Every industry has various companies competing for market share. Yet, there always seem to be a few outliers. These companies dominate and make it hard for competitors to displace them.
What makes a great company?
Vast hours have been dedicated to answering this question. The best academics and consultants have all tried to figure it out. With good reason – 80% of entrepreneurs fail within 18 months of business.
But nobody can agree on a single, definitive factor. Business can’t be reduced to a simple formula. Instead, there are many factors colluding to create the stopping power of the most successful businesses. Factors such as team, market and customer demands. There is one factor that brings them all together, however. There is a metaphorical ‘glue’ that gives meaning, direction and coordination to the various elements of successful business.
The ‘glue’ i’m referring to is vision.
By providing a destination and purpose for the organization, a powerful vision is capable of bringing people together to define an industry.
Destination and purpose
Vision acts as the destination and purpose of an organization’s existence.
Where do you want to end up?
In order to make progress towards something, you have to know what you are aiming for. You need a target – a goal.
Vision represents a combination of the two. It is having a moving target that you are continually trying to hit. And also, an idealistic endgame. Vision represents how your company moves on a day to day basis. It’s the driving force that energizes your people as they build products and interact with customers.
It also represents the big Why – the big change that you want to see in the world. If we actualize our vision, how will the world be different?
The story of Steve Jobs has been told countless times. It’s been dissected and taught throughout business schools. It’s even been made into movie (more than one actually). But the reason why it’s effective is that the message is clear and easy to understand. Especially if we want to define and understand vision.
Steve Jobs and Steve Wozniak changed the world. They built one of the most successful companies of all time. They named it Apple, Inc. The name itself doesn’t seem fit for a computer company. Had they been working with business consultants at the time, they would have walked out in protest. But the name itself gives insight into where Jobs was coming from. He wanted to be different. He wanted to challenge the status quo. He was the square peg that society wanted to fit in the round hole. He rejected this idea.
He believed that personal computers should be in the hands of everyday people. Not just business executives. He wanted to empower the masses by giving them tools to advance the mind. He wanted these computers to have an intuitive user experience – designed for the everyday person. He wanted to beautify and democratize access to technology. That was his vision.
The Why, the How, and the What
In his best selling book, ‘Start With the Why’, Simon Sinek created a model that encapsulates what vision is. In what he calls the Golden Circle, there are three aspects: the Why, the How, and the What. Here is some further clarity:
- The Why – This circle represents the problem or need you are solving. It also represents the shift in the status quo that you are trying to bring about. You could be solving the problem of internet connectivity in Africa. But your broader Why is to bring the human family together.
- The How – Alone, the Why of your vision is just a dream. There needs to be a pragmatic road map that leads to the achievement of the Why. This is the building aspect where processes and systems are put in place to achieve the vision.
- The What – The final circle refers to the output of the two inner circles. What is the product or service that is being built in relation to the vision? What are the features that allows it to solve that particular problem?
Starting with Why
Having vision is about the Why of what you do. The best businesses are laser-focused on the problem they are solving. But they go further. They have a definitive mission which goes beyond that particular problem. And ideally, they define a new status quo.
Here are some examples of company visions and their Why:
- Facebook – To give people the power to share and make the world more connected.
- Apple – To make a contribution to the world by making tools for the mind that advance humankind. (This was quoted from Steve Jobs as his original vision).
- Google – To organize the world’s information and make it universally accessible and useful.
- Amazon – To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.
- TED – To spread ideas.
None of these vision statements talk about what they do. Nor do they mention how they do it. But in the background, these are the factors that allowed them to achieve the Why. Hence, the Why, How and What are all interconnected and codependent.
Google doesn’t speak of the complexities that their search algorithms have. But it’s this robust technology that allowed them to organize the world’s information. This despite there being others on the same mission.
Apple’s original vision statement isn’t about how aesthetic their products are – although this was a core part of how they achieved their vision. Instead, there is a greater feeling of revolution and empowerment. Great user experience was just a means to achieve that.
In all, although the How and What of vision is important (critical to achieving it), the Why has to come first. Otherwise, there is no concrete destination to build towards.
Becoming a visionary leader
Creating a great business is hard. Bringing together a great team, identifying markets, solving customer problems and fending off competition. These are just a few things you have to deal with. And without a concrete vision about why your company exists and what you believe in, excelling in these areas is much harder.
Your ability to harmonize the various aspects of business through a strong vision is key.
To illustrate why, let’s take a look at a charismatic visionary: Elon Musk.
An example of a strong vision
Musk is one of the founders of PayPal. He went on to found SpaceX and Tesla Motors, which he both actively runs. He is also the founder of Open AI, the Boring Company and various smaller ventures. Some even describe him as ‘Iron Man’, in reference to the superhero who shares the same inventiveness and desire to take on the world.
But what is it that distinguishes Musk from other entrepreneurs? He’s smart, but there are thousands of smart entrepreneurs who aren’t as successful. What sets him apart is his otherworldly vision for the future. And I mean that literally – SpaceX’s vision is to make humanity a multi-planetary species. Likewise, Tesla Motors vision statement is to drive the transition to sustainable vehicles.
Through this strong sense of purpose, Musk is able to do what others aren’t. He is able to thrive despite the many setbacks he’s faced. Here’s how Musk’s vision impacts his business:
- Building a team – Musk’s compelling vision appeals to the talented and idealistic. The best people aren’t just looking for a job, they’re looking to change the world. Through working with Musk, they’re able to do so.
- Overcoming adversity – Musk has overcome a huge amount of adversity. He struggled to get funding for his ideas. He faces negative PR, funded from incumbents in the car industry. He has to overcome difficult technical challenges. Yet at every stage he has managed to succeed – something only possible with a strong purpose.
- Penetrating the market – Tesla is making waves in the centuries old automobile industry. It’s an industry with high barriers to entry, powerful lobbies and red tape that keeps upstarts at bay. In Q2 2018, Tesla shipped 40,740 vehicles. Considering his cars range in price from $55,000 to $100,000, Tesla is doing very well.
- Spotting opportunities – How many entrepreneurs can go toe to toe with the American, Chinese and Russian governments? Musk’s SpaceX brought spaceflight into the private domain. Where other entrepreneurs shied away, he had the vision to seize the opportunity.
Creating a compelling vision
You should now have a greater understanding of the importance of having a vision. Now it’s time to turn inwards.
Start thinking about your current situation. Do you even have a vision? Or is it just a vague idea about what you do and how you do it? Worse, are you on autopilot with no clear sight of where your organization is going?
Making it concrete
You probably have some idea of where you are taking your business. But having a vague idea of your purpose isn’t going to give you the effect that you need.
A fuzzy vision won’t remind your people about why they come into work everyday. It isn’t going to give them the fuel they need to do their best work.
Likewise, if your customers don’t get a sense of what you represent then you are missing out on a key competitive edge. Do you want your customers to think about you based on what your product does? Or would you rather they align with your brand as an expression of their values?
A study by researchers at the University of Bangkok and Macquaire University found that there were 7 aspects of a powerful vision. They were:
- Future orientation
- Ability to inspire
These factors play an important role in the message that you are trying to communicate. But it’s also important to look at the factors that inform your vision in the first place. In other words, how do you find your Why?
There are four steps that will help you construct your Why.
1. Identify problems
Think about what problems your company is solving. Think about the implications of these problems and the effects if left unsolved.
For instance, let’s say you are a manufacturing company that produces parts for wheelchairs. The problem you are solving is that you are helping people to be more mobile. If left unsolved, people’s life quality will suffer.
2. See past it
Next, it’s important to go beyond what you are currently solving. You need to be able to see the forest from the trees.
In other words, you can’t just be fixated on your specific problem. You have to be thinking about the future and adjacent problems that you aren’t solving. You have to visualize how your organization can tackle the whole industry, both now and in the future.
In the example of the wheelchair manufacturing company, you could have a broader vision to give people lifelong access to great mobility. This would extend their focus past just wheelchair parts and more into the domain of personal transport. The emphasis of ‘great mobility’ could mean developing ways of enhancing general mobility – even for people without disabilities. This could mean inventing a completely new method of personal transport – something akin to a Segway.
3. Define values
Then you have to start thinking about what your company represents. What are the ideas, beliefs, and values that guide you as you go about solving these problems?
Think beyond profit. Do you represent honesty? Fairness? Changing the status quo? These are the values that give work meaning beyond simply earning a living.
With the example above, the company could embody values of freedom, equality of access and respect regardless of physical ability.
4. Create a story with meaning
Finally, you want to bring it all together to create a story that has meaning. You now exist to represent a mission. Your organization is embarking on a new journey.
“We are Mobility Manufacturers Inc. We represent freedom, equality of access and respect for all. We exist because everyone should have the ability to easily and efficiently move around our shared planet. We started 5 years ago when we personally experienced the difficulties and lack of access that disabled people have to deal with.”
One final aspect of developing a vision lies within yourself as a leader.
You may have a compelling vision, but you need to embody and represent it. The vision has to be communicated through you. And for it to resonate, it has to be congruent with who you are.
So, who are you? And how do you plan to change the world?