Planning is not a strategy

Planning is not a strategy

With the New Year upon it is probably too late for some clients to be considering their strategy for 2014. If it isn’t there is a very inspiring article in this month’s Harvard Business Review on strategy.


The argument goes like this: a detailed plan may be comforting, but it’s certainly not a strategy.  In fact it is a natural reaction is to make the challenge less daunting by turning it into a problem that can be solved with tried and tested tools.


That nearly always means spending weeks or even months preparing a comprehensive plan for how the company will invest in existing and new assets and capabilities in order to achieve a target: an increased share of the market, say, or a share in some new one.


The plan is typically supported with detailed spreadsheets that project costs and revenue quite far into the future. By the end of the process, everyone feels a lot less scared! We’ve all been there.


This though is planning not strategy.


A good strategy is not the product of hours of careful research and modelling that lead to an inevitable and almost perfect conclusion. But instead, is a result of a simple and quite rough-and-ready process of thinking through what it would take to achieve what you want and then assessing whether it’s realistic to try.


In other words, a way of shortening the odds. How?

Rule 1: Keep the strategy statement simple.

Focus your energy on the things that influence—that is, customers. They will decide to spend their money with your company if your value proposition is superior to competitors’. Two choices determine success: the where-to-play decision (which specific customers to target) and the how-to-win decision (how to create a compelling value proposition for those customers).

Rule 2: Recognise that strategy is not about perfection

As strategy is about revenue rather than cost, and revenue is hard to predict exactly, it cannot be about perfection

Rule 3: Make the logic explicit.

Because the human mind naturally rewrites history and will declare the world to have unfolded largely as was planned rather than recall how strategic bets were actually made and why. If the logic is recorded and then compared to real events, you will be able to see quickly when and how the strategy is not producing the desired outcome and will be able to make necessary adjustments



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