Will Barnett
3 minute read
Summary
In this article, we briefly look at what is the difference between a strategy vs plan, when you should use one over the other, and why it really matters.
Let us start with why.
Confusion between strategy vs plans creates delay
We’ll return to this first point multiple times in the StrategyWorks blog, but one of the biggest and most commonly occurring problems with the planning and implementation of the strategy we see is confusion and ambiguity. One person’s strategy is another person’s plan and vice versa. When should I use a strategy vs plan and why?
This confusion leads causes delays, mixed understanding, and a general lack of clarity which hampers the progress of the strategy and ultimately the delivery of objectives and goals. Given the stakes, this really is important to get right.
We see organisations spending significant amounts of time and energy developing the frameworks for strategy, disagreeing over terms and structure, rather than working on the clarity and alignment required to achieve the goals that the strategies should be designed to deliver.
It is our goal to give you a simple framework for organising strategy from planning objectives through to implementation. The framework we offer is common sense, clear, and has simple definitions of the major moving parts of the strategy execution framework.
I hope that using this framework will enable all involved in the planning and delivery of strategy to understand and agree on a common set of terms and structures so that you can focus your valuable time and resources on delivery and outcomes.
Ultimately, it is our goal to help you to be successful in delivering your strategy rather than worrying about the tools and frameworks.
What is strategy?
A strategy is the selected way you have chosen to achieve a goal or outcome. A strategy is a single choice that has been made from a range of available choices. Nearly always, a strategy is just a hypothesis. It is simply a working idea of the path you will take the achieve the outcome you seek in the most effective way. It uses your strengths to your best advantage and removes dependencies on your weaknesses (or competitors’ strengths).
A strategy typically has two phases. A planning phase (determine and test the right strategy to achieve an outcome) and an implementation phase (when you deliver the strategy).
The outcomes of strategy
The fundamental outcome of the strategy is an idea of what will work or a selected path. With that path comes a series of risks, assumptions, and expectations.
Because a strategy is just a hypothesis, it needs to be validated through learning and testing. The more ambiguous it is, the more assumptions we have made, and the riskier it is, then the more testing is required to validate our thinking.
Consider a strategy like building a bridge in the fog. You know where you want to get to, but you don’t have clarity on how. The denser the fog, the slower you go and the more testing you run.
I draw a lot of parallels with strategy and the principles of Eric Reis’ Lean start-up. The fundamental goal of a start-up is to learn and validate many of the unknown variables. Similarly, with a strategy, the goal is to test the hypotheses as quickly as possible and create certainty about the way ahead.
A worked example
Organisation X has been successful in a market, but this market is now contracting, and products are being democratised. The leadership team of Organisation X wants to drive growth but is unsure about the best way to achieve it.
Taking a traditional Ansoff matrix approach, they can either continue to do what they do (their default future as David Trafford would say) and get whatever comes from that (liable to be less than ideal) or they can do something different which they hope to yield better results.
Within their alternative strategy, they have a range of options. At the high level, these options are to sell existing products to new markets, develop new products and sell to existing markets or sell new products to new markets.
Different strategic paths, each with their own risk profile and assumptions to be tested.
There are of course, many more ways to drive growth but for the purposes of this article, I am keeping it simple to make the point.
Developing new products brings risk and challenges, as does selling to entirely new markets.
For each option, there could be significant unknowns about the competitive landscape, market preferences, market trends, and challenges that need to be overcome to be successful.
However, the risk of doing nothing may be even greater than the risk of doing something new. Taking a gamble and going “all out” into one of these options is extremely high risk and could spell the end of the company (or the end of the leadership team who have developed the strategy) if the assumptions made don’t hold true.
Given what is at stake, a sensible approach is to test the most promising idea and confirm whether the assumptions are correct. However, to be successful, testing and learning aren’t a one-off exercise. Repeated testing throughout the whole lifecycle of the path to market is called for, to continually test and refine ideas and assumptions. As one assumption is ratified, another may appear which needs validation.
What makes the stakes potentially higher is that testing the market takes time, investment and is never a perfect exercise. For some particularly innovative products, it may never be possible to fully test the market before a launch.
However, the alternative of assuming that picking a product and hoping blindly that it will work is extremely high risk.
Back to the drawing board
What happens if tests show that this isn’t a viable or potentially healthy way ahead? In this instance, it is healthy to return to the drawing board, regardless of how politically difficult this can be. For some organisations, this is seen as a leadership team weakness, but the reality is this is a healthy way of learning. Getting to the understanding as quickly as possible and killing ideas that don’t work out is a healthy outcome in the process of strategy development. For this reason, the strategy development phase requires slow development and does not mean rushing headlong in to the first idea.
This is where strategy and innovation are closely related. For some organisations, this process of developing ideas and innovations which are then tested never ends. For other organisations in more stable markets, they may only follow this path periodically when markets or conditions change.
The plan
Having discussed the strategy, what then, is a plan?
A plan is a structured set of steps or activities which lead to an outcome or deliverable(s). A deliverable could be a product, a change a service or a similar tangible outcome that has been methodically worked towards.
A plan has a start, an end, and an optional series of milestones, which reach a well-defined end. It includes resources (both people and non-human resources), a series of activities, and results in some kind of tangible or intangible asset.
Plans are often documented and are a clear recipe for what needs to be done to achieve the outcome. The plan includes the definition of outcomes, resources, timelines, milestones, dependencies, and activities.
Given the definitive nature of a plan, it is almost the opposite of a strategy which is just a hypothesis, and idea, with a risk profile that needs to be validated and tested.
Key differences of a strategy vs plan.
Plans and strategies appear at different stages of the strategy lifecycle (more on this in coming articles) and they serve very different purposes and are typically executed by different types of people.
Strategies are normally led by those that welcome ambiguity and require a solid understanding of the whole situation and broad context. This is necessary because the evaluation of competing ideas, the overall context, and the wide implications of each path’s outcomes are vital.
Plans on the other hand can be much narrower, very tightly defined, and focussed on delivery and outcomes. Plans are unambiguous and result in a definite outcome with a well-defined set of inputs and outputs.
The role of strategy execution
Having talked about strategies and plans. What then, is strategy execution?
Strategy execution is the overarching framework that sits above all detailed plans and provides oversight that the chosen strategy is being implemented and is realising the goals of the organisation.
We’ll cover much more on this in coming blog articles (so please subscribe to receive more content like this if you find it useful).
Returning to why the strategy vs plan matters
It should be hopefully clear that strategies and plans are different things, but both are required in the achievement of your objectives and are complimentary.
The Chinese military strategist Sun Tzu famously wrote, “Tactics (plans) without strategy is the noise before defeat. A strategy without Tactics (plan) is the slowest route to victory.”
Sun Tzu, The Art of War, 2500 BC.
My hope is that through clear definitions, some of the confusion on the difference between strategy vs plans can be avoided and you can focus on what is required at each stage of strategy development and implementation with clarity.
It also means plans have a clear “why” that can be easily explained, and strategies have a supporting implementation.
I hope you have found this perspective useful in framing conversations in your organisation and as ever, we would love to hear your views and what you’ve found to work.
Finding out more about strategy execution software
No obligation strategy review
We also are happy to offer a no-obligation, in-confidence your strategy and supporting plans. If that’s of interest, please do contact us.
Subscribe for more content
Subscribe to our mailing list to receive free content, offers and webinar invites directly to your inbox.
