LME006 – How to create a vision statement for your company.

5 points how to create a vision statement

What’s needed to create a business vision statement and what’s needed for the vision to work? I’ll give you 5 crucial points which make a great business vision.

In the previous episode we spoke about why you should have a true business vision. Today we’ll focus on what makes a great business vision and what’s needed for the vision to work successfully.

Let’s think about why some corporate visions are perceived as strong and useful and others aren’t.

Listen to the podcast version

What makes a vision successful?

What does really matters? Most managers agree: In today’s world, we need employees who are motivated, self-reliant and independent. We need employees who we don’t have to force to work and who think along with us.

We are talking here about intrinsically motivated employees. That means employees who’re motivated by themselves, cooperate and think creatively. Here a true business vision is a huge asset in helping to get intrinsically motivated employees.

Let me explain why: There are three points that are important to an intrinsically motivated employee:

1st autonomy

An intrinsically motivated person has a desire for autonomy. He says

“Give me a destination, tell me where we want to go, but please let me set the path.”

That’s what’s fun for him, he wants to decide for himself how to get there.

2nd striving for championship

An intrinsically motivated person has the inner need to become better and better at what he does.

3rd Purpose

“What I do must make sense to me and has to have a meaning for me.”

The intrinsically motivated person sees meaning in what he or she does.

Support autonomy, striving for championship and purpose

As a manager, you should therefore make sure that you support these three points in order to have intrinsically motivated employees: Autonomy, striving for mastery and meaning or purpose.

Of course, you cannot instill purpose into your employees. But you can proffer meaning and purpose in a true vision. If the vision is attractive to them you have a good chance that they connect and see the purpose behind the vision as useful and important. It’s their decision if they connect to the vision or if they don’t. You can’t force them to. But you can enthusiastically talk about it and help them to understand.

Viktor Frankl, a well-known psychiatrist said,

“The question of meaning never depends on what we expect from the world, but on what the world expects of us.”

In other words, meaning should always be linked to benefits for others. It isn’t just a benefit to us. It’s usually considered useful when it brings benefits to others.

The purpose isn’t money.

Therefore, It’s important to state: Contrary to popular belief, the real purpose of a company is never simply to earn money. Rather, it is about benefiting others – namely the customer. A company receives its money for this, but its purpose is not money.

Please don’t get me wrong: The companies need money in order to be able to operate, to function, to pay suppliers and employees and to provide interest and returns for the investors – shareholders as well as banks – otherwise it won’t survive.

But money is not the purpose of a company. Just as it is not the purpose of a person to simply earn money. The purpose of every company is to help customers, whether with a product or with a service. Only then does the company have a right to exist. Otherwise, this company would simply be a parasite in our society.

The answer to the question “why?” and clearly knowing the purpose of the company is cruicial. The business strategy with the company vision or corporate mission is closely linked to this.

The vision statement usually describes the future. That’s where we’re going. The big guiding star, so to speak. And the mission defines what  our task is. Many say:

“The mission is important to the outside world. It tells why we exist and what our job is.”

Personally, I don’t think this distinction is particularly useful, because people keep confusing mission and vision. In my opinion, it’s also not helpful to say that the mission is rather for the outside, while the vision is for us inside the company.

In my opinion, the smartest way to combine mission and vision is to say there is a vision and it has to answer both. That way I don’t need to make this distinction,either.

5 points to create a vision statement

Whether vision or mission: one thing is imperative. When I speak of a vision, I mean a guiding star, something that is vague but emotional. It describes a great picture for the future. It’s something people can connect to that you can inspire people with.

How to create a vision statement? What characterizes a good vision? In my view, there are five characteristic points.

1) The vision must be emotionally charged.

It must inspire, at least it must address a certain type of people and exactly the one I want to pick up with it. And that’s how it gives energy.

2. The vision sets a direction.

…but no details.

3. The vision paints a picture of the future.

“I have a dream.”

Not

“I have a plan.”

Although it does not provide any details, it is nevertheless unmistakable. It positions and distinguishes from others.

Statements like:

“We will become the No. 1 in our market and offer the best quality at the lowest prices.”

are not only nonsense, because nobody can deliver the lowest prices at the best quality in the long
run. No, it’s also interchangeable. Such a statement does not position. It does not explain the “why”.

4. The vision is not fixed in time.

It has no deadline.

5. The vision is a desirable improvement of the current situation.

It includes and expresses a clear customer benefit. In the best case, it provides significant added value not just for a customer segment but for societyas a whole. This makes it desirable for a large number of people and they can connect with this vision.

These five points are the hallmarks of a good corporate vision. As a positive example for this I gladly take again and again the vision of Wikipedia.

“Imagine a world in which every single person is given free access to the sum of all human knowledge.”

This is a vision. It’s emotionally charged. It may not inspire all people, but some who then say:

“I think that’s great when everyone has access to all human knowledge. I want to support this or even be a part of this project.”

This vision sets a direction, but no details. It is not fixed in time. There’s no deadline. It clearly expresses the benefits and it’s a really high added value for society.

Why is it, that some business visions don’t work?

… even if they meet the 5 points I’ve set up?

If you as the company owner want your business vision to really function as a guiding star, then as a person who sets up the vision, you have to live this vision 100 %. You have to live the values that this vision implies.

For example: You want your company to be innovative. Your business vision implies innovation. Then you have to set an example. Your actions must reflect that you really want innovation – with all the consequences.

Let’s assume, that you are someone who attaches great importance to precise processes, goals and systems in your company. For you it’s very important that everyone behaves in accordance with the rules and everything is regulated and specified in detail.

For example, you want your employees to strictly abide by an 80 page guideline, which describes in detail how travel expenses are to be settled. – Well, then that doesn’t go with innovation.

This contradicts the value of creativity. If you want innovation, you cannot tell your employees exactly every step what they have to do. You need to have trust in your employees.

Don’t get me wrong. Of course, you can have rules. And these rules need to be followed. But an 80 page guideline just for the travel expenses? Come on!

“If the values lived don’t correspond to those in the vision, the vision is doomed to fail.”

You have to stand identify with and be behind your vision 100% – and that has some serious implications. If you have a big vision, then this has implications for your behavior. You need to be consistent.

The vision must have consequences…

Like Steve Jobs, for example, when he returned to Apple in 1996. Sales had fallen sharply, Apple was no longer profitable. Something simply had to happen. Steve Jobs had a vision with the development of iMac, iTunes and iPod.

However, implementing this vision meant that the company had to position itself and focus clearly. For this reason, he quickly closed 22 out of 24 product areas. This was a tough decision, but consistently aligned with his vision. He focused only on the two areas that were important for implementing the vision.

What we can learn here is this:

When you have a clear vision, then this must have consequences. All existing processes and rules in your company must be questioned. What aligns with the vision, and what doesn’t?

But keep in mind: If you want to consistently align your company with your vision, you need a lot of energy – and as business owner or CEO you probably only have this energy if your vision really is 100 % in line with your own values and your motivation.

The bigger the company, the more difficult this is. It’s usually easier if the entrepreneur is still in the company and is still in charge – at least if he really is a visionary. Because the company will at least initially be very strongly influenced by the entrepreneur.

Who is driving the vision?

However, as soon as a company grows, goes into the 2nd or 3rd generation, or goes public, it becomes difficult. Usually the formative visionary is then no longer there – or at least he no longer has a say in decisive matters and generally lacks influence.

The company’s focus and perspective, and with it the company’s culture, are gradually changing. Instead of an entrepreneur, employed managers rule now. It is less and less about customer benefit and the long-term goals and growth of the company.

Rather, managers – and even the CEO – are measured by achieving short-term goals. Sales, profit, quarterly results and the share price determine what the managers have to do.

Beware of Pseudo visions!

If high bonuses are paid for reaching short-term financial goals then it’s understandable that managers focus on just that. The words customer relations, long-term vision as well as longterm strategy degenerate to empty phrases in such enterprises. Usually such companies no longer have any real vision but only pseudo visions like:

“We want to be market leader!”

or

“We’ll be number one in our market segment and aim for a 15% profit!”

Benefits for the customer or for society? Not really our focus. Our shareholders want to make a good profit.

This is not to say that there can’t be any true visions in such large corporate companies or that real customer orientation isn’t possible. But my impression is that if only employed managers are in charge, a true business vision is hard to Sustain for the long-term.

How to agree on goals after having a clear vision

When you created your vision, take care that you also agree on goals with your employees using the vision. There is a lot of things you can get wrong.

Therefore, you might be interested in reading this post: “How to set goals with your employees the right way.” or watch this video:

The inspiring quote

“Your vision will become clear only when you look into your heart. Who looks outside, dreams. Who looks inside awakens.”

Carl Jung