A strategic vision is a road map showing the route a company intends to take in developing and strengthening its business. It paints a picture of a company’s destination and provides a rationale for going there.
Key Elements of a Strategic Vision
Delineates management’s aspirations for the business –
Charts a strategic path for the future “Where are we going?”
Steers energies of employees in a common direction
Molds organizational identity
Is distinctive and specific to a particular organization
Avoids use of generic language
Triggers strong emotions
Is challenging, uncomfortable, nail biting
Exelon’s Strategic Vision
One Company, One Vision. Exelon strives to build exceptional value - by becoming the best and most consistently profitable electricity and gas company in the United States. To succeed, we must . . .
Live up to our commitments . . .
Perform at world-class levels . . .
Invest in our consolidating industry . . .
Examples of Strategic Visions
Red Hat Linux
To extend our position as the most trusted Linux and open source provider to the enterprise. We intend to grow the market for Linux through a complete range of enterprise Red Hat Linux software, a powerful Internet management platform, and associated support and services.
Wells Fargo
We want to satisfy all of our customers’ financial needs, help them success financially, be the premier provider of financial services in every one of our markets, and be known as one of America’s great companies.
Examples of Strategic Visions
Wyeth
Our vision is to lead the way to a healthier world. By carrying out this vision at every level of our organization, we will be recognized by our employees, customers, and shareholders as the best pharmaceutical company in the world, resulting in value for all. We will achieve this by:
Making quality, integrity, and excellence hallmarks of the way we do business
Attracting, developing, and motivating the best people
Continually growing improving our business
Examples of Strategic Visions
Dental Products Division of 3M Corporation
Become THE supplier of choice to the global dental professional markets, providing world-class quality and innovative products. [All employees of the division wear badges bearing these words, and whenever a new product or business procedure is being considered, management asks “Is this representative of THE leading dental company?”]
Nike
To bring innovation inspiration to every athlete in the world.
Examples of Strategic Visions
Intel
Our vision: Getting to a billion connected computers worldwide, millions of servers, and trillions of dollars of e-commerce. Intel’s core mission is being the building block supplier to the Internet economy and spurring efforts to make the Internet more useful. Being connected is now at the center of people’s computing experience. We are helping to expand the capabilities of the PC platform and the Internet . . . We have seen only the early stages of deployment of digital technologies.
Examples of Strategic Visions
Heinz
Our vision, quite simply, is to be the world’s premier food company, offering nutritious, superior tasting foods to people everywhere. Being the premier food company does not mean being the biggest but it does mean being the best in terms of consumer value, customer service, employee talent, and consistent and predictable growth.
General Electric
We will become number one or number two in every market we serve, and revolutionize this company to have the speed and agility of a small enterprise.
Strategic Vision vs. Mission
The mission statement of most companies focuses on current business activities - “who we are and what we do”
Current product and service offerings
Customer needs being served
Technological and business capabilities
A strategic vision concerns a firm’s future business path - “where we are going”
Markets to be pursued
Future technology-product-customer focus
Kind of company management is trying to create
Characteristics of a Mission Statement
Defines current business activities, highlighting boundaries of current business
Present products and services
Types of customers served
Conveys
Who we are,
What we do, and
Why we are here
A company’s mission is not to make a profit! Its true mission is its answer to “What will we do to make a profit?” Making is profit is an objective or intended outcome!
Key Elements of a Mission Statement
Three factors to consider
Customer needs – What is being satisfied
Customer groups – Who is being satisfied
Technologies/resources/business approaches used and activities performed – How customer needs are satisfied
Trader Joe’s Mission Statement
To give our customers the best food and beverage values that they can find anywhere and to provide them with the information required for informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.
(a unique grocery store chain)
Linking the Vision With Company Values
A statement of values is often provided to guide the company’s pursuit of its vision
Values – Beliefs, business principles, and ways of doing things that are incorporated into
Company’s operations
Behavior of workforce
Values statements
Contain between four and eight values
Are ideally tightly connected to and reinforce company’s vision, strategy, and operating practices
A company’s achievement of satisfactory financial performance, by itself, is not enough
Financial performance measures are “lagging indicators” reflecting results of past decisions and actions
Of equal or greater importance is a company’s performance on measures of its strategic well-being — its competitiveness and market position
Strategic performance measures are “leading indicators” of a company’s future financial performance and business prospects
Achievement of strategic performance targets
Signals growing competitiveness
Signals growing strength in the marketplace
Balanced Scorecard Approach – Strategic and Financial Objectives
Balanced scorecard approach for measuring company performance requiresboth –
Financial objectives
Strategic objectives
Emphasis on financial performance may assume priority over strategic performance when company’s
Financial performance is dismal and
Survival is threatened
Otherwise, management is advised to put more emphasis on achieving strategic objectives
The surest path to sustained future profitability year after year is to relentlessly pursue strategic outcomes that strengthen a company’s business position and give it a growing competitive advantage over rivals!
Milestones or stair steps for reaching long-range performance
Long-term objectives
Targets to be achieved within 3 to 5 years
Prompt actions now that will permit reaching targeted long-range performance later
Concept of Strategic Intent
A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective and concentrates its competitive actions and energies on achieving that objective!
Characteristics of Strategic Intent
Indicates firm’s intent to making quantam gains in competing against key rivals and to establishing itself as a winner in the marketplace, often against long odds
Involves establishing a grandiose performance target that is out of proportion to its immediate capabilities and market position but then devoting the company’s full resources and energies to achieving the target over time
Signals relentless commitment to achieving a particular market position and competitive standing
Objectives Are Needed at All Levels
1. First, establish organization-wide objectives and performance targets
2. Next, set business and product line objectives
3. Then, establish functional and departmental objectives
4.Individual objectives are established last
Importance of Top-Down Objectives
Guide objective-setting and strategy-making at lower levels
Ensures financial and strategic performance targets for all business units, divisions, and departments are directly connected to achieving company-wide objectives
Integration of objectives has two advantages
Helps produce cohesion among objectives and strategies of different parts of organization
Helps unify internal efforts to move a company along the chosen strategic path
Crafting a Strategy
Strategy-making involves entrepreneurship – searching for opportunities
To do new things or
To do existing things in new or better ways
Strategizing involves
Picking up on happenings in the external environment and