Strategy and planning

Clearing up the confusion

Many firms confuse strategy with planning.

The confusion arises because both involve the future, but they operate at different levels.

Planning assumes the direction is broadly correct and focuses on sequencing actions. Strategy questions whether the direction itself makes sense, given how the environment is changing.

When the two are conflated, organisations optimise execution against assumptions that are no longer valid. The plan is delivered no matter what, and the strategy remains unexamined.

This is why well-run organisations deliver industry-average performance.

Strategy sets the direction. Planning directs the work needed to get there. One cannot substitute for the other.