Strategy knowledge with Christian Underwood
Who doesn't know them: the boring vacuous or interchangeable corporate visions and mission statements in the long corporate hallways?
There are the visions that vary in their slogans between market leader and number 1 in the market. Strange-looking interpretations of missions and visions that make it clear at first glance that nothing is clear here. The whole thing is then garnished with a potpourri of values that often makes you lose your appetite or simply fails to stimulate it. Yes, mission statements are important, and yes, good mission statements are a fine art and also take a lot of time to develop, which is why they are rare.
However, those who have visions should not go to the doctor for this reason, but should ask themselves the question: is my vision motivating enough and generating momentum for our corporate strategy?
In this episode, you'll learn what it takes to have a good mission statement, what alternatives there are, and how to set big goals with Big Hairy Audacious Goals (BHAG) that motivate and inspire while also creating a positive impact.
Detailed episode description:
Table of contents
- Better no mission statement than a bad one
- What is a mission statement anyway
- Alternatives to the mission statement
- BHAG - "Big Hairy Audacious Goals"
- What are BHAGs?
- BHAGs with positive effect
- BHAG examples from practice
- Three guiding questions for your BHAG formulation
- Contact
- Shownotes
Today's episode from the Strategy Knowledge category is all about the North Star, which is the strategy to be aligned with.
Our guiding question is: How do you find the North Star for your corporate strategy?
Better no mission statement than a bad one
A popular quote that I always come across in this context is from Helmut Schmidt - the former German Chancellor: "Anyone who has visions should see a doctor.
Of course, I would like to contradict this energetically, but he is right in one point: most of the guiding principles are often written with D and not T and are really hard to get used to.
Why do many companies still try to carry out a mission statement process at the same time as the strategy process? After all, we have read and learned that there is no strategy without a mission statement. The mission statement is the anchor, the north star, however, often enough degenerates emergency nail and in the end it is also no panacea. Of course, your strategy should be based on something essential, but one statement has proven itself in practice over the past 15 years: better no mission statement than an incredibly bad one.
So it's either all or nothing. Either you decouple the mission statement process from the strategy process and put it ahead of it with sufficient time, or you need a good alternative.
What is a mission statement anyway
If your Mission Statement is your North Star, that is, why we exist? Then your Vision Statement is the mountain you want to climb - what you want to achieve and how it feels to reach this goal.
Together with the corporate values and principles, the mission represents the philosophy of your company, so to speak, and should therefore have an extremely long shelf life - 100 years and more are a good guideline here according to Prof. Esch. Your vision plays with 10-30 years in another temporal league and an additional external dimension. It should not only help your team to make strategic decisions about long-term goals that need to be achieved on the way to mission fulfillment. No, the vision can also make a difference to external stakeholders such as banks, investors, potential employees but also the customers. Because the vision ideally provides clear answers to the "Why?" and "How?" behind your mission statement so that you can achieve your company's mission.
If you want to know from practice how to approach a mission statement correctly, you will find suggestions in our very first podcast with Jan Hoffmann from Viessman who have solved this topic very nicely.
A link to the episode is of course in the show notes: https://www.underwood.de/podcastfolgen/01-vi-have-a-dream
Alternatives to the mission statement
But time is not only precious and to create a real momentum with inspirational power, a real alternative that provides clarity is recommended. Since, as we all know, many paths lead to the goal, here are a few more options for aligning strategy: With Simon Sinnek's "Golden Circle" and the "Start with Why", he has created a nice pragmatic approach. A "Purpose" development would also be more lengthy and profound here, which travels at the content-related flight level of the mission statement, but usually takes just as long as the mission statement development and similar problems can arise here.
BHAG - "Big Hairy Audacious Goals"
In practice, one method has proven itself, and we have added a small addition to it. We are talking about the BHAG. Pronounced: Bie-hag stands for "Big Hairy Audacious Goals." Big, challenging or audacious goals. Brought to the world by Collins and Porras in the mid-90s, BHAG has laid the search - for the incentive of impact - for many companies. When we talk about really big goals, we really mean it literally.
What are BHAGs?
Your BHAG should be inspiring and long-term, taking your business to the next level. BHAGs are daunting tasks that take 10-15 years to implement. They push the boundaries of what your company can do and challenge your team to make tremendous progress. Yet the lines between visions and BHAGs are blurred. When they are first set, BHAGs often seem like goals that are nearly impossible to achieve. Consider President John F. Kennedy's 1961 proclamation that the United States would land a man on the moon before the end of the decade. In 1961, such an aspiration seemed more like a dream than a possible future reality. But by setting this goal, President Kennedy inspired the United States to achieve the seemingly impossible.
BHAGs with positive effect
But to give the BHAGs a little more depth, and thus a combination of mission and vision with a powerful shot of adrenaline, we have added the term Wirkung or impact to the target direction for the BHAG. This addition draws one's attention to the impact the company wants to achieve and, if worded correctly, has great inspirational potential.
Why impact? Impact statements show how your work makes a demonstrable and verifiable difference in the lives of people, communities, your company and the environment - in the three dimensions of social, economic and environmental conditions - ESG for short. Thus, the Impact Statement bridges the gap between BHAG and ESG - i.e., sustainability in a holistic sense. Documenting the results of your efforts is also increasingly expected by donors and stakeholders. Specifying what impact you want to achieve with your actions helps.
Purely financial goals are out of place here, and not only in terms of impact. Sales and profit are only a consequence and not a pure end in themselves. Describe the topic or problem (relevance) you want to solve, for your main target audience, in simple and appropriate words.
BHAG examples from practice
One of the most beautiful high-impact BHAG examples comes from automaker Volvo:
By 2022, no one will die in a new Volvo.
One consequence of this was for Volvo to limit all new cars to 180km/h with a speed limit. Very consistent and strong.
Microsoft also had a vision that worked like a BHAG:
Microsoft's famous goal was to put a computer on every desk and in every home.
More examples
Airbnb: Creating a world where anyone can belong anywhere
Evernote: Remember everything
Feeding America: ensuring equitable access to nutritious food for all
Facebook: Connect the world
Google: Organize the world's information
Michael J. Fox Foundation: Finding a cure for Parkinson's disease
Microsoft: Bringing a computer to every desk and home
Spotify: Unleashing the potential of human creativity
Tesla: To accelerate the world's transition to sustainable energy
Volvo: By 2020, no one will die in a new Volvo.
Three guiding questions for BHAG formulation
But how do you create such a BHAG with impact? To do this, imagine three circles with three guiding questions:
1. what is your great passion?
2. in what can your company be the best in the world?
3. what drives your economic engine? Is it profit per customer? Profit per meter? Profit per shipment? What is your "x" in "profit per x"?
At the intersection of these three questions or circles lies their goal-oriented BHAG with impact.
Again, we hope to give you some inspiration for the foundation on which your strategy should be based.
Contact
If you have any questions, would like to have your mission statements or BHAG reviewed, or are planning such a process, I welcome a message from you to christian@underwood.de
SHOWNOTES:
Christian Underwood: https://www.linkedin.com/in/christianunderwood/
Hope is not a strategy: http://www.hoffnungistkeinestrategie.de
Pre-order the book Hope is not a strategy now https://www.underwood.de/buch
Underwood Ltd: https://www.underwood.de
HIKS Podcast episode with Jan Hoffmann from Viessman https://www.underwood.de/podcastfolgen/01-vi-have-a-dream