Apr
04

Business Vision: How to supercharge yours for a more profitable business

posted on April 4th 2017 in Best Practices & Business performance & How to be a better manager with 102 Comments

Business vision

Is it possible that your business vision can influence your business’ profitability?

In February of 1996, the Journal of Applied Psychology published the Longitudinal Study of the Relationship between Vision and Vision Communication to Venture Growth in Entrepreneurial Firms. The study was conducted by J. Robert Baum and Edwin A. Locke. Baum and Locke are both professors at the University of Maryland’s Robert H. Smith School of Business. Together they designed the study to explore if there is any relationship between having a clear business vision, communicating it with your staff, and the impact of both on the profitability of business.

Their findings are enlightening. Baum and Locke established that having a clear vision significantly affected an organisation’s performance, both directly and indirectly, through vision communication. They also found that it is possible to produce a quantitative measure of vision.

How does this translate into what we already understand about vision and mission statements? What is the relation between business vision, vision statements and mission statements?

According to the Harvard Business Review, a vision statement is “what an organisation wishes to be like in some years’ time.” A mission statement “describes what business the organisation is in (and what it isn’t) both now and projecting into the future. Its aim is to provide the focus for management and staff.”

When Baum and Locke investigated the impact of a clear company vision on its profitability, they used vision attributes, vision content, and vision communication as variables in their study.

Here’s a brief explanation of each variable:

  • Vision attributes are a set of characteristics that describe business vision. According to Baum and Locke, there are seven predetermined attributes that are necessary for vision to be effective. The attributes are: brevity, clarity, abstractness, challenge, future-orientation, stability, and desirability or ability to inspire.
  • Vision content includes elements described in the business vision, such as market share, financial strength, organisational performance and quality of products.
  • Vision communication relates to whether a business has a written business vision, and if the CEO talks about the business vision to his employees.

“Business vision” is, therefore, a combination of a typical vision and mission statement. While vision statements explain what a business wants to become, a “business vision” (as explored by Baum and Locke), is a marriage between inspirational and guiding initiatives of a vision statement, and objectives of a mission statement.

How to supercharge your business vision

Crafting your enhanced business vision is all in the details. You must articulate what you want for your business in no uncertain terms. To create your answers for each question, pay special attention to the seven vision attributes, making sure that you articulate a business vision that stays true to each attribute. Here is each attribute along with a question to help you apply them to your business vision:

  • Brevity. Is your vision described using concise and exact words?
  • Clarity. Is your vision clear to everyone in your organisation if they had to read it?
  • Abstractness. Does your vision represent a general idea instead of a single, one-time goal that is discarded once met?
  • Challenge. Does your vision motivate your staff?
  • Future-orientation. Does your vision have a long-term focus?
  • Stability. Is your vision abstract and general enough to not be affected by market changes?
  • Desirability or ability to inspire. Is your vision representative of an ideal that your employees will find worthy of pursuing?

Determining which elements will form part of your business vision is entirely specific to your business. There are, however, some elements that are more common for businesses in general. We’ve listed a collection of the more common elements that leaders focus on when creating impactful business visions, along with questions to help you create the most complete and concise answers:

  • Customer impact. What will customers think and feel when they interact with your products and people?
  • Employee growth, talent acquisition, and culture. How will you attract, retain and develop the very best people in your business?
  • Shareholders satisfaction and obligations. What shareholder obligations will you meet?
  • Market share growth. What portion of the market would you like to capture?
  • Socio-economic impact. What impact will your business have in your community?
  • Product development. What new products will your business develop in the future?
  • Revenue growth. What revenue goals will your business achieve?

Maximising vision communication

With your new and enhanced business vision in hand, your next step is to make it known to all employees. Vision communication is an integral part of vision realisation. A clearly communicated vision acts as a guiding hand for employees, a source that they can turn to for inspiration when times get tough. Two impactful ways to share your enhanced business vision are:

  1. Make it an event. Titans like Apple, Tesla, and Microsoft do fantastic jobs at inspiring the world to take action and buy their products. Take a chapter out of their playbooks and put together an event dedicated to sharing your enhanced business vision.
  2. Make it visible. Often, work can demand a tremendous amount of focus, and company ideals get lost along the wayside. To make sure your vision lives on, decorate your office with snippets of your vision. Common areas are great places to share your vision because of the foot traffic and the amount of time that people spend in them. Passages and walkways are equally valuable real estate that you can use.

Conclusion

As proven by Baum and Locke, a well-articulated business vision has the power to impact venture growth. Make yours as detailed as possible by focusing on the future you want to create for your business, and share it extensively with your employees for maximum effect.

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