This past year, I attended an event with several people from Salesforce. That’s when I heard that the secret to the company’s stellar success is something they referred to as “V2MOM.”
Having never heard of this, I pressed one of the Salesforce guys for more details, and he explained it stands for vision and values (V2) combined with methods, obstacles, and measures (MOM). It’s shorthand for some fundamental business processes:
Vision: Defines what you want to do or achieve.
Values: Principles and beliefs that help you pursue the vision.
Methods: Actions and steps to take to get the job done.
Obstacles: The challenges and issues you have to overcome to achieve the vision.
Measures: The ways in which you measure achievement.
V2MOM was the brainchild of Salesforce founder and co-CEO Marc Benioff, who has said that it is “the biggest secret of Salesforce.com’scess.”
In a column explaining the origin of V2MOM, Benioff wrote,
“When I was at Oracle, I struggled with the fact that there was no written business plan or formal communication process during our growth phase. In fact, I remember asking Larry Ellison during my new-hire orientation, ‘What is Oracle’s five-year plan?”
His response was simple: ‘We don’t have a five-year plan, we barely have a six-month plan. It was our job to figure it out what Larry wanted on our own.”
This led Benioff down the path to examining what great companies do differently. He found that the discussions kept coming back to the themes of clarity and alignment. I’ve found this true in my experience as well. Most business planning systems that have endured — including Gazelles and the Entrepreneurial Operating System, which we use at Acceleration Partners — have these concepts at their core. Each is a system of planning and alignment tools that acts as an operating system for a company.
If employees don’t have a clear sense of where the business is going or how they contribute to that success, it is really hard for them to apply their energy in smart ways.
In fact, a study in The Strategy-Focused Organization by Robert Kaplan and David Norton shows that as little as 7 percent of employees fully understand their company’s business strategies and what’s expected of them to achieve their company’s goals.
Using V2MOM is a great way to address this disconnect. Once you’ve established the corporate V2MOM, simply cascade the mission down to teams and individuals so that that everyone can create his or her own V2MOM in service of the overall goal.
This process ensures each employee has a clear understanding of priorities every year, as well as how his or her role, goals, and performance contribute to the success of the company
Today, every employee at Salesforce.com has a V2MOM, and anyone can pull up a V2MOM for any of the company’s 20,000 colleagues in real time. This provides total clarity on what everyone is working on and why.
Here are the four main principles behind V2MOM that make it work well.
- Alignment: Every individual’s V2MOM aligns with the company V2MOM, ensuring that all employees are working toward the same goal. In addition, everyone can see how his own work is connected to the bigger picture.
- Priorities: Using V2MOMs to manage how employees are spending their time and resources makes it clear to everyone what tasks are most important to the company. (One Salesforce.com employee even told me that it’s understood that you should not ask someone to work on something that is inconsistent with her V2MOM.)
- Accountability: Since the V2MOM is public, everyone knows where he or she stands. Progress is easy to monitor and track, creating a high level of accountability.
- Adaptability: Business plans tend to be static: People create them and shove them in a drawer. A set of tightly linked V2MOMs makes far more sense is a fast-moving business. When you need to change direction, simply update the V2MOM at the highest level and everyone will switch gears.
While there are lot of different planning and alignment systems available to accomplish the same goals, the V2MOM offers a great blueprint for a high-performance culture. It’s certainly hard to argue with Saleforce’s results: The business has added $100 billion in market capitalization in the past 10 years.