Start With Why: Carrots and Sticks (Chapter 2 Summary)

This book summary series is taken from Simon Sinek’s Start With Why: How Great Leaders Inspire Everyone to Take Action (2011). Your curiosity and knowledge is infinite, but your time is not. Read this summary – and you’ll be inspired!

Simon Sinek tells that there are only two ways to influence human behaviour: You can manipulate them or you can inspire them. Inspiration (see Introduction) is always better than manipulation. When companies do not have a clear sense of why their customers are their customers, they tend to rely on a disproportionate number of manipulations to get what they need. Here are typical ways of manipulations, Carrots and Sticks:

Price. For the seller, selling based on price is like heroin. The short-term gain is fantastic, but the more you do it, the harder it becomes to kick the habit. Once buyers get used to paying a lower-than-average price for a product or service, it is very hard to get them to pay more.

Fear. Fear – real or perceived – is arguably the most powerful manipulation and also very destructive.

Peer Pressure. When marketers report that a majority of a population or a group of experts prefers their product over another, they are attempting to sway the buyer to believing that whatever they are selling is better. Peer pressure works not because the majority or the experts are always right, but because “we fear that we may be wrong.”

Novelty. Real innovation changes the course of industries or even societies, like the light bulb, the microwave and iTunes. Adding a camera to a mobile phone is not an innovation – a great feature, but not industry altering. Novelty can drive sales but the impact does not last. “If a company adds too many novel ideas too often, it can have a similar impact on the product or category as the price game. In an attempt to differentiate with more features, the product start to look and feel more like commodities and, like price, the need to add yet another product to the line of compensate for the commodization ends in a downward spiral.”

Manipulations Lead to Transactions,
Only Inspirations Lead to Loyalty.

Manipulations don’t breed loyalty, although they can drive sales. Over time, they cost more and more. And they increase the stress for both buyer and seller. Loyalty is when people are willing to turn down a better product or better price to continue doing business with you. Loyal customers often don’t even bother to research the competition.

Addicted to the short term results, businesses today has largely become a series of quick fixes added on one after another. “Carrots and sticks work just fine for transactions occurring on the average just once, but if you want to build lasting relationships, you have to inspire people.” Manipulations are perfectly valid strategy for driving a transaction. But if you want loyalty, inspired people. It is the feeling of “we’re in this together” shared between customer and company, employers and employee, mentor and mentees that defines great leaders.