Winston Churchill
Financial performance, either good or bad, is a measurable result of the clarity of a business leaders vision, the execution of the strategy and the effectiveness of the organization (people, processes and technology). Financial numbers reflect how well vision, strategy and organization are aligned toward an objective. Some questions we can all ask ourselves:
Financial performance, either good or bad, is a measurable result of the clarity of a business leaders vision, the execution of the strategy and the effectiveness of the organization (people, processes and technology). Financial numbers reflect how well vision, strategy and organization are aligned toward an objective. Some questions we can all ask ourselves:
- Where do I want my business to go?
- In what direction is my business currently going?
- Is my current strategy profitable?
- Am I operating as efficiently and effectively as possible?
- Do I have the right people and systems in place?
- What do I need to change -
- clearer or different vision,
- different strategy, or
- organization (people, processes and technology)?
For instance, Alfred is in the buggy whip business. Demand for buggy whips is down. In looking at the three things Alfred can change, vision, strategy and organization, Alfred decides that since the business has been selling buggy whips profitably for 120 years he has no intention of changing the company vision. He wants to continue being the best buggy whip manufacturer in the world.
Alfred determines that their strategy is needs to be modified so he decides to buy other buggy whip companies to increase his economies of scale. He feels the organization of the business does not really need to change much, he'll simply close the other buggy whip factories after buying them and sell the customers his whips instead.
We can all see the problem here with this old but still valid story. Alfred is changing the wrong component. His narrow vision is no longer valid because the marketplace is shrinking, and his business along with it. By buying other buggy whip companies he is only delaying the inevitable failure of the business.
In this true buggy whip business story the actual stakeholders choose a different path. They changed their vision. They realized that there organization had strengths that could be realigned to a new vision and strategy. They decided to sell fishing line and took advantage of the increasing recreational sportsman marketplace.
Changing their vision meant they needed to change their strategy as well, but not by much. They were used to selling their buggy whips through dealers, now those dealers would be retail stores. And, as noted, they were already taking advantage of their existing organizational strengths, just redirecting them.
Changing a company vision is a drastic but necessary step, especially if the company vision is narrow. Broadening the company vision (up to a point) allows lower level components such strategy or the organization to be changed in the future without affecting the overall vision.
