Starting with Why Mar14

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Starting with Why

Recently I’ve started publishing transcripts of Marketing Over Coffee Interviews that I’ve done. As part of #blogchat I keep referring back to Simon Sinek’s book “Start With Why” and I’m excited to announce that I’ve landed a block on his calendar to talk with him about his new book “Leaders Eat Last”. With both of these coming up I thought it would be good to crank the wayback machine to 2010 and get a transcript of the last discussion with him.

John: Simon, for someone who has written a business book, you’re uncomfortable with saying that you are in business. Tell us more about that.

Simon:  It’s true, for me this is a cause. This is a movement. We live in a world these days where there is a lot less leadership than I think we need. There was a time not that long ago where you could rattle off the names of leaders: Lou Gerstner, Jack Welch, Lee Iacocca, Vaclav Havel, Lech Walesa, Margaret Thatcher, and Ronald Reagan. These people were all contemporaries. I defy you to name on one hand five great leaders that are living today that are contemporary in business or in politics. It’s really hard. Quite frankly, we lack leadership in this world in all segments of our society, especially in business, and I think we need to change that.

For me, this is a crusade. This is a cause. What I understand about great leaders is that they all operate from this center, from this “why.” They all have clarity of “why.” Every single business, every single organization – even our careers – are based on three levels: what we do, how we do it, and why we do it. The problem is that most of us are only aware of two of them: how and what, strategies and tactics. We don’t even have a word in business for the word why. It’s just strategies and tactics, how and what.

When you’re operating on two pieces of a three-piece puzzle, inherently things are out of balance. Out of balance can manifest in multiple ways: obsession with price, obsession with what your competitors are doing, increased levels of stress, and loss of passion. It just doesn’t feel the same way that it used to. This is what happens when there’s a lack of leadership.

My cause is simply to share that this thing called the “why” exists because I know the more people that understand the third piece of this three-piece puzzle, the more businesses, organizations, and careers are in balance; and quite frankly, the better the world will get. For me this is very personal. The goal is to share the “why” with as many people as I can.

John:  The very first thing that got me into this was that your agent had sent out a link. We get these things all the time: “Check out our book. Here’s what we have going on.” But you had a YouTube link in the first paragraph, so I jumped to the video and caught that. That was what reeled me into this. Where did that come from and what was the idea behind that?

Simon:  It was a great honor to be invited to speak at a TEDx event. It’s a room full of idealists that you get to share your message with. Once we had that video, we realized that it was such a great primer. In 18 minutes you could hear a broad overview of what I speak about. It’s this great primer for what’s in the book.

First and foremost, what’s important to me is to share my message, to share this concept of “why,” and it’s such a great way to do it. Whether it’s to me or quite frankly to anybody else, it’s really important to me to share that message and the link is such an easy way to do it.

John:  The first thing that came to me was how relevant so much of this stuff is for copywriting to really drive the message home and have it stick in a different kind of way.

Simon:  I started in the ad business a long time ago, and I was always fascinated with how companies of equal size could hire the same agencies, the same creatives, the same consultant, and  the same media, why is it that some marketing worked and some marketing didn’t? I even saw it in my own agency, where you could have the same creative team and it would work for one client and not another. Why was that?

The genesis of The Golden Circle actually started out with me just trying to understand why some marketing worked and some marketing didn’t. When I looked at marketing from Apple, Southwest, Harley Davidson and all these great marketers, what I discovered is the way the copy is physically organized on the page, the way the message is communicated, is the same and it’s different from everybody else. It all starts with this concept of “why” and all I did was write it down.

It wasn’t until somebody started asking me, “Do you know how the human brain works?” which I didn’t, and they started telling me about the limbic brain and the neo-cortex and how people make decisions. When I looked a little deeper and started to understand the decision-making biology, I realized that the biology perfectly overlapped with this little concept of The Golden Circle. So I hadn’t discovered why some marketing works and some marketing doesn’t; I discovered why people do what they do, and that became vastly more profound.

John:  Can you give us an example and explain to us how it works well for Apple?

Simon:  Sure. Apple is a great marketing example. If Apple were like everyone else, a marketing message would sound like this: they’d start with what they do, they’d tell you how they’re different and better, and they’d expect some sort of behavior. In this case, a purchase.

If Apple were like everyone else, a marketing message would sound like this: “We make great computers. They’re beautifully designed, simple to use, and user friendly. Want to buy one?” Whatever, right? And that’s the norm in the world: “Here’s what we do and here’s how we do it. Here’s our new car, it has great gas mileage, tinted windows, and leather seats. Here’s how we’re different and better. Choose us.” “Here’s our law firm. We have the best lawyers who went to the best schools. We win all of our cases. Choose us.”

But here’s how Apple actually does it. Apple starts with why: “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use, and user friendly. We just happen to make great computers. Want to buy one?” It’s totally different, and all I did was reverse the order of the information. No trickery, no celebrity endorsements, no manipulations. All I did was reverse the order of the information. What it proves to us is that people don’t buy what you do. They buy why you do it. It’s not what you do that matters. It’s why you do it.

This is the reason why every single person listening to this is perfectly comfortable buying a computer, MP3 player, DVR, or phone from Apple because it’s not what Apple does; it’s what they believe. And their products prove what they believe. Dell, on the other hand, has defined themselves by what they do, not why they do it. They’ve defined themselves as a computer company and a few years ago they came out with MP3 players and PDAs.

Dell makes good quality products and they’re every bit qualified to make MP3 players and PDAs…and nobody bought one. Why would we buy an MP3 player from a computer company? It doesn’t make sense. but we do it every day. It’s not what you do that matters. It’s why you do it. And from a copywriting standpoint, to communicate from the “why” – to start with “why” – talks directly to the part of the brain that controls decision making and then people can rationalize it with the product. To do it any other way, quite frankly, is just hard work.

John:  The core idea of the book is The Golden Circle. Go ahead and tell me more about that.

Simon:  The Golden Circle is an idea. About three or four years ago I made a discovery that all the great marketers and all the organizations capable of inspiring people, think, act, and communicate the exact same way – and it’s the complete opposite of everyone else.

Whether it’s Apple Computers, Harley Davidson, or Southwest Airlines, even great leaders like Martin Luther King and Ronald Reagan, regardless of their size or industry, they all think, act, and communicate the same way.

All I did was write that little system down, and that’s what The Golden Circle is. Basically it’s three levels. Imagine a bull’s eye, in the middle of the bull’s eye, is the word “why.” One ring out is the word “how,” and on the outside ring of the bull’s eye is the word “what.” That’s The Golden Circle.

Every single person and organization on the planet knows what they do, the products they make, and the services that they offer. Some know how they do it, whether you call it your differentiating value proposition, your proprietary process, or your USP.

Very few organizations can clearly state why they do what they do, and by why I don’t mean to make money or sell products. Those are both results. By “why” I mean, what’s your purpose, cause, and belief? Why does your organization exist? Why did you get out of bed this morning and why should anyone care?

What I learned was that while the rest of us think that differentiation happens in talking about what we do and how we’re different, those that are truly great marketers, those that are truly great at communicating and commanding loyal followings, every single one of them, regardless of their size or industry all starts with “why”.

John:  There’s a lot of stuff on decision making in marketing and studies on why we make the decisions that we do, why we buy what we buy, and so much of it comes down to the bottom line of everyone believes they’re making a rational decision-making process, but in reality they’re going with their gut and they’re justifying their gut all the time.

Simon:  That’s true. The rational part of our brain – the neo-cortex that corresponds with the “what” level – is responsible for rational, analytical thought and language. The “why” part of the brain is responsible for all of our feelings like trust and loyalty (the limbic brain). It’s also responsible for all human behavior, all decision making, and has no capacity for language.

In other words, when we tell people what we do and try to explain all the added benefits or differentiating value propositions, yes, people can understand vast amounts of complicated information, but it just doesn’t drive behavior. But when you tell people what you believe and why you do what you do, you’re talking directly to the part of the brain that controls behavior and then, as you said, we rationalize those decisions.

This, by the way, is where gut decisions come from. Gut decisions don’t happen in your stomach. You’re not following your heart and soul, and it’s not in your bones. It’s happening in the limbic brain – the part of the brain that controls decision making, but not language – which is why we say gut decisions. They just feel right. That’s not an accident. We use that verb because the part of the brain that controls feeling also controls decision making.

John:  You have a great section and it’s funny because it kind of tracks some stuff we’ve talked about in the show and even gotten a lot of heat on, where we talk about manipulation. It’s really just a matter of language. We joke about the fact that we are manipulating your perceptions, whereas really that can mean exactly the same thing as giving you a convincing argument. That is technically manipulating your perception, but nobody wants to be manipulated.

You actually went deep into a bunch of different things of manipulation versus inspiration. If you could talk about that and tell us what you think there. I’m especially interested in innovation as just a manipulation.

Simon:  Sure. There are only two ways to influence human behavior. You can manipulate it or you can inspire it. Examples of manipulation are things like dropping your price. If you drop your price low enough people will buy from you. Fear is a great manipulator, promotions, two-for-one, free toy inside, or if you’re in the B2B space, we call it value add. The principle is the same: giving stuff away for free to drive the behavior.

Manipulations work. What a manipulation does is it’s offering outside motivations –outside drivers – to drive a transaction, a single behavior, totally possible to do. The problem is that to drive repeat behavior requires more money and often more stress to come up with new and different manipulations to do it.

Inspiration, on the other hand, is completely different, which is those organizations that are capable of inspiring a purchase. What’s happening is that the person who’s buying isn’t doing it because of some giveaway or price drop. It’s because they feel like they have to be a part of it. Those organizations that are able to inspire are the ones who charge premiums, they’re more profitable, they’re more innovative, and this is where loyalty comes from.

I always talk about how there’s a huge difference between repeat business and loyalty. Repeat business means people do business with you over and over again. Loyalty means they’re willing to turn down a better product, maybe even at a better price, to continue to do business with you. That only happens when people are inspired.

John:  Right. You gave the example of the Motorola. Not the Katana, but the phone before that, that replaced the Startac. Could you talk a little bit about that? I think that’s a good story.

Simon:  It’s so fascinating. You’re talking about the Razr. I think it’s so funny, quite frankly, what organizations think are so innovative is really just features and benefits. They advertised the Razr as being made of special titanium and being thinner. Why is that an innovation? Real innovation changes the course of industries, if not society: the microwave, the fax machine, the light bulb, iTunes. These things changed industries, if not the way we live our lives.

Making a phone slightly thinner and out of titanium, though wonderful ideas – they’re wonderful features – didn’t really change anything. What Motorola thought was an innovation was really just a novelty and people thought, “Ooh, it’s shiny, it’s pretty. I’ll buy it.” It boosts their stock price and sales, and then very shortly after that all dried up.

John:  That’s the big thing with all these manipulations. You’re not instilling any loyalty, so as soon as the guy down the street has two cents less or a little bit shinier phone, that’s it. You lose the business.

Simon:  Keeping up with the Jones’. That’s what it’s all about.

John:  Obviously “why” is a critical component to the whole picture, but you’re saying that for successful businesses they also need to have the discipline of “how” and the consistency of “what.”

Simon:  Absolutely.

John:  How does all that stuff fit into the “why”?

Simon:  At the end of the day, a “why” is just a belief. That’s all it is. It’s your purpose. It’s your cause. It’s your belie. It’s this intangible thing. It’s why you do what you do. “Hows” are the actions we take to realize that belief, whether you call them your values, your differentiating value proposition, or your guiding principles. And what are the results of those actions? The products, services, our marketing, who we hire, the things we say, and the things we do.

We live in a tangible world, and if it’s not what you do that matters, it’s why you do it and it’s “why” that drives behavior, no one will know what you believe unless you say and do the things you actually believe. This is the idea of consistency, and this is where the concept of authenticity comes from.

Quite frankly, I’m a little tired of listening to talking heads talking about the importance of authenticity. People are more likely to do business with the “authentic” brands. They’re more likely to vote for the “authentic” candidate but that’s totally unactionable. How do you go back to your desk and make your work a little more authentic? “If you could market this a little more authentically, I’d be very grateful.”

What authenticity means is the things you say and the things you do, you actually believe – that your Golden Circle is in balance, that what you do and what you say proves what you believe. The reason it works is because we’re social animals. The human being is a social animal and we’re very good at judging. We get gut feelings on people.

Authenticity is consistency of “what.” If you’re not saying and doing the things you actually believe people can “sense it.” They can feel it in their guts that you’re just trying to pull one over on them, and that certainly does not inspire. It might drive a transaction, but it certainly doesn’t drive loyalty or repeat behavior.

John:  In the book, you talk about the celery test, which goes with walking the walk and talking the talk.

Simon:  Absolutely. The celery test is just a metaphor. It’s great to test whether you are truly following your “why” and making decisions based on your “why”. Like I said, it’s just a metaphor. Imagine if you’re going to a dinner party, and at the dinner party someone you meet says to you, “You know what you need to be implementing in your business? You need to be implementing M&Ms into your business. In this economy, if you’re not implementing M&Ms, you’re leaving money on the table.”

Somebody else says to you, “Rice milk. It’s all about rice milk.” Someone else says, “Oreo cookies. I made millions by using Oreos to market my business. You have to use Oreos.” And somebody else says to you, “Celery.”

It’s all perfectly good advice from perfectly good people from all legitimate sources. The problem is, which advice do you follow? We go to the supermarket and we buy celery, rice milk, Oreos, and M&Ms. We spend a lot of time at the supermarket and a lot of money. We’re not guaranteed to get value out of all of these products. We might get some value out of some of them. But the worst part is when you’re standing in line with all the products that you bought, no one can see what you believe.

As we just talked about with authenticity, you have to say and do the things you actually believe so people know what you believe. There you are, standing in line with all of your products and no one knows what you stand for. No one knows why you do what you do and they will walk past you.

However, if you know your “why”, things are totally different. Imagine you know your “why”. Imagine your “why” is to always be healthy and only do things that protect the integrity and health of your body. You’re going to get all the same brilliant advice from all the same brilliant experts from all the same brilliant books. The only difference is you’re only going to buy celery and rice milk. Those are the only two things that make sense, so you spend less money at the supermarket and less time, so there’s an efficiency play. You’re guaranteed to get value from those products.

When you’re standing in line in the supermarket, now everyone can see what you believe because you only bought the things that help you bring your “why” to life. You only bought the things that help you manifest being healthy: your celery and your rice milk. So somebody walking past can look at you and say, “I can see that you believe in being healthy. So do I.” Congratulations! You attracted a customer, a vote, support, or a recommendation simply from saying and doing the things that you actually believe.

Here’s the best part: you knew. In fact, every single person listening to this, as soon as I said the “why” and that our “why” is to be healthy and only protect the integrity of our bodies, knew that we were only going to buy celery and rice milk. That’s called scale, and when an organization can clearly articulate why it does what it does, anyone within the organization knows the decisions to make because they’re the only decisions that make sense, and that’s the power of “why.” It’s scalable.

John:  You talked about the danger of the split, when organizations reach a certain point and they get to large. Tell us more about that.

Simon:  The greatest challenge that any organization has is success. When an organization is small, it’s usually run on the passion and personality of one person or a small group of people. It’s their gut that is making all the decisions, and the few people who join the organization at the beginning are inspired by those people and they’re inspired to take a ridiculous risk, to quit their job, cut their salary in half, and work out of a basement with a 99% chance of failure.

Small businesses have a very high chance of failure, and yet we do it because we’re inspired by the passion and all of that. The problem is, as the organization grows and becomes more successful, then it is impossible for that leader, small group, or founder to be in every meeting and to make every decision; and as the organization grows even more, even to know every person in the organization.

So, the split is when the organization’s “why” and what they do become separated, and they become fixated on making the money and they forgot why the organization was founded in the first place. It’s unbelievable to me how many very successful organizations believe that it’s what they’re doing and how they’re doing it that made them successful, but if you go back in history it’s actually why they were doing it that inspired everybody. They weren’t doing any market research. There was no poll data. There were no focus groups that they were using to make decisions. Somebody was trusting their gut, but they never extracted that gut feeling. They never extracted that “why” and put it into the culture.

The biggest challenge any organization has is success. You hear it all the time in successful organizations. The people who were there from the beginning, what do they always say? “It’s not like it used to be. I remember way back when and it’s not like that anymore. I miss the good old days.” What they’re talking about is not living in basements making half their salary. They’re talking about the feeling they had when they came to work. And as the “why” goes away, so does that feeling.

John:  We talk a lot about Geoffrey Moore and “Crossing the Chasm.”  It’s so neat that it’s playing itself out now in every market. We see the same thing across the board. But you actually turned it up another notch. You talked about Everett Rogers’ book, “Diffusion of Innovation,” which was done in the sixties.

Simon:  It’s an old book. And that’s where Moore took his inspirations from is Everett Rogers.

John:  Right. Tell us more about that.

Simon:  What Rogers did was identify something called the Law of Diffusion of Innovations. What it is very simply is a bell curve. If people don’t know the law, they’ve all heard the terminology. The first 2.5% of our population are innovators. The next 13.5% of our population are early adopters, moving from the left side of the bell to the right side. The next 34% are the early majority and the next 34% are the late majority. The last 16% are your laggards. I always like to joke that the only reason laggards buy touch tone phones is because you can’t buy rotary phones anymore. That’s a laggard.

What the Law of Diffusion tells us is that you cannot achieve mass market success – you cannot achieve the majority of people to buy into your idea or product – until you’ve achieved between 15% and 18% market penetration. That’s the tipping point. The reason is because the early majority (that 34%) will not try something until someone else has tried it first. It’s the innovators and the early adopters that are comfortable trusting their guts and making intuitive, gut decisions.

They’re the ones who spent $40,000 and $50,000 on flat screen TVs when they first came out even though the technology was sub-standard. They were the ones who stood in line to buy iPhones when they first came out for six hours when they could have just walked into the store the following week and bought one off the shelf. It had nothing to do with the quality of the technology. It had to do with who they were. They wanted to be first. That’s early adopter behavior, where the majority is a little more practical. They care about things like price and quality.

So if you have to achieve between 15% and 18% market penetration for the system to tip, that means you have to talk to the early adopters and the innovators first. Now anyone, even if they get it all wrong, is going to get about 10% loyal customers. We all have about 10% loyal customers or 10% loyal employees.

I love to talk to companies about their conversion on new business and they love to say, “Oh, we do about 11% conversion,” proudly. You can trip over 10%. That’s the law of averages. It’s that next 5% to 8% that Geoffrey Moore calls the chasm. How do you get that tipping point away from the 10% of the early adopters all the way up to something that can tip? The way you do it is talking about why you do what you do. Because when you talk about what you believe, you attract people who believe what you believe. You attract people who are willing to take a risk, pay a premium, for no other reason than it’s about them and not you. Eventually everyone else will follow.

John:  Long-time listeners know that I’m a sucker for a human interest story, but you had a tale about Ben Comen, and it actually illustrates competition and not having to worry about your competition. If you could, tell us about that.

Simon:  Ben offers an amazing lesson to us. When Ben Comen was in high school, he was on the track team. This doesn’t sound particularly profound, but for the fact that Ben had cerebral palsy. For those who know about cerebral palsy, it’s when your muscles are withered, your joints are weak, your bones are brittle, and your balance is poor. A young kid with cerebral palsy doesn’t often find himself on the high school track team.

Ben never won a race. When he would run he would fall over a lot and he would eventually cross the finish line muddied, bloody, bruised, and exhausted. And when everyone else finished their race in 21 minutes, Ben finished his in 45.

What’s profound about Ben’s moral is this is not a story about when the going gets tough, the tough get going. This isn’t a story about how when you fall over, you pick yourself back up. Those are great morals; don’t get me wrong. We can learn those from an Olympic athlete who breaks their leg and three months later comes back to win a gold medal. Ben’s lesson is vastly more profound because after 21 minutes something happens. After 21 minutes when everyone else has finished their race, they all come back and run with Ben. Ben is the only runner that when he falls over, someone else helps him up and he’s the only person that has people behind him when he crosses the finish line.

What Ben teaches us is that if we wake up every day to compete against everybody else, no one wants to help us. But if we wake up every day to compete against ourselves, everyone wants to help us. Olympic athletes don’t want to help each other because they compete against each other.

If you look at the worst companies, the ones that struggle, the ones where marketing is difficult, the ones that are constantly worried about their own differentiation, they are obsessed with what their competitors are doing and they’re less obsessed with what they are doing. If you look at the great marketing organizations like Apple Computers and Southwest Airlines, they are obsessed with what they are doing and they know exactly why they are in business and you can either jump on the train of jump off. They tend to vastly ignore their competition.

From a business perspective, Apple is a smaller company than Microsoft, and offers no threat to Microsoft. However, why is it that everyone at Microsoft wakes up every day and worries what Apple is doing and Apple wakes up every day and doesn’t really care what Microsoft is doing? It’s because one has defined themselves by why they do what they do and their train is moving fast and they’re going with or without you, and the other one has become a software company that is now worried about what everyone else thinks about them and what everyone else is doing.

The key to great marketing is to compete against yourself and make your own work better than it was six months ago and work to make it even better six months from now and don’t worry about everybody else.

John:  The book is available at Amazon, Barnes & Noble, and all the regular places. You have it on your website, also, correct?

Simon:  Absolutely. The website is www.StartWithWhy.com.

John:  That’s great. I’ll have a link to the TEDx presentation in the show notes. You can just go to YouTube and look up Simon Sinek. Simon, thanks for spending time with us today.

Simon:  Thank you very much and thanks for helping me share the “why”.