Start With Why Part 10

The company had grown from fewer than 1,000 stores to 13,000 in only ten years. Eight years and two CEOs later, the company was dangerously overextended just as it was facing an onslaught of compet.i.tion from McDonald's, Dunkin' Donuts and other unexpected places. In a now famous memo that Schultz wrote to his successor, Jim Donald, just months before returning to take the helm, he implored Donald to "make the changes necessary to evoke the heritage, the tradition and the pa.s.sion that we all have for the true Starbucks experience." The reason the company was floundering was not that it grew too fast, but that Schultz had not properly infused his WHY into the organization so that the organization could manage the WHY without him. In early 2008, Schultz replaced Donald with a leader who could better steer the company back to a time before the split: himself.

None of these executives are considered G.o.d's gift to management. Steve Jobs's paranoia, for example, is well doc.u.mented, and Bill Gates is socially awkward. Their companies are thousands of people deep and they alone can't pull all the strings or push all the b.u.t.tons to make everything work properly. They rely on the brains and the management skills of teams of people to help them build their megaphones. They rely on people who share their cause. In this respect, they are no different from other executives. But what they all have in common, something that not all CEOs possess, is that they physically embody the cause around which they built their companies. Their physical presence reminds every executive and every employee WHY they show up to work. Put simply: they inspire. Yet, like Bill Gates, these inspired leaders have all failed to properly articulate their cause in words that others could rally around in their absence. Failing to put the movement into hard words leaves them as the only ones who can lead the movement. What happens when Jobs or Dell or Schultz leave again?

For companies of any size, success is the greatest challenge. As Microsoft grew, Gates stopped talking about what he believed and how he was going to change the world and started talking about what the company was doing. Microsoft changed. Founded as a company that believed in making people more productive so they could achieve their highest potential, Microsoft became a company that simply made software products. Such a seemingly subtle change affects behaviors. It alters decisions. And it impacts how a company structures itself for the future. Though Microsoft had changed since its founding, the impact was never as dramatic because at least Bill Gates was there, the physical embodiment of the cause that inspired his executives and employees.

Microsoft is just one of the tangible things Gates has done in his life to bring his cause to life. The company is one of the WHATs to his WHY. And now he's off to do something else that also embodies his cause-to use the Gates Foundation to help people around the world wake up every day to overcome obstacles so they too can have an opportunity achieve their potential. The only difference is he's not doing it with software anymore. Steve Ballmer, a smart man by all accounts, does not physically embody Gates's vision of the world. He has the image of a powerful executive who sees numbers, compet.i.tors and markets. He is a man with a gift for managing the WHAT line. Like John Sculley at Apple, Jim Donald at Starbucks and Kevin Rollins at Dell-all the CEOs who replaced the visionary founders or executives-Ballmer might be the perfect man to work alongside a visionary, but is he the perfect man to replace one?

The entire culture of all these companies was built around one man's vision. The only succession plan that will work is to find a CEO who believes in and wants to continue to lead that movement, not replace it with their own vision of the future. Ballmer knows how to rally the company, but can he inspire it?

Successful succession is more than selecting someone with an appropriate skill set-it's about finding someone who is in lockstep with the original cause around which the company was founded. Great second or third CEOs don't take the helm to implement their own vision of the future; they pick up the original banner and lead the company into the next generation. That's why we call it succession, not replacement. There is a continuity of vision.

One of the reasons Southwest Airlines has been so good at succession is because its cause is so ingrained in its culture, and the CEOs who took over from Herb Kelleher also embodied the cause. Howard Putnam was the first president of Southwest after Kelleher. Though he was a career airline guy, it was not his resume that made him so well suited to lead the company. He was a good fit. Putnam recounts the time he met with Kelleher to interview for the job. Putnam leaned back in his chair and noticed that Kelleher had slipped his shoes off under the desk. More significantly, Putnam noticed the hole in one of Kelleher's socks. It was at that point that Putnam felt he was the right man for the job. He loved that Kelleher was just like everyone else. He too had holes in his socks.

Although Putnam felt Southwest was right for him, how do we know if he was right for Southwest? I had a chance to spend half a day with Putnam to talk. At one point in the afternoon I suggested we take a break and grab a Starbucks. The mere suggestion incensed him. "I'm not going to Starbucks!" he cracked. "I'm not paying five dollars for a cup of coffee. And what the heck is a Frappuccino anyway?" It was at that point I realized how perfect a fit Putnam was for Southwest. He was an everyman. A Dunkin' Donuts guy. He was a perfect man to take the torch from Kelleher and charge forward. Southwest inspired him. In the case of Howard Putnam, Kelleher hired somebody who could represent the cause, not reinvent it.

Today it has become so acculturated there that it's almost automatic. The same could be said for Colleen Barrett, who became president of Southwest in 2001, some thirty years after she was working as Kelleher's secretary in his San Antonio law firm. By 2001, the company had nearly 30,000 employees and a fleet of 344 planes. By the time she took over, Barrett says that running the company had become "a very collective effort." Kelleher stopped his day-to-day involvement in the company, but left a corporate culture so strong that his presence in the hallways was no longer needed. The physical person had largely been replaced by the folklore of Kelleher. But it is the folklore that has helped keep the WHY alive. Barrett freely admits she's not the smartest executive out there. She is self-deprecating in her personal a.s.sessment, in fact. But as the leader of the company, being the smartest was not her job. Her job was to lead the cause. To personify the values and remind everyone WHY they are there.

The good news is, it will be easy to know if a successor is carrying the right torch. Simply apply the Celery Test and see if what the company is saying and doing makes sense. Test whether WHAT they are doing effectively proves WHY they were founded. If we can't easily a.s.sess a company's WHY simply from looking at their products, services, marketing and public statements, then odds are high that they don't know what it is either. If they did, so would we.

When the WHY Goes, WHAT Is All You'll Have Left

On April 5, 1992, at approximately eight in the morning, Wal-Mart lost its WHY. On that day, Sam Walton, Wal-Mart's inspired leader, the man who embodied the cause around which he built the world's largest retailer, died in the University of Arkansas Medical Science Hospital in Little Rock of bone marrow cancer. Soon after, Walton's oldest son, S. Robeson Walton, who succeeded his father as chairman of the company, gave a public statement. "No changes are expected in the corporate direction, control or policy," he said. Sadly for Wal-Mart employees, customers and shareholders, that is not what happened.

Sam Walton was the embodiment of the everyman. Though he was named the richest man in America by Forbes magazine in 1985, a t.i.tle he held until he died, he never understood the importance others placed on money. Certainly, Walton was a compet.i.tor, and money was a good yardstick of success. But that's not what gave Walton or those who worked at Wal-Mart the feeling of success. It was people Walton valued above all else. People.

Look after people and people will look after you was his belief, and everything Walton and Wal-Mart did proved it. In the early days, for example, Walton insisted on showing up for work on Sat.u.r.days out of fairness to his store employees who had to work weekends. He remembered birthdays and anniversaries and even that a cashier's mother had just undergone gallbladder surgery. He chastised his executives for driving expensive cars and resisted using a corporate jet for many years. If the average American didn't have those things, then neither should those who are supposed to be their champions.

Wal-Mart never went through a split under Walton's command, because Walton never forgot where he came from. "I still can't believe it was news that I get my hair cut at the barbershop. Where else would I get it cut?" he said. "Why do I drive a pickup truck? What am I supposed to haul my dogs around in, a Rolls-Royce?" Often seen wearing his signature tweed jacket and a trucker's cap, Walton was the embodiment of those he aimed to serve-the average-Joe American.

With a company so beloved by employees, customers and communities, Walton made only one major blunder. He didn't put his cause into clear enough words so that others could continue to lead the cause after he died. It's not entirely his fault. The part of the brain that controls the WHY doesn't control language. So, like so many, the best Walton could articulate was HOW to bring his cause to life. He talked about making products cheap to make things more affordable to the average working American. He talked about building stores in rural communities so that the backbone of America's workforce didn't have to travel to the urban centers. It all made sense. All his decisions pa.s.sed the Celery Test. It was the WHY upon which the company was built, however, that was left unsaid.

Walton was involved in the company until just before his death, when his ailing health prevented him from partic.i.p.ating any longer. Like all organizations with founder-leaders whose physical presence helps keep the WHY alive, his continued involvement in the company had reminded everyone WHY they came to work every day. He inspired everyone around him. Just as Apple ran on the fumes of Steve Jobs for a few years after he left the company before significant cracks started to show, so did Wal-Mart remember Sam Walton and his WHY for a short time after he died. But as the WHY started to get fuzzier and fuzzier, the company changed direction. From then on, there would be a new motivation at the company, and it was something that Walton himself cautioned against: chasing money.

Costco was cofounded in 1983 by WHY-type Jim Sinegal and HOW-type Jeffrey Brotman. Sinegal learned about discount retailing from Sol Price, the same person from whom Sam Walton admitted to "borrowing" much of what he knew about the business. And, like Walton, Sinegal believes in people first. "We're going to be a company that's on a first-name basis with everyone," he said in an interview on ABC's newsmagazine show 20/20. Following the same formula as other inspiring leaders, Costco believes in looking after its employees first. Historically, they have paid their people about 40 percent more than those who work at Sam's Club, the Wal-Martowned discount warehouse. And Costco offers above-average benefits, including health coverage for more than 90 percent of their employees. As a result, their turnover is consistently five times lower than Sam's Club.

Like all companies built around a cause, Costco has relied on their megaphone to help them grow. They don't have a PR department and they don't spend money on advertising. The Law of Diffusion is all that Costco needed to get the word out. "Imagine that you have 120,000 loyal amba.s.sadors out there who are constantly saying good things about you," quips Sinegal, recognizing the value of trust and loyalty of his employees over advertising and PR.

For years, Wall Street a.n.a.lysts criticized Costco's strategy of spending so much on their people instead of on cutting costs to boost margins and help share value. Wall Street would preferred the company to focus on WHAT they did at the expense of WHY they did it. A Deutsche Bank a.n.a.lyst told FORTUNE magazine, "Costco continues to be a company that is better at serving the club member and employee than the shareholder."

Fortunately, Sinegal trusts his gut more than he trusts Wall Street a.n.a.lysts. "Wall Street is in the business of making money between now and next Tuesday," he said in the 20/20 interview. "We're in the business of building an organization, an inst.i.tution that we hope will be here fifty years from now. And paying good wages and keeping people working with you is very good business."

The amazing insight in all of this is not just how inspiring Sinegal is, but that almost everything he says and does echoes Sam Walton. Wal-Mart got as big as it did doing the exact same thing-focusing on WHY and ensuring that WHAT they did proved it. Money is never a cause, it is always a result. But on that fateful day in April 1992, Wal-Mart stopped believing in their WHY.

Since Sam Walton's death, Wal-Mart has been battered by scandals of mistreating employees and customers all in the name of shareholder value. Their WHY has gone so fuzzy that even when they do things well, few are willing to give them credit. The company, for example, was among the first major corporations to develop an environmental policy aimed at reducing waste and encouraging recycling. But Wal-Mart's critics have grown so skeptical of the company's motives that the move was largely dismissed as posturing. "Wal-Mart has been working to improve its image and lighten its environmental impact for several years now," a column published on the New York Times Web site on October 28, 2008, read. "Wal-Mart is still selling consumerism even as it pledges to cut the social and environmental costs of making the stuff in its stores." Costco, on the other hand, was later than Wal-Mart to announce an environmental policy, yet has received a disproportionate amount of attention. The difference is that people believe it when Costco does it. When people know WHY you do WHAT you do, they are willing to give you credit for everything that could serve as proof of WHY. When they are unclear about your WHY, WHAT you do has no context. Even though the things you do or decisions you make may be good, they won't make sense to others without a clear understanding of WHY.

And what of the results? Still running on the memory of Sam Walton, Wal-Mart's culture stayed intact at first, and the value of the two stocks was about even for a few years after Walton died. But as Wal-Mart continued to run its business in a post-Sam, post-split manner while Costco maintained clarity of WHY, the difference in value changed dramatically. An investment in Wal-Mart on the day Sam Walton died would have earned a shareholder a 300 percent gain by the time this book was written. An investment made in Costco on the same day would have netted an 800 percent gain.

Costco's advantage is that the embodiment of their WHY, Jim Sinegal, is still there. The things he says and does help reinforce to all those around him what the company stands for. Staying true to that WHY, Sinegal draws a $430,000 salary, a relatively small amount given the size and success of the company. At Wal-Mart's peak, Sam Walton never took a salary of more than $350,000 per year, also consistent with what he believed. David Gla.s.s, the first man to take over as CEO after Sam Walton, a man who had spent considerable time around Walton, said, "A lot of what goes on these days with high-flying companies and these overpaid CEOs, who're really just looting from the top and aren't watching out for anybody but themselves, really upsets me. It's one of the main things wrong with American business today."

Three more CEOs have attempted to carry the torch that Walton lit. And with each succession that torch, that clear sense of purpose, cause and belief, has grown dimmer and dimmer. The new hope lies in Michael T. Duke, who took over as CEO in early 2009. Duke's goal is to restore the l.u.s.ter and the clarity of Wal-Mart's WHY.

And to do it, he started by paying himself an annual salary of $5.43 million.

PART 6.

DISCOVER WHY.

13.

THE ORIGINS OF A WHY.

It started in Vietnam Warera Northern California, where antigovernment ideals and distain for large centers of power ran rampant. Two young men saw the power of government and corporations as the enemy, not because they were big, per se, but because they squashed the spirit of the individual. They imagined a world in which an individual had a voice. They imagined a time when an individual could successfully stand up to inc.u.mbent power, old a.s.sumptions and status-quo thoughts and successfully challenge them. Even redirect them. They hung out with hippie types who shared their beliefs, but they saw a different way to change the world that didn't require protesting or engaging in anything illegal.

Steve Wozniak and Steve Jobs came of age in this time. Not only was the revolutionary spirit running high in Northern California, but it was also the time and place of the computer revolution. And in this technology they saw the opportunity to start their own revolution. "The Apple gave an individual the power to do the same things as any company," Wozniak recounts. "For the first time ever, one person could take on a corporation simply because they had the ability to use the technology." Wozniak engineered the Apple I and later the Apple II to be simple enough for people to harness the power of the technology. Jobs knew how to sell it. Thus was born Apple Computer. A company with a purpose-to give the individual to power to stand up to established power. To empower the dreamers and the idealists to challenge the status quo and succeed. But their cause, their WHY, started long before Apple was born.

In 1971, working out of Wozniak's dorm room at UC Berkeley, the two Steves made something they called the Blue Box. Their little device hacked the phone system to give people the ability to avoid paying long-distance rates on their phone bills. Apple computers didn't exist yet, but Jobs and Woz were already challenging a Big Brothertype power, in this case Ma Bell, American Telephone and Telegraph, the monopoly phone company. Technically, what the Blue Box did was illegal, and with no desire to challenge power by breaking the law, Jobs and Woz never actually used the device themselves. But they liked the idea of giving other individuals the ability to avoid having to play by the rules of monopolistic forces, a theme that would repeat many more times in Apple's future.

On April 1, 1976, they repeated their pattern again. They took on the giants of the computer industry, most notably Big Blue, IBM. Before the Apple, computing still meant using a punch card to give instructions to a huge mainframe squirreled away in a computer center somewhere. IBM targeted their technology to corporations and not, as Apple intended, as a tool for individuals to target corporations. With clarity of purpose and amazing discipline, Apple Computer's success seemed to follow the Law of Diffusion almost by design. In its first year in business, the company sold $1 million worth of computers to those who believed what they believed. By year two, they had sold $10 million worth. By their third year in business they were a $100 million company, and they attained billion-dollar status within only six years.

Already a household name, in 1984 Apple launched the Macintosh with their famed "1984" commercial that aired during the Super Bowl. Directed by Ridley Scott, famed director of cult cla.s.sics like Blade Runner, the commercial also changed the course of the advertising industry. The first "Super Bowl commercial," it ushered in the annual tradition of big-budget, cinematic Super Bowl advertising. With the Macintosh, Apple once again changed the tradition of how things were done. They challenged the standard of Microsoft's DOS, the standard operating system used by most personal computers at the time. The Macintosh was the first ma.s.s-market computer to use a graphical user interface and a mouse, allowing people to simply "point and click" rather than input code. Ironically, it was Microsoft that took Apple's concept to the ma.s.ses with Windows, Gates's version of the graphical user interface. Apple's ability to ignite revolutions and Microsoft's ability to take ideas to the ma.s.s market perfectly ill.u.s.trate the WHY of each company and indeed their respective founders. Jobs has always been about challenge and Gates has always been about getting to the most people.

Apple would continue to challenge with other products that followed the same pattern. Recent examples include the iPod and, more significantly, iTunes. With these technologies, Apple challenged the status-quo business model of the music industry-an industry so distracted trying to protect its intellectual property and their outdated business model that it was busy suing thirteen-year-old music pirates while Apple redefined the online music market. The pattern repeated again when Apple introduced the iPhone. The status quo dictated that the cellular providers and not the phone manufacturer decide the features and capabilities of the actual phones. T-Mobile, Verizon Wireless, and Sprint, for example, tell Motorola, LG, and Nokia what to do. Apple changed all that when they announced that, with the iPhone, they would be telling the provider what the phone would do. Ironically the company that Apple challenged with their Blue Box decades before, this time around exhibited cla.s.sic early-adopter behavior. AT&T was the only one to agree to this new model, and so another revolution was ignited.

Apple's keen apt.i.tude for innovation is born out of its WHY and, save for the years Jobs was missing, it has never changed since the company was founded. Industries holding on to legacy business models should be forewarned; you could be next. If Apple stays true to their WHY, the television and movie industries will likely be next.

Apple's ability to do what they do has nothing to do with industry expertise. All computer and technology companies have open access to talent and resources and are just as qualified to produce all the products Apple does. It has to do with a purpose, cause or belief that started many years ago with a couple of idealists in Cupertino, California. "I want to put a ding in the universe," as Steve Jobs put it. And that's exactly what Apple does in the industries in which it competes. Apple is born out of its founders' WHY. There is no difference between one or the other. Apple is just one of the WHATs to Jobs's and Woz's WHY. The personalities of Jobs and Apple are exactly the same. In fact, the personalities of all those who are viscerally drawn to Apple are similar. There is no difference between an Apple customer and an Apple employee. One believes in Apple's WHY and chooses to work for the company, and the other believes in Apple's WHY and chooses to buy its products. It is just a behavioral difference. Loyal shareholders are no different either. WHAT they buy is different, but the reason they buy and remain loyal is the same. The products of the company become symbols of their own ident.i.ties. The die-hards outside the company are said to be a part of the cult of Apple. The die-hards inside the company are said to be a part of the "cult of Steve." Their symbols are different, but their devotion to the cause is the same. That we use the word "cult" implies that we can recognize that there is a deep faith, something irrational, that all those who believe share. And we'd be right. Jobs, his company, his loyal employees and his loyal customers all exist to push the boundaries. They all fancy a good revolution.

Just because Apple's WHY is so clear does not mean everyone is drawn to it. Some people like them and some don't. Some people embrace them and some are repelled by them. But it cannot be denied: they stand for something. The Law of Diffusion says that only 2.5 percent of the population has an innovator mentality-they are a group of people willing to trust their intuition and take greater risks than others. Perhaps it is no coincidence that Microsoft Windows sits on 96 percent of the world's computers whereas Apple maintains about 2.5 percent. Most people don't want to challenge the status quo.

Though Apple employees will tell you the company's success lies in its products, the fact is that a lot of companies make quality products. And though Apple's employees may still insist that their products are better, it depends on the standard by which you are judging them. Apple's products are indeed best for those who relate to Apple's WHY. It is Apple's belief that comes through in all they think, say and do that makes them who they are. They are so effective at it, they are able to clearly identify their own products simply by preceding the product name with the letter "i." But they don't just own the letter, they own the word "I." They are a company that champions the creative spirit of the individual, and their products, services and marketing simply prove it.

The WHY Comes from Looking Back

Conservative estimates put the numbers at three to one. But some historians have said the English army was outnumbered by six to one. Regardless of which estimates you choose to believe, the prospects for Henry V, king of England, did not look good. It was late October in the year 1415 and the English army stood ready to do battle against a much bigger French force at Agincourt in northern France. But the numbers were just one of Henry's problems.

The English army had marched over 250 miles, taking them nearly three weeks, and had lost nearly 40 percent of their original numbers to sickness. The French, in stark contrast, were better rested and in much better spirits. The better-trained and more experienced French were also excited at the prospect of exacting their revenge on the English to make up for the humiliation of previous defeats. And to top it all off, the French were vastly better equipped. The English were lightly armored, but whatever protection they did have was no match for the superior weight of the French armor. But anyone who knows their medieval European history already knows the outcome of the battle of Agincourt. Despite the overwhelming odds, the English won.

The English had one vital piece of technology that was able to confound the French and start a chain of events that would ultimately result in a French defeat. The English had the longbow, a weapon with astounding range for its time. Standing far from the battlefield, far enough away that heavy armor was not needed, the English could look down into the valley and shower the French with arrows. But technology and range aren't what give an arrow its power. By itself, an arrow is a flimsy stick of wood with a sharpened tip and some feathers. By itself, an arrow cannot stand up to a sword or penetrate armor. What gives an arrow the ability to take on experience, training, numbers and armor is momentum. That flimsy stick of wood, when hurtling through the air, becomes a force only when it is moving fast in one direction. But what does the battle of Agincourt have to do with finding your WHY?

Before it can gain any power or achieve any impact, an arrow must be pulled backward, 180 degrees away from the target. And that's also where a WHY derives its power. The WHY does not come from looking ahead at what you want to achieve and figuring out an appropriate strategy to get there. It is not born out of any market research. It does not come from extensive interviews with customers or even employees. It comes from looking in the completely opposite direction from where you are now. Finding WHY is a process of discovery, not invention.

Just as Apple's WHY developed during the rebellious 1960s and'70s, the WHY for every other individual or organization comes from the past. It is born out of the upbringing and life experience of an individual or small group. Every single person has a WHY and every single organization has one too. An organization, don't forget, is one of the WHATs, one of the tangible things a founder or group of founders has done in their lives to prove their WHY.

Every company, organization or group with the ability to inspire starts with a person or small group of people who were inspired to do something bigger than themselves. Gaining clarity of WHY, ironically, is not the hard part. It is the discipline to trust one's gut, to stay true to one's purpose, cause or beliefs. Remaining completely in balance and authentic is the most difficult part. The few that are able to build a megaphone, and not just a company, around their cause are the ones who earn the ability to inspire. In doing so, they harness a power to move people that few can even imagine. Learning the WHY of a company or an organization or understanding the WHY of any social movement always starts with one thing: you.

I Am a Failure

There are three months indelibly printed in my memory-September to December 2005. This was when I hit rock bottom.

I started my business in February 2002 and it was incredibly exciting. I was "full of p.i.s.s and vinegar," as my grandfather would say. From an early age, my goal was to start my own business. It was the American Dream, and I was living it. My whole feeling of self-worth came from the fact that I did it, I took the plunge, and it felt amazing. If anyone ever asked me what I did, I would pose like George Reeves from the old Superman TV series. I would put my hands on my hips, stick out my chest, stand at an angle and with my head raised high I'd declare, "I am an entrepreneur." What I did was how I defined myself, and it felt good. I wasn't like Superman, I was Superman.

As anyone who starts a business knows, it is a fantastic race. There is a statistic that hangs over your head-over 90 percent of all new businesses fail in the first three years. For anyone with even a bit of a compet.i.tive spirit in them, especially for someone who defines himself or herself as an entrepreneur (hands on hips, chest out, standing at a slight angle), these overwhelming odds of failure are not intimidating, they only add fuel to the fire. The foolishness of thinking that you're a part of the small minority of those who actually will make it past three years and defy the odds is part of what makes entrepreneurs who they are, driven by pa.s.sion and completely irrational.

After year one, we celebrated. We hadn't gone out of business. We were beating the odds. We were living the dream. Two years pa.s.sed. Then three years. I'm still not sure how we did it-we never properly implemented any good systems and processes. But to heck with it, we'd beaten the odds. I had achieved my goal and that's all that mattered. I was now a proud member of a very small group of people who could say, with statistical proof, that I was an American small business owner.

The fourth year would prove to be very different. The novelty of being an entrepreneur had worn off. I no longer stood like George Reeves. When asked what I did, I would now tell people that I did "positioning and strategy consulting." It was much less exciting and it certainly didn't feel like a big race anymore. It was no longer a pa.s.sionate pursuit, it was just a business. And the reality was that the business did not look that rosy.

We were never a runaway success. We made a living, but not much more. We had some FORTUNE 500 clients and we did good work. I was crystal clear on what we did. And I could tell you how we were different-how we did it. Like everyone else in the game, I would try to convince prospective clients how we did it, how we were better, how our way was unique . . . and it was hard work. The truth is, we beat the odds because of my energy, not because of my business ac.u.men, but I didn't have the energy to sustain that strategy for the rest of my life. I was aware enough to know that we needed better systems and processes if the business was to sustain itself.

I was incredibly demoralized. Intellectually, I could tell you what I needed to do, I just couldn't do it. By September 2005 I was the closest I've ever been to, if I wasn't already, completely depressed. My whole life I'd been a pretty happy-go-lucky guy, so just being unhappy was bad enough. But this was worse.

The depression made me paranoid. I was convinced I was going to go out of business. I was convinced I was going to be evicted from my apartment. I was certain anyone who worked for me didn't like me and that my clients knew I was a fraud. I thought everyone I met was smarter than me. I thought everyone I met was better than me. Any energy I had left to sustain the business now went into propping myself up and pretending that I was doing well.

If things were to change, I knew I needed to learn to implement more structure before everything crashed. I attended conferences, read books and asked successful friends for advice on how to do it. It was all good advice, but I couldn't hear it. No matter what I was told, all I could hear was that I was doing everything wrong. Trying to fix the problem didn't make me feel better, it made me feel worse. I felt more helpless. I started having desperate thoughts, thoughts that for an entrepreneur are almost worse than suicide: I thought about getting a job. Anything. Anything that would stop the feeling of falling I had almost every day.

I remember visiting the family of my future brother-in-law for Thanksgiving that year. I sat on the couch in the living room of his mother's house, people were talking to me, but I never heard a word. If I was asked questions, I replied only in plat.i.tudes. I didn't really desire or even have the ability to make conversation anymore. It was then that I realized the truth. Statistics notwithstanding, I was a failure.

As an anthropology major in college and a strategy guy in the marketing and advertising world, I had always been curious about why people do the things they do. Earlier in my career I started becoming curious about these same themes in the real world-in my case, corporate marketing. There is an old saying in the industry that 50 percent of all marketing works, the problem is, which 50 percent? I was always astounded that so many companies would operate with such a level of uncertainty. Why would anyone want to leave the success of something that costs so much, with so much at stake to the flip of a coin? I was convinced that if some marketing worked, it was possible to figure out why.

All companies of equal resources have equal access to the same agencies, the same talent, and the same media, so why does some marketing work and some doesn't? Working in an ad agency I'd seen it all the time. With conditions relatively equal, the same team could develop a campaign that would be hugely successful one year, then develop something the next year that would do nothing. Instead of focusing on the stuff that didn't work, I chose to focus on the stuff that worked to find out what it all had in common. The good news for me was there was not much to study.

How has Apple been able to so consistently outmarket their compet.i.tion over and over and over? What did Harley-Davidson do so well that they were able to create a following of people so loyal that they would tattoo a corporate logo on their bodies? Why did people love Southwest Airlines so much-they aren't really that special . . . are they? In an attempt to codify why these worked, I developed a simple concept I called The Golden Circle. But my little theory sat buried in my computer files. It was a little pet project with no real application, just something I found interesting.

It would be months later that I met a woman at an event who took an interest in my perspectives in marketing. Victoria Duffy Hopper grew up in an academic family and also has a lifelong fascination with human behavior. She was the first to tell me about the limbic brain and the neocortex. My curiosity piqued by what she was telling me, I started reading about the biology of the brain, and it was then that I made the real discovery.

The biology of human behavior and The Golden Circle overlapped perfectly. While I was trying to understand why some marketing worked and some didn't, I had tripped over something vastly more profound. I discovered why people do what they do. It was then that I realized what was the real cause of my stress. The problem wasn't that I didn't know what to do or how to do it, the problem was I had forgotten WHY. I had gone through what I now know is a split, and I needed to rediscover my WHY.

To Inspire People to Do the Things That Inspire Them

Henry Ford said, "If you think you can or you think you can't, you're right." He was a brilliant WHY-guy who changed the way industry works. A man who embodied all the characteristics of a great leader, who understood the importance of perspective. I wasn't any dumber than I was when I started my business, probably the opposite, in fact. What I had lost was perspective. I knew what I was doing, but I had forgotten WHY. There is a difference between running with all your heart with your eyes closed and running with your all your heart with your eyes wide open. For three years, my heart had pounded but my eyes had been closed. I had pa.s.sion and energy, but I lacked focus and direction. I needed to remember what inspired my pa.s.sion.

I became obsessed with the concept of WHY. I was consumed by the idea of it. It was all I talked about. When I looked back to my upbringing, I discovered a remarkable theme. Whether among friends, at school or professionally, I was always the eternal optimist. I was the one who inspired everyone to believe they could do whatever they wanted. This pattern is my WHY. To inspire. It didn't matter if I was doing it in marketing or consulting. It didn't matter what types of companies I worked with or in which industries I worked. To inspire people to do the things that inspired them, so that, together, we can change the world. That's the path to which my life and my work is now completely devoted. Henry Ford would have been proud of me. After months of thinking I couldn't, now I knew I could.

I made myself a guinea pig for the concept. If the reason I hit rock bottom was because my Golden Circle was out of balance, then I needed to get it back in balance. If it was important to start with WHY, then I would start with WHY in everything I did. There is not a single concept in this book that I don't practice. I stand at the mouth of my megaphone and I talk about the WHY to anyone who will listen. Those early adopters who hear my cause see me as a tool in their a.r.s.enal to achieve their own WHY. And they introduced me to others whom they believed I could inspire. And so the Law of Diffusion started to do its job.

Though The Golden Circle and the concept of WHY was working for me, I wanted to show it to others. I had a decision to make: do I try to patent it, protect it and use it to make lots of money, or do I give it away? This decision was to be my first Celery Test. My WHY is to inspire people to do the things that inspire them, and if I am to be authentic to that cause there was only one decision to make-to give it away, to talk about it, to share it. There would never be any secret sauce or special formula for which only I knew the ingredients. The vision is to have every person and every organization know their WHY and use it to benefit all they do. So that's what I'm doing, and I'm relying entirely on the concept of WHY and the naturally occurring pattern that is The Golden Circle to help me get there.

The experiment started to work. Prior to starting with WHY, I had been invited to give one public speech in my life. Now I get between thirty and forty invitations per year, from all sorts of audiences, all over the world, to speak about The Golden Circle. I speak to audiences of entrepreneurs, large corporations, nonprofits, in politics and government. I've spoken at the Pentagon to the chief of staff and the secretary of the Air Force. Prior to The Golden Circle, I didn't even know anyone in the military. Prior to starting with WHY, I had never been on television; in fewer than two years I started getting regular invitations to appear on MSNBC. I've worked with members of Congress, having never done any government or political work prior to starting with WHY.

I am the same person. I know the same things I did before. The only difference is, now I start with WHY. Like Gordon Bethune who turned around Continental with the same people and the same equipment, I was able to turn things around with the things I already knew and did.

I'm not better connected than everyone else. I don't have a better work ethic. I don't have an Ivy League education and my grades in college were average. The funniest part is, I still don't know how to build a business. The only thing that I do that most people don't is I learned how to start with WHY.

14.

THE NEW COMPEt.i.tION.

If You Follow Your WHY, Then Others Will Follow You