Strategy vs. Strategic Planning: Unveiling the Distinction

In the realm of business, the concepts of strategy and strategic planning are often intertwined, leading to a fusion that, while seemingly intuitive, can obscure the distinct and critical roles each plays in an organization’s success. This article aims to demystify these terms, exploring their differences and correlations, addressing the reasons behind their frequent conflation, and elucidating how a clear understanding of both can significantly enhance strategy development and execution.

The Difference and Correlation between Strategy and Strategic Planning

At its core, strategy is the art of crafting a competitive advantage and defining the path an organization will take to achieve its long-term goals. It’s the overarching vision that guides a company, rooted in a deep understanding of the competitive landscape, internal strengths, and market opportunities. It is less about the meticulous planning of steps and more about the adaptive, intuitive understanding of the environment. If we draw from the ancient wisdom of Sun Tzu, strategy is about “winning the war without fighting.” Strategy is about choosing what to do—and importantly, what not to do—to position the organization for sustainable success.

Strategic planning, in contrast, is the systematic process of defining how the strategy will be implemented – the blueprint of how to move from point A to point B. It involves setting shorter-term objectives, allocating resources, and establishing a detailed plan of action. Strategic planning translates the broad strokes of strategy into actionable steps, timelines, and metrics, providing a clear roadmap for the organization to follow.

While distinct, strategy and strategic planning are inextricably linked. Strategy provides the direction and destination, while strategic planning outlines the journey. Imagine strategy as the captain of a ship who knows the destination (objective), understands the sea (market environment), and can read the stars (guiding principles). This captain doesn’t necessarily plot every wave and wind shift but has a profound sense of direction and the agility to navigate through storms (market disruptions) and calm waters (stable markets) alike. Now, think of strategic planning as the diligent cartographer who, alongside the captain, charts out the course. This process involves calculating distances, noting potential harbors for resupply, and marking areas of known pirate activity. Without a clear strategy, strategic planning lacks purpose and focus; without strategic planning, a strategy is nothing more than an idea. The two are complementary, with strategic planning acting as the bridge between strategic vision and operational execution.

Why is Strategy often conflated with Srategic Planning

The conflation of strategy and strategic planning is often due to their close relationship and the seamless way in which one flows into the other. In practice, the development of a strategy can directly inform the planning process, making it easy to blur the lines between the two. Additionally, both processes involve strategic thinking, decision-making and forward thinking, which can further contribute to the confusion.

This conflation is also a result of the language used in business discourse, where the terms are used interchangeably without a clear distinction between the conceptual (strategy) and the procedural (strategic planning). Furthermore, the urgency of operational demands can lead organizations to focus on the tangible aspects of planning at the expense of the abstract, visionary elements of strategy, reinforcing the overlap in usage.

Why is it important to delineate Strategy and Strategic Planning

Enhance Focus and Alignment

Understanding the difference ensures that the organization’s vision (strategy) and its implementation (strategic planning) are both given due attention. This clarity helps align the organization’s efforts, ensuring that all actions are purposefully directed toward achieving the strategic objectives.

During my initial tenure as an in-house Strategy Analyst, I inadvertently conflated strategic planning with strategy—a common misunderstanding that my manager and I shared. In the first few months, my efforts were misdirected as I endeavoured to revamp our long-term strategic vision rather than focusing on more immediate objectives. I persisted in urging our leadership team and my manager to develop a new growth strategy which it’s already pre-defined by the corporate team. Had the distinction been clear from the outset, it would have undoubtedly guided me towards aligning with the established strategy and developing a more pertinent and actionable plan.

Allocate resource more effectively

With unclear distinction, we frequently observed large companies mislabeling job titles, which leads to a misallocation of resources or the hiring of wrong talents. In another word, many positions labeled “strategy” are, in fact, actually strategic planning roles. It is understandable that corporates are focusing more towards shorter-term objectives, which explains the rising demand of strategic planning roles. However, the misnomer “strategy” in job titles often attracts many strategy consultants or corporate strategy specialists. While they can excel and add value through their transferrable skills and strategic mindset; the conflation suggests a missed opportunity for the company to leverage these good resources in refining their long-term vision and trajectory.

However, when the differences between strategy and strategic planning are well recognized, it becomes easier to correctly define the job scope and allocate resources effectively. Strategic planning, with its focus on actionable steps and timelines, allows for a more targeted and efficient use of resources, ensuring that investments are directly contributing to strategic objectives.

Improve Strategic Accountability

Clarity in the distinction promotes accountability at all levels of the organization. While leadership is primarily responsible for setting the strategy, the execution through strategic planning involves many layers within the organization. This separation of duties helps in establishing clear lines of responsibility and accountability for both setting directions and executing the plan.

Meanwhile, employees become more aware of the strategic context of their work, understanding not just the ‘how’ but the ‘why’ behind their actions. This strategic awareness can foster innovation and initiative, furthering the organization’s strategic goals.

The intricate correlation between strategy and strategic planning is a testament to the complexity of navigating a business toward success. By distinguishing the visionary from the procedural, leaders can harness the full power of both, steering their organizations with precision and foresight. The clarity in distinction not only sharpens the focus but also enriches the process of strategy development and execution, paving the way for a more deliberate, aligned, and adaptable approach to achieving long-term goals.