To truly stand out as a strategic thinker, it's essential to understand how organizations view and appreciate skills like long-range planning and problem-solving. This means understanding the difference between strategy and strategic planning, the two primary ways strategic thinking gets used. Mixing them up can lead to poor decisions and wasted resources, making it challenging to develop and apply your strategic thinking skills effectively.
Understanding the Strategic Plan: A Framework for Long-term Goals
A plan is a set of actions to achieve a specific goal or objective, while astrategic planis a term organizations use to describe a high-level plan for achieving long-term goals or objectives. Strategic plans provide a framework for future decision-making and guide resource allocation broadly. For example, when Netflix committed to building a video streaming service, it likely had a multi-year strategic plan to develop capabilities in e-commerce, mobile apps, and digital video streaming. We use words like "comprehensive," "well thought-through," "holistic," or "big picture" to describe this type of plan. They're valuable for coordinating activities and organizing resources, but they're not strategies.
Strategy: The Singular Thought for Success
While a plan and strategic plan are variations of the same thing (e.g., a green apple and a red apple), astrategyis an entirely different fruit. A strategy is a singular thought -- an answer or solution to a specific problem -- and, when well-formed, has a simple, straightforward logic (e.g., Get X To Y By Z). It's an idea for success, a kernel of thought on overcoming a challenge or seizing an opportunity.
In strategy, scope, duration, and level of detail are irrelevant. For example, you can have a strategy for winning a board game tonight, getting a raise at work this year, or achieving world dominance over a generation. We use very different words to describe a strategy, such as "brilliant," "clever," "weak," "unconventional," or "bold." Netflix's strategy of betting the company's future on video streaming was indeed bold.
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The Interplay of Strategy and Strategic Planning
Strategy and strategic planning can also be used together. For example, an organization that changes its overall strategy (like Netflix did) will likely need a high-level, multi-year strategic plan to execute it. But not every strategy warrants a strategic plan. Your board game strategy, for example, probably has a sequence of specific steps or patterns of play but hopefully doesn't require a long-range plan. Conversely, strategies can often be found within strategic plans. For example, one can imagine that Netflix had long-term goals and objectives related to product usage. Recognizing how time-consuming it was for users to find video content to watch, they may have devised a strategy of employing machine learning algorithms to deliver customized recommendations in order to drive customer engagement and, therefore, product usage.
Recognizing Your Strengths in Strategy or Strategic Planning
Because they are distinct types of problem-solving, strategic planning and strategy do require different kinds of strategic thinking. Some people are naturally better suited to one or the other. For example, people who are good at synthesizing information, prioritizing, and making long-term decisions may excel in strategic planning. Alternatively, those good at creative thinking, anticipation, and analyzing options may shine at strategy. Both are valuable skills for leadership success, but it's helpful to know your strengths.
Conclusion
While it's common to confuse strategy and strategic planning, it's crucial to differentiate between them to improve your strategic thinking skills. And by developing expertise in both, you can make a more significant impact on your team while becoming that sought-after strategic thinker your organization wants and needs.
