Wednesday, April 16, 2014

Sinek's tips on a 35-word effective company strategy

A company’s success is a function of how its leadership has defined the hierarchy of company statements. The hierarchy of company statements is Mission, Values, Vision, Strategy (Objective, Scope, and Advantage), and Key Performance Indicator’s Measurement.  As one works his/her way down the statements they become more practical, exhaustive and ultimately clear. These documents define the very existence of the company- why they do business, the task force, culture, etc. In short, these statements are nothing short of a constitution of the company.

“Your biggest hurdle isn’t your opponent, it’s yourself “– Brandon Todd

In this article, I will provide a short transcript of a very famous TED talk by Simon Sinek, which I believe every leader, who is a stakeholder in formulating the above-mentioned documents for a company, should bear in mind for the successful outcome of their performance. Collins and Rukstad are right when they say; In order to be effective, a company’s strategy should be easily summarized in 35 words. The ideas presented in the talk can really guide companies to come up with an effective 35-word strategy. Sinek gives a thought provoking talk about how great leaders/companies differentiate themselves from just any other leader/company. He uses a very simple but thought provoking line- “People don't buy what you do, they buy why you do it.”

Let me dig a bit deeper into the details of the video. He starts by saying, why Apple is just like another computer company is still so innovative or what made Martin Luther King a special speaker or for that matter why only Wright brothers, despite having little access to resources could come up with the concept of powered-man flight? Sinek codifies the way great leaders communicate with a simple model-“The Golden Circle”, which he believes is exactly the opposite the other ordinary communicates. The golden circle is represented by 3 concentric circles. Innermost has the word “Why”, followed by “How” and the external circle has “What”.  The definitions of these simple terms are- Every company knows “What” they do, some know “How” they do it, whereas the successful few know exactly “why” they do what they do. ”Why” should not be defined by profit. Profit is just the result any company aims for. ”Why, ” precisely is why does your organization exit. Obviously, one communicates by starting with the clearest point and later runs into a unclear fuzzy point. Hence, companies communicate by saying “What” they do, “How” they do it and later “Why” they do it. In Golden Circle’s context, they start with the outermost circle and later move into the innermost circle. Sinek says the mantra to success lies in communicating the other way around, i.e. Starting from the innermost circle and moving up into the exterior circle. A wonderful example, again considering Apple, a marketing statement from them can be- we make great computers (What), they are beautifully designed, simple to use (How), want to buy one?; Instead, Apple actually communicates the successful way- Everything we do, we believe in thinking differently and challenging the status quo (Why), we challenge by making our products user friendly (How), we happen to make great computers (what) want to buy one? Not to argue, the latter message is much more compelling and effective. All the greats just reverse the order of information. To reiterate, he rightly says – “People don't buy what you do, they buy why you do it”. This makes life easy for Apple where, despite just being Computer Company customers feel assured to buy an iPhone, iPads and a plethora of other products from them. That is why other computer companies like Dell failed when they tried to sell MP3 players.

Later, Sinek wonderfully maps the golden circle to the structure of the human brain. The inner limbic brain drives our emotion, whereas the outer neo-cortex of the brain drives logical and analytical thinking. When one communicates inside out, it drives human behavior through emotions.  The inner limbic brain controls decision-making, and when that is tickled with a positive statement, we respond affirmatively. He adds that a company should hire people who share the same beliefs as theirs. This lets the workforce share the same passion and hence is not motivated by monetary compensation rather excellence in work.

In Conclusion, a rational leadership can answer the - Why, How and What question succinctly, and in order to put forth a pressing, wide-reaching strategy.

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