Organizations use a variety of terms to describe their business vision. These include mission statements or ‘missions’, business def- inition, statement of business philosophy, belief statement, credo, vision statement, statement of purpose and so on. Davidson found the term ‘mission’, which has been widely used over the last 25 years, has become less popular in recent years as managers feel the use of the term has been abused. He concluded that it did not matter which words were used to describe the business vision; what was important were three fundamental questions. The questions and terms he uses to describe them are:
● What are we here for? – Purpose
● What is our long-term destination? – Vision
● What beliefs and behaviours will guide us on the journey? – Values.
A good example of a company putting this into practice is Goldman Sachs. They are a market leader in their sector and one the best com- panies in the investment-banking industry. The box below shows how they define their purpose, vision and values.
and well-communicated vision the company is unlikely to be highly successful in achieving its goals. Organizations are now realizing that developing a vision and a set of values associated with it may be diffi- cult but is a very worthwhile activity. A business vision is typically developed as part of an enterprise-wide consultative process, which involves input from different functional areas and management levels.
Competitive advantage is difficult to create and sustain. As the service economy continues to grow, few purely product-based businesses now exist. Where they do, their products can be reverse- engineered and imitated. Companies providing services have no patent protection and are open to ever greater and faster copying of their service range. Those businesses that are highly successful tend to have a strong culture and compete on the basis of their people and process skills. A strong and appropriate vision and values enable companies to develop a distinctive culture and a focus for their employees. This can result in a ‘people advantage’ that is difficult, if not impossible, to imitate. Davidson concluded that a strong vision and values can create differentiation and build motivation, trust and customer focus among employees.
Experience has shown that vision and values are often developed the wrong way. Inventing slogans like: ‘the customer is king’ or ‘let’s be customer focused’ are exactly the wrong way to develop vision and values. You have got to start off by identifying what are the key future factors for success in your marketplace and then build the val- ues around achieving those key factors for success. In that way if you make your values work, they build competitive advantage. Otherwise they are quite irrelevant.3
To assist in the development of business vision and values Davidson identified seven best practices for making vision and val- ues work (Figure 2.1). He applied these best practices to the 125 organizations he studied, defining ‘excellence’ as the achievement of all seven of them. Only 6 per cent of the organizations, including Johnson & Johnson and the Mayo Clinic, attained an excellence rating. The average company only addressed four of the seven practices. Davidson concluded that ‘the seven best practices are syn- ergistic and work together: Four out of seven is not 55 per cent, it’s about 33 per cent in terms of performance’. His research findings show most organizations still had a long way to go in making their vision and values deliver demonstrable returns.
Figure 2.2 gives some examples of strong visions, which Davidson identifies as meeting his seven best practice criteria. Sun Microsystems’
Figure 2.1 Seven best practices in making vision and values work Seven best practices in making vision and values work
1. Building foundations: Needs of key stakeholders understood and linked through vision and values
2. Strong vision: Vision is memorable, clear, motivating, ambitious, customer related and translated into measurable strategies
3. Strong values: Values support the vision, are based on key factors for success and turned into measurable practices
4. Communication: Consistent communication by action, signals, words
5. Embedding: Recruitment, training, appraisal, rewards, promotion and succession, all reflect values
6. Branding: Organization’s branding expresses vision and values
7. Measurement: Rigorous measurement of how effectively vision and values are implemented
Source: Based on Davidson4
Figure 2.2 Examples of strong business visions Examples of strong visions
‘To connect anyone, anywhere anytime – using almost anything – to the resources they need’
Sun Microsystems
‘A computer on every desk and in every home’
Microsoft, original vision
‘The best care to every patient every day’
Mayo Clinic
‘Making communication with pictures as easy as using a pencil’
George Eastman, Kodak, c.1920 Source: Based on Davidson6
vision is a particularly good example of how a strong vision can act as a compass for employees. As Robert Youngjohns, the company’s Vice President, explains: ‘Sun Microsystems’ vision of open systems and computers as easy to operate as a mobile phone was developed in 1987. Our consistently followed vision has been the key to our suc- cess in the past 10 years. Without it, we would have become diverted and lost direction, like some of our competitors’.5
Developing a strong business vision represents an important first stage in establishing a successful business strategy. We will revisit this subject when CRM change management is discussed in the final chapter.
Industry and competitive characteristics
Having developed the business vision, the next step in business strategy formulation is to undertake a review of the industry and competitive environment including an assessment of both existing and potential competition. This addresses the issue raised above of
‘where are we?’