Submitted by Jim Gunderson of Gamma-Two on Wed, 11/30/2011
Jim: I guess the title says it all. What is the ROI on investing time and energy into a corporate vision statement. Crafting a good vision statement can take a significant investment of resources, so what is the practical value. Yes, there is all the talk about ‘energizing the staff’ and ‘informing the customer’ and ‘aligning values’. But what is the real value of:
“Connecting people and Very Human Technology” (Nokia)
“To develop a perfect search engine.” (google) – and this relates to google docs how?
At FedEX the vision statement is “Leading the way”
This helps how?
Those are externally targeted vision statements, often developed by the marketing department. Vision statements targeted internally are very different, and come first when building a business.
Without an internal vision statement, values and mission statement, business owners don’t have a strategic foundation for their business. I know most entrepreneurs have some idea of those things in their head, but that’s not good enough. Yes, we’ve all seen entrepreneurs make millions without all that, but that’s huge exception.
Creating a vision happens when you work on the business part of the business. Successful entrepreneurs spend energy and sometimes money on learning and executing on that. You have great technology and cool, very useful robots. You know your product needs more work…that will always be the case.
Building robots is art and science. Building a business a completely different art and science and is nearly as complicated. As Michael Gerber teaches in E-Myth, he describes the Technician as the one who’s great at their craft, like you and your robots. When the entrepreneur realizes how important it is to spend time working ON the business, they learn about what M. Gerber describes as the Entrepreneur. And they execute on that learning.
I’d suggest you’d get great value from a decision to do more Entrepreneur work. Entrepreneurs that strive to be the best CEO are more likely to succeed in their business. That’s why investors hold in the highest regard those entrepreneurs that have failed or have already sold one of their businesses. Investors know that they have gone through the changes to become a good or great CEO. Entrepreneurs are way more capital attractive when they do.
If an entrepreneur hasn’t done that before, or is self-resistant to do more high value Entrepreneur work (vs. Technician or Manager), they benefit greatly from outside help.
When you do that, it’ll be like walking into a dark room, and someone turns on the lights. You’ll see the value of a vision, mission and values, and all the other “stuff” that sets the initial foundation for a successful business.
Planning for the success of a business is the opposite of what the software startup gurus will tell you. Their approach is usually – “put up a landing page, get input from people, build a minimum viable product, get more feedback, and continue that cycle till you can charge for it”. Software investor’s don’t seem to care whether you have a financial plan, a strategic plan, marketing plan, which blows me away, but that’s today’s reality. Nearly every other type of business requires planning. If you can’t show an investor your plans on paper, how can you convince them it’s more than an idea with a prototype? They likely won’t read the plans, but you can show them the highlights, and they’ll have greater confidence that you’ll be successful. Unless you want to be at the bottom of the pile along with the 99.9% of the rest of budding entrepreneurs who want money.
Jim, here’s some information on visioning, part of my strategic planning service offering:
“A declaration of where you are headed – your future state. To formulate a picture of what your organization’s future makeup will be and where the organization is headed.”
A vision statement is your ticket to success. A photograph in words of your company’s future, it provides the inspiration for both your daily operations and your strategic decisions.
Without a vision statement, effective business or strategic planning would be impossible; it’s the vision statement that provides the destination for the journey and without a destination, how can you plan the route?
Vision is a destination: To where, by when, and who wants to make what. It can include quantification, how much money do you want to make in the first five years? It’s an internal document, for the company and CEO. It attracts and retains your team and helps them figure out what the team wants and likes.
Your vision statement is your inspiration, the framework for all your strategic planning. Vision spells out goals at a high level. It’s important when crafting a vision statement to let your imagination go and dare to dream – and why it’s important that a vision statement captures your passion.
Unlike the mission statement, a vision statement is for you and the other members of your company, not for your customers or clients. Simply put, the vision should state what the founder ultimately envisions the business to be, in terms of growth, values, employees, contributions to society, and the like; therefore, self-reflection by the founder is a vital activity if a meaningful vision is to be developed.
Jim’s follow up:
Your answer suggests that vision statements come in flavors based on the intended audience. An ‘external’ vision statement is supposed to engender some sense of investment, attachment, or commitment in the customer – give them a feeling that they ‘get’ the company’s philosophy and/or values. Hence fluffy statements like Nokia’s “Connecting people and Very Human Technology”
On the other hand, an ‘internal’ vision statement is targeted at the people who make the decisions and execute the work of building the company and its products or services. It should be actionable, in that it must have enough meat to guide the decisions, choices, and behaviors of the business’s internal stakeholders.
This actionable vision statement should guide the development of the business plan, and should give potential investors a sense of what they are buying into?
You referenced E-Myth by Michael Gerber, a take it that is an endorsement of its value to a growing entrepreneur?
Marty’s follow up:
“If you wait till all the lights are green before you leave, you’ll stay right where you are”. Don’t worry about how the magic will occur. Just know that it does. You’ll get clarity and can execute on that. Yes, I endorse my friend Michael Gerber’s work. This book is the quintessential work on the topic of Entrepreneur, Manager and Technician.