4 Elements of a Shared Vision
4 Elements of a Shared Vision
Future landscape, right to win, North Star impact, and business theory
I wrote recently about why a shared vision is essential to digital transformation (DX).
In my new book, I argue that the first step of DX must be to define a vision of where you are going, why you must go there, and why your organization is uniquely suited to this path.
But there’s a hitch.
Many organizations that I meet with already have some kind of official statement of their “vision.” And yet, in most cases, these companies fail to derive any benefit from them.
As I wrote before, the most common mistakes I see are vision statements that are: generic (not unique to their business) or not shared (not widely understood among employees at all levels).
But if we are able to get past these two hurdles… what makes for a truly effective shared vision?
What are the ingredients of a vision statement that can inspire and align employees and external investors, guide resource allocation towards the most important initiatives, and set expectations with a clear understanding of what success should look like and what metrics to track?
Four Elements
What I have seen across diverse organizations is that the most effective vision statements incorporate four elements: a future landscape, a right to win, a North Star impact, and a business theory.
We can think of each of these elements as answering a different question:
Future landscape—where do you see your world and your business context going?
Right to win—what are the unique strengths and limits of your organization that will define the role you play?
North Star impact—what impact do you seek to achieve in the long term, and why?
Business theory—how do you expect to capture value and recover the investments you make for the future?
Let’s take a look at each of these four elements, why they matter, and how you can put them to work in your business.
Future Landscape
The first element of a shared vision is what I call your future landscape: a description of where your world is going and how your business context is changing.
Understanding your future landscape will be critical to how you compete in the digital future, what markets you will serve, and where you hunt for growth.
In developing your future landscape, I suggest focusing on four broad areas:
Customers
Focus on your customers’ changing behaviors, needs, and expectations. Pay close attention to how these are influenced by players outside your industry. (If you sell payroll software to doctor’s offices, the people using your software also use Amazon, Netflix, and ChatGPT.)
Be alert to differences between your existing customers (who deliver your current revenue) and new emerging customers (who will provide your future growth).
Technology
Learn all you can about new technologies that are shaping the lives of your customers and the operations of your business and firms in adjacent industries.
As you do, take a broad view of tech maturity—tracking technologies that are in wide use today, those still in the early curve of adoption, and others not yet in market but attracting research and venture capital. This approach will help you spot long-term trends that could reshape your industry.
Competition
Take a broad view of competition as you seek to understand the business ecosystem of your future. Who are the new entrants in your industry? What new business models are being tested?
Be sure to consider both symmetric competitors (with the same business model as you) and asymmetric competitors (with a competing value proposition but a different business model). Understand that the same company may be an asymmetric competitor and a vital business partner.
Structural trends
Study the non-business trends that may shape your future context: demographic trends (population, urbanization, aging), macroeconomic trends (globalization, resource availability), and government trends (regulation, trade, and industrial policy). Look at ever trend—environmental, social, health, climate—that may strongly impact your business.
A well-crafted future landscape should provide actionable guidance as you think about the opportunities you will pursue.
Four tools from my last book, The Digital Transformation Playbook, may be helpful: the Value Proposition Roadmap, Competitive Value Train, Disruptive Business Model Map, and Disruptive Response Planner.
Each of these tools defines digital change as a call to lead toward your own future. As Chris Reid, EVP at Mastercard, told me, “I think disruption oftentimes is a good thing, as long as you’re agile, as long as you can predict it. You should be able to figure out how do you either navigate around it, or how do you take advantage of it.”
Right to Win
The second element of any shared vision is your right to win in the future you see. What gives your business a reason to succeed in your future landscape?
To find your right to win, you will need to understand your unique strengths as an organization and identify important limits on your strategic choices. Where your future landscape arises from continuous scanning of the external environment, your right to win will stem from deep internal knowledge of your organization.
Unique advantages
Your right to win begins with knowing the distinct strengths of your business to compete in the marketplace.
What is your organization uniquely good at? What assets or skills add value to your products or services and give you a competitive edge? I call these your unique advantages.
When Netflix filed for its IPO, its paperwork identified three advantages that distinguished the firm: its subscriber base, its data sets on customers’ media preferences, and its proven ability to deliver personalized experiences.
For Mastercard, its vast network of consumers and business partners (both banks and merchants) is one key strength as it looks toward the digital future. Another is its access to massive amounts of economic data tied to individual commercial transactions.
Strategic Constraints
Just as important as understanding your unique advantages is understanding your strategic constraints. As you formulate new digital strategies, it is critical to identify any guard rails you won’t touch or places you won’t go (that other firms might).
Common strategic constraints include:
Ownership or legal structure—whether family-owned, public sector, or a franchise business with limited central authority, your structure may place limits on strategy
Partner agreements—contracts with distributors may prohibit direct competition, or supplier contracts may prohibit competing in certain product areas
Legal regulation—a major constraint for many companies, especially in industries like health care and financial services
Local infrastructure—the availability of broadband, transportation networks, credit-scoring, or skilled labor could impose limits
Social mission—can define what you won’t do, along with what you will
Sometimes, a constraint can be treated as a risk factor to carefully manage. But in other cases, it may establish a clear strategic redline that you will not cross.
Taken together, your strategic constraints and your unique advantages will define the space where your business must seek to outcompete others with a strategy that you can execute better than anyone else.
North Star Impact
The third element of a shared vision is what I call your North Star impact: a statement of what you seek to achieve over time.
Steve Jobs famously referred to Apple and its employees as seeking to “make a dent in the universe.” What difference do you seek to make through your own transformation?
Try asking these questions:
What impact do you seek to have on the world?
What problems are you uniquely able to solve?
Why would the world miss you if you disappeared?
Your North Star impact should not simply be an inspiring string of words. It should be a statement that shapes business decisions for years to come—the investments you make, the people you recruit into leadership, and the strategies you pursue.
Digital-native businesses are known for defining a clear statement of the long-term impact they seek to make. Google has a long-stated mission to “organize the world’s information.”
The same is also true of non-digital-native businesses with a clear vision for DX:
Ford Motor seeks to meet the environmental and mobility needs of a growing, urbanizing planet with connected vehicles and transport systems.
Mastercard seeks to power and protect secure commerce in the digital world, across every device, partner, and platform.
Notice that these statements are extremely ambitious. And each statement encompasses the entire company—both the evolving core and new digital ventures. This means everyone has a stake in the company’s future.
Why Versus What
Any North Star impact answers the question Why? rather than the question What? It is a statement of what you hope to achieve, not what you hope to do. It is about outcomes not activities.
This is especially critical for DX.
As I have written before, digital transformation is not about technology!
I see many companies who cannot write a sentence about their DX without leaping to terms like “artificial intelligence,” “blockchain,” and “metaverse.” Before you start thinking about technologies you will deploy, first identify the purpose for which you will be using them.
Business Theory
The final element of a shared vision is a business theory: how you expect to recover the investments you will make for your digital future.
Let me be clear: a business theory is a causal theory that doing X will lead to Y, but it is not a business case, with financial projections of specific outcomes at specific times. Instead, a business theory addresses broader, directional questions. Will your financial return come from selling more, reducing costs, generating new sources of revenue, or from some mix of these?
Great digital-era businesses have been built on a simple business theory. Amazon’s revolutionary business model was guided from the beginning on a specific theory. Jeff Bezos proclaimed an “article of faith” that keeping Amazon’s prices low would earn customer trust and that customer trust would drive free cash flow over the long term.
Businesses theories are equally critical in DX. When Disney CEO Bob Iger decided to make a strategic bet on streaming media with Disney+, he knew he would have to explain his business theory to investors. Disney had been licensing its most prized content to digital streamers, but those lucrative agreements would have to end before Disney+ could launch with exclusive content. So Iger laid out his vision and explained the theory behind it: Disney’s unique content was its greatest asset. For years, Disney had been “selling our nuclear weapons technology” to a competitor (Netflix). By ending such agreements, Disney would face a substantial decrease in revenue in the short term. But it would thrust Disney into the most compelling growth opportunity in media. Iger was very clear that Disney+ would not turn a profit in its early years; but when it launched, shareholders gave a vote of confidence by raising Disney’s stock price.
An effective business theory is essential to earning the support of investors, CFOs, P&L heads, and other stakeholders responsible for financial performance. It will also help you identify the metrics to judge the financial health of any DX effort.
Getting Started
In The Digital Transformation Roadmap, I provide examples from leading companies of all four elements—future landscape, right to win, North Star impact, business theory.
I also introduce the “Shared Vision Map”— my tool designed to help anyone craft a vision that is unique to your organization and can align employees, investors, and other stakeholders behind your DX.
This tool is based on my experience advising firms and has been iterated on with organizations around the world and in different industries.
The Shared Vision Map can be used to define a vision at any level of your organization: the entire company, a single business unit, a function (like marketing, HR, or supply chain), or an individual team.
I encourage you to use the Shared Vision Map and the other tools in the book to align others on your journey to digital transformation.
I look forward to hearing what you learn as you define your own vision and share it throughout your organization!
How Can We Help Your Business?
Please let me know if the David Rogers Group can help with your vision and next growth opportunity for your business.
How we work with clients
executive coaching for leadership teams
advisory & workshops for business leaders or the board
training programs
conference keynotes and custom research
Common areas of focus:
defining a shared vision for digital
new ventures & business models for high-value growth
governance for rapid experimentation
managing innovation portfolios
digital mindset and culture change
To find out more, write to services@davidrogers.digital
“THE DIGITAL TRANSFORMATION ROADMAP: Rebuild Your Organization for Continuous Change”
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