Friday, November 1, 2013

From "vision fixation" to "strategy tinkering"

In the article "Using the Balanced Scorecard as a Strategic Management System" the first step is to translate the vision of the organization.1 The example given in this article mentions how a company developed a balanced scorecard to translate a vision into a strategy and how around a year later, the vision was refined and the scorecard was changed to reflect these changes. While an evolving vision is encouraged with the changing environment, a more traditional definition of a companies' vision is to develop it at inception and stick to it till the end. But we also know that in changing environments it is imperative for companies to adapt their strategies. So how do companies strike the right balance between being adaptive enough to be relevant in a changing industry versus having a steadfast vision in order to achieve their goals in the long run?

In this article on Forbes, it is mentioned about how there are many strategies that go awry because of organizations that refuse to budge from their initial vision. An example could be Kodak, that commercialized the camera extremely successfully, but refused to transform itself in the digital age. Its fixed visions meant that the strategies it employed remained the same even though the environment was changing.2
But how would an organization know if it's being fixated on it's vision? If it's not obvious from it's dwindling profits or decreasing market share that is bound to happen, one way would be to compare the current situation the organization is in, with the quadrant for choosing the right strategic style for the environment. In the Kodak example, the company could have avoided being obsolete by recognizing that it should have a "adaptive" strategy (where the industry is unpredictable but the company can't change it - so more appropriately it can change itself to maintain relevance) in stead of using a "classical" strategic approach.

However dangerous a vision fixation might be, the other end of the spectrum is not particularly good as well. Constantly changing your vision and strategy (called "strategy tinkering" by Robert Sher) would result in the organization losing focus. While it might keep the leaders who create and refine the visions busy, the employees of the organization would consider the changes in the vision to be more of a distraction rather than being a motivational force. In this article he mentions how the CEO of an on-line service company kept changing strategies with every change that happened in the industry (maybe an extreme case of "adaptive" strategies). A year and many vision revisions later, nothing had been finished and the company was doing a loss before it even began operations.

One way to strike a balance between being a "fixed vision" company and a "strategy tinkering" company, is probably to understand the differences between a vision and a strategy. Mark Lipton in his book Guiding Growth: How Vision Keeps Companies on Course breaks down the vision development process into 3 processes3:
1. Finding the organization's purpose
2. Building strategies of how the purpose will be realized
3. Building values in the organization that would support the strategies
This might be one way of separating the vision from the strategy to ensure that the adaptive strategies would support the organization in changing environments while maintaining the same vision throughout.

While being adaptive to changes, and refining visions is important to survive in the industry, there is still no definite guideline on how often you must adapt your strategies, as long as it falls somewhere in the middle of being labelled as having a "vision fixation" to being a "strategy tinkering" organization.


1 Best of HBR; Using the Balanced Scorecard as a Strategic Management System; July - August 2007
2 USNews August 2010; http://money.usnews.com/money/blogs/flowchart/2010/08/19/10-great-companies-that-lost-their-edge
3Mark Lipton; http://hbswk.hbs.edu/archive/3342.html

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