Planning vs. Strategy

Chief Strategy Officers

Planning and strategy are two closely related but distinct concepts, especially in the context of small business management.

Planning

Planning involves the process of setting objectives and determining the actions necessary to achieve those objectives. It's about outlining the steps required to reach a specific goal or set of goals.

Planning may include decisions like leasing more space, buying new equipment or hiring more talent. These are not decisions that strategically help gain marketshare. Planning is a comfortable process because as the planner, you control the outcome without outside influence. Make sense?

Planning is typically more concrete and focused on the operational aspects of the business. It answers questions like "What needs to be done?" and "How will it be done?"

Strategy

Strategy, on the other hand, is broader and more abstract than planning. It involves making choices about where to compete and how to position the business in the market to achieve sustainable competitive advantage. Strategic decisions often have far-reaching implications and are focused on achieving the overall mission and vision of the business.

In the context of small business owners, strategy may involve:

·        Identifying target markets and customer segments.

·        Defining the unique value proposition of the business.

·        Analyzing competitors and market trends.

·        Choosing the most effective channels for distribution and marketing.

·        Evaluating opportunities for growth and expansion.

Strategy addresses questions like "Why are we doing this?" and "What sets us apart from our competitors?". As a small business owner you are the Chief Strategy Officer and you must be comfortable knowing that you will not always get it right because there are outside influences that have a say in your success. So you make the best decisions you can based on data and expert advice from outside your company, people who have no political ties or agendas within your company. You need honest and sanitized advice.

Take Away: While planning focuses on the specific actions needed to achieve short-term objectives, strategy is concerned with the bigger picture and the decisions that shape the direction and competitive positioning of the business in the long run. Small business owners need to engage in both planning and strategy to effectively manage their businesses and achieve success.

While major airlines were planning on how many new planes to budget for, upstart Southwest Airlines was strategically planning how to become the industry’s alternative to Greyhound Bus Line. No meals, short flights to control planes, eliminating travel commissions to travel agents, all planes will be 737’s to make maintenance and training more efficient. Today, Southwest logs more seat miles than any other carrier.

Mike Warren

President

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