Many businesses have plans. Fewer have strategy.
A plan can tell you what will happen next week, next month or next quarter. It can contain projects, deadlines, campaigns, budgets and responsibilities. Useful as these are, they do not automatically answer the strategic question: what are we choosing to do differently, and why?
Strategy begins with choice
Strategy is a set of deliberate choices about where to play, what value to create, what capabilities to build and what trade-offs to accept.
This is why strategy can feel uncomfortable. Choosing one direction means accepting that another direction will receive less attention. Saying yes to one customer segment may mean saying no to another. Investing in one capability may mean postponing another.
The danger of strategy without trade-offs
- Every customer is treated as equally important.
- Every opportunity gets explored.
- Every service is kept because it might be useful.
- Every initiative remains alive.
The business looks flexible, but its resources become fragmented.
A practical strategy test
Ask five questions: Who are we choosing to serve? What problem are we choosing to solve? What value are we choosing to deliver? What will we deliberately not pursue? What capability must become stronger for the choice to work?
Plans come after choices
Once the strategic choices are clear, planning becomes easier. The plan translates choices into priorities, owners, measures and timing.
Without the choices, planning can become an impressive list of activities with no clear strategic logic behind them.
The Catalyst perspective
Good strategy does not predict the future perfectly. It gives the business a coherent basis for making decisions as the future changes.
Before asking what should we put in the plan, ask what are we choosing?