Developing a Strategic Vision

Top management’s views about the company’s long-term direction and what product market customer business mix seems optimal for the road ahead constitute a strategic vision for the company. A strategic vision delineates management’s aspirations for the company’s future, providing a panoramic view of “where we are going” and a convincing rationale for why this makes good business sense. A strategic vision thus points an organization in a particular direction, charts a strategic path for it to follow, builds commitment to the future course of action, and molds organizational identity. A clearly articulated strategic vision communicates management’s aspirations to stakeholders (customers, employees, stockholders, suppliers, etc.) and helps steer the energies of company personnel in a common direction. The vision of Google’s cofounders Larry Page and Sergey Brin “to organize the world’s information and make it universally accessible and useful” provides a good example. In serving as the company’s guiding light, it has captured the imagination of stakeholders and the public at large, served as the basis for crafting the company’s strategic actions, and aided internal efforts to mobilize and direct the company’s resources.

Well-conceived visions are distinctive and specific to a particular organization; they avoid generic, feel-good statements like “We will become a global leader and the first choice of customers in every market we serve.” Likewise, a strategic vision proclaiming management’s quest “to be the market leader” or “to be the most innovative” or “to be recognized as the best company in the industry” offers scant guidance about a company’s long-term direction or the kind of company that management is striving to build.

A surprising number of the vision statements found on company websites and in annual reports are vague and unrevealing, saying very little about the company’s future direction. Some could apply to almost any company in any industry. Many read like a public relations statement—high-sounding words that someone came up with because it is fashionable for companies to have an official vision statement. An example is Hilton Hotel’s vision “to fill the earth with light and the warmth of hospitality,” which simply borders on the incredulous. The real purpose of a vision statement is to serve as a management tool for giving the organization a sense of direction.

For a strategic vision to function as a valuable management tool, it must convey what top executives want the business to look like and provide managers at all organizational levels with a reference point in making strategic decisions and preparing the company for the future. It must say something definitive about how the company’s leaders intend to position the company beyond where it is today.

Source: Thompson, Arthur A., Margaret A. Peteraf, John E. Gamble and A.J. Strickland III. 2018. “Crafting and executing strategy : the quest for competitive advantage: concepts and
cases”. New York : McGraw-Hill