The Difference Between Strategy and Strategic Planning

Think strategy and strategic planning are the same? Think again. In this video, Steve breaks down the real difference—and why getting it wrong can stall your business growth.

He explains how true strategy is about making bold, intentional choices, not just filling out a planning template. You’ll learn how to align your actions with your goals and use a simple framework to turn big ideas into real results.

If you're ready to think more clearly and lead more confidently, this one’s a must-watch.

TRANSCRIPT:

In this video, I wanna explain the difference between a strategy and a strategic plan because they are not the same thing, but oftentimes I hear business leaders use these terms interchangeably with their teams, and if you fall down the same trap, it can be really problematic for your organization.

Look, when I started my first company, I didn't have a strategy, let alone a strategic plan, and as a result, I made a lot of mistakes and I left a ton of money on the table. And I don't want you to make the same mistakes.

Instead, I wanna help you to fast track your path to success. So let me explain the difference here. Starting with strategy.

A strategy is a set of interrelated choices a company makes to overcome its overarching strategic problem. So at the top here, we have strategic problem. In other words, every organization is grappling with an obstacle that stands in the way of its success.

And if it doesn't overcome this obstacle, whether it's losing market share, whether it's struggling to attract and retain the right type of talent, or whatever it may be, if they don't overcome this strategic problem, it could be disastrous for the organization. So whenever I work with companies and I start building out their strategy, I always begin with the strategic problem. Then organizations need to explore possibilities for overcoming the strategic problem, and it involves walking through four quadrants and making choices in each of these steps.

So number one, in the first quadrant, we have shared aspiration. And I'm gonna abbreviate here. But shared aspiration is when a company decides what does winning look like.

Not just for itself internally, but also externally by considering other stakeholders, such as vendors, investors, and especially customers. When organizations can decide on their shared aspiration, then they're ready to move to the next box, which includes market focus and position. I'm abbreviating and my handwriting is terrible.

My kids tell me all the time. So I'll be very clear so you can grasp these very important concepts. But in box two here, we have market focus and position.

And this involves a company deciding who its ideal customer profile will be and the channels it will pursue to deliver its products and services to this ideal customer. It also involves deciding the makeup of a company's products and services and the geographies in which they'll compete and a variety of other decisions related to where it will compete. So when a company can make choices about its market focus and position, then it moves on to the next box, which includes competitive behavior.

When it comes to deciding how to compete, organizations can pursue a differentiation strategy, a cost leadership strategy, or a focus strategy. And a part of a focus strategy is defining which niche a company will pursue. And as part of that segment, it may decide to do a hybrid approach of the two other strategies that I just mentioned.

In other words, an organization can pursue a focus strategy and in that focus, they can differentiate themselves or they can choose to be a cost leader. So that's how competitive behavior unfolds is when an organization decides which type of strategy it will pursue in order to define its competitive behavior. Also, organizations need to choose which operating model is best fitting based on the strategic option and evaluate the activities that the company is pursuing in order to deliver value in its market focus and position.

So you can see how each of these decisions build upon another. In the last box, I have resources and returns. And in this step of the process, a company decides what resources will they need in order to make the strategic option viable.

In other words, what do they need to execute successfully on their strategy? And in addition, what is the upside or the returns of this given option? So as you can see here, a strategy is a set of interrelated choices to help an organization to overcome a strategic problem, to build competitive advantages, to enhance the customer experience, and to foster innovation. Now at the center of all these squares right here, I like to draw a circle because this is where the customer should live. Because when you're making these choices for your organization, you have to make it customer centered.

Because if you don't have the customer at the center of your strategy, then you're just pursuing a very selfish strategy. And if you're not walking in your customer's shoes and you're not empathetic, then you're gonna be disrupted by another organization that is very customer centric. So the customer has to be at the very center of all these choices.

This is a strategy, folks. Next is a plan. So once you explore your strategic options and you choose which possibility is best for your organization, and you go out there and test it, because remember, we'll roll out a strategy, that's our intended strategy, but then as things unfold, really an emergent strategy arises, and that's how we build, measure, and learn along the way.

But you need a plan in order to take this strategy and turn it into tangible results. So that's where a plan comes into place. So you take this, and as part of the Coltivar framework, we help companies establish IARs, which stands for Initiatives, Actions, and Results.

And really what we're doing here is we're taking organizational goals and we're breaking them down into bite-sized pieces, which includes an initiative, what the organization aims to achieve, their objective, the action steps they will take to push their initiatives forward, and then the key results that they will measure to determine whether or not their initiatives are on track. In conjunction with this, organizations need to define their KPIs. This is how they will measure their operational and financial performance along the way.

So as you can see here, this is a strategy. Then organizations use IARs to develop a plan. They establish initiatives, actions, and results, and that's a part of the plan to go execute and bring forth the strategy that they've designed here.

So as you can see here, there's a huge distinction between strategy and strategic planning, and that's why it's important to disaggregate these two things so you don't confuse them, because otherwise what you'll do is you'll say your strategic plan is your strategy and you'll fall into the trap of just listing out a bunch of initiatives without walking through this critical process of identifying your strategic problem, your shared aspiration, your market focus and position, your competitive behavior, and your resources and returns. If you want help with this process, you can go to Coltivar.com. I'll leave a link below in the video description. In there, you can take a free course called A Million Dollar Strategy Blueprint.

It's free, there's no gimmicks, you don't need to sign up for anything. You can literally go to Coltivar.com, click on the button, and start watching the course today. My goal is to help you to get to a million dollars in profitability, and once you get there, to go to the next level.

Now, before you sign off, I wanna hear from you. Does this make sense? If so, can I get a yes in the comments box below? Also, I'd love to hear your feedback, so drop any comments you have down below as well, and I'll be sure to get back to you. And until next episode, all the best to you as you take these principles and apply them to your business.

Cheers.