The Board of Directors and the CEO need to establish is an envisioned future (some call this building a vision). The vision is best established, not as a solo exercise on the part of the Board of Directors and the CEO, but should rather be the result of a team discussion involving senior executives of the organization. Building the envisioned future is a bit like making a painting. The more details you add to the canvas, the more precise the image will be, and the easier it will be for the viewer to get what the image is saying. The vision establishes the long-term aspirations of the organization; say three to five years out. It should include as many details as possible about the future financial situation, number of employees, number of plants, divisions, geographies serviced, lines of business operated in, amongst other relevant details. In addition, it can include demographic or philanthropic elements. It should talk about its employees, its customers, its shareholders, is stature in the market, and so on. The more the better. The envisioned future needs to be bold, yet believable and reachable, but only as a tough stretch, requiring a immense amount of efforts; it should includes what Collins calls in Built to Last, Big Hairy Audacious Goals (or BHAGs).

Ideally, the vision should take the organization to a place in its value-chain, not necessarily where the money is today but where the money will be, and where the performance is not yet good enough⁽⁴⁾.

The envisioned future is a depiction of a new “strategic canvas” depicting which of the strategic levers will be reduced, or eliminated, and which will be increased or created.

In order to break away from a competitive environment, you need to break out of the accepted boundaries of you market. Your envisioned future should attempt to reconstruct your market boundaries by:

Looking across alternative industries
Looking across strategic groups within industries
Looking across the chain of buyers
Looking across complementary product and service offerings
Looking across functional or emotional appeal to buyers
Looking across time

You envisioned future needs to bear three important characteristics: 1) it needs to take the company on a path of divergence, away from competitors and existing customers, into a space not yet occupied; 2) it needs to bring focus so that it helps organizations spend their resources on a specific set of actions; and 3) it is expressed as a simple, understandable and memorable Vision Statement⁽¹⁶⁾.

Documenting the envisioned future is important. It allows stakeholders to see truly the seriousness of the aspirations and assimilate more details on each read. Yet, once the envisioned future is documented, it needs to be distilled back into the infamous vision statement.

Vision statement

The vision statement is a simple, understandable and memorable statement. It is a very short, 10-40 words, future tensed single sentence that captures the essence of the envisioned future. It is short so that all employees can remember it, verbatim. For example, Jack Welch’s vision was “To become the most competitive organization on Earth”. Its simplicity was its strength and gave it great clarity and immediate understanding. As the vision statement will be used in many future communications, its meaning cannot be left to each person’s interpretation. Employees need to understand why the specific words of the vision statement where selected. The subtle meanings, the reasons why one word was chosen above other words cannot be understood only by the scribe, but must be fully grasped by the target audiences. Here is an example: “Our ultimate goal is to build an ABC service organization with a global reach; an organization that embeds quality and value in everything it does; that cares for people and delivers superior results.” In explaining in details the vision statement, the Board of Directors and the CEO need to clarify words such as “ABC service organization” by describing which industries are covered and which are not. The words “global reach” were picked perhaps to mean that although the organization will not be physically present in all countries, it will create alliances in some specific countries to provide market reach. What is meant by imbedding quality and how might the organization do such? And so on.

Strategic elements

Furthermore, the vision statement needs to be broken down, or connected to the five to ten strategic levers or strategic elements identified when creating your strategic canvas⁽¹⁶⁾. These strategic levers and elements are the basis on which the Core Strategies will be developed and allow to document the objectives against which you can measure the advancement of the organization in achieving its envisioned future. In the example above, the Board of Directors and the CEO need to clarify the metrics that will be used to track the progress towards the envisioned future: how the organization will track its market play, its global reach, embedding of quality, caring for people, delivering superior results. The strategic elements bring the vision statement into life by clarifying a link between the vision statement and the strategies needed to achieve the vision. It gives the organization a way to align the employees’ day-to-day work along some measurable progress bars. It will allow those metrics to be allocated to business leaders and tracked over months, quarters, years. It will tell you if the strategies adopted, which we will cover later, are delivering the results.

Two other Statements of Visions

In addition to define the envisioned future, which is largely for internal consumption, the organization needs to declare one or two other visions.

The first is a market vision. Anchored on its Fundamental Beliefs, the market vision summarizes the organization’s Fundamental Beliefs to the market stakeholders, shareholders, customers, industry and financial analysts. Although it is essential for the organization to tell its story, the market vision needs not be crafted with such precision.

The second vision applies more so to product organizations than to services organizations and that is the Product Vision. The Product Vision is essential for the organization to establish a roadmap for its product lines and take them every so closer to the ultimate customer delight.

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Published at 20:01

11 March 2011