A recent Facebook post by a friend that praised her CEO’s ‘vision’ caught my attention. Curious on why a CEO would discuss his vision for the company in a media interview, I decided to read on. Turns out, what the CEO described was not his vision. It was not even the company’s strategy. It was, at best, the company’s medium-term tactical plan for India. Being a hands-on CEO, he was probably briefed about it earlier in the day by the executive team.
My friend does not lack experience. She is a senior member of the marketing team with a proven track record. Why then does she (and many others like her) get confused between vision and tactics? Are the two concepts that close to warrant confusion?
Vision – the raison d’etre
In the context of a company, its vision – decided by the CEO and agreed upon by the Board – is an ultimate stretch goal. It is not a milestone but the raison d’etre of the company – its reason to exist. And because the vision is the most important reason or purpose for the company’s (and its employees) existence, it often seems ethereal and far-reaching. That’s the way it has to be; the elusive end of the rainbow where the pot of gold lies. Only that can keep the vision stable and unchanging.
Consider the vision statements of some of the world’s most successful companies. I have edited it to glean out its essence, but feel free to look up the full statement on the company’s website.
“..to be one of the world’s leading producers and providers of entertainment and information…” – Walt Disney Company
“…to continually improve all aspects of the world in which we operate – environmental, social, economic – creating a better tomorrow than today.” – PepsiCo
“…to organize the world’s information and make it universally accessible and useful” – Google Inc. This statement merges both the vision and mission of Google’s founders.
“Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” – Amazon
And the best for last….
“Better.” – Apple
As you see, the vision statement is the North Star for a company. It is meant to guide and provide direction to those at its helm. It energizes constantly by describing the company’s purpose and outlining the values that drive it. The vision of the company is linked to but very different from its strategy.
Strategy – what achieves advantage
Strategy is about being different. It is choosing to differentiate a company from competition and create an advantage for its products and services so that the customer sees more value in choosing and paying for them. It is in short, a plan to beat the competition.
Let’s use the example of Walt Disney Company to see how their vision statements translated to strategy:
To realize its vision “..to be one of the world’s leading producers and providers of entertainment and information…” the company’s strategy is to create and distribute entertainment through its own media networks (Disney Channel & Movies), parks (Disneyland) and studios. To further increase business they also have consumer products (clothes, gifts, souvenirs) and interactive media (DVDs, games etc).
It doesn’t end at just creating successful franchises like Mickey Mouse, Toy Story, Cars and its latest blockbuster Frozen. (Did you know that Frozen is a bigger sensation than Harry Potter and Star Wars?). It encompasses an ecosystem (content created and distributed across channels) that successfully differentiates it from Universal Studios, SeaWorld, and other merchandising companies. In the words of Chief Financial Officer, Jay Rasulo: “… unlike other media companies, we really do have a very clear strategy of an ecosystem in which we both own the franchises and own the means of distribution to get those franchises out across almost all consumer touch points.”
Clearly, setting up this ecosystem was very important for Disney to roll out its tactical plan – which is the next step. As with the vision, its strategy is linked to but very different from its tactical plan.
Strategy, not Tactics
Often, I hear colleagues talk about “strategies”. I assume they mean ‘tactics’ – or the set of specific actions that are taken to implement the strategy. It is the part of the plan that explains how you are going to do it.
A successful vision, strategy and the tactical plan link into each other. For Disney to be a world-leading producer of entertainment and information, its strategy is to not just create world-class content franchises, but to also own its distribution. This leads to its tactical plan of creating the different channels of distribution (media/movies/studios, amusement parks, retail & merchandise and interactive media). The company allocates resources to these tactical arms and monitors appropriate business metrics for each channel.
I am sure you can easily superimpose this example on the pharmaceutical industry.
So in the interview that my friend read, the CEO of her company spoke of India presenting growth opportunities for his company, because of an ‘under-performing health care sector’. My friend probably mistook the suit-speak to depict something very ethereal, hence his vision. What the CEO might have meant instead, was how his company could use the opportunity to build newer products and convince more people to buy them through effective pricing. Was that his vision?