How to establish a corporate vision

Alberto Andreu explores how to establish a corporate vision

It’s very strange. In the corporate world, everybody is always talking about “vision”, but when you ask them what it is, it seems less clear. You either find that a single aspect is referred to as vision; or you find that there are as many visions as the company has departments; or people think it means company values or the strategic plan. Or they just ask you to let them get on with their work.

If the vision is a perception that overarches the whole organization, because it sums up the reason for its existence (the purpose) and the factors which distinguish it from any other business operating in the market (the values), why is it so difficult to understand it, establish it and take advantage of its whole potential? Why can’t it be used to organise everybody around a shared goal?

After years of working in a number of top- rank companies and sharing experiences with executive training students, I think I’ve found a few answers to this problem:

1. Because the “standard” executive is more action oriented than thought oriented. It may be because managers are under an obligation to present attractive quarterly results for investors, but it’s common to meet them literally telling you that they “can’t allow themselves” to think about theory. They’ll say what really matters is knowing the business, knowing where the margin is, getting a return on capital and implementing plans as approved. That’s why, whenever they hear or read that the vision is “like a guiding star on the horizon, forever pursued but never reached” (Collins and Porras, Built to Last and Building your company’s vision), they think we’re talking about “psychology or theory”.

2. Because an incoming CEO usually wants to distinguish himself from an outgoing CEO. It’s merely human nature for someone who has just arrived to want to leave their own mark. And it’s also human (although not very bright) to think that the past is now

history, and that what you have to do is start from scratch. And it’s this “starting over” that leads many incoming CEOs to decide to reinvent the vision without realising that a vision is neither a five-year strategic plan nor a new product line. Put simply, these new CEOs think that they are above the institution they’re running and that “they” are the institution.

3. Because being consistent with the vision also means knowing how to say no. A lot of CEOs thank that a clearly-defined vision is a restriction and may imply a certain “competitive disadvantage” because carrying the vision to the extreme (the purpose and the corporate values) may mean establishing limits or drawing red lines around fresh sources of income (not directly connected with the core business) or different ways of doing business (setting aside some values or principles).

4. Because the vision is not being correctly communicated downstream. The outcome of all this means that establishing a vision is not only an exercise in in-house communications, but above all it means you must ensure that the decision-making process and the in-house filters which guarantee consistency between what is said and what is done are clear. For example, Johnson & Johnson “live their vision” by means of their Credo (the statement which sums up their purpose) and guarantees in-house consistency by means of the Credo Office and their “credo decision-making process”.

All these reasons make it very difficult to maintain consistency with the corporate vision. And although it may appear naïve, I recommend that all executives, before they act, should ask themselves three simple questions: Why does my company exist? How can we do it? What can we offer the customers? These three simple questions would at least help establish the vision… without having to “think about theory”.

Alberto Andreu

Alberto Andreu is global director of corporate reputation and responsibility at Telefónica and visiting professor at Economics and Business Administration, Navarra University