I usually dislike to start a strategic planning discussion with the subject of company vision. I find the term very theoretical, and I am always afraid that the management team will spend endless hours refining the wording of the vision instead of asking what the strategic focus and direction for the company should be. However, in the past few months, I have worked with companies which did not have a clear vision, and the exercise had to be done. The article below outlines some of the processes used, and also the lessons learned:
- Why draft a corporate vision?
- The four pillars of a corporate vision
- Core values
- Core purpose
- Big Hairy Audacious Goal
- Vivid description
Why draft a corporate vision?
Drafting a corporate vision can serve many purposes:
- Helps define performance standards. Without an understanding of the organization’s purpose, its actions are confined to management by objectives, i.e. the goals that have been set by the higher management level or, often in the case of public institutions, by outsiders. Consequently, members of an organization without vision are not able to really take part in creating their own professional future – and the future of their working environment.
- Inspires employees to work more productively by providing focus and common goals: regrettably, the only perceptible direction some workers receive comes from leaders who are reacting to the latest quarterly report. A vision statement, on the other hand, articulates the overreaching, long-term goals of the enterprise. It is a look beyond the present to see what could be.
- Guides employee decision-making.
- Helps establish a framework for ethical behavior.
- Guides management’s thinking on strategic issues, especially during times of significant change
Enlists external support.
Creates closer linkages and better communication with customers, suppliers, and alliance partners.
Makes it easier to recruit.
Serves as a public relations tool.
Explains to shareholders where the company is heading
These tools are widely used in various companies.
The four pillars of a corporate vision
A vision statement should assert what the organization can be at its best. It may define what is unique about your enterprise. An effective vision statement is vivid, something you can describe that people can picture in their minds. The statement itself is concise, motivating and memorable.
“Every organization has a destiny: a deep purpose that expresses the organization’s reason for existence. Visions exist on different levels of the organization’s identity. Every telephone organization, for example, is tied to the original vision of Graham Bell – to provide a tool for universal communication. Many members of the organization have a collective sense of its underlying purpose – but in day-to-day operations those visions are often obscured. To become more aware of an organization’s vision, one must ask the members and learn to listen for their answers. People sometimes say that it is pointless to develop a sense of purpose for a company. There already is a purpose: “To maximize return on investment to shareholders.” Obviously, making money is important. But to confuse the essential requirement for advancing in the game with the deeper rationale, is a profound confusion. Focusing on the purpose of making money at the expense of other purposes, will naturally distract an organization’s competitive advantage.” (P. Senge)
Visions can be created on different levels of an organization.
- They can be developed by the CEO and then published in the organization’s newsletter, or communicated in any other way to the staff, in the sense, “That is the view of our future, and we want you to come on board;”
- Or they can be developed in a process that involves every member of the staff, from the driver to the boss. Of course, there are many shadings between both extremes;
- Visions can be created at a higher level of the organization and then developed by working groups of the staff;
- The management could also consult the members of the organization before creating the actual vision.
There is no right or wrong way, but there are appropriate and inappropriate approaches. Members of an organization that have always been steered in a more autocratic style might not initially be able to freely describe their image of the future. You have to assess the degree of participation pertinent for your environment. The exercise “Is your organization a participatory one?” might help you in the assessment.
To derive the vision statement, a company can follow two simple steps:
- First, define the core ideology: a combination of core values and core purpose;
- Second, define the envisioned future: a combination of Audacious Goals and a vivid description of that future.
The core values are the enduring assets of an organization. They require no external justification, but have an intrinsic value to the organization.
If vision and mission statements supply the long-term direction of an organization in terms of its business, markets, customers, and financial objectives, its values express the ethics that must guide the behavior of the organization and its members as they seek to achieve their vision and mission.
Examples of core values include:
- respect for the individual;
- respect for the community;
- concern for productivity;
- commitment to personal integrity;
- individual responsibility;
- freedom of action, and so on.
Corporate values represent the unwavering beliefs of the organization’s leadership. These are the principles that influence decisions every day at every level. They affect the way you treat your customers, workers, suppliers, and neighbors. They define how you are willing to operate as you pursue your mission – what behavior is appropriate, permissible, and what is not.
How to facilitate a meeting to understand core values?
I found that taking key people off-site to discuss the vision to be a good format. It provides a calm environment away from the frenzy of the office, and executives enjoy this time “off” to reflect.
I advise you select people from within the company whom you feel would really help you define your vision. It typically includes the core management team plus a few other key people whose creative input would be very beneficial to the program (shareholders, even clients).
- Split the team in groups of three, and ask them to list the core values of their organization;
- When debriefing all together, look for patterns and values that seem to be coming back often;
- Apply the test below to define which values to keep.
How do you know a value is really a value?
Apply the test:
- What core values do you personally bring to work?
- What would you tell your children are the core values that you hold at work?
- If you could retire for the rest of your life, would you continue to live those core values?
And finally, ask yourself: if those core values would make you uncompetitive, would you keep them? For instance, my client had listed “Integrity” as a core value, but management decided to take it out after a difficult discussion: integrity would have meant not taking an order when the company knew it would be delivered late, for example.
Here is an example:
Air Liquide: Our values are the underlying attitudes and beliefs that shape our fundamental approach to all aspects of our business. At Air Liquide America, we define our values to be:
- Business partnership – We value our customers and suppliers and pledge to work with them to achieve the goals of our organizations. We value people and their individual and team contributions, recognizing that our success depends on everyone’s integrity, initiative, creativity and competence.
- Responsible conduct – We value the conduct of business in an ethical, environmentally responsible and safe manner that supports community and corporate expectations.
- Continuous improvement – We value continuous improvement as a way of life in order to create a better, faster and more efficient company.
- Performance – We value and reward the achievement of our objectives through committed and accountable employees.
The core purpose is the organization’s reason for being. It is rarely composed of notions of shareholder value. The purpose is not to be confused with:
- Specific goals or business strategies;
- A strategy.
Here are some examples:
- A phone in every home – BELL TELEPHONE
- An affordable car for every family – FORD
- A network that allows an entire company to communicate – DEC
- Number One or Number Two worldwide in our core businesses – GE
Johnson & Johnson continually questions its structure and revamps its processes while preserving the ideals embodied in its credo written by General Robert Wood Johnson more than fifty years ago. Their corporate vision and guiding philosophy, Our Credo, covers four main areas of responsibility: customers, employees, communities, and shareholders.
We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs, everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make fair profit.
We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical.
We are responsible for the communities in which we live and work and to the world community as well. We must be good citizens – support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.
Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.
How to facilitate a meeting to understand core purpose?
There are several ways you can run that meeting. You will find below suggestions for some frameworks:
Story telling: Goes back to the original purpose of the organization to see whether it is still valid and how it can accompany the organization into the future.
Co-creating a vision: Consists of questions that help to structure a group process for creating an organization’s vision. It can be done individually, but it is particularly applicable for an organization-wide vision sharing process.
Companies that belong to the planet: Goes beyond the point of an organization’s vision. It asks the questions: “Is there anything else? Why are we existing as an organization? What is our contribution to the world around us?”
Logical level alignment: Defining the organization’s identity is another wonderful exercise for vision sharing. It starts by delineating the future environment, and then stepwise defines future behaviors, skills, values, identities and relations to the outside world.
The five why’s: Ask management to tell you why the company is in business. Then ask why again. Repeat five times to arrive at the core of the purpose of the company.
Big Hairy Audacious Goal
The Harvard Business Review captures the essence of the objectives a company can set by calling them the BHAG: the Big Hairy Audacious Goals. Those goals have to be:
- Clear and compelling;
- A catalyst for team spirit;
- A clear finish line;
- People can get it right away.
The goals typically apply to the entire corporation and they are unlikely to change over the years.
Quantitative: Become a $125 billion company by the year 2000 (Wal-mart).
Qualitative: Become the dominant player in commercial aircraft and bring the world to the jet age (Boeing).
Common-enemy: Crush Adidas (Nike).
Role-model: Become the Harvard of the West (Stanford University).
Internal transformation: Transform this company from a defense contractor into the best diversified high-technology company in the world (Rockwell).
(Source: Harvard Business Review)
In addition to the goals, an envisioned future needs to be described in words that will capture the imagination and create a real momentum in the organization. Henry Ford was a master at this when he described his goals:
“I will build a motor car for the great multitude … it will be so low in price that no man making a good salary will be unable to own one and enjoy with his family the blessings of hours of pleasure in God’s great open spaces … When I’m through, everybody will be able to afford one, and everyone will have one.”
How to facilitate a meeting to draft the vivid description?
This is a difficult meeting to run with a large group, since what is required is to draft a description. This is what works:
- Ask the members of the team to write a description of their goal;
- Use expertise from marketing or public relations to add the appropriate words to capture the essence of the goals;
- Ask each member of the team to stand up and “act” the description, as if they had to describe it in a major public event;
- Take videos and looking back at it, decide if the description is clear and compelling;
- At the conclusion of the retreat, ask members of the strategic management team whether or not they bought into the plan and if it was something they could dedicate themselves to achieving over the next decade
Once you have solidified your long-term vision and have it down on paper, share it with the rest of the organization to get feedback and comments. With this vision, your partners and customers never have to wonder where you’re going as a company because it’s all spelled out for them. And your corporate employees don’t have to wonder either.
This article was originally featured at www.competia.com and is reprinted with permission.
© 2002 – 2014, Estelle Métayer. All rights reserved.