A values-based organization is built brick by brick, one layer at a time, in a specific sequence. We have already discussed how to define the values and put them in place and ensure that the right people are on the team. These two steps—having strong values and a phenomenal team—are a good start, and must absolutely come first, but we don't stop there. For the values of the organization and the people on the team to make a real difference, it is critical to set a clear direction. I repeat: set not just a direction, but a clear direction.

This need to set a clear direction applies at every level, whether you're the CEO or a member of the senior executive team determining the strategy for the entire organization, a first-level manager with three people reporting to you, or a single contributor working with cross-functional teams. Every person with whom you interact, whether he reports to you or is a peer, must have a clear understanding of exactly what needs to be done and how those actions fit into the bigger picture. In a business context, this means addressing the competitive advantage of a particular team: “What do we as a team do exceptionally well? How can we uniquely serve our customers to create a viable and sustainable enterprise?” In other words, you must set a clear direction and communicate it to everyone at every level.

Without a clear direction, your efforts to establish a values-based organization will come to a screeching halt. Even when the values are well defined and the right people are in place, an organization can suffer from a disconnect between the plan and the execution. When this occurs, managers wonder why things went wrong. More often than not, the problem resulted from not setting a clear direction.

The reason there is so much dysfunction and inconsistency in organizations is not that people are unwilling or incapable. As I've said, I believe that 99 percent of people really do want to do the right thing and follow a clearly set direction. However, it seems in many organizations that at least half the people are doing things that are inconsistent with what the company is trying to achieve. The managers who think they know the strategy and how to execute it are often stumped. They just can't seem to put their finger on the problem. Here's a hint: nobody else knows the plan.

In many cases, the strategy that the leaders defined fails to be disseminated throughout the organization, and many people don't understand what they are supposed to do. Although the course of action may appear perfectly clear to the leaders who sit around a conference table and hash out the strategy, nobody communicates it to the rest of the organization in a way that everyone understands. Nobody informs the team on the front lines—those who are supposed to take the proverbial ball and run with it—what the game plan is. No wonder there are multiple fumbles!

You can't risk having each person moving in what she thinks is the right direction or doing what seems to make sense in the moment. If you let this happen, there are going to be many missed opportunities, much confusion, and a higher likelihood of disaster. Or you could end up with very little action because people want to overintellectualize every decision or action. When setting a clear direction, you are seeking simplicity and clarity.