Strategy is not Planning.

What most strategic planning is in the world of business has nothing to do with strategy. It’s a set of activities that the company says it’s going to do.

A strategy is an integrative set of choices that positions you on a playing field of your choice in a way that you win — Roger Martin

Strategy

A strategy is a plan to create value. The way a company plans to create that value, that is the strategy of the company. It involves making integrative choices that position you on a playing field of your choice in a way that you win.

A great strategy must have a coherent theory, be doable, and be translatable into actions.

Strategy requires specifying an outcome that involves customers wanting your product or service enough that they will buy enough of it to make the profitability that you’d like to make.

You do not control the customers, which makes strategy a trickier task. The customer does whatever it wants, whenever it wants, however it wants. Great strategies compel the customer to do what the company hopes and wishes.

Planning

Planning does not require coherence, but it is comfortable because it involves the resources you can control.

You can control how many employees to hire, how much office space to rent, how much advertising to run, how much to invest in R&D, and so on (scientists would call these the dependent variables). And you can plan for these variables.

The Difference

Planning is the act of laying out projects with timelines, deliverables, budgets, and responsibilities.

Strategy is about compelling the variable you don’t control. Planning is controlling the variables you do.

You need both BUT planning is not a substitute for strategy.

The How

How do you develop a strategy?

1. Start by identifying the playing field you want to be on. Determine where you can win.
2. Develop a theory as to why this playing field is the right one for you to be on.
3. Determine how you will win on this playing field. What can you do to serve the customers on this playing field better than anyone else?
4. Translate your theory and choices into concrete actions.

Think of strategy as a map

The map has to show you where you are and where you want to go. It should also show you the terrain and the obstacles you may encounter along the way. Without a map, you’ll be lost, and without a strategy, you’ll be directionless.

Perspective

1. Instead of focusing on the activities you want to engage in, focus on the outcomes you want to achieve.
2. Instead of listing a set of activities that sound good, identify a set of choices that will make you win on the playing field you choose.
3. Instead of trying to control the customers, focus on serving them better than anyone else.

What

1. Focus on a specific market segment and differentiate from competitors.
2. Keep the business model simple and streamlined.
3. Use a clear and concise strategy that is easy to communicate and understand.
4. Accept uncertainty and take calculated risks.
5. Continuously monitor and adjust the strategy based on the changing environment.

Case

To apply these principles and tactics to your own situation, you need to first identify your target market and differentiate yourself from your competitors. Simplify your business model and focus on one or two key strengths that set you apart. Use a clear and concise strategy that is easy to communicate and understand. Take calculated risks and accept uncertainty, and continuously monitor and adjust your strategy based on the changing environment.

What

1. Flexibility: A good strategy is flexible and adaptable to changes in the environment or circumstances.
2. Clarity: A clear understanding of the destination and how to achieve it is crucial for a successful strategy.
3. Focus: A strategy must prioritize and focus on the most important initiatives to avoid spreading resources too thin.
4. Agility: The ability to act quickly and make decisions under pressure is necessary for a successful strategy.
5. Resourcefulness: A good strategy utilizes available resources effectively and efficiently.
6. Innovation: Innovative thinking is necessary to create a unique and effective strategy.
7. Risk management: Risk assessment and mitigation strategies should be incorporated into the overall strategy.

The only way that you have a chance to have the customer do what you would wish is to have a thoughtful theory of how you can assemble the variables under your control to produce an offering that compels customers to choose your offering over those of competitors.

That is strategy and that is not planning.

Thanks for reading. I’m John McAuliffe and I help companies accelerate growth more consistently and with greater predictability using repeatable processes.

I am a learner. I find myself constantly reading on a variety of topics with an insatiable appetite for continuous learning. My thoughts on business have been influenced by many. You may feel a bit of déjà vu in reading some of my thoughts because of this. When it comes to strategy and business management systems I follow the likes of Jim Collins, Roger Martin, Gino Wickman, Verne Harnish amongst others. On consumer insights, marketing and sales I am influenced by the likes of Adele Revella, John McMahon, Geoffrey Moore and many others. Thanks for reading.