Why are you in business? Posted: March 19, 2014 at 4:07 am By Andy Kenworthy, March 14, 2014 @ 10:39 am Knowing your ‘why’ can help you with the ‘how’ (not to mention the ‘ka-ching!’). Andy Kenworthy talks to a collection of business leaders who keep their purpose in focus at all times. Simon Sinek has a simple proposition. He argues that people are inspired to support certain organisations and buy their products not because of what they do or how they do it, but why they do it. Sinek’s most concise exposition of this insight was in a 2009 TEDx talk filmed in a small room in Newcastle, USA. It’s now been viewed more than 15 million times and is the seventh most viewed TED talk out there. He also produced a book on the same subject, Start With Why: How Great Leaders Inspire Everyone to Take Action, and has since worked with the likes of Microsoft, MARS, SAP, Intel, 3M, the US military and a host of others. “All the great leaders and organisations in the world all think act and communicate the exact same way and it’s the opposite to the way that everybody else does,” he says. “Every single organisation on the planet knows what they do, and some know how they do it, whether you call it your differentiating value proposition, your proprietary process or your USP. But very few people or organisations know why they do what they do. By why I don’t mean to make a profit that’s a result. By why I mean what’s your purpose, your cause and your belief. Why do you get out of bed in the morning and why would anyone care?” Interestingly, and perhaps most arguably, he asserts that this idea is directly reflected in the structure of the human brain. For Sinek, this is where ‘gut reactions’ come from. Since the part of the brain that deals with feelings does not ‘do’ language, so these feelings cannot be truly expressed or appealed to directly but come from the establishment of trust through a whole host of more subtle triggers. And this is the part of the brain that truly guides most of our decisions, with the rest of the brain simply rationalising the decisions that have in fact already been made. “People don’t buy what you do, they buy why you do it,” he says. “The goal is not to do business with everybody who needs what you have, the goal is to do business with everybody who believes what you believe.” This means you can bang on to people about your products, features and benefits until doomsday, but it won’t make any difference unless you inspire them by what inspires you. It’s a captivating idea, and one that seems to chime with some of the most interesting companies in New Zealand. So we went out and asked some of the leaders of these businesses to talk about why they do what they do, how they express that and how it helps them succeed. Self-belief is key Ecostore is perhaps New Zealand’s most obvious example of these principles at work. In his recently released autobiography Ecoman (read our book review here), chief executive officer Malcolm Rands writes that the genesis of his business was not the need to make a living or even an aspiration to be a successful entrepreneur. It was a genuine desire to make it easy and pleasurable to clean your own house and body, without risk to the environment, or to our health. Starting from a garage in a Northland eco-village, its ‘no nasty chemicals’ range now graces the shelves of every supermarket in New Zealand, 2,000 stores in Australia and more in the US. “When you believe in something wholeheartedly, it’s an incredibly powerful place to be,” Rands says. Read more – ecostore takes a look around, looks hard at itself and comes out with brand and design makeover His work has two major ‘whys’ that go well beyond the standard business metrics. Personally, he is working on figuring out a new model of capitalism and a new way to raise money for not-for-profit organisations such as his own Fairground Foundation, which focuses on areas of health, culture and sustainability. The ‘why’ of the business itself is more customer-focused. Ecostore wants to make it easy and pleasurable for you to make a difference. “Twenty years ago the whole issue of pollution was seen as vast and people felt they couldn’t do much about it, especially not without wearing a hair shirt, being uncomfortable and not getting what they want. Most of the attempts to tackle it were ‘hippie grunge’ – they weren’t professional and had an anti-capitalist feel. They were very ‘alternative’ and in many ways there was no attempt to make it inviting to the mainstream.” This ‘why’ has expressed itself in everything the company does, even more so since a major rebranding exercise in 2011 that refocused on this core reasoning and aimed to enhance the ‘pleasure’ features of the packaging and visual look. “Every time we have made compromises, it’s mainly been to please new partners who may have not come from an eco-world, such as stakeholders and semi-executive types,” says Rands. “And every time we have done it we have regretted it. In hindsight we never really needed to do it – people would have respected us for holding our ground. Not big stuff – like when we moved to a new office I wanted a new eco-carpet, but the financial guys just couldn’t see why we should spend that money. I wish I hadn’t buckled, because small things like that can be important.” So why is this kind of thing worth it? “Business has big problems differentiating itself,” says Rands. “It’s so easy to compromise towards the middle, and the middle is nowhere. We need to keep our leadership position as we have global ambitions. Moving away from our ‘why’ is the worst thing we could do, as where would we be moving to? Nowhere. Unless you can find a ‘why’ that is even more compelling.” The Sci-why Science and technology may not seem like fertile ground in which to build a ‘why’-based business. But Sinek cites Apple as one of the great exemplars of this movement and closer to home, Nick Gerritsen’s approach to business may also serve as another good example of how it can be done. Gerritsen is a former commercial lawyer specialising in intellectual property strategy. Read more – Nick Gerritsen on the key to great ideas These days he’s the founder and director of CarbonScape, which converts waste biomass into valuable carbon products, and renewable fuel company NXT Fuels, formerly the Aquaflor Bionomic Corporation. Read more – Blenheim start-up scoops green honours overseas He is also the founder and director of Loomio, an online consensus decision-making tool, and climate change website Celsias.com. His CV might make it a bit startling when he starts talking about love as a founding concept for the style of leadership he’s interested in. Read more – The Kiwi web app out to democratise decision-making “If we really loved the world or our community, then we wouldn’t let silliness happen,” Gerritsen says. “Our inability to deal with structural issues such as the financial system or climate change indicates to me that society is not yet strong enough to operate on this basis. As when you are in love, another set of rules applies. If you are in love with someone and your father says ‘be home by 8.30’, or whatever, suddenly you are looking at the rules in a different frame – some things are valid and some things are not.” This is another crucial aspect of the ‘why’ in business. Running businesses from deeper motivations brings on the rule-breaking and disruption that characterises innovation and success – because when the rules disagree with what people believe in, they go ahead and break them. Gerritsen expands this into a deeper kind of leadership. “It’s just another way of describing how we have to make decisions from a much deeper place than we have got used to in the past 200 years,” he explains. “For example, the way the world reads New Zealand and increasingly how New Zealand is coming to see itself is through nostalgia – a nostalgic view of how the land is, with happy little lambs jumping around in paddocks. In fact that agricultural landscape is becoming more about intensive high nutrient-loading dairy farming and irrigation schemes. That sentimental thing is a really big challenge.” And as Sinek argues, it takes sentiment to overcome sentiment – no amount of rational argument alone will do it. The sentiment that will eventually succeed is one that comes from an authentic, truthful place. When it comes to translating this into the day-to-day operations of his businesses, Gerritsen prefers a role something like an indulgent parent who pays most attention to which one of his ‘baby’ business is screaming the loudest. “I see the companies as organic things; they develop their own characteristics,” he says. “The danger is to be over them too much and stop them from breathing naturally. My role is to guide them as they develop their own rhythms and personalities – that enables the original values to continue to be replicated. Those values become part of the operating model, it’s just how we do things.” Man with a mantra Not many businesses know more about motivating people than Les Mills, where motivation is so core to its highly successful international business in fitness clubs and classes. Interestingly, chief executive Phillip Mills is also a fan of Sinek’s work. “I’ve been inspired by Sinek for a few years and we’ve talked a lot about it throughout our organisation,” he tells me. He says that although Les Mills customers have a variety of different key motivators for why they choose these classes and clubs, he has seen the impact that taking a ‘why’ type approach has had with the company’s staff and its legion of more than 100,000 fitness instructors around the world. According to Mills, they are the ones that really chime with the mantra ‘For A Fitter Planet’ that has been adopted as the Les Mills tagline. “For our people it is a very important mission for them,” he says. “They love that they’re doing something that has a real purpose. All the research we do with staff and instructors tells us that they definitely want to work for a company that wants to make the world a better place, rather than just making a buck. And they will be motivated to work with passion for that.” Read more – Les Mills: fitter, faster, and more disruptive Mills has also become well-known for taking a sustainable and ecological view of business, partly through his role as a trustee of green economy lobbying and research group Pure Advantage. But interestingly this message is not one that is overtly publicised in Les Mills marketing, despite a lot of work being done on green facilities and practices. “There is still a certain amount of cynicism out there on this issue. We don’t talk about that very publicly. I think it is better if you just do that stuff and people find out gradually.” Read more – Can Pure Advantage deliver? For Mills, there are increasingly clear distinctions between the businesses that think and believe this way and those that don’t. “Right now I see two ends of the spectrum in the world,” he says. “I see more companies that are genuinely trying to make the world a better place and then I see this terrible polarisation between rich and poor and companies that have played the system for decades to milk more out of it for themselves. “I don’t ascribe individual blame for that, but I think there’s something inherent in the corporate system where managers are forced to live by quarterly reports and short-term profits. It’s a blinkered approach to long-term success.” Serial success Serial success suggests an approach to business that works across many sectors. Simon Coley is somebody who can justifiably lay claim to this. As ‘marketing bloke’ for 42Below he rode the victory lap of that particular roller coaster when every bastard suddenly said yes and Bacardi bought the firm for $138 million. Read more – Give us all your money! Since then he’s been design and creative director at Powershop, whose unique approach to electricity retail saw it take top prize at the Deloitte Fast 50 in 2011. He’s taken on the big banana corporates and lately the soft drinks giants as founder director of All Good Organics. “With 42Below and all the others it was kind of more of a ‘why not?’” he says. “It’s about individualism.” For Coley, this was an integral part of the motivation being expressed by the business, what was driving the protagonists themselves and the way they worked. “When you’re not that large and everybody who makes decisions is in the same room, you can just bang ideas out,” he explains. “That’s a big part of the internal ‘why’, the motivation, is the ability to get on with it – the idea of begging forgiveness rather than asking permission. You have got to have overall strategy, but when it comes to execution you need to be able to do things with an enormous amount of enthusiasm and take the opportunities, otherwise you feel a bit irrelevant.” As a designer Coley’s focus is all about expressing the desirability of the product or services via people having a great experience and passing that on. Right of the heart of that for Coley is the idea of getting up close and personal with the customer. This creates a genuine dialogue, a constructive and creative relationship, rather than a one-way street. Accordingly Powershop allows customers to fully understand and control their power bills, while its marketing material is carefully designed to be fun and engaging, whether it’s a poster of the pope presiding over a gay marriage or an ordinary call centre enquiry. Read more – How Powershop changed the game Now that ideas about ‘good motivations’ are spreading all over the sectors that Coley inhabits, there is a risk of differentiation becoming harder, but like Sinek, he believes the key to staying ahead lies in authenticity and integrity. “The trouble with saying these things is that they have to be true,” he says. “As soon as somebody says something that doesn’t fit with the way they behave, people notice, or they just feel it. It is pretty hard to be something that isn’t a genuine expression of your behaviour as an organisation. This can be a pretty hard thing to achieve. We have to make sure that our call centre treats every call as an opportunity to really lift someone’s day. When you are trying to do that economically, it’s a real challenge.” That feeling part is especially important, since Coley also agrees with Sinek that we all might like to think we make rational decisions when in fact mostly we make emotional decisions and then rationalise them with the evidence later on. “Sympathy and empathy is what builds trust and when you have to make a lot of decisions and the price isn’t that different, you really have to trust the people to choose them,” he says. Perhaps this all comes out of a shift in the entire working culture into a new era. Years ago in the ‘jobs for life’ era we were much more likely to be highly focused on a certain service, product or sector we worked with in order to get ahead and this focus in itself became an admirable quality. Now, in the more flexible working era where skill sets are much more likely to cross-pollinate, this kind of focus is generally seen as unnecessary limitation, especially at the top end of the hierarchy and in leadership positions. In such a culture it becomes admirable for people and organisations to take a far broader interest in the world around them. It creates a certain amount of confidence in those business leaders that can express it. We think of them as more rounded and as such probably more capable, likeable people who we are more willing to support. For example, when I first interviewed Derek Handley a couple of years ago on the eve of the US$16 million or so sell-off of Hyperfactory, he told me that he wasn’t especially obsessed with the mobile phones and tablets that are the basis for his fortune and the operations of his company, his brother was, while he was more obsessed with starting successful companies. That’s not to say that he was entirely disinterested – his new company Snakk media runs on similar lines – but it suggests that Handley as a person was more expansive than just this one sector. This has been further evidenced in his role as founding CEO of Richard Branson’s Plan B, which could be summed up as a global attempt to put a ‘why’ back into business all around the world. Of course, it is by no means certain that knowing the why of what you do and being able to adequately express it will guarantee you commercial success and personal fortune. Read more – Derek Handley and the B Team unleashed Other factors are also required, such as business acumen, fortitude, people skills, as well as a good balance between self-belief and self-knowledge all seasoned with a healthy dash of luck. But it can’t hurt. Knowing the ‘why’ of what we do also takes us beyond the realms of business metrics onto the higher ground of meaningful living and leadership. Another leading business commentator of our day, Umair Haque, director of Havas Media Labs and author of The New Capitalist Manifesto: Building a Disruptively Better Business puts it this way: “It isn’t about what you have, and how much – but what you do, and why – if you’re to live a life that matters. Leaders – true leaders, those worthy of the word – lead us to truth, worth, nobility, wonder, imagination, joy, heartbreak, challenge, rebellion, meaning. Through love, they lead us to lives that matter. Wannabes impoverish us. Leaders enrich us.” Isn’t this, after all, why we all really went into business in the first place?