To successfully grow a business, it’s vital to maintain a clear and coherent strategic vision. An ambitious idea of where an organisation is going and what it stands for are key factors in future success in everything from employee attraction and retention to customer success and the bottom line.
Shared vision has a measurable impact on a wide range of performance measures according to the Massachusetts Institute of Technology. The Institute found that investment returns from 18 “visionary” companies were six times higher than their peers that did not manage with a vision.
However, research by Rungway of 2,000 employees in the UK has found that 52 per cent can’t communicate their organisation’s vision and 49 per cent cannot remember its values.
This suggests that some businesses are missing out on the benefits of having a clear and simple vision built into the fabric of their organisation.
While there is a growing appreciation for the importance of vision, with leaders like author Simon Sinek driving discussion on the issue, in order to ensure consistent and sustainable success it’s vital that businesses build on this. It must form a core part of the strategy – informing a robust and realistic plan that is effectively communicated to employees and embodied by action.
Why is having a vision so important?
As one of the more conceptual elements of business planning it’s easy for senior leadership teams to minimise the importance of vision and purpose. After all, it’s harder to model and doesn’t necessarily produce immediate results, however, it is a foundational element of building a successful and sustainable organisation.
The evidence for this is overwhelming, McKinsey has found that teams that work towards a common vision are 1.9 times more likely to post above median financial performance – highlighting the clear financial benefits that a strategy informed by an overarching vision can offer.
These financial benefits are driven in part by the coherence in planning and strategy that a vision offers. Engaging with experts and maintaining common objectives and targets related to a predetermined vision improves the coherence of all business activity across all business functions, helping to ensure that tactical actions work in synergy towards common goals.
It also has its own benefits for employee retention, motivation and candidate suitability. A good vision improves planning, meaning businesses are more likely to understand what is required from their employees – while uniting staff behind common goals and values can improve motivation which naturally leads to higher retention levels and improved performance.
Forbes found that employees that don’t find their organisation has a meaningful vision had an average engagement score of only 16 per cent. This is in stark contrast against organisations with an “average” or “high” level of meaningful vision, these businesses scored 40 per cent and 68 per cent in employee engagement respectively.
Communication is key
There is still some level of disparity between the creation of a vision and the strength of the internal communication that ensures employees are aware of it. Gallup’s 2016 report How Millennials Want to Work and Live showcases this, finding that only 40 per cent of millennial employees surveyed feel they are strongly connected to their company’s mission and wider vision.
Without clear communication the effectiveness of a strategic vision is significantly reduced as employees are not aware of the vision they’re working towards and the part they play in delivering it. Therefore, an integrated approach that prioritises communication of the vision is vital. This can be achieved by ensuring that messaging to employees is clear, and the vision statement of the organisation is tied to achievable goals that resonate with employees – providing a tangible link between day-to-day work and the long-term strategic goals.
Beyond the work itself, it’s important to also ensure the organisation embodies its values and reminds stakeholders of its vision in all communications. This can be achieved using language that engages with employees and customers, and by effectively sharing company success stories that demonstrate the power of the organisation’s vision, purpose and values.
Ultimately these elements are a key part of creating a value creation plan that is connected to the overall ambitions of the company as well as the employees on a day-to-day basis. This overall approach is vitally important to ensure that a smart strategic vision, informed by industry experts and engaged partners, is supplemented by a coherent rollout to both employees and customers. It maximises the value created throughout the process and helps to build a strong foundation for the future sustainability of the business.
Rungway research shows that half of employees can’t recite their company’s vision or values. Over a third wish they were more involved in contributing to their company’s vision and one in five say that the vision doesn’t reflect what the organisation is actually like.
Private equity supporting ambitious vision
Private equity can play a key role in supporting the definition of a compelling vision that a business and its people can drive towards, whilst also focusing on maximising shareholder value.
Beyond supporting in more traditional ways, such as active partnership and financial investment, we can provide insights on how to integrate a vision into the core of an organisation and the value creation plan – helping to guide portfolio businesses through the implementation process to secure buy-in from employees and improve the chances of successfully delivering the strategic objectives.
We connect portfolio businesses with a diverse range of industry experts and business leaders, from across our network and portfolio, who can help to provide a new perspective that can drive value creation. By taking this insight and combining it with investment, internal advice and an understanding of how to grow businesses, we can play a pivotal role in supporting portfolio companies in the development and implementation of a transformative vision and value creation plan.
Vision is the ability to talk about the future with such clarity it is as if we are talking about the past.Simon Sinek