For most founders, understanding the difference between “Strategy Setting” and “Strategic Planning” can be like trying to tell two nearly identical shades of blue apart. I get it, these concepts seem like they’ve been plucked straight from the consultant’s handbook or a business lecture hall. It took me a long time to understand those as well, and I completely understand why it might feel overwhelming at first. That’s exactly why I’ve put pen to paper (or fingers to keyboard) today. I’m here to demystify these terms for you, so that you can gain clarity on what strategy setting is all about and when and how to use strategic planning.
Understand the difference
What is Strategy Setting?
Strategy setting is all about making decisions that clarify your business’ direction. It usually outlines:
- Market Positioning: Understanding precisely the core and adjacent markets your business aims to serve.
- Growth Pathways: Charting out the ways and means to expand your business, be it through product diversification, market penetration, or other avenues.
- Competitive Analysis: Identifying your business’s competitive advantages and areas of vulnerability to understand how you stack up against competitors.
- Customer Experience: Designing the kind of interaction and experience you want your customers to associate with your business.
- Vision: Establishing a clear, inspiring future state that your business aspires to achieve.
- Internal Alignment: Ensuring that your team, processes, and culture are aligned with the vision to effectively support your strategy and business model.
It’s important to understand that strategy setting is not a one-time exercise or a task to tick off during an annual off-site. It’s a dynamic process, constantly evolving with market shifts, customer feedback, and internal developments. It’s a journey of understanding, adapting, and positioning your business to not just react but to proactively lead in your market.
What is Strategic Planning?
Strategic planning serves as the roadmap for transforming your current operations into your ideal future state. It meticulously outlines:
- Current Functions Assessment: Evaluating the existing state of various business areas, from sales and finance to operations.
- Future State Vision: Defining where you want these functions to be in the future, aligning with your overall business goals.
- Goal Setting: Establishing clear, achievable objectives to guide the transformation from current to future state.
- Priority Identification: Pinpointing which areas need immediate attention and which can follow suit, ensuring a strategic approach to change.
- Project Implementation: Launching specific initiatives and projects tailored to bridge the gap between the present and the desired future.
- Team Alignment and Collaboration: Fostering a culture of cooperation, ensuring that all functional leaders and teams are on the same page and working towards the common goal.
Strategic planning is execution-focused and dives deep into the specifics of each business function. While it can involve intensive sessions, possibly spanning a day or more, the ultimate goal is to solve operational challenges and streamline functions for optimal performance. These high-level problem-solving sessions unite functional leaders, empowering them to address issues head-on and drive the business forward.
Know when to use one or the other
When should you do Strategy Setting vs Strategic Planning
Both strategy setting and strategic planning play ensure your business thrives, but they function optimally at different times and for distinct purposes:
Strategy Setting: This is the heart and soul of leadership, primarily resting on the CEO and the Executive Team’s shoulders. It’s not a once-a-year task, but a continuous project. The clearer the vision you paint, the more effectively you can translate it into actionable steps. When you become more consistent with this exercise, you’ll ensure that strategy remains relevant, actionable, and in line with the business’s evolving needs.
Strategic Planning: Think of this as your business’s regular health check-up. It’s a mechanism to identify gaps, challenges, and new opportunities. Most businesses find a quarterly rhythm effective, ensuring they’re on the right track and making adjustments as needed. These sessions aim to refine the journey towards achieving the overarching strategic vision.
Symbiotic Relationship: These concepts aren’t stand-alone pillars but rather two sides of the same coin. Employing one without the other is akin to having a GPS without a destination (or vice versa). It’s crucial to set the strategy clearly and then plan meticulously for its execution. Neglecting either leaves room for ambiguity, misdirection, and the potential risk of veering off course.
Time to get practical
How to Set Your Business Strategy
1. Identify Key Components: Before diving deep, segment your strategy into definable components. This could be anything from market positioning and customer experience to competitive advantage and long-term vision.
2. Deep Dive: Once you’ve identified a component, give it your full attention. This focused approach ensures each aspect of your strategy gets the depth of thought it deserves. Jot down everything that comes to mind regarding the chosen component, be it ideas, challenges, opportunities, or even doubts.
3. Analyse and Refine: With your ideas on paper, it’s time to dissect and understand them. Review each point, refining and shaping them into actionable decisions. Remember, strategy isn’t just about what you choose to do but also what you consciously decide against.
4. Seek Clarity: Work iteratively on your strategy. Refine, discuss, challenge, and adjust until you have a clear, actionable strategy that aligns with your business’s goals and is something your team can rally behind.
5. Document It: Transform your strategy into a living document. This doesn’t just act as a reference but evolves over time. As you encounter new insights or face changing circumstances, revisit and adjust this document to ensure it remains relevant.
How to go about Strategic Planning
1. Establish a Regular Cadence: Dedicate time for you and your team to engage in strategic planning sessions. While many companies opt for quarterly meetings with an annual review, the frequency can vary based on your specific needs. Some businesses even incorporate strategic discussions into their weekly operational meetings.
2. Prepare Your Agenda: Once you’ve scheduled these sessions, begin crafting a detailed agenda. Consider the following:
- Task Ownership: Who is responsible for what?
- Progress Tracking: How are these tasks progressing?
- Pre-Session Information: What information should be shared and reviewed before the session to ensure productive discussions?
- In-Session Essentials: What materials or data should be brought into the meeting to facilitate decision-making and strategic alignment?
3. Define Your Outcomes: For a highly-effective strategic planning session, you should always have clearly defined outcomes. Try to:
- Set Clear Priorities: Establish what needs to be accomplished before your next strategic planning session.
- Measure Success: Decide on the criteria that will be used to evaluate the success of your initiatives.
- Assign Responsibilities: Determine who will be responsible for each task and establish deadlines.
Knowing the difference between strategy setting and strategic planning is not just a matter of semantics—it’s a crucial skill that sets visionary leaders apart. As a scaling founder, your ability to navigate these waters confidently will shape the future of your business. But remember, you’re not alone on this journey.
At Metavolve, we’re here to provide the expertise, tools, and support you need to thrive. Curious to dive deeper and bring strategic mastery to your venture? Reach out to us today and let’s explore how our Strategy Development service can be the catalyst for your business’s next big leap forward.