It may seem like a simple question, but the answer often confuses people.
Even dictionaries blur the lines, defining strategy as:
“A plan designed to achieve a particular long-term aim.”
But for practitioners, a strategy is not the same as a plan. Confusing the two undermines the understanding of what strategy is, what it does, and whether you're actually doing it.
Here's an easy way to distinguish them:
- Strategy: A framework, guiding principles, or approach to achieve a desired outcome.
- Plan: The operational details—resources, tasks, and actions—aligned with the strategy to achieve that outcome.
Examples That Clarify the Difference
1.World War II: The Allied strategy in Europe focused on eroding Germany's industrial base and stretching their supply lines by fighting on multiple fronts. The resulting plan included alliances, blockades, bombing campaigns, and resource allocation for battles.
2. Olympic Glory: An athlete’s strategy might involve choosing the event and competitions to maximize their Olympic potential. The plan might then focus on specific training and diet to win those competitions.
3. A Sports Team: A strategy could centre on building an offensive or defensive team, while considering revenue streams and marketing. The plan then outlines the specific activities and funding to deliver the strategy.
4. Business: Strategy determines which markets to enter, products to offer, and customers to target (amongst other things). The plan addresses structuring of the business, resources allocations and tactics to achieve success.
Why This Matters
The difference matters because often leadership teams develop a plan without a fully considered strategy, but they think they have a strategy because they have a plan for the next 12 or so months. This can often result in outcomes such as:
- The business gets pulled from pillar to post as the leadership team jump at any new opportunity that comes along, whether it’s the right one or not (not that anyone knows what the ‘right opportunity’ looks like as there is no strategy).
- The wider business feels there is no coherent sense of direction or purpose as to what the business is trying to achieve. It just ‘kind of drifts along’, doing what it does, but setting slightly higher targets than the year before.
- Different parts of the business conduct activity or take decisions that are the best thing for each part of the business in isolation, but collectively are counter to each other, causing wasted effort, delays, additional costs and frustration.
- Business Boards get mired in operational detail (often to the frustration of the Executive Team) because they have no strategy to hold the business accountable to and so simply ‘chest poke’ the Executive on what they can see instead – the business operations. This massively reduces the value any Board brings to a business.
- Decision making is slow and fractious as there is no consensus as to what the priorities of the business are.
All of these symptoms and more can have a significant impact on any business. So it’s important leadership teams understand what a strategy is and whether or not they have one.
Is strategy hard?
No. Though many would have you think it is. Business schools charge hundreds of thousands to provide an MBA qualification that may or may not leave people any wiser or more confident in their ability to conduct strategic planning.
But here’s an observation: You know more about your business, it’s products/services, markets, customers/clients, current team and capabilities than anyone else. And – if you’re reading this – you’re likely to be in a key leadership position. A position you’re in because you earned it, which means you’re highly capable. Between that unique knowledge of your business and your space, and the capability you have already shown to get to where you are, you have an outstanding opportunity to effectively shape and inform the strategy for your business.
If you want support and expertise to help you harness the insights and capabilities of your team to develop a strategy – and a resulting operational plan – that can drive your business to the next level, then the Cambridge Network can help.