#001 - The Paradox of Strategic Planning
What is NOT a Strategy
‘We will drive more value to our customers by strategically planning to hire 10 more resources for the customer support department’
And if you’re tired of statements like this thrown around in your circle - today’s issue is for you.
Welcome to the first issue of The Rift - in this one, I want to cover something that left bruises in my mind working at corporate.
The Paradox of Strategic Planning
Strategy and Planning -
Why do folks keep using these 2 unrelated things in the same sentence?
One can say that at the end of the day, it’s all semantics, but when it comes to being successful with your business, these semantics matter. And the paradox of Strategic Planning is definitely a real thing.
Strategy is not Planning. Period.
And having done good Planning doesn’t mean you have a good Strategy.
If you’re in a team where the term ‘Strategic Planning’ is thrown around, understand one of two things -
- Either the people using this don’t care much about specificity
- Or they are substituting a term for their lack of competence, aka want to sound fancy
If you’re in the early stages of your business, this is really important for you to understand.
Strategy is everything you will be doing to win with your business.
Planning is everything you will be doing to execute in your business.
Strategy vs Planning
The terms "Strategy" and "Planning" are often used interchangeably, but they are fundamentally different.
Strategy is the vision for your business, outlining how you will win in the market.
It's a high-level, subjective, and thematic approach that sets the direction for your organization.
On the other hand, Planning is the detailed, calculated, and outlined execution of that strategy. It's the set of steps you need to take to achieve your goals.
To put it simply -
Strategy is more visionary
Planning is more calculated
Strategy helps you set a direction
Planning helps you get to a destination
Strategy is based around limitations of environment - out of your control
Planning is based around constraints like time, resources, and budget - in your control
Strategy is harder to track with metrics
Planning is easier to track with metrics
A good strategy needs context
A good plan needs detail
Planning and Strategy both have their place in Business, but understand that
- strategy should be set to outcompete
- planning should be set to make progress
Adding Customer Value to the mix
So what should you do in order to win?
At the foundation, when it comes to providing value, you need to understand that you can either:
1 - Provide more value to your customers at the same cost
2 - Provide same value to your customers at a lower cost
And if you can figure out how to provide more value at a lower cost - that means you’ve made it.
In the short -
When you are figuring out your strategy, figure out how you are maximizing customer value by adopting 1 or 2.
And then in the long -
In order to out compete as a business, your strategy needs to eventually result in you commanding ‘Powers’.
These powers are Scale economics, Network economics, counter-positioning, switching costs, branding, cornered resource, process power.
And we will eventually explore them in the series when the time is right. For now you can learn more on 7 Powers here:
In Conclusion
The key behind having a successful strategy - first and foremost - is understanding what strategy is and what it is not.
The gist of it is that just mere planning is a comforting place to be. It feels nice to create to-do lists, and kanban boards, and notion docs - but at the end of it all - if there is nothing to show for it, have you really made any progress?
I hope in today’s issue you have gotten clarity on what a strategy is. Soon in this series I plan to cover numerous topics that will help you build your own strategy. And align it with other parts of your business.
To close out, I would request you to reflect on these questions:
1 - Do you fully understand the difference between Planning and Strategy?
2 - Have there been cases in your life where you felt stuck in Motion without Action? List them out
3 - What do you believe you are doing better than your competitors? Does your advantage align with the listed 7 powers?
Feel free to send a reply to this email with your responses.
That’s it for today.
Thanks for reading!
Further Learning:
https://gibsonbiddle.medium.com/3-the-strategy-metric-tactic-lock-up-b7539ec69a7e
https://rogermartin.medium.com/strategy-vs-planning-complements-not-substitutes-ea08e56809d6
