One more time with feeling – are there benefits in setting a vision for your organisation?

Many Australian CEOs are wary of setting grandiose strategic visions for their organisations. They don’t believe there is much value added to the business. And those that do use vision statements, often resort to rather generic statements like “being the best” or “creating shareholder value”. These don’t add much value for the people in the organisation either.

My work in the field of future strategy suggests three key problems in the way we use vision statements - and this may contribute to some of the cynicism that they often attract.

Firstly, vision statements are often somewhat generic and don’t relate to the specific nature of the organisation’s business. Vision statements need to pass an acid test to be useful - ie we should NOT be able to remove the name of our organisation from the top of the statements, replace it with another, and still have it make sense. So, to state that you want to offer the “best service” and be the “leading supplier of..” does not define your core purpose and the way you operate. Vision statements need to reflect the essence of your business - you need to be able to recognise the very DNA of the organisation in the way the vision statement is crafted.

Secondly, the vision statement should have the ability to impact on people’s behaviour - it should offer them guidance on how they should act or make difficult decisions. Vision statements that emphasise financial outcomes serve little purpose other than to motivate the few senior leaders that are rewarded on the profitability of the business. People don’t get out of bed to increase shareholder returns or improve asset utlisation - they are motivated by a desire to serve their customers or make a difference to the community they are part of. In any event, the purpose of a business is NOT to make a profit - this is simply one measure of how effective it has been in meeting its purpose.

Thirdly, if the vision statement includes a section on core values, these have to be carefully selected again to reflect the business of the organisation. Values that emphasise “innovation” and “change readiness” in an organisation where the strategy emphasises accuracy and efficiency is not only misleading - it may actually be counter-productive and result in destructive behaviour. In addition, I am suspicious of the “ten commandments” type values where things like “honesty” and “integrity” are listed. We should be able to take these for granted if we are decent human beings. If we can’t, it makes me wonder what types of behaviour occur normally within those organisations. Furthermore, these generic values offer little support for the particular strategy or way we seek to do business in the organisation.

In his latest book that examines the nature of successful organisations, Jim Collins (Great by Choice) reinforces the contribution made by clear statements of strategic vision and values. These are powerful tools for leaders wishing to improve the performance of their organisations - but they must be done right!

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Part 3: Accelerate Performance With Strategic Alignment - Develop The Appropriate Culture

By Norman Chorn • March 27, 2023

In my previous article "Accelerate Performance with Strategic Alignment - Define the logic of your strategy", we demonstrated the alignment between the market and business strategy by matching the logic of the market with the logic of the strategy. The Explore logic emphasises a market where customers seek new solutions for emerging requirements. The strategy responds by exploring new opportunities and driving for growth. The Exploit logic occurs in a more stable market where customers seek lower costs and reliability of supply. The appropriate strategy focuses on operational efficiency and building close customer relationships. Culture is key to shaping the capabilities of the business to successfully implement strategy . It drives the way that people behave, decisions are made and actions are taken. It determines, therefore, the strategy that is actually realised in the market, as opposed to that which is merely intended. We make a key distinction between the desired culture and the appropriate culture. The desired culture is what people may choose because it sounds attractive and in vogue. However, the appropriate culture is the culture that is required to successfully implement the chosen strategy. Often, these can be different. For example, people might seek to develop a culture that is ‘innovative’, ‘flexible’ and ‘empowering’, but this may not be the appropriate culture needed to successfully implement the business strategy. DEVELOP THE APPROPRIATE CULTURE FOR YOUR STRATEGY Developing the appropriate culture requires a deliberate emphasis on certain cultural attributes and making trade-offs on others. As we will see, the attributes that are traded off are usually the opposites of those that are emphasised.

Part 2: Accelerate Performance with Strategic Alignment - Define the Logic of your Strategy

By Norman Chorn • March 27, 2023

In Part 1 "How to Accelerate Performance with Strategic Alignment - Understand the Logic of the Market" we outlined different market conditions and defined them in terms of two overarching logics — Exploring and Exploiting . To briefly recap, an Exploring logic is one where customers are seeking new solutions for emerging needs. It’s all about change and action. An Exploiting logic occurs in a more stable market in which the issues are about lowering costs and working collaboratively with customers. It’s a market that focuses on stability and cohesion. FORCES THAT SHAPE YOUR STRATEGY Clearly, it is one of these two logics — or a combination of both — that will shape your strategy as you operate in these markets. See figure 1 below that describes how these logics will form your business strategy: