Does our company have a common business objective? One of the most basic components of a company’s success is a strong and well-defined vision for the future of the business. Where is the business heading? What is the ultimate goal? What direction should everyone in the business be rowing in? Besides being an important component of basic business management, a stated and understood vision critical to accelerating enterprise value. Without a common business objective, a company will always struggle.
When there is one owner, assuming they, in fact, defined and communicated that vision, there is no question and there is no conflict. One person leads to one vision. However, when there is more than one owner, or when there are partners or multiple shareholders, we often lose that certainty. Unless the owners can agree on a common vision for the company, sooner or later there is going to be conflict and that conflict will prevent the company from ever reaching its potential. It can lead eventually to the total failure of the enterprise. Without establishing and communicating that common business objective, the organization cannot focus on a single outcome.
A number of years ago I worked with a family-owned company that had two generations active in the business and three visions among them. The mother, in her sixties, was still active in the business as the CEO and the majority shareholder. Her vision was to maintain very slow and conservative growth. She was averse to any risk that could jeopardize her ability to be comfortable in her old age. Her daughter was in her forties and a vice president in charge of the administrative functions of the business. She said that she wanted to see the company grow but she wanted it to happen without affecting her ability to take cash out of the business (a challenge that is typically not very realistic). At her stage of life, she was facing kids and college tuitions and her focus was on current income. The third person on the family team was the son who was the President of the company. In his thirties and unmarried, his focus and vision were to aggressively grow the business. His “damn the torpedoes, full steam ahead” attitude directly conflicted with both his sister and mother’s vision. His vision called for strong reinvestment into the company’s production capacity, into marketing and sales, and into its infrastructure.
Vision
Were any of their visions wrong? How could we answer that since the vision belongs to the owners? What was wrong was that there were three totally different visions. The management team and the employees, therefore, had no clear direction or understanding of where the company was going. Camps were forming in support of each of the three owners. I, along with the company’s board of advisors, worked with the owners and struggled with them on this issue for a long time. No matter what we did or said, we could not get the owners on the same page to form a consensus on the vision.
This issue unfocused the management team and the rest of the company and it had a truly negative effect on the future growth potential and success of this company. Then to make matters even worse, the mother, in response to the advisory board’s suggestion that unless a common vision could be established, one of the three of them had to be given the ultimate leadership role and the authority to set and implement the vision, fired the board.
As seen in the example, often when owners are in different stages of their lives or they have different financial needs, gaining consensus on a common business objective can be very difficult. Many times, the only option, if no one is willing or able to change their perspective on the vision becomes changing the owners themselves. That way, if you cannot agree on a common vision, at least you can avoid a common failure where all owners will be hurt. Without that common business objective, there is nothing for the owners or the employees of the company to focus on and guide their decision making.
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