Creating a Compelling Vision
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What is culture?
The beliefs and values that guide everyone in the company and are consistently followed
It's about how you behave, as an organization.
It's about your company's personality; It's about who you are as a company
The Three V’s of culture
Values are a small set, a small number of non-negotiable behaviors, that drive your organization.
Vision is to know and to have a clear picture of where you're going as an organization and why you're going there as an organization.
Vulnerability is about trust in the team; not task-based trust but the ability to give and receive honest feedback without fear of retribution.
Why Vision is so important?
Vision, is the future picture, three years down the road, 10 to 15 years down the road, infinity down the road, it is an almost never changing future.
Everyone on that leadership team should be an evangelist of that vision
Components of a Vision
1. Purpose
Making money is not the purpose of your company, but it is a very important goal
Purpose tells you which direction to take your business in
A purpose adds real value to society
Purpose should be almost never changing
Purpose is not a goal to achieve; it's the actions you take every single day, it is the why you do what you do.
Think of your purpose as the North Star
Use the 5 Why's Plus Exercise to find your purpose
2. BHAGs (Big, Hairy, Audacious, Goals)
Think of the BHAG as a flag on top of the mountain; it's 10, 15 years out; it challenges you to greatness. You're not really sure how to get there, but your goal is to get there.
Four different types of BHAGs
The Target BHAG
It is typically a number, revenue numbers typically don't work.
Example of numbers that work: how many people you're impacting through your purpose.
The common Enemy BHAG
Once you know who your competition is and you want to beat them, it drives you to greatness and pushes you to be better
The Role Model BHAG
What is the organization that you would like to be like? For example, Amazon, Uber …
The internal transformation BHAG
we're going to transform from X to Y by this date
3. The 3HAG (3yr Highly Achievable Goal)
The 3HAG is your three-year highly, achievable goal
You're more committed and you are much more focused on how to figure out how to get there; between now and three years.
Components of the Three HAG
Numbers and Non-Financial Numbers
Are numbers, example; three years from now, what's your revenue gonna be? What's your gross margin gonna be? What's your net profit gonna be? What's your net cash flow gonna look like?
So there are financial numbers, financial targets, and then there are non-financial targets, things like: number of clients, number of new products, client retention, etc
The differentiators
They are the three to five things that three years out will differentiate you from the competition
The Strategy
It is one where you need to be different and unique, with a different set of activities to deliver a unique mix of values.
In knowing your strategy, you will know what differentiates you and how over the next three years, you're going to build those differentiators
The Sandbox
What sandbox are you playing in? What are your products and services? What are your distribution channels? What are your clients, and lastly, what are the geographies that we will tackle? Are we gonna be global?
The Postcard from the Future
Write a postcard from the FUTURE to your current organization saying what the company looks like and what it feels like to work there; it's almost giving thanks.
Write questions like; how is the company different? What does the team look like? Answer that question; what are our clients saying about us? What is our brand representing? What impact are we having on the world? Etc…
Thanks for listening!
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The relationships between your team members are much more important than each of their individual skills, and that's all about culture. In this episode, I want to talk about culture. I'm going to talk about the big picture, but then we're going to drill into one aspect of it. It's too big a subject to cover in one better leadership team show episode.
So, let's cover it big picture and we'll drill into one area. But first, let's talk about what culture is. Culture is one of these words that comes up a lot for the most part, without any real definition behind it. If someone's a pain in the ass, we say they're not a good fit with our culture. But if I say, what is your culture, there's very often not a real clear answer. Let's define what culture means and then talk about the aspects of culture. The definition I use for culture is ‘It's the beliefs and values that guide everyone in the company and are consistently followed.’
What does it really mean? It's about how you behave as an organization. It's about your company's personality. It's about who you are as a company, and it starts with the leadership team. I hear way too often that there's a problem with culture out there, outside the conference room door. It's what's going on with the team? What's wrong with this team? We do so much for them and yet their morale and retention stinks, and we're getting no referrals and people aren't thankful. But it starts with the leader team. Yes, there's work to do outside of the leadership team on culture, but I've never seen a culture actually get better, more empowering, stronger as you cascade down through an organization. If you've got an amazingly strong culture up in a leadership team level, it will cascade down in a positive way, but it'll get a little weaker as you go down if you have a mediocre culture at a leadership team level. By the time it gets down to the second, third, fourth levels of your organization, things are really, really bad.
So it starts with the leadership team and again, as part of this overview, let's talk about what I call the three Vs of culture. As I said earlier, we going to dive into one of them. The first V of culture is Values. Values are a small set, small number of non-negotiable behaviors that drive your organization.
It's not 27 things, it's not the 5 things that look really good on our website because our clients are going to like it and our vendors are going to like it and the shareholders are going to like it. Core values are internal. You may wind up using them as marketing, but it's first and foremost internal and it guides your behavior.
They're non-negotiable behaviors. If someone is not living your core values, that's a fireable offense and they're not aspirational cuz they can't be both non-negotiable and aspirational. So, those are core values. It's typically three to five non-negotiable behaviors. That's the first V. Second V is vision.
Vision is about having a crystal-clear picture as to where and why you're going there as an organization. I'm going to keep it high level for the moment because vision is the one we're going to drill into on this podcast episode. The third V is vulnerability. Vulnerability is about trust on the team and not task-based trust. Not, “I trust Joe says he's going to get on, get it done on Tuesday, he'll get it done on Tuesday.” That is trust. That's an important aspect of trust, but that's not what I'm talking about in vulnerability. In vulnerability based trust, what I mean is the ability to give and receive honest feedback without fear of retribution.
It's the ability to say, I'm sorry, I screwed up. I made a mistake. I need help. The ability to be open and honest and know that everyone around that table has positive intent about the team, positive intent about you. They're not going to chop your head off. They're going to try to help them and they're going to try to help you and they know you are trying to help them.
That's vulnerability. The ability to be open and honest and vulnerable with the team. But as I said, covering all three of those is multiple episodes of the show. Today we're going to dive into vision. Let's start by talking about why vision is important. When I say vision, it's this future picture three years down the road, 10 to 15 years down the road and you know, infinity down the road.
An almost never changing future. Why is it important, especially these days where a lot of folks are being hit by the economy? It's really easy to spend your days, what I would call looking down. Looking down at the next hour, the next day, the next week, the next month, the next quarter, and just focus on survival.
It's easy to do that. It's important to spend some of your time, of course, doing that. We've got to be pragmatic about our business. But if all we do is look down, focusing on survival, and we don't spend time looking up and out to a bigger, brighter, clearer, compelling, exciting future, then we lose touch with who we are.
We lose touch with who we want to be. We make decisions in the short term that are going to hurt us in the long term. We lose the ability to motivate our people beyond just the security of keeping their jobs. Regardless of the economy, regardless of whatever the next big thing is that hits us, that causes us to pivot in our business, we've got to do both look up and down, look up at the future, look down at getting through the day, the week, the month, the quarter. And when I talk about this clear, compelling, exciting vision of the future, it's not about just understanding what it is. It's not about the CEO coming down from a mountain with tablets and saying, “Here it is. Here's our future vision. Now go forth and execute on that vision.” That's not what it's about. It's about the leadership team collaborating on that vision. It may be driven more by the business owner, entrepreneur, CEO. That's typical. There's nothing wrong with that, but the leadership team should be involved in creating that vision and challenging that vision and detailing that vision, in figuring out how you're going to communicate that vision.
And that's not only so they're on board and they understand it. It's because part of having a compelling vision is that everyone on that leadership team should be an evangelist of that vision. When you talk about your vision, I don't care if you're the CEO, you are heading up sales, you're a CFO, a COO.
When you talk about the vision, it ought to send chills up and down your spine. You ought to try and help that to happen through the rest of your organization. So, you ought to be communicating it often and with excitement. You need to be an evangelist of the vision, excited about the vision. Cuz again, as you cascade down the leadership team, chances are pretty good that that excite. Is going to decrease, not increase. So if the members of your leadership team are not incredibly excited, good luck getting the rest of the organization excited. So let's talk about some of the components that I think are most important in a future vision. And starts with purpose.
What's the purpose of your organization? And it's really easy to say, that's a BS question. I know that's nice for the brand, but let's face it, the purpose is making money. And I don't believe that. I believe that's a goal. I believe that's a damn important goal. If you're not making money, you can't continue to run the company. You can't attract great people. You can't keep great people. You can't promote great people. But I think that is a benefit of adding some real value to society. Now, what does society mean? Does society mean the world? Does society mean your local community? Does society mean your team members or your vendors or your clients?
You determine what society means. But a purpose is about adding real value to society and it answers the question why? Why do we do what we do? A benefit of doing it in an amazing way is we make money, but why do we do it? And some examples of that are Disney. Disney's purpose is not to make money.
Disney's purpose is not theme parks. Disney's purpose is not to put out new Marvel movies or Star Wars series. Disney's purpose is probably happiness. That's what drives them through their movies, through their theme parks, through books and products. Their purpose is probably something like happiness.
Starbucks’ purpose is not a cup of coffee. From what I've read, Starbucks believes their purpose is to be a third place. We've got work, we've got home. Starbucks is a third place where we could escape and just see something different. Especially after Covid, when we were finally able to get out of our offices, of our homes, it was great just to go to a place like a Starbucks and sit with my laptop and work and just escape from the normal and do little people watching, get in a different environment. It made me more creative. So Starbucks’ purpose is about escape. It's about a third place.
What's your purpose? What's your why? And the exercise that I would suggest that I normally give my clients, I call the five Ys plus. And the five Ys plus starts off with, of course, five Ys. And in that five Ys part of the exercise, you actually start out with what do you do? We are a digital marketing firm. We're a coaching firm. We distribute tools. We're a plastic surgery company. Whatever it is you do, you start off with what you do, and then you ask yourself and your team, doing this as a team is great. You ask yourself in your team why five times. So, we are a tool distributor. Why do we do that?
We do that because domestic manufacturers have a need for great tools at the right price. First why. And why is that important? Well, it's important because these manufacturers have enough challenges on their plates in making sure their business doesn't go to China or Vietnam or different places.
it's a tough business. They have a tough time hiring people. The least we can do is take the challenge of quality tools at the right time off their hands. And if you keep asking why, at some point, probably in question four or five, you get to a point where you say something like, to make the world a better place.
Now, that's probably not really helpful for you, but the answer right before that might be something like happiness or escape or in the case of a tool distributor I worked with a number of years ago, it was to keep the American dream alive for manufacturers, to help them compete domestically.
So, you start with the five why's, and then I add a couple of questions. One question is, if you won the lottery for a billion dollars tomorrow, what would the purpose of the organization need to be in order for you to want to come back in the next day, the day after that, and the day after that? And then the last question is, if your company ceased to exist tomorrow, how would it impact the world?
By taking the five why's, by taking those second two questions, you've got a lot of great raw data that get to the heart of why you do what you do. If you take all that raw data and debate that, get a flip chart and a bunch of post-it notes, put all those ideas up on a wall, up on a flip chart, and debate them, you have all the information you need to come up with your purpose as an organization. Now, do I believe you could sit for 30 minutes, come up with the purpose and the next day communicate it out to the rest of the team? No. This takes time. Your purpose should be almost never changing. If you're changing your purpose every week, every month, every quarter, every year, or even every three years, then you've probably got the wrong purpose.
Your purpose is something that should be 10, 15 years plus almost never changing as an organization, I'm pretty confident 50 years ago, Disney's purpose was happiness and it still is. So, sit with it a while. It may take several quarters before you get it right. Don't communicate it out to the organization only to say, “Oh crap, we got it wrong,” and then change it. Give it some quarters, sleep on it, get your purpose right, and then with excitement, get it out there to the world. That's one component, purpose. The second component is a Jim Collins thing from Build to Last, then he talked about it again in Good to Great. It's the big hairy, audacious goal
Jim talks about it as 10 to 30 year big, hairy, audacious goal. I can't think 30 years out. So I just say 10 to 15 years, but I still steal it from him. It's a great concept. And the big, hairy, audacious goal is like a man on the moon thing. Now, I'm not quite old enough to remember, I think it was 1962, JFK said, “By the end of the decade, we're going to put a man on the moon.”
No idea how we're going to do it, but it inspired the country. It inspired the United States to greatness. People rallied around that. Not just Nasa, the whole country rallied around that. It's a great example of a big, hairy, audacious goal. What is that challenge to greatness for you? Think of your purpose as the North Star.
The reason it's the North Star is because it gives you direction. Your purpose tells you which direction to take your business in.
But you're not going to wake up one day and say, “Oh my God, we've achieved our purpose.” CEO of Disney is not going to wake up one day and go, everybody is happy. We need a different purpose. What are we going to do?” It's the North Star because it guides you every day. You live it every single day, but you never get there.
It's not a goal you achieve. It's the actions you take every single day. It's a direction you are going in. It's the way you behave. It's why you do what you do. The BHAG is different. Think of the BHAG as a flag on top of the mountain. It's 10-15 years out. It challenges you to greatness.
You're not really sure how to get there, but your goal is to get there. Your goal is to wake up one day and say, “Oh my God, we've achieved it. We need another BHAG.” And there four different types of BHAGs. Again, I'm stealing this from Jim Collins, but he talks about four different types of BHAGs. One is a target BHAG.
A target BHAG is typically a number. There's a company out of Australia called RedBalloon, and their number was we're going to deliver 2 million experiences for our member companies. It was a number. I don't know what your number is, I'll tell you the one number that tends not to work, and it might be surprising to you, but when you come up with a target BHAG, revenue numbers typically don't work.
In 2035, we're going to be a $1 billion company. As an owner, that might be exciting to you. As a shareholder, that might be exciting to you. As a member of the leadership team, it might be exciting to you. But to the rest of the organization, that's typically not all that exciting, believe it or not. They might look at a billion-dollar rental organization and say, “Crap, I don't want to be that big. I like the family atmosphere we have right now. Why do I want to be a billion dollars?” Now it becomes a bureaucratic mess. Dollar numbers typically don't work there, but are there other numbers? Are there numbers about here's how many people you're impacting through your purpose? So, one type of BHAG is a target BHAG. The second type of BHAG is a common enemy BHAG.
And this one isn't quite as measurable, but it's still pretty measurable as a target BHAG. Common enemy BHAG, this is the best example I know of. There's a great book by Phil Knight called Shoe Dog, all about Nike that I suggest you read. But in that book, he talks that in the sixties, I believe it was, there were posters all over the walls of the offices and the manufacturing plants that said, ‘Beat Adidas’.
It was all about beating Adidas. They were the big gorilla back then. So, all they wanted to do was kick Adidas's butt and they did it. It drove them to greatness and they achieved it. So that's the second type of BHAG. You got target, you got common enemy. The third is role model. Role model BHAG is something like we're going to be the Uber of something. There's a coaching organization I used to be a part of where their BHAG was we're going to be the Harvard of mid-market coaching organizations. We're going to be the Amazon of something. So, there's a role model BHAG. Again, how do you measure that?
There are different ways to measure it. Not quite as measurable as a target BHAG or a common enemy BHAG. But role model BHAG is a great way to go. And the last one is an internal transformation BHAG. We're going to transform from X to Y by this day. So, the first component of a vision is your purpose.
The second component we talked about is your BHAG, your big hairy audacious goal. Your man on the moon flag on top of the mountain, challenge the company to greatness. Like purpose, this is not one typically where you sit for 30 minutes and come up with your BHAG.
I say that and I just worked with a client last month who did that. They sat for 30 minutes and came up with something. But more often than not, like your purpose, this is something that may take a quarter or two or three to get it right. And once you get it right, like your purpose, you want to shout it from the rooftops or in this case, the mountaintops to your organization and make sure, and use that as a guide, as a compass as to whether you're moving in the right direction. We've got a decision we've got to make, which one is going to help us get closer to our BHAG while living our purpose, is a great question to ask. The third and last component, we're going to talk on this episode is the 3HAG.
BHAG was big hairy audacious goal. 3HAG is your three-year, highly achievable goal. Big, hairy, audacious says, I don't know how we're going to do it, but man, if we could do it, how cool would that be? Your three year highly achievable goal is one where you're a little bit more committed and you are much more focused on, hey, we're going to figure out how to get there between now and three years.
I'm taking that term 3HAG from a wonderful author Shannon Susko, who's got a great coaching organization called Metronomics and a bunch of great books. One is called 3HAG Way. When I steal from other people, which is normally the case, I like to give them credit for it.
But I included a number of components in that 3HAG, in that three-year vision. And by the way, the three year vision is so important because if all you've got is a bunch of annual goals, and then you've got your long-term BHAG and your purpose, there are 10 or 15 years between your annual plan and your BHAG.
That's just too much time. There's too much of a chance to disconnect your one year from your BHAG and your purpose, and you wind up setting these one-year goals, one year plans, one year priorities, and they never quite get you any closer to living your purpose or closer to achieving your BHAG. So, it's important to have this waste station in between called the 3HAG. And the components of the 3HAG, number one very simply are numbers.
Three years from now, what, what's, what's your revenue going to be? What's your gross margin going to be? What's your net profit going to be? What your net cash flow is going to look like? So, there are financial numbers, financial targets, and then there are non-financial targets. Things like number of clients, number of new products, client retention, you name it.
But in thinking about what your organization is going to look like three years from now, some of those non-financial numbers are just as important or actually more important than the financial numbers. So, what are your financial and non-financial targets is one piece of the 3HAG. Another is what are your differentiators?
What are the three to five things that three years out will differentiate you from the competition? Now, I'm sure I will do more than one episode on strategy, so I'm not going to dive deep into strategy here, but I'm looking up at my cork board. I have a Michael Porter, who's the father of competitive strategy.
His definition of competitive strategy is deliberately choosing a different set of activities to deliver a unique mix of value. I'm going to say that one more time. Deliberately choosing a different set of activities to deliver a unique mix of value. Your strategy is not being better than everybody in all the same ways everybody else is trying to compete.
Your strategy is one where you need to be different, unique, set a different set of activities to deliver a unique mix of value. And in doing that, you need to know what differentiates you and how over the next three years, you're going to build those differentiators, so three years from now, you could own the market in that strategy with those differentiators.
3HAG, we talked about numbers. The targets, financial and non-financial. We talked about differentiators. The third thing is your sandbox. Your sandbox is what sandbox are you playing in? What products and services will we deliver to our clients? Who are our clients? What are our distribution channels?
Will it just be our own sales force? Will we work in partnerships with others? what are our products and services? What are our distribution channels? Who are our clients? And lastly, what geographies? Are we going to continue to be company that deals only in the Northeast, or are we going to be national?
Are we going to continue to be national or are we going to be international and expand into three countries in Europe? Are we going to be global? Understanding those things is critical. Understanding the three-year view of those things is critical because when we step back and you start doing your quarterly planning and your annual planning, we need to know what's the next 12-month chunk of that three year sandbox we're going to bite off? What's the next 12-month chunk of our differentiators we're going to bite off? What's the next 12-month chunk of the financial and non-financial targets we're going to chunk off? So you've got your numbers, you've got your differentiators, you've got your sandbox, and lastly is this question, what will we be known for?
And it's typically powerful to have a sentence or a phrase there, but it starts with something bigger than that. Along with the numbers and the differentiators and the sandbox, I believe you need something that's more three dimensional. Something that you can touch, taste, smell, see and hear.
I think I've got all those senses. And there are a number of ways to do that. One of the exercises I really like, I call the postcard from the future. And the postcard from the future says, if you're in 2023 and three years gets you out to sometime in 2025, let's say.
The postcard from the future is one, you are out in 2025 or 2026, and you're writing a postcard from the future to your current organization saying, “Oh my God, it's amazing that this is what we look like today and this is what it feels like to work here today. It's almost giving thanks. And some of the questions you want to answer in creating that postcard for the future are things like, how is the company different today? And by today, I mean, you're sitting in April of 2026 and you're saying, “Wow, the company is different in these ways.” What does the team look like? Answer that question. What are our clients saying about us? What does our brand represent?
What impact are we having on the world? you could add your own questions. What's the media saying about us? What are our vendors saying about us? What are our employees say about us? How have we improved our talent? Add any number of questions, but you're creating a three-dimensional vision of what the organization looks like. Another great way to do that goes deeper than the postcard from the future is, is Cameron Harold wrote a great book called Vivid Vision, where he talks about this idea of creating a vivid vision of the future and getting it out there to your organization.
So, we've talked about three major components. The purpose, which is the almost never changing component, your BH G, which is the 10 to 15 year component, your 3HAG, which is your three year component, and there were a lot of components underneath the 3HAG. And in wrapping up, what you want to do, what I want to stress is you use that not only to communicate to the organization and get excited, but you use it to make decisions. Any decision you need to make from a team member you're going to hire to a new priority or bringing on a new client or brand-new project or initiative or a new technology you're going to put in place. Whatever it is, any major decision, it ought to be seen through the lens of will this bring us closer to our vision? And if it doesn't, why are we doing it? If it does, how do we accelerate it? You want to communicate that vision clearly and often. Again, as a member of a leadership team, you need to be an evangelist of that vision.
If you're not, question it. If you're the CEO and you don't believe your leadership team or evangelist, that's your fault, not theirs. Work, make it clear, make it more compelling, make it more three dimensional. And the last thing I'll say is that vision is not set in stone, and the world changes.
Now, if your vision is changing every time there's a change in short-term goals, then you've probably got a weak vision. But there are times where the world changes so significantly or for some reason, your goals for the organization change so significantly that that vision needs to be tweaked or maybe changed pretty radically.
What I'd say is at the very least every year, if not ideally, every quarter, take a look at that vision. Take a look at your purpose and say, does this still feel right? Are we still living it? Take a look at the BHAG. Is this still right? Are we making progress? Take a look at the 3HAG. Are those still the right differentiators?
Are those still the right numbers? Is that still the right sandbox we want to play in? Update it annually at a minimum, communicate it clearly in office. And often, be an evangelist of that. Talk to you soon.