So, it’s again time for annual strategic planning? Here we go again: the annual retreat – focussing on revisiting our company’s vision, mission, values, critical success factors, goals, objectives, plans and actions, resource allocation, and balanced scorecard measurements. Out comes the mechanistic toolbox to either help us to analyse our internal and external environments (think SWOTs, scenarios), or to deductively structure (often with the help of a template) goals into plans and actions.

But pause for a moment: the essence of a strategic plan is competitive strategy. In a free market system, companies need to compete to survive and grow. And it can’t without a competitive strategy and differentiated value proposition! This means two things: what we do, and how do we compete? Defining the business concept and competitive strategy form the core of strategy – the rest is planning. For instance: what are we doing to grow our business, how do we create new competitive white space, how do we compete and leapfrog the competitors?   

To think strategy, start by thinking military strategy. Think Guerilla Warfare, think Blitzkrieg, think Attrition Warfare, think Layered Defence, think Encircle Strategy, think Naval Blockade and Air Superiority. And then think broader: how can we change the rules of the game, how can we create new customer demand, how do we create new revenue streams, how do we increase our share of customer wallet, how do we leverage core capabilities into new market spaces, how do we mitigate our risk. Then go one step further: consider if entrenched paradigms in the business are not preventing us from growing our business – and challenge these. If there is no contention, aggression or stretch in a strategy, it is doubtful if it is a strategy!

Strategy ≠ Planning!

The term strategic planning is confusing – and often a contradiction in terms. Strategic planning is generally equated to longer term planning based on strategic (i.e. important) considerations. It tends to be process and cycle driven, with little emphasis on what the company does or its reaction to events.  

Let’s also recognise: Operational excellence ≠ competitive strategy. Operational excellence is foundational and important to success – but what if the company does the wrong things (very) well?

Ultimately, strategy should set direction, planning sets out the path to get there. Strategy sets out the ‘what’ and ‘why’ of goals; planning sets out the ‘how’ and ‘when’.

And strategy does not happen in a once-a-year strategic planning retreat only.