Creating vision and strategic direction

Leaders establish organizational direction through vision and strategy. They are responsible for
studying the organization's environment, considering how it may be different in the future, and
setting a direction everyone can believe in. Superior organizational performance is not a matter
of luck. It is determined by the decisions a leader makes.

1. Strategic leadership

Strategic leadership is the ability to anticipate and envision the future, maintain flexibility, think
strategically, and work with others to initiate changes that will create a competitive advantage for
the organization in the future. It is responsible for the relationship of the external environment to
choices about vision, mission, strategy, and their execution.

Strategic leadership is one of the most critical issues organizations face. It means the ability to
anticipate and envision the future, maintain flexibility, think strategically, and work with others
to initiate changes that will create a competitive advantage for the organization in the future. The
complexity of the environment and the uncertainty of the future can overwhelm a leader. Thus,
many are inclined to focus on internal organizational issues rather than strategic activities.
Strategic leadership is responsible for the relationship of the external environment to choices
about vision, mission, strategy, and their execution.

The top level of strategic leadership is a clear, compelling vision, which is an aspiration for the
future. The vision works together with the company s mission, the second level, which is its core
values, purpose, and reason for existence. The third level is strategy, providing direction for
translating the vision into action. It is the basis for the development of specific mechanisms to
help the organization achieve goals. The final level is execution. Strategies are intensions,
whereas execution is making things happen. Each level of the hierarchy supports the level above
it.

2. Leadership vision

A vision is an attractive, ideal future that is credible yet not readily attainable. It provides a link
between today and tomorrow, severs to energize and motivate employees toward the future,
provides meaning for people’s work, and sets a standard of excellence and integrity in the
organization.

A vision is an attractive, ideal future that is credible yet not readily attainable. It is an ambitious
view of the future that everyone involved can belief in, one that can realistically be achieved, yet
one that offers a future that is better in important ways than what now exists. Visions are
powerful when leaders paint a compelling picture of where the organization wants to go, because
that encourages people. Strong, inspiring visions have been associated with higher organizational
performance and greater employee motivation and satisfaction. They are based in the current
reality but is concerned with a future that is substantially different from the status quo.

Vision provides a link between today and tomorrow, severs to energize and motivate employees
toward the future, provides meaning for people s work, and sets a standard of excellence and
integrity in the organization. Five themes are common to powerful, effective visions:

 They have broad, widely shared appeal.

 They help organizations deal with change.
 They encourage faith and hope for the future.
 They reflect high ideals.
 They define both the organization s destination and the journey.

Visions can be about the company as a whole, but divisions, departments, and individuals also
have their own visions. These visions grow and change. When every person understands and
embraces a vision, the organization becomes self-adapting. Although each individual acts
independently, everyone is working in the same direction. This principle is also called self-
reference, which means that each element in a system will serve the goals of the whole system
when the elements are imprinted with an understanding of the whole. Thus, the vision severs to
direct and control people for the good of themselves and the organization.

3. Mission

Mission is the organization’s core broad purpose and reason for existence. It defines the
company’s core values and reason for being, and it provides a basis for creating the vision. There
are four approaches leaders take in framing a purpose: discovery, excellence, altruism, and
heroism.

Mission is the organization s core broad purpose and reason for existence. It defines the company
s core values and reason for being, and it provides a basis for creating the vision. Whereas vision
is an ambitious desire for the future, mission is what the organization stands for in the larger
sense. The mission persists in the face of changing technologies, economic conditions, or other
shifts. It serves as the glue that holds everything together and guides strategic choices and
decisions about the future. The mission can be used as a leadership tool to help employees find
purpose in their work.

Typically, the mission is made up of two critical parts: the core values and the core purpose.
They are frequently expressed in a mission s statement. Most successful companies have
missions that proclaim a noble purpose. Leaders are responsible for framing a noble purpose that
inspires and leads followers to high performance and helps the organization maintain a
competitive advantage. There are four approaches leaders take in framing a purpose:
  Discovery, which means that people are energized by the psychic rewards they get from
working on intellectually stimulating and challenging problems.
 Excellence, which means that leaders focus people on being the best.
 Altruism, which emphasizes serving others.
 Heroism, which means that the company s purpose is based on being strong, aggressive,
and effective.

4. Strategy in action

For organizations to succeed, they need ways to translate vision, values, and purpose into action,
which is the role of strategy. Strategic management refers to the set of decisions and actions used
to formulate and implement specific strategies that will achieve a competitively superior fit
between the organization and its environment so as to achieve organizational goals.

For organizations to succeed, they need ways to translate vision, values, and purpose into action,
which is the role of strategy. Strategic management refers to the set of decisions and actions used
to formulate and implement specific strategies that will achieve a competitively superior fit
between the organization and its environment so as to achieve organizational goals. It is the
leader s job to find this fit and translate it into action.

Strategy can be defined as the general plan of action that describes resource allocation and other
activities for dealing with the environment and helping the organization attain its goals and
achieve the vision. Developing effective strategy requires actively listening to people both inside
and outside the organization, as well as examining trends and discontinuities in the environment.
Rather than reacting to changes, strategic leaders study the events that have already taken place
and act based on their anticipation. Innovative thinking carries a lot of risk. Sometimes leaders
have to shift their strategy several times before they get it right. In addition, strategy necessarily
changes over time to the shifting environmental conditions. To improve the chances for success,
leaders develop strategies that focus on three qualities: core competence, developing synergy,
and creating value for customers.

An organizations core competence is something the organization does extremely well in

comparison to competitors. Synergy occurs when organizational parts interact to produce a joint
effect that is greater than the sum of the parts acting alone. Organizations might gain synergy
through alliances and partnerships.

Focusing on core competencies and attaining synergy help companies create value for their
customers. Value is the combination of benefits received and costs paid by the customer.

Strategy formulation integrates knowledge of the environment, vision, and mission with the
company s core competence in such a way as to attain synergy and create value for customers.
When these elements are brought together, the company has an excellent chance to succeed in a
competitive environment. Strategy execution, or implementation, means using specific
mechanisms, techniques, or tools for directing organizational resources to accomplish strategic
goals. It is the most important and difficult part of strategic management, and leaders must
carefully and consistently manage the execution process to achieve results. Strategy execution
involves using several tools or parts of the organization that can be adjusted to put strategy into
action. Strong leadership is one of the most important tools, but strategy can also be executed
through organizational elements such as structural design, pay or reward systems, budget
allocations, and organizational rules, policies, or procedures to support the company s strategic
direction.

Making strategic decisions can be placed two dimensions, depending on whether a particular
choice will have a high or low strategic impact on business and whether execution of the
decision will be easy or difficult. A change that both produces a high strategic impact and is easy
to execute would obviously be a leader s first choice.

5. The leader's contribution

To keep organizations competitive, leaders consciously adopt a focused vision and strategy and
make sure everyone’s activities move the organization in the right direction.

Although good leadership calls for actively involving everyone, leaders are still ultimately
responsible for establishing direction through vision and strategy. To keep organizations
competitive, leaders consciously adopt a focused vision and strategy and make sure everyone s
activities move the organization in the right direction. For leaders to make a real difference, they
need to link hopes and dreams for the future with strategic actions.

There are four possibilities of leadership in providing directions. The person who is low both on
providing vision and stimulating action is uninvolved, not really a leader at all. The leader who is
all action and little vision is a doer. The dreamer is good at providing a big idea with meaning for
self and others. However, to be an effective leader, one both dreams big and transforms those
dreams into significant strategic action.

To determine strategic direction, leaders look inward, outward, and forward. They scan both the
internal and external organizational environment to identify trends, threats, and opportunities for
the organization. One approach leaders take in setting a course is through hard analysis. Situation
analysis, for example, includes a search for SWOT – strengths, weaknesses, opportunities, and
threats. Another formula often used is a five-force analysis developed by Michael Porter, who
proposed that strategy is often the result of five competitive forces: potential new entrants to an
industry, the bargaining power of buyers, the bargaining power of suppliers, the threat of
substitute products, and rivalry among competitors. Vision and strategy have to be based on a
solid factual foundation, but too much rationality can get in the way of creating a compelling
vision. Leaders conduct analysis, but successful visions also reflect their personal experiences
and understandings.