TIB #32: Strategic vs Tactical planning
Let’s explain the difference between strategic vs tactical planning. Strategies cannot be planned. Tactics can, but require strategy to be effective.
We’re in the last month of the year as I am writing this. For many that is a time to start making plans for the next year. Plans are comfortable, but not what you need if they are not supporting an underlying strategy.
Strategies and tactical planning are not just for big businesses. Creators and solo-teneurs too benefit greatly from having a strategy. And it does not have to be complex either. In fact: the shorter and more coherent, the better.
A strategy describes how you think you can go from where you are today to where you want to be in the future. In this context “you” can either mean your business or you as a person. For many solo entrepreneurs, there is no clear separation between the two though.
This HBR video describes a strategy as answering these two questions:
- Why are you on this playing field and not another playing field?
- How are you going to be better serving your customers than others on this playing field?
Answering those two questions will create a theory of the direction you and/or your business take. Note that we call it “a theory” and not “a plan”.
That is because a strategy cannot be proven before execution. A theory, by its very nature, is an educated guess. No plan will turn an educated guess into a fact. Experimentation and action will, and those can be planned.
A definition of a theory is “a set of principles on which the practice of an activity is based.”
Therefore, a (good) strategy has these characteristics:
- Describes the intended field you are “playing” in and why
- Provides an indication of how you intend to best serve your customers
- It is a theory, in other words: it cannot be proven, it is not a fact.
- Therefore, it probably give you some level of anxiety.
Tactics are the steps and activities we want to do to make progress on our strategy.
A plan is a series of actions or steps set out in time. Those actions can happen in parallel or sequential or a mixture of the two.
The plan focusses on how we spend our time and other resources. But having a plan does not mean you are taking actionable steps in line with your strategy.
For example: in larger businesses a plan is made when migrating to a new software system. Or hiring new employees, etc. In small- and solo businesses plans are common to plan content creation.
A plan can definitely contain action steps based on a strategy, the problem is that more often than not, a plan is made without having a strategy. A good tactical plan, describes the actions and experiments to be done to prove or disprove the theory that is your strategy.
Too many creators and entrepreneurs set a goal or objective, often based on results instead of effort btw, and then dream up a plan to get to that objective.
It gives us a good feeling: we are being a responsible business owner, make plans, feel like a real CEO. We’re stuck in the planning trap.
The biggest reason planning makes us feel good, is that we are the customer of it. Making a plan means, we are spending/planning time, budget, and other resources.
That is comforting because it is fun to “spend”. Plans are all about costs of resources. And you control those costs. Additionally, you spend it on yourself: you are the customers of your plan.
So, a plan gives us a sense of control. Running a business is full of uncertainty, so a plan or the activity of making a plan, can be a soothing experience and give us a (often false) sense of control.
Since our strategy is a theory, there is very little control (hence the anxiety). It specifies an outcome we want to achieve. Its succes depends on your customers wanting your product or service enough to become profitable.
But ultimately, you do not control your customers.
Don’t get me wrong: planning is not forbidden, au contraire mon ami. But, don’t do it for comfort. Have a strategy, no matter how basic, first.
Strategy will have some angst associated with it. It is supposed to be like that, because even the best strategy is still a strategy, a theory of a desired outcome. You cannot prove your strategy in advance, you cannot make it SMART in order to guarantee a successful outcome
Not knowing this for sure, does not mean you are a bad business owner. Quite the opposite; not turning assumptions into fake facts is wise.
If you can say: “This is what we believe allows us to be a winner” (the strategy, a theory), then these are the steps we can take to position ourselves as best as possible (the plan).
Explain the logic behind your strategy. What has to be true about you, your niche or industry, and the other players in your field. Knowing these things allow you to watch time unfold and compare your assumptions with reality. If your strategy matches reality, you are on the right track. And if not, you can decide to adjust. To pivot or persevere.
In short: Having a coherent strategy means you can intelligently picot when your tactics, your plan, are not moving you into the direction of your (L.O.F.T.Y.!) goal.
Please tell me: What is your strategy? Do you even have one, or will you be making one now that you have read this?
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