Model "Golden Circle": What is the Basis of Building a Successful Company

By Thomas Bennett Financial expert at Priceva
Published on August 14, 2023
"The Golden Circle" is a concept developed by Simon Sinek that seeks to explain why some organizations are more successful than others. This concept is built upon three fundamental questions, each represented within three concentric circles: the question of "Why?" lies at the core, "How?" is positioned in the middle circle, and "What?" is in the outer circle.
Sinek gained renown as a speaker at TED conferences. His lectures delve into how true leaders should inspire their employees and partners, why it's essential to engender trust, and how to transform businesses for the better. In the context of this article, we want to discuss the postulates he put forward in his book "Start With Why: How Great Leaders Inspire Everyone to Take Action." His TEDx talk on the subject, "Start with Why," garnered over 40 million views and has been translated into 47 languages.

In his "Golden Circle" concept, Sinek asserts that most organizations construct their strategies by addressing the questions starting from the outer circle. They first answer the question, "What are they planning to do?", then decide "How will they do it?", and only at the end do they answer, "Why are they doing it?"
However, the concept's creator believes that the most successful organizations always start with "Why are they doing what they're doing?". Only then do they seek answers to "How will they do it?" and "What exactly needs to be done?" to implement the solution born from the response to the first question.

Sinek validates his findings through neurobiology research and case studies of flourishing organizations that follow the "Golden Circle" system. This concept, leaning on understanding of brain function, attempts to explain how certain individuals and organizations can inspire others with their ideas and use that inspiration to build successful business narratives.

Neurobiology suggests that people respond best to messages targeting brain regions that control emotions, behavior, and decision-making.

First Circle of the Model: Why?

The question "Why?" is the most critical in this system because the answer inspires action. It is an emotionally charged question that expresses passion and directly appeals to the brain's ancient limbic system. It's how an individual or company explains the reason behind their actions and their existence. This part of the brain is responsible for behavioral responses. It also governs feelings of trust, loyalty, and the formation of motivations.

Answering the question "Why are you doing this?" helps to articulate a brand's unique selling proposition, whether it's an individual or an organization.

Second Circle of the Model: How?

The question "How?" also resides within the brain's limbic system. "How-messages" are emotionally charged and largely governed by emotions. A clearly formulated answer to the question "How?" reinforces and supplements the answer to the question "Why?". It helps to formulate the actions needed to implement the solution provided to the initial question.

Third Circle of the Model: What?

Sinek believes that only the answer to the question "What?" is connected with the neocortex, the rational part of our brain. The answer to this question will be the product or service that will help achieve the vision and mission answered in the "Why?" question.

The neocortex is the outermost layer of the cerebral cortex, responsible for higher mental functions such as sensory perception, spatial thinking, conscious thought, and speech. It's the most advanced and complex part of the human brain. The neocortex plays a significant role in analyzing, interpreting, and processing information received from various parts of the body and the environment. It also participates in decision-making and problem-solving.

So why does Sinek place the answer to the question "What?" in the outer, less significant radius of his "Golden Circle" concept?

He maintains that the neocortex, as a newer formation of the brain, has significantly less influence on decision-making than the limbic system. This is why successful individuals and organizations concentrate their efforts on the answers to why and how they do what they deem important.
The answers to these questions carry a potent inspirational charge as they allow leaders and brands to sincerely express commitment to their idea, and also attract and inspire others with their enthusiasm.

Simon Sinek's "Golden Circle" in Practice

Here's what the answers to the "Golden Circle" questions look like using the company Tesla as an example:

Why: Our mission is to accelerate the world's transition to sustainable energy.

How: We tirelessly work on finding new ways to make sustainable energy more accessible, affordable, and economically efficient.

What: We manufacture electric cars.

Have you and your company already answered the questions in the "Golden Circle" model?

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