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What Is A Vision Statement And Why Is It Important?

What Is a Vision Statement and Why Is it Important?

Every new business or organization begins with an idea. Behind the idea is a vision of what the organization could be if they have the right structure, the right leadership, adequate funding, and a group of people that believe in the vision. The vision speaks to the organization’s purpose and why it’s important for the organization to exist.

All types of organizations, including for-profit companies, nonprofits, charities, and other groups use vision statements to guide them with their important work. They need to be clear on what role the vision will serve in the organization. So, what is a vision statement?

Defining the Vision

Every vision starts with a visionary leader who is able to create mental and verbal pictures of desirable future states. It’s also important for visionary leaders to share their vision with their partners including customers, suppliers, and employees.

The board of directors needs to understand the importance of taking sufficient time to define the mission, vision, and values statements. The vision statement is the basis for everything else they do. Employees look to the vision statement for long-term direction.

Corporations exist to make a profit and work in the best interests of their shareholders. Beyond that, many companies are interested in many other things as well. A long-term approach to business means that the company desires to serve like-minded customers. A vision statement caters to the characteristics and lifestyle of the customers they serve as well as the market conditions.

Writing a vision statement is part of the strategic planning process. It takes planning, time, and consideration. It’s important for boards of directors to give the process of writing their vision statements the adequate time because it’s a critical step in building a business. In simple terms, a vision statement is a written document that describes where an organization is going and what it will look like when it gets there.

A vision statement can be short or long. The length of the vision statement can be telling about the company. A vision statement describes the company’s purpose, what the company is striving for, and what it wants to achieve.

Most writers of vision statements find that it’s a rewarding and inspiring process. It gives them the chance to articulate the characteristics that influence the organization’s strategy. Writing the vision statement should be a somewhat challenging process because it has a bearing on many other parts of the business.

A vision statement is something that’s meant to be shared and proud of. The vision communicates your organization’s value and its commitment to achieving its goals.

You should be proud to share your vision statement boldly on your website, on your letterhead, on your invoices and other documents, and in other prominent places. Some corporations have their vision statements placed on the company vehicles and on the walls of their offices so that the company creates a culture of around the vision statement. Employees, customers, and vendors should all be familiar with and respectful of your vision statement.

The risk of not writing a clear vision statement is that it gives your company the potential to veer off course. Without a vision statement, it becomes easy to veer off course. Everyone in the company can so easily lose focus of the goals and priorities.

Let’s use a tire shop as an example of a company that doesn’t have a clearly written vision statement. Over time, the tire shop is losing money, so they open up an auto repair shop to bring more customers into the store, hoping that they will be inspired to purchase tires while they’re waiting for their repairs. Over time, the repair shop becomes so busy that management starts to take resources away from the tire shop to support the repair shop. These decisions have a domino effect on the tire shop causing them to stop offering quality tires to offset the cost. Management was also forced to lay off higher-paid employees with minimum wage employees and opted not to train them as well in their products. If they’d had a defined vision statement for the tire shop, and used it to make business decisions, they may have opted to solve problems in a different way.

Why Is a Vision Statement Important?

A vision statement isn’t just an exercise. It defines the core reason for a company’s existence and makes work more meaningful. A vision statement usually helps to attract and engage passionate, like-minded employees. Companies can more easily build an appropriate organizational culture around the vision statement and work towards strengthening the culture. A corporate vision statement gives everyone clarity around the big picture which sets the stage for improved decision-making and targeting the right customers.

Examples of Good Corporate Vision Statements

  • To be a nerd for all your needs. It’s short, sweet, catchy, and has a nice ring to it.
  • To make people happy. It’s short and to the point and it dovetails nicely with their tagline, “The happiest place on earth.”
  • To be the company that best understands and satisfies the product, service and self-fulfillment needs of women—globally. Based on qualities that women appreciate.
  • To accelerate the world’s transition to sustainable energy. Nearly every word has meaning for today and into the future.
  • To give people the power to share and make the world more open and connected. An accurate statement that applies globally.
  • To give customers a wide assortment of their favorite products, Every Day Low Prices, guaranteed satisfaction, friendly service, convenient hours (24 hours, 7 days a week) and a great online shopping experience. It’s a bit longer than most, but it speaks clearly to what they offer.

There are several key takeaways for understanding the importance of a vision statement. It doesn’t matter whether the statement is short or long. Vision statements should be a central part of strategic planning. Because the vision statement guides all aspects of a company, boards should take their time in developing it. Once the vision statement has been created, don’t hide it. Share it with the world and take a sense of pride in it.

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