The Golden Circle: How Great Leaders Inspire Action

Table of Contents

• Understanding the 'Golden Circle' Concept
• Biology Behind the Golden Circle
• Real World Applications of the Golden Circle
• Case Studies: Failures and Successes
• Qualities of Effective Leadership
• Conclusion and Key Takeaways

Understanding the 'Golden Circle' Concept

The 'Golden Circle' is a concept introduced by Simon Sinek to explain what separates truly inspiring leaders and organizations from the rest. At its core, it represents the fact that inspiring people and organizations all think, act and communicate in the exact same way, starting from the inside and working outwards. This is the opposite approach from most others, who start from the outside and work inwards, focused on the details rather than the core purpose.

Specifically, the Golden Circle has three layers - the outermost 'What' layer that describes what a company or organization does, the middle 'How' layer that talks about how they do it or what differentiates them, and critically, the innermost 'Why' layer that articulates their purpose, cause or belief. Most companies and leaders are very clear about the 'What' i.e. what they do, and some can clearly explain the 'How' or how they differentiate themselves. However, very few can clearly articulate their 'Why' or their reason for existing and core ideology that drives them.

This 'Why' is critical, because it inspires loyalty and passion in others. People don't really buy what you do; they buy why you do it. When you communicate and connect to people through your beliefs and purpose, it resonates deeply and allows you to inspire action, not just talk. On the other hand, a functional, feature-driven communication may convey competency, but completely lacks the ability to inspire. Understanding this concept of the Golden Circle and using it to structure communication is the key difference between leaders who achieve phenomenal, almost unbelievable success, versus competent people or companies who have all the ingredients for success but somehow fall short.

Defining the Terms: Why, How, What

Let's look at the three layers of the Golden Circle in a bit more detail: 'What' refers to the products, services or functional competencies of an individual or organization. This is the outermost layer that everyone is extremely clear about e.g. 'We make great computers' for Apple. It focuses purely on 'What' the offering is. 'How' refers to how the offering is unique or differentiated e.g. 'Our computers are beautifully designed and user-friendly'. It seeks to explain how the offering stands apart from the competition or alternatives. 'Why' refers to the purpose, cause or belief that drives the individual or company. It explains their reason for existing beyond profit. Apple's 'Why' may be stated as 'We believe in challenging the status quo and thinking differently'. Very few companies or people have clarity on their 'Why' or original driving ideology.

The Inside-Out Approach

The key insight from the Golden Circle is that typical communication works from the 'outside-in', starting with detailing the 'What', sometimes explaining the 'How', but rarely communicating the 'Why'. e.g. 'We make great computers that are beautifully designed and easy to use - want to buy one?' This fails to inspire any action. On the other hand, truly inspiring leaders and organizations take an 'inside-out' approach, starting from articulating the 'Why', then explaining how the 'How' supports and aligns with the 'Why', and finally detailing the 'What'. However, the focus always remains on the 'Why' or the underlying ideology rather than the product/competencies themselves. e.g. Apple says 'Everything we do, including making great computers, is a result of our belief in challenging the status quo and thinking differently. Want to buy one?' This creates inspiration rather than just conveying functional benefits.

Biology Behind the Golden Circle

The Golden Circle concept has strong scientific backing as well. Human biology and neuroscience shows that the sections of our brain align perfectly with the Why-How-What layers:

The newest outer layer that deals with rational thought, analysis and language is our neocortex. This aligns with the 'What' layer.

The middle two layers make up our limbic system that controls emotions, trust, loyalty and all decision-making behavior - but has no capacity for language. This aligns with 'How' and 'Why'.

Therefore, when we communicate from the outside-in and provide details features and benefits to appeal to the rational side of the brain, it may convey functional competency. But it does not drive decision-making or loyalty. True inspiration that incites action requires connecting directly with the emotional limbic brain, which is done only through communicating the 'Why' or purpose.

This explains why some things can feel right (or wrong) even when all the facts and figures logically suggest otherwise. It also explains gut decisions, following your heart or convictions over just factual data etc. - the part processing this intuitive input has no language capacity.

Real World Applications of the Golden Circle

Many real world examples prove the power and impact of focusing communication on the 'Why' rather than 'What':

Apple is just a computer company with the same talent, resources and agency access as competitors. But by clearly communicating their 'Why' or core belief, they are able to inspire loyalty well beyond their primary products. People now comfortably buy MP3 players, phones, and other devices from a 'computer company'. Competitors like Gateway and Dell failed at similar expansions, as they could only communicate technical competency.

Martin Luther King Jr. inspired millions and defined an era not because he had the most resources, credentials or even the best ideas necessarily. There were many other skilled orators with valid plans. However, his ability to communicate his dream or 'Why' in a deeply inspiring way caused people to take his cause as their own personal conviction.

Case Studies: Failures and Successes

Two classic examples showcase how companies and causes with very similar competencies and plans achieve completely opposite results based on whether their core driver is the 'What' or the 'Why':

TiVo is unanimously regarded as the highest-quality DVR product, with widespread market penetration and even becoming a verb. But it is still a commercial failure that never made money. Because while they competently talked about the features, they never gave people a reason to believe in their cause or 'Why'.

In contrast, the Wright Brothers had none of the ingredients for success against far better equipped Samuel Langley. They had no funding, credentials or media backing. Yet their singular focus on their dream of flight rallied a tightly knit team driven by passion rather than just financial motivations. This allowed them to ultimately achieve the historic milestone of controlled flight while Langley's equally competent attempt failed.

Qualities of Effective Leadership

The concept of the Golden Circle also explains the key difference between mere leaders or figures of authority, versus those who actually inspire real leadership.

Leaders may hold hierarchical power and drive outcomes through authority and incentives. But they do not inspire action for their own sake. Their communication starts from 'What' needs to be done or 'How' to do it efficiently.

In contrast, those who lead and inspire communicate first 'Why' something should happen - for a greater cause or ideology. This cause then becomes fully owned by the audience rather than the person communicating it, even if they originated it. And this voluntary, self-motivated drive is infinitely more powerful, innovative and productive versus external incentives.

Dr. King is the classic example. His skill was not just great oratory, but his ability to connect people to his dream in a deeply personal way that then manifested through voluntary activism for civil rights, not obligated effort for Dr. King himself. 250,000 people turned up to Washington for their own belief system, not for Dr. King.

Conclusion and Key Takeaways

The concept of the Golden Circle beautifully captures perhaps the most important difference between competence and true inspiration. Leaders or organizations who master inspiration are the ones who create history rather than just good outcomes.

Some key takeaways:

• People do not buy What you do, they buy Why you do it

• Inspiration comes from communicating the Why from the inside-out, before the How and What

• This allows you to transcend beyond just products/competencies to appeal to self-interest in those who share your beliefs

• Biology shows Why and How link directly to loyalty and action, while What only brings rational assessment

• Inspired leaders personalize their cause so completely that followers then push it through their own self-will

FAQ

Q: What is the golden circle concept?
A: The golden circle is a concept by Simon Sinek about how effective leaders and organizations think, act and communicate. It refers to three concentric circles with 'Why' at the core, surrounded by 'How', and finally 'What' on the outside.

Q: Why is 'Why' the most important part of the golden circle?
A: The 'Why' represents an organization or leader's purpose, cause or belief. It explains why they exist. Understanding the 'Why' inspires action in others who believe what you believe.