"Management is about doing it right, leadership is about doing the right thing." -Peter Drucker & Warren Bennis
Key points from the book.
Introduction
Leadership and management are two different things. Management is about the bottom-line; How can I best accomplish certain things? Whereas leadership deals with the top line; What are the things I want to accomplish? Or in other words, management is about the efficiency in climbing the ladder whereas leadership determines whether the ladder is leaning on the right wall. There's only one thing that leaders have, and that is followers, not Instagram followers ( because I don't have that many :P), but followers as in people who volunteer to go where you want to go.
Generally, there are two ways to gain followers. The first is manipulation, or the carrot and stick method. In business, there are a number of ways to manipulate customers to buy your products, including by playing the price game, promotions by incentives, instilling fear, aspirations, and even novelty. Lets take novelty as an example, in 1970s, Colgate only had two different products. And when competitions came in, they felt the need to "innovate", and now they have about 32 different types of toothpaste for 1 brand. It worked in short term, but sales never maintained or raise in the long term. The problem is, their competitors do the same as well, and now they are trying to differnetiate themselves, which is probably going to repeat the same cycle.
Manipulation leads to transaction, not loyalty. When you lose your kitten and offer a reward to get it back; you don't need to have long lasting relationship with the person returning it. Police incentivise by giving rewards to those who help with giving evidence that will lead to an arrest. And like any promotion, manipulation works if the incentives are high enough to mitigate the risks. While manipulations may be a viable strategy when times are good, a change in market conditions will make them very expensive. The American car industry learned this the hard way, when they had to rely on the high cost of manipulation when what they actually need is loyal customers to nurture.
In contrast, Southwest Airlines received tremendous support from their customers following the struggle after September 11 because of the company's emphasis on high class customer experience by sending checks. One note that accompanied check for $1000 read, "You've been so good to me over the years, in these hard times I wanted to say thank you by helping you out." Although the checks that Southwest Airlines received may not be enough to make any significant impact on the company's bottom line, they were symbolic of the feeling customers had for the brand- They had a sense of partnership. In short, using manipulations to gain followers is synonymous to using steroids to gain more muscles; you'll gain very quickly in the short-term, but you will suffer heavy consequences after a certain period of time.
The reality is, in today's world, manipulations are the norm. But there is an alternative.
There are few leaders who choose to inspire than manipulate, and every single of these inspiring leaders thinks, acts and communicates exactly the same way. Consciously or not, they followed a naturally occurring pattern that is called The Golden Circle, which is inspired by the golden ratio- a mathematical relationship for proportion and even beauty, supporting the idea that there is more order in nature than we think. (symmetry of leaves, geometric perfection of snowflakes)
1. The Golden Circle Before we can explore its applications, lets define these terms starting from outside of the circle and moving inward.
WHAT: Every single company know what they do, they know what services they provide and they know what products thy sell.
HOW: Some companies and people know how they do it, they know how to explain how they are different or better, or they know their "differentiating value proposition", "proprietary process", or "unique selling proposition".
WHY: BUT very few people or companies can clearly articulate WHY they do WHAT they do.(money is out of the question since profits are results, not the main reason why a company should exist.) Its the question of what is your purpose, cause or belief? Why do you get out of bed every morning?
In the computer industry, Apple has the same access to the same number of talent, and other big companies like Dell or HP have brilliant engineers like Apple. They also have the capability to design great computers, mp3 players etc. But what makes Apple have stand out?
Lets look at how a typical computer company do their marketing message:
We make great computers. (What)
They're beautifully design, simple to use and user-friendly. (How)
Wanna buy one? ..... not so compelling.
Now, lets look at how Apple Inc. communicate:
Everything we do, we believe in challenging the status quo. We believe in thinking differently.
The way we challenge the status quo is by making our products beautifully designed, simple to use and user-friendly.
And we happen to make great computers.
Wanna buy one?
The products are still the same, but the message feels completely different. There's no trickery, no manipulation, no free stuff and no aspirational messages. Apple doesn't simply reverse the order of information, they start by clarifying the question why, why the company existed in the first place, which is to challenge the status quo.
WHAT: Every single company know what they do, they know what services they provide and they know what products thy sell.
HOW: Some companies and people know how they do it, they know how to explain how they are different or better, or they know their "differentiating value proposition", "proprietary process", or "unique selling proposition".
WHY: BUT very few people or companies can clearly articulate WHY they do WHAT they do.(money is out of the question since profits are results, not the main reason why a company should exist.) Its the question of what is your purpose, cause or belief? Why do you get out of bed every morning?
In the computer industry, Apple has the same access to the same number of talent, and other big companies like Dell or HP have brilliant engineers like Apple. They also have the capability to design great computers, mp3 players etc. But what makes Apple have stand out?
Lets look at how a typical computer company do their marketing message:
We make great computers. (What)
They're beautifully design, simple to use and user-friendly. (How)
Wanna buy one? ..... not so compelling.
Now, lets look at how Apple Inc. communicate:
Everything we do, we believe in challenging the status quo. We believe in thinking differently.
The way we challenge the status quo is by making our products beautifully designed, simple to use and user-friendly.
And we happen to make great computers.
Wanna buy one?
The products are still the same, but the message feels completely different. There's no trickery, no manipulation, no free stuff and no aspirational messages. Apple doesn't simply reverse the order of information, they start by clarifying the question why, why the company existed in the first place, which is to challenge the status quo.
Apple's Think Different Campaign
It is no wonder that we are comfortable buying phones and mp3s from Apple, but not from Dell or Microsoft, (they actually did have mp3 players in their production line) because Apple manage to communicate their why clearly. When the Golden Circle (why, how and what) are aligned, the message will be authentic, and it will be able to stand out.
2. This is biology, not opinion
The principles of The Golden Circle are much more than a communications hierarchy. Its principles are deeply grounded in the evolution of human behaviour. The power of WHY is not opinion. It's biology. If you look at a cross section of the human brain, from the top down, you see that levels of The Golden Circle correspond precisely with the three major levels of the brain.
The neocortex, or the rational brain, corresponds with the WHAT level. The neocortex brain is responsible for rational and analytical thought. Whereas the middle two sections comprise the limbic brain. The limbic brain is responsible for all of our feelings, such as trust and loyalty. It is also responsible for all human behaviour and all our decision making, but it has no capacity for language.
Humans are irrational. We are more inclined to act based on our emotions than reasoning. This is what we mean when we talk about wining hearts and minds. The heart represents the limbic, feeling part of the brain, and the mind is the rational, language centre.
3. The tipping point.
According to the Law of Diffusion, mass-market success can only be achieved after you penetrate between 15% to 18% of the market. That's because the early majority won't try something new until someone else has tried it first.
Especially when you are going from zero to one (innovating with a new product/service), the goal of business then should not be simply sell to anyone who wants what you have- the majority- but rather to find people who the people who believe what you believe, the left side of the bell curve. It is the percentage of people who share your beliefs and want to incorporate your ideas for themselves. They look to WHAT you do as a tangible element that demonstrates their own purpose, cause or belief to the outside world.
SummaryMartin Luther King, John F. Kennedy, Steve Jobs, Professor Yunus and many other great leaders inspire others by showing their convictions on their beliefs, by having a clear action plan and by starting with why.
This book made me think a lot about the significance of having a clear belief and communicate as well as remind about your organisation's belief to those around you. It makes a lot of sense when you think about it because once you have or attain the same values or principle, the people in your organisation//community//society will have a sense of belonging and it is one of the factors that can help them perform better in their tasks.
Personally, I want to close the gap between the rich and the poor through education, because I firmly believe that education is the key factor for those who want to advance further in their career. There's a study that shows those who are well-off and performed badly are more likely to pursue their university qualifications than those who are poor but excel in their studies. Yes, it is true that the lucky ones have their parents' support and there is nothing wrong with that, because I strongly feel that the world is not a zero-sum game. To me, the deciding factors are our ability to learn both hard skills (mathematics, writing, reading) and soft skills (communication, leadership, especially listening) which is the reason why I decided to continue blogging and share as much as I can from a selection of books that I have read.
My dad always remind me that there are two ways to achieve happiness; purpose and pleasure. I hope this blog post will help you to find your purpose.
Leadership is not a process of invention, it is the process of discovery. :)
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