Leading and operating a groundbreaking, forward-thinking company takes a ton of work. You know this. We know this.
Unfortunately, what that means for many is that they quickly get bogged down in operational activities. Fighting fire after fire until the small hand reaches 5 pm.
The part we inevitably miss out on here is what makes our company specials? What is our company vision and mission, and why do we do all of this in the first place?
Many leaders struggle to answer these questions. Why do we do any of it? But fear not.
The Golden Circle offers a framework designed to tackle this.
In this article, you’re going to learn how you can put this system to use to reimagine and clarify your company's purpose. This will ensure your strategies and tactics hold true to these values.
What is The Golden Circle?
The Golden Circle is a business development theory created by Simon Sinek, a British-American author and speaker best known for his book Start With Why.
The theory is designed to help business leaders develop a deep understanding of their organization's purpose by focusing first on understanding and communicating the "why."
What does the "why" mean?
In short, Sinek criticizes many business leaders for developing a business model in this fashion:
- What do we do?
- How do we do it?
- Why do we do it?
Instead, he proposed that we flip this concept on its head, and start with why — working back to what. "Why" is more compelling. It taps into interest and passion. It motivates when the what and how sometimes seem unclear. The right "why" can sustain you through the inevitable setbacks and uncertainty and attract others to join you on your quest — employees and customers.
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Why has it become so popular?
The idea first started to gain traction when Sinek spoke about it in The Golden Circle Ted Talk.
The video has been viewed more than 15 million times, inspiring business leaders around the world.
Why?
Because The Golden Circle concept is much more than just a fluffy, feel-good discussion about company values. It’s an actionable framework backed by data and draws links between the concept and other scientific findings.
For example, in his talk, Sinek discusses how:
- How the likes of Martin Luther King Jr. and the Wright Brothers were successful in their ventures, while others who were seemingly better prepared for success actually failed.
- The human brain can be broken up into systems that roughly correspond with the three aspects of The Golden Circle concept.
- Innovators and initial adopters are key to reaching a tipping point for scaling your business. He also discusses that these personality types are much more motivated by "why" than "how" or "what."
To further promote this success, Sinek has published a book, Start With Why. The Golden Circle is the center point of the book, and it's sold hundreds of thousands of copies since.
How does The Golden Circle work?
There are a few reasons that you might want to use The Golden Circle:
So, in light of those lofty goals, how does this whole thing work?
The Golden Circle is actually three concentric circles.
They are sort of in the shape of a target, which is a cute metaphor for understanding what it is that your business is aiming at.
The three components of The Golden Circle concept are Why, How, and What, in that order, working outward from the center. Let’s look at what each of these means.
Why?
The why component of The Golden Circle concept spins off a few similar questions:
- Why do we do what we do?
- Why should people care?
- Why do we get out of bed every morning to come to work?
- Why do we do this rather than anything else?
In short, it’s your company’s purpose for existing. It doesn't have to be every employee's reason for existing, but it should feel connected to and coherent with their own sense of individual purpose.
Wait, what if my purpose is to make money?
Sinek states pretty explicitly that your Why is not about making money, which he considers a result.
However, this is a hotly debated perspective.
Some people are in business solely to make money. It doesn’t necessarily make them greedy, intent on destroying the world. It just means that of all possible outcomes, generating profit is their number one priority.
Not everyone is out to improve the world.
Of course, that leads to other questions, such as profit for who, across what time horizon (today only or across years), and is maximizing profit even possible with such a narrow focus? But, shareholder value is where many leaders have staked their purpose.
That said, though, it’s pretty well established that those who have a well-defined and meaningful purpose tend to manifest more success. This goes for individuals and organizations alike and includes financial success as a measure.
Essentially what this means is that even if making money is your organization’s purpose, you’re going to be more likely to achieve this goal if you can identify a complementary positive and meaningful purpose to pursue.
And what if money isn’t my primary goal?
Great.
You’re already on the path to figuring out your Why. It’s probably why you felt motivated to start or join the company in the first place.
We’ll soon discuss a few tips on how to find your why. But first, let’s cover the other two circles.
How?
This is essentially short for "How do we do what we do?"
Even better, it’s "How do we put our Why into action?"
Most organizations have a pretty good understanding of how they do what they do. It’s what sets them apart from their competitors. But it's worth thinking about how you'd like to do what you do — How is often rooted in values.
If your company hasn’t yet established a Why then your How is probably what you’re using in your sales marketing messaging to position your point of difference.
What?
What do we do?
This one is pretty straightforward. Every organization can answer this. (You’re on pretty shaky ground if you can’t.)
For companies, your What is typically expressed as your products or services. For individuals, it might be your job title or responsibilities.
Your What is generally rational, tangible, and easily understood. However, it’s not always very motivating or compelling and is not what attracts new customers (or new talent).
How to put it into practice
Let us start by acknowledging that The Golden Circle is not an easy exercise that can be completed in a 30-minute meeting.
There’s a reason why many organizations don’t know their Why. It’s often hard to put into words. It's weighty. And trying to articulate it can sound abstract, pompous, or naive. Maybe it should feel that way — it is a bit of your heart and soul, after all — yet it will be more compelling if it is also real, tangible, and urgent.
Here are a few ways you can get started on finding your Why, and putting The Golden Circle into practice.
Finding your Why
Organizations don’t exist on their own. They are made up of a collection of people.
Thus, the Why of your company will be built around the Whys of those working there.
A good starting point then is to have each of your employees and/or executives answer these questions individually. Do this before coming together as a group.
- Why do I get out of bed and come into work every day?
- Why am I here, and not working for some other company?
- What cause am I passionate about that is related to what this business is doing?
- What things in my industry and in the world am I unhappy about and wish to change?
- In what ways would the world be different if my company did not exist?
- How would that be different if my company was twice as big as it is now, having twice the impact on the world as it does now?
Once you’ve gathered all of these answers, it’s time to get together and discuss. Don’t just simply collate the answers and go with what is mentioned most.
Hold a meeting to discuss these results, and how others in the organization feel about them.
Then, you can work towards crafting a singular purpose that resonates with everyone in the company.
We’ll discuss some real-life case studies shortly, but an example of a meal prep company’s why might be:
We believe in challenging the concept that providing healthy, quality food for your family each night means spending hours in the kitchen.
Turning your Why into a How
If you’re an existing company, then you already have a How, and it’s pretty likely that you know what it is.
So, the first question is:
Is our current How relevant to our Why?
This might be a bit of an eye-opener for some, as they realize that the business has been operating in a way that is not conducive to their overall mission and purpose.
For example, our meal prep company might have been doing a great job of finding new subscribers. But perhaps they aren’t really committed to delivering recipes that can be completed quickly.
In this example, the new How looks like this:
We do this by consistently creating new, interesting, easy to prepare and delicious meal recipes every month.
Determining your What
Just as with the previous stage, you should already know your what. There is a chance, again, that your current What doesn’t connect very well to your How and Why, but in most cases, it won’t require a huge change.
For our meal prep company, the What is delivering a new food box to your doorstep every week.
The whole story looks like this:
We believe in challenging the concept that providing healthy, quality food for your family each night means spending hours in the kitchen. We do this by consistently creating new, interesting, easy to prepare and delicious meal recipes every month, and delivering a new food box to your doorstep every week.
4 examples of The Golden Circle in practice
One of the best ways to understand how The Golden Circle works in a real-life scenario is to check out some real-life companies.
Here, we’re going to discuss four different companies and how the concept applies to them.
Bear in mind that these aren’t insights from the companies themselves. Rather they are insights others (such as Simon Sinek) have drawn about well-known brands.
Apple
Sinek uses Apple as an example during his Ted talk, demonstrating their Golden Circle as such:
- Why: everything we do, we believe in challenging the status quo. We believe in thinking differently.
- How: the way we challenge the status quo is by making our products beautifully designed, simple to use, and user-friendly.
- What: we just happen to make great computers.
Humblebee
Humblebee, a digital service studio, describe their Golden Circle as such:
- Why: we build what’s needed. We means you and I. We only work collaboratively with brands. What’s needed is not always what is expected.
- How: we use design and technology to rapidly solve problems and change businesses.
- What: we create digital products, tools, and services.
Tesla
Elon Musk and Tesla have broken a lot of ground in recent years, and it’s hard to explain without considering their Why.
Here’s what their Golden Circle looks like:
- Why: our mission is to accelerate the world's transition to sustainable energy.
- How: we work tirelessly to find new ways to make sustainable energy more affordable, accessible, and cost-effective.
- What: we sell electric vehicles.
The Wright Brothers
Our final example is another that Sinek uses to describe The Golden Circle theory:
- Why: if we can figure out this flying machine, it will change the course of the world.
- How: we shed blood, sweat, and tears every day, testing new ways to fly, learning from our mistakes and failures.
- What: we’re building man-powered flight.
Time to put The Golden Circle into action
Like all good concepts, the key to seeing success from The Golden Circle is actually using it.
Before you go diving right in, let’s recap on the main points discussed here:
- Many businesses know what they do and how they do it, but not why
- Knowing your purpose is important for three reasons:
- It helps you to gain early adopters.
- It helps you to differentiate yourself in a saturated market.
- It helps you to communicate with the decision-making regions of your customers’ brains
- Companies need to start by defining their Why, only then can they outline their How and What
Time to transform your business and bring your Why to the rest of the world? Check out BetterUp’s Sales Performance coaching.
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