CEO and vision


Every company wants to device ways to sell more. It is apparent marketing can add to company’s business. It is equally obvious why every company wants accurate accounting, prodigious and insightful output from their IT systems, great relations with employees, access to financial markets, and superb quality for its products. We are discussing here what exactly strategy adds to all the important functions.

In classic business school curricula, ‘Strategy’ or in earlier decades ‘Policy’ was billed as a way to tie all of the functional areas together. A strategic Plan is chalked out that enumerated each of the areas’ goals and tactics and how they would all fit together. It was fine in theory but got messy in practice. Coordinating all these functions is not an easy task. The problems like if Marketing didn’t really want to worry about the objectives of the Human relations department or when Production is more interested in meeting shipping goals than quality targets. It seemed like the Strategic Plan needed a tremendous amount of cooperation from every functional manager before it had a chance of being useful and even then, it wasn’t clear if it added much.

That view has changed. The leading edge of strategy now is far less concerned with coordination among the groups inside the company and much more worried about the CEO contend with his or her central function looking at the future.

The highest praise we can bestow upon a CEO is to call him or her a “visionary�. A magnificent description for a person who has seen the future and doing this appears to be not possible for mere mortals to understand what lies ahead for the company.

The answer is ‘Strategy’, if properly conceived, provides a method for systematically thinking about the future and increasing odds of success. The method used is identical to that used by scientists or weather forecasters in the development of powerful repeating patterns.

Each time a pharmaceutical company releases a new prescription drug, they have collected a large series of patterns on how that drug functions in their clinical trial. They are confident about predicting the future outcomes based on the patterns of the past. The same is true of weather forecasters as well. They know that weather in the Northern Hemisphere moves predominately west to east. So look west and you’ll see tomorrow’s weather with reasonable, but far from perfect, accuracy.

And that’s the CEO’s most important job — to predict the weather for his or her company. To do it, they first study the history of their firm and the industry, and then search for powerful patterns. Those patterns help them illuminate the future. You do this already in your life, but may not recognize how to translate that method into strategy for your firm.

One of the tricks is that life is lived forward but understood in reverse. Everyone knows what is important when it is too late. The great CEOs use their sense of the patterns in their industry to understand their world as it is unfolding. You can do this too once you see a few examples and begin to think about strategy in the way great CEOs do.