Start with 'Why?'

Simon Sinek of Ted Talk fame, author of ‘Start with Why?’ and creator of the Golden Circle concept advocates that great organizations create their foundation (or business model) by first addressing ‘Why’ they exist, then ‘How’ they go about their mission and then finally, ‘What’ they do.

Most leaders and organizations however start from the outside in. That is, they start with ‘What’. Like Francisco Gonzalez, Executive Chairperson at BBVA Digital Bank in Columbia once said:

“Most organizations look only at the rooftop in terms of competitive advantage - the products and services that customers see. The problem is if you only build the rooftop, and don’t change the business model structure underneath, the whole building becomes unstable and susceptible to digital disruption”.

As such, Simon Sinek instead starts with the fundamental and perpetual question of why? Why are some people and organizations more innovative, more influential and more profitable than others? Why do some command greater loyalty from customers and employees alike? Even among the successful, why are so few organizations able to repeat successful programme and project delivery over and over again? The Why explains the purpose, cause and belief that inspires an organization to do what they do – and it’s not about profit.

Similarly, the Strategy Implementation Institute advises that to gain awareness of any new strategy, organizations should explain ‘why’ they need to change, and then follow through by aligning business activities, allocating resources, assessing the organizational culture, identifying performance measures and training people in new skills required to successfully deliver strategy objectives¹. When an organization thinks, acts and regularly communicates starting with ‘why’ they can inspire others, not only the employees but, most importantly, their customers.

So, let’s explore how Simon Sinek’s ‘Start with Why?’ theory applies to portfolio management. Effective portfolio management as the main investment vehicle within any organization is the coordinated collection of strategic processes and decisions. This should result in the optimal balance between organizational change (through exploration) and business as usual (through exploitation) in an ambidextrous organization. Like the Golden Circle concept, portfolio management helps organizations answer the fundamental question of “why?” by asking if we’re sure that each investment is right for us and how it will individually and collectively contribute to our new strategy objectives?

Better Business Cases states that the need for a new idea (or an existing programme or project) may be perceived as an obvious outcome of the portfolio management process but a spending proposal – particularly during prioritisation – should never be taken forward without confirming why it is required in relationship to²:

• the strategy and organizational policies it supports;
• other programmes and projects within a portfolio (that are united by a set of common strategic objectives);
• the other projects within a programme;
• impact upon other organisational policies and programmes.

A strategic assessment, in the form of a gateway review, should occur if the response to any of these points is unclear, particularly given that the Praxis Framework advises that structured portfolios have several interrelationships between the component projects and programmes and subsequently P3 governance must be more rigorous³. To understand why, genuine commitment must exist, and all parties that represent the business, supplier and users interests must be absolutely clear about why a programme and project is needed. The organization should be able to answer what the new or existing spending proposal is designed to deliver, how the new strategy objectives including the required outcomes and benefits are to be achieved, and a clear definition and delineation of roles and accountabilities.

Effective portfolio management within any organization within any sector or industry simply demonstrates that the spending proposal provides business synergy and strategic fit and is typically predicated upon a robust and evidence-based case for change. This includes the rationale of ‘why’ intervention is required, as well as a clear articulation of viability (benefits), affordability (costs) and achievability (risks) including the potential scope for what is to be achieved driven by the benefits used for continual justification. If organizations want to improve their strategy implementation success, then benefits must be the driver behind all change initiatives from initiation through to, and indeed beyond, integration into business as usual⁴.

Unfortunately far too many organizations struggle to demonstrate a return on their investment in change. True success, therefore, is only possible if the programme and project was the right initiative to implement in the first place by actually contributing to the organization’s strategic objectives. The ‘what’ an organization does can change with the times, but the ‘Why’ an organization does never (or rarely) changes. Conversely, strategy implementation through programmes and projects should adapt to a changing digital environment but explaining the ‘why’ behind change demonstrates the value of change. The reality is many organizations today make investment decisions based on a set of incomplete, or worse, completely flawed assumptions about ‘what’ is driving their value proposition and business model. It is therefore critical for organizations to continually assess and articulate whether or not their change initiatives, both individually and collectively, are the right ones and whether the potential return on investment is to be achieved.

There are those who decide to initiate business change through programmes and projects to achieve the desired new strategies and resultant benefits and there are those who start from somewhere very different. Though both courses of action may yield similar short-term results, it is what organizations cannot see that makes long-term success more predictable for only one. The organization that understands why programmes and projects need to fit by design and not by default. The pathway to purpose can be achieved by following the Golden Circle framework, upon which organizations can be built, strategy implementation can be led, and people can be inspired. And it all starts with ... Why!