THE BIG IDEA: Great companies have a clear purpose for their existence, and it’s not the pursuit of money.
The Wright brothers were able to inspire those around them and truly lead their team to develop a technology that would change the world.
Apple inspires. Apple starts with Why. Steve Jobs and Steve Wozniak, men not motivated by money, envisioned a nobler purpose for the technology. They saw the personal computer as a way for the little man to take on a corporation. What has made Apple special is that they’ve been able to repeat the pattern over and over and over.
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.
Companies that have a clear WHY have the most loyal customers and the most loyal employees. They tend to be more profitable than others in their industry. They are more innovative, and most importantly, they are able to sustain all these things over the long term.
People who love going to work are more productive and more creative. They go home happier and have happier families. They treat their colleagues and clients and customers better. Inspired employees make for stronger companies and stronger economies.
PART 1: A WORLD THAT DOESN’T START WITH WHY
CH 2: CARROTS AND STICKS
If you truly have a first-mover’s advantage, it’s probably lost in a matter of months.
There are only two ways to influence human behavior: you can manipulate it or you can inspire it.
Playing the price game or relying on promotions are such common manipulations that we often forget that we’re being manipulated in the first place.
Fear can manipulate us into buying. Aspirational messages can also manipulate us into buying. But both are still manipulations.
I cannot dispute that manipulations work, but these manipulations don’t last. Manipulations don’t breed loyalty .
In business, leadership means that customers will continue to support your company even when you slip up.
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.
Manipulations lead to transactions, not loyalty.
Manipulations are a perfectly valid strategy for driving a transaction, or for any behavior that is only required once or on rare occasions.
After September 11, there were customers who sent checks to Southwest Airlines to show their support. One note that accompanied a check for $1,000 read, “You’ve been so good to me over the years, in these hard times I wanted to say thank you by helping you out.”
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.
The danger of manipulations is that they work. And because manipulations work, they have become the norm, practiced by the vast majority of companies and organizations, regardless of size or industry.
PART 2: AN ALTERNATIVE PERSPECTIVE
CH 3: THE GOLDEN CIRCLE
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?
People don’t buy WHAT you do, they buy WHY you do it.
Apple’s WHY, to challenge the status quo and to empower the individual, is a pattern in that it repeats in all they say and do. It comes to life in their iPod and even more so in iTunes.
And it is Apple’s clarity of WHY that gives them such a remarkable ability to innovate, often competing against companies seemingly more qualified than they, and succeed in industries outside their core business.
Knowing your WHY is not the only way to be successful, but it is the only way to maintain a lasting success and have a greater blend of innovation and flexibility.
CH 4: THIS IS NOT OPINION, THIS IS BIOLOGY
Our desire to feel like we belong is so powerful that we will go to great lengths, do irrational things and often spend money to get that feeling.
The power of WHY is not opinion, it’s biology.
The limbic brain is responsible for all of our feelings, such as trust and loyalty. It is also responsible for all human behavior and all our decision-making ,
We often trust our limbic brain even if the decision flies in the face of all the facts and figures.
Companies that fail to communicate a sense of WHY force us to make decisions with the rational brain.
Decisions started with WHY — the emotional component of the decision — and then the rational components allowed the buyer to verbalize or rationalize the reasons for their decision.
This is what we mean when we talk about winning hearts and minds . The heart represents the limbic brain and the mind is the rational brain.
Winning hearts takes more work.
We trust our gut to help us decide whom to vote for or which shampoo to buy.
It is not logic or facts but our hopes and dreams, our hearts and our limbic brain, that drive us to try new things .
CH 5: CLARITY, DISCIPLINE AND CONSISTENCY
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.
HOWs are your values or principles. HOWs are the actions you take to realize that belief. WHATs are the results of those actions — everything you say and do: your products, services, marketing, PR, culture and whom you hire.
Authenticity is when you say and do the things you actually believe. Authenticity cannot be achieved without clarity of WHY.
Southwest had no first mover’s advantage. Southwest was not built to be an airline. It was built to champion a cause. They just happened to use an airline to do it.
In the early 1970s, only 15 percent of the traveling population traveled by air. At that rate, the market was small enough to scare off most would-be competitors to the big airlines. But Southwest wasn’t interested in competing against everyone else for 15 percent of the traveling population. Southwest cared about the other 85 percent. Back then, if you asked Southwest whom their competition was, they would have told you, “We compete against the car and the bus.” But what they meant was, “We’re the champion for the common man.” That was WHY they started the airline.
Southwest Airlines’ guiding principles and values stemmed directly from their WHY and were more common sense than anything else.
In the 1970s, air travel was expensive, and if Southwest was going to be the champion for the common man, they had to be cheap.
And in a day and age when air travel was elitist — back then people wore ties on planes — as the champion for the common man, Southwest had to be fun.
In a time when air travel was complicated, with different prices depending on when you booked, Southwest had to be simple.
Cheap, fun and simple. That’s HOW Southwest did it.
Those who could relate to Southwest, those who saw themselves as average Joes, now had an alternative to the big airlines. And those who believed what Southwest believed became fiercely loyal to the company. They felt Southwest was a company that spoke directly to them and directly for them. More importantly, they felt that flying Southwest said something about who they were as people. The loyalty that developed with their customers had nothing to do with price. Price was simply one of the ways the airline brought their cause to life.
What Southwest has achieved is the stuff of business folklore. As a result of WHY they do what they do, and because they are highly disciplined in HOW they do it, they are the most profitable airline in history.
Everything Southwest says and does is authentic. Everything about them reflects the original cause King and Kelleher set out to champion decades earlier.
Differentiation happens in WHY and HOW you do it. Southwest isn’t the best airline in the world. Nor are they always the cheapest. But WHY they do it is crystal clear and everything they do proves it. There are many ways to motivate people to do things, but loyalty comes from the ability to inspire people.
PART 3: LEADERS NEED A FOLLOWING
CH 6: THE EMERGENCE OF TRUST
And if a company mistreats their people, just watch how the employees treat their customers. Mud rolls down a hill.
Trust begins to emerge when we have a sense that another person or organization is driven by things other than their own self-gain.
You have to earn trust by communicating and demonstrating that you share the same values and beliefs. You have to talk about your WHY and prove it with WHAT you do.
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.
Follow your metric but also recognize that problems arise, however, when the metric becomes the only measure of success. Remember WHY you set out to achieve the metric in the first place.
Hire people who believe what you believe. When you hire those who believe what you believe, success seems to just happen.
Ad for Shackleton’s voyage: “Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.”
Southwest Airlines is a great example of a company with a knack for hiring good fits. Their ability to find people who embody their cause makes it much easier for them to provide great service. As Herb Kelleher famously said, “You don’t hire for skills, you hire for attitude. You can always teach skills.”
Simply hiring people with a solid résumé or great work ethic does not guarantee success.
For years, Southwest didn’t have a complaints department — they didn’t need one. Their genius came from figuring out why some people were such good fits and then developing systems to find more of them.
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.
Companies with a strong sense of WHY are able to inspire their employees. Those employees are more productive and innovative, and the feeling they bring to work attracts other people eager to work there as well.
Wwhen companies feel the need to pay mega-salaries to “get the best talent.” Those people are not necessarily showing up because they believe in your WHY, they are showing up for the money.
Average companies give their people something to work on. In contrast, the most innovative organizations give their people something to work toward.
The role of a leader is to create an environment in which great ideas can happen.
If the people inside a company are told to come to work and just do their job, that’s all they will do. If they are constantly reminded WHY the company was founded and told to always look for ways to bring that cause to life while performing their job, however, then they will do more than their job.
Companies with a clear sense of WHY tend to ignore their competition.
When people come to work with a higher sense of purpose, they find it easier to weather hard times or even to find opportunity in those hard times.
Great organizations become great because the people inside the organization feel protected. Trust matters.
Passion comes from feeling like you are a part of something that you believe in.
Herb Kelleher recognized that to get the best out his employees he needed to create an environment in which they felt like the company cared about them.
CH 7: HOW A TIPPING POINT TIPS
Marketers are always trying to influence the influencers, but few really know how.
It is nearly impossible to “convince” someone of the value of your products or ideas based on rational arguments and tangible benefits.
Manipulations don’t breed loyalty.
The goal of business then should not be to simply sell to anyone who wants what you have, but rather to find people who believe what you believe.
You don’t just want any influencer, you want someone who believes what you believe. The entire act of incentivizing an influencer is manipulative.
When you start with WHY, those who believe what you believe are drawn to you.
Martin Luther King Jr gave the “I Have a Dream” speech, not the “I Have a Plan” speech.
PART 4: HOW TO RALLY THOSE WHO BELIEVE
CH 8: START WITH WHY, BUT KNOW HOW
Bill Gates doesn’t have natural charismatic energy, but he still inspires.
All great leaders inspire because they have clarity of WHY.
Bonuses, promotions, other carrots and even a few sticks can get people to work harder, for sure, but the gains are, like all manipulations, short-term.
Loyalty among employees is when they turn down more money or benefits to continue working at the same company.
An airline gave Herb Kelleher the perfect outlet to spread his belief in freedom.
The WHAT level is where the rubber meets the road. It is at this level that the majority of the employees sit and where all the tangible stuff actually happens.
For every great leader, there is an inspired person focused on the HOW. They take the intangible cause and build the infrastructure that can give it life.
Walt Disney dreamed, while Roy Disney built the empire.
Herb Kelleher was able to personify and preach the cause of freedom, but it was Rollin King who came up with the idea for Southwest Airlines.
Steve Jobs was the rebel’s evangelist, but Steve Wozniak is the engineer who made Apple work.
CH 9: KNOW WHY. KNOW HOW. THEN WHAT?
WHAT you do can change with the times, but WHY you do it never does.
As a company grows, the CEO’s job is to personify the WHY.
The leader must ensure that there are people on the team who believe what they believe and know HOW to build it.
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.
CH 10: COMMUNICATION IS NOT ABOUT SPEAKING, IT’S ABOUT LISTENING
Copying WHAT or HOW things are done at high-performing organizations will inherently work for you is just not true.
Starting with WHY not only helps you know which is the right advice for you to follow, but also to know which decisions will put you out of balance.
With a WHY clearly stated in an organization, anyone within the organization can make a decision as clearly and as accurately as the founder.
The reason we trust Disney is simple; we know what Disney believes in. We also know what Southwest Airlines believes in.
Volkswagen, which translated means “people’s car,” had spent generations making cars for you and me. We know what Volkswagen believes in.
PART 5: THE BIGGEST CHALLENGE IS SUCCESS
CH 11: WHEN WHY GOES FUZZY
Sam Walton believed that if he looked after people, people would look after him. Service was a higher cause. For Wal-Mart, forgetting their founder’s WHY has come at a very high cost.
“Celebrate your successes,” said Walton “Find some humor in your failures. Don’t take yourself so seriously. Loosen up and everybody around you will loosen up.”
Success and achievement are not the same thing. Achievement comes when you pursue and attain WHAT you want. Success comes when you are clear in pursuit of WHY you want it.
CH 12: SPLIT HAPPENS
As companies grew more successful, WHAT starts to take priority over WHY.
The single greatest challenge any organization will face is…success.
Without a clear WHY, bonuses, promotions, and fear, become the only way to hold on to talent.
WHY must be extracted and integrated into the culture of the company early on.
A strong succession plan should aim to find a leader inspired by the founding cause and ready to lead it into the next generation.
The only succession plan that will work is to find a CEO who believes in and wants to continue to lead that movement, not replace it with their own vision of the future.
One of the reasons Southwest Airlines has been so good at succession is because its cause is so ingrained in its culture. Kelleher stopped his day-to-day involvement in the company, but left a corporate culture so strong that his presence in the hallways was no longer needed.
Costco, founded in 1983 by Jim Sinegal and Jeffrey Brotman, believes in looking after its employees first. Costco continues to be a company that is better at serving the club member and employee than the shareholder.
Profits are never the WHY of a great organization, but they are, often, inevitable through the pursuit of a WHY that people can connect with.
PART 6: DISCOVER WHY
CH 13: THE ORIGINS OF A WHY
Finding WHY is a process of discovery, not invention.
WHY is born out of the upbringing and life experience of the founders.
CH 14: THE NEW COMPETITION
All organizations start with WHY, but only the great ones keep their WHY clear year after year.
What if the next time when someone asks, “Who’s your competition?” we replied, “No idea.”
Find customers who believe what you believe and work together so that you can all succeed.
All leaders must have two things: they must have a vision of the world that does not exist and they must have the ability to communicate it.