WHY COMPANY VISION AND VALUES ARE IMPORTANT
Vision
Every great company begins with the entrepreneur’s vision of what that company will become. Just as top professional athletes envision everyday play of an upcoming game before they ever set foot on the playing field, so do entrepreneurs envision the kind of company they want to build. The company’s ‘true north’ acts like a beacon, guiding it in the right direction. Although it is possible for a company to be successful without a vision, it is difficult, if not impossible, to become a great company without a vision.
Researchers have found that the number-one company in every industry outperformed its number-two competitor by a significant amount in terms revenues, profits, and return on investment. The primary reason was that each number-one company each had a strong vision based on core values that it regarded as inviolable. Vision is made up of core values, purpose, and mission.
Core Values
Core values are the fundamental beliefs that a company holds about what is important in business and in life in general. They are based on the personal values and beliefs of the founder; therefore, they are not something that can be created or invented for the company out of thin air. A company’s core values tell the world what it is and what it stands for. Because they are so fundamental to the existence of the company, core values rarely change over time, and they endure beyond the tenure of the founder. One way to test whether a value (for example, “The customer is always right”) is a core value or not is to ask whether it would ever be relinquished if there were a penalty for holding it. If a company is willing to let go of the value, then it is not a core value.
Purpose
Purpose is the company’s fundamental reason to be in business. It is the answer to the question “Why does the business exist?” It is not necessary a unique characteristics of the business; in fact, more than one business may share the same purpose. What is crucial is that the purpose be authentic; that is, it must mean what it says. “We are in the business of helping people” might be the purpose of a socially responsible business. A properly conceived purpose will be broad, enduring, and inspiring, and it will allow the company to grow and diversify.
Mission
A company’s mission is what brings everyone together to achieve a common objective and is closely related to the company’s purpose. A mission is designed to stimulate progress. All companies have goals but a mission is a daunting challenge, an overriding objective that mobilizes everyone to achieve it. The natural metaphor for a mission is mountain climbing. The mission is to scale Mount Everest, a major challenge to be sure. To get there, however, will require smaller goals, such as reaching base camp in one week. The smaller wins motivate the team to achieve the more bold and compelling mission.
A company’s mission is communicated through a mission statement. A mission statement precisely identifies the environment in which the company operates and communicates the company’s fundamental philosophy. Peter Drucker asserts that a company’s mission should “fit as a T-shirt.” The best mission statements are simple, are precise, and use clear words.
A mission statement should convey what the company wants to be remembered for. In writing a mission statement, it is important to gather the thoughts of everyone in the organization. The initial drafts should be evaluated against a set of criteria. It is suggested that a mission statement should be short, sharply focused, clear, and easily understood. It should explain why the organization exists; indicate what the company wants to be remembered for. It should not prescribe means but should provide direction for doing the right things. Finally, the mission statement should address the company’s opportunities, match the company’s competence, and inspire the company’s commitment.
Core Values and Success
An entrepreneur’s personal definition of success, that is, what it means to be successful, is really a function of core values and vision that the entrepreneur has for his or her life. A business’s success is easily measured in terms of total revenues, earnings, returns on investment, and so forth, but entrepreneurs don’t typically measure their personal success solely in these terms. In fact, research has shown that the personal rewards that motivate entrepreneurs to start businesses are independence and freedom. Entrepreneurs are goal-oriented and tend to cite being one’s own boss, being in control of one’s destiny, and having ultimate control of the success of the venture as reasons for going into business.
Some entrepreneurs believe that success is turning “lemons into lemonade”, or that success is “being happy with what you are doing and feeling as though you are accomplishing something.” But one group of entrepreneurs decided that measuring the financial performance of the business did not totally reflect their definition of success, even at the company level. These are the entrepreneurs who started many of the “socially responsible” businesses. They tend to take personal definitions of success to the company level. This is possible if, at the same time, the business is conducted effectively so that it can achieve its financial goals and give the entrepreneur a vehicle for his or her social responsibility efforts.
Constants of Success
No matter how success is defined, there are some constants that seem to permeate everyone’s definition. These constants are purpose, failure, a sense of satisfaction with what was accomplished, and having to pay for, or earn, success.
Purpose
To feel successful, entrepreneurs need to know that what they are doing is taking them in the direction of a goal they wish to achieve. True success is a journey, not a destination – even the achievement of a goal will be just a step on the way to the achievement of yet another goal.
Failure
The second constant is that life has its ups and downs. Failure is the other half of success, and most entrepreneurs have experienced several failures of one sort or another along the way. Still, they do not fear failure, because they know intuitively that those who obsessively avoid failure are doomed to mediocrity. To avoid failing, one has to virtually retreat from life, to never try anything that has risk attached to it. Most entrepreneurs are calculated risk-takers, so that they make sure every time they come up to bat they give it their best; then, win or lose, they strive to learn from the experience and go on. Entrepreneurs are generally optimists who believe that failure is a normal part of the entrepreneurial process.
Sense of Satisfaction with Work
The most successful entrepreneurs are doing what they love, so their satisfaction level is usually very high. Does satisfaction with the work result in success or does success bring satisfaction? Probably a little of both, so it is important to know what kinds of tasks and activities will return satisfaction in business.
No free Lunch
Success rarely comes without work. Entrepreneurs do not have the luxury of a nine-to-five workday; they usually are married to their businesses twenty-four hours a day. It is not just the number of hours of work that distinguishes entrepreneurs, of course, but also the way they use their time. Entrepreneurs make productive use of odd moments in their day – while they are driving, on hold on the telephone, in the shower, or walking to a meeting. Because they love what they are doing, it doesn’t feel like work, and that’s probably why, wherever entrepreneurs are, they are always working on their businesses in one way or the other.
Firm core values and ethics plus a socially responsible business can lead to the kind of success that is most meaningful to most entrepreneurs: satisfaction in creating something and seeing it thrive. Today, more than ever before, the world is watching the way entrepreneurs run their businesses, so it is more critical than ever to design a new business on the basis of sound values and ethical practices.
If you find this article useful, please share and subscribe to our newsletter.
