126: Strategy vs. Planning

Today’s podcast is simply my summary of a very interesting talk by Roger Martin on Harvard Business Review that my friend Heather Snyder posted on LinkedIn.

He raises the question, what is the difference between planning and strategy?

Strategy, he says, is
1. an integrated set of choices
2. that position you on a playing field of your choice
3. in a way that you win.

For example, to form a strategy we might ask these questions.
* Why we should be on this particular playing field?
* How are we going to be better than anybody else?

A strategic theory must be coherent and doable. Planning, on the other hand, doesn't have to have internal coherence. It's a list of things to do that get their coherence from the strategy.

Plans have to do with resources -- that’s the cost side of business.
Strategy specifies a competitive outcome you wish to achieve.

You control plans. And while you control a strategy, you can’t control the outcome of a strategy because it depends on your customers and your competitors.

"I will build a factory" is a plan.
"Customers will prefer my product" is part of a strategy.

Martin says it's easy to fall into a "planning trap." It's a trap because it's comfortable. It's within your control.

Strategy will make you feel nervous because you can't prove that it will succeed. But a good strategy will give your organization a chance to do something great.

When you build a strategy, you should list the things that would have to be true for it to work. E.g., What would have to be true about our sales, our customers, our competition, etc., to achieve this goal. Then you watch to see if things turn out that way. And since they might not, you need a mechanism to tweak and adjust in response to changes.

Finally, he says don't let a strategy get over-complicated. Try to get it on one page. It should include ...
1. Here's where we're choosing to play.
2. Here's how we're choosing to win.
3. These are the capabilities we need in place.
4. These are the management systems we need.

That's how we'll achieve our goal.

Resources

https://www.tiktok.com/@thebizchannel/video/7284752739739995435?_r=1&_t=8gaAF7diaqM