Start With Why

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