Why is it that only about 30 percent of privately held companies move beyond the founder and transition to a second generation? One primary reason is that there is no roadmap from “here” to “there.” Many founders are both highly entrepreneurial and highly opportunistic. They often operate with a compass instead of a map, meaning they are moving in a specific direction but not looking for a specific destination. While we see incredible success from many with that model, it is rarely transferable to a subsequent generation of owners/leaders. That’s why we encourage our clients to understand and utilize the power of vision in order to set a clear course toward a compelling future.
When we speak of vision, we aren’t talking about a marketing slogan or a tagline. By vision, we mean clearly answering the questions, “Who are we?” and “Where are we going?”
We like Jim Collin’s model of vision as the joining together of a Core Ideology and an Envisioned Future. The Core Ideology (purpose and values) ensures that wherever the organization goes in the future, it re-mains true to its roots. An Envisioned Future (clearly articulated description of a preferred future) gives clarity, energy, and focus to those who will carry the company into the future. This is not something that can be done well in a single afternoon. And no matter how comprehensive the process, if it is not created by a team representing both present and future leaders, it will likely be ignored. And even if the right people create the right roadmap for the future, if it’s not relentlessly communicated early and often, both broad and deep, it’s unlikely to create an impact. So, it’s not easy, but if you get it right, you’ll create a lot of tailwind as you move forward.
These types of exercises often feel like corporate navel-gazing to many, particularly to smaller companies. But the end-result is not a plaque on the wall or a sign on the side of our service vans. The result is for our people to find security and direction in clarity, which almost all people are looking for. One of the guys on our team often says, “In the absence of clarity, people will jump to the most pathological conclusion possible.” When we conduct leadership assessments for companies and ask questions about vision and culture, we often find that this isn’t much of an exaggeration!
Your people may not specifically be asking existential questions like “Who are we?” and “Where are we going?” But they are asking, “Is this the place for me to build a career?” And if you as an owner are of a certain age,
“What’s going to happen when the old man is done?” If those questions go unanswered year after year, there are several undesirable consequences. Your best people are highly susceptible to seeing better opportunities elsewhere. You’ll have a harder time deciding when to step away. Most importantly, you’ll miss the chance to lead well by inviting people to commit to an incredible adventure together. It was Jack Welch who said, ““Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” We are committed to seeing our industry experience the power that great vision brings.
Ron Magnus, managing director of FMI’s Center for Strategic Leadership with Ed Rowell, CSL consultant.