Why Having a Clear Vision Is Crucial to Success

I’ve spent lots of time on this blog discussing what makes a bad leader, enumerating all the ways that CEOs can undermine those who report to them by being controlling, manipulative, and undermining. But what about the flip side? What makes an inspiring leader? I’m not talking about charisma, which plenty of mean men possess in spades. Every effective leader I’ve seen in my decades of working as a management consultant has had one huge thing in common that differentiates them from all the others: vision. A confession. Though it’s fairly accepted that vision is a necessary element of leadership now, I didn’t believe in “the vision thing” when it first became a trend in management circles in the 1980s. When the idea first started getting buzz, I suspected the notion of organizational vision might be just another fad. I’m inherently skeptical of any new silver bullet that promises to cure a range of organizational ills, and back then vision was the cure-all du jour. Yet, after a few years as a cynical consultant, I found myself intrigued by the staying power of the idea. However, broad studies analyzing the impact of vision were nonexistent at the time. I still found the idea of vision as a management tool a bit “squishy,” but I didn’t have the data to prove it. A good vision seemed to be something that—similar to the old saying about pornography—one knew when one saw it; the criteria were too vague to be useful.

As a management professor, I decided to take it upon myself to confirm my own suspicions and prove that having a vision would have no noticeable difference on organizational performance. But a year into the first leg of my research project on the impact of vision, I started to see some very surprising data. My hypothesis, I began to realize, was dead wrong. Contrary to my expectations, I found that a well-articulated vision, when implemented throughout an organization, had a profoundly positive impact. Data doesn’t lie, and I found myself converted from skeptic to true believer. As my research continued and I uncovered some of the key characteristics of a successful vision (which I will enumerate in a separate post), I was able to begin testing some of the best-practices results with a range of organizations in the private, nonprofit, and public sectors. Consistently, I found that once senior executives were able to break through the natural barriers of resistance that often bring the process of developing a coherent vision to a screeching halt, they too became believers.

The data is convincing for any CEO invested in the bottom line. Publicly owned firms that use a vision to guide their growth have significantly higher market-cap, top-line, and bottom-line growth in comparison to their competitors who aren’t driven by the vision process. Firms with a vision were twice as profitable as the S&P 500 as a group, and their stock price grew at nearly three times the rate of others. An analysis of average compounded total return found the vision-driven firms earning their investors 17.69 percent more than the S&P 500 overall. A well-conceived and well-implemented vision doesn’t yield this kind of bottom-line performance magically. It results from the ways in which employees are challenged by the vision and remain focused on a clear, yet distant target. These firms had higher productivity per employee, greater levels of employee commitment, increased loyalty to the firm, greater esprit de corps, clearer departmental and/or organizational values, and a greater sense of pride in the organization.

Some executives I meet still regard vision as “squishy,” assuming it will be too difficult to quantify. But my research and experiences over the past decade make a nearly incontrovertible case that the vision process has a profound impact on organizational performance. Better still, that performance is measurable.

So what gives? Why do so many CEOs believe in the need for vision yet fail to follow through on the process to develop and implement one? The reason there is cynicism about “the vision thing” is less about the actual failure of a vision than it is about a leadership failure I call The Believing-Doing Gap: while there’s a lot of talk about vision, few at the helm actually follow through on the work required to bring their vision to life.

The vision process—when fully executed—demands a considerable amount of emotional engagement that I find many executives are ill prepared for. Most become myopic when it comes to vision. A successful vision is not simply a question of crafting a few paragraphs of verbiage that sound snazzy on a website’s home page. A successful vision requires personal passion about how you want to make an impact on the world—whether you run a corporation, a nonprofit, or a government agency. Regardless of the organization’s motive (to make money or provide social good), there must be clarity about what you want to change or create. Without substantive ideas and concrete actions, the process becomes a joke, often backfiring on the leader responsible as others become cynical. As long as the gap between believing and doing persists, no vision will be effective.

So what does a successful vision look like? A guiding vision should be broad enough that it speaks to everyone in the organization, while telling an engaging story that people want to be a part of, one that challenges them and creates a sense of urgency. But the words are not enough. Success comes when the vision becomes embedded in the daily decisions made and actions taken by leaders at all levels of the company. A vision is not merely an extended strategic plan or mission. If a mission is what you do, a vision is why you do it. When we see a vision that is working, guiding an organization to sustained growth, we know that behind it are leaders who are comfortable leading with their hearts as well as their heads.

In the next few weeks, we’ll take a closer look at common pitfalls of the vision process, as well as some secret shortcuts and tension reducers that I’ve used to help executives frame the vision that fits both them and their organizations. I hope to help you hone in on your own vision for the coming year.