The Illusion of Invincibility. Paul WilliamsЧитать онлайн книгу.
become the world’s most loved, most flown and most profitable airline.” (Southwest Airlines)
Simon Sinek, the successful TED speaker, author, and management consultant, links this with the “Start with why” effect. Almost everyone knows what a business does, and some people know how it does it, but it is rarely clear why it does what it does. Most visions get stuck at the level of “what we do,” as shown above. That’s the reason they are so long and boring. “Why” visions inspire, are meaningful, and provide a real vision: A fair chance for every child, improving everyday life, making information available at all times to everyone, feeding the world. This “why” is also the key difference of mission statements, which are often confused with visions. Just as a reminder: A mission statement describes what a company wants to do now and how it will do it, whereas a vision statement outlines why a company exists and where it wants to be in the future. Management visionary Jim Collins uses the catchphrase “Big, Hairy, Audacious Goals” (BHAG) instead of visions, meaning a picture of a very large, bold, extremely challenging (“hairy”) distant objective, an inspiring “Mount Everest” which the business wants to conquer in the next ten to thirty years. Good BHAGs—pronounced “bee-hags”—are not just marketing talk; they drive things forward forcefully and effectively. The bar is thus set pretty high, and so it’s not surprising that, despite the surfeit of visions, a really cracking, inspiring vision is rare.
Why Striving for Increased Market Share Is Not a Vision
So, you’d like to be “number one” in your industry? Well, what might seem like an exciting and motivating target is something you might want to think about a little more carefully before proceeding. Is that really a sensible objective? Watch out if your top management starts to toy with the idea of such a so-called vision. Maybe VW wouldn’t be involved in constant legal battles if former CEO Martin Winterkorn hadn’t announced his objective to topple Toyota from its title of largest automobile manufacturer in the world. A good vision guides workforce behavior positively, whereas overambition can take it in the opposite direction. Would there be an exhaust emissions scandal caused by “cheating software” if VW hadn’t wanted to expand its markets in the US in order to reach its ambitious targets? Would Deutsche Bank have been hijacked by investment bankers with their “boom or bust” mentality if, like many other banks toward the end of the nineties, it had not wanted to join the ranks of global players, cost what it may? Would the Inca Empire have been able to put up sterner resistance against the Spanish if it had started earlier to shift from rapid expansion to internal consolidation? The focus on a goal such as “being number one” gives employees the impression that anything goes, as long as the activity is helping to achieve this target. In the cases of VW, Enron, Arthur Andersen, and others, it created a values-free zone, in which behavior was no longer subject to accepted company values or even those of wider society.
We look at this issue more closely in Chapter 4, “Fair Play or Shifting Values.” The following example illustrates some of the other dangers of seeking to be Number One.
“Vision 2020” or How to Provoke Poor Investments
It is the turn of the millennium and we are at a Eurostoxx 50 company, an engineering business in the process of launching its “Vision 2020” which foresees a large-scale transformation, creating thousands of jobs and generating billions in turnover. Within the next twenty years, one of its key business units should, once again, rank in the top five in the world. In the previous ten years, the business has dropped out of the top five, falling to sixteenth place, so the vision seems to make sense and be strategically sound. It is communicated worldwide across the organization by means of a large number of meetings and workshops, and ambitious targets are set. So, why did the whole initiative eventually fail, considering how much was invested in the new business approach and how many employees embraced and adopted it enthusiastically? Here are four reasons, all of which are applicable to other businesses.
1. It did not have the full backing of the Board
The 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