Strategy and Strategic Planning are often used interchangeably, leading to confusion about their distinct roles in achieving organizational goals.
While they are closely related, they are not the same thing. In this article, we will clarify the difference between strategy and strategic planning based on the video "Strategy Is Not a Plan" by Roger Martin and explain how they complement each other to drive success.
What is a strategy?
A strategy is an integrative set of choices that positions a company on a specific playing field so that it can win. The strategy must have a coherent theory that explains why the company should be on that playing field and how it will be better than its competitors at serving customers on that playing field. It must also be doable and able to be translated into actions.
What is Strategic Planning?
Strategic Planning is focused on the resources a company will spend, such as building a new plant, launching a new brand, or hiring more people. It can have internal coherence or specification of how it will accomplish goals for the company.
Strategic Planning is comfortable as it is something a company can control. Still, a strategy is focused on the outcome and the customers, which a company can't control but can influence.
What is the difference between Strategy and Strategic Planning?
- Strategy is an organization's overarching approach to achieve its goals and objectives. It outlines the organization's direction and defines how it will compete.
- Strategic Planning is creating a specific plan to achieve the goals laid out in the strategy. It involves identifying specific actions and resources needed to execute the strategy.
- While Strategy defines where an organization wants to go, Strategic Planning explains how it will get there. Strategy provides the direction and Strategic Planning of the roadmap to follow.
Strategy and Strategic Planning: How They Work Together to Achieve Success
Strategy and Strategic Planning are often used interchangeably, but they are different.
Strategy is a high-level plan that outlines how an organization will achieve its goals, while planning is creating a specific plan of action to achieve those goals.
Strategy is about making big-picture decisions about what an organization wants and how it will achieve it, while strategic planning is about the specific steps needed to implement those decisions.
Strategy and strategic planning provide a clear roadmap for the organization, allowing it to stay focused and aligned on achieving its objectives. By regularly reviewing and updating the strategy and the plan, the organization can adapt to changing market conditions and capitalize on new opportunities. Thus, design and strategic planning complement each other and drive the organization's success.
"A Plan Is Not a Strategy" by Roger Martin
Summary of the video:
- Roger Martin argues that planning and strategy are not the same and that most "strategic planning" in the business world is just a list of activities the company wants to do rather than a coherent plan for achieving a specific outcome.
- A strategy is defined as an "integrative set of choices that positions you on a playing field of your choice in a way that you win" and must have a coherent theory behind it, be doable, and be able to be translated into actions.
- Strategic Planning is focused on the resources a company will spend and is, therefore, more comfortable to control, but may not lead to a competitive outcome.
- Martin uses the example of Southwest Airlines, which had a strategy for winning by being a more convenient and affordable alternative to Greyhound. At the same time, other airlines were focused on planning routes and other resources.
- The video emphasizes the importance of focusing on the outcome and the customers, rather than just the resources and activities, for a successful strategy.
- A company must have a strategy and not rely on planning to succeed.
How do you come up with a Strategy and Strategic Plan?
There are several key steps that organizations can take when developing a strategy and transferring it into a strategic plan:
Define the organization's mission, vision, and values
The first step in developing a strategy is to define the organization's purpose, what it aims to achieve, and the values that guide its actions.
Conduct a SWOT analysis.
A SWOT analysis is a tool that helps organizations identify their strengths, weaknesses, opportunities, and threats. This step helps organizations understand their internal capabilities and external environment, which will inform the direction of the strategy.
Could you set goals and objectives?
Based on the SWOT analysis results, organizations should set clear, measurable, and achievable goals and objectives for the future.
Identify strategic options
After setting goals and objectives, organizations should identify various strategic options to help them achieve them. These options should be evaluated based on their potential impact, feasibility, and alignment with the organization's mission and values.
You can choose a strategic direction and develop a strategic plan.
Based on evaluating strategic options, organizations should choose a strategic direction that best aligns with their goals, capabilities, and external environment. The chosen strategy should be aligned with the company's mission, vision, and objectives. The next step is to develop a plan that outlines the specific actions and resources needed to execute the strategy.
Could you implement and monitor the strategy?
Once the strategy and plan are in place, organizations should implement them and monitor progress regularly. This includes tracking key performance indicators, adjusting the plan as necessary, and making any changes required to the strategy.
Communicate the strategy
Finally, organizations should communicate the strategy and plan to all stakeholders so that everyone understands the organization's direction and their role in achieving its goals.
Strategy and Strategic Planning are closely related but distinct concepts. Strategy refers to an organization's overarching approach to achieving its goals and objectives. At the same time, strategic planning is creating a specific plan to achieve those goals.
Strategy and strategic planning provide a clear roadmap for the organization, allowing it to stay focused and aligned on achieving its objectives.
Key steps to develop a corporate strategy include defining the organization's mission, conducting a SWOT analysis, setting goals and objectives, identifying strategic options, choosing a strategic direction, developing a plan, implementing and monitoring the strategy, and communicating the process to all stakeholders.
Other Click-Worthy Links on Strategy
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Michael E. Porter's Five Forces: Free PowerPoint Template
Strategy and Strategic Plan Template
How to come up with a Strategy and Strategic Plan?
Strategy and strategic planning are closely related but distinct concepts. Strategy refers to an organization's overarching approach to achieving its goals and objectives. At the same time, strategic planning is creating a specific plan to achieve those goals.
FREE PDF Template with the seven main steps to develop a strategy and strategic plan.