6. A good vision is competitive, original and unique. It makes sense in the market place. 7. A good vision represents integrity. It is truly genuine and can be used for the benefit of
people.
Did u know? When does a vision fail?
A vision may fail when it is:
1. Too specific (fails to contain a degree of uncertainty) 2. Too vague (fails to act as a landmark)
3. Too inadequate (only partially addresses the problem) 4. Too unrealistic (perceived as unachievable)
A.D. Jick observes that a vision is also likely to fail when leaders spend 90 percent of their time articulating it to their staff and only 10 percent of their time in implementing it. There are two other reasons for vision failure:
1. Adaptability of vision over time 2. Presence of competing visions
2.2.6 Formulating a Vision Statement
Generally, in most cases, vision is inherited from the founder of the organisation who creates a vision. Otherwise, some of the senior strategists in the organisation formulate the vision statement as a part of strategic planning exercise.
Nutt and Backoff identify three different processes for crafting a vision:
1. Leader-dominated Approach: The CEO provides the strategic vision for the organisation.
This approach is criticized because it is against the philosophy of empowerment, which maintains that people across the organisation should be involved in processes and decisions that affect them.
2. Pump-priming Approach: The CEO provides visionary ideas and selects people and groups
within the organisation to further develop those ideas within the broad parameters set out by the CEO.
3. Facilitation Approach: It is a “co-creating approach” in which a wide range of people
participate in the process of developing and articulating a vision. The CEO acts as a facilitator, orchestrating the crafting process. According to Nutt and Backoff, it is this approach that is likely to produce better visions and more successful organisational change and performance as more people have contributed to its development and will therefore be more willing to act in accordance with it.
While the above frameworks identify the extent to which there is involvement throughout the organisation in the development of the vision, they do not address the specifics on how to develop the actual vision itself. Some routines for producing vision are outlined in Table 2.2.
Unit 2: Strategy Formulation and Defining Vision
Notes
Implementing Strategic Vision
(Gratton, 1996)
Vision Retreat (Nanus, 1996)
Strategic Vision and Core Capabilities 1992:67) Developing the Vision (Pendiebury et al., 1998:63–67) 1. Articulate the long-term vision 2. Identify strategic people and processes critical to achieving the vision 3. Assess alignment of the vision with current capabilities 4. Prioritize key actions to bridge from current reality to vision of the future Phase 1: Preparation.
Establish purpose and goals of the retreat
Phase 2: Initial meeting.
Two-day meeting with discussion on vision audit (character of
organization), vision scope (who it includes and desired vision
characteristics), and vision context (environmental issues)
Phase 3: Analysis and report cycle. Facilitator prepares three scenarios of the future that are discussed among participants over a number of weeks
Phase 4: Final meeting One- day discussion and evaluation of vision alternatives and their strategic implications Phase 5: Post-retreat activities. Conclusions communicated throughout the organization including ways of implementing it 1. Generate scenarios of possible futures the organization may face 2. Do a competitive analysis of the industry 3. Analyze the core
capabilities of the company and its competitors 4. Develop a strategic
vision (best) aligned to the strategic options generated from steps 1–3 1. Formalize the need for change 2. Identify the issues that need to be addressed 3. Develop multiple visions 4. Choose an appropriate vision 5. Formalize the vision, ensuring it is clear and communicable
To develop a strategy with a coherent internal logic, the strategists need to understand where the firm and industry are headed. As the future cannot be precisely and definitely described, the strategist has to make some assumptions about it. This requires foresight. Foresight requires imagination of how events might unfold and the role the firm might play in shaping that future to the firm’s advantage. “Vision” is therefore needed to guide the strategists’ plan for bridging the gap between current reality and a potential future.
Task Visit the websites of a few Blue Chip companies and find out their business
vision.
Notes
Caselet
Microsoft Broadens Vision Statement Beyond PCs
R
esponding to what Microsoft perceives as serious threats, the company changed its "PCcentric" vision statement to one that embraces the impact of the Internet on technology. Specifically the shift is from "a computer on every desk and in every home" to "empower people through great software any time, any place and on any device". The most serious threat is the decreased need for windows' software and PCs as developers create programmes accessible via web browsers. While the number of developers writing for Windows is currently stable, the percentage targeting the web have increased from 21% to 38% in the past year.Microsoft has also introduced a pop-up notes feature in their online MSN, that is compatible with and competes with AOl:s instant messaging (IM) feature (Wall Street Journal, July 29, 19990). AOL has blocked Microsoft's "hacking" into their IM feature, as this technology is currently" closed". Microsoft and other Internet service providers such as Yahoo and Prodigy are pursuing AOL to work with them and create interoperable systems (Wall Street Joumal, July 26, 1999b). However, Microsoft continues to adapt its software to enable its Hotmail subscribers to continue instant communication over the Internet-in line with its new vision.
The new corporate vision also indicates Microsoft's intentions to take advantage of new opportunities. Consumers are using their PCs and the Internet to share photography and sample new music. The Windows operating system will integrate digital photography and music, technology, and online services into Windows (Wall Street Journal, July 26, 1999c.) While the company is still under anti-trust scrutiny, they hope to position product integration as a competitive response to changing industries and markets. Clearly, their new vision demands such actions.
Source: Adapted from WallStreet Journal, July 26, 1999
2.3 Summary
Strategic management is the set of managerial decisions and action that determines the way for the long-range performance of the company.
It includes environmental scanning, strategy formulation, strategy implementation, evaluation and control.
Strategy formulation is the development of long range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses. It includes defining the corporate mission, specifying achievable objectives, developing strategies and setting policy guidelines.
Corporate strategy is one, which decides what business the organisation should be in, and how the overall group of activities should be structured and managed.
Competitive Strategy is concerned with creating and maintaining a competitive advantage in each and every area of business.
Unit 2: Strategy Formulation and Defining Vision
Notes
Corporate vision is a short, succinct, and inspiring statement of what the organisation intends to become and to achieve at some point in the future, often stated in competitive terms.
2.4 Keywords
Core Ideology: based on the enduring values of the organisation
Corporate Level Strategy: Involves broad decisions about organisation's scope and direction. Facilitation Approach: A wide range of people participate in the process of developing and
articulating a vision.
Functional Strategy: Involves decisions about each unit of the organisation.
Leader Dominated Approach: The CEO provides the strategic vision for the organisation. Pump-priming Approach: The CEO provides visionary ideas and selects people and groups
within the organisation to further develop those ideas.
Strategic Business Area (SBA): SBA is a distinctive segment of the environment in which the
firm wants to do business.
Sustainable Competitive Advantage: getting a substantial edge over the competitors.
Vision: The overall goal of an organisation that all business activities and processes should
contribute toward achieving.
2.5 Self Assessment
Fill in the blanks:1. Strategy formulation is the process of determining appropriate courses of action for achieving organisational ...
2. The most wonderful strategy in the history of the world is useless if not ... successfully.
3. Corporate strategy involves ... kinds of initiatives.
4. Strategy formulation includes defining the ..., specifying achievable ..., developing ... and setting policy guidelines.
5. Corporate vision is a short, succinct, and inspiring statement of what the organisation intends to ... and to ...
6. ... basic characteristics distinguish functional strategies from corporate level and business level strategies.
7. Competitive Strategy is concerned with creating and maintaining a competitive ... in each and every area of business.
8. Lack of vision is associated with organisational ... and ...
9. ... of business vision means that it should include innovative possibilities for dramatic organizational improvement.
10. A business vision should be ...; it should be able to paint a picture of the kind of company the management is trying to create.