A story of a company with an unclear why

Let’s look at the breaking of a 47 billion dollar unicorn

WeWork was founded in 2010 and initially marketed itself as a co-working space provider that would revolutionize the way people work. The company’s goal was to create a sense of community and collaboration among its members, while also offering flexible workspace solutions.

However, as the company grew, its purpose became increasingly muddled. WeWork began to expand into other areas, such as residential and educational spaces, and also positioned itself as a tech company. The company’s focus shifted from providing co-working spaces to becoming a “lifestyle” brand, which led to some confusion about what exactly the company was trying to achieve. 

In 2019, WeWork attempted to go public, but the company’s unclear purpose and questionable financial practices were exposed. This led to the collapse of the IPO and a significant drop in the company’s 47 billion dollar valuation. WeWork’s CEO, Adam Neumann, was forced to resign, and the company had to undergo major restructuring to stay afloat. 

WeWork’s failure highlights the importance of having a clear and well-defined purpose as a company. When a company loses sight of its purpose and pursues multiple, unrelated goals, it can lead to confusion, lack of direction, and ultimately, failure. It’s crucial for companies to regularly evaluate their purpose and ensure that all of their actions and decisions align with that purpose. Having an unclear why can be devastating for any business. WeWork is a perfect, and tragic, example of this.

Does your why influence everything you do?

Unfortunately, many companies fail to prioritize their “why” and this can lead to lack of direction and motivation. When employees do not understand the company’s purpose and how their work contributes to that purpose, they may feel disengaged and unfulfilled in their roles. This can lead to decreased productivity, increased turnover rates, and a negative impact on the overall success of the company.

To address this issue, companies should make a conscious effort to communicate their “why” to their employees and ensure that it is integrated into all aspects of the company’s culture. This can involve regularly sharing the company’s mission and values, providing opportunities for employees to give feedback and contribute to the company’s goals, and recognizing and rewarding employees who embody the company’s purpose.

Also, the key to success is having a systematic approach to tracing the grand purpose down to everyday decisions. This is sometimes referred to as a “why model” or “why system”. A why model connects the dots and ties it all together. 

Ultimately, when a company’s “why” is clear and communicated effectively, employees are more likely to feel engaged, motivated, and committed to the company’s success, and the same is true for customers.

What can you learn from WeWork?

WeWork did not fail because they invested in bad opportunities. WeWork failed because they invested in great opportunities with great potential, outside of the original purpose. 

We may not identify with almost going bankrupt, but we can all identify with being tempted to say yes to all kinds of opportunities that show great potential. This may be the most important learning point. If things are not going as well as you feel they should, part of the answer may be that your purpose is muddled. And you start investing in great ideas outside of your purpose.

Saying no to great ideas is difficult for all of us, but that is just what we need to do to achieve higher levels of success. Great companies say no to great ideas outside of their why.