Strategy & Planning Are Different

Been a while. I am back; we shall see if I still enjoy writing publicly.

Strategic Planning. Many organizations engage in strategic planning at the end of each calendar year but I dislike the term “strategic planning” because “strategy” and “planning” are very different processes for an organization. Let’s define, differentiate, and get these separate processes sorted.

A “strategy” for an organization is the theory of why the organization should be competing in a certain market, and how this organization will compete in that market space. Strategy is not a guaranteed outcome; it is dependent on your ability to execute as you desire AND the marketplace’s acceptance of your business model to solve their needs. The strategy for a new plumbing service may be to use on-call, independent, licensed plumbers who drive company vans that are fully equipped with every conceivable piece, part and tool that could be used in a home repair. This way the repair job can be guaranteed to be resolved with a single visit by the plumber. The plumbing company drive this value proposition as part of their marketing and processes they implement to win market share.

“Planning” is a process by which an organization controls how it will use resources. The company controls the expenditure of resources to accomplish a demonstrable outcome. In the plumbing case above, the company needs to plan its purchase of vehicles equipped with the ability to carry a wide variety of parts and tools. The company needs to plan its inventory management process so it never runs out of a tool or part by logging each tool and part with a barcode that is scanned when used and automatically restocked when the van returns from the job. The company needs to plan for how to get in touch with the independent contractors each time a service call comes in.

Planning is far more comfortable to do for managers. Planning is a process by which you know in advance what the outcome will be (the vans will be fully stocked each time they leave the lot. Planning is the process to compare radio systems and go through a RFQ process with 4 providers to get the best deal.

Strategy can provoke angst and worry. You can not be sure your chosen strategy will work as you expect. Other plumbing firms may offer a monthly service plan that satisfies the customer base more so that your ability to resolve issues with one visit. Your compensation plan for the independent plumbers may fail to get enough to sign up as part of your labor force.

Determining strategy is critical for organization leaders. And the better they can articulate strategy, the easier they will be able to raise funding, hire talent, and run their business. But strategy is does not have a guaranteed outcome. Planning is what happens after strategy is determined so that the organization can execute the chosen strategy. Let’s not confuse strategy with planning. And let’s skip the “strategic planning”

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