How to define what your company stands for and avoid the most common pitfalls
Over the last 25 years, the idea of what a copmany Vision is, what it should contain, and even whether you need one at all, has been questioned and refined.
In a successful company, everyone is working towards one goal, guided and inspired by a singular Vision.
In companies that are struggling, you’ll see different groups of people working towards different goals, while all believing the company stands for different things.
That singular, guiding Vision can come tumbling from the Founder’s mind, or it can be the responsibility of the incoming CEO. Either way, a clear Vision is the single most important piece of thinking inside a company: every other decision springs from it.
Our work helping clients define their Vision has resulted in the investment of over £500m. This is a summary of some of the articles that we’ve found most useful in that work.
Building Your Company’s Vison by Jim Collins and Jerry Porras, written in 1996, is the granddaddy. It’s given rise to much of what’s now known about how a singular Vision is critical to the success of a company. Jim Collins spent six years researching his first book and went on to show that the companies which enjoy enduring success all have a Vision which remains fixed, even while their business strategies and practices endlessly adapt to a changing world.
Jim points out that two companies can have the same core values; it’s where you’re going and what you stand for that will differentiate you. This corresponds to our own fundamental belief, which is that the two questions the new CEO always wants to clarify are:
Who are we?
What do we stand for?
Key point: Don’t confuse Vision with Strategy. This article carefully draws a distinction between Vision (what do you want?) and strategy (how do you allocate resources to get it?).
Where we disagree: Jim pioneered the idea of the BHAG (Big, Hairy, Audacious, Goal), to inspire people. We see the value in BHAGs but find that today we’re living in a short-termist, sometimes cynical, world where 10- to 20-year bets are no longer credible.
This HBR article is an interesting 20-minute read (even if the title confuses ‘Vision’ with ‘Strategy’).
The authors point out how a lack of a unifying Vision slows a company down. They also reveal some of the things you’ll hear in a company that lacks a unifying Vision. Any sound familiar? “I try for months to get an initiative off the ground, and then it is shut down because it doesn’t fit the strategy.” “Why didn’t anyone tell me that at the beginning?” and “I don’t know whether I should be pursuing this market opportunity. I get mixed signals from the powers that be.”
Key point: Once you’ve clarified the Vision, creating a strategy and executing it happens a lot faster.
Where we disagree: Their definitions of Vison, Mission etc. I’d replace Mission with ‘Purpose’ and I’d put Vision much higher in the decision tree.
Pat Lencioni uses elegant writing to soften the blow of tough knuckle messages. In this article, he talks about how important it is to make sure the Values which you say are a core part of you, really are. If they’re wishful thinking, they don’t survive.
Key Point: When it’s time to define your values, be prepared to be ‘Aggressively Authentic’.
Roger Martin takes no prisoners. He points out in this article why most big strategic planning exercises fail. He calls these the ‘Comfort Traps’. In his view, making a strategy is a scary thing (I agree, especially if you don’t have a guiding Vision before you start). He points out that leaders, in reaching for reassurance, will typically ‘over-plan’ (Comfort Trap 1) or choose what to do based on the one thing they know for sure they can control – costs – rather than focussing on what they can achieve (Comfort Trap 2).
Key point: Avoid the Comfort Traps. Keep the strategy statement simple (great advice) and accept imperfection (difficult to admit to, but important).
Another great overview of how and when companies use Vision (and mission statements). More than that though, it’s got a great reading list at the end.
In this paper by Insead alumnus Stanislav Shekshnia, it’s clear how the CEO plays a central role in creating the Vision. It also points out the need for the CEO to develop a deep understanding of their own personal values (mixed with curiosity, ambition and passion) to formulate an effective vision for the wider company.
It quotes the (now ex-) CEO of Geox, Diego Bolzonello, who turned the company round. He says that vision is “really the main role of the CEO … and to transfer it to the management.”
Key Point: The CEO is the guardian of the Vision. The authors point out how the CEO must be the continuing Champion of the Vision – so, not just kick-starting it, but continuing to champion it to the organisation after it’s been created.
This is a fabulously interesting article if you care about gender issues at work. Even if you’re some kind of lughead that doesn’t care, then it’s still interesting because it points out why some people are ‘good at vision’ and some aren’t.
The paper looked at over 22,000 evaluations of leaders and found that women were rated below average for being able to create and articulate a Vision.
The authors suggested 3 possible reasons why this might be:
1. Women may be using a more collaborative method to determine the company’s vision and peers might not value that collaborative process as highly. (Hmmm, what kind of company is this?)
2. Women may be hesitant to make audacious statements because they are more frequently challenged for the robustness of their reasoning in business settings.
3. Women themselves may not value Vision highly, perhaps viewing it as an empty sales pitch, or perhaps worrying that it will be dismissed as fanciful window gazing rather than getting things done.
Key Point: The authors also note that there are no ‘classes for Visionaries’ at Insead. We’ve suggested it’d be easy to fix that, we’ll have to see.
If you enjoy reading these, or think we’ve missed any great pieces off the list, please email me, Chris, and let me know.
If you want to see how implementing a successful Vision depends on building alignment within your leadership team, look at our next summary document: Leading the Leaders
If you’re thinking of developing your own company’s Vision but aren’t yet sure whether it’s really what you need, try our Diagnostics Tool: it takes about 15 minutes and gives you some clear answers.
If there’s anything else, or just the occasional question, please email me. Chris