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CHAPTER 13: CREATING VISION AND STRATEGIC DIRECTION 411
Steve Jobs “felt with every bone in his body that Apple had to do retailing” in
order to meet it’s strategic goals, says Ron Johnson, the former Target executive
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who is now senior vice president for retail operations at Apple. Observers credit
Jobs with the vision—and with the smarts to hire a talented retailer
like Johnson to help him achieve it.
As a leader, you can combine vision with
Action Memo
How Leaders Decide
your team or organization by both having
To determine strategic direction for the future, leaders look in- action. You can make a difference for
ward, outward, and forward. Leaders scan both the internal and big dreams and transforming them into
external organizational environment to identify trends, threats,
and opportunities for the organization. signifi cant strategic action.
Organizations need both a broad and inspiring vision and an
underlying plan for how to achieve it. To decide and map a strategic
direction, leaders strive to develop industry foresight based on trends
in technology, demographics, government regulation, values and lifestyles that will
help them identify new competitive advantages. One approach leaders take in set-
ting a course for the future is through hard analysis. Situation analysis, for example,
includes a search for SWOT—strengths, weaknesses, opportunities, and threats that
affect organizational performance. Leaders using situation analysis obtain external
information from a variety of sources, such as customers, government reports, sup-
pliers, consultants, or association meetings. They gather information about inter-

nal strengths and weaknesses from sources such as budgets, financial ratios, profi t
and loss statements, and employee surveys. Another formula often used by lead-
ers is a five-force analysis developed by Michael Porter, who studied a number of

businesses and proposed that strategy is often the result of five competitive forces:

potential new entrants into an industry; the bargaining power of buyers; the bar-
gaining power of suppliers; the threat of substitute products; and rivalry among

competitors. By carefully examining these five forces, leaders can develop effective
strategies to remain competitive.
Vision and strategy have to be based on a solid factual foundation, but too much
rationality can get in the way of creating a compelling vision. Leaders do conduct

rational analysis, but successful visions also reflect their personal experiences and
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understandings. When leaders rely solely on formal strategic planning, competi-
tor analysis, or market research, they miss new opportunities. Consider that when

Ted Turner first talked about launching a 24-hour news and information channel
in the 1970s, many dismissed him as delusional. Every source of conventional wis-
dom, from market research to broadcast professionals, said the vision was crazy
and bound to fail. Yet Turner looked at emerging social and demographic trends,
listened to his intuition, and launched a global network that generates 35 percent
gross margins. 69
To formulate a vision, leaders also look inward to their hopes and dreams,
and they listen to the hopes and dreams of followers. Foresight and the ability to
see future possibilities emerge not just from traditional strategic planning tools
and formulas, but from curiosity, instinct and intuition, emotions, deep think-
ing, personal experience, and hope. To connect with people’s deeper yearning for
something great, vision can transcend the rational. Although it is based on reality,
it comes from the heart rather than the head.

The Leader’s Impact

When leaders link vision and strategy, they can make a real difference for their
organization’s future. A leader’s greatest discretion is often over strategic vision
and strategic action. Research has shown that strategic thinking and planning for