Preparing a meal and then eating it are two different activities. Both are needed to avoid going hungry. If you prepare dinner and then don’t enjoy the meal, you’ll still be hungry. Likewise, you cannot have a nice meal without someone preparing it.
When it comes to business strategy and strategic planning, we are essentially talking about the same principle. Both are essential components of any successful organization. Yet, many companies use the terms interchangeably, leading to confusion and potentially severe consequences. Although related, these two concepts serve different purposes and require distinct approaches.
Business strategy involves crafting a high-level outline that guides a company’s decisions and actions.
It encompasses identifying goals and objectives, analyzing market trends, assessing the competition, and selecting the best approaches to achieve desired outcomes. A well-defined business strategy creates a sense of clarity and direction for the organization.
Strategic planning, on the other hand, is the process of implementing a business strategy through a detailed roadmap.
It involves establishing specific objectives, identifying necessary resources and capabilities, setting timelines and metrics, and monitoring progress towards achieving those objectives. Strategic planning ensures that the business strategy is effectively executed, and enables the organization to adapt and respond to changes in the market.
When companies confuse these terms, the results can be disastrous.
Blockbuster Video failed to develop an effective business strategy for the shift towards streaming media. The company neglected to focus on the changing market trends, missed opportunities to adapt its business model, and ultimately became obsolete. Alternatively, Toys “R” Us invested heavily in a strategic plan to expand its e-commerce offerings but neglected to create a cohesive business strategy. The company failed to differentiate itself from competitors, leading to a decline in sales and eventual bankruptcy.
To avoid such failures, it is critical for leaders to differentiate between business strategy and strategic planning. Next time you’re calling in the team for a strategic planning session, make sure you aren’t trying to enjoy dinner without deciding what you want to eat and someone preparing your plate.
Reach out today to discover how the right combination of strategy and planning can make all the difference in your business.
Main image by Hannah Tasker