Main Argument: Strategy and planning are different and merging them as "strategic planning" is often misleading.
Planning
Definition: Set of activities a company plans to undertake.
Characteristics:
Includes activities like improving customer experience, opening new plants, launching talent programs.
Comfortable because it involves controllable resources and costs (e.g., building, hiring).
Typically lacks coherence and does not ensure company success.
Strategy
Definition: An integrative set of choices positioning the company on a chosen playing field to win.
Theory:
Requires coherence and actionability.
Specifies a competitive outcome, not controlled by the company.
Involves customers' decisions which are not controllable by the company.
Example: Southwest Airlines Strategy
Aimed to be a convenient substitute for Greyhound at competitive prices.
Choices included point-to-point flying, single aircraft type, no meals, and encouraging online bookings.
Resulted in lower operational costs and competitive pricing.
Differences Between Strategy and Planning
Control:
Planning: Company controls the inputs and resources.
Strategy: Involves desired outcomes dependent on uncontrollable customer decisions.
Comfort:
Planning is comforting due to control.
Strategy involves embracing uncertainty and potential outcomes.
The Pitfalls of Planning
Competitors may develop winning strategies while others focus on planning.
Example of strategic neglect: Major U.S. carriers vs Southwest Airlines.
Transitioning to Strategic Thinking
Challenges:
Strategy involves risk and cannot be completely proven in advance.
May cause managerial discomfort due to uncertainty.
Approach:
Recognize the inherent angst in strategy.
Clearly lay out the logic of the strategy.
Observe and adapt based on unfolding realities.
Avoid overcomplicating — a clear, concise strategy is beneficial.
Conclusion
Key Takeaway: Engaging in strategic thinking, despite its discomfort, offers the best chance for success, unlike planning which may lead to complacency and eventual failure.