🔖How would I describe this book in 1 sentence?
A must read before getting into any business or management role.
🗺️What was the role of this book in my journey?
I first came across the idea of the Golden Circle in the TEDx video of Simon Sinek performance. It served as the main inspiration when I was writing marketing content for OB Trading landing pages.
But, as with all summaries and short-lived memories (the video was just 18 minutes), it went forgotten quickly. The power of WHY went lost until I had a chance to listen to the whole audiobook and I am glad I did.
At the times of read I was struggling to see the motivational sparkle inside the eyes of my colleagues and partners, and I couldn't figure out the solution to this. We also had recruitment problems where newly recruited members failed to perform within their first 1-2 months due to what we thought were "lack of enthusiasm and initiative".
Little did I know it was our vision and our problem to solve before getting to everything else. The bullseye of the golden circle was flawed and all the problems stemmed from it.
After re-establishing a clear vision and a clear sense of WHY of the company, I started to look for people because of their WHY and how it lines up with my sense of WHY, not because of their WHAT and HOW. That decision so far resulted in 3/3 astonishingly talented individuals joining the team and becoming loyal followers of the organization.
- There are leaders and there are those who lead. Leaders have the position of power or influence and those who lead inspire us. Whether individuals or organizations will follow those who lead not because we have to but because we want to
- The door should fit by the design, not by default
- There is a wonderful story of a group of American car executives who went to Japan to see a Japanese assembly line. At the end of the line, the doors were put on the hinges, the same as in America. But something was missing. In the United States, a line worker would take a rubber mallet and tap the edges of the door to ensure that it fits perfectly. In Japan, that job didn’t seem to exist. Confused, the American auto executives asked at what point they made sure the door fit perfectly. Their Japanese guide looked at them and smiled sheepishly. “We make sure it fits when we design it.” In the Japanese auto plant, they didn’t examine the problem and accumulate data to figure out the best solution—they engineered the outcome they wanted from the beginning. If they didn’t achieve their desired outcome, they understood it was because of a decision they made at the start of the process.
- The question each business owner must ask himself: "Why our customers are our customers and why our employees are our employees?"
- Focus on building loyalty, don't manipulate your customers. Manipulation is a good short-term mechanism to boost up sales, but in a long run it will always lose
- The danger of manipulations is because they work. And if the thing works, it becomes the norm. When manipulations are the norm, no-one wins.
- The Golden Circle. The WHAT ring of the Golden Circle represents the products or services a company sells. The HOW is an explanation of what the company does. In this ring of the Golden Circle, the company explains why their products/ services are better or stand out from the competition. The WHY is about what a company believes in and its values (not about making a profit)
- Most of the companies on the market work from the outside in. They start with the clearest thing (WHAT they sell) because it is simpler and keep the fuzziest thing (The WHY) for later.
- There is a clear pattern among the most successful companies and the most inspiring individuals - they always start from the inside out. Starting with WHY first (the purpose), then HOW (how we do it), and only then WHAT (the result).
- 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.
- Only when the WHY is clear and when people believe what you believe can a true loyal relationship develop
- The Golden Circle: Clarity (Why) → Discipline (How) → Consistency (What)
- When brands start to compete on price, features, and quality - products quickly become commoditized. And when you start perceiving your product as a commodity, it becomes capital-intensive and exhausting to stay competitive.
- Once buyers get used to paying lower than average prices, it's very difficult to make them pay more in the future
- People don't buy what you do, they buy why you do it.
- If I had asked people what they wanted, they would have said a faster horse (c) Henry Ford
- Great leaders and great organizations are good at seeing things most of us can't see. They are good at giving us the things we would never think of asking for
- It's what we can’t see that makes long-term success more predictable for only one. The one with the clear sense of WHY
- People always try to rationalize their decisions, although sometimes they make a decision just because "it feels right"
- Price and features matter. They provide us the tangible things we can point to to rationalize our decision making. But they do not set the course and they do not inspire behavior
- Companies that fail to communicate the sense of WHY force us to make decisions only with empirical evidence. This is why these decisions take more time, often feel difficult, or leave us uncertain
- Authenticity means that your golden circle is in balance
- The goal is not to hire people that have the skills you need. The goal is to hire people that believe in what you believe. The goal is to hire those who are passionate about your WHY, your purpose, and your beliefs
- How Sir Ernest Shackleton, the famed explorer of Antarctica, hired the extraordinary people for his exploration mission. He posted the following ad:
- Customers will only love a company when the employees love it first
- Being a great leader is to understand that earning trust of the organization comes from sitting up and serve those who serve you.
- Company culture is the essential thing in company success. It is important to get surrounded by people with the same beliefs and the same goals as you are. People get easily motivated by other people just by seeing how hard they work
- Companies with the fuzzy sense of WHY are obsessed with what other companies are doing
- A company or any organization must work actively to remind everyone WHY the company exists. WHY it was founded in the first place. What it believes. They need to hold everybody in the company accountable to the values and guiding principles. It's not enough to write them on the wall - it's passive. Bonuses and incentives must revolve around them. The company must serve those whom they wish to serve it.
- If people do not trust that the company is organized to advance their WHY then the passion becomes diluted. Without managed trust, people will show up to do their jobs and they will worry mostly about themselves
- Priorities: Employees → Customers → Shareholders. In that order. Take good care of the employees, which in turn will care of the customers, which will drive more sales that will appeal to shareholders
- Law of diffusion of innovation. Everything always starts with innovators and early adopters. You cannot build a successful product without getting attention from them first
- Mass-market success can only be achieved after you penetrated 15-18% of the market. The early majority will not try something new unless someone tried it before already.
- The fundamental question of innovative businesses: how to get more people that "get it"?
- Don't forget - WHY is just a belief, HOWs are the actions we take to realize that belief, and WHATs are the results of those actions. No matter how charismatic or inspiring the leader is, if there are not enough people in the organization inspired to bring the vision into a reality, to build the infrastructure with systems and processes - then at best inefficiency reigns, and at worst failure results
- After the inspirational speech, there should always be someone to say "Now let me tell you what this means for you tomorrow morning" to provide an actionable plan of achieving the vision.
- To actually move people - the proper organization is required. For every great leader, for every WHY type, there is an inspired HOW type or group of HOW types that take an intangible cause and build and give it life. That infrastructure is what actually makes any measurable change or success possible
- Company vision is a public statement of the founders' intent - why the company exists. It is literally the vision of a future that does not yet exist. The mission statement is a description of the route, the guiding principles, how the company intends to create that future
- As a leader of a company, you must focus on communicating a vision to a HOW layer within the organization. You need to make sure people inside the company understand the vision and steps required to achieving 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 that we are on the right path. It is not a neither or. In our life, we need both
- Beware of the split of WHY and WHAT.
- When you compete against everyone else - no one wants to help you. But when you compete against yourself, everyone wants to help you.
- If you think you can or cannot - you are right. (c) Henry Ford
- Those organizations who forget about their WHY, show up at work every day to outdo someone else. They are forced into competition with prices and features
- Our goal is to find customers who believe what we believe and work together so that we can all succeed.
- Build loyal base of followers by creating a powerful brand
- Don't use manipulations on your customers
- Establish a clear purpose before doing anything
- Make sure the decisions you make align with your purpose
- Inspire by telling about your purpose not about your product
- When you find yourself competing with price or features, it is a good sign that something has to change
- Limit offering discounts to your customers. Once buyers get used to paying lower than average prices, it's very difficult to make them pay more in the future
- Customers don't always know what the want
- Hire people that believe in what you believe
- Customers will only love a company when the employees love it first.
- Aim to target innovators and early adopters
- For every vision, there must be a clear implementation plan.
- Focus on communicating a vision to a HOW layer within the organization
- Consistently maintain a clarity of company vision between key employees
- Avoid competing with others, compete against your past self
Interview with an organization with a clear sense of WHY:
— Who is your competition? — No idea.
— Why are you better than your competition? — We are not better than them in all cases.
— Why should I do business with you then? — Because the work we are doing now is better than work we had been doing 6 months ago. And the work will be doing 6 months from this point will be much greater than we do now.