The Benefits of Vision:

Let’s now turn our attention to the four primary benefits of corporate vision:

1. Vision forms the basis of extraordinary human effort.

1. Vision provides a context for strategic and tactical decisions.

1. Shared vision creates cohesion, teamwork, and community.

1. Vision lays the groundwork for the company to evolve past dependence on a few key individuals.

Much of the material in this chapter is based on extensive research at Stanford and the article “Organizational Vision and Visionary Organizations” (California Management Review, Fall 1991). We need not go into all of the theoretical underpinnings and background research of the framework here. The essence of it is that a good vision consists of:

1. CORE VALUES AND BELIEFS

1. PURPOSE

1. MISSION

Vision Component 1: Core Values and Beliefs

Core values and beliefs are where vision begins. Core values and beliefs are like an ether that permeates an organization—its decisions, its policies, its actions— throughout all phases of its evolution. Some companies refer to this as their “guiding philosophy.”

Core values and beliefs form a system of fundamental motivating principles and tenets—precepts about what is important in both business and life, how business should be conducted, its view of humanity, its role in society, the way the world works, what is to be held inviolate, and so on. You can think of it as analogous to the “philosophy of life” that an individual might have. Core values and beliefs are analogous to a biological organism’s “genetic code”—they are in the background, but always present as a shaping force.

The core values and beliefs come from inside you. You, as a leader of the company, imprint your personal values and beliefs about life and business through your daily actions.

And therein lies the crucial aspect of core values and beliefs: they must be an absolutely authentic extension of the values and beliefs you hold in your own gut. You don’t “set” values. The proper question isn’t, “What values and beliefs should we have?” but rather “What values and beliefs do we actually hold in our gut?”

Ultimately, core values and beliefs get instilled by what you do, by specific, concrete actions, not by what you say.

Another simple subtraction rule is, when you write or revise the core values for your organization, don’t list more than four. And use vivid imagery to describe each value. If you are running a nonprofit, for example, don’t talk about “excellence in fundraising.” Instead, talk about donors who tell friends and neighbors that their gift was “among the best decisions they have ever made.” A short list of vivid values triggers a shared sense of purpose in employees, customers, and other stakeholders, which in turn fuels effort and coordination. That’s what University of Pennsylvania’s Andrew Carton and his coauthors concluded after studying patients treated for heart attacks in 151 California hospitals. When a hospital had four or fewer values and used vivid imagery, patients were far less likely to be readmitted for further treatment within thirty days—a key indicator of the quality of care. Carton’s team found similar results in an experiment where they assembled sixty-two virtual teams to design new toys.

I believe it is appropriate – indeed necessary – to view the business organisation in the same way. The proper goal of corporate activity is the flourishing of the multiple stakeholders of the corporation: employees, investors, suppliers and customers, the communities in which it operates and the corporation itself. For the corporation to flourish, it must contribute to the flourishing of the society in which it operates. And ‘the doctrine of the mean’ is as relevant to the business organisation as it is to the individual. The directors and executives of a flourishing company operate within a mediating hierarchy, which meets the needs of all its stakeholders, gives them an opportunity for voice and protects the business from the adverse consequences of stakeholder exit.