Start With Why (24 page)

For Wal-Mart, WHAT they do and HOW they are doing it hasn’t changed. And it has nothing to do with Wal-Mart being a “corporation”; they were one of those before the love started to decline. What has changed is that their WHY went fuzzy. And we all know it. A company once so loved is simply not as loved anymore. The negative feelings we have for the company are real, but the part of the brain that is able to explain why we feel so negatively toward them has trouble explaining what changed. So we rationalize and point to the most tangible things we can see—size and money. If we, as outsiders, have lost clarity of Wal-Mart’s WHY, it’s a good sign that the WHY has gone fuzzy inside the company also. If it’s not clear on the inside, it will never be clear on the outside. What is clear is that the Wal-Mart of today is not the Wal-Mart that Sam Walton built. So what happened?

It’s too easy to say that all they care about is their bottom line. All companies are in business to make money, but being successful at it is not the reason why things change so drastically. That only points to a symptom. Without understanding the reason it happened in the first place, the pattern will repeat for every other company that makes it big. It is not destiny or some mystical business cycle that transforms successful companies into impersonal goliaths. It’s people.

Every year a group of high-performing entrepreneurs get together at MIT’s Endicott House just outside Boston. This Gathering of Titans, as they call themselves, is not your average entrepreneurial conference. It’s not a boondoggle. There’s no golf, there’s no spa and there are no expensive dinners. Every year forty to fifty business owners spend four days listening, from early in the morning until well into the evening. An assortment of guest speakers is invited to present their thinking and ideas, and then there are discussions led by some of the attendees.

I had the honor of attending the Gathering of Titans as a guest a few years ago. I expected it to be another group of entrepreneurs getting together to talk shop. I expected to hear discussions and presentations about maximizing profits and improving systems. But what I witnessed was profoundly different. In fact, it was the complete opposite.

On the first day, someone asked the group how many of them had achieved their financial goals. About 80 percent of the hands went up. I thought that alone was quite impressive. But it was the answer to the next question that was so profound. With their hands still in the air, the group was then asked, “How many of you feel successful?” And 80 percent of the hands went down.

Here was a room full of some of America’s brightest entrepreneurs, many of them multimillionaires, some of whom don’t need to work anymore if they don’t want to, yet most of them still didn’t feel like they had succeeded. In fact, many of them reported that they’d lost something since they started their businesses. They reminisced about the days when they didn’t have any money and were working out of their basements, trying to get things going. They longed for the feeling they used to have.

These amazing entrepreneurs were at a point in their lives where they realized that their businesses were about much more than selling stuff or making money. They realized the deep personal connection that existed between WHAT they do and WHY they were doing it. This group of entrepreneurs gathered to discuss matters of WHY, and at times it was quite intense.

Unlike the typical Type-A-personality entrepreneurs, the Titans were not there to prove anything to each other. There was a feeling of immense trust rather than ruthless competition. And because of this feeling, every member of the group was willing to express vulnerability that they probably rarely let show the rest of the year. Over the course of the event, every person in the room would shed a tear or two at least once.

It doesn’t interest me to write about the idea that money doesn’t buy happiness, or in this case, the feeling of success. This is neither profound nor a new idea. What does interest me, however, is the transition that these entrepreneurs went through. As their companies grew, and they became more and more successful, what changed?

It is easy to see what they gained over the course of their careers—we can easily count the money, the size of the office, the number of employees, the size of their homes, market share and the number of press clippings. But the thing they had lost is much harder to identify. As their tangible success grew, something more elusive started to dissipate. Every single one of these successful business owners knew WHAT they did. They knew HOW they did it. But for many, they no longer knew WHY.

For some people, there is an irony to success. Many people who achieve great success don’t always feel it. Some who achieve fame talk about the loneliness that often goes with it. That’s because success and achievement are not the same thing, yet too often we mistake one for the other. Achievement is something you reach or attain, like a goal. It is something tangible, clearly defined and measurable. Success, in contrast, is a feeling or a state of being. “She feels successful. She
is
successful,” we say, using the verb
to be
to suggest this state of
being
. While we can easily lay down a path to reach a goal, laying down a path to reach that intangible feeling of success is more elusive. In my vernacular, achievement comes when you pursue and attain WHAT you want. Success comes when you are clear in pursuit of WHY you want it. The former is motivated by tangible factors while the latter by something deeper in the brain, where we lack the capacity to put those feelings into words.

Success comes when we wake up every day in that never-ending pursuit of WHY we do WHAT we do. Our achievements, WHAT we do, serve as the milestones to indicate we are on the right path. It is not an either/or—we need both. A wise man once said, “Money can’t buy happiness, but it pays for the yacht to pull alongside it.” There is great truth in this statement. The yacht represents achievement; it is easily seen and, with the right plan, completely attainable. The thing we pull alongside represents that hard-to-define feeling of success. Obviously, this is much harder to see and attain. They are distinct concepts, and sometimes they go together and sometimes they don’t. More importantly, some people, while in pursuit of success, simply mistake WHAT they achieve as the final destination. This is the reason they never feel satisfied no matter how big their yacht is, no matter how much they achieve. The false assumption we often make is that if we simply achieve more, the feeling of success will follow. But it rarely does.

In the course of building a business or a career, we become more confident in WHAT we do. We become greater experts in HOW to do it. With each achievement, the tangible measurements of success and the feeling of progress increase. Life is good. However, for most of us, somewhere in the journey we forget WHY we set out on the journey in the first place. Somewhere in the course of all those achievements an inevitable split happens. This is true for individuals and organizations alike. What the Endicott entrepreneurs experienced as individuals was the same transition that Wal-Mart and other big companies either have gone through or are going through. Because Wal-Mart operates at such an immense scale, the impact of their fuzzy WHY is felt on a greater scale. Employees, customers and the community will feel it also.

Those with an ability to never lose sight of WHY, no matter how little or how much they achieve, can inspire us. Those with the ability to never lose sight of WHY and also achieve the milestones that keep everyone focused in the right direction are the great leaders. For great leaders, The Golden Circle is in balance. They are in pursuit of WHY, they hold themselves accountable to HOW they do it and WHAT they do serves as the tangible proof of what they believe. But most of us, unfortunately, reach a place where WHAT we are doing and WHY we are doing it eventually fall out of balance. We get to a point when WHY and WHAT are not aligned. It is the separation of the tangible and the intangible that marks the split.

Wal-Mart started small. So did Microsoft. So did Apple. So did General Electric and Ford and almost every other company that made it big. They didn’t start by acquisition or spin-off, or achieve mass scale overnight. Nearly every company or organization starts the same way: with an idea. No matter whether an organization grows to become a multibillion-dollar corporation like Wal-Mart or fails in the first few years, most of them started with a single person or small group of people who had an idea. Even the United States of America started the same way.

At the beginning, ideas are fueled by passion—that very compelling emotion that causes us to do quite irrational things. That passion drives many people to make sacrifices so that a cause bigger than themselves can be brought to life. Some drop out of school or quit a perfectly good job with a good salary and benefits to try to go it alone. Some work extraordinarily long hours without a second thought, sometimes sacrificing the stability of their relationships or even their personal health. This passion is so intoxicating and exciting that it can affect others as well. Inspired by the founder’s vision, many early employees demonstrate classic early-adopter behavior. Relying on their gut, these first employees also quit their perfectly good jobs and accept lower salaries to join an organization with a 90 percent statistical chance of failing. But the statistics don’t matter; passion and optimism reign and energy is high. Like all early adopters, the behavior of those who join early says more about them than it does about the company’s prospects.

The reason so many small businesses fail, however, is because passion alone can’t cut it. For passion to survive, it needs structure. A WHY without the HOWs, passion without structure, has a very high probability of failure. Remember the dot-com boom? Lots of passion, but not so much structure. The Titans at Endicott House, however, did not face this problem. They knew how to build the systems and processes to see their companies grow. They are among the statistical 10 percent of small businesses that didn’t fail in their first three years. In fact, many of them went on to do quite well. Their challenge was different. Passion may need structure to survive, but for structure to grow, it needs passion.

This is what I witnessed at the Gathering of Titans: I saw a room full of people with passion enough to start businesses, and with knowledge enough to build the systems and structures to survive and even do very well. But having spent so many years focused on converting a vision into a viable business, many started to fixate on WHAT the organization did or HOW to do it. Poring over financials or some other easily measured result, and fixating on HOW they were to achieve those tangible results, they stopped focusing on WHY they started the business in the first place. This is also what has happened at Wal-Mart. A company obsessed with serving the community became obsessed with achieving its goals.

Like Wal-Mart, the Endicott entrepreneurs used to think, act and communicate from the inside out of The Golden Circle—from WHY to WHAT. But as they grew more successful, the process reversed. WHAT now comes first and all their systems and processes are in pursuit of those tangible results. The reason the change happened is simple—they suffered a split and their WHY went fuzzy.

The single greatest challenge any organization will face is . . . success. When the company is small, the founder will rely on his gut to make all the major decisions. From marketing to product, from strategy to tactics, hiring and firing, the decisions the founder makes will, if he trusts his gut, feel right. But as the organization grows, as it becomes more successful, it becomes physically impossible for one person to make every major decision. Not only must others be trusted and relied upon to make big decisions, but those people will also start making hiring choices. And slowly but surely, as the megaphone grows, the clarity of WHY starts to dilute.

Whereas gut was the filter for early decisions, rational cases and empirical data often serve as the sole basis for later decisions. For all organizations that go through the split, they are no longer inspired by a cause greater than themselves. They simply come to work, manage systems and work to reach certain preset goals. There is no longer a cathedral to build. The passion is gone and inspiration is at a minimum. At that point, for most who show up every day what they do is just a job. If this is how the people on the inside feel, imagine how those on the outside feel. It is no wonder that manipulations start to dominate not only how the company sells its wares, but even how they retain employees. Bonuses, promotions and other enticements, even instilling fear in people, become the only way to hold on to talent. That’s hardly inspiring.

This diagram depicts the life of an organization. The top line represents the growth of WHAT the organization does. For a company, that measurement is usually money—profits, revenues, EBITA, share price or growth in market share. But the metric can be anything, depending on what the organization does. If the organization rescues lost puppies, then the metric would be the number of puppies successfully rescued. It is inherently simple to measure the growth of WHAT an organization does. WHATs, after all, are tangible and easy to count.