Why Vision Matters
by Robert Knowling

Leader to Leader, No. 18 Fall 2000

In business, as in life, good intentions are often lost. Our everyday practices, not our espoused values, define who we are. To align good intentions with effective practice, leaders need to define a vision, articulate values, and infuse both into every aspect of the business.

Most leaders love to make strategy, but it is vision and values that spawn strategic action. The absence of a vision will doom any strategy -- especially a strategy for change. A true vision shapes your hiring, assessment, and promotion of employees, and your behavior toward customers, partners, and investors. It is a more powerful tool for leading an organization than any market analysis or spreadsheet. But defining your vision (the expression of what your company wants to be) and articulating your values (the principles governing how you operate) are not easy or painless.

The first step in visioning is to assess your organization, your industry, and your sector of the economy. What do you do uncommonly well, and how do you fit into the changing landscape? For me, the next step is to take the management team to an offsite to look at depth at these questions .

Matching Effort to Results

Many people in the company wonder why we invest such time and effort inculcating our vision and values. We will be a negative-cash-flow business for the next two and a half years; why are vision and values a priority? Why not invest in marketing or delivery systems? Leaders are always tempted to focus on core business deliverables rather than "the distraction" of vision and values. But leaders have to pay attention to both. I invest our resources in vision and values because company culture is inseparable from strategy -- and because I don't want to wake up one day and have a profitable organization that does not have a soul. Without an identity that we purposefully shape, we have no future.

A disciplined approach to vision and values helps employees understand what's important in the business. It tells us not just what, but also how and why we are expected to deliver. We assess people according to two criteria -- their current performance and their values. We use a nine-cell matrix borrowed from Action Learning Associates (see figure in our hiring process, performance reviews, and succession planning.

For instance, in succession planning, I first rate each manager's performance and leadership values. Then the rest of the management team challenges me based on their observations. Rarely do we agree on all candidates, but they usually fall into one of three groups. There are the easy calls -- high performers with good values. There are others who have the right attitudes but have performance problems. We try to help them succeed if we can. Finally come those who get results, but do so at the expense of teamwork, integrity, openness to change, development of others, or the interests of customers. People who don't share our values are cancerous to the organization, regardless of their performance. In my experience, every time you invest trying to save these people you end up regretting it. It's simply too difficult to change people's values.

Putting Teeth into HR

Obviously, it is not enough to cheerlead for values; you still have to make tough business decisions. In 1998 I joined Covad Communications, the first company other than a traditional phone company to offer Digital Subscriber Lines for high-speed Internet access. After less than 30 days on the job, I saw that our sales strategy was wrong. We would never get the necessary reach or volume with a direct sales force; we needed multiple channels and partners. About 40 people, in a company of less than 200 at the time, were affected by this change. My opening act was to say that 20 percent of the workforce had the wrong skills for the job, and by the way, and the company's current strategy was doomed.

The only way a leader wins support for those kinds of decisions is to make the business case, to respect people and the organization, and to slowly build trust. No boss can do that without strong leadership in the management team and throughout the organization.

Walking the Line

Leaders also must connect with customers, partners, and front-line employees. If you really want to understand a problem, go to the front line and give people your ear. It is amazing what you will find out about your business, your customers, and how life really is.

I recently made changes in our business as a result of a visit to a reseller of our service. My host wanted to give me an executive tour, but I asked if I could sit with someone who worked on our account. It was a revelation. The young woman I met showed me what she had to go through to do business with us. She was trying to correct a mistake on a customer order. She had to talk to four people at Covad -- and none of them could fix the problem. Why not? That order passed through our company like a part on an assembly line. No one had accountability for where it went next. It reminded me of a culture I know well -- the phone company. Of course, phone company mentality is not unique to the phone company.

We implemented a system that I think will change the way our partners view us. We made a supervisor and a dedicated team responsible for each of our channel partners. It will create a new customer experience. But I never would have seen that problem if I did not sit with someone who does our work.

It takes time and commitment to be at the front line. It also takes an ability to relate to people. One of the first things I learned as a manager was a communication technique called FORM. You can learn a lot about people and open useful conversations about your business by asking about any of these elements:

Family -- what's happening with spouse, children, immediate relatives (usually the most important thing in people's lives)
Occupation -- what they like or don't like about their job
Recreation -- how they spend their time away from the job
Money -- how they spend it, what they enjoy; what's important to them

Leading for Change

Leadership is about managing the constant of change. The market and the world shaping your market are never going to stand still -- especially in the New Economy. One technical breakthrough or blockbuster deal could render your strategy irrelevant overnight. Leaders have no choice but to be fluid, to learn to deal with the ambiguity, to be able to change their business model. That is why it is so important to have an overarching vision and values to steer by.

But, given a clear vision and strong values, how do we help move an organization forward? I have discovered few great ideas on my own; friends, colleagues, and mentors have taught me most of what I know. However, I have led large-scale change efforts in three organizations, and have found that several principles hold.

Knowing the Warning Signs

Most change efforts fall far short of their potential. Even with principled leadership, implementing change is a messy, perplexing, and never-ending process. I have found five warning signs that can undermine change.

Leaving a Legacy

You cannot build value for customers, shareholders, or the community without a vision and values for your organization. You build value by becoming the leader in your field, the company that everybody wants to work for, buy from, or invest in.

It takes tremendous confidence to stake out that territory and to lead others toward it. You have to withstand the doubts and loneliness of leadership. At the same time you have to acknowledge to yourself and others that you don't always know how you will reach your destination. For others to follow you through times of uncertainty requires mutual trust and faith. That is what clarity of vision and commitment to values can bring.