There are many reasons to separate planning from strategy. This article explores some of them.
Even though planning and strategy are often used interchangeably, they are two different concepts.
For example, if you have to develop a document with insights and ideas on how to promote, sell, and distribute your company’s products and services, are you going to work on a marketing plan or a marketing strategy?
You are probably trying to figure out which one would be appropriate and why. Things get even fuzzier when you start to talk about developing a strategic plan. What exactly is a strategic plan? Are you developing a strategy or a plan?
The essence of asking these questions is not to have you answer them right away. The purpose is to have you think deliberately about these concepts as we work towards gaining a clear understanding of each one.
What is the difference between planning and strategy?
Strategy is about making decisions that will lead to the desired outcome. Planning is about translating those decisions into definite action steps.
The point of strategy is to use a variety of tactics to get what you want. Planning is meant to break down a strategy into specific, manageable steps that can be carried out over time.
Strategy tells you where to go and what to focus on. Planning tells you when and how to get there.
Strategy provides the rationale and the basis for working towards certain desired outcomes. Planning involves clarifying the required commitments for executing the strategy.
You can compare planning and strategy to the process of solving a puzzle. Strategy paints a picture of the end result while planning arranges the pieces of the puzzle to bring that picture to life.
Many organizations default to planning instead of strategy because planning is easier. It is essentially about determining what you want to do and how you want to allocate your resources.
But planning without a strategy is futile, or at best, ineffective. If you make a plan without first creating a strategy, you’re probably not going to feel happy and satisfied when you achieve your goals. You will not be able to determine when the outcomes have been achieved because you did not define those outcomes in the first place.
Worse, you are likely to keep changing directions along the way, which makes it less likely that you will ever get to where you want to go.
On the other hand, strategy is based on a set of assumptions that must have been tested and validated. It also takes into account everything that could change the chances of getting the desired result.
In a presentation at Harvard Business School, Roger Martin, Professor Emeritus at University of Toronto’s Rotman School of Management, defines strategy as ‘an integrative set of choices that positions you on a playing field of your choice in a way that you win.’ In other words, without a strategy, you are not playing to win; you are simply ‘playing to play’.
An impressive plan will not necessarily create meaningful progress or sustainable growth. But a well-thought-out strategy will always lead to an execution plan that gives you an edge over the competition. This is why Felix Oberholzer-Gee, author of Better, Simpler Strategy, describes strategy as a plan for creating value.
Why business leaders must separate planning from strategy
Running a business without a winning strategy is like setting out on a journey without a clear purpose or direction. And developing a strategy without an execution plan is like painting the picture of a desired outcome and then going to sleep.
As Alan Lakein observed, “Planning is bringing the future into the present so that you can do something about it now.” It is therefore evident that both strategy and planning are indispensable to business success.
But business leaders need to know that the two concepts are different and approach each one in the right way. This distinction is important for the following reasons.
1. Strategy and planning require different faculties
To come up with a strategy, you need to be able to see far into the future and know a lot about your industry and the business environment as a whole. This is different from being able to figure out what steps need to be taken to put the strategy into action and get the desired results.
2. Clarify what it means to win
Keeping planning and strategy separate will help you figure out what success means for your business. You will be able to identify long-term goals and their corresponding short-term objectives. If you lump planning and strategy together, you are in prime position for a rude awakening when you find out that you have achieved your goal, but it is not what you wanted. What’s the use of gaining speed when you are headed in the wrong direction?
3. Capitalize on your unique advantage
By coming up with a clear strategy and using that as the basis for your planning, you will be able to figure out where your company stands relative to other players in the industry. This will help you understand where your strengths lie and how you can use them to your advantage.
4. Chart your own path to success
When you make a distinction between planning and strategy, you will be able to set your priorities right. It will help you focus on the objectives and key results that truly matter and avoid being distracted by demands that appear to be urgent but are actually not important. You will also be able to find your own way to success instead of playing the comparison game.
5. Maximize your impact
When you understand the difference between strategy and planning, you will be better positioned to allocate resources in a way that is both efficient and effective. Ultimately, this will minimize waste while also increasing your return on invested capital.
6. Build a resilient organization
Once you have developed a clear and simple strategy, it will be easier to plan for different scenarios. You can anticipate risks that could stop you from getting what you want and new opportunities that you can take advantage of. This will help you to be proactive in your response to situations. As a result, you will be able to build a business that endures despite changes in the external environment. [Click to tweet]
What do you think about the difference between planning and strategy? Share your thoughts in the comments.