Simon Sinek: How to identify great leaders & find your why

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1:17I always treated my business like a social movement. Still do. The people who are on the receiving end, it really becomes theirs. They take ownership. There might not be anyone in the world of business more synonymous with helping people find their purpose, passion, and reason for being than my guest, Simon Sinek. He calls it the why. This week on Masters of Scale, author and visionary Simon Sinek and I unpack that old Silicon Valley aphorism about who is more likely to succeed in business, mercenaries or missionaries. I would venture a guess that the earlier days of Silicon Valley, you saw more missionaries.

2:01And the current days of Silicon Valley, you see more mercenaries. The true missionaries will tell the money to go screw themselves. The true missionaries are not afraid of the short-term losses. We also discuss how to build great leaders, the ultimate hack for achieving success, and whether AI can never really be your friend. This is a fun one. Stay with us.

2:31You've got to have incredible talent at every position. It's like this huge push. There are fires burning when you're going home. Can you believe it? Such an idiot. And then you go back to, this is totally going to be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. working as a three-bedroom apartment. Stuff that just seems absolutely nut balls. Ten years later, we're like, well, that's just how you do it. We haven't made it just how you do it. This is Masters of Scale.

3:07I'm Reid Hoffman, your host. Simon Sinek just released a 15th anniversary edition of his best-selling book, Start With Why. I wanted to hear how he's reflecting and reimagining his signature framework for finding purpose in this moment.

3:30Been looking forward to this, actually, I think, in fact, for years. So welcome to Masters of Scale. Oh, I'm really excited to be here. I'm such a fan. And as you said, this is weirdly the first time we've ever met. So I'm really excited to chat with you. First, congratulations on the new anniversary to start with why. Thank you. What's the original impetus of the Start With Why? And then what's the update? Yeah. So it all started out as an experiment, which I think you would appreciate. I had discovered two things. It was putting them together that was the big idea, right? So I discovered Emmett Rogers' work, which you know, the law of diffusion of innovations, where all populations, regardless of their size, sift across the standard deviation, the bell curve.

4:14And as Rogers explained, the first 2.5 % of any population are your innovators, your big idea people, present company included. The next 13.5 % of the population are your early adopters, high risk tolerance, willing to spend money, time, or energy to be part of something that reflects their beliefs. Then you have your early majority and your late majority, more cynical, more practical, what's in it for me? If it doesn't work, will I get my money back? And then your laggards, the last 16%, the only reason they affect any change is because they have no choice. The world has changed around them. As Rogers explained, if you want to have mass market acceptance of an idea or if you want long-term success, you need the bell.

4:53Obviously, you need the majority. And what most companies and people do is they aim all of their advertising, all of their efforts, all of their sales towards the majority because that's where the market is. Unfortunately, it doesn't work. And what Rogers explained is that if you can achieve 15 % to 18 % market penetration, there's a social phenomenon that happens called a tipping point. And it just goes. The problem is, how do you get 15 to 18 % market penetration? And most organizations, if they're fairly good at what they do, they can organically achieve about 10%. And so I knew that as Moore called it crossing the chasm, going from that 10 % to that 15 to 18 % was really damn near impossible and usually luck.

5:37and then i discovered the concept of why and when i first articulated this idea of a why i realized it's based on the biology of human decision making every single one of us knows what we do the products we sell the services we offer you and i can easily answer that question so can anybody else some know how they do it the thing that makes them different stand out from the crowd whatever it is but very very few people and very very few organizations can clearly articulate why they do what they do that deep deep-seated purpose cause or belief that's deeply ingrained in who we are that inspires us to take risks, do things, trust our guts, whatever you want to call it.

6:12And what I learned was that if I can put the why into words, that that is what appeals to the early adopters because it's about them, not about me. And so I had a marketing consultancy back then. I walked away from it to do this experiment. If I could learn to start with why and I could learn to identify based on language and behaviors, early adopters, that if I only talk to them, if I had the discipline to only talk to them, I should be able to create my own tipping point. And that's what I set out to do. And I remember my phone rang and it was a friend of a client. He says to me, I heard about your work.

6:55He says, I've heard you're good at what you do. and then he said, convince me why I should hire you. He's asking me to sell to him. And what I had learned was immediately I realized, this guy's not an early adopter. And I said, don't. The reason most people in companies don't use my work, right? Because it's all biology. It's just how the mind works. It's how the brain works. It's just these social phenomena that happen. It's just, it is what it is, right? Not my opinion. The reason most people in most companies do not use my work is because I cannot tell you when it will work. I can't tell you it's going to happen exactly at the end of the quarter or on the date you need it to work.

7:39It may, but I don't know. And so one of the things I had to let go of was my own goal setting, my own arbitrary time frames, and allow the process to do its thing. So to go back to your question, what makes me proud is that I architected one of these things and it continues to grow without me. I had to go reread it. I cringed a little bit at some of the repetition in the language. I'm a more mature writer now. And my original TED Talk, the quality is terrible. The video quality is terrible. The audio quality is terrible. My microphone breaks. I'm drawing on pieces of paper, right? Like by all standards, it's complete crap.

8:24But somebody said, you need to watch this. And so we trust our friends. And so the thing that I'm proud of is that I could even get to have a 15th anniversary edition. In engaging with leaders, what were some of the kind of like surprises, delights, weirdnesses in these engagements? The thing that surprised me the most and continues to surprise me to this day is how it becomes deeply personal for somebody else. You know, people would say to me in the early days, they would come up to me after I gave a Y talk, for example, and they would say to me, I've been trying to put this into words my whole life.

9:01Like, you gave me the words for the thing that's in my mind that I couldn't get out. And so it's deeply mutual, which is I have a message and a movement that I'm trying to share. because I can't throw money at the problem, message is everything, and how deeply personal it becomes for some. And if you look at any social movement, and I always treated my business like a social movement, still do, you know, we don't talk about, is this good for the company? We talk about, is this good for the movement, right? Is that the people who are on the receiving end, it really becomes theirs. They take ownership.

9:35If you think about, you know, Martin Luther King standing on the steps of the Lincoln Memorial, they weren't there for him. they were there for themselves. It's the America that they believed in. It's the America that they want to live in. I think that's the thing that people miss, which is we can motivate people with money and promotions or threats. And like, there's many ways to drive behaviors. But when it becomes deeply personal for someone, and they're now doing it for themselves and not for you, the risks that they'll take, the sacrifices that they'll make, and most important, the stickiness.

10:08That's the difference between a fad and a movement. It has deep lasting impact. And I think the things that surprised me the most were the people who they didn't know me. And yet they were taking career risks to tell their boss and their boss's boss that we should bring this guy in to talk. Like that was what was mind blowing. A principal lesson that I think about in the world is that everyone wants to be the hero of their own journey. And if you give them a chance to be that hero of their own journey, it's a good thing. In Silicon Valley, one of our aphorisms is missionaries build enduring companies, mercenaries don't.

10:42And it doesn't mean that everyone holds that aphorism, but it is an aphorism that's repeated amongst me, other students, and it's tied to the why. And it kind of leads to this kind of what the balance and the integration of the why with the other incentive structures we have within our capitalist society, promotion, title, money, you know, other kinds of things. And what is some of the things you have found about balancing those things? Where it starts to go sideways is when you hear business people say, you know, we incentivize performance. We're a performance-driven organization. You can't incentivize performance.

11:20Performance is an outcome. You can only incentivize the input. And so this performance obsession, output obsession, efficiencies obsession, creates incentive structures that actually undermine the movement, the mission. You know a lot better than I do on this, but I would venture a guess that the earlier days of Silicon Valley, you saw more missionaries. And the current days of Silicon Valley, you see more mercenaries. Because it's largely a venture capital incentivized model where the venture capitalist wants their money out in a reasonably short period of time. And the mission very often goes very counter to the incentive structure of the investor.

12:06And the true missionaries, the true missionaries will tell the money to go screw themselves. The true missionaries are not afraid of the short-term losses. The true missionaries will take less money from a less famous venture capitalist than the big money from the big venture capital so they can tell their friends, look who I got, you know, or find alternative ways, bootstrapping bank loans, credit card debt, because they don't want anything or anyone to muddy the waters. And they will figure out incentive structures internally that find the right balance also, because we don't want to make it all about money because then we're going to get that internally.

12:44I'll share one quick story that comes to mind. I went to visit Quantico Marine Base. This is where the Marine Corps selects its officers. They have something called the LRC, which is leadership reaction course, which is 20 mini obstacle courses, 10 wet, 10 dry. They're basically problem-solving courses. They're timed. They run it through twice. The first time they don't assign anybody to be the leader, and the second time they do assign somebody to be a leader, and then they watch. They watch what happens, right? And I'm standing next to the drill instructor as this is going on, and I'm looking at his grading sheet.

13:20nowhere on the grading sheet does it say if they made it to the other side or not. Not even a checkbox, yes or no, they made it to the other side or not in the time period. And I said to the drill instructor, don't you care if they succeed in the mission or not? And he said, no, we care if they are good leaders. I said, well, how do you know that? He goes, we measure the characteristics of good leaders. And he said, we understand that sometimes good leaders suffer mission failure. And sometimes bad leaders enjoy mission success. So the success or failure that they have in the mission doesn't tell us if they're a good leader or not.

13:57But we know that if we select the people who have the qualities of good leadership, that over time, they will enjoy mission success more often than not. In business, we do the exact opposite. Is there, I just have to ask, is there a pricey of what the, in that context, what the measurement of good leaders are? Yeah, yeah, yeah. I mean, they have things like willingness to hear ideas of others, decisiveness. Do you take the ideas of others, but at some point you've got to make a decision. Simon's start with why relies on a simple framework. You may have seen it if you're one of the 68 million viewers of his 2010 TED Talk.

14:35He calls it the golden circle. On the outer ring, what you do. On the middle ring, how you do it. But the core, why? your purpose, mission, and reason for being. I noticed Simon never trademarked the golden circle or his start with why framework. I asked him, why not do that? I knew when I had this idea that it resonated with people. And I knew that if all I did was chase people who were using it without my permission, that sure, I'd make a little more money. I'm protecting the IP. But at the end of the day, the message won't spread. or people just change the name and keep the concept and there's nothing I can do.

15:18And so my attitude was I'd rather people share the idea and use my language than change the language and use the idea anyway. My attitude was I treat it like a social movement. And I looked at Microsoft versus Apple as well. So Apple wanted total control of their operating system because they wanted to maintain the highest quality possible, which is great. In those days, undoubtedly, you know, undisputably, it was probably the highest quality product on the market. They also had 4 % market share of computer operating systems in the world. Even less, actually. But then I looked at Microsoft that was willing to clone and share it and let the OEMs make changes.

15:55It was kind of not as good. And they lost some control, but they had 90-some percent of the world's computer operating systems. And when Gates said, I want a PC on every desk, he understood that scale, you have to accept some loss of quality. and control. If you want maximum quality and maximum control, you're restricting scale, which is why the highest quality products on the market, Couture and all of these, the best lamb's wool, blah, blah, blah, you can't scale those. If you want scale, you go to target. And so I accepted that I had to just make a choice. Do I own max quality, max price, max control, but then I lose scale.

16:35It was more important to me to spread an idea. So I accepted a loss of control and I accepted a loss of quality. And what have you discovered about the general scaling of ideas? And I have a deeply personal interest in this. And I've discovered some little kind of tactical hacks, like I called blitzscaling, blitzscaling in part because it created some heat and controversy. So people would talk about it as part of it. But like, what are some of the techniques for getting the ideas to spread? I think when people invent entirely new words, all they end up doing is running around trying to explain to people what the definition is.

17:09We want things to induce curiosity or have some level of familiarity. And we also want to reduce semantic debates. And I think where most people settle on, they're so obsessed with having something proprietary and IP that they make it so difficult to understand that they don't induce curiosity or they don't have a level of familiarity. By the way, even the concept of why. In the early days, I remember talking to people and like there was this debate. What comes first, vision or mission? and I would sit in meetings watching people have these debates. And the reason was there's no standardized definitions.

17:46And so we infused our own meaning and then had semantic arguments about my meaning versus your meaning rather than actually trying to understand. And so I went to the people who said, vision is primary. I said, what's vision to you? And they said, it's the reason we get out of bed in the morning. It's why we get out of bed in the morning. I said, okay, to the people who believe mission or purpose or brand, whatever word they wanted to use, what was it to you? And they said, it's why we do what we do. It's why we get out of bed. It's why we sacrifice. I said, great, let's call it the why. And now we can all agree.

18:20The coup of my work wasn't that it was like, like I wasn't the first person to start talking about purpose. It's that I found language that made us stop having semantic debates and we could actually just focus on doing it now. Things have to be simple, understandable, and repeatable, right? If your message is simple, it means someone else can understand it. And if somebody else can understand it, that means they can repeat it, even imperfectly, without you in the room, without your PowerPoint. And so the coup of any movement or idea that spreads is that somebody else can put it into their own words and their friends will understand it without any technological aid to support it.

18:57Because very often, you can always tell when it doesn't work. Like you have this amazing meeting with this amazing inspired person with this amazing idea. And you leave the meeting and somebody goes, what was the meeting about? You're like, so, you have to call them. I don't know. Yeah, no, exactly. And that's what we need to avoid. We want people to be able to repeat our ideas in their own words. Still ahead, I talk with Simon about how to scale optimism in tumultuous times. and what he thinks is the ultimate hack for success.

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20:29And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the US can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

21:12So if you're scaling, make it simple with Deal. Go to deel.com slash M-O-S and get up to three months free. Welcome back to Masters of Scale. You can find this conversation and more on our YouTube channel.

21:36So one of the other mission zones that I think you do a excellent scaling idea leadership in is optimism. And, you know, obviously we're in quite troubled times. How should people cultivate their optimism even in difficulty? So let's first define the term. Optimism is not blind positivity. Everything's great. Everything's amazing. Look how good everything is. Is not optimism. That's not healthy, right? Because especially when times are difficult and a leader's like, look how good everything is because they think they have to, to keep morale up, it backfires because it makes people feel worse because they're like, I'm struggling and my leader is so positive.

22:14There must be something wrong with me. Or you lose trust. You're like, that guy's blind. So it is not that. optimism is not naive. It is the undying belief that the future is bright. And an optimistic leader can say, look, these are the most difficult times we've ever had to operate in. There's a lot of uncertainty. I don't know what's going to happen. And I don't know how long this is going to last. But I know one thing for sure, that if we take care of each other, if we work together, we will come through this and be stronger when we come out than when we went in. That is optimism. And so you can see one is the undying belief that the future is bright that there's always a light at the end of the tunnel That's number one And as my colleague says every storm runs out of rain.

23:00That's number one And there's the very very very important part, which is the social relationship It's very hard to maintain optimism in darkness when you're alone It's very hard to find that energy But if you have one person that you can say hey We got this whether you're the one saying it or you're the one hearing it That sense of camaraderie and teamwork is what allows for optimism to flourish. I don't think you can have optimism without relationships. I agree with Simon. There's an important distinction between being blind to risks and being optimistic. As I've often said, starting a company can feel like you have to jump off a cliff and assemble the plane on the way down, which requires optimism.

23:43And Simon actually had a riff on that idea.

23:50You can jump out of a plane with a parachute or you can jump out of a plane with a backpack. Both amazing thrills, but only one you can do again. And so, you know, there's the idea like, yes, take the risk, but just check the pack, you know? So all I'm asking you to do is just have a little look inside. You know, is it a canteen or is it a parachute, you know? I think we have to distinguish between big ideas and small ideas or big, big decisions and small decisions, right? They are not interchangeable. Little decisions with little consequences that can be fixed quickly, sure. Let the market decide.

24:21And then tweak and tweak and tweak and tweak, sort of the software mentality. But big things like reorgs or asking somebody to leave your team because for whatever reason, like make those slowly because those have ripples and consequences. And you can't undo a reorg with another reorg. And I think one of the aphorisms in tech that has been overused and misused and now abused is this concept of fail fast. That appeals to a very small percentage of a population's mentality. And that you come into a company and say, fail fast, and people don't know what to do. They don't know what it means. Nobody wants to fail.