Strategic Thinking vs Strategic Planning

Larry Goddard
Strategy, Growth, Family Business & Turnaround Advisor & Executive Coach

Passive or Active

Most middle market businesses know they should be doing Strategic Planning on a regular basis! But, very few do any kind of in-depth, formal strategic planning.

Some businesses rely on “seat-of-the-pants” strategic planning, whereby the CEO and perhaps a few other senior executives have developed some strategic plans, perhaps over a meal or cocktail, but they have not been expanded into strategic initiatives and action plans – and are not well communicated within the company.

Businesses really have two stark choices – a more passive approach that allows internal and external forces to impact its future – or a more active approach whereby the business consciously impacts its own future. In the highly competitive world, most businesses now operate in, there is a real benefit to actively charting your own course rather than being buffeted around by the winds of chance and change.

Understand Today Before Planning Tomorrow

Strategic Planning starts by having an in-depth and candid understanding of the current state of the business – its strengths, weaknesses, threats, culture, values, competencies, value proposition. Vitally important is understanding the evolution and trends in the marketplace – who the competitors are; what their strengths and weaknesses are in relation to the company; who the customers are and what are their needs; is demand for the products growing, stable or declining; what are the technological developments in the industry. Also important is to understand how the company has competed and grown in the past – did it grow because the market was growing, or did it grow because it did some unique things in the areas of product development, service or sales and marketing.

It takes real work to develop this Current State assessment – but the knowledge gained provides a very important foundation to developing a realistic and attainable Future State for the business, which is the essence of strategic planning.

Strategic Speculation

Designing the Future State involves intelligent and informed speculation about what the business could become – how much could it grow; how is that growth likely to be achieved; what skills will the company need to develop; what resources will it need; what changes will it need to make? This is referred to as “intelligent and informed speculation” because nobody has a crystal ball to accurately predict the future. The best managers can only speculate about what might happen – but in-depth analysis and research can make that speculation more intelligent and informed. Some managers think this a waste of time – questioning the point and relevance of speculation. What they fail to understand is that tremendous knowledge and insight is gained from intelligent and informed speculation – many different scenarios, trends, innovations and developments are considered and examined – all adding to the collective knowledge of the organization – and enhancing its ability to evaluate and prioritize options.

Dynamic Process

Strategic Planning cannot be a static process. The day after a Strategic Plan is developed, it starts to become a little out-of-date. Every day, changes in the environment and circumstances could have an impact on the validity of the Strategic Plan. Intelligent and Informed Speculation must constantly evolve as the business gathers more information. Managers will invariably have better information tomorrow than they have today, which facilitates more accurate speculation. This makes Strategic Thinking more relevant than Strategic Planning. Strategic Thinking is more of a way of life for a business while Strategic Planning is often treated as an event. Businesses that apply Strategic Thinking are regularly evaluating their Current State, Desired Future State and the Strategic Initiatives and Action Plans needed to get there – and they are updating these based on changing conditions and circumstances. Strategic Thinking is not just for top managers – all managers and even employees should apply Strategic Thinking to their jobs.

A Business that develops a competency in Strategic Thinking enhances its ability to anticipate and react to future developments – and is well positioned to positively impact its future - and gain a significant advantage over its competitors. 

By Larry Goddard, CEO of The Parkland Group, Inc., and developer of the SOAR Growth Strategies™ process (www.SOARgrowth.com).

© Copyright, The Parkland Group, Inc., 2020, All rights reserved.

LinkedIn Article:

https://www.linkedin.com/pulse/strategic-thinking-vs-planning-larry-goddard/