Apr 15, 2022

Why, How, What - The Golden Circle as a Leadership Tool

Business Model Innovation
by Stefan Lemmerer

The Golden Circle by Simon Sinek

With the three simple questions "Why? How? What?", Simon Sinek has left a lasting mark on our thinking about leadership. In his book "Start with Why," he describes how successful organizations start with the "why," then answer the "how," and only then address the "what.

Get Premium Access

The "Why, How, What" model is composed of three concentric circles that work from the inside out.


Why - Why and for what actually?

The starting point and center of the Golden Circle is the question of "Why". Why are you here? Probably because you searched for it on Google? But what are you here for? Because you want to take something with you, in this case the concept of Simon Sinek.

In a business context, the "Why" defines the Purpose or the higher meaning of an organization. In my understanding, this purpose always refers to the customer. If you find that the question of the "Why" does not find a convincing answer for you, then replace the "Why" with a "For". The "why" is the central polar star that gives your project an identity. The car manufactor Tesla, for example, tells its customer-centric "Why" very impressively. Another good framework for the "why" question is the Value Proposition Canvas and the Business Model Canvas.

Get Premium Access

How - How exactly?

With the "How" you describe your procedure to achieve the goal. At this level, you will find strategies and process models that pave the way to the goal and define a route for the "Why". If the "Why" would be a hidden treasure, then the "How" is your treasure map, so to speak.

In an entrepreneurial context, the "How" defines your value creation processes, your business model and your organization. At this strategic level, you define how your company achieves the "Why".

What - What do we do?

Finally, in the "What" you define concrete actions and actions. Due to the concentric structure of the "why, how, what" model, the "what" is linked to the higher goal and your approach.

In a business context, the "what" describes concrete products and services that your company provides. This operational level is much more tangible and, above all, visible. Perhaps this is why so many companies try to define and differentiate themselves through the "What". In doing so, they miss their chance to differentiate themselves more than clearly from their competition through a good "Why".

Reference - The St. Gallen Management Model

The philosophy behind the "Why, How, What" model is not new. As a system-oriented management theory, the St. Gallen Management Model (SGMM) is based on an identical structure at its core. In the SGMM, the leadership and management of a company have three levels.

Normative management (-> Why)

Strategic management (-> How)

Operational management (-> What)

The St. Gallen Management Model was first published in 1972 and has been continuously developed since then. Currently, the SGMM is in its fourth generation.

You want to get more information about how you can develop your business model? Subscribe for Premium and get access to 150+ analysis!

Sign Up For Free