In today’s highly competitive business environment, the terms “strategy” and “strategic planning” are often used interchangeably.
However, according to Roger L. Martin, author of the book “Playing to Win,” these two concepts are distinct and should not be confused.
We will delve into Martin’s perspective on why strategy is not the same as strategic planning, and explore the implications of this distinction for companies aspiring to succeed in their respective industries.
Strategy and strategic planning definitions
To understand the disparity between strategy and strategic planning, it is crucial to understand their definitions.
Strategic planning usually refers to the process of setting goals, defining objectives and outlining the steps to achieve them. It involves forecasting and budgeting, and often leads to a detailed roadmap for the future.
Strategy, on the other hand, involves making decisions about where to compete and how to win. It is a concept that requires a deep understanding of the business environment, the competition and the company’s unique capabilities.
Strategy as a choice
As Martin explains, strategy is fundamentally about making decisions.
A sound strategy helps a company differentiate itself from its competitors and leverage its unique capabilities.
It involves answering critical questions such as which customers to serve, what needs to satisfy and how to provide value in a differentiated way.
Strategy sets the direction of the organization, guiding decision making and resource allocation.
However, strategic planning tends to focus more on the execution and implementation of predetermined objectives than on strategic decision making. It tends to be more concerned with the process of creating plans, budgets and schedules, without necessarily exploring the underlying logic and competitive advantage.
The strategy is to make decisions
He goes on to tell us that strategy is fundamentally about making decisions.
A sound strategy helps a company differentiate itself from its competitors and leverage its unique capabilities.
It involves answering critical questions such as which customers to serve, what needs to satisfy and how to provide value in a differentiated way.
Strategy sets the direction of the organization, guiding decision making and resource allocation.
Strategic planning, however, tends to focus more on the execution and implementation of predetermined objectives than on strategic decision making.
The pitfalls of strategic planning
Strategic planning is undoubtedly important for organizations to align their activities and ensure effective execution, although Martin argues that overemphasis on this process can lead to strategic failures.
When companies rely solely on strategic planning, they tend to stick to existing formulas and follow industry conventions.
This approach does not usually take into account the changing dynamics of the market or encourage innovation and adaptation.
Strategy, on the other hand, forces organizations to think critically about their industry, their competitors and their value proposition.
It encourages companies to continually question their assumptions and be open to new possibilities.
By emphasizing strategy over strategic planning, companies can foster a proactive and dynamic mindset that allows them to stay ahead of the curve.
The role of strategy in sustained success
Martin’s argument is that strategy, as a discipline, should be a continuous practice and not a one-time event.
Developing a coherent and robust strategy requires constant analysis, learning and adaptation.
It involves engaging with the broader business ecosystem, understanding changing customer needs and exploring new opportunities.
Strategic planning, which is important for execution, must be a tool at the service of a well-defined and evolving strategy.
By prioritizing strategy over planning, organizations can remain agile and responsive, enabling them to seize emerging opportunities and navigate industry disruptions effectively.
Closing
In the book “Playing to Win”, Roger L. Martin emphasizes the distinction between strategy and strategic planning.
While strategic planning focuses on the execution and implementation of predetermined objectives, strategy is about making decisions that differentiate a company and drive its success.
While both aspects are necessary for organizational success, an overemphasis on strategic planning can hinder a company’s ability to adapt and innovate.
By recognizing strategy as an ongoing discipline, companies can foster a mindset that promotes strategic thinking, agility and sustained success.
Adopting this perspective enables organizations to navigate uncertainties, identify new opportunities and stay ahead in an ever-changing business landscape.
