This article is an excerpt from the Shortform book guide to "Traction" by Gino Wickman. Shortform has the world's best summaries and analyses of books you should be reading.
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What is a company vision? How do you define and communicate it across all of your business functions?
A company vision consists of the values, beliefs, and principles that guide the business towards its ultimate purpose. Most business owners have a clear idea of what they want their company to become, but the problem is that oftentimes others in the organization don’t see it.
Here is how to create your company vision and make sure it is understood and internalized across all of your business functions.
What Is Company Vision?
Most business owners have a company vision, which they assume everyone else can see as well as they can. But many times, others in the organization don’t see it—and when people are confused, they go in different directions and visions can’t be realized.
To get traction—the ability to execute, or make the company’s vision a reality—you need to clearly define and communicate your vision.
Your Defining Values
Creating a vision starts with defining three to seven core values that serve as guiding principles for your company. They define your culture and who you are. When your core values are clear and compelling, you’ll attract people who share them and discourage those who don’t from sticking around.
You build a culture around your core values by letting them guide you when you hire, fire, review, and reward people. In Built to Last, Jim Collins and Jerry I. Porras write that successful companies defined their core values early in their development and built a culture around them.
In contrast, most businesses lack clarity about where they’re going, which hinders their growth.
How to Determine Your Core Values
Here are four steps to determine your company’s core values:
Step 1: Think of three people in your company who stand out as star performers.
Step 2: List the characteristics these people embody. What do they do or what values do they exemplify—for example, working hard, serving customers, and acting with integrity or imagination.
Step 3: Your core values are among the characteristics you listed. Combine similar values and narrow the list.
Step 4: Decide which three to seven values define your company. Examples are: service, results, or cutting-edge knowledge. Think about them for a month or so, then finalize them.
Communicate them to your employees in a compelling way. Write a speech that backs up each value with stories and examples of people in your company applying the value. Present the speech at a company-wide meeting. Also, explain the values and examples when you interview job candidates—and ask them about ways they have applied those values in their previous work. You’ll make better hires if you determine whether candidates share your values before you evaluate their skills.
When your core values are part of the common language in your organization, they’ll become a way of life.
Your Company’s Main Focus
The second step in defining your company vision is determining your company’s main focus. When talking about their main focus, businesses use different terms for it, including mission, core business, and “sweet spot.” Your core focus is the job your company excels at. It should get your time and resources.
It’s the responsibility of your leadership team to establish your company’s core focus and make sure nothing distracts from it. When you clarify your focus, you may discover that you need to streamline the business, eliminating unrelated product lines, positions, or even divisions that don’t fit. While this is painful, it strengthens the company in the long run.
How to Determine Your Focus
To determine your core focus, you need to know two things: your company’s reason for being and its niche. Here are some ways to think about these components.
1) Why does your company exist? What’s its purpose or mission? The answer doesn’t have to be unique to your business; when you answer the niche question, you’ll be looking for what’s unique or differentiates your business from others.
To define your purpose or mission, strive for an answer that:
- Is no more than seven words
- Is simple
- Is bold
- Resonates emotionally
- Involves everyone in the company
- Doesn’t involve money
- Is broader than a goal
An example of a purpose or mission would be “to improve the quality of life in our town.”
2) What’s Your Niche? What specifically do you do that fulfills your mission? The answer should be simple and useful in making decisions about how to spend time and resources. Examples of niches include: popcorn (Orville Redenbacher) and solving complex real estate problems (a real estate company).
Here are some examples of both mission and niche, which together define a company’s core focus:
- A paving company: being the best (mission), quality asphalt paving (niche)
- A construction firm: exceeding expectations (mission), completing every aspect of a project (niche)
- A laser printer company: building a great company, with great people and results (mission), simplifying companies’ printing environments (niche)
As you concentrate your company’s efforts on its core focus (purpose and niche), you’ll see increased success and profits as a result of building on what you do best. It’s like playing golf: a golf club has a “sweet spot” that, if lined up with the ball, sends the ball farther and straighter, improving your score. Your company’s core focus is its sweet spot—if you stick with it, your business will get the best results.
Share Your Company Vision
With the completion of your company vision, you have a basis for building and implementing the rest of the Entrepreneurial Operating System (EOS™). Next, share your vision with employees so everyone is working toward the same goal. Communicate your vision with three company events:
1) A kickoff meeting at which you present your vision, using your core values speech and answering questions.
2) A quarterly company status meeting at which you share progress, review the vision, and share the priorities for the next quarter.
3) A quarterly leadership meeting to set both company priorities and priorities for each department to support the overall vision.
The meetings will give employees clear direction, which will enable them to make better decisions and enable you to “delegate and elevate.”
Employees typically need to hear the vision seven times before it sinks in, so it’s critical that you, as the leader, deliver a consistent message repeatedly. Expect to keep repeating your company vision, as opposed to expecting employees to get it by the second or third time.
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Like what you just read? Read the rest of the world's best book summary and analysis of Gino Wickman's "Traction" at Shortform .
Here's what you'll find in our full Traction summary :
- How a first-time entrepreneur can gain the traction needed to grow
- Why hard work and determination aren't enough for your business to succeed
- The 6 key principles of the Entrepreneurial Operating System
