#22 The main reasons nobody cares about your corporate vision
This episode was recorded in German.
Everyone knows them: the dull, meaningless or interchangeable corporate visions and mission statements hanging in long company hallways.
There are the visions whose slogans range somewhere between "market leader" and "number one in the market." Odd interpretations of missions and visions where one glance makes it clear: nothing here is clear. And then the whole thing gets garnished with a potpourri of values that usually kills your appetite instead of whetting it. Yes, mission statements matter, and yes, good mission statements are an art form that takes a lot of time to develop, which is why they're rare.
So if you have visions, don't see a doctor. Ask yourself instead: is my vision motivating enough, and does it create momentum for our corporate strategy?
In this episode, you'll learn what makes a good corporate mission statement, what the alternatives are, and how to use "Big Hairy Audacious Goals" (BHAGs) to set big goals that motivate and inspire while also creating a positive impact.
Detailed episode description:
Table of contents
- Better no mission statement than a bad one
- What is a mission statement, anyway?
- Alternatives to the mission statement
- BHAG: "Big Hairy Audacious Goals"
- What are BHAGs?
- BHAGs with positive impact
- BHAG examples from practice
- Three guiding questions for formulating your BHAG
- Contact
- Show notes
Today's episode in the strategy knowledge category is about the North Star your strategy should be aligned with.
Our guiding question: how do you find the North Star for your corporate strategy?
Better no mission statement than a bad one
A popular quote I keep running into in this context comes from Helmut Schmidt, the former German chancellor: "Anyone who has visions should see a doctor."
I'd energetically disagree, of course, but he's right about one thing: most mission statements really are something you'd rather do without.
So why do so many companies still try to run a mission statement process alongside their strategy process? After all, you've read it and learned it: no strategy without a mission statement. The mission statement is the anchor, the North Star, but often enough it ends up as a stopgap, and in the end it's no cure-all either. Of course your strategy should rest on something substantial, but one statement has proven itself in practice over the past 15 years: better no mission statement than an unbelievably bad one.
So it's all or nothing. Either you decouple the mission statement process from the strategy process and put it first with enough time, or you need a good alternative.
What is a mission statement, anyway?
If your mission statement is your North Star, the why we exist, then your vision statement is the mountain you want to climb: what you want to achieve and how it feels to reach that goal.
Together with your corporate values and principles, the mission represents the philosophy of your company and should therefore have an extremely long shelf life. According to Prof. Esch, 100 years and more is a good benchmark. Your vision plays in a different league at 10 to 30 years, with an additional external dimension. It should not only help your team make strategic decisions about the long-term goals that have to be reached on the way to fulfilling the mission. The vision can also make a difference for external stakeholders such as banks, investors, potential employees and customers. Ideally, the vision delivers clear answers to the "why?" and "how?" behind your mission statement so you can reach your company's mission.
If you want a real-world example of how to approach a mission statement properly, you'll find inspiration in our very first podcast with Jan Hoffmann from Viessmann, who solved this beautifully.
A link to the episode is in the show notes, of course:https://www.underwood.de/podcastfolgen/01-vi-have-a-dream
Alternatives to the mission statement
But time is precious, and to create real momentum with the power to inspire, it pays to have a genuine alternative that creates clarity. Since there's more than one road to the goal, here are a few other ways to align your strategy: with his "Golden Circle" and "Start with Why," Simon Sinek created a nicely pragmatic approach. A more drawn-out and deeper option would be developing a "purpose," which operates at the same altitude as the mission statement but usually takes just as long as developing a mission statement, and can run into similar problems.
BHAG: "Big Hairy Audacious Goals"
One method has proven itself in practice, and we've added a small twist to it. We're talking about the BHAG. Pronounced bee-hag, it stands for "Big Hairy Audacious Goals." Big, challenging or bold goals. Introduced by Collins and Porras in the mid-90s, the BHAG has ended many companies' search for a driving force with impact. And when we talk about truly big goals, take that literally.
What are BHAGs?
Your BHAG should be inspiring and long-term, lifting your company to the next level. BHAGs are enormous undertakings that take 10 to 15 years to accomplish. They push the boundaries of what your company can do and challenge your team to make huge progress. The lines between visions and BHAGs are fluid. When they're first set, BHAGs often look like goals that are nearly impossible to reach. Think of President John F. Kennedy's 1961 announcement that the United States would land a man on the moon before the end of the decade. In 1961, that claim looked more like a dream than a possible future reality. But by setting that goal, President Kennedy inspired the United States to achieve what seemed impossible.
BHAGs with positive impact
To give BHAGs a bit more depth, and to get a combination of mission and vision with a strong shot of adrenaline, we've added the notion of impact to the BHAG's direction. This addition draws attention to the impact the company wants to create, and when formulated well, it has enormous potential to inspire.
Why impact? Impact statements show how your work makes a demonstrable, verifiable difference in the lives of people, communities, your company and the environment, across the three dimensions of social, economic and ecological conditions: ESG, in short. The impact statement closes the gap between BHAG and ESG, meaning sustainability in the holistic sense. Documenting the results of your efforts is also increasingly expected by funders and stakeholder groups. Defining what impact you want your actions to create helps.
Purely financial targets are out of place here, and not just when it comes to impact. Revenue and profit are a consequence, not an end in themselves. Describe the topic or problem (relevance) you want to solve for your main target audience, in simple, fitting words.
BHAG examples from practice
One of the finest, most impactful BHAG examples comes from carmaker Volvo:
By 2022, no one will be killed or seriously injured in a new Volvo.
One consequence for Volvo: capping every new car at a top speed of 112 mph. Consistent and powerful.
Microsoft also had a vision that worked like a BHAG:
Microsoft's famous goal was to put a computer on every desk and in every home.
More examples
Airbnb: Create a world where anyone can belong anywhere
Evernote: Remember everything
Feeding America: Ensure equitable access to nutritious food for all
Facebook: Connect the world
Google: Organize the world's information
Michael J. Fox Foundation: Find a cure for Parkinson's
Microsoft: Put a computer on every desk and in every home
Spotify: Unlock the potential of human creativity
Tesla: To accelerate the world's transition to sustainable energy
Volvo: By 2020, no one will be killed or seriously injured in a new Volvo.
Three guiding questions for writing your BHAG
So how do you create a BHAG that actually has impact? Picture three circles with three guiding questions:
1. What are you deeply passionate about?
2. What can your company be the best in the world at?
3. What drives your economic engine? Is it profit per customer? Profit per meter? Profit per shipment? What is your "x" in "profit per x"?
Where these three questions, or circles, overlap, you'll find your focused BHAG with impact.
We hope this gives you some inspiration for the foundation your strategy should rest on.
Contact
If you have questions, want a review of your guiding principles or BHAG, or are planning a process like this, I'd be glad to hear from you at christian@underwood.de
SHOW NOTES:
Christian Underwood:https://www.linkedin.com/in/christianunderwood/
Hope Is Not a Strategy:http://www.hoffnungistkeinestrategie.de
Preorder the book Hope Is Not a Strategy nowhttps://www.underwood.de/buch
Underwood GmbH:https://www.underwood.de
HIKS podcast episode with Jan Hoffmann of Viessmannhttps://www.underwood.de/podcastfolgen/01-vi-have-a-dream