Vision, Strategy, and Change Management: Two Critiques

Visionaries, Managers, and Strategic Direction: Overview

In Visionaries, Managers, and Strategic Direction (Rotemberg & Saloner, 2000), the authors contend that the most effective CEOs mitigate the risk of biased analyses of a visionary new initiative or product strategy by choosing one that is narrowly focused over broad, complex, and often unwieldy ones to manage. A foundational precept of the study is that bias exists in how CEOs choose the projects that support their vision-based orientation of their businesses. As the CEO's vision for the company changes, there are reverberating impacts on incentive and compensation plans.

The foundational premise of the article is that when a company's vision changes, it becomes inordinately more difficult to manage compensation and incentive plans accurately and with fidelity to the original promises made to employees. The authors also state that "profits may be enhanced further by letting objective middle managers decide which projects to investigate, even though their decisions can depart from the firm's 'strategy' by differing from those the CEO would have made" (Rotemberg & Saloner, 2000). The authors continue with an expanded analysis of how visions of CEOs that have a narrow focus have a much greater potential of being achieved.

Key Arguments and Paradoxes in CEO Vision

This narrow-focus argument is paradoxically presented, as the authors state that CEOs must be expansive and all-encompassing in their vision of what their enterprises can be, while at the same time maintaining a very granular, clear focus on a specific vision that has a higher probability of being accomplished (Rotemberg & Saloner, 2000). This paradox serves as the foundation for the remainder of their analysis.

Making a case against micromanagement as detrimental to the growth of a business, the authors state that "independence of middle management is critical for the implementation of the vision" (Rotemberg & Saloner, 2000). This further reinforces the paradox the authors use to illustrate how wide, broad visions of CEOs often conflict with the need for a precisely defined vision that middle managers and employees can rally around and believe in.

The authors also contend that the "role of middle managers in bridging the gap between visionary senior managers and the lower-level managers who are the engine of innovation, experimentation, and change in the organization" is essential (Rotemberg & Saloner, 2000). The article concludes by showing how significantly the economics of a given enterprise are directly tied to the performance of the CEO in defining and executing a vision. CEOs who are biased or who capitulate on their visions essentially undermine compensation and incentive plans, robbing employees of the opportunity to have greater ownership over their inventions and innovations (Rotemberg & Saloner, 2000).

Leading Change and the Kotter Model: Overview

A vision needs to provide an exceptional level of clarity and acuity to the direction of a given enterprise, galvanizing everyone around a common set of goals while giving everyone an opportunity to see how their contributions matter (Wilson, 1992). The authors fail to achieve this, stopping at only the most fundamental factors when they state that "autonomy is critical for middle managers to attain the visions of a business" (Rotemberg & Saloner, 2000). Rather than charging ahead and requiring CEOs to move from being partial or biased in their vision definition to being fully committed — which would make incentive programs highly effective — the authors call instead for greater middle-level management support.

The biggest failure of the article is this lack of directness and candor. The authors identify that CEOs lack consistency of vision and direction, yet stop short of prescribing the change needed to support effective incentive and compensation programs. Furthermore, the authors have proposed no metrics despite a wealth of theorems and theoretical constructs, further distancing their analysis from the immediate, pragmatic needs of companies that require a consistent vision in order to succeed.

The foundation of Leading Change (Gebhart, 1996) is the eight phases of the Kotter Model of Change. The author has carefully defined each of the eight stages, making the first — increasing urgency — a foundational element of the analysis (Gebhart, 1996). The author states that "leaders can alleviate the complacency that grips organizations by concentrating more on having a compelling sense of urgency that change is necessary for improvement" and for the attainment of challenging objectives and goals (Gebhart, 1996).

Defining the steps of building guiding teams, getting the vision right, communicating for buy-in, and enabling action are what the author identifies as critical for long-term change to become the new normal of an organization (Gebhart, 1996). These steps are juxtaposed with the need to create short-term wins, maintain intensity of effort, and ultimately make change stick — all of which are presented as critically important for long-term change management to occur (Gebhart, 1996). The author delineates these final three phases — creating short-term wins, not letting up, and making change last — as all being essential for the internalization of goals.

The author also makes the point that once these eight steps have been successfully completed, "it is time to reward the change agents. While celebrating short-term gains, leaders also need to produce more change and keep up the momentum" (Gebhart, 1996). These are essential strategies for change management and must be orchestrated well across all eight phases, regardless of the duration of the change being attempted — a key point that Kotter himself has made in commentary on the model (Iveroth, 2012).