sense of WHY tend to ignore their competition, whereas those with a fuzzy sense of WHY are obsessed with what others are doing.

How a Tipping Point Tips

Our population is broken into five segments that fall across a bell curve: innovators, early adopters, early majority, late majority and laggards.

Innovators [...] pursue new products or ideas aggressively and are intrigued by any fundamental advance; being first is a central part of their lives. As their name suggests, innovators are the small percentage of the population that challenges the rest of us to see and think of the world a little differently.

Early adopters are similar to innovators in that they appreciate the advantages wrought by new ideas or technologies. They are early to recognize the value of new ideas and are quite willing to put up with imperfection because they can see the potential. Although quick to see the potential and willing to take risks to try new technologies or ideas, early adopters are not idea generators like the innovators.

Early adopters, like innovators but to a lesser degree, are willing to pay a premium or suffer some level of inconvenience to own a product or espouse an idea that feels right.

The farther right you go on the curve, the more you will encounter the clients and customers who may need what you have, but don't necessarily believe what you believe. As clients, they are the ones for whom, no matter how hard you work, it's never enough. Everything usually boils down to price with them. [...] The importance of identifying this group is so that you can avoid doing business with them. Why invest good money and energy to go after people who, at the end of the day, will do business with you anyway if you meet their practical requirements but will never be loyal if you don't?

Each of us assigns different values to different things and our behaviors follow accordingly. This is one of the major reasons why it is nearly impossible to "convince" someone of the value of your products or ideas based on rational arguments and tangible benefits.

The early majority, indeed the entire majority, need the recommendation of someone else who has already sampled the product or service. They need to know someone else has tested it. They need that trusted, personal recommendation.

If you have the discipline to focus on the early adopters, the majority will come along eventually.

How to Rally Those Who Believe

Start With WHY, But Know HOW

All great leaders have charisma because all great leaders have clarity of WHY; and an undying belief in a purpose or cause bigger than themselves.

Regardless of WHAT we do in our lives, our WHY – our driving purpose, cause or belief – never changes. [...] WHAT we do is simply the tangible way we find to breathe life into that cause.

No matter how charismatic or inspiring the leader is, if there are not people in the organization inspired to bring that vision to reality, to build an infrastructure with systems and processes, then at best, inefficiency reigns, and at worst, failure results.

For every great leader, for every WHY-type, there is an inspired HOW-type or group of HOW-types who take the intangible cause and build the infrastructure that can give it life. That infrastructure is what actually makes any measurable change or success possible.

WHY-types are focused on the things most people can't see, like the future. HOW-types are focused on things most people can see and tend to be better at building structures and processes and getting things done. One is not better than the other, they are just different ways people naturally see and experience the world.

Without someone inspired by their vision and the knowledge to make it a reality, most WHY-types end up as starving visionaries, people with all the answers but never accomplishing much themselves.

For a message to have real impact, to affect behavior and seed loyalty, it needs more than publicity. It needs to publicize some higher purpose, cause or belief to which those with similar values and beliefs can relate. Only then can the message create any lasting mass-market success.

Clarity of purpose, cause or belief is important, but it is equally important that people hear you. For a WHY to have the power to move people it must not only be clear, it must be amplified to reach enough people to tip the scale.

Know WHY. Know HOW, Then WHAT?

As a company grows, the CEO's job is to personify the WHY. To ooze of it. To talk about it. To preach it. To be a symbol of what the company believes.

The leader must ensure that there are people on the team who believe what they believe and know HOW to build it. The HOW-types are responsible for understanding WHY and must come to work every day to develop the systems and hire the people who are ultimately responsible for bringing the WHY to life. The general employees are responsible for demonstrating the WHY to the outside world in whatever the company says and does. The challenge is that they are able to do it clearly.

Communication Is Not About Speaking, It's About Listening

A symbol cannot have any deep meaning until we know WHY it exists in terms bigger than simply to identify the company. Without clarity of WHY, a logo is just a logo. To say that a logo stands for quality, service, innovation and the like only reinforces its status as just a logo. These qualities are about the company and not about the cause.

It's not just logos, however, that can serve as symbols. Symbols are any tangible representation of a clear set of values and beliefs.

If WHAT you do doesn't prove what you believe, then no one will know what your WHY is and you'll be forced to compete on price, service, quality, features and benefits; the stuff of commodities.

We are in pursuit of understanding the best practices of others to help guide us. But it is a flawed assumption that what works for one organization will work for another. Even if the industries, sizes and market conditions are the same, the notion that "if it's good for them, it's good for us" is simply not true.

It is not just WHAT or HOW you do things that matters; what matters more is that WHAT and HOW you do things is consistent with your WHY. Only then will your practices indeed be best.

There is nothing inherently wrong with looking to others to learn what they do, the challenge is knowing what practices or advice to follow.

With a WHY clearly stated in an organization, anyone within the organization can make a decision as clearly and as accurately as the founder. A WHY provides the clear filter for decision-making.

[...] if a company tries too many times to "seize market opportunities" inconsistent with their WHY over time, their WHY will go fuzzy and their ability to inspire and command loyalty will deteriorate.

What companies say and do matters. A lot. It is at the WHAT level that a cause is brought to life. It is at this level that a company speaks to the outside world and it is then that we can learn what the company believes.

The Biggest Challenge Is Success

When WHY Goes Fuzzy

[...] success and achievement are not the same thing, yet too often we mistake one for the other. Achievement is something you reach or attain, like a goal. It is something tangible, clearly defined and measurable. Success, in contrast, is a feeling or a state of being.

[...] achievement comes when you pursue and attain WHAT you want. Success comes when you are clear in pursuit of WHY you want it.

Success comes when we wake up every day in that never-ending pursuit of WHY we do WHAT we do. Our achievements, WHAT we do, serve as the milestones to indicate we are on the right path. It is not an either/or – we need both.

Split Happens

The reason so many small businesses fail, however, is because passion alone can't cut it. For passion to survive, it needs structure. A WHY without the HOWs, passion without structure, has a very high probability of failure.

The single greatest challenge any organization will face is... success. When the company is small, the founder will rely on his gut to make all the major decisions. From marketing to product, from strategy to tactics, hiring and firing, the decisions the founder makes will, if he trusts his gut, feel right. But as the organization grows, as it becomes more successful, it becomes physically impossible for one person to make every major decision. Not only must others be trusted and relied upon to make big decisions, but those people will also start making hiring choices. And slowly but surely, [...] the clarity of WHY starts to dilute.

[...] for an organization to continue to inspire and lead beyond the lifetime of its founder, the founder's WHY must be extracted and integrated into the culture of the company. What's more, a strong succession plan should aim to find a leader inspired by the founding cause and ready to lead it into the next generation. Future leaders and employees alike must be inspired by something bigger than the force of personality of the founder and must see beyond profit and shareholder value alone.

Money is a perfectly legitimate measurement of goods sold or services rendered. But it is no calculation of value. Just because somebody makes a lot of money does not mean that he necessarily provides a lot of value. Likewise, just because somebody makes little money does not necessarily mean he provides only a little value. [...] Value is a feeling, not a calculation. It is perception.

[...] value is a perception, not a calculation, which is the reason companies make such a big deal about investing in their brand. But a strong brand, like all other intangible factors that contribute to the perception of value, starts with a clear sense of WHY.

When people describe the value they perceive with visceral, excited words like "love", that is a sure sign that a clear sense of WHY exists.

[...] though profit and shareholder value are valid and essential destinations, they do not inspire people to come to work.

When the person who personifies the WHY departs without clearly articulating WHY the company was founded in the first place, they leave no clear cause for their successor to lead. The new CEO will come aboard to run the company and will focus attention on the growth of WHAT with little attention to WHY. Worse, they may try to implement their own vision without considering the cause that originally inspired most people to show up in the first place. In these cases, the leader can work against the culture of the company instead of leading or building upon it. The result is diminished morale, mass exodus, poor performance and a slow and steady transition to a culture of mistrust and every-man-for-himself.

Successful succession is more than selecting someone with an appropriate skill set – it's about finding someone who is in lockstep with the original cause around which the company was founded. Great second or third CEOs don't take the helm to implement their own vision of the future; they pick up the original banner and lead the company into the next generation.

Discover WHY

The Origins of a WHY

The WHY does not come from looking ahead at what you want to achieve and figuring out an appropriate strategy to get there. It is not born out of any market research. It does not come from extensive interviews with customers or even employees. It comes from looking in the completely opposite direction from where you are now. Finding WHY is a process of discovery, not invention. [...] the WHY for every [...] individual or organization comes from the past. It is born out of the upbringing and life experience of an individual or small group.

The New Competition

When you compete against everyone else, no one wants to help you. But when you compete against yourself, everyone wants to help you.

All organizations start with WHY, but only the great ones keep their WHY clear year after year. Those who forget WHY they were founded show up to the race every day to outdo someone else instead of to outdo themselves.