A Plan Is Not a Strategy

Summary

The video discusses the difference between strategic planning and strategy. Strategic planning involves creating a list of activities a company will do, but often lacks coherence and does not lead to success. A strategy involves making integrated choices to position a company to win in a competitive space. Strategy requires accepting some uncertainty, as you cannot control customers, while planning focuses on what you can control internally. To develop a winning strategy, you need a theory for how to serve customers better than competitors. Strategy takes some angst to accept uncertainty, but gives the best chance of success rather than comfortable planning which guarantees losing.

Takeaways

• 😀 Strategy is an integrative set of choices that positions a company to win in a competitive market
• 👍 Strategy has an underlying theory for why a company can win on a particular playing field
• 😟 Planning is often just a comforting list of activities within a company's control
• 😐 Strategic planning usually lacks internal coherence and a path to accomplishing goals
• 👀 Strategy focuses on competitive outcomes involving unpredictable customer reactions
• 😬 Planning avoids worrying about competition and customer reactions
• 😡 Competitors with a sound strategy can disrupt and take market share from 'planning' companies
• 🤔 Accept the uncertainty of strategic choices - don't demand perfect proof upfront
• 📝 Clearly lay out the logic underlying your strategy to refine it as real-world events unfold
• 📋 Keep your written strategy succinct - the path to aspired outcomes on a single page

Q & A

What is the difference between planning and strategy according to Roger Martin?

Planning involves laying out activities a company is going to do, while strategy involves making integrated choices to position a company to win in a competitive marketplace. Planning focuses on using company resources and is internally-focused, while strategy focuses on outcomes related to customers and the external environment.

Why does Roger say that just combining planning and strategy into "strategic planning" does not help?

Because planning and strategy are fundamentally different. Planning involves laying out activities a company will do, while strategy involves making integrated choices to position a company competitively. Simply calling planning "strategic" does not make it an actual strategy.

What are some examples Roger gives of typical strategic planning activities that are not actually strategy?

Examples include plans to improve customer experience, open a new plant, or start a new talent development program. These are planning activities but do not represent an integrated strategy.

What are the key components of a strategy according to Roger?

The key components are: 1) An integrative set of choices 2) Positioning the company in a competitive playing field 3) A theory for why the positioning will allow the company to win/be better than competitors 4) Coherence between the theory and actions 5) A focus on desired competitive outcomes related to customers.

Why does Roger say developing a strategy tends to create more angst for managers than planning activities?

Because with planning, managers are doing activities within their control like spending resources. With strategy, managers are making guesses about competitive outcomes that involve customer behavior they can't completely control or predict.

How did Southwest Airlines' strategy differ from other major US air carriers?

Southwest had a clear strategy to be a lower-cost substitute for bus travel with point-to-point routes and a standardized fleet. Other carriers were focused more on operational planning and acquiring resources rather than strategically positioning themselves.

What advice does Roger give for escaping the "planning trap"?

He advises accepting the uncertainty of strategy, clearly laying out the logic so it can be monitored, keeping the strategy simple and understandable, and being willing to tweak the strategy over time based on market feedback.

Why does Roger say planning activities tend to be more comfortable for managers than developing a strategy?

Because planning activities involve committing internal resources and operations that managers directly control. Strategy involves making guesses about competitive outcomes in the marketplace that managers can't completely control.

What does Roger mean when he says other airlines were "playing to play" rather than to win?

He means they were focused on operational activities like adding planes and gates rather than making strategic choices to position themselves better than competitors.

What does Roger say is important about laying out the logic of your strategy?

It allows you to monitor what's happening externally to see if key assumptions are holding true or need adjustment. This lets you tweak the strategy over time.