A strategy is a theory, not a plan

I often meet people with a new business, and as we talk, I eventually ask them what their strategy is. And nearly every time, I get back a plan.

A plan is a list of things you’re going to do, with some details about how you’ll go about doing them. A strategy is a theory as to why you’ll be successful.

A strategy can be wrong. A plan, since it’s basically a task list, can’t really be wrong. A plan can be incomplete, misinformed, or poorly carried out. But since it doesn’t have a point of view, it’s always just neutral.

But a strategy can be executed perfectly… and still lose. Your theory can be proven wrong.

A strategy can be that you want to be the company with the absolute best user experience. Or that you’ll capture the top of the market with the most luxurious offering.

If those theories are correct, then you can hit it big (by then executing on them with the right tactics). OXO has made a killing selling user-first kitchen products. Diptyque has convinced millions of customers to spend north of $80 on a candle.

But maybe user experience isn’t actually the winning strategy – perhaps cost is all that matters in this market. Maybe there isn’t actually demand for a luxury offering in your vertical. If these are the case, it doesn’t matter how good your SEO is or how many billboards you put up – you’re out of luck.

Plans are tactical. Running ads on TikTok is a tactic. Hiring a celebrity spokesperson is a tactic. They’re just things you do.

Ideally, these plans serve your overall guiding strategy, but in practice, they often do not. Roger Martin from the University of Toronto outlines this difference elegantly:

That theory has to be coherent. It has to be doable. You have to be able to translate that into actions for it to be a great strategy.

Planning does not have to have any such coherence.

We tend to fall into planning when we should be thinking about strategy because it’s a more comfortable place to spend our attention. Plans are making purchases and investments, hiring people and doing sales calls. Plans have a finite beginning and end, and a degree of control – but strategies are about outcomes, which are outside of your control.

Strategies have uncertainty. And they are inherently simple. You can get lost in the weeds with hundreds of pages of plans. Done right, your strategy is just a single idea.

So, what’s your strategy – your theory?