Vision Versus Strategy

For the first 20 years of my career, I regarded strategy and vision as, essentially, the same thing. One might have a slightly shorter horizon, but the difference seemed more like “wordsmithing.” During those years, the strategy was to become the best and largest in a select vertical segment. This was accomplished through geographical expansion, investment in applied technology, hiring talent from the best schools, winning the most important projects in the industry and having a reputation for both doing good work and standing behind it. Each of the components of this strategy had plans and personnel responsible for their accomplishment. We hammered away, year by year, using industry “league tables” as our barometer for success.

Sure, I read the business articles about companies that had noble end goals like “we provide mobility, not cars,” but it didn’t register as to how that might apply to us. Implementation seemed so much more important than philosophy.

My perspective changed in 2005, when I was invited as the only representative from an engineering firm to join the Clinton Global Initiative (CGI). The CGI was devised by President Clinton to serve as a forum for nongovernmental organizations (NGO) and Fortune 500 companies’ leaders to look at world problems and brainstorm how these could be solved without government. It was nongovernment activism to look at poverty, climate change and education from the volunteer energy of the private sector. Due to the draw of President Clinton, world leaders and many brand-name CEOs attended and, before the end of the conference, gave huge monetary or in-kind gifts toward one of the issues. I must have been the CEO of the smallest company there, but was treated as an equal.

One evening I was seated at a round table of high-profile CEOs. They all knew each other and asked who I was and why I was there. I described my company’s business with great pride. Next to me sat John Chambers, the CEO of Cisco Systems, who had been on the covers of Fortune and Businessweek within the month. As John listened to what my company did, he gave no reaction nor asked any questions. Soon he went on stage, hugged Bill Clinton, and gave a $60 million corporate gift of computer networking equipment to North Africa. When he returned, I told him that I was impressed, that the scale of my firm could never allow us to provide such a huge gift and that it must have felt good for him to commit. He smiled and said, “Bob, you are very lucky and I wish I had your company. You have such a compelling and attractive vision to create a better planet through water for our next generations of children. My company and I are in an important but in a temporal chase for processing speed. I think you have a nobler goal.” It was then I realized that we had never articulated our vision! I suddenly understood the difference between vision and strategy.

That conversation affected me greatly and I reflected on it during my three-hour flight home. It took an outsider to make me realize that the company had a higher calling than simply being the largest or best in business. It had a purpose to use its resources to make a difference to the planet. As a secondary goal, it could be a successful business, if it could execute a good strategy, but strategy was second to keeping us influential and in business to carry out a vision. It was on my return that we changed the byline of the company from “Innovative Projects and Solutions Globally” to “Building a Better World.” We went back the next year to the CGI and made our own three-year commitment to environmental education in grade schools, offsetting our physical carbon by adding projects with green offsets and changing our buildings and automobile fleets to low-carbon output.

Rising to the philosophical level of why a company exists through a vision is powerful and keeps orientation over time. It is different from a mission. As one writer put it: “A mission comes from the head, while a vision comes from the heart.” It is enduring over a series of strategies. Some other company visions and purpose statements are:

McKinsey: The purpose of McKinsey & Company is to help leading corporations and governments be more successful.

3M: To solve unsolved problems innovatively

Merck: To preserve and improve human life

Walt Disney: To make people happy

Mary Kay: To give unlimited opportunity to women

Walmart: To give ordinary folk the chance to buy the same things as rich people.

American Association of Retired Persons (AARP): We are a nonprofit, nonpartisan organization that helps people 50 and older improve the quality of their lives.

Pixar: To combine proprietary technology and world-class talent to develop computer-animated feature films with memorable characters and heartwarming stories that appeal to audiences of all ages.

IKEA: To offer customers a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

Smithsonian National Museum of Natural History: Understanding the natural world and our place in it.

How important is a having a vision? I think it is critical, especially today. A company’s strategy is the key to near term direction, but vision is a vital compass. A vision serves as the general purpose of the life of a company’s long-term ambition. Think of the number of huge and sophisticated train manufacturing companies that disappeared in the early 1900s. They were convinced that they were in the train business instead of the transportation business. All they had to do was shift into automobiles, but almost none did it and died out. Yet, the few that had an overarching vision wielded huge competitive advantage—the technology evolution just changed their strategy. We are now facing the Digital Revolution. It is at least as powerful as its agricultural and industrial revolution predecessors. Due to the speed and resulting impact of the expected change, I wonder if a vision today is not even more important today than it was 25 years ago.

With change of business platforms occurring so rapidly, I believe knowing what your corporate purpose is, is vital in order to know which way to turn. You need to know if you are going East, West, South or North. The vision is the soul of the company.