Effective Engineering e-Newsletter – 1/02/2003

This is your bi-weekly e-Newsletter from Effective Engineering Consulting Services (www.effectiveeng.com).  If you would like to receive Effective Engineering e-newsletters as they are published, please send an email to e-newsletter@effectiveeng.com, and we will add you to our distribution list.

eN-030102:

Poor Company Vision Clouds Everyone’s View
  By Tom Dennis – President, Effective Engineering [tdennis@effectiveeng.com]

Everyone in a company wants that company to succeed.  Everyone will do their best to contribute toward making the company a success.  If not told otherwise, people will make their own determination of what they can do to make this happen.  Unfortunately, individual and some group activities can appear more like “Brownian Motion” (that is, everyone is moving fast with high energy, but in a wide variety of generally random directions) than an organized effort toward a common goal.  These individuals or groups may even believe strongly that their activity is absolutely the most essential activity in achieving success.  They may even feel that their vision is perfectly clear, but the actual net result of this wide variety of random “perfectly clear” visions is a cloudy view for the company as a whole.  Further, as cloudy as it may be for those within the company, it is often far cloudier for those looking in from the outside.  This includes customers, suppliers, stockholders, the financial community, and other stakeholders.  If the true view of those involved with a company is clouded, the prospects for its success is cloudy indeed.  It is amazing how many companies operate without a written vision statement, or with a vision statement that is more confusing than clarifying.

It is imperative that an overarching company vision be articulated by the top management of the company so that everyone in the company can key off that vision and march in the same direction, and so that everyone outside of the company can understand the driving forces that guide the company.  This vision need not be long, complex, and cumbersome.  In fact, a long, complex, and cumbersome vision is really counterproductive, since it leaves that vision open to interpretation by all of the parties as discussed above.  The company vision should be short, sweet, simple to understand, and difficult to misunderstand.

Keep in mind that the primary overarching goal of any for-profit company is to make money.  If the company cannot generate revenues, and from these revenues make a profit, that company will not survive for long.  That is not to say that the vision statement for every company should be “to make money”, but the company vision must state what it wants to be and do in the context of the overarching goal of making a profit and growing.

Let’s take a look at how a good or bad company vision impacts the many forces that it affects.

Within the company there are many functional groups that must work together effectively to get products and/or services to customers to generate revenues and make profits.  These include engineering, marketing, sales, business development, finance, customer support, field support, human resources, and more.  There are further sub-groups within each of these functional areas (e.g. within engineering there is development, test, documentation, etc.).  Each of these groups and sub-groups has their own specific functional responsibilities in the organization, and contributes in different ways to making the company succeed.  There often exists a tension between these groups and sub-groups regarding who is responsible for what, who is being an obstacle to achieving certain milestones, whose role is most critical, etc.  These tensions can be healthy (where the differences between the groups and sub-groups improve the decision making process and make a net positive contribution) or unhealthy (where groups or sub-groups actively work against each other and impede effective decision making and make a net negative contribution).  When everyone involved has a common vision they are keying off of, the odds of them working together effectively are significantly improved; when each has their own perspective of the company vision, the tendency for them to be working at cross-purposes is significantly increased.  With a clear vision, simple problems get quickly resolved and complicated issues get addressed jointly in a spirit of cooperation; with a cloudy vision, turf battles erupt and turn into “us versus them” rather than “we”.  A simple and clear common vision can do more to head off unintended consequences than any “peacemaking” efforts ever can.

Outside of the company are a variety of “stakeholders”.  These include customers, suppliers, stockholders, financial analysts, and many more.  Each of these stakeholders also benefits from a well-articulated company vision (or suffers from a poorly stated vision or no vision statement at all). 
► Customers need to determine if your company vision matches their vision of what they’ll get from your company.  Are they willing to bet their future on your company? 
► Suppliers need to determine if your company will be a good customer of theirs.  Can they count on your company to give them continuing business? 
► Stockholders need to be able to make informed decisions about the company and its directions. 
► Financial Analysts need to make assessments on behalf of current and potential investors. 
► Other stakeholders (anyone with a stake in the future of your organization) need to understand what the company thinks it will be when it grows up, and how it intends to get there.

Overall, a simple statement of a company vision goes a long way toward getting everyone (employees, customers, suppliers, stockholders, financial analysts, and others) on the same page, and this simple act can give everyone a clear view.


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