News: August 2012
Vision, mission statements and strategy are often confused terms in business. In reality all of them are quite different and are complementary to each other.
A vision statement is essentially what the leaders of an organisation want the business to become. It is aspirational and typically forward looking – generally focusing on 10 or more years into the future. On the other hand a mission statement explains why a company/organisation exists and almost never change throughout the life of a company. A strategy is the roadmap that defines how a company is going to reach its vision. Strategy is action oriented and lists the major initiatives that a company has to implement in order to achieve its vision.
One thing that all successful businesses share in common is to have a vision. A company with a vision knows where it wants to go over the long term. Many business leaders and CEOs engage too much in short-term priorities and forget to take the actions that will help them realise their long-term goals. A vision statement and a strategy defined to achieve the vision ensures that a company is organising its activities around achieving its long term goals.
One good example of vision and strategy in action is General Electric (GE) during the leadership of Jack Welch. When Jack Welch became CEO of GE, which consisted of dozens of very different businesses, he developed the following vision statement for the firm:
“Become the number one or number two in every market we serve and revolutionise this company to have the strength of a big company combined with the leanness and agility of a small company”.
Of course having vision without strategy would not work. Therefore he rigorously implemented a strategy that divested businesses that weren’t either market leaders or number two in their respective market segments. He implemented “6 Sigma” initiatives across all of GE to drive efficiency and make the business a lean and agile organization. A strict performance management system was implemented and everyone at GE had numerical goals. Success of an individual was measured strictly by their achievement of personal goals.
Successful leaders are great not only at setting visions but also at “walking the walk”.