Start With Why Part 8

The Education for Employment Foundation is not an American charity hoping to do good in faraway lands. It is a global movement. Each EFE operation runs independently, with locals making up the majority of their local boards. Local leaders take personal responsibility to give young men and women that feeling of opportunity by giving them the skills, knowledge and, most importantly, the confidence to choose an alternative path for themselves. Mayyada Abu-Jaber is leading the movement in Jordan. Mohammad Naja is spreading the cause in Gaza and the West Bank. And Maeen Aleryani is proving that a cause can even change a culture in Yemen.

In Yemen, children can expect to receive nine years of education. This is one of the lowest rates in the world. In the United States, children can expect sixteen years. Inspired by Bruder, Aleryani sees such an amazing opportunity for young men and women to change their perspective and take greater control of their own future. He set out to find capital to jump-start his EFE operation in Sana'a, Yemen's capital, and in one week was able to raise $50,000. The speed at which he raised that amount is pretty good even by our philanthropic standards. But this is Yemen, and Yemen has no culture of philanthropy, making his achievement that much more remarkable. Yemen is also one of the poorest nations in the region. But when you tell people WHY you're doing what you're doing, remarkable things happen.

Across the region, everyone involved in EFE believes that they can help teach their brothers and sisters and sons and daughters the skills that will help them change path that they think they are on. They are working to help the youth across the region believe that their future is bright and full of opportunity. And they don't do it for Bruder, they do it for themselves. That's the reason EFE will change the world.

Sitting at the top of the megaphone, at the point of WHY, Bruder's role is to inspire, to start the movement. But it is those who believe who will effect the real change and keep the movement going. Anyone, regardless where they live, what they do or their nationality, can partic.i.p.ate in this movement. It's about feeling like we belong. If you believe that there is an alternative path to the one we're on, and all we have to do is point to it, then visit the Web site efefoundation.org and join the movement. To change the world takes the support of all those who believe.

9.

KNOW WHY. KNOW HOW. THEN WHAT?.

They marched in, single file. Not a word was spoken. No one made any eye contact with anyone else. They all looked the same. Their heads shaved, their clothes gray and tattered. Their boots dusty. One by one, they filled a large, cavernous room, like a hangar from a science fiction movie. The only color was gray. The walls were gray. Dust and smoke filled the s.p.a.ce making even the air look gray.

Hundreds, maybe even thousands of these drone-people sat on neatly organized benches. Row after row after row. A sea of gray conformity. They all watched a projection of a huge talking head on the screen in the front of the room that filled the entire wall. This apparent leader recited dogma and propaganda, stating proudly that they were in complete control. They had achieved perfection. They were free of pests. Or so they thought.

Running down one of the tunnels that led into the cavernous hangar, a lone blonde woman. She wore bright red shorts and a crisp white T-shirt. Like a lighthouse, her complexion and the color of her clothes seemed to shine through gray air. Pursued by security, she ran with a sledgehammer. This would not end well for the status quo.

On January 22, 1984, Apple launched their Macintosh computer with their now-famous commercial depicting an Orwellian scene of a totalitarian regime holding control over a population and promised that "1984 won't be like 1984." But this advertising was much more than just advertising. It was not about the features and benefits of a new product. It was not about a "differentiating value proposition." It was, for all intents and purposes, a manifesto. A poetic ode to Apple's WHY, it was the film version of an individual rebelling against the status quo, igniting a revolution. And though their products have changed and fashions have changed, this commercial is as relevant today as it was twenty-five years ago when it first aired. And that's because a WHY never changes. WHAT you do can change with the times, but WHY you do it never does.

The commercial is one of the many things the company has done or said over the years to show or tell the outside world what they believe. All Apple's advertising and communications, their products, partnerships, their packaging, their store design, they are all WHATs to Apple's WHY, proof that they actively challenge status quo thinking to empower the individual. Ever notice that their advertising never shows groups enjoying their products? Always individuals. Their Think Different campaign depicted individuals who thought differently, never groups. Always individuals. And when Apple tells us to "Think Different," they are not just describing themselves. The ads showed pictures of Pablo Pica.s.so, Martha Graham, Jim Henson, Alfred Hitchc.o.c.k, to name a few, with the line "Think Different" on the upper right hand side of the page. Apple does not embody the rebel spirit because they a.s.sociated themselves with known rebels. They chose known rebels because they embody the same rebel spirit. The WHY came before the creative solution in the advertising. Not a single ad showed a group. This is no accident. Empowering the individual spirit is WHY Apple exists. Apple knows their WHY and so do we. Agree with them or not, we know what they believe because they tell us.

Speak Clearly and Ye Shall Be Clearly Understood

An organization is represented by the cone in the three-dimensional view of The Golden Circle. This organized system sits atop another system: the marketplace. The marketplace is made up of all the customers and potential customers, all the press, the shareholders, all the compet.i.tion, suppliers and all the money. This system is inherently chaotic and disorganized. The only contact that the organized system has with the disorganized system is at the base-at the WHAT level. Everything an organization says and does communicates the leader's vision to the outside world. All the products and services that the company sells, all the marketing and advertising, all the contact with the world outside communicate this. If people don't buy WHAT you do, they buy WHY you do it, and if all the things happening at the WHAT level do not clearly represent WHY the company exists, then the ability to inspire is severely complicated.

When a company is small, this is not an issue because the founder has plenty of direct contact with the outside world. Trusted HOW-types may be in short supply and the founder opts to make a majority of the big decisions. The founder or leader actually goes out and talks to customers, sells the product and hires most if not all the employees. As the company grows, however, systems and processes are added and other people will join. The cause embodied by an individual slowly morphs into a structured organization and the cone starts to take shape. As it grows, the leader's role changes. He will no longer be the loudest part of the megaphone; he will become the source of the message that is to flow through the megaphone.

When a company is small, it revolves around the personality of the founder. There is no debate that the founder's personality is the personality of the company. Why then do we think things change just because a company is successful? What's the difference between Steve Jobs the man and Apple the company? Nothing. What's the difference between Sir Richard Branson's personality and Virgin's personality? Nothing. As a company grows, the CEO's job is to personify the WHY. To ooze of it. To talk about it. To preach it. To be a symbol of what the company believes. They are the intention and WHAT the company says and does is their voice. Like Martin Luther King and his social movement, the leader's job is no longer to close all the deals; it is to inspire.

As the organization grows, the leader becomes physically removed, farther and farther away from WHAT the company does, and even farther away from the outside market. I love asking CEOs what their biggest priority is, and, depending on their size or structure, I generally get one of two answers: customers or shareholders. Sadly, there aren't many CEOs of companies of any reasonable size who have daily contact with customers anymore. And customers and shareholders alike both exist outside the organization in the chaotic world of the marketplace. Just as the cone demonstrates, the CEO's job, the leader's responsibility, is not to focus on the outside market-it's to focus on the layer directly beneath: HOW. The leader must ensure that there are people on the team who believe what they believe and know HOW to build it. The HOW-TYPES are responsible for understanding WHY and must come to work every day to develop the systems and hire the people who are ultimately responsible for bringing the WHY to life. The general employees are responsible for demonstrating the WHY to the outside world in whatever the company says and does. The challenge is that they are able to do it clearly.

Remember the biology of The Golden Circle. The WHY exists in the part of the brain that controls feelings and decision-making but not language. WHATs exist in the part of the brain that controls rational thought and language. Comparing the biology of the brain to the three-dimensional rendering of The Golden Circle reveals a profound insight.

The leader sitting at the top of the organization is the inspiration, the symbol of the reason we do what we do. They represent the emotional limbic brain. WHAT the company says and does represents the rational thought and language of the neocortex. Just as it is hard for people to speak their feelings, like someone trying to explain why they love their spouse, it is equally hard for an organization to explain its WHY. The part of the brain that controls feelings and the part that controls language are not the same. Given that the cone is simply a three-dimensional rendering of The Golden Circle, which is firmly grounded in the biology of human decision-making, the logic follows that organizations of any size will struggle to clearly communicate their WHY. Translated into business terms this means that trying to communicate your differentiating value proposition is really hard.

Put bluntly, the struggle that so many companies have to differentiate or communicate their true value to the outside world is not a business problem, it's a biology problem. And just like a person struggling to put her emotions into words, we rely on metaphors, imagery and a.n.a.logies in an attempt to communicate how we feel. Absent the proper language to share our deep emotions, our purpose, cause or belief, we tell stories. We use symbols. We create tangible things for those who believe what we believe to point to and say, "That's why I'm inspired." If done properly, that's what marketing, branding and products and services become; a way for organizations to communicate to the outside world. Communicate clearly and you shall be understood.

10.

COMMUNICATION IS NOT ABOUT SPEAKING, IT'S ABOUT LISTENING Martin Luther King Jr., a man who would become a symbol of the entire civil rights movement, chose to deliver his famous "I Have a Dream" speech in front of another symbol: the Lincoln Memorial. Like King, Lincoln stands (or in the case of the memorial, sits) as a symbol of the American value of freedom for all. Great societies understand the importance of symbols as a way of reinforcing their values, of capturing their beliefs. Dictators understand the importance of symbols all too well. But in their case, the symbols are usually of them and not of a larger belief. Symbols help us make tangible that which is intangible. And the only reason symbols have meaning is because we infuse them with meaning. That meaning lives in our minds, not in the item itself. Only when the purpose, cause or belief is clear can a symbol command great power.

The flag, for example, is nothing more than a symbol of our nation's values and beliefs. And we follow the flag into battle. That's some serious power. Ever notice the patch of the American flag on a soldier's right arm? It's backward. There was no mistake made, it's like that on purpose. A flag flying on a staff, as an army was rushing into battle, would appear backward if viewed from the right side. To put it the other way around on the right shoulder would appear as if the soldier were in retreat.

Our flag is infused with so much meaning that some have tried to pa.s.s laws banning its desecration. It's not the material out of which the flag is sewn that these patriots aim to protect. The laws they propose have nothing to do with the destruction of property. Their goal is to protect the meaning the symbol represents: the WHY. The laws they drafted tried to protect the intangible set of values and beliefs by protecting the symbol of those values and beliefs. Though the laws have been struck down by the Supreme Court, they have spurred contentious and emotionally charged debates. They pit our desire for freedom of expression with our desire to protect a symbol of that freedom.

Ronald Reagan, the Great Communicator, knew all too well the power of symbols. In 1982, he was the first president to invite a "hero" to sit in the balcony of the House chamber during the State of the Union address, a tradition that has continued every year since. A man who exuded optimism, Reagan knew the value of symbolizing the values of America instead of just talking about them. His guest, who sat with the First Lady, was Lenny Skutnik, a government employee who had dived into the icy Potomac just days before to save a woman who had fallen from a helicopter that was attempting to rescue her after an Air Florida plane crashed into the river. Reagan was trying to make a point, that words are hollow, but deeds and values are deep. After he told Skutnik's story he waxed, "Don't let anyone tell you that America's best days are behind her, that the American spirit has been vanquished. We've seen it triumph too often in our lives to stop believing in it now." Skutnik became Reagan's symbol of courage.

Most companies have logos, but few have been able to convert those logos into meaningful symbols. Because most companies are bad at communicating what they believe, so it follows that most logos are devoid of any meaning. At best they serve as icons to identify a company and its products. A symbol cannot have any deep meaning until we know WHY it exists in terms bigger than simply to identify the company. Without clarity of WHY, a logo is just a logo.

To say that a logo stands for quality, service, innovation and the like only reinforces its status as just a logo. These qualities are about the company and not about the cause. Don't forget the dictators. They understand the power of symbols, except the symbols are often of them. Likewise, so many companies act like dictators-it's all about them and what they want. They tell us what to do, they tell us what we need, they tell us they have the answers but they do not inspire us and they do not command our loyalty. And to take the a.n.a.logy a step further, the way dictators maintain their power is through fear, reward and every other manipulation they can think of. People follow dictators not because they want to, but because they have to. For companies to be perceived as a great leaders and not dictators, all their symbols, including their logos, need to stand for something in which we can all believe. Something we can all support. That takes clarity, discipline and consistency.

For a logo to become a symbol, people must be inspired to use that logo to say something about who they are. Couture fashion labels are the most obvious example of this. People use them to demonstrate status. But many of them are somewhat generic in what they symbolize. There is a more profound example: Harley-Davidson.

There are people who walk around with Harley-Davidson tattoos on their bodies. That's insane. They've tattooed a corporate logo on their skin. Some of them don't even own the product! Why would rational people tattoo a corporate logo on their bodies? The reason is simple. After years of Harley being crystal clear about what they believe, after years of being disciplined about a set of values and guiding principles and after years of being doggedly consistent about everything they say and do, their logo has become a symbol. It no longer simply identifies a company and its products; it identifies a belief.

In truth, most people who tattoo Harley-Davidson logos on their bodies have no idea what the stock price of Harley is. They have no idea about some management shake-up the week before. That symbol is no longer about Harley. The logo embodies an entire value set-their own. The symbol is no longer about Harley, it's about them. Randy Fowler, a former U.S. Marine and now general manager of a Harley-Davidson dealership in California, proudly sports a large Harley tattoo on his left arm. "It symbolizes who I am," he says. "Mostly, it says I'm an American." Customer and company are now one and the same. The meaning of Harley-Davidson has value in people's lives because, for those who believe in Harley's WHY, it helps them express the meaning of their own lives.

Because of Harley's clarity, discipline and consistency, most will know what that symbol means, even if you don't subscribe to it yourself. That's the reason why when someone walks into a bar with a big Harley logo on his arm we take a step back and give him a wide berth. The symbol has become so meaningful, in fact, that 12 percent of Harley-Davidson revenues are strictly from merchandising. That's remarkable.

It's not just logos, however, that can serve as symbols. Symbols are any tangible representation of a clear set of values and beliefs. An ink-stained finger for Iraqis was a symbol of a new beginning. A London double-decker bus or a cowboy hat-both are symbols of national cultures. But national symbols are easy because most nations have a clear sense of culture that has been reinforced and repeated for generations. It is not a company or organization that decides what, it symbols mean, it is the group outside the megaphone, in the chaotic marketplace, who decide. If, based on the things they see and hear, the outsiders can clearly and consistently report what an organization believes, then, and only then, can a symbol start to take on meaning. It is the truest test of how effective a megaphone has been produced-when clarity is able to filter all the way through the organization and come to life in everything that comes out of it.

Go back to Apple's "1984" commercial at the beginning of chapter 9. For those who have seen it, does it make you think about Apple and its products or do you simply like the sentiment? Or the line "Think Different," does it speak to you?

If you're a Mac customer, you probably loved this commercial; it may even give you goose b.u.mps when you watch it-a surefire test that the WHY is connecting with you on a visceral or limbic level. In fact, this commercial, after you learned it was from Apple, may have reinforced your decision to buy a Mac, whether for the first time or the tenth time. This commercial, like all Apple's advertising, is one of the things Apple has said or done that reinforces what they believe. It is every bit consistent with the clear belief we know they embody. And if the commercial speaks to you and you're not an Apple lover, odds are you still like the idea of thinking differently. The message of that ad is one of the things Apple does to tell their story. It is one of the WHATs to their WHY. It is a symbol. It is for these reasons that we say of a piece of advertising, "It really speaks to me." It's not really speaking to you, it's speaking to the millions of people who saw the ad. When we say that something like that "speaks to me," what we're really saying is, through all this clutter and noise, I can hear that. I can hear it and I will listen. This is what it means for a message that comes out of the megaphone to resonate.

Everything that comes out of the base of the megaphone serves as a way for an organization to articulate what it believes. What a company says and does are the means by which the company speaks. Too many companies put a disproportionate amount of weight on their products or services simply because those are the things that bring in the money. But there are many more things at the base of the megaphone that play an equal role in speaking to the outside world. Though products may drive sales, they alone cannot create loyalty. In fact, a company can create loyalty among people who aren't even customers. I spoke favorably of Apple long before I bought one. And I spoke disparagingly of a certain PC brand even though I'd been buying their products for years.

Apple's clarity, discipline and consistency-their ability to build a megaphone, not a company, that is clear and loud-is what has given them the ability to command such loyalty. They are accused of having a cultlike following. Those inside the company are often accused of following the "cult of Steve." All of these compliments or insults are indications that others have taken on the cause and made it their own. That experts describe their products and marketing as a "lifestyle" reinforces that people who love Apple products are using WHAT Apple does to demonstrate their own personal ident.i.ty. We call it "lifestyle marketing" because people have integrated commercial products into the style of their lives. Apple, with great efficiency, built a perfectly clear megaphone, leveraged the Law of Diffusion and invited others to help spread the gospel. Not for the company, for themselves.

Even their promotions and partnerships serve as tangible proof of what they believe. In 2003 and 2004, Apple ran a promotion for iTunes with Pepsi-the cola branded as "the choice of the next generation." It made sense that Apple would do a deal with Pepsi, the primary challenger to Coca-Cola, the status quo. Everything Apple does, everything they say and do, serves as tangible proof of what they believe. The reason I use Apple so extensively throughout this book is that Apple is so disciplined in HOW they do things and so consistent in WHAT they do that, love them or hate them, we all have a sense of their WHY. We know what they believe.

Most of us didn't read books about them. We don't personally know Steve Jobs. We haven't spent time roaming the halls of Apple's headquarters to get to know their culture. The clarity we have for what Apple believes comes from one place and one place only: Apple. People don't buy WHAT you do, they buy WHY you do it, and Apple says and does only the things they believe. If WHAT you do doesn't prove what you believe, then no one will know what your WHY is and you'll be forced to compete on price, service, quality, features and benefits; the stuff of commodities. Apple has a clear and loud megaphone and is exceptionally good at communicating its story.

The Celery Test

In order to improve HOW and WHAT we do, we constantly look to what others are doing. We attend conferences, read books, talk to friends and colleagues to get their input and advice, and sometimes we are also the dispensers of advice. We are in pursuit of understanding the best practices of others to help guide us. But it is a flawed a.s.sumption that what works for one organization will work for another. Even if the industries, sizes and market conditions are the same, the notion that "if it's good for them, it's good for us" is simply not true.

I know of a company with an amazing culture. When asked, the employees say they love that all the conference rooms have ping-pong tables in them. Does that mean that if you were to put ping-pong tables in all your conference rooms your culture would improve? Of course not. But this is an example of "best practices." The idea that copying WHAT or HOW things are done at high-performing organizations will inherently work for you is just not true. Like the Ferrari and the Honda, what is good for one company is not necessarily good for another. Put simply, best practices are not always best.

It is not just WHAT or HOW you do things that matters; what matters more is that WHAT and HOW you do things is consistent with your WHY. Only then will your practices indeed be best. There is nothing inherently wrong with looking to others to learn what they do, the challenge is knowing what practices or advice to follow. Fortunately, there is a simple test you can apply to find out exactly WHAT and HOW is right for you. It's a simple metaphor called the Celery Test.

Imagine you go to a dinner party and somebody comes up to you and says, "You know what you need in your organization? M&M's. If you're not using M&M's in your business, you're leaving money on the table."

Somebody else comes up to you and says, "You know what you need? Rice milk. The data shows that all the people are buying rice milk these days. You should be selling rice milk in this economy."

While you're standing over the punch bowl, yet another person offers some sage advice. "Oreo cookies," he says. "We made millions from implementing Oreo cookies in our organization. You've got to do it."

Still somebody else comes up to you and says, "Celery. You've got to get into celery."

You get all this great advice from all these highly accomplished people. Some of them are in the same industry. Some of them are more successful than you. Some of them have offered similar advice to others with great success. Now, what do you do?

You go to the supermarket and you buy celery, rice milk, Oreos and M&M's. You spend a lot of time at the supermarket walking the aisles. You spend a lot of money because you buy everything. But you may or may not get any value from some or all of these products; there are no guarantees. Worse, if you're budget-constrained, you had to whittle down your choices again. And then which do you choose?

But one thing's for sure: when you're standing in line at the supermarket with all of these items in your arms, your celery, rice milk, Oreos and M&Ms, n.o.body can see what you believe. What you do is supposed serve as the tangible proof of what you believe, and you bought everything.

But what if you knew your WHY before you went to the supermarket? What if your WHY is to do only things that are healthy? To always do the things that are good for your body? You'll get all the same good advice from all the same people, the only difference is, the next time you go to the supermarket, you'll buy only rice milk and celery. Those are the only products that make sense. It's not that the other advice isn't good advice, it's just not good for you. The advice doesn't fit.

Filtering your decisions through your WHY, you spend less time at the supermarket and you spend less money, so there's an efficiency advantage also. You're guaranteed to get value out of all the products you bought. And, most importantly, when you're standing in line with your products in your arms, everybody can see what you believe. With only celery and rice milk it's obvious to people walking by what you believe. "I can see that you believe in looking after your health," they may say to you. "I feel the same way. I have a question for you." Congratulations. You just attracted a customer, an employee, a partner or a referral simply by making the right decisions. Simply ensuring that WHAT you do proves what you believe makes it easy for those who believe what you believe to find you. You have successfully communicated your WHY based on WHAT you do.

This is an idealistic concept and in the real world that level of discipline is not always possible. I understand that sometimes we have to make short-term decisions to pay bills or get some short-term advantage. That's fine. The Celery Test still applies. If you want a piece of chocolate cake, go right ahead. The difference is, when you start with WHY, you know full well that the chocolate cake is a short-term decision that doesn't fit with your beliefs. You're under no illusions. You know you are only doing it for the short-term sugar rush and you'll have to work a little harder to get it out of your system. It's astounding the number of businesses I see that view an opportunity as the one that's going to set them on a path to glory, only to have it blow up or slowly deflate over time. They see the chocolate cake and can't resist. Starting with WHY not only helps you know which is the right advice for you to follow, but also to know which decisions will put you out of balance. You can certainly make those decisions if you need to, but don't make too many of them, otherwise over time, no one will know what you believe.

But here's the best part. As soon as I told you the WHY, you knew that we were going to buy only celery and rice milk even before you read it. As soon as I gave you the filter, as soon as I said the WHY, you knew exactly what decisions to make before I said so.

That's called scale.

With a WHY clearly stated in an organization, anyone within the organization can make a decision as clearly and as accurately as the founder. A WHY provides the clear filter for decision-making. Any decisions-hiring, partnerships, strategies and tactics-should all pa.s.s the Celery Test.

The More Celery You Use, the More Trust You Earn

Mark Rubin is a good parent. He spends a lot of time with his two daughters, Lucy and Sophie. One Sat.u.r.day afternoon, his wife, Claudine, took Lucy to a friend's for a playdate and Mark was left home to look after five-year-old Sophie. Feeling a little tired, Mark really wanted to just have a little time to relax on the couch and not have to play tree house again for the ninth time that day. To keep Sophie occupied, he opted for the TV as babysitter. Mark had two brand-new DVDs to choose from. He'd seen neither of them and heard nothing about either of them in the press or from any of his friends with small children. Mark didn't feel like watching the cartoon himself-the plan was to let Sophie enjoy the movie in one room while he watched something in the other room. One of the DVDs was from some company he'd never heard of and the other was from Disney. Which one did he put in the DVD player? Which one would you put in the DVD player?

The answer is so clear it verges on a silly question, but let's consider the facts for fun. Both DVDs were cartoons. Both were age-appropriate for a child. Both had a couple of good reviews on the packaging. The only difference is that we trust the DVD from Disney. Disney is not a perfect company. They occasionally have management and leadership issues. Their stock price sometimes goes down. They have lawsuits filed against them all the time. Some would lump them in with all the other nasty corporations that work to appease Wall Street. So why would we trust them?

Disney operates with a clear sense of WHY-they exist to promote good, clean family fun and everything they say and do has, for decades, worked to prove it. The reason we trust Disney is simple; we know what they believe. They pa.s.s the Celery Test. They have been so consistent over time in everything they say and do that parents trust them enough to expose their children to Disney content without vetting it first. This has nothing to do with quality products. This is not rational.

Southwest Airlines also pa.s.ses the Celery Test. The company has been so consistent over time that we almost know what to expect from them. The airline offers only open seating on its flights, for example. It's one of the things they do to prove that they believe in freedom. It just makes sense. A company that serves the common man and values equality for all so much could never have a cla.s.s structure. If Delta or United or Continental tried to do the same, it wouldn't make sense, open seating doesn't fit their way.

In Violation of Celery

Birkenstock sandals, tie-dyed T-shirts, daisy chains and a VW van. All are symbols of the hippie ideals of peace, love and all things vegetarian. So it was a bit of a surprise in 2004 when Volkswagen introduced a $70,000 luxury model to their lineup. The company famous for putting a vase for fresh flowers on the dashboard of their new Beetle introduced the Phaeton in an attempt to compete with high-end luxury cars, including the Mercedes-Benz S-Cla.s.s and the BMW 7 Series. The V-8, 335-horsepower car boasted some of the most advanced features in the industry, like an air compressor suspension system and a draftless four-zone climate control. It even included an electronically controlled shiatsu ma.s.sage system in the seats. The car was an astounding achievement. It was very comfortable and was a monster on the road, outperforming other more established luxury cars in its cla.s.s. The critics loved it. But there was a small problem. Despite all the facts and figures, features and benefits, and regardless of the world-renowned German engineering, few people bought one. It just didn't make sense. What VW had done was inconsistent with what we knew them to believe.

Volkswagen, which translated means "people's car," had spent generations making cars for you and me. Everyone knew what VW stood for-power to the people. It brought its cause to life in products that were all about quality that the average person could afford. In a single swoop of German ingenuity, VW had been put completely out of balance. This is not like Dell coming out with an mp3 player or United starting the low-cost airline Ted. In those cases, we had no idea what the companies' WHYs were. Absent any knowledge or feeling for their WHY, we couldn't bring ourselves to buy products from them that went anything beyond WHAT they do. In this case, VW has a clear WHY, but WHAT they produced was completely misaligned. They failed the Celery Test.

Toyota and Honda knew this better than Volkswagen. When they decided to add luxury models to their lineups, they created new brands, Lexus and Acura respectively, to do it. Toyota had become a symbol of efficiency and affordability to the general population. They had built their business on a suite of low-cost cars. They knew that the market would not pay a premium for a luxury car with the same name or with the same logo on the hood. Although a luxury car, Lexus is still another WHAT to Toyota's WHY. It still embodies the same cause as the Toyota-branded cars, and the values of the company are the same. The only difference is WHAT they are doing to bring that cause to life.

The good news is, VW hasn't made the same mistake again, and their WHY remains clear. But if a company tries too many times to "seize market opportunities" inconsistent with their WHY over time, their WHY will go fuzzy and their ability to inspire and command loyalty will deteriorate.

What companies say and do matters. A lot. It is at the WHAT level that a cause is brought to life. It is at this level that a company speaks to the outside world and it is then that we can learn what the company believes.

PART 5.

THE BIGGEST CHALLENGE IS SUCCESS.

11.

WHEN WHY GOES FUZZY.

Goliath Flinched.

"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." This is the sentiment pa.s.sed down from the founder of one of the most vilified companies in recent history.

Raised on a farm in America's heartland, he came of age during the Great Depression. This probably explained his predisposition for frugality. Standing five feet nine inches and weighing only 130 pounds when he played football in high school, Sam Walton, the founder of Wal-Mart, learned early the value of working hard. Working hard leads to winning. And as the quarterback on his high school football team, he won a lot. In fact, they went on to become state champs. Whether through hard work, luck or just an unflappable optimism, Walton got so used to winning all the time that he couldn't fully visualize what losing looked like. He simply couldn't imagine it. Walton even philosophized that always thinking about winning probably became a self-fulfilling prophecy for him. Even during the Depression, he had a highly successful paper route that earned him a decent wage for the times.