Strategic cycle: vision

Back to Book content or Previous page - Next page

---

Or directly to Main Page - Corporate futuring

---

Introduction: vision

.

Strategic vision

.

The necessary vision components

With a focus on its VISION, your company has to be able to:

• create customer value
  • Customer value is the perception of a customer's worth of your products or services. It is determined by the extent to which the product or service meets the customer's needs and expectations relative to the price they are paying for it. Customer value is essential because it can help your company determine how much to charge for its products or services. It can also help the company understand what its customers are looking for in terms of quality, features, and benefits. In general, the higher the customer value, the more likely a customer is to purchase and continue doing business with your company.

• while, at the same time, enhance value creation
  • Value creation aims to create long-term, sustainable value for all stakeholders, including customers, employees, shareholders, and society. This can include creating value for customers through our products or services and creating value for shareholders and employees by providing a positive and fulfilling work environment. There are many ways your company can create value, and the specific strategies will depend on the industry in which you operate, your target market and your overall business model. However, some common ways that companies create value include:
    • Developing innovative products or services that solve problems or meet the needs of customers in a unique or better way
    • Leveraging technology or other competitive advantages to increase efficiency and reduce costs
    • Expanding into new markets or entering into strategic partnerships to increase revenue and reach
    • Investing in research and development to drive innovation and stay ahead of competitors
    • Building strong brand recognition and customer loyalty through excellent customer service and high-quality products or services
• and streamline value appropriation.
  • Value appropriation is how your company captures value created by its products or services. This is done through various means, such as setting prices for products or services, charging fees for using a platform, or licensing intellectual property to others. By appropriating value effectively, your company can create value for itself, its shareholders, and other stakeholders.

.

---

.

Value is the core concept of a 'vision'-strategy

It must be clear if you read the above: vision is all about (business) value. More precisely, the value your company or organisation creates for its stakeholders, such as shareholders, customers, employees, and society.

Business value can be created through various activities, such as developing and selling products or services, increasing efficiency, improving customer relationships, and innovating new business models. As a result, your company can sustain itself and grow by creating value for its stakeholders.

One view about value is to measure how much your company is worth and can be expressed in financial terms, such as revenue, profit, or market value, or non-financial terms, such as customer satisfaction, employee engagement, or social impact.

A second view is that business value is closely related to the concept of people, planet, and profit, as it encompasses financial performance and the social and environmental value a company creates. The idea of "people, planet, profit" (also known as the triple bottom line or the three pillars of sustainability) is a framework for measuring and reporting on a company's social, environmental, and economic performance. It suggests that businesses should consider the impact of their activities on all three of these areas rather than focusing solely on financial performance. By considering its activities' impact on people and the planet and its financial performance, a company can create sustainable, long-term business value that benefits all of its stakeholders..

.

---

.

The results of the 'vision'-strategic flow

When your company invests tangible and intangible resources with its proper vision in mind, it tends to end up with the following:

• enterprise value when there is an OUTSIDE-IN mentality
  • Enterprise value is a way to measure the value of your business as a whole. It takes into account not only the value of the company's assets, such as its buildings and equipment but also things like debt & any cash it has on hand and intangible resources, such as IP, reputation, installed base, etc.

• or value appropriation when there is an INSIDE-OUT mentality.
  • Value appropriation is how your company captures value created by its products or services. This can be done through various means, such as setting prices for products or services, charging fees for using a platform, or licensing intellectual property to others. By appropriating value effectively, your company can create value for itself, its shareholders, and other stakeholders.

.

.

---

.

Vision with an 'OUTSIDE-IN' (action) orientation

.

Overview

In this situation,

• while products & services are what we hope for,
• customer value is the critical step, and
• more than we wish for, we are stuck (looking for) enterprise value.

.

OUTSIDE-IN strategic cycle in VISON-mode

.

Dynamic process view

1. First action (OUTSIDE).
   1. (When the enterprise creates customer value),
   2. value appropriation is the next big thing.
   3. The action step following this is to reserve resources for business capacity building.
2. Second focus (INSIDE).
   1. The obtained capabilities & competencies,
   2. Contribute to enterprise value.
3. The hope is,
   1. that this cycle will lead in a natural way to the right products and services, but but to make this hope come true,
   2. customer value is the critical step to shift the mindset from vision to strategy.

.

Linear process view

Vision, the outside-in (action) strategic cycle

Outside		Driver		Inside
Organisational development
	↓	Strategy	↑	Products & services = hope
Value creation
	↓	VISION	↑	Customer value = critical step
DREAM 1. Value appropriation		<<<<<<<
	↓	Mission	↑	DO 4. Enterprise value
ANALYSE 2. Capacity building
	↓	Tactics	↑	DECIDE 3. Capabilities & competencies
		>>>>>>>

Dreaming, analysing, deciding and doing together form a complete thinking cycle.

.

Areas of concern

It seems paradoxical but starting from a vision with an 'action' mindset leads to the mission triangle loop: value appropriation, capacity building and enterprise value.

In this outside-in vision mindset, the organisation tends to go 'backwards' to the mission triangle in the attempt to appropriate value with which to build capacity with the products & services they already have.

Leadership has to continue this mission loop or invest in customer value (by customer analysis methods), with the hope that this will lead towards new products & services. Therefore, creating customer value (from the products & services we already have) is the first critical 'strategic/leadership' step. After that, one has the opportunity to strart thinking and acting strategicaly.

As you will have noticed, the strategy triangle, products & services (innovation), organisational development and value creation are nowhere in this situation. When capabilities or competencies fall short in the organisation, they are (tacticaly and fiercely) recruited from outside and directly injected into the enterprise value area.

.

---

.

Vision with an 'INSIDE-OUT' (focus) orientation

.

Overview

In this situation,

• while capacity building is what we hope for,
• enterprise value is the critical step, otherwise
• we end up contemplating value appropriation.

.

INSIDE-OUT strategic cycle in VISON-mode

.

Dynamic process view

1. First focus (INSIDE).
   1. Driven by the vision of those who steer the enterprise (the founders or others), the enterprise tries to create customer value.
   2. So, they (quickly) develop (some) products and services.
2. Second action (OUTSIDE)
   1. With these products and services, they aim for value creation.
   2. If one succeeds in doing so, a process of value appropriation starts.
3. The hope is
   1. that this cycle will lead in a natural way to enterprise capacity building, with the trap of falling into disconnected 'tactics'
   2. therefor, to restart the vision cycle, enterprise value is the critical step.

.

Linear process view

Vision, the inside-out (focus) strategic cycle

Outside		Driver		Inside
		<<<<<<<
	↓	Strategy	↑	ANALYSE 2. Products & services
DECIDE 3. Value creation
	↓	Vision	↑	DREAM 1. Customer value
DO 4. Value appropriation		>>>>>>>
	↓	Mission	↑	Enterprise value = critical step
Capacity building = hope
	↓	Tactics	↑	Capabilities & competencies
Organisational development

Dreaming, analysing, deciding and doing together form a complete thinking cycle.

.

Areas of concern

In an inside-out vision mindset, the organisation tends to go 'forward' to the strategy triangle to create value with products & services. In the value appropriation step, value is transferred immediately to customer value. Leadership has to decide which part may be used for enterprice value. When the balance value appropriation, enterprice value shifts to capacity buiilding, a next step starts in the history of the enterprise.

As you will have noticed, the tactics triangle, capabilities & competencies (talent), capacity building and organisational development are nowhere in this situation.

.

---

.

General concern

.

Development

As already stated, (organisational) development is not present in the action- (outside-in) nor the focus (inside-out) situation. Organisational development is the intersection between the strategic- and tactical triangle. In this mindset, it is not development but the organisations' vision & mission that is vital. This brings us to the next point:

Purpose

The vision-misson (or mission-vision) or more recent the purpose discours is a sign of this vision strategic cycle.

To illustrate this we present here an excerp of the contents table of a 'purpose-management-book':

• Proof of purpose
• Impactful innovations
• Craftmanship
• Like minded peers
• Peer-to-peer partnering
• Personal relationships
• Trusted friends
• The innovators choice

As you can see 'purpose' in current times is a very 'personal' concept. Which brings us to the next point:

Paradoxal management

• Starting from the outside view,
  • enterprise value is the way to go,
  • with customer value the concern.
• Starting from the inside view,
  • customer value is the way to go,
  • while enterprise value the concern.

A excellent illustration of this is the typical argument we often hear between the 'inside-' and outside' oriented people in businesses: "Sell what we can make" vs "Make what we can sell'.

Leadership tends to be the art of the managment, balancing between both views.

.

---

.

Back to Book content or Previous page - Next page