goal of getting back into the “Top Five” was only ever going to be achievable through the company acquiring at least one of its biggest competitors. However, the board was not prepared to support such ambitious M&A activity, and this in turn led to frustration among the senior management of the operational business unit, which made many attempts to start negotiations with takeover candidates. All these initiatives were blocked by the board at some stage in the evaluation process, and countless man-hours at middle management level were wasted. The skepticism with which the chairman of the board rejected the vision of the business unit was tangible and, although the vision had been formally approved at board level, the chairman openly scorned his business unit colleagues in meetings and at company events.
2. The overall objective was too ambitious
In many cases, employees and managers were driven by the extremely ambitious targets to take what was actually inappropriate action, albeit consistent with the vision, as they assumed that any activity which increased growth and market share was justified. This led, among other things, to some absurd situations in which non-core M&A activities in emerging markets were approved with enthusiasm. So, for example, a local business in the Philippines was taken over with no global or even regional integration strategy in place, and a similar amount of money was spent in Colombia on the acquisition of a stake in a newly established distribution company. Our interview partner, at the time a junior manager, was directly involved and had to deal with the critical discussions with other business divisions and corporate functions which followed. They strongly doubted the wisdom of these activities, which, with the benefit of hindsight, seems well founded. Similar things took place in other markets.
3. Discussions about the vision were too focused on soft factors
Vision workshops focused too much on values, teamwork, and how people interacted with each other. These are, of course, extremely important aspects, but in this case the more measurable, harder factors such as profitability and practical delivery were not considered enough. A lot of employees misunderstood this apparently very “soft” approach and treated it as an open invitation to do their own thing (see Point 2 above).
4. Responsibility for communicating the vision to the grassroots was delegated
Junior managers were appointed “vision coaches” and given the job of conveying the vision to individual departments and divisions. This had the negative effect of diluting responsibility so that many middle managers no longer felt accountable for embracing the vision and all the changes that came with it, which detracted from the acceptance of the whole project.
From the example above, by implication, we can derive some rules of thumb on how to deal with business visions:
1.Avoid expressing visions in concrete numbers. A numerical target risks misconduct (technical, legal, moral) because employees, under the yoke of a fixed number, no longer do what is best or right, but instead do whatever is needed to achieve the target.
2.Do not propagate messages or mottoes which senior executives have not fully bought into.
3.When you are formulating a vision, critically examine its implications as a guide to day-to-day actions and objectively discuss the consequences. What does it mean to feel bound by this vision?
4.Make sure that the vision is really accepted in the business and not just perceived as an optional nice-to-have. This includes everybody: senior managers, department heads, team leaders, and rank-and-file employees.
5.Be open to criticism and adjust the vision if errors or undesirable behaviors emerge, rather than stubbornly sticking to the original path (unlike the Incas, who were incapable of changing course once the original direction—permeated with religious significance—was set).
6.Consider what impact your vision may have on your various stakeholders.
One of our interview partners shows us why these rules are important. Gerd Stürz, Head of Life Sciences (Germany, Austria, Switzerland) at EY, told us about his negative experience with solely concentrating on growth targets. Commenting on an international consulting firm for which “top line growth” became its official objective, he said:
Suddenly, the principal focus was no longer on quality but on growth. Later, this was seen to have been the final nail in the organization’s coffin, when it lost all credibility in the face of the scandal-laced insolvency of one of its clients. This was due to the external perception that their misguided business strategy, focusing solely on growth, was an important contributory factor to the client’s downfall.
Anything Is Better than Bullshit Bingo
If this vision thing is so difficult, then why bother? Our experience suggests that visions are important and answer the question posed by employees and other stakeholders: “What’s in it for me?” It encourages them to identify more closely with the business. You can earn money anywhere, so why would you want to work for this company? In an era when, for many people, work is about more than just putting bread on the table, a compelling vision can act as an invitation to be part of an exciting project. Identifying with something that feels important is one of the keys for motivation. Then again, identity is highly emotional. It’s no coincidence that every year the Gallup Institute, in its well-known “Engagement Index,” measures the level of “emotional attachment” workers have to their employers. When people feel that they’re an important part of something bigger, they get involved in a different way than those who see themselves as small cogs in a big machine. The same message is conveyed by the tale of three stonemasons working on the Cologne Cathedral. When asked what they are doing, one replies, sullenly, “I’m chiseling away at a stone.” Another says, “I am working to feed my family,” while the third explains, with a sparkle in his eye, “I’m building a cathedral!”
As well as identity, a vision creates solidarity—a connection between employees which can, in some instances, reach across continents. Sometimes this works its way into company jargon, such as when workers at Google refer to themselves, globally, as “Googlers.” The bigger a business, the more useful it is to have something visionary which binds it together. Ideally, it promotes a sense of community, even though face-to-face interaction seldom or never occurs. Another theme in one of our interviews was the need in large organizations to have a sense of community in order to enjoy mutual success.
Dr. Christoph Straub, CEO of BARMER, one of Europe’s largest Health Funds, told us about his work as the CEO of a group of hospitals:
I was taken on to integrate a portfolio of several independent clinics and merge them into a single hospital care provider. It should have been possible. After all, others manage it. Nevertheless, we failed because we never worked on the shared identity of the business. It is very difficult to create an identity if the only principle which applies in the business is “Every man for himself” and if the organizational structure is designed, from the top down, so that people have to fight each other. The image we portrayed to the outside world of the clinics being a strong unit was not reflected internally, neither in terms of business culture nor organizational structure. When faced with financial problems, we weren’t able to find any innovative ideas on how to improve the situation. We could have solved these issues, but finding a common solution was not part of the DNA of the business.
This report, based on direct experience, is interesting for two reasons. First, because the reference to a shared identity highlights the importance of a unifying vision. And secondly, because Christoph Straub also makes it clear that words alone cannot achieve anything if the actions of management and the business culture are more inclined to divide than to unite. A vision which is more like a behavioral letter of intent serves as an official invitation to the employees.
