Strategy starts with Purpose and Vision (Part 2)
As discussed in my previous post, to develop a clear and effective strategy for your company you need to understand your purpose and vision, the pillars that strategy is built on. Your purpose is why you exist. Your vision is the destination you are aiming for.
The why, where, what and how
Organisations can often get purpose, vision, mission and strategy confused. It can be helpful to think of them as the why, where, what and how of the thing you do.
Purpose: Your purpose is why your company exists.
Vision: A forward looking statement, describing what the future looks like when you are successful. It’s where you are headed.
Mission: Describes what business the organization is in (and what businesses it isn’t in), both now and projecting into the future.
Strategy: How you are going to achieve your vision, in line with your purpose and mission.
Unlike purpose and vision, which are typically broad but committed to for the long term, mission and strategy often need to adapt over time – to changes in the market, for example, or following a product acquisition.
Purpose and mission are sometimes used interchangeably. However, your mission can be different to your purpose and may overlap with your strategy. All these elements should sit comfortably with your values, the expectations and behaviours that define your culture and how people will work together.
The vision statement
The vision for your company is where you are headed – a destination in the future. A vision statement is by nature aspirational and paints a picture of a future worth working towards. It outlines the transformation that you will deliver for the world or in your industry.
In Built to Last, Jim Collins’ and Jerry Porras’ book on visionary companies, vision is presented as a BHAG – a Big Hairy Audacious Goal. Clearly, I had just read the book when we crafted our vision statement in 2007:
By 2010, our clients will have made us the international standard for project information management. Our people will have grown to support a vibrant business, servicing increasingly connected online communities. => BHAG: More than 50% market share and over $1 billion in revenue by 2015
We didn’t get to the billion in revenue, but we were approaching 50% global market share among construction of projects using collaboration software – and we were well above 50% in many of our core markets.
Over time the vision evolved as we revisited and iterated it. We would do this as an executive team every few years, as part of our annual strategy and planning session. Our expectation was that the purpose and vision would remain fairly constant unless the company was no longer aligned to them, or we had moved beyond them in some way. For example, our 2007 vision was based on a 2010 horizon, so we reset it that year to be relevant to the next stage of the journey.
Our final vision statement, in place at the time of the Oracle acquisition in 2018, was that:
Aconex would be used by every project team everywhere to digitise all construction processes and operations and that we are the industry standard.
Why this vision? It aligned to and informed our growth strategy. We were global and believed that every major project in the world could use our platform. We were focused on project teams – bringing them together on a common collaboration platform. And we were digitising the industry by automating inefficient and manual processes. As we – and the category – grew, we had increased confidence in our ability to estimate market share and ultimately to determine whether we had become the standard.
For a vision to work, it should:
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align to your purpose
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be time-limited and measurable, like any good goal
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be both aspirational and inspirational – a big stretch for your company, but not impossible to believe in or achieve
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be clear and easy to understand.
A great example is Bill Gates’ compelling 1980 vision of “a computer on every desk and in every home.” This was a massive stretch, given where the world was at the time, but it helped align Microsoft at the start of its journey to provide software for every person’s desktop computer.
One question to think about is how much of a stretch your vision should be. John F Kennedy’s famous statement in 1962 that “by the end of the decade, we will put a man on the moon” must have seemed impossible to most. Yet it galvanised the American people and helped deliver a significant win in the space race.
But an impossible vision can also be a demotivating one. It’s important to get the balance right between shooting for the stars and aiming for something that’s just about with reach. Is it better to achieve success against a less ambitious vision, or to fail to meet a loftier one but build something great in the process?
But I haven’t honed my purpose and vision yet…
Do you need a purpose and a vision to found a start-up? The short answer is no. Some founders certainly have an over-arching purpose that drives them, but you may simply have a great product idea without being entirely sure how it will impact your customers and your industry. And as a start-up, you may pivot as you explore how your technology or idea helps, making it hard to craft a purpose and vision at first.
However, I don’t think it is easy to sustain a growing company over time without a vision and sense of purpose that align your people. That’s why I think it is good to define them as early as you can.
At Aconex we really didn’t start off with a clearly defined purpose – other than knowing that we could apply the new technology of the internet to solve problems in construction. But as we started our journey, we saw that what we were doing could fundamentally change how people worked together on construction projects and that we had the potential to transform the industry as a result.
That realisation allowed us to create the first iterations of our purpose and vision. As we scaled, they became the foundations on which we developed our strategy, aligned our teams, and rolled out growth initiatives.
As a founder, take the time to figure out what your purpose and vision are. In my experience, they can play a critical role in the success of your business.
