Why Vision Matters
by Robert Knowling

Leader to Leader, No. 18 Fall 2000

In business, as in life, good intentions are often lost. Our everyday practices, not our espoused values, define who we are. To align good intentions with effective practice, leaders need to define a vision, articulate values, and infuse both into every aspect of the business.

Most leaders love to make strategy, but it is vision and values that spawn strategic action. The absence of a vision will doom any strategy -- especially a strategy for change. A true vision shapes your hiring, assessment, and promotion of employees, and your behavior toward customers, partners, and investors. It is a more powerful tool for leading an organization than any market analysis or spreadsheet. But defining your vision (the expression of what your company wants to be) and articulating your values (the principles governing how you operate) are not easy or painless.

The first step in visioning is to assess your organization, your industry, and your sector of the economy. What do you do uncommonly well, and how do you fit into the changing landscape? For me, the next step is to take the management team to an offsite to look at depth at these questions (see sidebar).

In addition, every new employee in our company goes through a three-day visions and values process within 90 days. I talk to every hire about who we are as a company. One of the values we discuss is having integrity in every business transaction. That's not an earthshaking aspiration, but we give it some bite. We talk about how we deal with each other. Honesty is the order of the day, in everything from how we present reports to how we book sales. It's all-encompassing and uncompromising -- and we've been tested on it. We once had to dismiss a highly visible manager for a violation of our values. It would have been easy to look the other way. But, as Jack Welch says, you must be public about the consequences of breaching core values. When you announce simply that an executive has "left to pursue other business interests," you lose the chance to make a statement about values.

Matching Effort to Results

Many people in the company wonder why we invest such time and effort inculcating our vision and values. We will be a negative-cash-flow business for the next two and a half years; why are vision and values a priority? Why not invest in marketing or delivery systems? Leaders are always tempted to focus on core business deliverables rather than "the distraction" of vision and values. But leaders have to pay attention to both. I invest our resources in vision and values because company culture is inseparable from strategy -- and because I don't want to wake up one day and have a profitable organization that does not have a soul. Without an identity that we purposefully shape, we have no future.

A disciplined approach to vision and values helps employees understand what's important in the business. It tells us not just what, but also how and why we are expected to deliver. We assess people according to two criteria -- their current performance and their values. We use a nine-cell matrix borrowed from Action Learning Associates (see figure in our hiring process, performance reviews, and succession planning.

Managing for Values
People rated low in leadership and values -- even if rated high for performance -- have a risky future.
Managing for Values Source: The Leadership Engine: How Winning Companies Build Leaders at All Levels, by Noel Tichy and Eli Cohen (HarperCollins, 1997), p. 263.

For instance, in succession planning, I first rate each manager's performance and leadership values. Then the rest of the management team challenges me based on their observations. Rarely do we agree on all candidates, but they usually fall into one of three groups. There are the easy calls -- high performers with good values. There are others who have the right attitudes but have performance problems. We try to help them succeed if we can. Finally come those who get results, but do so at the expense of teamwork, integrity, openness to change, development of others, or the interests of customers. People who don't share our values are cancerous to the organization, regardless of their performance. In my experience, every time you invest trying to save these people you end up regretting it. It's simply too difficult to change people's values.


Putting Teeth into HR

Obviously, it is not enough to cheerlead for values; you still have to make tough business decisions. In 1998 I joined Covad Communications, the first company other than a traditional phone company to offer Digital Subscriber Lines for high-speed Internet access. After less than 30 days on the job, I saw that our sales strategy was wrong. We would never get the necessary reach or volume with a direct sales force; we needed multiple channels and partners. About 40 people, in a company of less than 200 at the time, were affected by this change. My opening act was to say that 20 percent of the workforce had the wrong skills for the job, and by the way, and the company's current strategy was doomed.

The only way a leader wins support for those kinds of decisions is to make the business case, to respect people and the organization, and to slowly build trust. No boss can do that without strong leadership in the management team and throughout the organization.

We build trust, and develop other leaders, by talking honestly. Every other month our senior team takes one or two days to examine our strategy, our effectiveness as a team, and own growth as leaders. These are difficult sessions. We try to get as brutally honest as we can with each other. There is nothing I like about those sessions. I put myself front and center to get facilitated feedback on how I'm doing as a leader -- what works, what doesn't work. This opens lines of communication; it discourages political agendas. Eventually it brings clarity about the way we operate. We gain rich perspective on our business and ourselves because we are a diverse team in every sense -- thought leadership, culture, religion, race, gender.

Walking the Line

Leaders also must connect with customers, partners, and front-line employees. If you really want to understand a problem, go to the front line and give people your ear. It is amazing what you will find out about your business, your customers, and how life really is.

I recently made changes in our business as a result of a visit to a reseller of our service. My host wanted to give me an executive tour, but I asked if I could sit with someone who worked on our account. It was a revelation. The young woman I met showed me what she had to go through to do business with us. She was trying to correct a mistake on a customer order. She had to talk to four people at Covad -- and none of them could fix the problem. Why not? That order passed through our company like a part on an assembly line. No one had accountability for where it went next. It reminded me of a culture I know well -- the phone company. Of course, phone company mentality is not unique to the phone company.

We implemented a system that I think will change the way our partners view us. We made a supervisor and a dedicated team responsible for each of our channel partners. It will create a new customer experience. But I never would have seen that problem if I did not sit with someone who does our work.

It takes time and commitment to be at the front line. It also takes an ability to relate to people. One of the first things I learned as a manager was a communication technique called FORM. You can learn a lot about people and open useful conversations about your business by asking about any of these elements:

Family -- what's happening with spouse, children, immediate relatives (usually the most important thing in people's lives)
Occupation -- what they like or don't like about their job
Recreation -- how they spend their time away from the job
Money -- how they spend it, what they enjoy; what's important to them

I use these experiences to show other leaders in the business how important it is to get out and to touch the people, feel the people. Leaders lead through stories. They use stories as tools for engagement, for change, for honesty, and for values.

Leading for Change

Leadership is about managing the constant of change. The market and the world shaping your market are never going to stand still -- especially in the New Economy. One technical breakthrough or blockbuster deal could render your strategy irrelevant overnight. Leaders have no choice but to be fluid, to learn to deal with the ambiguity, to be able to change their business model. That is why it is so important to have an overarching vision and values to steer by.

But, given a clear vision and strong values, how do we help move an organization forward? I have discovered few great ideas on my own; friends, colleagues, and mentors have taught me most of what I know. However, I have led large-scale change efforts in three organizations, and have found that several principles hold.

Start with the Answers
The boss does not have all the answers -- no one does. When a team is floundering, you need somebody to step up and say, "I've got an answer." It doesn't even have to be the right answer. If you bring everybody into the process, you may discover quickly that it's not the right answer What's important is to spark action, debate, and a sense of urgency.

Set Bold Goals
A bold goal gets everyone's attention, and it provides a simple measure of success for everyone in the company. Last year, for instance, we set a goal to extend our network to 40 percent of homes and 45 percent of businesses in the United States by the end of 2000. This is not about setting goals so high that people simply give their best or burn out trying. Most systems can quickly realize 20 percent or even 40 percent gains in efficiency once you target a problem. That's been my experience every place I've worked.

Supply Resources
One of the things leaders can provide that others probably cannot is a commitment of the organization's time, money, people, or training. My job is to allocate resources, and to do that effectively I have to listen, recognize, and celebrate success.

Coach the Team
I understand the value of a team. When a team clicks it becomes far more than the sum of its parts; the opposite is also true. Great coaches, and effective leaders, understand everybody's strength and everybody's weakness. They know how to play to those strengths. Your job as a leader is to lift the game of the others on the team. I hold leaders accountable for that.

Know the Business and How You Make a Difference
A lot of people don't understand the business they're in or the value proposition they offer. As a business leader you have to be sure that everybody understands how you make money (or, in the public or nonprofit sector, how you get cost-effective results). You have to break down the top line results so that people throughout the enterprise understand how they contribute. At U.S. West I was able to show the line installers why they each needed to make six installations a day to support the larger business. People have to be able to go home every day and know if they made a difference.

Understand the Human Connection
Never forget or forsake the people who are affected by your decisions, and who in turn affect your ability to implement decisions. You cannot be sentimental in shaping the right strategy for the future. Nor can you bully, badger, or fail to respect people. I've never seen transformational efforts succeed when leaders showed no concern for others. There is a humane way to deal with people even when you have to deliver tough news.

Never Compromise on Performance
In the phone company, at least until recently, no one's job was ever at risk. If you had a problem employee, you moved that employee into another department. It was demoralizing for the high performers, degrading to the poor performers, and toxic to any change effort. Yet most poor performers know they're poor performers. If you've been honest in your assessments of them and treated them fairly and respectfully, they can usually accept the fact that they have not made the grade.

Knowing the Warning Signs

Most change efforts fall far short of their potential. Even with principled leadership, implementing change is a messy, perplexing, and never-ending process. I have found five warning signs that can undermine change.

Underestimating the Culture
We all have our own image of bureaucracy: the Phone Company. The Government. The School System. But bureaucracy is above all a mentality. Many of the syndromes of the 30,000-member organization are replicated in the 100-member enterprise. Every organization has a culture -- sometimes two or three fighting for control. The culture determines how people work together and how they respond to change. No leader can succeed without understanding and shaping the norms at work.

Declaring Victory
Most of the time when you start change initiatives, you get immediate lift. The easy pickings are always the first to harvest. It's important to show early results and to celebrate success. But if you don't work for systematic, continuous improvement, the organization will snap back to original shape. True victory is like a compelling vision -- it is never really achieved.

Letting People Catch Their Breath
As you reach certain milestones you want to take the pressure off -- to slow down, let people rest. You cannot. Change has to part of everyone's job description. You cannot keep people in perpetual fire-fighting mode, but initially, people do have to respond as if their house were on fire. You then have to create a structure and ongoing process to make change a part of the business.

Delegating the Change Process
The senior executive has to walk the halls, make the calls, be physically and emotionally present. You cannot tell subordinates to present your plan to the staff and give you a weekly update (a popular approach in Silicon Valley). I have found that people love to give PowerPoint presentations, but they hate to actually give you information. The change process starts with you -- how you run your meetings, manage your calendar, share information.

Believing Your Own Press Clips
It is easy to be seduced by success. Every leader receives glowing reports from the field. Discount the good news and pay attention to your doubts. Personal and organizational success are fragile and fleeting. You should take pride in your and your team's accomplishments, but you have to let people know that the best is always ahead of you.

Leaving a Legacy

You cannot build value for customers, shareholders, or the community without a vision and values for your organization. You build value by becoming the leader in your field, the company that everybody wants to work for, buy from, or invest in.

It takes tremendous confidence to stake out that territory and to lead others toward it. You have to withstand the doubts and loneliness of leadership. At the same time you have to acknowledge to yourself and others that you don't always know how you will reach your destination. For others to follow you through times of uncertainty requires mutual trust and faith. That is what clarity of vision and commitment to values can bring.

I once thought that the test of personal leadership was the number of people that follow a leader when he or she moves to a new organization. But what is more rewarding is to look across an organization and see the number of leaders in place, people who share a common aspiration and have the tools and wisdom -- the vision and values -- to achieve something great. That is any leader's greatest legacy.


An Exercise in Visioning

How can a management team build a shared vision and translate that vision into a strategy? I have used a process in three different organizations that has helped develop both a vision and a plan for the future.

First we listen to Martin Luther King Jr.'s "I Have a Dream" speech. We talk about one leader at a point in history and note that his speech said nothing about the current state of affairs. Instead it painted a picture of the future. It tapped a deep aspiration.

We try to define our own aspirations for the organization. Then we each imagine that Fortune or Business Week is writing about our company five years from now.

We have just achieved our dream, and the reporter asks exactly how we did it. The combination of thinking aspirationally about where you want to be and then tactically about how you would get there helps crystallize a vision for the enterprise.

That process led us to see we wanted to be "the next great admired company" -- a company that delights customers, attracts top talent, rewards investors, challenges an industry, serves the community. Our strategies may change, but those aspirations do not.

Had King lived, he would have witnessed an extraordinary phenomenon -- the achievement of a far reaching vision articulated at a time when the leader had no idea how to get there. That is the challenge of leadership.

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Robert Knowling
Robert Knowling is chairman, CEO, and president of Covad Communications, a national provider of high-speed Internet access. Previously he led large-scale change efforts at U. S. West and at Ameritech. He also leads the Digital Opportunity Initiative to increase minority participation in the high-tech workplace. Knowling has been featured in Fast Company, Forbes, Business Week, and The Industry Standard. (9/2000)
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