“Vision and strategy are both important. But there is a priority to them. Vision always comes first. Always. If you have a clear vision, you will eventually attract the right strategy. If you don’t have a clear vision, no strategy will save you.”
That quote comes from Michael Hyatt, a world-renowned leadership and personal development consultant.
When I first read it I thought, “He’s right. Vision and strategy are both important.” And yes, vision does come first.
But, while reading the second part of what Hyatt wrote I said to myself, “He’s way wrong on that one.” In other words, I strongly disagree with the idea that if you have a clear vision, you will attract the right strategy.
Why? Let me ask you this question: “What if your vision is crystal clear, but misguided?”
You see, in my view it’s not just about how clear your vision is. It’s also important that your vision be correct.
Lots of people come up with crystal-clear visions for their businesses, but their visions are based on fantasy. And subsequent strategies end up being a pile of excrement. Here’s an example.
In 1995 an upstart New Zealand airline company launched a scheduled flight service between Australia and New Zealand. Called Kiwi Travel International airlines, the company’s strategy was quite simple – cut-price trans-Tasman air travel.
During the launch phase of its scheduled service Kiwi’s founding CEO, Ewan Wilson, shared his vision about how the airline would revolutionise trans-Tasman air travel and also become a major player in the air travel market.
Back then I wrote that the firm’s strategy was dumb and that the airline won’t last 2 years. I also shared this prediction in several seminars I spoke at.
What happened? Kiwi Travel International airlines went belly up within 18 months of its launch… and some people called me a prophet.
In Kiwi’s situation, offering consumers cut price air travel was a beautiful value proposition. But Ewan Wilson was naive and stupid as his firm’s strategy could be easily replicated by much larger competitors such as Air New Zealand. Which is exactly what Air New Zealand did with the launch of its cut-price subsidiary, Freedom Air.
Yes, although its important to have a vision for your business, that vision cannot be built upon a fantasy. Instead, it must be built upon a solid strategy that has high barriers to competitor imitation or entry.
Another way to look at it? A beautiful vision built upon a really dumb business strategy will soon become a nightmare.
Another example for you.
In the personal development and motivational industry there are coaches and consultants who advocate the use of a thing called a vision board. Quite simply, a vision board is a poster or board upon which a person puts pictures of the things they desire like a flash car, nice big house, a six-pack or model-type body blah blah blah.
The theory behind vision boards is commonly known as the law of attraction, and the theory as it applies to vision boards is that if you put up stuff that you want on a poster or board, then the universe will attract that stuff to you.
My thoughts? The law of attraction is a whole load of pyscho-babble (also known as b.s) and using a vision board is a dumb idea if there’s no strategy supporting the vision. Also, a vision should not be selfishly about you. It should be about the value you give to others.
So, a vision must be supported by sound strategy. And the vision and strategy must complement each other.
How can you have a strategically sound vision for your business? Here’s how, courtesy of the world’s best business owner, Warren Buffett.
As you may know, Warren Buffett is the world’s 3rd richest man with a fortune estimated at US $65.2 billion according to Forbes magazine. His specialty? Identifying and then investing in high-potential businesses.
A terrific teacher, one of Buffett’s finest lessons is his castle and moat metaphor, which he uses to explain the key characteristics of a high-potential business:
As highlighted above, Buffett’s premise is that a great business is like a beautiful castle. Meaning that the business is attractive to customers (strategic brand) and has a great strategy.
The key component or ingredient in that strategy is the way in which the business is strategically positioned. A strong strategic position is a competitive focal point that highlights the key factors that make a business better than its competitors. And this in turn gives the business the attractiveness that makes it appealing to customers.
Then, that castle also has a wide moat surrounding it. And, in business terms, a moat is the competitive advantages or barriers to entry that make it difficult for competitors to imitate.
As a rule, Warren Buffett invests only in castle and moat businesses. To repeat, these are attractive businesses with durable competitive advantages.
The key takeaway here? Your vision must be based on a beautiful castle with a big moat.
Anyway, three key things I look at when analysing the strength of a firm’s strategy and vision are:
- Overall positioning of the business concept and model. The positioning of the business concept and model is key to the success of a business and therefore a core component of the business strategy. The well-positioned business concept is one which has serious product/service competitive advantages that are highly valued by target segments, and is highly differentiated.
- Strategic brand, which incorporates the firm’s strategic positioning and perceptions about its values and culture, its people, as well as its products and services
- The moat. These are the competitive advantages a business has, but which competitors find difficult to copy. These advantages must be highly valued by prospective customers.
As a business growth principle to learn from and follow, you will be hard-pressed to find something better than Warren Buffett’s castle and moat metaphor.
So contemplate your business castle and moat and weigh up all the competitive advantages and the barriers to competitor entry you can come up with. Then, have those elements be the key components of your vision.