Strategy vs. plan: What’s the difference, and why does it matter?
I see and hear the words “strategy” and “plan” used interchangeably all over the place. It often reflects a belief that they’re essentially the same. And I get it. The language most commonly used about strategies and plans has caused confusion about what these words mean in a practical sense.
I talk about the importance of planning a lot. But strategy and planning aren’t the same, and it’s essential to understand the difference. I haven’t talked nearly enough about the strategy that guides planning. Because if you don’t have a strategic foundation in place, even the best plans may not generate the results you want.
What is strategy?
Stay away from the dictionary when it comes to understanding strategy. The definitions in every single dictionary I looked at either focus on its militaristic roots or equate it to a plan (not helpful 🙄), so I prefer how it’s explained on Wikipedia:
“Strategy is important because the resources available to achieve goals are usually limited. Strategy generally involves setting goals and priorities, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). Strategy can be intended or can emerge as a pattern of activity as the organization adapts to its environment or competes.”
Even in military contexts, this definition is superior to what the dictionaries describe.
In business/marketing, a strategy gives you a comprehensive overview of your position in the industry/market based on the goals and objectives you want to achieve, why these are the goals you’ve set, along with an honest assessment of the challenges that may be barriers to your success. It includes competitive and target audience analysis essential to making the plans that flow from the strategy.
The best part? It lays out what you’re not going to do. One of my favourite people often brings up this quote in our work together:
“The essence of strategy is choosing what not to do.”
I know you can relate to this in your business:
The clients that made you re-think your offerings or ideal client profile.
The projects that you didn’t love and didn’t make you money.
The tactics you don’t want to use in your business because they don’t feel right.
These instances may be split-second decisions, but they have long-term impacts. They were strategic decisions, even if they didn’t seem like it at the time.
What strategy isn’t
Tactics are not and never will be strategic. Ideally, they’re part of a plan that flows from a strategy, but the tactics are just steps to achieving the strategic goals.
For example, earlier this year, a CEO described a plan for creating blog content and then said, “That’s going to be our blogging strategy going forward.”
It was a plan. It was not a strategy.
You can have a social media strategy, though I tend to group that into a content strategy, along with video, advertising, and other content.
When do you need a strategy?
This is the time of year that many businesses are hard at work reviewing the strategic plan for the coming year and beyond. If they already have a strategic plan, they’re making changes based on new information and what’s happened over the previous year to re-align their course.
If you don’t have a strategic plan or marketing strategy for your business, make it a priority to complete one as soon as you can. Taking the time to do the deep thinking that centers your business focus can help you improve your results and make more realistic plans for the next steps in your business.
Your business is worth the time and effort.
The plan that flows from a strategy starts with goals
Your strategic plan (the business strategy) lays out the goals you want to achieve and gives you a timeframe to make it happen. Let’s say these are the high-level goals you have for your business because you’re working on scaling up:
Improve the financial health of your business
Expand your team by X people (# or % and area)
Launch a new product/service
Increase customer retention by X (%)
If those are the high-level business goals, you’ll want to break them down into smaller, measurable goals, much like large organizations do when different departments set goals for how they’ll contribute to the overall business goals:
Improve the financial health of your business
Reduce business expenses by X ($ or %) (ALL)
Increase revenue by X ($ or %) (ALL)
Expand your team by X people (# or % and area)
Launch a new product/service
Engage a new target audience segment (marketing)
Increase customer retention by X (%)
Establish new processes for customer onboarding/service (customer service)
This is just a quick example of how you can break down these business goals. There are more ways you can break it down to address the cross-functional nature of each goal. Small businesses will want to be detailed enough without getting so complicated you’re overwhelmed by the work ahead of you.
Some thoughts about documenting goals
You probably already know that documenting goals makes it more likely that you’ll work on and achieve them. In business, you have to also communicate the goals to the people who help you do the work to achieve the business goals. When everyone has a shared understanding of what you’re working toward, it makes it easier for teams and individuals to make plans for how they’ll take action and be accountable for doing their part.
If you’re a solo or micro business, you might feel like it’s wasted effort because you know what you want to do—it’s all in your head, so why do you need to write it down?
Apart from the stats about documentation and being more likely to achieve your goals, it gives you greater clarity. If you commit to a set of documented goals, you can track your progress and use the plans you’ve made to weigh your options when opportunities come up that may take you off course.
Small businesses have the great advantage of being less bureaucratic and more agile in how we operate and make decisions, but it doesn’t mean we should be less strategic.
The plan for achieving goals
Your plan is just the list of steps you’re going to take tactically to achieve the goals you’ve set for your business/marketing. Let’s look at how you might plan out just one or two of the goals, which are already closely linked:
Improve the financial health of your business
Reduce business expenses by X ($ or %) (ALL)
Audit all expenses for potential elimination/reduction
Make a plan for professional development ($ max)
Make a plan for equipment purchases ($ max)
Increase revenue by X ($ or %) (ALL)Sell X ($) new product/service
Complete a pricing audit to confirm increases
Create a launch plan for new product/service
Engage a new target audience segment (marketing)
Introduce updated messaging into website/content
Use advertising to increase reach to new audience
These steps are all still high level, but the action plan that flows from your strategy won’t cover the granular details that a project plan would. The steps here are all actions. They aren’t outcomes. But they align with the goals that were set for the business. You can have marketing goals in addition to the business goals, though small business owners don’t always differentiate the marketing goals.
Use strategy as a strong foundation for your business
When you have a business strategy and marketing strategy that give you an accurate picture of your place in the industry, it makes planning and execution so much easier.
Knowing what you want to achieve is just one piece. A thorough overview of the opportunities and challenges that exist will give you the ability to take action to go around, over, or through barriers by using your advantages when you encounter competitors and other market forces.