Famous management guru Jim Collins writes in his book Beyond entrepreneurship 2.0 that the number one responsibility of a leader is to articulate a clear and shared vision for the company and to secure a commitment to vigorously pursue that vision. Jim Collins stresses that this is the universal leadership requirement. He goes on writing that irrespective of your leadership style and size of your organisation, you must perform this function, if you are a leader. But research shows that many managers are intimidated and frustrated by the challenge of developing a compelling vision for their company.
So what exactly is vision, why is it important and how do you go about setting one? These are some of the questions I'll explore in today's episode based on Jim Collins and Bill Lazier’s recent book.
Why is vision important?
Despite catalysing and sharing vision being dubbed as preeminent leadership responsibility, building your company with a lasting vision is challenging. But vision is essential to attaining corporate greatness argues Jim Collins. Don’t assume that vision is necessary to make money in business. You can certainly create a profitable company without a compelling vision. There are many people who have done this. However, if you want to do more than just make a lot of money and if you want to build a long-lasting great company, then you need a vision. For example, if you look closely into the history of the world's great companies like McKinsey, IBM, Rio Tinto, Marriott, Volkswagen, etc., you’ll find that at their inception or a few years down the line, while these companies were relatively small, their leaders developed and communicated a compelling shared vision for the entire organization.
Good history, isn’t it? But many of you might be thinking ‘We are not IBM, Marriott or McKinsey. Does this vision talk apply to us? ‘ That's a good point but remember that each of these big companies once was a small and struggling business. Jim Collins argues that, in every case, the vision was laid in place when the company was still small. It's not that these companies are big and so have the luxury of vision. Instead, it's the vision that helped them become great in the first place. However this doesn’t imply that vision is necessary only if you want to become big. Even if you want to remain a small company, then still you need a vision. You may be asking why? It’s because there’ll be opportunities to grow down the road. So the only way to remain small is to have a clear vision about what you want your company to be.
Now let’s point out some benefits of having a company vision.
Vision energizes people by connecting them to the organization’s purpose.
Vision provides a context for strategy and change.
Vision motives people and helps attract and retain talent.
Vision also provides focus and direction in decision-making.
Vision impacts employee and customer satisfaction.
What is a vision?
The word vision brings up different kinds of images. We think of it as future focused, one that doesn’t fluctuate annually. We believe it shows what the company will do when faced with uncertainty. We think vision paints the vivid picture of the company. To do this, it requires imagination and intuition. All these statements are ok, but what do good visions look like?
Seminal research in the area of organizational vision points that a good vision has three components. Let’s briefly look into each of them:
Core values and beliefs.
Your company’s vision is based on its core values and beliefs. They guide the company’s decisions, policies and actions. You might be thinking where do these core values and beliefs come from? The answer is you! Whether you are planning for your family’s or your organization’s future, starting from your values will help you plot a path into the future.
As a leader, you imprint your personal values and beliefs about life and business through your actions. You don’t set values and beliefs. Instead, what you do is extend those personal values and beliefs into your business through your specific actions, not only mere words.
Purpose
Purpose is the ultimate reason why your company exists. An important aspect of the purpose is that it’s always worked towards, but never fully achieved. It’s like pursuing a guiding star. You should be able to articulate purpose in one or two statements. For example, Patagonia’s purpose statement is ‘to be a role model and tool for social change’. You must have noticed that this statement isn’t a description of the current product lines or customer segments. A good purpose statement is broad, fundamental, motivational and long-lasting. One way to develop a powerful purpose is asking the ‘why’ question five times. Purpose statements don’t necessarily have to be brilliantly innovative. They don’t necessarily have to differentiate one company from another. That differentiating work will be done by the company’s mission.
Mission
Mission is a clear and compelling overall goal that serves as a focal point of effort. Unlike purpose, which is never fully achieved, mission is achievable. Effective mission is concise. It contains between 11-22 words, rendering them easy to communicate and remember. It’s alo bold and challenging. It shows a high but achievable degree of difficulty motivating staff to try their best to achieve desired outcomes. And a good mission has a specific finish line, typically 10 to 25 years, for its achievement. For example, a clothing retailer in Bangkok may set a mission ‘to go national with $100 million sales by 2035’.
It’s always good to write down your core values and beliefs, purpose and mission. Writing them down forces you to think thoroughly about what you want to achieve and why. But this is not enough. To be effective, vision must be well understood and shared by all the people in your organization. Does this mean vision should come from the top or derived from the discussion among people in your company? Jim Collins argues that there is no one answer for this. He goes on that each company’s vision must come to its own conclusion depending upon its norms, situation and personal style. The only thing that matters is you as a leader should articulate a clear and shared vision for your company and receive commitment from your people. Turning a vision into a new reality doesn’t happen overnight. But if you have persistence and stay true to your vision, it is the most important contribution you’ll ever make as a leader.
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