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Chapter 5

Creating Vision and Strategic Direction

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Strategic Leadership

The ability to anticipate and envision the future, maintain flexibility, think strategically, and initiate changes that will create a competitive advantage for the organization in the future

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The Domain of Strategic Leadership

Architecture for alignment and implementation

Strategy

Mission

Vision

Purpose?

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VisionAn attractive, ideal future that is credible yet not readily attainable

•Links the present to the future•Energizes people and gather commitment•Gives meaning to work•Establishes a standard of excellence and integrity

Action memo - As a leader•Articulate an optimistic vision for the future. Inspire and challenge people to give their best.•Connect your vision to the current reality of the organization. • Frame a vision that sets a standard of excellence and integrity, connect to core values, and helps people find meaning and dignity in their work.

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Examples of Brief Vision Statements (selected)

Motorola Become the premier company in the world

Ritz-Carlton (Amelia Island) Engineering Dept. Where no hotel has gone before – free of all defects

Johnson Controls Inc. Continually exceed our customers’ increasing expectations

New York City Transit No graffiti

Egon Zehnder Be the worldwide leader in executive search

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The Nature of the Vision

Current reality

Staying the course

Mov

ing

tow

ard

a de

sire

d

futu

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Vision

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Common Themes of Vision Vision has broad appeal : The ideal vision is

identified with the organization as a whole not with a single leader or even a top leadership team. It capture people in the gut and motivates them to work toward a common end. It allows each individual to act independently but in the same direction.

Vision deals with change : Changes can be frightening, but a clear sense of direction helps people face the difficulties and uncertainties involved in the change process.

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Vision encourages faith and hope : Vision is an emotional appeal to our fundamental human needs and desires – to feel important and useful, to believe we can make a real difference in the world.

Vision reflects high ideals : Vision has power to inspire and energize people only when it paints an uplifting future.

Vision defines the destination and the journey : A good vision for the future includes a specific outcomes that the organization wants to achieve. It also incorporates the underlying values that will help the organization get there.

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A vision works at multiple level

Self-reference: A principle stating that each element in a system will serve the goals of the whole system when the elements are imprinted with an understanding of the whole.

Good leaders give up the idea that vision emanates from only the top

“My job, fundamentally, is listening to what the organization is trying to say, and then making sure it is forcefully articulated”.

Action memo - As a leader• Encourage people to share their hopes and dreams for the future.• Create a shared vision so that every individual, team and department is moving in the same direction.• Help people see the values, activities and objectives that can attain the vision.

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Mission

The organization’s core broad purpose and reason for existence

Action memo - As a leader• Remember what the organization stands for

in a broader sense – its core purpose and values.• Create the vision around that central mission.

Mission statement for Merks & Co.

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Vision

We will be the first drug maker with advanced research in every disease category. Our research will be as good as the science being done anywhere in the world. Our drugs won’t be used by a single person who doesn’t need them. Merk will continue to grow on a steady basis, bringing forth worthwhile products.

Mission

The mission of Merk is to provide society with superior products and services – innovation and solutions that improve the quality of life and satisfy customer needs – to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return.

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Values•Our business is preserving and improve human life.•We are committed to the highest standards of ethics and integrity.•We are dedicated to the highest level of scientific excellence and commit our research to improving human and animal health and the quality of life.•We expect profits, but only from work that satisfies customer needs and benefits humanity.•We recognize that the ability to excel – to most competitively meet society’s and customer needs – depends on the integrity, knowledge, imagination, skill, diversity, and team work of employees, and we value these qualities most highly.

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Strategic Management

Strategic Management The set of decisions and actions used to formulate and

implement specific strategies that will achieve a competitively superior fit between the organization and its environment so as to achieve organization goals

Strategy The general plan of action that describes resource

allocation and other activities for dealing with the environment and helping the organization attain its goals

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Core Competence

Something the organization does extremely well, even uniquely well, in comparison to competitors

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Synergy and Value

Synergy: the interaction of organizational parts to produce a joint effect that is greater than the sum of the parts

Value: the combination of benefits received and costs paid by the customer

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Strategy in Action

Strategy Formulation The integrating knowledge of the environment, vision, and

mission with the core competence in such a way as to achieve synergy and create customer value.

Strategy Implementation Putting strategy into action by adjusting various parts of the

organization and directing resources to accomplish strategic goals.

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Making Strategic Decisions

Ease of Implementation

Hard Easy

Strategic Impact

High

Low

High Impact, Hard to Implement.Major changes, but with potential for high payoff

High Impact, Easy to Implement.Simple changes that have high strategic impact – take action here first

Low Impact, Hard to Implement.Difficult changes with little or no potential for payoff – avoid this category

Low Impact, Easy to Implement.Incremental improvements, “small wins;” pursue for symbolic value of success

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Action memo - As a leader• Formulate strategies that focus on the organization’s core competencies, attain synergy, and creative value for customers.• Prepare for the future based on trends in the

environment today.• Don’t be afraid to think radically.• Shift your strategies to fit changing environmental condition.

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Linking Strategic Vision and Strategic Action

The Dreamer The Effective Leader

The Uninvolved The Doer

Action

Low HighLow

High

Vision

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Action memo - As a leader• Build the trust and commitment of employees

to support the strategy.• Direct resources toward the achievement of

strategic goals.• Revise policies procedures, reward systems,

budget allocations, organizational design, or other elements as needed to effectively

implement the strategy.