Implementing a Strategic Vision
Key Factors for Success
Lynda Gratton
FOR STRATEGY RESEARCHERS and practitioners alike,
one of the key emerging trends of the last decade has
been an increasing awareness that successful
implementation of business strategy and vision in
part results from the strength of the alignment
between strategic intent and the behaviour of indi-
viduals and teams. This reflects a growing emphasis
on organization and culture as critical ingredients in
the execution of strategy, and a recognition that
values, motivations and the behaviour of the organ-
ization's members are critical determinants of cor-
porate performance and therefore of success or failure
in implementing strategy. Attempts to create cus-
tomer-focused organizations have floundered as
reward processes continue to reinforce inward, prod-
uct-focused behaviours; innovative intents have
failed to materialize because, despite the rhetoric,
risk-taking behaviour is punished and the 'unwritten
rules of the game' remain to 'keep your head down
and please your boss'.
But delivering strategic intent through behaviour is
notoriously difficult since it requires a clear and
agreed corporate mission and an executive group pre-
pared to think in the longer-term. Too often decisions
about people are made which meet short-term prob-
lems and needs, but have insufficient insight into the
impact these decisions may have for the future. The
consequence of this tactical and ad hoc approach is
employees bombarded by mixed and often con-
tradictory organizational messages, unclear what is
required of them.
The successful implementation of longer-term busi-
ness strategies can only occur w h e n executives are
prepared to agree what the long-term will mean, to
identify the actions required to bridge into the future
and to debate actions which take into account the
likely blocks to change.
For m a n y executive groups this long-term per-
Pergamon
S0024-6301(96)00019-2
This article examines how senior executives
from a number of multi-national companies
perceive the gap between the human resource
needs of the future and current organizational
tly cited hu man
dentified and their
association with specific business strategies
discussed. Copyright © 1996 Elsevier Science Ltd
spective has simply remained a d r e a m - - w i t h the
needs of today always crowding in on the plans for
tomorrow. But as it becomes increasingly clear that
people can be a source of sustainable competitive
advantage, so the benefits of taking a longer-term view
on the management of h u m a n assets becomes more
apparent.
In this article we describe how groups of executives
from seven European multi-national companies built
a vision of their business which has as a central aspect
the role played by people and structure, processes
and culture. They worked through a process model
which begins with their articulation of the future,
compares this with current reality, identifies the gaps
and creates pathways of action (see Ref. 1 for a detailed
description). Using this model they were able to
identify those factors which place at risk the delivery
of strategic intent. By comparing the debates from
the executive groups we are able to explore two key
questions:
~3 Across the seven multi-national companies, what
are the factors which place at risk the capability
to deliver long-term corporate success?
Cl Are these risk factors particularly associated with
a specific strategic intent? For example, are there
Long Range Planning, Vol. 29, No. 3, pp. 290 to 303, 1996
Copyright © 1996 Elsevier Science Ltd
Printed in Great Britain. All rights reserved
0024-6301/96 $15.00+0.00
 specific risks associated with a customer-focused
or transnational growth strategy?
The experiences of these seven companies can add
real insight into our understanding of h o w strategy
is delivered through people, and the factors which
hinder the delivery. Perhaps most importantly it
shows the sheer complexity of the task these execu-
tives face and the failings of an oversimplistic and
prescriptive approach to change. Whilst there are
broad themes across the companies, each is operating
a complex portfolio of strategies and has a unique
administrative heritage. The implication is clear--
there may be broad prescriptive themes but each com-
pany has a unique set of characteristics which must
be considered. For most, the gap between current
capabilities and future intent is wide, but by sharing
their vision of the future and identifying the risk they
faced they were able to develop together a strong com-
mitment to action.
The Study
Study Participants
Over the past 5 years, 19 executive groups from seven
companies have engaged in a four-stage process in
w h i c h they attempt to understand the h u m a n
resource implications of their strategic intent, and
what this means to their priorities and the actions
they should be taking n o w to bridge from current
reality to future aspirations. The process they have
engaged in is long-term rather than short-term,
focused on people rather than finance and numbers,
and democratic and involving many functional
groups rather than top-down and mono-functional.
These groups of executives attempted this long-
term, people-oriented view because they were con-
cerned that too often their response to the man-
agement of h u m a n assets was essentially tactical,
built on fads and fashions rather than focusing on the
key actions which w o u l d really allow them to make
a significant difference. They h o p e d by doing so to
build u p o n sources of real competitive advantage and
create processes and routines which have reality for
people. This w o u l d not only deliver current business
plans, but also create the capability to build for the
future.
The companies they represent are not sector lag-
gards hoping to make up lost ground; on the contrary,
all are ranked within the top five European performers
in their industry sectors. They represent diverse sec-
tors from Oil & Gas, Healthcare, Engineering, Comput-
ing, Electronics, Newspapers & Publishing and
Telecommunications. The focus is far from parochial
or country centred. They are headquartered in four
European locations and have substantial inter-
national businesses. The participating executives
from four companies represented a range of func-
tional backgrounds. The impetus for action in other
three companies came from within the Human
Resource function, and it was this functional group
from which the main participants were drawn. A
more detailed description of the companies and par-
ticipating executives is presented in Table 1.
Overview of the Process
The process in which they engaged has four key steps:
articulating long-term vision; identifying those peo-
ple and process factors critical to this vision; under-
standing the alignment between current capability
and future requirements; highlighting those key
actions which will bridge current reality and future
vision by creating pathways to the future.
This four-step process can be illustrated through
the experiences of a group from the engineering com-
pany. Their aspirations for the future and concerns
about the present highlight a number of key themes.
1. Articulating the vision. The process begins
by focusing on future business aspirations rather than
current realities. This longer-term perspective
encourages executives to consider the discontinuities
rather than simply create incremental changes. 2 For
this group the vision for the year 2000 was clear: to
be market leader in their key product areas, to be a low
cost producer, to strengthen their regional presence
whilst expanding in the Asian Pacific Region.
2. Identifying factors of strategic impact. "It
is n o w the year 2000: you have achieved many of the
aspirations described in 1995. Describe this organ-
ization: the senior group; their aspirations and skills;
the w a y in which jobs are structured; the talents and
competences necessary to support competitive suc-
cess; the culture, norms and values; the types of per-
formance that are valued, appraised and rewarded;
the people w h o get developed and the training they
receive. What are the 10 strategic factors which are
most central to the success of the business in the
year 2000?" This is the question which begins the
exploration and grounding of the vision, which cre-
ates detail around what has been vague and nebulous.
The Engineering group began with a theme repeated
across many other companies, that the business in the
year 2000 w o u l d be one where power and decision
making is decentralized into the operating businesses
and regions, supported by horizontal working pro-
cesses sufficiently flexible to support organizational
transformation and orchestrate change. There w o u l d
be a truly international talent pool whose national-
ities represent the major regional markets in which
the business operates and who have contributed to
the regional growth enjoyed during the years 1995-
2000.
The organization w o u l d be particularly adept at
performance metrics and rewarding the achievement
Long Range Planning Vol. 29 June 1996
Industrial sector Level of Number of Number of Type of Purpose
analysis groups executives participants

Conglomerate, Oil Strategic 11 88 Multi-national, Development of

& Gas, Healthcare business unit senior human human resource
resource strategy
executives
Healthcare Corporate 3 8x3 Multi-national, Training in
m ulti-functional strategic
middle analysis
managers
Engineering Corporate 3 8x3 Multi-national, Training in
multi-functional strategic
middle analysis
managers
Computers Corporate 1 6 Senior human Development of
resource HR strategy
executives
Electronics Strategic 4 8×4 Multi-national, Development of
business unit multi-functional human resource
workforce/middle strategy
and senior
managers
Newspapers & Strategic 4 8x 4 Multi-national, Training in
Publishing business unit multi-functional strategic
middle analysis
managers
Telecommuni- Corporate 2 8×2 Multinational, Development of
cations senior human human resource
resource strategy
executives
7 companies 11 businesses 19 groups 150 executives

of financial targets. Regional growth w o u l d be
achieved through three clusters of people processes:
the creation of career mobility across functions, busi-
nesses and regions; recruitment processes which
recruit and retain talented people, particularly
nationals and those with engineering and marketing
talents; educational, training and coaching pro-
grammes w h i c h support core technical competencies
and ensure organizational values and ethics are part
of the behaviour of employees in every region. In
the view of the group, these people processes w o u l d
support and facilitate a workforce which could rap-
idly acquire n e w skills and operate across many jobs
in a multi-skilled manner.
3. Aligning strategic factors with current capa-
bility. In the third stage of the process the group
moves from the vision of the future back to current
reality by describing for each strategic factor the cur-
rent capability and consequent alignment between
vision and reality. By mapping each strategic factor
against the strategic impact they believe it has, and
aligning with current capability, they are able to begin
to prioritize the actions necessary to deliver success,
and to identify those factors which represent unac-
ceptably high level of risk, and hence bring vul-
nerability to the vision. The 10 strategic factors this
group identifies are mapped against strategic impact
and current alignment in the strategic risk analysis
matrix in Figure 1.
The group highlighted two factors which were to
be repeated across the seven companies: the decent-
ralization of decision making, and simultaneously the
creation of horizontal cross-functional working
patterns. They considered that these w o u l d be critical
to their ability to bring new products to their
regionally dispersed customer base faster than their
competitors. A failure to get this right w o u l d place
their vision in real jeopardy, yet they are currently far
from this decentralized/flexible structure. They also
questioned their ability to develop an international
management cadre by facilitating international
mobility. If left unresolved, these two factors w o u l d
leave their vision for Asian Pacific expansion simply
a dream.
In the process they also focused on those factors of
m e d i u m or high alignment where much was already
being achieved. They highlighted their ability to
recruit, train and retain a multi-skilled workforce,
capable of rapid shifts in skill base to meet the needs
of the changing market. Whilst they had always
believed this to be important, it had not been

Implementing a Strategic Vision--Key Factors for Success

 T
t-

"1-

¢0
C:L
E E
m -I
®~ ~ I 0 "10
(D
~ ~1

• Job rotation
• Corporate i d e n t i t y
0

• Internationalization

High Medium Low •

Alignment

described as crucial to the vision. Instead attention
had been concentrated on the structural and process
issues of rapid regional growth. However, this align-
ment analysis showed that the multi-skilled work-
force may be an organizational competence which is
currently underrated and could play a more central
role in the longer-term vision. So for this group the
process of iteration between vision and current capa-
bility had real meaning.
4. Creating pathways to the future. There is
now clarity about the strategic factors they need to
address to deliver the future vision. The group now
focuses on factors of vulnerability which put the long-
term vision at risk. Using the Force Field Analysis
process, 3 the group works to identify the forces acting
for change and those forces operating to maintain the
status qno. They describe actions which serve to
increase the forces for change, and those which have
the effect of decreasing the forces against change.
These actions begin to create markers for the pathway
to the future. They may describe a broad band or be
rather focused on specifics. A sample of Force Field
Analysis and resulting action steps from this and

Long Range Planning Vol. 29 June 1996

other groups is presented in Box 1. They provide some
insight into the complexity of the challenge of change.
The Strategic Factors
The Analysis
The strategic factors arising from the strategic risk
analysis matrix across the 19 groups were extensively
analysed to identify the overarching themes. The
results will be discussed in two ways. First the general
strategic factors and those associated with greatest
risk (an overview of which is presented in Table 2)
will be described. Next these factors will be related
to the specific strategic vision of the businesses in the
study (as presented in Table 4).
Strategic Factors Associated with Greatest
Risk
In the first stage a detailed content analysis of the
188 strategic factors was undertaken, resulting in 22
categories into which 90% of the data from the 19
risk matrices fitted. These 22 factors are presented in
Table 2, in five overarching subject areas: the senior
management cadre; the organizational structure; the
people processes; the culture; the workforce. The first
column of Table 2 contains the total number of times
the factor was mentioned across the 19 groups, whilst
the subsequent columns show the frequency by the
three risk levels of the risk matrix (high, m e d i u m
and low risk). Of these 22 factors, six emerged as top
priority factors for many companies in the sample,
flagging up an agenda which many share. These high
priority areas are: the importance of decentralizing
power and establishing flatter horizontal team-based
structures; the need to create and facilitate horizontal
working at cross-national, cross-business and cross-
functional level; the creation of a learning environ-
ment u n d e r p i n n e d by excellent channels of com-
munication; the ability to encourage and manage high
performance; processes to recruit, train and develop
the talent needed in the year 2000.
The Major Risks Associated with Specific
Strategies
In the second stage of the analysis the underlying
strategic visions of the participating businesses were
related to six top priority factors identified in the
first analysis. This analysis was conducted by first
categorizing for each business the major focus of the
strategic vision. As Table 3 shows, none of the par-
ticipating businesses are pursuing single or unitary
strategic visions. On the contrary, all are pursuing
portfolios or hybrids at the centre of which is growth
(through market share, regional growth and/or merg-
ers, joint ventures and partnerships) supported by
other strategies: cost reduction, customer orientation,
innovation through development of n e w products or
Implementing a Strategic Vision--Key Factors for Success
technological leadership in core products. Each busi-
ness has a unique bundle, or blend, of strategies.
Following this initial categorization by specific
strategy, the top priority factors were analysed and
the results are represented in Table 4. In this table the
major strategies are presented on the vertical axis, and
the strategic factors or areas of risk on the horizontal
axis. In the body of the table the factors which are
identified by at least 50% of the businesses with a
specific strategy are shown. Those factors which over
75% of the businesses identified as a risk are shown
in bold print. The actual descriptions used reflect the
particular thrust of the discussion within the group.
For example, the management of performance is of
central importance to strategies focused on regional
growth, customer orientation and n e w product devel-
opment. However, within this broad description the
specifics of the performance management process
reflect the specific strategy at which they are directed.
The Results
Strategic Factors Associated with Greater Risk
Decentralized decision making. This is the
broadest and most frequently discussed factor. When
discussing their vision of the future, only five of the
19 groups failed to refer to the strategic importance
of organizational structures which are simple, and
decision making processes which are transparent and
widely understood. To quote executives in the Elec-
tronics company, "regions should formulate their
own business plans". A Healthcare group puts it in a
slightly different way: "the vision will necessitate a
structure which is functionally simpler and more
closely aligned to the need of the market". The
Telecommunications group speak of "a structure
which no longer reflects separate functions, but
reflects the needs of the market place and has fewer
layers".
Decentralized, flat structures are part of the growth,
cost, customer and innovation visions. They are seen
to be the w a y these executives visualize the future,
whatever they are trying to achieve. However, decent-
ralization is far from being universally seen as the
factor of greatest risk. Many groups believed much
has already been achieved and further structural
transparency and devolution may not necessarily
mean increased competitive advantage. Moreover,
their recipe for structural success is far from simple.
In some groups it was well understood that the dif-
ferentiation brought by decentralization has to be bal-
anced with integration and centralization around core
competencies, or in the case of the Publishing
company, intellectual copyright.
Creating horizontal team working. Many
groups envision highly decentralized organizational
 Box 1
A Sample of Force Field Analysis
First Analysis
The issue: to create within Asia Pacific Region (APR) a decen-
tralized, regional based business, with local product, R and D
and operation plan (with a particular focus on APR)
Forces operating to support APR development
• Sense of urgency, APR is a major potential market
• Awareness of the need to decentralize and communicate the
skill set
• Will to transfer senior m a n a g e m e n t
• Acquisition of Japanese c o m p a n y
• Joint venture with Chinese c o m p a n y
• Stretching targets for the region
• Competition already active in the region
Forces operating against APR development
• Local top m a n a g e m e n t is European
• Fear of the unknown
• Centralist thinking in the corporate headquarters
• No local R & D capability
• No overall APR business plan
• Lack of funds to back significant growth
Bridging actions required from senior management
• Increase number of local managers
• Place APR managers in head office
From human resource managers
• Identify young local Asian high potentials
• Establish regional human resource planning capability
• Stimulate cross-country job exchange
Second Analysis
The issue: managing customer focused performance through
appraisal and reward
Forces operating to support customer focused appraisal and
reward
• Clear and understood need to meet strategic goals, particularly
around customer focus
• Desire of employees to understand their role and expectations
• Career aspirations, achieving clear goals is important
• Desire to reward high customer satisfaction
• Desire for recognition and security
Forces operating against customer focused appraisal and
reward
• Lack of clarity of strategic intent
• Lack of a system to cascade strategic messages
• Changing reward systems is uncomfortable
• Inconsistencies of terminologies (KSF, KPI etc,)
• Difficulty in measuring 'softer' outputs, particularly team lead-
ing and customer satisfaction
• Linking business strategy to personal objectives, individuals
have their own agenda
• Complexities of measuring and rewarding on a team and/or
individual basis
Bridging actions required
• Clearly communicate customer strategy
• Establish cross-functional/territory teams to develop per-
formance management processes to obtain real ownership
• Provide training and coaching to participating individuals
• Measure performance against relevant measurable goals
Third Analysis
The issue: create horizontal, cross-functional team working
Forces operating to support cross-functional team working
• General awareness that horizontal processes are critical to
success
• Benchmarking has demonstrated some competitors are fur-
ther advanced
• Some informal networks are already in place
• Multi-disciplinary steering groups are cross-functional and
seen to be successful
• Some horizontal project-based processes are established at
some sites
• General desire to work in cross-functional teams
Forces operating against cross-functional team working
• The functions speak different professional languages
• Rigid functional structures make horizontal working difficult
• Functional 'barons' will not release people
• Lack of mutual understanding
• Conflicting interests of departments
• 'Not invented here' syndrome
• Cross-functional communication only occurs at senior levels
• No cross-functional career planning
• Lack of free capacity
• It is seen to be important to remain an expert
• Appraisal and reward focuses on one function, no ability for
dual reporting
Bridging actions required from senior management
• Support cross-functional mobility by releasing and parenting
staff
• Facilitate discussions between staff
Bridging actions required in the structure
• Establish greater number of horizontal project groups at all
levels
• Enhance communication processes at operational levels
• Create change agents w h o facilitate team working
Bridging actions required in people processes
• Establish planned exposure to other areas
• Teach project management and cross-functional tools
• Appraise and reward cross-functional team working
• Create cross-functional career planning
Long Range Planning Vol. 29 June 1996
Factor Frequency No. of times No. of times No. of times
rated high risk rated medium rated low risk
risk

A senior management cadre who:

Is internationally orientated and experienced 9
Has multi-disciplinary, cross-functional 4
backgrounds
Has a shared strategic vision 6
Is technically literate 3
Is entrepreneurial, skilled in acquisitions 3

An organizational structure which:

Is decentralized with a flat and transparent 21 10
decision making process
Is international 9
Creates horizontal working 13
Is customer focused 5
Facilitates communication and learning 11
Has centralized R & D intellectual property, core 10
technical competencies
Supports the management of change 3

People-processes where:
Performance is managed through the linkage of 14
organizational goals to individual and team
appraisal reward
Cross-functional experience is facilitated 8 7
Human resource responsibilities are 9 3
decentralized to the line
International human resource needs are met 15 9
Effective recruitment and retention of talent 12 6
takes place
Effective training and development takes place 12 9

A culture which is:

Creative and innovative 10 5
Customer focused 4 3

A workforce where:
New skills are rapidly acquired 3
Specialist skills are developed O

Strategic Oil & Health- Health- Engin- Com- Elec- Publish- Publish- Publish- Publish- Tele-
focus Gas care care eering puters tronics ing ing ing ing communi-
cations

Regional growth X X X X X X
Market share X X X X X X X X
growth
Mergers/ X X X X
Partnerships/
JVs
Cost X X X
Customer X X X X X X X X
orientation
Innovation X X X X X X X

I m p l e m e n t i n g a Strategic V i s i o n - - K e y Factors for Success

Strategic focus Decentralized Horizontal Communication Recruiting and Managing Training and
decision working and learning retaining talent performance development
making

Regional Decentralize to Accurately International

growth regions appraise cadre
Decentralize performance International
human resource Reward targeted management
responsibility performance skills
(growth) Multicultural
sensitivity
Core training

Market share Decentralize Cross-functional

growth power and cross-
Centralize core business
technical working
competencies

Mergers/ Decentralized to Rapid cross-

partnerships/ business business
joint ventures communication
and learning

Cost and Decentralize/ Upwards Management

productivity empower communication training
workforce

Customer Decentralize Recruit Accurately

orientation Centralized core customer appraise
technical focused skills performance
competencies Reward targeted
performance
(customer/
teamwork)

Innovation and Decentralize/ 'Virtual teams' Recruit Accurately

product flatten/ Cross-functional innovation appraise
development transparent working (R & 'weirdos' performance.
Decentralize D/production) Reward targeted
human resource performance
responsibility (innovation)
Issues identified by more than 50% of those groups with particular strategic intent--those identified by more than 75% are shown in
bold.

structures, yet see horizontal team-working across
regions, functions and businesses as key integrating
processes. To quote the Healthcare group with a
vision focused on product innovation and speed of
development, "potential synergies between functions
and territories can only be realized through an organ-
ization structure which is team-based, matrixed and
networked, where the sharing of knowledge and infor-
mation occurs across functions and divisions". Two
groups go further, describing these horizontal pro-
cesses as 'virtual teams'. For many, future success
will depend on the ability to migrate expertise across
functional and geographic teams.
Yet, whilst the rhetoric and vision is about teams
and horizontal working, the reality in most of these
companies remains firmly vertically based. They
described appraisal processes based on vertical
reporting relationships which break down for people
with multiple bosses; rewards focused on individual
performance which simply pay lip service to team-
working; and people promoted for managing their
boss, not for working as part of a team.
For a proportion of these companies, team-based
working is the core to future success, but their per-
ception of current alignment is low. When debating
the pathways to future success m a n y groups con-
cluded that either they focus attention and com-
mitment on creating and reinforcing team-based
working, or they will maintain the status quo and
breed the cynicism which arises from the chasm

Long Range Planning Vol. 29 June 1996

between the rhetoric of the vision and the pragmatism
of reality. Whichever the outcome, like m a n y current
commentators 4 they can see that horizontal processes
count.
Facilitating communication and learning.
The vision of the networked organization with well
established upward and horizontal communication is
seen by some to be central to their vision of the future.
The Electronics group describe it this way: "people
are closely networked, particularly through infor-
mation technology"; the Engineering group as "know-
how is rapidly communicated across the organ-
ization". Interestingly, the focus is not simply on
communication per se, but rather on the breadth and
sources of information. They believe that well estab-
lished communication channels will be a crucial
element if their organization is to be capable of learn-
ing and leveraging tacit knowledge across functions,
businesses and countries. In the Electronics group
this is expressed as "learning and communication
processes in which we use and share information
from different cultures and view points". This focus
on what Senge 5 has termed the 'learning organization'
is particularly crucial to those companies operating in
industrial sectors such as telecommunications where
their vision of the future is firmly rooted in mergers
and joint ventures. For some of these companies, there
is a strong belief that they have the basis of a learning
organization, which, with further focused attention,
could become a core competency in this joint venture
activity. For others, they are well aware that the
inability to institutionalize the routines and processes
necessary to facilitate the rapid transfer of knowledge
and learning puts their joint venture and acquisition
vision at risk.
Managing performance. This factor refers to the
institutionalization of routines and processes capable
of appraising and rewarding the specific performance
required to deliver the vision. These processes are
viewed as critical in creating and sustaining in the
minds of individual employees a consistent and inte-
grated view of what the business is trying to achieve.
For example, appraisal and reward processes which
reinforce customer satisfaction or w h i c h are capable
of tracking innovative behaviours and rewarding
teams and individuals for successful product devel-
opment. The Oil & Gas team puts it this way: "the
delivery of the stretching and ambitious goals for the
year 2000 will necessitate a process of performance
management which ensures that the goal and per-
formance of the individual is intimately tied to the
goals and aspirations of the organization".
When considering current capability, most groups
believed they were well able to appraise and reward
against 'hard' performance outcomes such as the pro-
fitability of a business or return on assets. However,
Implementing a Strategic Vision--Key Factors for Success
they were m u c h less confident about 'soft' per-
formance outcomes such as team management, cus-
tomer satisfaction or innovation. Rewarding these
would require the development and implementation
of a whole new set of metrics based on upward and
peer-based appraisal.
Recruiting and retaining talent. A broad
theme, but one which captures the unease some
groups had with their ability to find and retain people
with the skills and competencies required for the
future; in the words of the Healthcare group "recruit-
ing people for your company and the future, rather
than for specific, narrow roles". For those companies
for which rapid and innovative future product devel-
opment is critical, retention of what may be a core
innovative competence is crucial. Some groups spoke
also of a potential misalignment between the need
of their business to retain core skill and knowledge
competence whilst also re-negotiating the psycho-
logical contract between employee and employer.
They are concerned that as the psychological contract
changes and they are no longer able to offer security
of employment and long-term career prospects, so it
will become more difficult to retain this highly
employable group. And if they go, they will take with
them the tacit knowledge which could be crucial to
the long-term success of the company.
Training and development. Again a broad
theme, particularly important for productivity and
regional growth strategies. For the Engineering com-
pany with strong regional growth aspirations the
"establishment of cross-business training in the core
competencies of the c o m p a n y " is critical. For others
the emphasis is on international training, focusing
on career development to build long-term strategic
capability and create internationally experienced
management cadres.
For those companies for w h o m training and devel-
opment is of strategic importance, m u c h has already
been achieved. These are all successful multi-
national companies many of w h o m have historically
used training as a major level to gain competitive
success. For those companies with visions of regional
growth, the challenge they face is to internationalize
their training capability to create cadres of nationals
able to deliver effectively. For those who are com-
peting on the basis of cost, the challenge is to create
and transfer analytical and production skills across
the countries in which they manufacture. The latter
brings into question the general belief that only those
companies who compete on the basis of quality invest
heavily in training. On the contrary for these com-
panies the ability to create lean manufacturing and
contain costs across their global operations will be
highly valued skills requiring significant training
investment.
The Major Risks Associated with Specific
Strategies
In the second stage of the analysis the six strategic
factors associated with greatest risk are related to the
specific strategic intents of the businesses. The results
of this analysis are presented in Table 4, and the focus
for each strategy is debated in the following section.
When describing their visions of the year 2000 all
the groups envisioned greater international markets
or production, larger market share for their key prod-
ucts, and/or substantial merger or joint venture
activity. In short, they all believed they w o u l d grow.
Transnational growth. The degree of inter-
nationalization varied from the Engineering company
which manufactures and sells across the globe, to
the Healthcare c o m p a n y which manufactures in one
European country and sells primarily into Europe.
For these and other companies in the sample, the
vision for the year 2000 embraces an increasingly
global manufacturing, distribution and sales base. It is
well understood that the management of these global
businesses requires unique solutions 6 to the
dilemmas they face, particularly to being globally
competitive and efficient yet responsive and flexible
to local needs and conditions.
This dilemma framed the discussion for many of
the groups with transnational growth aspirations. The
conclusion from three-quarters of them was unani-
mous: accelerated international growth could only
be achieved though a further decentralization of the
power and decision making base. Yet within the sam-
ple there were varying levels of current inter-
nationalization and decentralization. For both the
Electronics and Telecommunications companies
there was a belief that further decentralization was
required if the growth plans were to be met. In
contrast, the Healthcare and Engineering companies,
with well established global markets, had already
gone some w a y to devolving power and creating flatter
structures.
For the Electronics groups the issue of decent-
ralization is particularly important if the aspirations
for regional growth, particularly in the Asian Pacific
Region, are to be achieved. Their discussion of this
aim is presented in the first Force Field Analysis in
Box 1. This clearly shows the extent of the will to
create a strong local presence in Asia Pacific, but also
hints at the political, institutional and inertial forces
capable of constraining change. Yet from these com-
plex dilemmas comes a list of clear and workable
actions for senior managers and h u m a n resource man-
agers.
When visualizing the year 2000, the groups
described businesses with a strong and relatively
autonomous regional presence with people processes
playing a key role in linking these geographically dis-
persed units. Three key people processes were par-
ticularly crucial: performance management, inter-
national career development and firm-specific
training. There was a widely held belief that inter-
national performance management processes will
play an increasingly crucial role, by specifying the
behaviours the businesses require, and creating
world-wide metrics capable of targeting and reward-
ing 'hard' (financial performance, return on assets)
and 'soft' (team and individual development, cus-
tomer satisfaction) performance. The groups believed
they were currently aligned on the 'hard' measures,
but had a long w a y to go with the 'soft' measures.
Management development has been described as
the 'glue' which bonds otherwise loose and separate
business entities. 7 These groups certainly saw it as
strategically important to transnational growth and
the creation of a cadre of global managers. This, com-
bined with training in the core competencies and cul-
ture of the company, w o u l d be central to strategic
aims. Most groups believed their companies had
focused resources on development and training, and
consequently perceived it as manageable risk for the
future vision rather than one in which they were vul-
nerable.
Market share growth. The intent of many of
these executive groups was to achieve business
growth through increasing market share. Clearly this
will result from strategies which could include prod-
uct innovation, increased focus on customer needs or
price competition. However, as Table 4 shows, the
areas of risk associated with this vision clearly illus-
trate a potential paradox, that of balancing decent-
ralization and centralization. For many of these
companies there is a perception that growth will
necessitate simultaneous decentralizing power and
decision making whilst centralizing research and
development and intellectual properties and thus
building core technical competencies.
The second major focus for these executive groups
is the need to create horizontal cross-functional and
cross-business working groups and projects. These
linkages have long been seen to be fundamental to
creating co-ordination and organizational learning. 8
Yet whilst these groups highlight their importance,
all believe they are far from achieving this. Horizontal
working and the reasons for misalignment are
explored in more detail in the section on innovation.
Growth through mergers, partnerships and joint
ventures. For the Healthcare, Engineering and
Computer companies, joint ventures, mergers and
acquisitions w o u l d provide opportunities to expand
into n e w markets (particularly in the Asia Pacific
region), gain technical expertise or knowledge or allo-
cate excess capital. Research has suggested that suc-
cessful merger activities require a focus on internal
Long Range Planning Vol. 29 June 1996
communication, structure and remuneration. 9 Cer-
tainly the structural focus was apparent for this group,
with a particular emphasis on decentralizing power.
However, whilst most groups felt confident about the
ability to create flexibility in the structure, an issue
they were m u c h more concerned about was the facili-
tation of lateral communication and the rapid transfer
of knowledge across the business and to and from
the newly acquires businesses. The concept of the
learning organization may be a strong rhetoric, but
the reality of knowledge transfer is an area of real
concern and there is a belief that the benefits of mer-
gers and joint ventures will never be realized without
substantial action to create processes and routines
which support knowledge transfer.
Cost and productivity strategy. The groups rep-
resenting the Engineering, Oil & Gas and Computing
companies all saw a future in which they w o u l d con-
tinue to compete on the basis of cost through lean
production and continuous productivity improve-
ments. In all cases competing on the basis of cost is
one element of a multiple strategy which may also
include customer focus or mergers and joint venture.
It has been suggested that companies who compete
primarily on the basis of cost do so through narrowly-
defined jobs, short-term, results-oriented perform-
ance appraisals and minimal levels of employee train-
ing. 1° This was not the case for these companies. On
the contrary, rather than rigid, narrowly-defined jobs,
they believed their aspiration to cut costs and increase
productivity required the creation of simple, trans-
parent and decentralized structures to emphasise an
empowered workforce capable of making rapid
decisions. They visualized communication and
learning processes capable of supporting incremental
improvements through rapid dissemination of knowl-
edge and best practices. Rather than describing mini-
mal levels of training, they emphasise the delivery of
management training.
It is interesting to consider the apparent anomaly
between the picture of the typical cost-reducing strat-
egy with the focus on short-termism and the future
w h i c h these groups have described. Clearly for none
of these businesses is cost reduction the primarily
strategy, but rather forms part of a complex vision for
the future. So, curtailing staff training may increase
the short-term cash flow of the computing company
but could well harm long-term customer satisfaction.
Further, m a n y believed they w o u l d compete on the
basis of cost as a result of increasing productivity
rather than simply cutting the underlying cost base.
Customer focus strategy. Many groups believed
they would grow by better understanding their cus-
tomers and leveraging from their technical supremacy
to deliver to customer needs. This would require
structural change to get closer to customers, to decent-
Implementing a Strategic Vision--Key Factors for Success
ralize whilst centralizing and controlling their core
technical competencies.
Whilst these structural changes were important, it
was the processes and routines necessary to support
and sustain a customer-focus which really dominated
the group discussions. In particular, they had real
concerns about the ability to recruit and retain people
with customer-focused and marketing skills, and to
appraise and reward customer orientation and team
work so critical to delivering customer expectations.
Sustaining customer focus is clearly a real chal-
lenge for these companies and to meet this challenge
will require action on many fronts. The breadth of
action required is best illustrated in the second Force
Field Analysis presented in Box 1. Here the Elec-
tronics group is debating how it can create an
appraisal and reward process which supports a cus-
tomer-focused vision. A clear force against change is
the lack of performance metrics to support the vision.
Without 'softer' customer-focus or team-building
metrics, employees naturally focus their attention on
what is actually measured (typically short-term fin-
ancial measures). For some of these companies, the
rhetoric may be customer-focused, the reality is short-
term profitability.
Innovation and product d e v e l o p m e n t strategy.
It is well understood that the entrepreneurial behav-
iour required to support product innovation requires
careful planning and nurturing. The potential points
of leverage include decreasing control mechanisms
and encouraging freedom and flexibility,11 recruiting
innovative talent and training in managing and
developing innovative behaviour, rewarding entre-
preneurial behaviour and moderate risk taking 12 and
creating broad career paths to reinforce the devel-
opment of broad skills. 2° These practices are designed
to facilitate cooperation, reward behaviour that is
orientated to the longer-term, and to foster the ex-
change of ideas and risk taking.
Faced with these m a n y potential points of leverage,
where are these executives directing their attention
and what do they see as the areas of unacceptable
risk? Two of the areas they focused on were structural,
based around the control mechanism which Kanter
has described. For over half of those groups striving
for innovation, their ability to break hierarchical, ver-
tical control and develop and maintain high-
performing cross-functional teams is an area of real
concern. There is a clear perception that rapid prod-
uct innovation will come through horizontal teams
bridging from research and development into manu-
facturing with a customer focus at all stages. The cre-
ation of horizontal pathways of innovation is crucial
to future success. Yet, as the third force field analysis
presented in Box I shows, m a n y current routines and
perceptions work against this. The executives are well
aware that the path to achieving innovation is
complex, requiring commitment from senior man-
agement to supported changes in structure and sup-
porting people processes. This focus on horizontal
working is support by a realization that the future
plans for innovation are put at risk by control-
orientated structures. The challenge is sim-
ultaneously to decentralize the power base whilst
centralizing intellectual property and R&D, to
encourage freedom and entrepreneurialism whilst
controlling and centralizing the core research com-
petencies and talents.
The creation of looser, horizontal structure is only
half of the solution. There was an overwhelming
belief across all the groups that many current reward
processes induce fear of failure and stifle innovation.
Only w h e n the reward processes were focused on
rewarding innovation, and innovative people were
recruited and retained could these companies hope
to deliver the product innovation required to compete
over the next decade.
Conclusions
Prescriptions for Change: the Simplicity of the
Prescriptive Approach
It w o u l d make life much simpler for executives if a
clear fit between specific strategy and related people
processes could be established. 13 So, if they are pur-
suing a strategy of innovation, then they w o u l d know
to gain leverage from recruiting and rewarding entre-
preneurial behaviours; whilst strategies of cost
reduction w o u l d require a focus on establishing nar-
rowly-defined and measured job specifications.
Within this study of seven companies there is sup-
port for broad agendas of action which frame specific
strategic intents. However, it w o u l d be overly sim-
plistic to suggest that the fit was perfect. In this study
three areas emerged as worthy of further con-
sideration: the potential impact of a portfolio rather
than unitary strategy, the administrative heritage and
the role of the individual in formulating strategy and
developing agendas for action.
The Portfolio Rather than Unitary Strategy
None of these companies operated single strategies.
All aspired to complex strategies combing elements
of growth, customer focus and innovation. For the
Engineering group, the final risk matrix shown in Fig-
ure 1 and the associated actions represents people
and process issues which are the result of entirely
different strategies. For example, the need for a multi-
skilled workforce arises primarily from the need to
improve productivity, whilst the training for multi-
national managers, creation of a talent pool and cross-
country mobility, are cornerstones of the trans-
national growth aspirations. This blend of strategies
can require complex and potentially conflicting peo-
ple processes. This complexity and potential con-
fusion is clearly shown in the Oil & Gas company
where the group are visualizing appraisal, reward and
training processes capable of supporting and rein-
forcing behaviours associated with a range of very
different strategic intents, including productivity
improvements, service and customer orientation and
innovation. It is easy to see from this company's lack
of strategic focus h o w initiative overload takes place.
What is clear is the importance of focusing on actions
which create a message and a portfolio of processes
which have internal consistency, establishing broad
themes or rallying cries.
The Administrative Heritage
To draw a direct parallel between strategic intent and
leverage from specific people processes and initiat-
ives is to negate the historical context within which
the company operates. This unique administrative
heritage may well provide a supportive environment
for some initiatives, whilst crushing others. Each
business builds up over time a stock of human
resource assets, routines and processes. So a factor
which is believed to be a risk in one company, and
therefore worthy of extensive management attention,
may not be so in another, even though they share
similar strategic intents. For example, the man-
agement of individual performance through appraisal
and performance processes is critical to the majority
of groups seeking to engender customer-focused
working practices. For the Computing company cur-
rent alignment is low, since the performance metrics
and reward processes do little to create customer
focus. Many actions must be taken if the vision is
to be achieved. Customer focus is of equal strategic
importance to the Telecommunications company
which believes that managing individual customer-
focused performance will be the key to success. How-
ever, these executives have inherited a company
which has been fanatically customer-focused for
the last decade, and this is underpinned by a cul-
ture and series of routines and processes which flame
and support this rhetoric. So performance manage-
ment is certainly key, but it does not require an ad-
ditional focus of attention since much has already
been achieved.
The Role of the Individual in Formulating
Strategy and Developing Courses of Action
In the linkage process the ideas and action plans
which emerge arise from the sharing and shaping of
individual mental models of the future and per-
ceptions of the present. 14 When these mental models
are debated the final mix of themes and visions will
depend, in part, on the characteristics of the par-
Long Range Planning Vol. 29 June 1996
ticipants. For the Electronics company the process of
linking long-term strategy to current capability was
based on the perceptions of four groups of executives.
These four groups had a strong core of shared visions,
believing that the future required decentralization,
the creation of horizontal working, the centralization
of R & D activities, the facilitation of cross-functional
experience and the development of a culture in which
creativity is supported. However, there were dif-
ferences b e t w e e n the groups: one group highlighted
the importance of developing an internationally
orientated senior management cadre, while another
believed actions should centre on customer-focused
performance management. The first group contained
a high proportion of international mangers, the
second a highly vocal and persuasive marketing
executive. These individuals were able to influence
the final group outcome with their own experience
and agendas.
The message is clear: use multi-functional groups
to debate future visions. These debates draw the
executives out of their specialized frames of reference
and into a general management view of trade-offs,
risks and potential actions. Doing so brings a sense of
urgency or quasi-crisis, a realization that innovation
and radical changes are needed. It has the potential,
with the involvement of many viewpoints, to lead to
truly creative actions and involve the whole organ-
ization in revitalization.
Implications for the Fit Model
The concept of a unitary relationship between strat-
egy and action has a great deal to commend, par-
ticularly for the executive w h o may be struggling to
find the points of leverage which will really impact
on the longer-term success of the business. The
experience of the groups of executives is that these
prescriptive models may be a useful starting point but
they can be no more than that. First, they invoke a
simple unitary vision for the future which none of
these companies had. Instead of a unitary strategy,
executives are faced with the task of balancing com-
plex priorities arising from multiple strategies. Sec-
ondly, much is dependent on the administrative
heritage, and understanding in detail this heritage
and current capability is a critical part of creating
feasible paths of action to the future. Without this
understanding of their specific context, executives are
in danger of working on points of leverage and paths
of action which may have been useful for companies
with similar ambitions, but w h i c h fail to recognize
the current capabilities or weaknesses of their own
company. Finally, it should be remembered that per-
ceptions of pathways to the future reflect in part the
past experience of contributing members. A group of
marketing executives will talk about customer focus,
while international executives will talk about the
Implementing a Strategic Vision--Key Factors for Success
need to create international cadres. So the creation of
the broadest view of pathways to the future requires
sharing the visions and beliefs from the broadest base
of experience.
Bridging to Action
The focus of attention for these executives was how
to bridge from current reality to future vision, to
understand those current processes capable of sus-
taining this bridge and highlight the n e w process
required to strengthen and underpin the trans-
formation. Their perceptions of this transformation
process and the associated challenges and risks per-
haps echo the beliefs of executives in other multi-
national companies.
The most striking aspect of their perceptions is the
gap they see between current practice and future
requirements, the gap between the reality of the pre-
sent and the rhetoric of the future. They describe peo-
ple processes and routines which resolutely maintain
the status quo: rewarding, appraising and developing
the attributes needed for the past, but doing little to
prepare for the challenges of tomorrow. Some people
processes have been developed in a rational manner,
to ensure a specific strategy is delivered, more often
executives described processes and routine which
simply represent the last vestiges of a long dismantled
structure, or are 'sacred cows' protected by a powerful
and influential group. A glance at the 'forces for
change' in Box I shows the emphasis On the emotional
and political rather than rational.
Faced with this gap, what are the messages from
this group which may have meaning for others? Per-
haps the first message is rather negative, that the 'solu-
tions' to the risks they face are far from simple. All
operate in high-performing companies, with world-
class standards, yet their analysis has shown the
extent and complexity of the challenges they face if
strategic intent is to be delivered. They understand
and can articulate what is required. Their Force Field
Analysis is testimony to their breadth of under-
standing. The difficulty they face is in knowing what
has to be done, in turning intentions into actions and
reducing the forces against change which they have
so clearly articulated.
For a minority of the groups the size of the gap and
lack of alignment between aspiration and actuality
was deeply unsettling. Some gaps were unpalatable,
particularly those around the roles, skills and vision-
ary capabilities of senior management. However, by
focusing so clearly and publicly on the future, rather
than simply the problems of today, they see the size
of the challenge and the inappropriateness of falling
back on those problems which are easily solved but
provide little long-term leverage.
 What these groups of executives have shown is that
the process of strategy creation can be an involving,
participative, crafting process 15 in which stake-
holders debate and plan. It is future-orientated and
visioning, where debates about people and core com-
petencies balance those of strategic positioning and
the competitive environment. The reality for many
of the executives in these companies is that strategy
creation means a short-term operating plan with fin-
ancial targets and performance standards. It does not
concern vision and future scenarios, it does not con-
sider people and core competencies and it does not
take due regard of current alignment. There is no
doubt for these executives, that as Hame116 has per-
suasively argued, in m a n y international European
companies too little time is spent visioning, debating
and describing the future. For most this was a unique
experience. The process gave them permission and a
means of debating the future, and if the international
executives w h o m Ready 17 surveyed are right, it also
develops the visioning skills which will be critical
for their future.

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Long Range Planning Vol. 29 June 1996