Stop Planning, Start Strategizing: Why Most Companies Get It Wrong

“Strategic planning.” The term gets thrown around a lot in the business world, but how many companies truly strategize? As Roger Martin, former Dean of the Rotman School of Management, points out, most “strategic planning” is just a laundry list of activities disguised as a plan for success. It’s comforting, yes, but it’s also a recipe for failure.

The Comforting Illusion of Planning

Planning focuses on controllable costs: building a new plant, hiring more staff, launching a new product. These activities feel productive because they’re within our immediate control. But as Martin emphasises, they often lack coherence and a clear path to achieving overarching company goals. While we’re busy planning, our competitors are busy strategizing – figuring out how to win.

What is Strategy, Really?

Martin defines strategy as “an integrative set of choices that positions you on a playing field of your choice in a way that you win.” It’s a theory about why you choose a specific playing field and how you’ll outperform everyone else on it. This theory must be coherent, actionable, and translate into a winning outcome.

The Southwest Airlines Example

While major airlines were “planning” routes and schedules, Southwest Airlines had a strategy. They chose a different playing field: becoming a more convenient and affordable alternative to bus travel. Their strategy involved point-to-point flights, a single aircraft type (737s), no meals, and online booking. This resulted in significantly lower costs and, consequently, lower prices, allowing them to dominate their chosen market.

Escaping the Planning Trap

So, how do we escape the comfortable but ultimately ineffective trap of planning?

• Embrace the Angst: Strategy involves uncertainty. You can’t prove it will work in advance. Accepting this discomfort is key to leadership.

• Clarify Your Logic: Articulate the assumptions underpinning your strategy. What needs to be true about your company, the industry, the competition, and your customers for it to succeed? This allows for adjustments as the market evolves.

• Keep it Simple: A single-page strategy outlining your playing field, winning approach, required capabilities, management systems, and aspirational goal is ideal. This clarity facilitates execution and adaptation.

Planning vs. Strategy: A Choice Between Playing and Winning

Planning is playing to participate. Strategy is playing to win. Planning feels safe, but it guarantees mediocrity. Strategy involves risk, but it offers the potential for extraordinary success. Which will you choose? As Martin concludes, “If you plan, that’s a way to guarantee losing. If you do strategy, it gives you the best possible chance of winning.”

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