Strategy vs plan. What's the difference and why it matters

Confusion between strategy vs plans creates delay

One of the biggest and most commonly occurring problems with the planning and implementation of strategy is confusion and ambiguity. One person's strategy is another person's plan and vice versa. When should you use a strategy vs plan and why?

This confusion causes delays, mixed understanding, and a general lack of clarity which hampers the progress of the strategy and ultimately the delivery of objectives and goals. Given the stakes, this really is important to get right.

We see organisations spending significant amounts of time and energy developing the frameworks for strategy, disagreeing over terms and structure, rather than working on the clarity and alignment required to achieve the goals that the strategies should be designed to deliver.

Our goal is to give you a simple framework for organising strategy from planning objectives through to implementation - common sense, clear, and with simple definitions of the major moving parts of the strategy execution framework. This framework enables all involved in the planning and delivery of strategy to understand and agree on a common set of terms and structures so that you can focus your valuable time and resources on delivery and outcomes.

What is strategy?

A strategy is the selected way you have chosen to achieve a goal or outcome. A strategy is a single choice that has been made from a range of available choices. Nearly always, a strategy is just a hypothesis - a working idea of the path you will take to achieve the outcome you seek in the most effective way. It uses your strengths to your best advantage and removes dependencies on your weaknesses.

A strategy typically has two phases: a planning phase (determine and test the right strategy to achieve an outcome) and an implementation phase (when you deliver the strategy).

The outcomes of strategy

The fundamental outcome of the strategy is an idea of what will work, or a selected path. With that path comes a series of risks, assumptions, and expectations.

Because a strategy is just a hypothesis, it needs to be validated through learning and testing. The more ambiguous it is, the more assumptions you have made, and the riskier it is - the more testing is required to validate your thinking.

Consider a strategy like building a bridge in the fog. You know where you want to get to, but you don't have clarity on how. The denser the fog, the slower you go and the more testing you run.

Organisation X has been successful in a market, but this market is now contracting and products are being commoditised. Taking a traditional Ansoff matrix approach, they can either continue with their existing model or do something different. Within their alternative strategy, they have options: sell existing products to new markets, develop new products for existing markets, or sell new products to entirely new markets.

For each option, there could be significant unknowns about the competitive landscape, market preferences, and challenges that need to be overcome. A sensible approach is to test the most promising idea and confirm whether the assumptions are correct - with repeated testing throughout the entire lifecycle.

Back to the drawing board

What happens if tests show that a path isn't viable? In this instance, it is healthy to return to the drawing board, regardless of how politically difficult this can be. For some organisations, this is seen as a leadership team weakness, but the reality is this is a healthy way of learning. Getting to the understanding as quickly as possible and killing ideas that don't work out is a healthy outcome in the process of strategy development.

This is where strategy and innovation are closely related. For some organisations, this process of developing and testing ideas never ends. For others in more stable markets, they may only follow this path periodically when markets or conditions change.

The plan

Having discussed the strategy, what then is a plan?

A plan is a structured set of steps or activities which lead to an outcome or deliverable. A deliverable could be a product, a change, a service or a similar tangible outcome that has been methodically worked towards.

A plan has a start, an end, and an optional series of milestones, which reach a well-defined end. It includes resources (both people and non-human resources), a series of activities, and results in some kind of tangible or intangible asset.

Plans are often documented and are a clear recipe for what needs to be done to achieve the outcome. Given the definitive nature of a plan, it is almost the opposite of a strategy - which is just a hypothesis, an idea, with a risk profile that needs to be validated and tested.

Plans and strategies appear at different stages of the strategy lifecycle and they serve very different purposes, typically executed by different types of people. Strategies are normally led by those that welcome ambiguity and require a solid understanding of the whole situation and broad context. Plans, on the other hand, can be much narrower, very tightly defined, and focused on delivery and outcomes.

The role of strategy execution

Having talked about strategies and plans - what is strategy execution?

Strategy execution is the overarching framework that sits above all detailed plans and provides oversight that the chosen strategy is being implemented and is realising the goals of the organisation.

Returning to why the strategy vs plan matters

It should hopefully be clear that strategies and plans are different things, but both are required in the achievement of your objectives and are complementary.

Through clear definitions, much of the confusion on the difference between strategy vs plans can be avoided, enabling you to focus on what is required at each stage of strategy development and implementation with clarity. It also means plans have a clear "why" that can be easily explained, and strategies have a supporting implementation.

Finding out more about strategy execution software

If you would like to find out more, or see how strategy execution software drives clarity at scale, book a session with one of our specialists who will be happy to take you through the StrategyWorks methodology.