In my previous article I defined what a strategy is, basically saying it is a ‘plan to achieve a certain result’. The ‘result’ is often called a ‘vision’. So if you don’t have a vision it becomes theoretically impossible to develop a strategy. Therefore it is often the case that when people say they need a ’strategy’ they really need a ‘vision’, …..and probably also a strategy.
Before we dive into strategy building, let’s take a closer look at some examples of visions and strategies. For my first example consider you are living in the 15th century and you have a family with 2 kids. As a responsible parent you want to make sure they are fed well. Your children haven’t had a full meal with a nice piece of meat in a while. As soon as you wake up you create your vision: “today at 20.00 my children will eat a full meal with a fresh piece of meat, larger than they can eat!’. That is pretty concrete, right? There is a time-line, a quantifiable goal, although the type of meat and the quantity is still left open. But you sort of get it, it is concrete enough.
In order to achieve the vision you come up with several potential strategies:
- You will go into the woods to hunt, hoping to kill a deer or boar. If you leave early you should have time enough to be successful and have enough time to have the meal ready by 20.00
- You will bake cookies and try to trade it for 2 large pieces of whatever meat you can get.
- You will try to get your family invited by the neighbours who always have plenty of meat.
These are quite different ways of possibly achieving the vision. The clear vision has helped us to create alternative strategies to achieve it. However, the real question is not coming up with strategies that may or may not work. We are basically only interested in the strategy that has the highest probability of succeeding! In order to evaluate which strategy is best we need to look at ourselves and our context. If you are a lousy hunter and there are only few animals in the neighborhood you are likely to fail on this strategy. Similarly, if your cookies really aren’t that good compared to the cookies other villagers make you may not be able to trade them for meat. And lastly, if your social skills are low or the neighbors happen to be out to visit the family that day, you will fail as well.
In other words, evaluating strategies means looking at your own situation and the wider context, to made an estimation about the likelihood of succeeding. Basically, educated guesswork!
In the example above the time-line was short, the vision very concrete. In practice it is often not the case. Let’s assume we change the time-line on our example and adjust the vision to “I want to be able to provide my children with quality food on every day of the year”. The time-line is now a year and the challenge is now to achieve a consistent ‘food performance’ every day. For this vision the strategies above are probably not efficient and you will need to consider other strategies:
- Get a steady job that will provide you with enough money to buy enough quality food for your children.
- Start an animal farm that will provide you with enough supply of animals for your family and beyond so that you can buy other types of food as well.
- Marry a partner with money so you’ll have access to enough money without having to do much for it.
These strategies are still potentially good plans but you see that the abstraction level of the strategy is getting higher. Moreover, it is also becoming more difficult to estimate your chances.
Enough about feeding your children, let’s look at real world visions and strategies! The problem with most companies is that their visions are usually very abstract and vague, e.g. “be the leader in industry X”, “be the best company doing X”, “making the best products/service in the field of Y”….and so on. That is if your company has a vision at all; most small companies never even formulate one. The really highlevel vision statements are clear on one side but also very vague on the other side. Take for example “be the leader in industry X”. The first question would be to make the word ‘leader’ more specific. Does that mean ‘highest number of products sold’, or ‘highest overall revenue’, or ‘most profitable’ or ‘most respected’ or perhaps all of these at the same time. Nonetheless, there can be a substantial difference between ‘highest product sales’ and ‘most profitable’. Then there is the question of who you compare yourself with. So who are your competitors? Then there is the question of what your ‘industry’ actually compasses…..My point is that such vision statements are problematic as they don’t really define the desired ‘vision state’ precisely enough for developing strategies.
There are usually 2 things that can happen: 1) the vision is refined before any strategies are formulated, or 2) management states the vision is ‘clear enough’ and strategies are demanded. You can guess the what problems may arise if the latter route is chosen. Basically you’d have to formulate a new vision statement anyway that is more useful because otherwise you will simply not be able to generate meaningful strategies. That’s brings is to the problem of clear vision statements.
If you know exactly what you want to achieve, formulated in a clear vision statement, you have already solved more than half of the puzzle. In a competitive market it is often quite hard to formulate a vision that is ‘good’. Just like with strategies there may be a whole set of potential ‘vision states’ that you could consider. But which one is the best for you company in terms of its business value, the people you have in your company, the knowledge and assets, the competitive advantage you may have and so on? Some of the vision states would be nice to be in but they may be utterly unreachable. Other vision states may be within reach but are business-wise not bringing the company anywhere significant. Companies that have very abstract vision statements or no statements at all really need help with their vision and not so much the strategy! A good vision is one that sets the company in a good business position and is both clear and specific at the same time. Naturally it will be hard to do that using only one sentence. Therefore good vision statements will use at least a paragraph to formulate!
In the next article we’ll take a look at how to build a vision….stay tuned!
