Strategic Leadership and Decision Making
A specialist was hired to develop and present a series of half-day training seminars on empowerment and teamwork for the managers of a large international oil company. Fifteen minutes into the first presentation, he took a headlong plunge into the trap of assumption. With great intent, he laid the groundwork for what he considered the heart of empowerment-team-building, family, and community. He praised the need for energy, commitment, and passion for production. At what he thought was the appropriate time, he asked the group of 40 managers the simple question on which he was to ground his entire talk: "What is the vision of your company?" No one raised a hand. The speaker thought they might be shy, so he gently encouraged them. The room grew deadly silent. Everyone was looking at everyone else, and he had a sinking sensation in his stomach. "Your company does have a vision, doesn't it?" he asked. A few people shrugged, and a few shook their heads. He was dumbfounded. How could any group or individual strive toward greatness and mastery without a vision? That's exactly the point. They can't. They can maintain, they can survive; but they can't expect to achieve greatness.
Vision is a widely used term, but not well understood. Perhaps leaders don't understand what vision is, or why it is important. One strategic leader is quoted as saying, "I've come to believe that we need a vision to guide us, but I can't seem to get my hands on what 'vision' is. I've heard lots of terms like mission, purpose, values, and strategic intent, but no-one has given me a satisfactory way of looking at vision that will help me sort out this morass of words. It's really frustrating!" (Collins and Porras 1991). To understand vision, clarify what the term means.
One definition of vision comes from Burt Nanus, a well-known expert on the subject. Nanus defines a vision as a realistic, credible, attractive future for [an] organization. Let's disect this definition:
Nanus goes on to say that the right vision for an organization, one that is a realistic, credible, attractive future for that organization, can accomplish a number of things for the organization:
Another definition of vision comes from Oren Harari: "Vision should describe a set of ideals and priorities, a picture of the future, a sense of what makes the company special and unique, a core set of principles that the company stands for, and a broad set of compelling criteria that will help define organizational success." Are there any differences between Nanus's and Harari's definitions of vision? What are the similarities? Do these definitions help clarify the concept of vision and bring it into focus?
An additional framework for examining vision is put forward by Collins and Porras. They conceptualize vision as having two major components: a Guiding Philosophy, and a Tangible Image. They define the guiding philosophy as "a system of fundamental motivating assumptions, principles, values and tenets." The guiding philosophy stems from the organization's core beliefs and values and its purpose.
CORE BELIEFS AND VALUES
Just as they underlie organizational culture, beliefs and values are a critical part of guiding philosophy and therefore vision. One CEO expressed the importance of core values and beliefs this way:
I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on whichit premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs. And, finally, I believe [the organization] must be willing to change everything about itself except those beliefs as it moves through corporate life. (Collins and Porras 1991)
Core values and beliefs can relate to different constituents such as customers, employees, and shareholders, to the organization's goals, to ethical conduct, or to the organization's management and leadership philosophy. Baxter Healthcare Corporation has articulated three Shared Values: Respect for their Employees, Responsiveness to their Customers, and Results for their Shareholders, skillfully linking their core values to their key constituencies and also saying something about what is important to the organization. The key, however, is whether these are not only stated but also operating values.
Collins and Porras have provided examples of core values and beliefs from a survey of industry they conducted, and cite the following examples, among others:
Marriott: "See the good in people, and try to develop those qualities."
L.L. Bean: "Sell good merchandise at a reasonable price; treat your customers like you would your friends, and the business will take care of itself."
Sony: "We should always be the pioneers with our products--out front leading the market. We believe in leading the public with new products rather than asking them what kind of products they want."
Motorola: "Everything will turn out alright if we just keep in motion, forever moving forward."
The second part of guiding philosophy is purpose-why the organization exists, what needs it fills. Collins and Porras believe a good purpose statement should be "broad, fundamental, inspirational, and enduring." Consider this purpose statement: "The purpose of the United States Naval Academy at Annapolis, MD, is to prepare midshipmen to become professional officers in the naval service." Or this purpose statement from Apple Computer: "To make a contribution to the world by making tools for the mind that advance humankind." How do these statements of purpose stack up?
Whether individual, team, organization or nation, a sense of purpose and direction is essential to commitment. A shared sense of purpose is the glue that binds people together in common cause, often linking each individual's goals with the organization's goals. Properly formulated, a shared sense of purpose provides understanding of the need for coordinated collective effort -- for subordinating individual interest to the larger objective that can be achieved only by the collective effort. When it is long range in nature, it is the basis for detailed planning for the allocation of resources. When it is noble and inspiring, it gives dignity and respect to those participating in the effort. And, when it promises a better future, it gives hope to all who seek it.
The second major component of vision is tangible image. This is composed of a mission and a vivid description. Mission is "a clear and compelling goal that serves to unify an organization's effort. An effective mission must stretch and challenge the organization, yet be achievable" (Collins and Porras). There are four ways of approaching developing a mission statement: targeting, common enemy, role model, and transformation. Targeting means developing your mission statement around a clear, definable goal. An example is the mission Merck Pharmaceuticals set in 1979: To establish Merck as the preeminent drug-maker worldwide in the 1980s. The common enemy approach is to focus the mission on overtaking or dominating a rival. Athletic shoe, automobile, and telecommuncations companies are all examples of areas where competition with rivals dominates company missions. Role model missions take an exemplar in another industry, and benchmark off that exemplar. For example, a mission "To be the Microsoft of retail sales companies" employs the role modeling technique. Finally, the internal transformation approach mission tends to focus on the internal remaking, restructuring, or rebirth of an organization. One example of a transformational mission might be the Army's recent efforts to transform itself into a newer, leaner Army positioned for the 21st century.
This may be a good point to address the confusion over the use of the terms purpose, mission and vision. Collins and Porras view purpose and mission as components of vision. Others, such as Nanus, differentiate between mission and vision. Nanus states, "A vision is not a mission. To state that an organization has a mission is to state its purpose, not its direction." Further complicating the semantics, different organizations may have mission statements, vision statements, purpose statements, or all three. To take one example, Quorum Health Group, Inc. a hospital management company, differentiates between its mission and vision this way:
Quorum Health Group, Inc., is a hospital company committed to meeting the needs of clients as an owner, manager, consultant or partner through innovative services that enhance the delivery of quality healthcare.
Quorum Health Group, Inc., will be valued for its expertise in hospital management and its ability to positively impact the delivery of quality healthcare.
What are the differences between these two statements? Note that the mission is oriented in the present ("QHG is a company . . ."), while the vision is oriented in the future ("QHG will be valued . . ."). The mission states what QHG does in relatively concrete terms (meet the needs of clients by providing services that enhance the delivery of quality healthcare), while the vision states what it wants to do in more idealistic terms (be valued for its expertise and its ability to positively impact the delivery of quality healthcare).
One final example may illustrate how confused mission and vision can become. The Coca-Cola Company in 1994 published a booklet entitled "Our Mission and Our Commitment." In that booklet, the company defines their mission as follows:
We exist to create value for our share owners on a long term basis by building a business that enhances The Coca-Cola Company's trademarks. This also is our ultimate commitment. As the world's largest beverage company, we refresh that world. We do this by developing superior soft drinks, both carbonated and non-carbonated, and profitable non-alcoholic beverage systems that create value for our Company, our bottling partners, and our customers.
Does this sound like a mission, a vision, or a combination of both?
In Collins and Porras's framework for vision, their last element is a vivid description or picture of the end state that completion of the mission represents. They view this as essential to bringing the mission to life. A vivid description gives the mission the ability to inspire and motivate. Look back at the Coca-Cola Company mission shown above. Does it paint a vivid description of completion of the mission, or would The Coca-Cola Company have to amplify the mission statement?
To put this all together, Collins and Porras present the following framework:
core beliefs and values + purpose = guiding philosophy
mission + vivid description = tangible image
guiding philosophy + tangible image = vision
Note that, as opposed to Nanus, Collins and Porras do not focus on a vision statement, but on a vision as consisting of elements shown above. It's worth exploring the properties of a good vision. Nanus has several guidelines for creating a realistic, credible, attractive future for an organization:
PROPERTIES OF A GOOD VISION
DEVELOPING A VISION
At this point you should know what a good vision consists of, and recognize a vision statement when you see one. But how does a strategic leader go about developing a vision for an organization? Nanus also offers a few words of advice to someone formulating a vision for an organization:
1. Understand the organization. To formulate a vision for an organization, you first must understand it. Essential questions to be answered include what its mission and purpose are, what value it provides to society, what the character of the industry is, what institutional framework the organization operates in, what the organization's position is within that framework, what it takes for the organization to succeed, who the critical stakeholders are, both inside and outside the organization, and what their interests and expectations are.
2. Conduct a vision audit. This step involves assessing the current direction and momentum of the organization. Key questions to be answered include: Does the organization have a clearly stated vision? What is the organization's current direction? Do the key leaders of the organization know where the organization is headed and agree on the direction? Do the organization's structures, processes, personnel, incentives, and information systems support the current direction?
3. Target the vision. This step involves starting to narrow in on a vision. Key questions: What are the boundaries or constraints to the vision? What must the vision accomplish? What critical issues must be addressed in the vision?
4. Set the vision context. This is where you look to the future, and where the process of formulating a vision gets difficult. Your vision is a desirable future for the organization. To craft that vision you first must think about what the organization's future environment might look like. This doesn't mean you need to predict the future, only to make some informed estimates about what future environments might look like. First, categorize future developments in the environment which might affect your vision. Second, list your expectations for the future in each category. Third, determine which of these expectations is most likely to occur. And fourth, assign a probability of occurrence to each expectation.
5. Develop future scenarios. This step follows directly from the fourth step. Having determined, as best you can, those expectations most likely to occur, and those with the most impact on your vision, combine those expectations into a few brief scenarios to include the range of possible futures you anticipate. The scenarios should represent, in the aggregate, the alternative "futures" the organization is likely to operate within.
6. Generate alternative visions. Just as there are several alternative futures for the environment, there are several directions the organization might take in the future. The purpose of this step is to generate visions reflecting those different directions. Do not evaluate your possible visions at this point, but use a relatively unconstrained approach.
7. Choose the final vision. Here's the decision point where you select the best possible vision for your organization. To do this, first look at the properties of a good vision, and what it takes for a vision to succeed, including consistency with the organization's culture and values. Next, compare the visions you've generated with the alternative scenarios, and determine which of the possible visions will apply to the broadest range of scenarios. The final vision should be the one which best meets the criteria of a good vision, is compatible with the organization's culture and values, and applies to a broad range of alternative scenarios (possible futures).
IMPLEMENTING THE VISION
Now that you have a vision statement for your organization, are you done? Formulating the vision is only the first step; implementing the vision is much harder, but must follow if the vision is going to have any effect on the organization. The three critical tasks of the strategic leader are formulating the vision, communicating it, and implementing it. Some organizations think that developing the vision is all that is necessary. If they have not planned for implementing that vision, development of the vision has been wasted effort. Even worse, a stated vision which is not implemented may have adverse effects within the organization because it initially creates expectations that lead to cynicism when those expectations are not met.
Before implementing the vision, the leader needs to communicate the vision to all the organization's stakeholders, particularly those inside the organization. The vision needs to be well articulated so that it can be easily understood. And, if the vision is to inspire enthusiasm and encourage commitment, it must be communicated to all the members of the organization.
How do you communicate a vision to a large and diverse organization? The key is to communicate the vision through multiple means. Some techniques used by organizations to communicate the vision include disseminating the vision in written form; preparing audiovisual shows outlining and explaining the vision; and presenting an explanation of the vision in speeches, interviews or press releases by the organization's leaders. An organization's leaders also may publicly "sign up" for the vision. You've got to "walk your talk." For the vision to have credibility, leaders must not only say they believe in the vision; they must demonstrate that they do through their decisions and their actions.
Once you've communicated your vision, how do you go about implementing it? This is where strategic planning comes in. To describe the relationship between strategic visioning and strategic planning in very simple terms, visioning can be considered as establishing where you want the organization to be in the future; strategic planning determines how to get there from where you are now. Strategic planning links the present to the future, and shows how you intend to move toward your vision. One process of strategic planning is to first develop goals to help you achieve your vision, then develop actions that will enable the organization to reach these goals.
An organization must and can develop a strategic plan that includes specific and measurable goals to implement a vision. A comprehensive plan will recognize where the organization is today, and cover all the areas where action is needed to move toward the vision. In addition to being specific and measurable, actions should clearly state who is responsible for their completion. Actions should have milestones tied to them so progress toward the goals can be measured.
Implementing the vision does not stop with the formulation of a strategic plan - the organization that stops at this point is not much better off than one that stops when the vision is formulated. Real implementation of a vision is in the execution of the strategic plan throughout the organization, in the continual monitoring of progress toward the vision, and in the continual revision of the strategic plan as changes in the organization or its environment necessitate. The bottom line is that visioning is not a discrete event, but rather an ongoing process.
A FORMULA FOR VISIONARY LEADERSHIP
Burt Nanus sums up his concepts with two simple formulas (slightly modified):
STRATEGIC VISION X COMMUNICATION = SHARED PURPOSE
SHARED PURPOSE X EMPOWERED PEOPLE X
APPROPRIATE ORGANIZATIONAL CHANGES X STRATEGIC THINKING =
SUCCESSFUL VISIONARY LEADERSHIP
Each one of the terms places unique and special demands on the strategic leader. If you can put these elements together in an organization, and you have a good vision to start with, you should be well on the way to achieving excellence. Collins and Porras affirm: "The function of a leader-the one universal requirement of effective leadership-is to catalyze a clear and shared vision of the organization and to secure commitment to and vigorous pursuit of that vision."
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