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I first interviewed Simon Sinek for Marketing Over Coffee back in 2010 (transcript here). His sophomore effort was published at the end of last year and is another exceptional book. You can listen to the original audio here, or read this transcript. Transcription service by rev.com.

John:We can wind back to 2010. I got “Start With Why” sent to me from a PR person behind the book. I clearly remember the pitch said, “Look, check out this TEDx video that talks about it.” I looked, and thought, “Wow, a TEDx video that has over 1,000 views. There’s got to be some meat here. This is a big deal.” Here we are, four years later, 16 million views on that TEDx video.

We’re going to talk about your latest book here, “Leaders Eat Last.” You’re just coming off of the big TED, if you will. I’m very pleased to welcome back Simon Sinek. Simon, thanks for joining us.

Simon:  Thanks for having me. It’s good to see you again.

John:  Pretty much our audience are all huge TED fans. Tell us about that. How was TED? How did that all go?

Simon:  It was my first time at the big event, speaking and attending. It was overwhelming in every proportion. It is exactly what you would expect it to be: surreal, brilliantly choreographed – I mean, it was one of the most buttoned-up, if not the most buttoned-up, event I’ve ever been to, and I’ve been to a lot – and just the people that show up, it’s astounding. They don’t just come in for an hour, they come in for a week.

Really humbling to be a part of, and there are various times where I thought, “What am I doing here?” Really excited to be a part of it and join the community.

John:  You literally forced your way on stage by the power of that video, because it runs so well. Were there people at TED that were saying, “Hey, we saw your video”? Were you kind of a celebrity there? Were people already aware of your work?

Simon:  I didn’t think that people knew who I was. And then, one person would say hello, and then another person would say hello, and then another person would say hello. I think there were more people who recognized me than I think. It was a strange experience. These are people that we know – the Ken Robinsons, the Amy Cuddys, the Susan Cains – these are amazing human beings, and they said hello to me. It was really flattering, really humbling.

John:  That’s excellent. Let’s dig into the new book here. It’s been four years, so you’ve obviously taken some time with it – you didn’t just crank another one out. Of course, the concern was, “Is this going to be a sophomore slump?” You wrote such a great book the first one out, that you set the bar high for yourself. I’m happy to report this book hits just as hard. In fact, I think for me, it wasn’t as revolutionary, but it’s more practical. It goes right to the core of a bunch of problems we have in business.

Talking about leadership, a big thing is primal response. A core message you’re talking about is we need workers to feel safe in the workplace for them to be effective. Talk about that, the primal response and what we’re doing there.

Simon:  We are social animals at our core. Our success hinges on our ability to cooperate with others. The problem with things like trust and cooperation is they’re not instructions. I can’t simply tell you, “Trust me,” and you will. I can’t simply tell two people, “I need you guys to cooperate,” and they will. Trust and cooperation are feelings.

At the end of the day, like I said, we’re tribal animals, we’re social animals, and we respond to the environment we’re in. Good people put in a bad, toxic environment are capable of doing bad things. But equally so, human beings that society may have given up on, if put in positive, good environments, are capable of remarkable things.

We spend so much time hiring the right person. We spend all this time getting the right people on the bus and we completely ignore the bus. What bus are they stepping into? What I’ve learned is it’s really the environment that matters so much more. If you create the right environment, the people are fine. They will respond to the environment they’re in.

When we feel that an environment has been created – what I call a “circle of safety” – when we feel that leadership would sooner sacrifice the numbers to save the people and would never sacrifice the people to save the numbers, the natural human biological response is trust and cooperation. However, if we believe that the company would sooner sacrifice us to save the numbers, the natural human biological response is mistrust, cynicism, paranoia, and self-interest.

We shouldn’t be surprised at some of the environments and personalities that we create in our organizations, because it’s the leaders who created them.

John:  This book takes the blinders off. As someone who follows the press all the time, you see all these articles about “What do we do to get more enthusiasm in the work place or to get people more dedicated and to create more of a service environment.” Your book says, “Look, step back. If you did a layoff last December and still gave the executive team a bonus, maybe there’s your motivation problem.”

Simon:  Forget about the executive team. Layoffs are so destructive to an environment, because basically what we’re saying is we will ask you to go home, even though you’ve done nothing wrong and your performance has been fine, if not exemplary. We will ask you to go home, open the door, and tell your spouse and tell your children that you can’t afford the mortgage, and you cannot afford food anymore, and we’re going to have to tighten the belt, because my career has been ended so that they could make the numbers for one year.

Forget about the people who got laid off, let’s just put them aside. Let’s think about the people who didn’t get laid off. How loyal do you think they feel to an organization if the next time the company misses its numbers that guy got laid off and that guy got laid off?

How do you think that makes me feel when I show up to work every day, with the absolute confidence that I am expendable? You think I’m going to take risks? You think I’m going to try? You think I’m going to stick my neck out? You think I’m going to volunteer my best ideas? In fact, you think I’m going to risk anything that I’ve achieved, for someone else, or do you think I’m going to be protective of anything I have, so that I can at least guarantee – or try – to create some sense of value for myself, that I’m not in the next line of fire?

Forget about the people that were sacked. Think about the people that weren’t sacked. This is what we’re doing to our companies year after year after year. We are systematically destroying the level of innovation, inspiration, and motivation for people to offer their best and to trust leadership. Why should they?

John:  You made a neat correlation that I hadn’t thought of. We’ve got the Fortune 1000, and by applying Milgram’s research – we won’t go into that now; you can Google that if you want to know about it. You should know about it, because it’s key to human behavior and inflicting suffering – we know that 670 of the Fortune 1000 CEOs are more than willing to harm others to –

Simon:  Not willing, capable.

John:  Capable. True. The thing that I was thinking about with that is, based on my only empirical evidence, the Fortune 1000 are a lot higher degree of psychosis and anger than the general public, so I would put that number even higher.

Simon:  I go into it in some depth in the book. In Milgram’s research, very quickly, the conclusion was if we cannot see or hear the people who are affected by the decisions we make, 66% of us have the capacity to kill them. This is Milgram’s research.

Which means that if the CEOS or any of the C-level executives of the Fortune 1000 do not spend any time and get to know the people whose decisions they make affect – it could be their employees or their customers – 66% of them, at least, have the capacity to change the ingredients of the product, to put chemicals rather than natural ingredients in. They’re cheaper, why not? We don’t see the impact. We don’t know the long lasting effects, if they produce cancer or destroy our health.

And yet, we have an entire health community that says the single biggest thing that hurts our health? Not fat. Not cholesterol. Overly processed food. The New York Times Magazine ran an article of how the people who make chips, like Doritos, freely admit that it’s not food. It’s not food. They can tweak the recipes to add the right number of salt and sugar, to literally make us crave more.

How were these decisions made? In other words, we can just look at the products that are produced. We can look at decisions that are made.

GM is going through it right now. This scandal that they’re having with the ignition issue with a lot of their cars, where there have been multiple deaths. There was a problem with the car where the car would shut off while it was driving and disable the airbags. So, if the shut off car crashed, no airbags would release.

They knew about it four or five years ago, and nobody did anything. How do you think that decision was made? Do you think when they got around the table and discussed, “Should we do the thing for the people who are driving our cars?” or were they concerned about how much it would cost? You start to see that Milgram’s research seems to play out in the real world.

John:  I get stuck on that. Where do you come up with the optimism? What do you prescribe, as far as how can we get out of this? At least we have the 300 CEOs who are willing to stand up and do what’s right, how can we improve this?

Simon:  There are multiple factors. One, we must demand it. If the free market says that we have to respond to market demands, then if we’re demanding that we are provided for and feel safe when we come to work every day, shouldn’t they respond? Isn’t that what capitalism is all about?

It’s not about simply appealing to the demands of a disinterested, external constituency, I have to believe. In other words, the mantras of the free market, we’re not actually obeying them. If we obey the free market, then we should be responding to the demands. We have to demand that our companies look after us. If they do, we will reward them with love and loyalty and hard work and innovation and blood and sweat and tears to see their visions come to life. That’s just the biological response when we feel protected by our leaders.

The other thing that we have to do is rise up ourselves. In other words, we can’t sit there, folded-armed, and say, “Well, until they do something about it…” Every single one of us has the responsibility to be the leader we wish we had.

What have we done for the person who sits next to us? If they’re in need, do we ignore them? If someone falls over, do we help them up? If someone’s panicking, do we go and spend the night and work until 3:00 in the morning to see that they get their presentation complete, even though we’re not even working with them on the project? Do we risk our bonus, do we risk our promotion, do we risk our credit, do we give up our sleep, because someone else needs us? Are we doing that?

We can’t complain unless we’re doing it ourselves. We have no right to complain about the leadership above us, if we refuse to be the leaders that we wish we had.

John:  Talking about human response, a huge chunk of the book is talking about EDSOs – endorphins, dopamine, serotonin, oxytocin – how did you get pulled down this track of human biology and chemistry? How did that come into your research?

Simon:  At the end of the day, I’m a little kid. I like to ask, “Why?” “Because that’s the way it works” is not a satisfactory answer. “It’s the law of attraction,” “It’s the law of the universe,” those answers are very unappealing to me.

When you ask, “Where does trust come from?” I could have done the case study model, where I go look at a bunch of companies with highly trusting environments and ask, “What are they doing?” But that still doesn’t answer the fundamental question of, “Why is it working? Why do they trust each other? Why did that work?”

When you ask that question enough, it forces you backwards. It forces you backwards until you get to the birth of Homo sapiens. When you start to understand the conditions that existed when our species was born, when our species was created, and you understand the things that evolved and the way that we were designed to cope with the environments that we were in, you start to realize that it all makes perfect sense.

If you look at the best organizations today, their environments eerily replicate the environments for which we were actually designed, for which we actually evolved. These things aren’t modern wonders. This is a very old machine. Our bodies are 50,000 years old. We are legacy machines, and really, we haven’t had a software update in 50,000 years, but the hardware’s changed around us. The work we’re being asked to do has changed, but the machine is old. Until we understand how the machine works, we won’t fully understand how to get the best out of the machine.

John: Performance at work, our bodies, our diets, all this stuff. I guess we just have to say we’re due for an upgrade. I don’t know if there’s any way around that. 

Simon:  There’s no way to upgrade it. What we have to do is protect it and look after it. We know exercise matters. That’s because it gives us our healthy dose of endorphins. In other words, we have to keep those chemicals in balance. No one chemical is more important than the other. They’re all highly necessary. The importance is balance. The argument I attempted to make in this new book is that we’ve created environments that have literally put our bodies out of balance, where the chemical balances inside our bodies have made us all more stressed out, and more tense. It exposes us to greater dangers of heart disease, cancer, and diabetes. Not because of partially hydrogenated oils. It’s because the chemicals inside our bodies are literally out of balance because of the environments in which we work. If we can restore those environments to the manner for which we were designed, then life gets healthier and we live longer. It’s really basic, and a basic equation.

John:  In the past four years since the first book, you’ve done a bunch of stuff with the military – the most noted one, Captain Marquet, his book, “Turn The Ship Around.” That’s a great book, how to be a leader at the frontline. There’s a concept that you hit on there, as far as giving authority to those closest to the information. Talk about that and how that works.

Simon: I really recommend that your viewers get his book, it’s called “Turn The Ship Around.” One of the things he came to realize in an organization is that those at the top have all the authority, but those at the bottom have all the information.

The CEO of the Ritz-Carlton famously said, “My lowest paid employees have all the contact with my customers.” In other words, if you want to know what’s going on, on a daily basis, it’s the people at the frontlines.

The problem is, they have all the information and none of the authority. The opportunity is not to push the information up, the information is to push the authority down. When we give the people at the frontline more authority, good things happen. When we force them to push information up, it just creates more bureaucracy, is all it does.

Marquet’s realization of this fundamental component of leadership significantly changed his own results. He was the captain of a Los Angeles-class nuclear-powered fast attack sub, and he had the lowest rated crew in the entire United States submarine fleet. This realization and some of the things he did to employ it, at the end, he walked away from that submarine with the same crew and the same equipment, and it became the highest rated submarine fleet in naval history. Not just that year, naval history. And it’s the exact same people who were the lowest rated crew. In other words: it’s not the people, it’s the environment. The people are fine.

John:  You have an interesting statement: “Unlike money, time has absolute value.” Talk about that and how it fits in specifically to leadership.

Simon:  Money is a redeemable commodity. You spend it, you waste it, you make some more. Time has an absolute value. You cannot redeem it. Once it’s spent it’s gone. Every single one of us has an equal amount of it. We all have 24 hours in one day. It doesn’t matter where you’re born. It doesn’t matter where you’re from. It doesn’t matter what you do, if you’re rich or poor, it doesn’t matter. 24 hours is all you get.

As human beings, we put in much higher regard for those who give us the time over those who give us their money. I’ll give you an example. What if I told you that, before our conversation, I logged on and gave $1,000 to charity? What would you think of me? You’d think, “Uh, good for you.” But what if I told you that last Saturday I went and spent half a day and I painted schools in the inner city? You’d think, “Nice, cool. I should do more.” Yet, the value of my labor was worth a lot less than $1,000. $1,000 could pay many more people to paint many more schools.

But, as human beings, you naturally thought higher of me because of my giving of my time, than the giving of my money. In other words, that’s how we react. When people give us their time and their energy, we reward them with love and loyalty. When they give us their money, the loyalty we may give, I wouldn’t call it loyalty. I’d say it’s temporary until somebody gives us more, or you have to give me more to get more out of me. These are transactions.

A key component of leadership is the person who’s willing to give up their time and energy for the good of others.

John:  You’ve been on this rollercoaster ride with the new book and TED. This has just been crazy. Where are you going next? What’s on the docket for you? What are you excited about?

Simon:  We’re working to build an MBA program from the ground up. There’s a couple of us who have had the discussion that one of the reasons why we see a decline of leadership in our country and in our companies is because the bench is pretty thin. We’re leaving it up to luck that the leaders will emerge.

Many of the business schools we have today, they may have a leadership class here and there, but fundamentally they teach management, and people are very often viewed as an asset or a line item and not something to be loved and protected and cared for. We can rail against the machine, we can complain, or we can do something about it.

We’re now in the early stages of actually building an MBA program from the ground up, where we will teach leadership based on the biological, anthropological principles of what leadership is. We hope to produce leaders, not managers, and start filling the bench.

John:  That’s excellent. Of course, your roots are in advertising and marketing. What do you see in the future there? All this stuff with social now, the way the market is moving to everything mobile, and smaller screens – are you more optimistic or is it a more challenging environment?

Simon:  If you’re going to ask me about the advertising and marketing world, it’d be hard to be an optimist. The closest thing I can equate that industry to is prostitution. If you’re willing to pay them, they’ll do it. These are not organizations that generally act with morality in mind. In other words, they’ll report on the trend that more young people are using social media to interact today, so what should we do? Encourage it.

Yet, if you look at the data and look at the research, we know that people who spend more time on Facebook suffer higher rates of depression than people who spend less time on Facebook. We know that dopamine is released every time we get a ping or a buzz or a flash or a beep from our cell phones when a text message comes in. We know we can get addicted to social media. We know that more baby boomers now die from suicide than from car accidents. We know that rates of depression and loneliness are on the increase, and it’s only going to go up because our young people are finding themselves more addicted to social media than they ever were before. That’s the trend.

If they were responsible, the marketing and advertising world would be working hard not to encourage people to use social media, but to encourage people to actually get together and spend time with each other, that brands can become the place for people to coalesce in person to spend time with each other.

This is why we don’t trust advertisers and marketers to set the course of our society. They will simply respond and follow the trend and do what the money tells them to do.

It is, unfortunately, up to the rest of us, where we have to take it upon ourselves to put down our devices and spend time with each other. Turning your phone upside down when you’re at lunch or dinner is not more polite. What it says, subconsciously, is whoever is sitting across from me, you’re not the most important thing to me right now. There’s something else as important, or more important. Put the phone away.

Like an alcoholic who doesn’t rely on their willpower to stop their drinking, they get rid of all the alcohol in their home. We do not have the willpower to ignore the dopamine-releasing power of social media. So, when we go out with somebody we love, leave our phones at home. Or, just bring one phone in case there’s an emergency. Everybody says, “What if there’s an emergency?” We don’t need four phones. We need one. Bring one. Turn it off, leave it in a bag. We don’t need it anymore. If we go with a group of friends, let’s all pass our phones one to the left.

Especially if you go out with one person, think about it: they go to the bathroom, and what’s the first thing we do? We pull out our phones. God forbid we should have nothing to do for two minutes. I’m guilty of it as well. There’s something magical when they take our phone with them to the bathroom and we don’t have access to it. We actually sit back and we actually see people, and we watch the world interacting.

You know where ideas come from? You know where innovation comes from? Observation. It is not for us to rely on the whorish style of marketers, but to take it upon ourselves to change the way we will live our lives to enhance the lives we live.

John:  That’s excellent. Simon, obviously things are going very well for you and you’re in high demand. We appreciate you giving us some of your time to talk to everybody here.

Simon:  Have I just insulted all of your viewers?

John:  Our viewers need insulting on a regular basis.

Simon:  Let me just continue down that path. Let me just alienate thousands more people.

I watch Hulu. When an ad comes on, I can’t skip it, but there’s now a progress bar that tells me when it’s going to end. You know why they put progress bars on things? We put progress bars on things we find torturous, like software updates. If you have to put progress bar on your product, maybe you have a bad product.

The way to fix this is not to force people, to get rid of the ability to push fast-forward and to take it off the web video, so every time I want to watch a news clip, I’m forced to watch a 30 second ad that I watch like this, and 12 times in a row. Maybe it’s to produce something that’s entertaining, that’s enjoyable, that’s provocative, and that makes me want to lean in and watch.

GEICO commercials, I like them, I watch them, I enjoy them. There are some old commercials – Saturn had a commercial called “Sheet Metal.” I loved it. It’s ten years old and I still pull it up on YouTube and watch it because it’s so good. 1984 was an amazing commercial. It aired once, and yet we all know it, because it was good.

They weren’t thinking about the product, they were thinking about the person who’s watching – in other words, the consumer. They were actually making something for the person who will be consuming the product, which is the advertising. If we just improve the quality of our marketing, we wouldn’t need to force people, like that scene in Clockwork Orange.

John:  Right, the eyes open.

Simon:  If you have to put a progress bar in your advertising, maybe you should let people skip it. How often people skip is something we should be measuring, and our objective should be to produce marketing so good, that the skip numbers go down. We should be counting the skips and using it as a metric of something to improve.

John:  It’s amazing that they even have throttling like that, where it’s like, “You can skip in ten seconds or 15 seconds,” and they’re literally parting it.

Simon:  We should be counting how often people skip our commercials with the hope and objective that we make something so good that they won’t. That would produce better marketing.

John:  Truly entertaining content, yes. That’s at the heart of it.

Simon:  Or compelling, or inspirational, or provocative, or sexy. Everybody knows sex sells. Put something sexy out. I promise you we’ll rewind.

John:  This is interesting though, too, you have all of those different routes to go down – compelling, interesting, provocative, even the brands that go offensive and don’t care about it – but you have to align that with what you do, because it is entirely possible to have some video that runs crazy, but you don’t sell anything because of it.

Simon:  That’s the magic of good marketing, isn’t it? I remember from my advertising days, the best creative directors were the ones who took their creatives aside and said, “Listen, you’re not making art here.”

There’s a balance between the creative side and the business side. What that balance is, is a myth to anyone. It’s mystical. But when you strike the balance, people want to consume the advertising and they want to buy the product.

“The Most Interesting Man in the World” commercials, my friend Dave Arnold came up with those. They’re amazing, because they’re funny, and we like them and we like him. It was brilliantly cast, brilliantly written, and brilliantly produced. We can’t wait for them. That’s great marketing.

I think that the only reason we have all of these other tricks and techniques is not because people are more impatient, it’s because the quality of the product is mediocre.

John:  The whole business side, just finding numbers.

Simon:  The data shows that people have shorter attention spans today. Really? Because you give me a good movie, I’ll sit there for three hours. Shorter attention spans, really? Because when I’m fast-forwarding on my DVR and I see a “Most Interesting Man in the World” commercial, how come I rewind? Am I that impatient, really? “Well, that’s what the trend data says, so we have to make things short.” No, we have to make things better.

John:  Good message for us to wrap on with that. On a high note.

Simon:  Hopefully, still one of your viewers likes me.

John:  As long as it’s thought provoking. We’re talking to the harlots. They’re not easily offended by anything, that’s for sure.

Simon:  I come from the industry. I’m not just blabbering. I have firsthand experience.

John:  “Leaders Eat Last,” available on Amazon.com and wherever fine books and e-books are sold. Check it out, get a copy of it today. I highly recommend it. Simon, thanks for spending time with us.

Simon:  John, thanks very much. It’s good to see you again, and I hope to see you soon.

Recently I’ve started publishing transcripts of Marketing Over Coffee Interviews that I’ve done. As part of #blogchat I keep referring back to Simon Sinek’s book “Start With Why” and I’m excited to announce that I’ve landed a block on his calendar to talk with him about his new book “Leaders Eat Last”. With both of these coming up I thought it would be good to crank the wayback machine to 2010 and get a transcript of the last discussion with him.

John: Simon, for someone who has written a business book, you’re uncomfortable with saying that you are in business. Tell us more about that.

Simon:  It’s true, for me this is a cause. This is a movement. We live in a world these days where there is a lot less leadership than I think we need. There was a time not that long ago where you could rattle off the names of leaders: Lou Gerstner, Jack Welch, Lee Iacocca, Vaclav Havel, Lech Walesa, Margaret Thatcher, and Ronald Reagan. These people were all contemporaries. I defy you to name on one hand five great leaders that are living today that are contemporary in business or in politics. It’s really hard. Quite frankly, we lack leadership in this world in all segments of our society, especially in business, and I think we need to change that.

For me, this is a crusade. This is a cause. What I understand about great leaders is that they all operate from this center, from this “why.” They all have clarity of “why.” Every single business, every single organization – even our careers – are based on three levels: what we do, how we do it, and why we do it. The problem is that most of us are only aware of two of them: how and what, strategies and tactics. We don’t even have a word in business for the word why. It’s just strategies and tactics, how and what.

When you’re operating on two pieces of a three-piece puzzle, inherently things are out of balance. Out of balance can manifest in multiple ways: obsession with price, obsession with what your competitors are doing, increased levels of stress, and loss of passion. It just doesn’t feel the same way that it used to. This is what happens when there’s a lack of leadership.

My cause is simply to share that this thing called the “why” exists because I know the more people that understand the third piece of this three-piece puzzle, the more businesses, organizations, and careers are in balance; and quite frankly, the better the world will get. For me this is very personal. The goal is to share the “why” with as many people as I can.

John:  The very first thing that got me into this was that your agent had sent out a link. We get these things all the time: “Check out our book. Here’s what we have going on.” But you had a YouTube link in the first paragraph, so I jumped to the video and caught that. That was what reeled me into this. Where did that come from and what was the idea behind that?

Simon:  It was a great honor to be invited to speak at a TEDx event. It’s a room full of idealists that you get to share your message with. Once we had that video, we realized that it was such a great primer. In 18 minutes you could hear a broad overview of what I speak about. It’s this great primer for what’s in the book.

First and foremost, what’s important to me is to share my message, to share this concept of “why,” and it’s such a great way to do it. Whether it’s to me or quite frankly to anybody else, it’s really important to me to share that message and the link is such an easy way to do it.

John:  The first thing that came to me was how relevant so much of this stuff is for copywriting to really drive the message home and have it stick in a different kind of way.

Simon:  I started in the ad business a long time ago, and I was always fascinated with how companies of equal size could hire the same agencies, the same creatives, the same consultant, and  the same media, why is it that some marketing worked and some marketing didn’t? I even saw it in my own agency, where you could have the same creative team and it would work for one client and not another. Why was that?

The genesis of The Golden Circle actually started out with me just trying to understand why some marketing worked and some marketing didn’t. When I looked at marketing from Apple, Southwest, Harley Davidson and all these great marketers, what I discovered is the way the copy is physically organized on the page, the way the message is communicated, is the same and it’s different from everybody else. It all starts with this concept of “why” and all I did was write it down.

It wasn’t until somebody started asking me, “Do you know how the human brain works?” which I didn’t, and they started telling me about the limbic brain and the neo-cortex and how people make decisions. When I looked a little deeper and started to understand the decision-making biology, I realized that the biology perfectly overlapped with this little concept of The Golden Circle. So I hadn’t discovered why some marketing works and some marketing doesn’t; I discovered why people do what they do, and that became vastly more profound.

John:  Can you give us an example and explain to us how it works well for Apple?

Simon:  Sure. Apple is a great marketing example. If Apple were like everyone else, a marketing message would sound like this: they’d start with what they do, they’d tell you how they’re different and better, and they’d expect some sort of behavior. In this case, a purchase.

If Apple were like everyone else, a marketing message would sound like this: “We make great computers. They’re beautifully designed, simple to use, and user friendly. Want to buy one?” Whatever, right? And that’s the norm in the world: “Here’s what we do and here’s how we do it. Here’s our new car, it has great gas mileage, tinted windows, and leather seats. Here’s how we’re different and better. Choose us.” “Here’s our law firm. We have the best lawyers who went to the best schools. We win all of our cases. Choose us.”

But here’s how Apple actually does it. Apple starts with why: “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. We just happen to make great computers. Want to buy one?” It’s totally different, and all I did was reverse the order of the information. No trickery, no celebrity endorsements, no manipulations. All I did was reverse the order of the information. What it proves to us is that people don’t buy what you do. They buy why you do it. It’s not what you do that matters. It’s why you do it.

This is the reason why every single person listening to this is perfectly comfortable buying a computer, MP3 player, DVR, or phone from Apple because it’s not what Apple does; it’s what they believe. And their products prove what they believe. Dell, on the other hand, has defined themselves by what they do, not why they do it. They’ve defined themselves as a computer company and a few years ago they came out with MP3 players and PDAs.

Dell makes good quality products and they’re every bit qualified to make MP3 players and PDAs…and nobody bought one. Why would we buy an MP3 player from a computer company? It doesn’t make sense. but we do it every day. It’s not what you do that matters. It’s why you do it. And from a copywriting standpoint, to communicate from the “why” – to start with “why” – talks directly to the part of the brain that controls decision making and then people can rationalize it with the product. To do it any other way, quite frankly, is just hard work.

John:  The core idea of the book is The Golden Circle. Go ahead and tell me more about that.

Simon:  The Golden Circle is an idea. About three or four years ago I made a discovery that all the great marketers and all the organizations capable of inspiring people, think, act, and communicate the exact same way – and it’s the complete opposite of everyone else.

Whether it’s Apple Computers, Harley Davidson, or Southwest Airlines, even great leaders like Martin Luther King and Ronald Reagan, regardless of their size or industry, they all think, act, and communicate the same way.

All I did was write that little system down, and that’s what The Golden Circle is. Basically it’s three levels. Imagine a bull’s eye, in the middle of the bull’s eye, is the word “why.” One ring out is the word “how,” and on the outside ring of the bull’s eye is the word “what.” That’s The Golden Circle.

Every single person and organization on the planet knows what they do, the products they make, and the services that they offer. Some know how they do it, whether you call it your differentiating value proposition, your proprietary process, or your USP.

Very few organizations can clearly state why they do what they do, and by why I don’t mean to make money or sell products. Those are both results. By “why” I mean, what’s your purpose, cause, and belief? Why does your organization exist? Why did you get out of bed this morning and why should anyone care?

What I learned was that while the rest of us think that differentiation happens in talking about what we do and how we’re different, those that are truly great marketers, those that are truly great at communicating and commanding loyal followings, every single one of them, regardless of their size or industry all starts with “why”.

John:  There’s a lot of stuff on decision making in marketing and studies on why we make the decisions that we do, why we buy what we buy, and so much of it comes down to the bottom line of everyone believes they’re making a rational decision-making process, but in reality they’re going with their gut and they’re justifying their gut all the time.

Simon:  That’s true. The rational part of our brain – the neo-cortex that corresponds with the “what” level – is responsible for rational, analytical thought and language. The “why” part of the brain is responsible for all of our feelings like trust and loyalty (the limbic brain). It’s also responsible for all human behavior, all decision making, and has no capacity for language.

In other words, when we tell people what we do and try to explain all the added benefits or differentiating value propositions, yes, people can understand vast amounts of complicated information, but it just doesn’t drive behavior. But when you tell people what you believe and why you do what you do, you’re talking directly to the part of the brain that controls behavior and then, as you said, we rationalize those decisions.

This, by the way, is where gut decisions come from. Gut decisions don’t happen in your stomach. You’re not following your heart and soul, and it’s not in your bones. It’s happening in the limbic brain – the part of the brain that controls decision making, but not language – which is why we say gut decisions. They just feel right. That’s not an accident. We use that verb because the part of the brain that controls feeling also controls decision making.

John:  You have a great section and it’s funny because it kind of tracks some stuff we’ve talked about in the show and even gotten a lot of heat on, where we talk about manipulation. It’s really just a matter of language. We joke about the fact that we are manipulating your perceptions, whereas really that can mean exactly the same thing as giving you a convincing argument. That is technically manipulating your perception, but nobody wants to be manipulated.

You actually went deep into a bunch of different things of manipulation versus inspiration. If you could talk about that and tell us what you think there. I’m especially interested in innovation as just a manipulation.

Simon:  Sure. There are only two ways to influence human behavior. You can manipulate it or you can inspire it. Examples of manipulation are things like dropping your price. If you drop your price low enough people will buy from you. Fear is a great manipulator, promotions, two-for-one, free toy inside, or if you’re in the B2B space, we call it value add. The principle is the same: giving stuff away for free to drive the behavior.

Manipulations work. What a manipulation does is it’s offering outside motivations –outside drivers – to drive a transaction, a single behavior, totally possible to do. The problem is that to drive repeat behavior requires more money and often more stress to come up with new and different manipulations to do it.

Inspiration, on the other hand, is completely different, which is those organizations that are capable of inspiring a purchase. What’s happening is that the person who’s buying isn’t doing it because of some giveaway or price drop. It’s because they feel like they have to be a part of it. Those organizations that are able to inspire are the ones who charge premiums, they’re more profitable, they’re more innovative, and this is where loyalty comes from.

I always talk about how there’s a huge difference between repeat business and loyalty. Repeat business means people do business with you over and over again. Loyalty means they’re willing to turn down a better product, maybe even at a better price, to continue to do business with you. That only happens when people are inspired.

John:  Right. You gave the example of the Motorola. Not the Katana, but the phone before that, that replaced the Startac. Could you talk a little bit about that? I think that’s a good story.

Simon:  It’s so fascinating. You’re talking about the Razr. I think it’s so funny, quite frankly, what organizations think are so innovative is really just features and benefits. They advertised the Razr as being made of special titanium and being thinner. Why is that an innovation? Real innovation changes the course of industries, if not society: the microwave, the fax machine, the light bulb, iTunes. These things changed industries, if not the way we live our lives.

Making a phone slightly thinner and out of titanium, though wonderful ideas – they’re wonderful features – didn’t really change anything. What Motorola thought was an innovation was really just a novelty and people thought, “Ooh, it’s shiny, it’s pretty. I’ll buy it.” It boosts their stock price and sales, and then very shortly after that all dried up.

John:  That’s the big thing with all these manipulations. You’re not instilling any loyalty, so as soon as the guy down the street has two cents less or a little bit shinier phone, that’s it. You lose the business.

Simon:  Keeping up with the Jones’. That’s what it’s all about.

John:  Obviously “why” is a critical component to the whole picture, but you’re saying that for successful businesses they also need to have the discipline of “how” and the consistency of “what.”

Simon:  Absolutely.

John:  How does all that stuff fit into the “why”?

Simon:  At the end of the day, a “why” is just a belief. That’s all it is. It’s your purpose. It’s your cause. It’s your belie. It’s this intangible thing. It’s why you do what you do. “Hows” are the actions we take to realize that belief, whether you call them your values, your differentiating value proposition, or your guiding principles. And what are the results of those actions? The products, services, our marketing, who we hire, the things we say, and the things we do.

We live in a tangible world, and if it’s not what you do that matters, it’s why you do it and it’s “why” that drives behavior, no one will know what you believe unless you say and do the things you actually believe. This is the idea of consistency, and this is where the concept of authenticity comes from.

Quite frankly, I’m a little tired of listening to talking heads talking about the importance of authenticity. People are more likely to do business with the “authentic” brands. They’re more likely to vote for the “authentic” candidate but that’s totally unactionable. How do you go back to your desk and make your work a little more authentic? “If you could market this a little more authentically, I’d be very grateful.”

What authenticity means is the things you say and the things you do, you actually believe – that your Golden Circle is in balance, that what you do and what you say proves what you believe. The reason it works is because we’re social animals. The human being is a social animal and we’re very good at judging. We get gut feelings on people.

Authenticity is consistency of “what.” If you’re not saying and doing the things you actually believe people can “sense it.” They can feel it in their guts that you’re just trying to pull one over on them, and that certainly does not inspire. It might drive a transaction, but it certainly doesn’t drive loyalty or repeat behavior.

John:  In the book, you talk about the celery test, which goes with walking the walk and talking the talk.

Simon:  Absolutely. The celery test is just a metaphor. It’s great to test whether you are truly following your “why” and making decisions based on your “why”. Like I said, it’s just a metaphor. Imagine if you’re going to a dinner party, and at the dinner party someone you meet says to you, “You know what you need to be implementing in your business? You need to be implementing M&Ms into your business. In this economy, if you’re not implementing M&Ms, you’re leaving money on the table.”

Somebody else says to you, “Rice milk. It’s all about rice milk.” Someone else says, “Oreo cookies. I made millions by using Oreos to market my business. You have to use Oreos.” And somebody else says to you, “Celery.”

It’s all perfectly good advice from perfectly good people from all legitimate sources. The problem is, which advice do you follow? We go to the supermarket and we buy celery, rice milk, Oreos, and M&Ms. We spend a lot of time at the supermarket and a lot of money. We’re not guaranteed to get value out of all of these products. We might get some value out of some of them. But the worst part is when you’re standing in line with all the products that you bought, no one can see what you believe.

As we just talked about with authenticity, you have to say and do the things you actually believe so people know what you believe. There you are, standing in line with all of your products and no one knows what you stand for. No one knows why you do what you do and they will walk past you.

However, if you know your “why”, things are totally different. Imagine you know your “why”. Imagine your “why” is to always be healthy and only do things that protect the integrity and health of your body. You’re going to get all the same brilliant advice from all the same brilliant experts from all the same brilliant books. The only difference is you’re only going to buy celery and rice milk. Those are the only two things that make sense, so you spend less money at the supermarket and less time, so there’s an efficiency play. You’re guaranteed to get value from those products.

When you’re standing in line in the supermarket, now everyone can see what you believe because you only bought the things that help you bring your “why” to life. You only bought the things that help you manifest being healthy: your celery and your rice milk. So somebody walking past can look at you and say, “I can see that you believe in being healthy. So do I.” Congratulations! You attracted a customer, a vote, support, or a recommendation simply from saying and doing the things that you actually believe.

Here’s the best part: you knew. In fact, every single person listening to this, as soon as I said the “why” and that our “why” is to be healthy and only protect the integrity of our bodies, knew that we were only going to buy celery and rice milk. That’s called scale, and when an organization can clearly articulate why it does what it does, anyone within the organization knows the decisions to make because they’re the only decisions that make sense, and that’s the power of “why.” It’s scalable.

John:  You talked about the danger of the split, when organizations reach a certain point and they get to large. Tell us more about that.

Simon:  The greatest challenge that any organization has is success. When an organization is small, it’s usually run on the passion and personality of one person or a small group of people. It’s their gut that is making all the decisions, and the few people who join the organization at the beginning are inspired by those people and they’re inspired to take a ridiculous risk, to quit their job, cut their salary in half, and work out of a basement with a 99% chance of failure.

Small businesses have a very high chance of failure, and yet we do it because we’re inspired by the passion and all of that. The problem is, as the organization grows and becomes more successful, then it is impossible for that leader, small group, or founder to be in every meeting and to make every decision; and as the organization grows even more, even to know every person in the organization.

So, the split is when the organization’s “why” and what they do become separated, and they become fixated on making the money and they forgot why the organization was founded in the first place. It’s unbelievable to me how many very successful organizations believe that it’s what they’re doing and how they’re doing it that made them successful, but if you go back in history it’s actually why they were doing it that inspired everybody. They weren’t doing any market research. There was no poll data. There were no focus groups that they were using to make decisions. Somebody was trusting their gut, but they never extracted that gut feeling. They never extracted that “why” and put it into the culture.

The biggest challenge any organization has is success. You hear it all the time in successful organizations. The people who were there from the beginning, what do they always say? “It’s not like it used to be. I remember way back when and it’s not like that anymore. I miss the good old days.” What they’re talking about is not living in basements making half their salary. They’re talking about the feeling they had when they came to work. And as the “why” goes away, so does that feeling.

John:  We talk a lot about Geoffrey Moore and “Crossing the Chasm.”  It’s so neat that it’s playing itself out now in every market. We see the same thing across the board. But you actually turned it up another notch. You talked about Everett Rogers’ book, “Diffusion of Innovation,” which was done in the sixties.

Simon:  It’s an old book. And that’s where Moore took his inspirations from is Everett Rogers.

John:  Right. Tell us more about that.

Simon:  What Rogers did was identify something called the Law of Diffusion of Innovations. What it is very simply is a bell curve. If people don’t know the law, they’ve all heard the terminology. The first 2.5% of our population are innovators. The next 13.5% of our population are early adopters, moving from the left side of the bell to the right side. The next 34% are the early majority and the next 34% are the late majority. The last 16% are your laggards. I always like to joke that the only reason laggards buy touch tone phones is because you can’t buy rotary phones anymore. That’s a laggard.

What the Law of Diffusion tells us is that you cannot achieve mass market success – you cannot achieve the majority of people to buy into your idea or product – until you’ve achieved between 15% and 18% market penetration. That’s the tipping point. The reason is because the early majority (that 34%) will not try something until someone else has tried it first. It’s the innovators and the early adopters that are comfortable trusting their guts and making intuitive, gut decisions.

They’re the ones who spent $40,000 and $50,000 on flat screen TVs when they first came out even though the technology was sub-standard. They were the ones who stood in line to buy iPhones when they first came out for six hours when they could have just walked into the store the following week and bought one off the shelf. It had nothing to do with the quality of the technology. It had to do with who they were. They wanted to be first. That’s early adopter behavior, where the majority is a little more practical. They care about things like price and quality.

So if you have to achieve between 15% and 18% market penetration for the system to tip, that means you have to talk to the early adopters and the innovators first. Now anyone, even if they get it all wrong, is going to get about 10% loyal customers. We all have about 10% loyal customers or 10% loyal employees.

I love to talk to companies about their conversion on new business and they love to say, “Oh, we do about 11% conversion,” proudly. You can trip over 10%. That’s the law of averages. It’s that next 5% to 8% that Geoffrey Moore calls the chasm. How do you get that tipping point away from the 10% of the early adopters all the way up to something that can tip? The way you do it is talking about why you do what you do. Because when you talk about what you believe, you attract people who believe what you believe. You attract people who are willing to take a risk, pay a premium, for no other reason than it’s about them and not you. Eventually everyone else will follow.

John:  Long-time listeners know that I’m a sucker for a human interest story, but you had a tale about Ben Comen, and it actually illustrates competition and not having to worry about your competition. If you could, tell us about that.

Simon:  Ben offers an amazing lesson to us. When Ben Comen was in high school, he was on the track team. This doesn’t sound particularly profound, but for the fact that Ben had cerebral palsy. For those who know about cerebral palsy, it’s when your muscles are withered, your joints are weak, your bones are brittle, and your balance is poor. A young kid with cerebral palsy doesn’t often find himself on the high school track team.

Ben never won a race. When he would run he would fall over a lot and he would eventually cross the finish line muddied, bloody, bruised, and exhausted. And when everyone else finished their race in 21 minutes, Ben finished his in 45.

What’s profound about Ben’s moral is this is not a story about when the going gets tough, the tough get going. This isn’t a story about how when you fall over, you pick yourself back up. Those are great morals; don’t get me wrong. We can learn those from an Olympic athlete who breaks their leg and three months later comes back to win a gold medal. Ben’s lesson is vastly more profound because after 21 minutes something happens. After 21 minutes when everyone else has finished their race, they all come back and run with Ben. Ben is the only runner that when he falls over, someone else helps him up and he’s the only person that has people behind him when he crosses the finish line.

What Ben teaches us is that if we wake up every day to compete against everybody else, no one wants to help us. But if we wake up every day to compete against ourselves, everyone wants to help us. Olympic athletes don’t want to help each other because they compete against each other.

If you look at the worst companies, the ones that struggle, the ones where marketing is difficult, the ones that are constantly worried about their own differentiation, they are obsessed with what their competitors are doing and they’re less obsessed with what they are doing. If you look at the great marketing organizations like Apple Computers and Southwest Airlines, they are obsessed with what they are doing and they know exactly why they are in business and you can either jump on the train of jump off. They tend to vastly ignore their competition.

From a business perspective, Apple is a smaller company than Microsoft, and offers no threat to Microsoft. However, why is it that everyone at Microsoft wakes up every day and worries what Apple is doing and Apple wakes up every day and doesn’t really care what Microsoft is doing? It’s because one has defined themselves by why they do what they do and their train is moving fast and they’re going with or without you, and the other one has become a software company that is now worried about what everyone else thinks about them and what everyone else is doing.

The key to great marketing is to compete against yourself and make your own work better than it was six months ago and work to make it even better six months from now and don’t worry about everybody else.

John:  The book is available at Amazon, Barnes & Noble, and all the regular places. You have it on your website, also, correct?

Simon:  Absolutely. The website is www.StartWithWhy.com.

John:  That’s great. I’ll have a link to the TEDx presentation in the show notes. You can just go to YouTube and look up Simon Sinek. Simon, thanks for spending time with us today.

Simon:  Thank you very much and thanks for helping me share the “why”.