This post is an excerpt from Chapter 2 of Flock Not Clock.

Given that so many companies lack a vision statement and those that exist exhibit a bizarre range of forms and purposes, you may wonder why you need one. 

Remember that all organizations are complex adaptive systems: they are made up of individual people always interacting with and adapting to their environment. The behavior of an organization (and the attendant outcomes of longevity, profit, growth, reputation, and so forth) is an emergent property of these individuals’ interactions with other organizational members and features of the organizational and external environment. This means we can’t readily predict
organizational outcomes based on group member behavior alone. As a leader, you get to decide whether to embrace the complexity of your organization and leverage it to your advantage through the creation and reinforcement of simple rules and the careful selection of your agents.

What does this have to do with a vision statement? The vision (a desired future goal or state) is a simple rule that must govern the interaction of everyone in the organization. In other words, everything that everyone at every level of your company does should be aligned toward this common goal. Peter Bregman, describing strategy as a people problem, put it best: “To deliver stellar results, people need to be hyper-aligned and laser-focused on the highest impact actions that will drive the organization’s most important outcomes. But even in well-run, stable organizations, people are misaligned, too broadly focused, and working at cross-purposes.”Even a quick mental appraisal of the organizations you belong to—and very possibly your own work patterns—should suggest the difficulty of complete alignment. Certainly without a clear, shared understanding of the company’s ultimate objective, its raison d’être, its North Star, the situation is hopeless.

Screen Shot 2020-06-24 at 1.34.29 PMFigure 2.1: The visionless organization.

Indeed, the argument for having an organizational vision is not just conceptual. A study by LRN, a company focused on principles and ethics, found that companies in which employees were primarily motivated by shared values and a commitment to a mission and purpose are nine times more likely to have high customer satisfaction.” Although we need more empirical studies of the effects of corporate visions, there is widespread agreement among CEOs about the importance and benefits of defining an organizational vision (though vision is often used interchangeably with mission terminology, which explains the greater prevalence of mission statements). More leaders today appreciate the position of
Kevin Plank, founder and CEO of Under Armour, who calls vision his “most important job.” 

One quantitative longitudinal study that analyzed company financial performance from 2004-2009 found that vision directly affected companies by increasing their sales, employment, and profit. However, the impact of communicating corporate vision to employees was an even greater determinant of growth in these areas. And a recent Gallup study of vision in almost 200 organizations in 49 industries in 34 countries found a link between profit and vision. The authors wrote, “As employees move beyond the basics of employee engagement and view their contribution to the organization more broadly, they are more likely to stay, take proactive steps to create a safe environment, have higher productivity, and connect with customers to the benefit of the organization.”

Beyond these positive associations between articulating a vision and organizational success, there is increasing data suggesting the harm associated with a lack of vision. Gallup’s 2017 State of the American Workplace report, highlights accelerating changes affecting the workplace. They warn, “The truth is, organizations have nowhere to hide. They have to adapt to the needs of the modern workforce. If they don't, they'll struggle to attract and keep great employees and, therefore, customers.” The survey data depict a paucity of faith in leadership. The data are damning: Just 22% of employees strongly agree that leadership “has a clear direction for the organization,” 15% strongly agree that leadership makes them “enthusiastic about the future,” and only 13% strongly agree that leadership “communicates effectively with the rest of the organization.” A key take-away from the report was the urgent need for leaders to “define and convey their vision more clearly and to rally their employees around it.”

There is another area in which the data are clear: Most employees are insufficiently aware of and affected by their organization’s vision statement. A recent survey found that 58% of employees in a large global sample didn’t know their company’s vision. Gallup conducted research in 2013 that found leaders, though skilled at process improvements, have a long way to go in terms of sharing core organizational mental models. The associated report explains that many executives don't realize the significance of vision as an asset to improve “organizational performance and profitability, and they neglect their ultimate responsibility of aligning their brand and culture with their highest purpose.” The authors identify failure to deal with organizational needs related to vision as a failure of leadership. James Kouzes and Barry Posner, creators of The Leadership Practices Inventory, analyzed the responses of more than one million leaders on the subject of vision, and found that leaders frequently struggle to communicate “an image of the future that draws others in—that speaks to what others see and
feel." Yet their research also indicates that this attribute is what most distinguishes true leaders from those who are not leaders.

All of this data suggest two issues we must address: (1) leaders must craft a vision in such a way that it is memorable and influential for employees; and (2) leaders must tirelessly inculcate the vision to the organization.