Strategic Planning vs. Strategic Management: What’s the Difference?

Strategic planning and strategic management are two distinct yet interconnected components of achieving a business’s long-term goals. Understanding the difference between strategic planning versus strategic management is crucial for organizational success.

Strategic planning is the approach used in forming an organization’s direction (e.g., its vision, mission and priorities), while strategic management is the overall process of achieving that direction, from planning to executing.

Managing the action plans, projects, and life cycle of the strategic plan is crucial to accomplishing your business’s long-term priorities.

Sometimes, middle market businesses excel at looking forward and identifying opportunities, but struggle with execution or vice versa. Therefore, it’s important to break down what strategic management involves.

Strategic management can be divided into three phases: think, plan and act.

1. Think

 The thinking phase comprises both an external assessment and an internal assessment, which are key components of a SWOT analysis.

SWOT analysis in strategic planning is a crucial tool for evaluating your organization’s strengths, weaknesses, opportunities and threats. You want to consider external factors, such as emerging opportunities for your business to leverage in the future and threats you can minimize or work around.

Technology can pose both an opportunity and a threat; your business must decide what your vision is and how developing technology fits into that vision.

Your internal assessment should evaluate your capabilities, processes, culture, and change readiness. It’s incredibly important to understand how flexible and ready for change your organization is.

Developing a good strategy doesn't automatically equal buy-in from your employees. Culture and change readiness can blindside you when you’re trying to implement your strategy if you don’t take them into account beforehand and effectively manage change.

You should also take your customers into consideration during the SWOT analysis.

What feedback are you getting from them? Do they seem interested in a product or service you traditionally haven’t provided? Is a competitor disrupting your industry or gaining some sort of competitive advantage over your business? Don’t leave out your customers when evaluating your organization’s strengths and weaknesses, as well as external opportunities and threats.

2. Plan

This is where strategic planning comes into play. We previously discussed the seven essential parts of the strategic planning process, but essentially, the process involves using your SWOT analysis to form your long-term vision and drill down from there into your strategic priorities, goals, and action plans. Various strategic planning frameworks can be employed to guide this process effectively.

A key aspect of strategic planning is to include organizational drivers of success. Make sure to ask what “success” and “done” look like. You should be able to measure your progress to see if you’ve met your goals. Determine those measurements during the planning process, not after. This is where key performance indicators (KPIs) come into play, helping you track progress toward your strategic objectives.

3. Act

Executing your strategic plan involves a few vital steps.

First is creating a performance culture to give your employees visibility into what your goals are, how they’re being met and when you successfully complete a goal. Since every employee plays some sort of role in the strategic plan’s execution, visibility and communication must start at the top. Otherwise, those employees are less invested in the plan, and you run into change management problems.

To overcome those problems, you must also build accountability. Developing a culture of ownership allows every employee to feel like they own the results and successes of your plan. This is where strategic management frameworks like the balanced scorecard can be particularly useful. The balanced scorecard approach helps in translating strategy into action by aligning organizational activities with the vision and strategy of the company.

Not every plan will go smoothly without any readjustments. Be sure to act on the measurements you set in the planning phase. Are you seeing the results you expected? Is there something new you can leverage?

Reviewing and evaluating your strategy execution to adjust course is one of the most important strategic management actions you can take. This process of continuous evaluation and adjustment is crucial for maintaining strategic alignment and helping to ensure your organization stays on track to achieve its goals.

Every employee plays a role in strategic management

While communication and metrics are two big parts of strategic management, don’t discount prioritization. You can’t ask your employees to do two full-time jobs, so you need to balance strategy with everyday work so production doesn’t grind to a halt and make your strategy a moot point. Prioritize goals and action plans and build out a timeline that takes into account the everyday work.

Also, make sure you keep an eye on how people’s roles change because of the strategy. Updating job descriptions and titles helps ensure employees feel aligned with a shared vision and are committed to the strategy. Clearly communicate performance measurements at all levels and find a way for employees to provide feedback in return. This feedback loop is essential for maintaining strategic alignment and ensuring that your strategic objectives remain relevant and achievable.

And in the end, remember that strategic management is an iterative, ongoing process, not a single event. When you have the plan, the buy-in, and the measurements, you’ll still need to review and readjust to help your organization stay on the path to achieving its long-term vision and goals. This may involve revisiting your SWOT analysis, reassessing your strategic positioning and adjusting your resource allocation as needed.

If you’d like to learn more about strategic management and how it can help your business grow and reach its goals, check out our strategy and operations advisory services. Our team can help you develop and implement effective strategic planning frameworks and strategic management frameworks tailored to your organization’s unique needs and goals.