Peter Gaeth’s Post

There’s a lot of misunderstanding that a strategy is a plan. Because it’s not. In business, a strategy and a plan are two entirely different things. These are differences. The confusion about what strategy is comes largely due to the widespread and inaccurate use of the word “strategy.” People use it to distinguish it from something ordinary, like in “strategic HR” and “strategic marketing.” People also use it in their day-to-day language, to reflect their ideas about how to achieve some goal. For example, “my strategy to lose weight is to eat 10% less than usual every day.” In business, or organizations more generally, strategy means something else. It must, because otherwise every plan, approach, and process can be called a strategy, which brings us nowhere. This is how strategy is different: → Strategy is a logic, Planning is a process Let this sink in before you read on. A strategy lays out the logic according to which an organization creates and captures value. As described in my book, The One-Hour Strategy, this covers: a) which customers and competitors it targets (Market),  b) with what products and services (Magic),  c) based on which assets and capabilities (Means),  d) how it generates revenues doing so (Money),  e) how it leverages its environment (Momentum), and  f) why it does so in the first place (Meaning).  Along these lines, you can describe an organization’s current strategy (how it creates and captures value today), its intended strategy (how it aims to do so in the future) and its realized strategy (how it actually was able to implement its intended strategy). Because, in all cases, we can outline what the basic logic is. None of this has anything to do with a plan. Because, a plan lays out the steps needed to achieve some goal, and often also the time, resources, and people it takes to do so. Of course, one may develop a plan for how to implement the strategy, but that plan is not the strategy itself. Framed differently: → Strategy leads to defining goals, Planning leads to achieving those goals. It is the logic of strategy from which you can derive your goals, which then drive the actions that you’re planning. This is important, because I’ve seen so many organizations getting stuck because even though they say they have a strategy, they basically skipped creating one. They formulated a vision, mission, targets, objectives, ambitions, themes, and what more, but there is no overarching logic that explains how it creates and captures value. So, they have a plan and goals, but no strategy they derived these goals from. Now the tough question comes: does your organization actually have a strategy? Or does it merely have a plan? ---- If you are eager to learn how to help organizations generate and implement real strategy in a refreshing and practical way, then the Certified Strategy & Implementation Consultant (CSIC) program may be something for you. See Strategy.Inc for more information and registration.

Is this the best kindergarten ever? Watch Takaharu Tezuka's full TED Talk here: http://t.ted.com/aTTcnDy