Why Planning and Strategy are Vital for Success in Every Field? What's the Differences Between Planning and Strategy ?

Abstract:

Often times, the words “plan” and “strategy” are used interchangeably. The meanings of the words are quite similar: a method for achieving an end.

But... Here’s the truth about their differences...

There are strong differences between these words.

A plan is an organized scheme created with a clear objective in mind. Conversely, a strategy functions as a flexible blueprint employed to achieve a particular goal, with the capacity for adaptation and change as needed.

It’s important for a company to understand the difference between having a plan and having a strategy. This is because although they each have strengths and purposes, they aren’t necessarily interchangeable. The differences in types of industry, clients, and projects call for one method or another.

Keywords:

Planning, Strategy, SWOT, Financial, Tactical, Forecasting Future

Learning Outcomes :

After undergoing this article you will be able to understand the following

1. What's Planning?

2. What's Strategy?

3. Why planning and strategy are necessary?

4. How do planning and strategy differ in process?

5. What's the main differences between planning and strategy?

6. What's the advantages of planning and strategy?

6. Conclusions

7. FAQs

References 

Overview 

Planning and strategy are both used to achieve a goal, but they have different scopes, processes, and uses: 

1. What's Planning?

Planning

A plan is a concrete, organized scheme with a clear objective and a focused process. It's useful for staying organized, increasing stability, and eliminating assumptions. Planning is often used to allocate resources, manage people and processes, and clarify roles and responsibilities. 

Often times, the words “plan” and “strategy” are often used interchangeably. The meanings of the words are quite similar: a method for achieving an end.

Here’s the truth:

There are strong differences between these words.

A plan is an organized scheme created with a clear objective in mind. Conversely, a strategy functions as a flexible blueprint employed to achieve a particular goal, with the capacity for adaptation and change as needed.

It’s important for a company to understand the difference between having a plan and having a strategy. This is because although they each have strengths and purposes, they aren’t necessarily interchangeable. The differences in types of industry, clients, and projects call for one method or another.

What Is a Plan?

A plan is an arrangement, a pattern, a program, or a scheme for a definite purpose. A plan is very concrete in nature and doesn’t allow for deviation. If “Plan A” doesn’t work, you don’t alter “Plan A” and try again. Rather, you move to “Plan B;” something totally different.

A plan is most useful when staying well organized and on-track is the highest priority. A plan provides a coherent framework from which to build and a sure direction to follow, with intermittent milestones to pass in order to reach an end goal. It eliminates false confidence and increases stability. A plan increases the transparency of your work, leaves no room for assumptions, and can prove that you’ve put in a lot of thought and effort.

Types of plans include:

• Financial: Must be rooted in reality and universally accepted
• Tactical: Concerns the responsibility and functionality of lower-level departments
• Operational: Focused on specific, routine procedures and processes
• Succession: Don’t skip a beat should a major player suddenly depart
• Contingency: Be proactive in vetting a researched and realistic backup

2. What's Strategy?

Strategy

A strategy is a flexible blueprint that can be adapted and changed. It's useful for creativity, collaboration, and innovation. Strategy involves external elements and uncertainty, and focuses on preparing to win. It specifies a competitive outcome that you wish to achieve, such as customers wanting your product or service. 

The building blocks of building a good strategy include the following actions:

1. Framing the right questions
2. Learning from the past
3. Diagnosing the whys
4. Forecasting the future
5. Searching potential pathways
6. Choosing how to integrate
7. Committing to changes
8. Evolving when it’s necessary

3. Why planning and strategy are necessary?

Strategic planning is a vital tool for organizations to achieve long-term success. It can help organizations: 

Determine direction

Strategic planning helps organizations focus their efforts and ensure that everyone is working towards a common goal. 

Improve decision-making

Strategic planning can help organizations evaluate the impact of initiatives and prioritize strategies. 

Manage resources

Strategic planning can help organizations align resources for optimal results. 

Increase operational efficiency

Strategic planning can help organizations adapt and modify operations to keep on track with their goals, even when unexpected circumstances arise. 

Strategic planning can also help organizations: Build competitive advantage, Engage with staff and communicate what needs to be done, Assess new programs or projects, Expand current business operations, and Exit current ventures. 

4. How do planning and strategy differ in process?

Planning and strategy are both used to define expectations and outline milestones and targets, but they differ in process and scope: 

Planning

A plan is a more focused, fast process that provides details on how to achieve a goal or objective. It involves laying out projects with timelines, deliverables, budgets, and responsibilities. Planning can help with allocating and aligning resources, managing people and processes, and clarifying roles and responsibilities. 

Strategy

A strategy is a more flexible blueprint that's often long-range and directional, and can adapt and change as needed. It involves understanding your environment and making choices about what you will do, such as where and how to play. Strategy can help you position your organization to win. 

5. What's the main differences between planning and strategy?

The most simple difference between strategy and planning

Put very simply, imagine a box on the floor that represents your organisation:

• Strategy is choosing where to put the box, its size and even whether it is even a box.
• Planning is working inside the box, deciding what to do about the choices that were made.  Of course you still need action, executing those choices.

Another way of looking at it is

• Strategy is about understanding your environment and making choices about what you will do.  Think, if you like, of where and how to play.
• Planning is about making choices about how to use the resources you have and the actions you will take to achieve the choices made inside your strategy.

Comparison Chart of differences between planning and strategy 

Basis for Comparison	Planning	Strategy
Meaning	Planning is thinking in advance, for the actions which are going to take place in the future.	Best plan opted for achieving the desired outcome.
What is it?	Planning is a road map for accomplishing any task.	Strategy is the path chosen for achieving the objectives.
Related to	Thinking	Action
Basis	Assumptions	Practical considerations
Term	Depending upon the circumstances.	Long Term
Nature	Preventive	Competitive
Part of Management Functions	Yes	Sub-part of Decision Making
Sequence	Second	First

6. What's the advantages of planning and strategy?

Planning and strategy can have many advantages, including: 

Strategic planning

Can help organizations achieve long-term success by providing direction, improving decision-making, and increasing operational efficiency. Strategic planning can also help organizations: 

Improve decision-making 

Allocate resources more effectively 

Increase organizational alignment 

Manage risk better 

Take advantage of opportunities for growth and innovation 

Make organizations more proactive 

Increase staff satisfaction and retention 

Manage expectations and build trust 

Set specific targets 

Create a sense of urgency 

6. Conclusions

Planning and strategy are so crucial for growth and development of people, projects and organisations 

In sum and substance, they offer

1. Direction: Strategic planning offers a sense of direction and outlines measurable goals. It's a tool that's useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward.

2. Future Focus: Strategic planning allows organizations to anticipate and respond to changes in the business environment. It also helps to forecast potential opportunities and threats, which is crucial for surviving in today's dynamic business world.

3. Operational Efficiency: Strategic planning provides the basis for all management decisions, reducing the potential for wasted resources, missteps, and inefficiencies.

4. Competitive Advantage: A strategic plan allows organizations to foresee their future and to prepare accordingly. Organizations that plan strategically are better equipped to predict the market, anticipate changes, understand competitors, and make decisions that keep them ahead.

7. FAQs

Q. Which companies excelled with proper planning and strategy?

Ans.

Companies That Exceled due to Strategic Planning are leaders in their respective fields.

Companies like Apple, Amazon, and Google have long been recognized as leaders in strategic planning.

Apple consistently demonstrates the value of a robust strategic plan. With its focus on design and user experience, Apple has managed to create a unique position in the market that is hard for competitors to emulate.

Amazon has excelled through its strategic planning based on customer obsession, a long-term orientation, and a willingness to experiment and innovate. Amazon’s ability to foresee and capitalize on internet commerce has placed it as a dominant player in multiple markets.

Google stands out with its strategic planning, particularly in its ability to innovate, experiment, and rapidly adjust to changes. Google's strategic planning process allows it to stay ahead of market trends and maintain its position as a global technology leader.

Q. What are the different tools and techniques that can be used for strategic planning?

Ans.

Different tools and techniques for strategic planning include:

- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats.
- PEST Analysis: Analyzes political, economic, social, and technological factors affecting the organization.
- Balanced Scorecard: Measures performance across multiple perspectives.
- Porter’s Five Forces: Examines the competitive forces within an industry.
- Scenario Planning: Develops and analyzes potential future scenarios to guide strategic decisions.
- Gap Analysis: Compares current performance with desired performance to identify gaps.
- Growth-Share Matrix: Assesses the potential of different business units or products.

References 

Books & Manuals Perspectives on Strategy from The Boston Consulting Group (1998).  Carl W. Stern and George Stalk, Jr. (Eds).  John Wiley & Sons. The Balanced Scorecard: Translating Strategy into Action (1996). Robert S. Kaplan and David P. Norton. Harvard Business School Press. Strategic Management: Concepts and Cases, 9th Edition (1996). Arthur Thompson, Jr., and A. J. Strickland III. Irwin. The Strategy Concept and Process, 2nd Edition (1996). Arnoldo C. Hax and Nicolas S. Majluf. Prentice-Hall. Creating Public Value: Strategic Management in Government (1995). Mark Moore. Harvard University Press. The New Strategists (1995). Stephen J. Wall and Shannon Rye Wall. Free Press. Concepts of Strategic Management, 5th Edition (1995). Fred David. Prentice-Hall. Strategic Planning for Public and Nonprofit Organizations (1995). John M. Bryson. Jossey-Bass. The Management Compass: Steering the Corporation Using Hoshin Planning (1995). Michele Bechtell. American Management Association. The Grand Strategist (1995). Mike Davidson. Henry Holt & Company. Managing In A Time of Great Change (1995). Peter F. Drucker. Truman-Talley/Dutton Books. Team-Based Strategic Planning (1994). C. Davis Fogg. AMACOM. The Rise and Fall of Strategic Planning (1994). Henry Mintzberg. Free Press. Hyper-Competition: Managing the Dynamics of Strategic Maneuvering (1994). Richard D’Aveni. Free Press. Strategy Pure & Simple (1993). Michel Robert. McGraw-Hill. Applied Strategic Planning: How to Develop A Plan that Really Works (1993). Leonard Goodstein, Timothy Nolan, and J. William Pfeiffer. McGraw-Hill. Managing the Unknowable: Strategic Boundaries Between Order and Chaos in Organizations (1992). Ralph D. Stacey. Jossey-Bass. ETS Planning and Budgeting Processes (1992). Office of Corporate Planning and Development. Educational Testing Service. Hoshin Handbook (1992). Pete Babich. Total Quality Engineering. Strategic Planning Plus: An Organizational Guide (1991). Roger Kaufman. Scott Foresman. The Art of The Long View (1991). Peter Schwartz. Currency Doubleday. Managing Strategic Investment Decisions in Large Diversified Companies (1988). Paul Marsh, Patrick Burwise, Kathryn Thomas, Robin Wensley. London Business School. The Little Black Book of Budgets and Forecasts (1988). Michael C. Thomsett. American Management Association. Planning Strategies That Work (1987). Arnoldo C. Hax. Oxford University Press. Strategic Planning and Management Handbook (1987). William King and David Cleland. Van Nostrand Reinhold. Implementing Strategy (1984).  Lawrence G. Hrebiniak and William F. Joyce.  Macmillan Publishing Company. Decision Making at The Top: The Shaping of Strategic Direction (1983). Gordon Donaldson and Jay Lorsch. Basic Books. The Mind of the Strategist: The Art of Japanese Business (1982). Kenichi Ohmae. McGraw-Hill. Creating the Corporate Future: Plan or be Planned For (1981). Russell Ackoff. John Wiley. The Concept of Corporate Strategy (1980). Kenneth Andrews. Richard Irwin. Top Management Strategy (1980). Benjamin Tregoe and John Zimmerman. Simon & Schuster. Competitive Strategy: Techniques for Analyzing Industries and Competitors (1980). Michael Porter. Free Press. Managing in Turbulent Times (1980). Peter F. Drucker. Harper & Row. Strategic Planning: What Every Manager Should Know (1979). George Steiner. Free Press. Redesigning the Future (1974). Russell Ackoff. John Wiley & Son. Managing the Resource Allocation Process (1970). Joseph L. Bower. Harvard Business School Press. Organizational Intelligence (1967). Harold L. Wilensky. Basic Books. Strategy (1967), 2nd Edition. B. H. Liddell Hart. Frederick A. Praeger, Publishers. Corporate Strategy (1965). H. Igor Ansoff. McGraw-Hill. Planning and Control Systems: A Framework for Analysis (1965). Robert Anthony. Graduate School of Business, Harvard University. Long-Range Planning for Management (1964). David Ewing. Harper & Row. Strategy and Structure: Chapters in the History of the American Industrial Enterprise (1962). Alfred Chandler, Jr. MIT. Articles “What’s Wrong with Strategy” (Nov-Dec 1997). Andrew Campbell and Marcus Alexander. Harvard Business Review, pp. 2-8. “What Is Strategy?” (Nov-Dec 1996). Michael E. Porter. Harvard Business Review, pp. 61-78. “Strategy as Revolution” (Jul-Aug 1996). Gary Hamel. Harvard Business Review, pp. 69-82. “Strategic Planning: It’s Back” (Aug 26, 1996). John A. Byrne. BusinessWeek, pp.46-52. “Using the Balanced Scorecard as a Strategic Management System” (Jan-Feb 1996). Robert S. Kaplan and David P. Norton. Harvard Business Review, pp. 75-85. “The Driving Forces Method for Strategy Development” (1996). Clayton Christensen. Harvard University Graduate School of Business Administration. "Shaping Conversations: Making Strategy, Making Change" (Fall 1996).   Jeanne M. Liedtka and John W. Rosenblum.  California Management Review, Vol. 39, No. 1., pp. 141-157. “Strategic Dissonance” (Winter 1996). Robert A. Burgelman and Andrew S. Grove. California Management Review, Vol. 38, No. 2., pp. 8-28. “Scenario Planning: A Tool for Strategic Thinking” (Winter 1995). Paul J. H. Schoemaker. Sloan Management Review, pp. 25-39. “The Nonmarket Strategy System” (Fall 1995). David P. Baron. Sloan Management Review, pp. 73-85. “Strategic Planning at Five World-Class Companies” (Jul 1995). Michael D. Akers and Grover L. Porter. Management Accounting, pp. 24-31. “Discovery-Driven Planning” (Jul-Aug 1995). Rita Gunther McGrath and Ian MacMillan. Harvard Business Review, pp. 44-54. “The Right Game: Use Game Theory to Shape Strategy” (Jul-Aug 1995). Adam M. Brandenburger and Barry Nalebuff. Harvard Business Review, pp. 57-71. “A New Tool for Boards: The Strategic Audit” (Jul-Aug 1995). Gordon Donaldson. Harvard Business Review, pp. 99-107. “Planning in a Global Business” (Mar-Apr 1995). Daniel Simpson (moderator). Planning Review, pp. 25-27. “Corporate Strategy: The Quest for Parenting Advantage” (Mar-Apr 1995). Andrew Campbell, Michael Goold, and Marcus Alexander. Harvard Business Review, pp. 120-132. “A New Model for Reforming the Planning Review Process” (Jan-Feb 1995). Marcus Alexander, Andrew Campbell, and Michael Goold. Planning Review, pp. 12-19, 48. “The Planning Process and the Role of the Planner” (Jan-Feb 1995). Daniel Simpson (moderator). Planning Review, pp. 20-23. “Inside IBM: Strategic Management in a Federation of Businesses” (1994). Glyn Lloyd and Mike Phillips. Long Range Planning, Vol. 27, No. 5, pp. 52-63. “Strategic Planning Isn’t Dead - It Changed” (1994). Ian Wilson. Long Range Planning, Vol. 27, No. 4, pp. 12-24. “Using Strategic Planning to Drive Organizational Change” (1994). Stephen Huntsman. Long Range Planning, Vol. 27, No. 1, pp. 50-55. “How Digital Uses Scenarios to Rethink the Present” (Nov-Dec 1994). Lucia L. Quinn and David H. Mason. Planning Review, pp. 14-17. “You Need A Strategic Plan to Win” (Jul-Aug 1994). Jerry Kuhn and Tena Carson Figgins. Journal for Quality and Participation, pp. 44-48. “Scenario-based Planning: Decision Model for the Learning Organization” (Mar-Apr 1994). Planning Review, pp. 6-11. “The Fall and Rise of Strategic Planning” (Jan-Feb 1994). Henry Mintzberg. Harvard Business Review, pp. 107-114. “Strategic Planning: the Engine of Change” (Sep-Oct 1993). Christopher Geberlein. Planning Review, pp. 17-19. “Putting the Balanced Scorecard to Work” (Sep-Oct 1993). Robert S. Kaplan and David P. Norton. Harvard Business Review, pp. 134-147. “Scaling the Productivity of Investment” (Jul-Aug 1993). Ernest H. Drew. Chief Executive, pp. 46-49. “The Structure of Strategy” (Summer 1993). John Kay. Business Strategy Review, Vol. 4, No. 2, pp. 17-37. “Customer Intimacy and Other Value Disciplines” (Jan-Feb 1993). Michael Treacy and Fred Wiersema. Harvard Business Review, pp. 84-93). “The Secrets of Great Planning” (Oct 1992). Leslie Brokaw. INC. , pp. 151-157. “Integrating Scenarios into Strategic Planning at Royal Dutch/Shell” (May-Jun 1992). Paul Schoemaker and Cornelius van der Heijden. Planning Review, pp. 41-46. “A Catalog of Commercially Available Software for Strategic Planning” (Jan-Feb 1992). Robert Mockler. Planning Review, pp. 29-33. “Creating a Strategic Control System” (1991). Stephen Bungay and Michael Goold. Long Range Planning, Vol. 24, No. 3, pp. 32-39. “Strategic Control in the Decentralized Firm” (Winter 1991). Michael Goold. Sloan Management Review, pp. 70-81. “The Business Information and Analysis Function: A New Approach to Strategic Thinking and Planning (May-Jun 1991). Stephen M. Millett and Rolf Leppanen. Planning Review, pp. 10-15, 36). “Generic Planning: Research Results and Applications” (Winter, 1990-91). Knowledge in Society: The International Journal of Knowledge Transfer, Vol. 3, No. 4, pp. 91-113. “Issues and Alternatives: Key to FMC’s Strategic Planning System” (May-Jun 1990). Planning Review, pp. 26-33. “The Paradox of Strategic Controls” (1990). Michael Goold and John J. Quinn. Strategic Management Journal, Vol. 11, pp. 43-57. “The Strategic Review: A Case Study” (Jul-Aug 1988). Jeffrey A. Schmidt. Planning Review, pp. 14-19. “Planning as Learning” (Mar-Apr 1988). Arie P. De Geus. Harvard Business Review, pp. 70-74. “The Roles of Formal Strategic Planning” (1988). Ann Langley. Long Range Planning, Vol. 21, No. 3, pp. 40-50. “Portfolio Simulation: A Tool to Support Strategic Management” (Summer 1987). Peter Merten, Reiner Loffler, and Klaus-Peter Wiedmann. System Dynamics Review. “Strategy and Structure: A Case Study of the Implications of Strategic Planning for Organizational Structure and Management Practice” (Summer 1986). Lynn Harold Vogel and Irma Patterson. Administration in Social Work. “Uses and Misuses of Strategic Planning” (Jan-Feb 1986). Daniel H. Gray. Harvard Business Review, pp. 89-97. “Scenarios: Shooting the Rapids” (Nov-Dec 1985). Pierre Wack. Harvard Business Review, pp. 139-150. “Scenarios: Uncharted Waters Ahead” (Sep-Oct 1985). Pierre Wack. Harvard Business Review, pp. 73-89. “Strategy Is Different in Service Businesses” (Jul-Aug 1978). Dan R. E. Thomas. Harvard Business Review, pp. 158-164). “Decentralized Planning in A Large French Company: An Interpretive Study” (Fall/Winter 1977). Jacques Sarrazin. International Studies of Management and Organization, pp. 37-59. “Coupling Strategy to Operating Plans” (May-Jun 1977). John M. Hobbs and Donald F. Heany. Harvard Business Review, pp. 119-124. “How to Design a Strategic Planning System” (Sep-Oct 1976). Peter Lorange and Richard F. Vancil. Harvard Business Review, pp. 75-81). “Planning on the Left Side and Managing on the Right” (Jul-Aug 1976). Henry Mintzberg. Harvard Business Review, pp. 49-57. “Defining Corporate Strengths and Weaknesses” (Spring, 1976). Sloan Management Review, pp. 51-68. “The New LEAN Planning Machine” (Undated). Meryl Davids. Journal of Business Strategy, pp. 26-29).