Entrepreneurial vision: 1. Introduction

On 2004-01-26 08:30:00, Allan Engelhardt wrote in CYBAEA Journal:

The last thing IBM needs now is a vision.

Lou Gerstner, CEO IBM, August 1993

When Lou Gerstner joined IBM as its new CEO, he famously quipped that the last thing IBM needs now is a vision. Four or five years later, the company announced a new vision symbolized by the letter “e” and backed by a huge advertising campaign. Four or five years after that we were told, again through a massive advertising campaign that is still with us, that the company's vision was expressed in the “On Demand” tag line.

This is clearly abusing the term “vision”. A vision doesn't change every few years. A company's strategy for achieving the vision may change every four or five years, and its portfolio of products and services and the markets in which it sells them may change more frequently. But the vision is, or should be, the guiding principles that steers the company through a changing marketplace without loosing its identity.

What Mr. Gerstner intended to say with his statement was that the problem IBM was facing was primarily in execution. IBM had the core capabilities to succeed in the market, at least in the short term, and management focus had to be squarely on realizing these immediate opportunities. Time spend sitting around the round table articulating and communicating a shared vision for the company was management time wasted.

The vision was Mr. Gerstner. It was his vision that eventually became articulated and communicated as executable strategy through the letter "e" and the “On Demand” messages.

This situation, where the company vision is embedded in a single person, is typical in start-up companies and turnarounds; what Mintzberg in the Strategy Safari [references in a later post] calls the entrepreneurial strategy school. Typically, these companies are characterized by being both deliberate and emergent: deliberate in the broad lines and in what the founder or leader want to achieve but emergent in the details of how this is implemented, allowing for flexibility and experimentation.

This manifests itself as a strong vision and a rapidly changing approach to how this vision is executed in the business environment, just like we saw with IBM.

The company vision is especially important for entrepreneurial companies both for the successful execution of this phase of the company and critically for the transition to the next stage of the company development. Entrepreneurial companies include start-up and turnaround companies, but also established organizations that face disruption in their markets through innovation or other events.

This role of the company vision is what we consider in this note.

Tomorrow: What is a vision?

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