Are Today’s Business Leaders Losing Their Vision?
One of my favorite ad headlines states, “You don’t open a Bike Shop to Run a Balance Sheet.” You open a bike shop because you love bicycles. You are passionate about riding them, talking about them and sharing them with others. This is how most great businesses are started. Someone with a personal passion recognizes a need in the marketplace, takes a risk and starts a company to share their vision with the world.
Sustained passion is how the best companies endure and gain a competitive edge by having someone at the helm connected to the true purpose of the business—someone eager to share his/her vision with the world. And when the reigns are passed from one leader to the next, the new chief must also be committed to the real reason the company was started in the first place?
Angela Ahrendts served as CEO of Burberry from 2016 to 2014. During her tenure she succeeded in the completely turning around the nearly 160-year-old company and tripled earnings. But this accomplishment alone did not define her success at the iconic brand.
Angela said, “Burberry’s true success is measured not by financial growth or brand momentum, but by something much more human: one of the most connected, creative and compassionate cultures in the world today, steeped in common values and beliefs, and united around a shared vision.”
So in 2013, when Ahrendts decided it was time for her to move into a position as Senior Vice President of Retail at Apple, Inc., she knew that one of the greatest responsibilities of a CEO is to have a smooth transfer of leadership. Ahrendts believed that that when it is time to move on, your team should not miss a beat. And in the aftermath of her departure Burberry sustained its vision and the culture became more closely united than ever.
Like Angela, many great business leaders are true visionaries. They start companies, take over businesses and lead teams of people toward something of mutual benefit. But unfortunately there seem to be an ever-increasing number who equate success with shareholder value or steadily increasing profits as the ultimate measure by which they should be evaluated. This mentality perpetuates a broken system that is fixated on short-term gains.
It is disheartening that a strong commitment to fulfilling a noble purpose is not more evident in the business world today. When did CEO’s get the idea that profits, shareholder value and ever-increasing bottom lines are the optimum end game? Why do they tout financial gain as the primary vision for the their companies’ futures? Where did providing something of meaningful value get lost in the shuffle?
This bottom-line obsession began many years ago with a measurement system created for the Industrial Age. During the Industrial Revolution, using a business model that relied on financial numbers made sense for measuring factory output and efficiency. Growth and profits were directly proportional to production volume. Industry finances were run just like the machines used on the factory floors: capital and labor pushed in one end, while growth in profits spat out the other in a calculated, formulaic process.
“Industrial firms combined human labor with big, expensive capital equipment. To maximize the output of that costly machinery, factory owners reorganized the processes of production. Workers were given one or a few repetitive tasks, often making components of finished products rather than whole pieces. Bosses imposed a tight schedule and strict worker discipline to keep up the productive pace. The Industrial Revolution was not simply a matter of replacing muscle with steam; it was a matter of reshaping jobs themselves into the sort of precisely defined components that steam-driven machinery needed—cogs in a factory system.”
Today, a strategy that honors economic outcomes over human needs and values is outdated—but there are still too many companies operating with this antiquated model. They continue to run their modern-day “factories,” feeding in capital and human resources in hopes of delivering ever-increasing returns for shareholders. But this system is both archaic and unsustainable. It’s causing business leaders to trade noble visions for revenues.
Although growth and profits are absolutely essential to the success of every business, the real game-changer is how revenues are achieved. The quest for endlessly rising bottom lines needs to be replaced by a focus on something more satisfying and beneficial—a human type of thinking that requires a shift away from the “more is better” mindset. And it takes visionary leadership to get this equation right.
These leaders focus on a more powerful way to drive behaviors and ultimately profits. They start by identifying what the business stand for, beyond making money. This understanding and articulating their company’s vision establishes the point on which everything else balances. It describes how the organization wishes to add to the world and identifies what they are committed to making better.
This focus away from a preoccupation with the bottom line actually holds the most promise for driving a bottom line up. In the book Firms of Endearment, Raj Sisodia shares research that states firms with an well articulated purpose and noble vision outperformed the S&P 500 by 14 times over a period of 15 years.
It’s time for our business leaders to get back to doing what they were intended to—running their “bike shops.” Back to envisioning the future and all its possibilities. It’s time for leaders to reconnect with what they believe in, care about and do best. It’s time to get their heads out of their bottom lines and lead with a vision that will positively impact people, planet and prosperity.
With a passion for helping others discover “why” and “what for,” Jackie Dryden leads companies to uncover and align with their purpose. But don’t be fooled. Her purpose development strategy packs a punch and will shake the core of your foundation. Serving as the Chief Purpose Architect at Savage, Jackie thrives on creating design and communications strategy to support corporate purpose. She is co-author of "Get Your Head Out of Your Bottom Line and Build Your Brand on Purpose" available at https://savagethinking.com.