Strategy vs Strategic Plan: Who Makes the Big Picture Decisions?

In the corporate world, the terms ldquo;strategyrdquo; and ldquo;strategic planrdquo; are often used interchangeably, but they serve distinct purposes. This article delves into who is responsible for making strategy versus who oversees and approves the strategic plan. By understanding the roles of the utives and the board of directors, companies can better align their vision with actionable steps for success.

The Shift in Terminology: From Strategic Plan to Strategy and Implementation Plans

Letrsquo;s retire the term ldquo;strategic planrdquo; and replace it with two distinct concepts: strategy and implementation plans.

Strategy addresses the big picture questions, such as ldquo;Where do we playrdquo; and ldquo;How will we winrdquo;. It provides a clear roadmap of what the business will and will not do, along with metrics to measure progress. A well-crafted strategy is not just about setting goals; it must also be understandable and actionable for everyone involved in executing the plan.

Who Makes the Strategy?

The utives (in the broadest sense, including executives and key team leaders) lead the process of creating the strategy. While the board of directors provides oversight and governance, the utives are the primary drivers. They are in the best position to understand the market, internal capabilities, and operational needs to make informed decisions.

This collaborative effort involves insights, feedback, and suggestions from various stakeholders across the organization. The strategy should be clear and simple enough for everyone to understand, ensuring that the planrsquo;s intent can be executed with ease.

The Role of the Board of Directors

The board of directors plays a critical role in the approval and oversight of the strategy. Their responsibilities include ensuring that the strategy aligns with the interests of shareholders and other stakeholders, as well as adhering to legal and ethical standards.

The board reviews the strategy, provides valuable input, and ultimately approves it. Their role ensures that the strategy stays aligned with the organizationrsquo;s long-term goals and benefits all stakeholders.

Implementing the Strategy: The Plans

Once the strategy is in place, the utives must develop detailed implementation plans. These plans break down the strategy into specific, actionable steps. They define who, what, when, where, and with what for each task, ensuring that the strategy is executed effectively.

The key difference between strategy and a strategic plan lies in their scope and detail. While the strategy provides the high-level direction, the plans offer the nuts and bolts of implementation. This ensures that the strategy is not just a document but a living document that adjusts to changing circumstances.

No Plan Survives First Contact with Reality

Itrsquo;s impossible to predict every detail or anticipate every problem. Therefore, smart leaders focus on the desired outcomes and leave many decisions and details to the individuals executing the plan. For example, in the military, every plan includes the ldquo;Commanderrsquo;s Intentrdquo;, which states the essential outcome in simple terms, such as ldquo;protect this bridge.rdquo;

Continuous Adaptation

Markets are constantly evolving, as everything responds to everything else. To remain relevant, the entire organization must be constantly monitoring, learning, and adjusting its plans and strategy as circumstances change.

By making the strategy and implementing it a team sport, companies can benefit from big-picture clarity guiding day-to-day operations. This approach ensures that the organization stays aligned with its goals and that the strategy is successfully executed.

Conclusion

Understanding the role of the utives and the board of directors in strategy and implementation is crucial for any business. The utives lead the creation of the strategy, while the board provides essential oversight. Implementing this strategy requires detailed plans that can adapt to changing situations.

By embracing this approach, companies can ensure that their strategy is not just a document but a dynamic, executable plan. This ensures that everyone in the organization is aligned and working towards common goals.

/ ONWARD! /