Recently I attended a national auto show full of futuristic concept cars. Visitors were clearly elated by the cars—three-wheelers with cartoon-like tires, driverless pods, super-cars with hybrid technology, and 4x4s that resembled Tonka Trucks–which gave an inspiring glimpse into the future. These new ideas excited audiences. That, in turn, could drive growth for the brands. Without dreams, companies lose meaning, purpose, and direction. Every startup begins with a vision of a business that matters—its equivalent of a concept car.
In the vision-state, entrepreneurs create, dream, and inspire us to see the future. This is what captivates investors and consumers. When Walt Disney expressed his vision to create Disneyland, most professionals thought it was a crazy idea destined to fail financially. His passion and persistence proved them wrong. Blake Mycoskie, founder of Toms shoe company, had a vision to provide shoes to those in need. Robin Chase knew nothing about cars, in fact she didn’t even own one, but she believed that having cars you could rent by the hour would make it more convenient to drive in urban areas. The driverless car was outside Google’s business focus yet it created an excitement and hope for the future, while changing the perception of Google. In all these cases not only did vision drive growth, it also innovated new markets, industries, and business models. Vision is what pulls at our emotions and creates desire to challenge the status quo.
The persistent drive of visionaries and their openness to changing the world creates an internal culture of collaboration, focus, and trust. This in turn sets the stage for innovation. True innovation, of course, produces growth and, as a by-product, shareholder value. Yet as companies grow and mature through organic and acquisitioned growth, we see less and less focus placed on vision. In many cases, a company’s founders or visionaries have left or been bought out of the company. The main focus shifts to creating more value. This is the typical trajectory of a maturing business, as management is tasked with optimizing products and services for scaled growth.
Scale presents its own set of challenges—operations, supply chain, manufacturing, organizational structure, and financial risk. Value pulls the organization, and vision begins to trails behind. This shift puts functional, measurable processes before emotional, vision-driven models. And ironically, the attempt to alleviate risk actually backfires, stifling innovation and leaving the company more at risk of irrelevance in this age of constant change.
Take Kodak, a once innovative company that is no longer valued by consumers. Kodak’s current global vision statement focuses on three main ideas: to engage the energies of its employees; to meet competitive changes in the marketplace; and to maximize shareholder value. If Kodak had spent more time concerning itself with the relevancy of its products and the desires of its consumers and less with putting money into the pockets of its shareholders, it might have saved itself from the dead zone it’s in today, as digital imagery has superseded film.
When you focus on building value first, you compromise the culture and vision of an organization, losing purpose and meaning. People inside and outside the company, including consumers, become uninspired, and there is no community of collective desire. There is little commitment or loyalty to the company, and like its investors, its employees focus on personal gain–many begin looking for other jobs.
Retaining a vision is the key to creating long-term value. Companies such as Tesla, Google, Flor, Nest, and Warby Parker understand that holding onto their vision challenges conventional value models. These companies lead with their long-term vision. In fact, their vision is a reflection of their values, and this naturally creates financial value. Warby Parker, for example, prides itself on offering designer eyewear at a revolutionary price while leading the way for socially conscious business. Each time you buy a pair of glasses another pair is donated, similar to Toms mission. Warby Parker’s annual revenue for 2014 was well over $100 million and the company was averaging $3,000 per square foot of retail space. Nest has stayed true to its vision of “taking unloved products in homes and making simple, beautiful, thoughtful things.” Nest is currently valued at around $2 billion.
A vision is fostered not through organizational processes but an authentic idea that inspires, excites, and makes us dream. A business with a vision that matters will assure a strong culture and inspire creative meaningful innovation that results in growth and, ultimately, increased shareholder value. Sustainable growth today is not about value, it’s about values.