Let’s talk about the difference between strategy and planning and why it matters in today’s business world.
This is REALLY important!
🧐 What is Strategy?
Strategy is a set of choices that an organization makes to position itself to win in a competitive market.
It’s a cohesive and coherent plan that outlines the approach to be taken to succeed.
A good strategy answers the question: “How are we going to beat our competitors and win in the market?”
🤔 Why is Strategy Important?
A well-crafted strategy is critical to the success of any organization. Here are some reasons why:
Helps focus resources: A clear strategy helps an organization to focus its resources, both financial and human, on the areas that matter most. It allows the organization to make better decisions about what to do and what not to do.
Aligns the team: A good strategy helps align the team around a common goal. It gives everyone in the organization a clear understanding of what the organization is trying to achieve and how they can contribute to that goal.
Improves decision-making: With a clear strategy in place, decision-making becomes easier. Decisions can be made more quickly because everyone understands what the organization is trying to achieve and can evaluate options against that goal.
Provides a roadmap for success: A good strategy provides a roadmap for success. It outlines the steps that need to be taken to achieve the organization’s goals and provides a framework for measuring progress.
🤔 What is Planning?
Planning is the process of creating a roadmap to achieve a set of goals. It involves setting goals, defining the steps needed to achieve those goals, and allocating resources to make it happen.
🤔 Why is Planning Important?
Planning is critical to the success of any organization. Here are some reasons why:
Provides direction: Planning provides direction for the organization. It helps the organization to define what it wants to achieve and how it’s going to get there.
Allocates resources: Planning helps the organization allocate resources effectively. It ensures that resources are being used in the most efficient way possible.
Establishes accountability: Planning establishes accountability. It helps the organization to define who is responsible for achieving specific goals and objectives.
Provides a framework for measuring progress: Planning provides a framework for measuring progress. It helps the organization to evaluate whether it’s making progress toward its goals and adjust its approach if necessary.
🤔 What’s the Difference?
At a high level, the difference is that strategy is about winning in the marketplace, while planning is about executing a set of goals.
A well-formulated strategy gives your organization the best possible chance of success.
You need to start by defining an outcome, a competitive advantage that you want to achieve.
This involves understanding what your customers want and delivering it in a way that your competitors cannot match.
A good way to start your strategic planning process is by answering these key questions:
What is the outcome we want to achieve?
What is our competitive advantage?
How can we achieve that competitive advantage?
What do we need to put in place to achieve our strategic goals?
What assumptions do we need to validate to ensure our strategy is working?
Once you have answered these questions, you can then start to lay out your strategy.
This should be a single-page document that outlines your chosen playing field, how you will win, the capabilities you need to have in place, and the management systems you will use to achieve your goals.
Case Study: Southwest Airlines
You ready for this? Southwest was not founded to compete with major airlines!
They wanted to provide a more convenient and affordable travel option, a slight upgrade from Greyhound buses, but with the comfort and speed of an airplane.
To achieve this, Southwest focused on a few key strategies:
🛫 Flying point-to-point: Rather than using hubs like other airlines, Southwest decided to fly directly to each destination. This allowed for faster travel times and more convenient flight schedules for passengers.
🛬 One type of aircraft: Southwest only flies Boeing 737 planes. This decision streamlined their operations and allowed for more efficient training and maintenance of their fleet.
🍴 No meals on flights: Since Southwest primarily focuses on shorter routes, they do not offer meals on their flights. This allows for quicker turnaround times between flights and helps to keep costs down.
💻 Online booking: Encouraging passengers to book directly online not only saves costs, but also provides convenience for their customers.
The outcome of Southwest’s strategy was significant.
By focusing on providing a unique travel experience that was both affordable and convenient, they were able to capture a significant share of the domestic airline market. In fact, they became the largest domestic airline in the United States.
Southwest’s success was not without risk. They had to be willing to take a different approach and be comfortable with uncertainty.
However, by staying true to their strategy, they were able to achieve a competitive advantage that their competitors could not match.
🚀 Crafting a Strategy
So, how can you create a strategy that will give you a competitive advantage in your market? Here are some steps you can follow:
1️⃣ Understand your market:
Before you can craft a strategy, you need to understand your market. Who are your competitors? What are the needs of your customers? What are the trends in your industry? Answering these questions will help you identify where the opportunities lie.
2️⃣ Define your playing field:
Once you understand your market, you need to define your playing field. Where do you want to compete? What are the segments of the market you want to target? What are the unique attributes of your product or service that will differentiate you from your competitors?
3️⃣ Identify your competitive advantage:
Once you’ve defined your playing field, you need to identify your competitive advantage. What is it that you do better than anyone else? Is it your price, your quality, your service, your innovation? Whatever it is, it needs to be something that is valuable to your customers and difficult for your competitors to replicate.
4️⃣ Develop a plan to achieve your advantage:
Once you’ve identified your competitive advantage, you need to develop a plan to achieve it. This involves identifying the capabilities you need to have in place, the resources you need to allocate, and the management systems you need to implement. Your plan should be actionable, with specific milestones and metrics that you can use to track your progress.
5️⃣ Continuously monitor and adjust:
Finally, it’s important to continuously monitor and adjust your strategy as needed. The market is always changing, and your competitors are always adapting. You need to be agile and willing to make changes to your strategy as needed to stay ahead of the curve.
Key Takeaways 🔑
While planning and strategy are closely related, they are not the same thing.
Planning is important for allocating resources and establishing accountability, but it’s a strategy that positions you to win in the marketplace.
To craft a winning strategy, you need to understand your market, define your playing field, identify your competitive advantage, develop a plan to achieve it, and continuously monitor and adjust.
By doing this, you can create a clear and cohesive plan that will help you achieve your goals and outcompete your rivals.
Just like Southwest, you need to be willing to take risks and be comfortable with the uncertainty of the outcome.
But if you stay true to your strategy, you may just achieve a level of success that you never thought possible.
P.S. – Please remember to add email@example.com to your primary inbox.