Got this via Fast Company:
Are vision statements really necessary? Does anyone really take them seriously? If the majority of vision statements are any indication, the answer to both questions is no. But are these companies missing something?
Paul was very direct: “All the vision statements I’ve ever seen are worthless. Just go on any company website and read theirs — it’s all fluff.” When I agreed wholeheartedly with him, he roared back — “So why are we talking about a vision statement?” My response was equally direct: “Just because most companies don’t understand the purpose of a vision statement, or don’t take the time to craft a meaningful one, it doesn’t mean that they aren’t useful when properly done.”
We’ve all seen one example after another of vision statements that are meaningless — often seemingly created to satisfy some check box on a “to do” list. But why does the leadership of a company take such a cavalier approach to establishing and articulating a clear direction for the company?
My experience suggests three common reasons. First, like Paul, there are those who do not understand the purpose or the importance of a vision statement. They often believe that having a well-defined strategy is enough.
Second, there are others who think they have a clear vision, but when challenged to write it succinctly, they cannot. It turns out that the direction which seemed so clear to them is not very clear at all.
And finally, creating a clear and compelling vision statement is not a simple matter. There are a number of concepts that a well-crafted statement of vision must include and it can take considerable effort to address them thoughtfully.
Why a Vision Statement?
When I asked Paul about the strategy for his company, he went into a 20 minute discussion about the details of his plan. I then asked, “If you achieve everything you’ve discussed, will you realize your objective for the business?”
After an uncomfortable silence, he said, “What objective? Do you mean my financial plan?” “No,” I said, “Your financial plan reflects your financial targets. What I mean is — will the actions you take result in creating the kind of business you want?” Once again I faced a puzzled look.
So I got right to the point, “How do you know if your strategy is the right one if you don’t know the kind of company you’re trying to create? Isn’t that a bit like building a house according to a blueprint, when you haven’t even decided whether it’s a primary residence or a vacation home that you’re seeking? The blueprint may be great, but following it won’t necessarily produce the type of home you want.”
The point is that you have to know what kind of company you’re trying to build before you can begin to determine whether you have the right strategy. With a nod Paul acknowledged that he understood. So I then asked, “What kind of company are you trying to create?” He quickly replied, “I am going to have to think about that and we’ll talk again.”
What Makes for a Good Vision Statement?
While there are many dimensions, at its core your vision statement should clearly delineate your direction or focus, as distinct from the direction or focus of your key competitors. Consider these questions:
- Does your vision statement declare what you are going to do better than your competitors? Does it identify what makes you different and how you will beat the competition?
- Does it identify your target market?
- Does it capitalize on your strengths and minimize the impact of your weaknesses?
- Would your vision statement fit any of your competitors or is it truly distinctive to you? Of all competitors in your target market, are you the best positioned to achieve that vision (in terms of market position, strengths and weaknesses, and capabilities)?
Consider for a moment the division of Apple that is responsible for the iPhone. They would not want to state their direction as simply being a manufacturer of cell phones — even though their product is called the iPhone and it makes calls using a cellular network. If they did, their vision statement would also fit any number of other cell phone manufacturers.
Instead they seem to be targeting a specific segment of all cell phone users — high-end users looking for a multi-function (business and personal applications) device that also makes calls. In crafting your vision statement, wouldn’t it make sense to zero in on the specific market you’re going after?
I have no inside information regarding Apple’s plans, but in looking at their history with the Mac and the iPod, one might surmise that their emphasis (and strength) is in several areas. These might include creating a highly intuitive user interface, offering the most desired functionality (and not just the greatest number of features), incorporating the latest technological capabilities, and providing it all in the most attractive packaging.
Could any or all of this be how Apple plans to create differentiation in their target market? Does this capitalize on their strengths?
If my characterization happened to be correct, wouldn’t a more informative vision statement for the iPhone division look something like this?
We will offer the preeminent multi-function communications and entertainment handheld device for high-end users by providing the most intuitive user interface to access the most desired functional capabilities, while applying the latest technology and packaging options in the design of our product.
Is Apple the competitor you would expect to be best suited to this vision statement? Does this meet the criteria we stated above? Would employees know how to focus their energy — that is, would they know what the goal of the company is and what they are working to accomplish? I think the answer is yes to all these questions.
But in addition to telling employees what this division of Apple is trying to achieve, a more specific vision statement like the foregoing serves another useful purpose. It tells everyone what the division is not about. They will not produce cell phones for every segment. They are not competing on cost. They will not try to do everything in a single device and include every imaginable feature.
While this discussion focuses on the core elements of a good vision statement, there are many more factors which should be taken into consideration, including:
- Is your vision statement broad enough to encompass all that you want to do without allowing forays into areas in which you have no distinctive competence?
- Is your vision something you wish will happen; or is it something you truly believe your company can make happen?
- Is your vision stated in such a way that employees as well as others can assess progress toward your objective?
In Part 2 of the discussion on vision we will cover more subtle aspects of creating a winning vision statement. But before we do, take the time to check your company’s vision statement against the core criteria discussed here.