By: Ryan Locascio
May 4th, 2021
Key Points:
- Leaders need a blueprint for creating a meaningful, measurable, inspiring vision for their company
- Great minds have built the foundation for Vision but they left out, possibly the most important aspect, the Vision financials
- Vision is more than just a statement, it’s an ecosystem
- You can’t have good strategy without a developed Vision ecosystem
- Vision ecosystem development is just the beginning of your strategic needs
Is a phrase enough?
The definition of “Vision” in business is lofty and nebulous which is why it seems to be often halfhearted and only understood by the CXO who thought it up. After the initial announcement of the “Vision”, an IT department worker is designated the great honor of placing it on the company website right after “things that no one will read” and just before “information that no one asked for” sections. Occasionally somebody will stumble across it and derive as much meaning as if they had read a Haiku about 15th century Korean pottery.
Why do so many companies have vision statements that, if read by a manager or director, no significant guidance or meaning could be gained? Why do corporations produce vision statements that only Rainman could find answers in? Why do leaders think that a 20-word statement is enough to inspire the workforce of an entire company?
The problem is with process and definition. More specifically, definition of the vision building process.
You can do a quick web search of “What is vision” and find an array of articles that explain vision or at least part of it. The purpose of the company, a future view of the company, a moral guideline, a goal to aspire to, etc., but in reality, Vision is all of these things combined plus a hearty dose of due diligence and sound calculations.
This is where we change the term “Vision” to “Vision Ecosystem”:
A vision ecosystem encompasses the entirety of the company’s future direction, a moral compass for future leaders and the often-overlooked mathematical calculations of it all.
It is simultaneously there to guide the company management in decisions, measure the long-term success of initiatives and to inspire the workforce to strive for greatness. It should give meaning and provide fulfillment to your workforce so they not only have pride in the company but also their efforts. Most of all, a well calculated vision will provide the greatest return on investment that any CEO/CFO/COO could ever dream of.
The right way is simple. The elements are there and it has been thoroughly vetted throughout the years but as I explored the base principals, elements were lacking.
My first attempt at vision ecosystem building was during my tenure in Japan working at an Aerospace manufacturing company. The ship was sinking, we had no lifeboats and the compass was broken.
I began to ask the leadership a simple but powerful question “What’s the goal?”. No one had a concrete answer and to add insult to injury everyone’s answer was different. (A bit conniving but I intentionally asked all of the leaders separately.)
Needless to say, I was shocked this company that had been around for 20+ years and produced 100s of millions in revenue had no answer to such a basic concept. I made it my quest to define our long-term goal. I started a special meeting with a couple of the top brass in the company.
In the beginning, there was an airy statement more akin to a marketing slogan than a vision statement. I spent weeks convincing the leadership how meaningless the statement actually was. Eventually, they begrudgingly nixed the statement. From here, we spent months defining “Vision”. Needless to say, we were not moving forward and I was becoming frustrated.
When we did finally agree what vision was, no matter how we worked at it, something felt off. There was a hollowness to each of our attempts. The team began to wallow and lose hope of creating the antidote to the company woes.
Frustration and disappointment in myself forced me to purchase several books on vision and strategy. Obsessing over finding the key, I eventually stumbled upon an article called “Building Your Company’s Vision” wrote in 1996 by James Collins and Jerry Porras. Their words were a godsend. We used these foundational ideas to set us on the right path towards a meaningful vision. I developed processes and guidelines beyond his basic concepts which had morphed into what I call a vision ecosystem. We’ll talk about this later on.
All in all, it took us 18 months to create the vision ecosystem accompanied by strategies to enact the plans. 12 months after the initiation of the plans created, the company was reporting the highest returns, highest employee retention and most efficient work atmosphere ever.
Vision Ecosystem defined:
The essay on Core values, Core purpose, BHAG and “what the future looks like” was the jumping off point for the creation of something great at the Aerospace manufacturer. The ideas he laid down were a foundation. As time passed, there were still several key points missing and that is when I designed and forged the Vision Ecosystem.
*The elements of vision as defined by Hartford Global.
As laid out in the article “Building Your Company’s Vision”:
Core values – Moral guidelines
Core Purpose – Why do we do what we do
BHAG – “Big hairy audacious goal” is exactly that, a pie in the sky goal
Effect – How the world has changed after the BHAG has been accomplished
Core values, core purpose, BHAG are all there and very much cornerstones of the Vision ecosystem but the cold, hard numbers were lacking. I took the core tenants from above and added Vision financials (and feasibility).
Financials and feasibility – Not sexy but the most important part of the ecosystem. This is where ideas are tested.
The BHAG is more than a direction, it is a map. But, without the qualitative and quantitative considerations the BHAG is a map drawn with crayons. Any BHAG worth its weight needs to be coupled with Vision financials that are tethered to a date in the future. This future date is used to create a, currently, non-existent company’s balance sheet, profit/loss statement and cash flow statement. The statements are then calculated backwards to the most current B/S, P/L, C/F statements. Here is where feasibility comes in.
For example, if you calculate backwards and find your BHAG requires an organic cumulative growth rate of 1500% YoY, you are then at a crossroads. Do you recalibrate the BHAG to address organic growth or start looking for potential acquisitions that fit into your BHAG?
*It’s all connected and by way of logic, your strategies will lack if you don’t base it on a Vision ecosystem
Scenarios are created, run through the gauntlet and given final judgement through the lens of the Vision ecosystem. Moral guidelines will tell you right or wrong, purpose will keep you honest and financials will enforce the rules of gravity on your BHAG.
Now you are ready to delve into the strategies that will turn your Vision Ecosystem into reality.
Questions will spawn questions and feasibility will be challenged. The true journey of revolutionizing your company has just begun and it is worth every bit of effort. You will never find a kaizen activity, a cost reduction initiative or a lean concept that will bring about the powerful change birthed from Vision ecosystem building.