Simon Shrek explained the concept of Golden circle principle in his TED talk. The golden circle principle aims to explain why a few brands and organizations can succeed in differentiating themselves better than the competitors. Despite essentially providing the same services or products, some companies are more successful than others. It all boils down to the simple golden circle principle followed by the great leaders.
According to Simon Sinek,
- All the organizations know what they do.
- Most of them know how they do it. This sets them apart from the competition.
- But, only a handful of them knows why they do it- and making money is not the answer, but the result of it. “Why” is the purpose that the organization fulfills.
Successful organizations always move from Why to What
How simply reversing the order of information can make you a more effective learner
For example, in the case of Volvo,
- Why they do it– their main driving force is promoting safety, and the purpose of the brand is to promote safety.
- How they do it– it is by integrating various safety features in their car, that differentiates it from the competition and keeps them ahead of the curve.
- What they do- They make cars, and that is how they serve their brand purpose.
Understanding the Golden Circle tells us why Volvo a company is such a successful company and is able to deliver on its purpose efficiently. Thus, it implies that the order in which one presents an idea (in this case, a brand) to a customer affects whether he purchases from them or not.
The success of a company will directly depend upon how effective it is in articulating the “Why” of their business. The “Why” taps into the Limbic part of the customer’s brain. The Limbic part is the one that influences behavior, and it goes on to show how the Golden circle is not just an opinion but is related to human biology.
Also Read: The Hedgehog Concept
