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The Golden Circle
The golden circle is a naturally occurring pattern. Simply put, every single one of us knows what we do. These are the products we sell, the services we perform, the jobs we do. Some of us know how we do it. These are the things that we think make us different, or special, or stand out from the crowd. But very few of us can clearly explain why we do what we do. And by why I don’t mean to make money, that’s a result. By why I mean, what’s your purpose? What’s your cause? What’s your belief? Why does your organization exist? Why did you get out of bed this morning? And why should anyone care?
The golden circle is simply an articulation of all three of those levels. And we have to know all three of them. Most organizations, most people know what they do, some know how they do it, but everyone needs to know why. What I’ve learned is that the most inspiring leaders, the most inspiring organizations, everyone from Martin Luther King to Steve Jobs, every single one of them knows why they do what they do.
Discovering Your “Why” — and Bringing it to Life
Having a clear sense of why is like having a sense of direction, a sense of purpose. In other words, what’s the point of going on vacation if you don’t know where you’re going. You can’t simply get in the car and pack up the car, and somebody says, “Where are you going?” And you say, “Vacation,” like that’s not enough. You actually have to have a place you’re going, so you know which direction to point the car.
It’s amazing to me how many companies don’t have a sense of direction. If you ask them why they’re in business they say, growth. That’s the same as saying, going on vacation. Well, you can go on vacation, you can pick a random direction, you can grow, but that doesn’t mean you’ll end up somewhere. Great organizations have a sense of purpose, have a sense of cause, have a sense of direction, which allow them to navigate good times and bad, because sometimes roads are closed and you have to take detours. But the point is you always come back on course.
If a person or an organization doesn’t have a sense of their why, then you go and look for it, it is a discovery process. For an individual there’s a way of doing it, and for an organization there’s a way of doing it. But you have to want to do it. It’s not something you pull out of thin air, it’s something that requires some self-reflection, some introspection, and a little bit of work. The amazing thing is, articulating the why is actually quite easy, it doesn’t take very long. It’s actually applying it that’s really the hard work. It’s all fine and good to say you want to get into shape, but it’s the actions of eating healthy and going to the gym that actually get you in shape, and that’s the hard work. The intention or the knowledge, or even the expression that you want to do it, is not enough. Why is the same, you actually have to start now aligning how you do things and what you do so they bring your why to life.
Remembering Your “Why”
An organization’s why is usually based on the reason the company was founded. 99 times out of a hundred, successful companies or companies that are making it, were founded because someone or a small group of people either had a vision for something or personally suffered, or somebody close to them suffered something for which there was no solution, so the solution they found became the company. In other words, there was a sense of purpose or cause when the company was founded. And when it was small, that’s all they had, because they had no resources, they had no people, they had no customers, all they had was the vision, the desire, and the drive to offer other people the same solution that benefited them. The trouble that most companies find, however, is that when they start to grow, you need structure. And that’s why so many small businesses fail, is because the structure is really hard.
However, success is equally as troublesome, because you may be really good at building the structure and forget why the company was founded in the first place. For an organization that has lost its sense of purpose, usually we either go to the founder or go to the history. There are cases where companies have gone so sideways for so many years that the why has been completely decimated. In those cases what we need is a new and inspiring leader to give us a sense of purpose. And that can come from anyone inside the organization, not necessarily the CEO.
Learning from Disney’s Discipline
Implementing the why, bringing the why to life, takes tremendous discipline. One of my favorite examples is the Disney corporation. Walt Disney clearly had a sense of purpose, clearly had a sense of why when he founded the Walt Disney Company, when he founded Disney. And everybody rallied to help him build his vision. We know what that looks like: it’s Disneyland, it’s the movies, it’s the characters, it’s wonderful.
Michael Eisner took over the company, and for many years it did just fine. And then somebody who was close to him, I think it was his COO, died, and it was like Mike Eisner lost his way. All of a sudden the sense of purpose was put in the back seat, and the company became obsessed with growth and world domination. They started making decisions driven by growth and world domination. Something happened to Disney, it used to be a company we loved, then it just became grouped with the other big corporations. They could no longer attract and retain the top talent anymore. And things just weren’t going as well. They could have some short-term hits, but it just wasn’t working the same way.
Then Bob Iger came in, and the first thing Iger did was, he went back to history, he went back to the beginnings to look at Walt Disney’s original vision. And he first said, are we doing everything consistent with Walt Disney’s vision? They first did an audit. And they sold off all the companies, even if they were profitable, that didn’t fit with the company’s why. For example, they sold Buena Vista Pictures. What is a company that believes in good clean family fun making R-rated films for? It was profitable, but they shouldn’t be doing it, so they got rid of it. And they got everything in line first.
But it’s the discipline of the company that I admire so much. Disney has never, and will never, own a casino on the Vegas strip. Think about it, it would be the most amazing casino ever. First of all, they’re a fantastic hotel company, they own all the intellectual properties, all the Disney characters, the Marvel characters, all the Star Wars characters, it would be an unbelievable hotel. But they would never do it, because their company should never be in gaming, it’s not part of who they are and what they believe, even though it’s literally billions of dollars of free money into the bottom line, because it would completely destroy their sense of purpose or cause. It’s the discipline that I admire so much about Disney and Bob Iger.