There is a massive misconception in management—possibly the biggest elephant in the boardroom. A plan and a strategy are not the same thing. Many CEOs, new ones mostly, make the mistake of thinking that their annual plan is their strategy, and the implications of this for competitive advantage and sustained growth are enormous.
As a student of strategy frameworks and approaches, I’ve found that Roger Martin is a person who gets it right. In one of his most popular YouTube videos, he explains the difference between a plan and a strategy and why so many CEOs get it wrong.
Because it’s such a fundamental building block of strategic planning, one of the first things that needs explaining in strategy and OKR consulting workshops is that a strategy is all about making coherent choices that will guide your actions. These choices allow you to develop aligned goals and measures. A plan, on the other hand, can be just a disparate list of actions without any real coherence or direction.
The second thing we always explain is that strategies and aligned OKRs are just hypotheses or bets on the future. They are not guaranteed success but rather educated guesses about what might work. On the other hand, plans are all about controlling resources with relative certainty and can often lead to a false sense of security that everything is going according to plan.
Finally, it’s important to remember that winning rarely comes from aspiring to be a little bit better than last year. While most CEOs are busy making plans, the real sector leaders are busy developing coherent choice-based strategies that explain how they are going to win a specific group of customers.
What is certainly true when you see it in action is that by focusing resources on executing a clear and coherent strategy rather than just a list of actions, you can set your company on a path to success and stand out from your competitors.
We would love to talk to you if you lack a winning strategy and want to use OKRs and other frameworks to execute your strategic hypothesis properly and accurately assess its effectiveness.
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