Wednesday, April 23, 2014

Book Review (#40 of 2014) Start with Why by Simon Sinek

Start with Why: How Great Leaders Inspire Everyone to Take Action I keep books on management and leadership in my reading rotation because that's what every book on leadership and management I've read says managers and leaders should do.

Sinek's premise is that great companies have an identity shared by their employees and customers that revolves around why the company/product exists rather than what the company/product does. Apple, as a frequent example, has a slogan of "Think Different" -- it's why it exists (think of the 1984 Big Brother Super Bowl commercial). People who buy Apple buy into that identity, they see it as a cause rather than just a product.

Other companies had products similar to iPods and iPhones before Apple rolled them out. But their marketing focused on what the devices could do, rather than why the customer should have one. A device that allows you to "hold hundreds of hours of mp3 files" is different psychologically than a device that lets you "have 1,000 songs in your pocket." That's why Apple succeeded while the others failed.

Sinek maintains competing on price, quality, rebates, celebrity endorsements, and clever marketing are "manipulations" that doom companies to mediocrity. But he does acknowledge the importance of "How," it's the second rung of the "Golden Circle" (love these business books defining vernacular). "Why" leaders need "How" people to organize their companies into efficient machines to deliver their product and message. But Why should be at the center of everything.

Key takeaways:
1. Keep returning to your "Why" and make sure it is instilled in your company so that it exists long after you're gone. Apple lost its "Why" when Steve Jobs was fired.
2. Avoid the temptation to focus on the "What" after you achieve success. Microsoft used to have a slogan of "A PC in every office and on every desk." Now, it's not clear what their "Why" is, and they've floundered.
3. Make sure you hire people that match up with your Why, and not your What or How. The CEO who replaced Steve Jobs after he fired was a great How guy but he didn't get the Why.
4. Pair yourself with good How people to make your business run efficiently. Jobs needed Wozniak; Gates needed Balmer (and vice versa).

As a Christian who is actively studying the doctrine of work and vocation, I agree with Sinek on the "Why" principle. Too many Christians identify themselves with what they do rather than why they do it. Ultimately, we should work, create products, start businesses, and help others for the glory of God and as an act of worshiping Him who gave us the capacity and the mandate (Genesis) to do such things. Our churches, likewise, should focus on the Why. A What church is one that is focused on having the best music, right programs, the highest attendance, the most baptisms, etc. rather than on leading people to a deeper relationship with Christ and one another. Churches stagnate and even become legalistic after they start focusing on the What.

Tivo might be the best example Sinek gives of a "what" company that performed dismally with a great product. The company focused marketing on the features of the product rather than the power and freedom that it gave TV watchers. Sinek proposes some alternative "why" pitches for companies like Tivo to get his point across.

Some of Sinek's conclusions are problematic or contradictory. He holds up Southwest Airlines as successful due largely to putting the employee, rather than the customer or the shareholder, first. But at the end of the day, it's the shareholders that have to be on board with the strategy. Other aspects of Southwest's business model that made it different from the other airlines go unmentioned.GM and Chrysler will gladly tell you that paying high wages and good benefits to employees-- putting them first-- only worked for so long in the face of global competition. That's life. Sinek's escape hatch is a carefully inserted caveat that "best practices" are not universally applicable-- every company, market, and situation is different.

Wal-Mart is another problematic what/why example in my view. Sinek maintains that Sam Walton's Wal-Mart was "obsessed with serving the community," whereas the modern Wal-Mart is only obsessed with low prices. This doesn't jive with other works on Wal-Mart I've read, it has always been Low Prices Every Day (and now it's Live Better). Sinek concludes that Walton just did not do a good enough job articulating his "Why" because the "Why" of a leader or company is more like a feeling than something that can be described by English. As a result, later CEOs got the What and the Why confused.  I would argue that Low Prices and Live Better are still "Why" visions, nobody is better at delivering what consumers want at the lowest price than Wal-Mart.

I'm currently prepping to teach a section of Managerial Economics for MBA students. Production managers focus very much on the How and What. Competing on price is effective-- if you have properly estimated a demand curve for your product then proper pricing is not a "manipulation." Sinek's analysis falls short in this area. I would say he also falls into a false sense of thinking he is the first person to "discover" (his word) why people do what they do. Most people just don't read anything older than 20 years to know there really is "nothing new under the sun."

3 stars out of 5.

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