Simon Sinek: How to Build a Company That People Want to Work For | Inc. Magazine

Summary

In this insightful startup boot camp live chat, Diana Ransom interviews Simon Sinek, an ethnographer and author, who emphasizes the significance of understanding 'why' organizations exist beyond their products or services. Sinek stresses that the most successful companies, like Apple and Virgin, are driven by a deep-seated purpose that resonates with their core beliefs and values. He distinguishes between leadership, a learned skill, and entrepreneurship, a mindset, suggesting that while leadership can be taught, entrepreneurship's inherent problem-solving nature may be innate. Sinek also discusses the importance of a company's origin story and how it fuels passion and longevity in business.

Takeaways

• 🧠 Every organization operates on three levels: what they do, how they do it, and why they do it. The 'why' is often overlooked but is crucial for long-term success.
• 💡 The 'why' of a company is its origin story, typically stemming from a personal struggle or a deep-seated need that the founder(s) experienced.
• 🔥 Companies with a strong 'why' that goes beyond profit tend to outlast and outperform their competitors because they inspire passion and loyalty.
• 🌱 The 'why' is not about the product or service but about the human values and beliefs that drive the company's existence.
• 🤔 Finding passion in business often comes from understanding who we are and what we believe in, rather than what we sell.
• 🌟 Successful leaders and organizations, like Apple and Martin Luther King Jr., have a clear and compelling 'why' that resonates with people on a deep level.
• 📈 The 'why' is essential for aligning a company's actions with its core beliefs, which in turn drives innovation and sustainable growth.
• 🛠 Leadership is a skill that involves a significant mindset shift from being responsible for tasks to being responsible for people and their outcomes.
• 🚀 Entrepreneurship is not just about owning a small business; it's about being a problem solver with a unique perspective on the world.
• 📚 While some aspects of entrepreneurship can be taught, the innate qualities that make a successful entrepreneur might be harder to instill.

Q & A

What is the significance of understanding 'why' an organization exists?

Understanding 'why' an organization exists is crucial because it goes beyond the 'what' and 'how' of operations. It's about the purpose and reason for the company's existence, which can inspire employees and differentiate the company from competitors. Organizations that know their 'why' tend to last longer and outperform those that focus solely on making money.

How do organizations typically define their 'why'?

The 'why' of an organization is often defined by its origin story, which is rooted in the founder's personal experiences or a problem they or someone close to them faced. This personal connection creates passion and gives the organization a unique reason for existence beyond just making money.

What is the role of passion in defining an organization's 'why'?

Passion is derived from personal experiences and values, and it's essential for defining an organization's 'why'. It's the driving force that keeps the company motivated and aligned with its purpose, even as it grows and evolves.

How does Tony Hsieh's approach to business at Zappos reflect his 'why'?

Tony Hsieh's 'why' at Zappos is not about selling shoes but about delivering happiness and providing excellent customer service. His passion for human connection and employee well-being is what drives the company's culture and success.

What is the difference between leadership and management as discussed in the script?

Leadership is a mindset and practice skill that involves taking care of people who are responsible for results, whereas management often focuses on the results themselves. Leadership is about inspiring and guiding others, while management is about organizing and controlling.

Why is it challenging to learn entrepreneurship according to the speaker?

The speaker suggests that entrepreneurship is not easily taught because it involves a unique way of seeing the world and solving problems. While skills for running a small business can be taught, the innate problem-solving mindset of an entrepreneur might be harder to instill.

What is the importance of a CEO's role in preaching the cause rather than just selling the product?

A CEO's role in preaching the cause is to inspire and align employees with the company's mission and values. This creates a sense of purpose and belonging, which can lead to higher engagement and better performance.

How did Steve Jobs articulate Apple's 'why'?

Steve Jobs articulated Apple's 'why' by focusing on empowering individuals through technology. He believed in democratizing access to personal computing to enable people to stand up to corporations, which was reflected in Apple's products and advertising.

What is the significance of an organization's origin story in determining its 'why'?

An organization's origin story is significant because it provides the foundational narrative that shapes the company's purpose and values. It's often the source of passion and inspiration that drives the organization's actions and decisions.

How does the speaker relate the success of Martin Luther King Jr. to the concept of 'why'?

The speaker relates Martin Luther King Jr.'s success to his ability to articulate the 'why' behind the Civil Rights Movement in a compelling way. King's speeches resonated with the core values of equality and justice, uniting people around a common cause.

What is the difference between a small business owner and an entrepreneur as per the speaker's perspective?

According to the speaker, a small business owner is someone who owns a small business, while an entrepreneur is a problem solver with a unique perspective on the world. Not all small business owners are entrepreneurs, and entrepreneurs can own large businesses as well.

Outlines

00:00

🧠 The Power of 'Why' in Organizations

In this segment, Diana Ransom interviews Simon Sinek, discussing the significance of understanding 'why' an organization exists beyond its products or services. Sinek emphasizes that while many organizations know what they do and how they do it, few grasp their true purpose. He explains that the most enduring companies are those founded on a deep, personal 'why'—often stemming from the founder's own struggles or passions. These companies are not just in business to make money but to fulfill a higher purpose. Sinek also touches on how this understanding can be crucial for startups defining their mission and how the 'why' should be rooted in personal stories and human values rather than market opportunities.

05:01

🌟 Leadership and Entrepreneurship Insights

This paragraph delves into the concepts of leadership and entrepreneurship. Sinek argues that leadership is a skill that is often not taught effectively, even in MBA programs, which tend to focus more on management. He describes leadership as a mindset shift from being responsible for tasks to being responsible for people. Sinek also distinguishes between small business owners and entrepreneurs, suggesting that not all small business owners are entrepreneurs. Entrepreneurs, according to him, are problem solvers who see opportunities differently. He questions whether entrepreneurship can be taught, suggesting that while skills for running a business can be learned, the entrepreneurial mindset might be innate. The conversation also touches on the idea that the success of companies like Apple and leaders like Martin Luther King Jr. stems from their ability to articulate a compelling 'why' that resonates with people's values and beliefs.

Keywords

💡Why

In the context of the video, 'Why' refers to the purpose or cause behind an organization's existence. It is distinct from 'What' (the actions or products of the organization) and 'How' (the processes used by the organization). The video emphasizes that understanding 'Why' is crucial for an organization's longevity and success. It is the driving force behind the actions of the company and resonates with people on a deeper, more human level. For example, Simon Sinek speaks about how companies that know their 'Why' are often the ones that last longer and outperform their competition.

💡Ethnographer

An ethnographer is a professional who studies and analyzes human cultures, often through fieldwork and participant observation. In the video, Simon Sinek, who is an ethnographer by training, applies his expertise to understand and explain the cultural dynamics within organizations. His background in ethnography allows him to delve into the deeper 'Why' behind organizational behaviors and structures.

💡Origin Story

The 'Origin Story' is the narrative that explains why a company or organization was founded. It is often rooted in personal experiences or passions of the founder(s). In the video, Sinek discusses how the best companies have a clear and compelling origin story that goes beyond the product or service they offer, and instead focuses on a deeper purpose or cause that drives the organization.

💡Passion

Passion, as discussed in the video, is the intense interest or enthusiasm for something that stems from personal experiences or values. It is what drives individuals and organizations to excel in their field. Sinek mentions that passion comes from who we are and not necessarily what we sell, and it is a key factor in the success of both individuals and organizations.

💡Leadership

Leadership in the video is portrayed as a skill and practice that involves a significant mindset shift from being responsible for tasks to being responsible for people. It is about inspiring and guiding others towards a common 'Why'. Sinek explains that leadership is rarely taught effectively and is distinct from management, which is more about the processes and systems within an organization.

💡Entrepreneurship

Entrepreneurship is the process of designing, launching, and running a new business, which starts as a startup and can grow to become a large organization. Sinek debates whether entrepreneurship can be taught, suggesting that it is more about a person's inherent problem-solving abilities and perspective on the world rather than a set of learnable skills.

💡Empathy

Empathy is the ability to understand and share the feelings of others. In the video, empathy is implied as a key component of leadership and the 'Why' behind successful organizations. It is about connecting with people on a human level, which is essential for inspiring and motivating a team towards a shared goal.

💡Customer Service

Customer service refers to the assistance and support provided to customers before, during, and after a purchase. In the context of the video, Tony Hsieh of Zappos is mentioned as an example of someone who is passionate about customer service, which is not just about the products they sell but about the experience and care provided to customers.

💡Personal Suffering

Personal suffering is a deeply personal experience of hardship or loss that can lead to the creation of a company or organization. In the video, Sinek explains that the best companies often stem from a founder's personal suffering, which becomes the driving force behind the company's 'Why' and its mission to solve a problem or fill a gap in the market.

💡Social Movement

A social movement is a type of group action that seeks to bring about change on a social issue. In the video, Sinek suggests that CEOs should preach the cause of their company as if it were a social movement, inspiring employees to join not just for the job, but for the greater purpose behind the organization.

💡Empowerment

Empowerment is the process of becoming stronger and more confident, especially in controlling one's life and claiming one's rights. The video discusses how companies like Apple were founded on the principle of empowerment, using technology to give individuals the power to stand up against larger entities, which is a key part of their 'Why'.

Highlights

The importance of knowing why you do what you do, rather than just what you do.

Organizations function on three levels: what they do, how they do it, and why they do it.

Few organizations understand their 'why', which is distinct from making money.

Organizations with a clear 'why' tend to last longer and outperform their competition.

Defining 'why' involves an origin story, often stemming from personal suffering or a need.

Weak companies are built around perceived market opportunities without personal passion.

Passion in business comes from who we are, not necessarily what we sell.

Leadership is a skill and practice that is rarely taught effectively.

Leaders are responsible for preaching the cause, not just selling the product.

Apple's success is tied to its origin story and Steve Jobs' belief in empowering individuals.

Martin Luther King Jr.'s success in civil rights was due to his ability to articulate 'why'.

Entrepreneurship is about problem-solving and seeing the world differently.

The debate on whether entrepreneurship can be taught and the distinction from small business ownership.

Leaders Eat Last: the concept that leaders should prioritize the needs of their team.

The transformation from individual contributor to leader involves a significant mindset shift.

The role of personal experiences and upbringing in shaping our 'why' and passion.

The impact of a leader's beliefs and values on the culture and success of an organization.

Transcripts

[Music]

hi everyone I'm Diana Ransom features

editor here at Inc and I'm pleased to

welcome you all today to a startup boot

camp live chat with a good friend Simon

cnic how are you um I'm well thank you

he's an ethnographer by training he's an

adjunct at the Rand Corporation and he

also consults with organizations of all

sizes from startups to the military and

um to toop it off he's also delivered

the third most viewed TED Talk to date

since it makes sense to start with why

yeah uh your book let's go ahead and go

take it from there what is the uh

basically can you speak about the

importance of knowing why you do what

you do rather than what you do sure

every organization on the planet knows

what they do um some know how they do it

but very few understand why and at the

end of the day every single organization

even our own career always functions on

these same three levels it's a

biological constant it's just how our

brains take in information and we make

decisions and so you have to know all

three but the problem is most

organizations don't know why and what

I've learned um and spoken about and

written about is that uh those few

organizations those few CEOs who truly

understand why their company exists and

this has nothing to do with making money

that's a result um but literally why do

we need their company to exist because

you can buy whatever they sell somewhere

else usually um those are the companies

that tend to last long longer and

outperform their competition when an

organization or a company is just

starting what how do they Define why

they do what they do well why at its

core is a is an origin story the best

companies are ones where the the founder

or a small group of Founders personally

suffered or something someone close to

them suffered something they couldn't

get something or they had to overcome

something they couldn't find another

market and so they produced it

themselves the weakest companies are the

ones where somebody reads a magazine

sees a market opportunity and attempts

to you know build a business around it

and the reason is simple is because

there's no passion for something that we

perceive a market opportunity around but

when we personally suffer something or

somebody around us personally suffers

something or we can't get something this

is the source of of passion and so the

ability to put that story into words the

ability to truly understand why this has

to exist on a very human level that goes

Way Beyond the product or the service is

what keeps the inspiration alive as the

company continues to grow it's

interesting um Tony Shay is often sort

of been quoted as saying how he isn't

necessarily passionate about what he

does or what he sells what zapo sells

it's more or less he's passionate about

customer service so there are it strikes

me as there are different aspects of

business that people can be passionate

about um how do you suggest finding that

passion so our passion comes from who we

are not necessarily what we sell um it's

true Tony doesn't necessarily care about

shoes you know what he cares about is

human beings what he cares about is his

his employees and he cares that his

employees take care of his customers and

that's how it works he's really obsessed

with having having a good time

delivering happiness as he calls it um

and what he sells is incidental he could

have sold anything um and so our why

comes from like I said who we are how

we're raised um it's the sum total of of

of our experiences when we were kids and

our wies are fully formed by the time

we're 18 1920 and the rest of our

careers simply offer us opportunities to

bring our cause to life to bring that

purpose or cause to life and when we do

something that is consistent with what

we believe we feel passion um when we

have to work hard for something we don't

believe in it's called stress you work

just as hard if not harder when you're

passionate than you are when you're

stressed the difference is one of them

it feels good and the other one it

doesn't so if you look at Great

organizations whether it's apple or

virgin you know every company that

virgin's ever started is Richard Branson

his personality as a human being is the

personality of the companies his beliefs

his values are imbued into the

organization in other words they're the

same thing his companies are one of the

things that he's done in his life to

bring who he is to life um we know this

is the case in small companies but it

doesn't change when those companies get

big so you talked about Apple you also

mentioned Martin Luther King um often um

in your speeches and in your book um I

wonder if you can kind of talk about why

this organization apple and why you know

this person Martin Luther King was so

successful because it strikes me as

maybe it's just a matter of good

marketing remember civil rights problems

existed long before Martin Luther King M

long before Martin Luther King I mean

what happened to the whole beginning of

the 20th Century you know there there

was there were issues and there was

strife and there was Uprising but how

come there was no Civil Rights Movement

um and what it did is it took a person

to put the cause into words beyond what

they wanted Beyond how to do it into

words so compelling we understood why we

had to do it you know it was deeply

deeply human um it was about all men are

created equal goes back to the very

founding values of the United States and

and it resonated and it brought people

together because we can disagree on how

to do it um but we can't but what we

what we find alignment on is is why

we're doing it in the first place so

what can companies and entrepreneurs um

take away from that experience a CEO's

responsibility is to preach the cause

not just sell the product but so that

all of the people who work to the who

join the company understand that they're

they're joining somewhat of a social

movement um uh Steve Jobs was really

good at this I mean the people who

worked there really thought they were

going to change the world you know and

they still do they did and they and they

did and this that was a credit to jobs

preaching the cause and preaching the

cause and if you go back to the origin

story of Apple um here was this new

technology called the personal computer

and job um was a populist he believed in

power to the people um and he believed

that this technology could really

Empower a human being to stand up to a

corporation um but and that would never

happen unless they made it simple to use

so it wasn't just about Simplicity and

design it was about giving power to

people and if you've noticed since the

dawn of Apple to this current day they

only have individuals in in they

advertising one person rising up that

old 1984 commercial of one person

running into this orwellian scene it's

one person dancing with an iPod it's I'm

a Mac I'm a PC it's really about the

individual and about empowerment had

Apple started in in in the '90s it would

have been a doom it would have been an

online it just happened to be the

technology of the day it had nothing to

do with the technology it had to do with

his own personal beliefs and the

technology was simply a means to an ends

um and this is what gave them the power

to diversify their their portfolio as

well which is it was about the product

in the first place it was always about

the people so it sounds like it's it

would be rather hard um from the way you

kind of put it to learn entrepreneurship

or to learn how to be a leader

leadership is a skill leadership is a

practice skill um and it's rarely taught

unfortunately and when it is taught it's

not taught well most of the MBA programs

don't really teach leadership they call

it leadership but they teach management

um leadership is this really really um

sort of sophisticated change in mindset

um when we're very Junior the only thing

we have to do is be good at our jobs and

they teach us how to use the software or

use the technology so that we can get

good at our jobs they give us training

some people get Advanced degrees on how

to do the job accounting or whatever you

know and if you're really good at your

job they'll promote you and eventually

you'll get promoted to a position where

you're now responsible for people who do

the job you used to do but nobody

teaches us how to do that and this is

why we get managers is because the

people who are now put in charge of us

are actually better at the job than we

are that's what got them promoted they

can't help them themselves and so we

have to go this through this transition

um some people make it slowly some

people make it quickly and unfortunately

without training some people will never

make it we have to go this through this

transition where we are no longer

responsible for the results we now

become responsible for the people who

are responsible for the results we're no

longer responsible for taking care of

the customer we're now longer we're now

responsible for the people who are

taking care of the customer this is what

leadership is and it's a practice skill

and it's the same thing as becoming a

parent your lifestyle will will change

and now everything is centered around

taking care of another human being

that's what leadership is

entrepreneurship is different you know

I've had these discussions and debates

with people whether you can teach

entrepreneurship there's a huge

difference between being an entrepreneur

and being a small business owner um um

not all small business owners are

entrepreneurs and some entrepreneurs are

own huge businesses Richard Branson's an

entrepreneur he owns 300 companies worth

multiple billions of dollars he's an

entrepreneur so let us not confuse small

business owner and entrepreneur an a

small business owner owns a small

business an entrepreneur is a problem

solver it's the way they see the world

they see the world differently and I

would debate whether we can teach that I

think we can teach some of the the

skills of building a small business but

I I'm I'm the jury is still out for me

whether we can teach entrepreneurship uh

oh I'm sure all the MBA programs across

the country are going to love that one

okay so let's skip ahead to your your

next book um your latest book uh Leaders

Eat Last