Strategic Thinking vs Strategic Planning - What's the Difference?

Posted on 10/26/2017 by Robin Scheu

In 1994, Henry Mintzberg wrote an article for the Harvard Business Review called The Fall and Rise of Strategic Planning. He made the case that strategic thinking is critical to success and that "the most successful strategies are visions, not plans."

Now many organizations are talking about and using strategic thinking instead of or in addition to strategic planning. So what's really the difference?

Here is one explanation from Six Disciplines:

Are strategic thinking and strategic planning -the same thing?

While they certainly related and complementary, thinking strategically and planning strategically are two different concepts.

Let's first consider strategic thinking, which involves viewing your organization from a holistic perspective.

Research has determined that strategic thinking can be explained through seven dimensions:

  1. A vision of the future
  2. Strategic formulation and implementation
  3. Managerial role in making strategies
  4. Control
  5. Managerial role in implementation
  6. Strategy making
  7. Process and outcome

Strategic thinking is extremely effective and a valuable tool, and requires developing skills in creativity, problem solving, teamwork, and critical thinking. The good news? It's a skill that can be learned.

Steps in building strategic thinking skills:

  1. Critically examine and evaluate the existing situation.Understand what is being done, if it needs to be done that way, and fight hard against the "we've always done it that way" mentality.
  2. Look at your business as a holistic system. Strategic thinkers view their businesses as a whole: its strengths, weaknesses, opportunities and threats.
  3. Focus on the future. Strategic thinking is future-oriented. Before considering the viability of ideas, consider their potential contribution to the future of your organization.
  4. Continuously ask for feedback from your customers.Strategic thinking cannot be effective if done in a vacuum.
  5. Get realistic data for confirmation. Strategic thinking requires making predictions about the future and forecasts must be realistic. Gather reliable data to justify and confirm your predictions.
  6. Align your thoughts to your organization. Review your organizational structure to determine if the organization and key leaders are in place to fulfill your vision, otherwise it's a pipe dream.
  7. Be ready to consider change and unexpected challenges.Flexibility is a critical element of strategic thinking.
Strategic planning, on the other hand, is a continual planning process that relies on strong strategic thinking. When done correctly, strategic planning is not a one-time or annual event. It's an on-going process, reviewed quarterly, that affects the organization's initiatives, plans, and activities. 
 
BOTTOMLINE: Both strategic thinking and strategic planning are important - even vital to your organization - and neither can be ignored.
 
If you prefer, the chart below was developed by Jeanne M. Liedtka, a faculty member at the University of Virginia's Darden Graduate School of Business and former chief learning officer at United Technologies Corporation.
 



Strategic Thinking

Strategic Planning

1. Vision of the Future

Only the shape of the future can be predicted.

The future is predictable and specifiable in detail.

2. Strategic Formulation and Implementation

Formulation and implementation are interactive rather than sequential and discrete.

The roles of formulation and implementation can be neatly divided.

3. Managerial Role in Strategy Making

Lower-level managers have a voice in strategy making.

Senior executives obtain the needed information from lower-level managers, and then use it to create a plan.

4. Control

Relies on self-reference.

Asserts control through measurement systems, assuming that organizations can measure and monitor important variables both accurately and quickly.

5. Managerial Role in Implementation

All managers understand the larger system.

Lower-level managers need only know their own roles well.

6. Strategy Making

Finding new strategic outcomes and implementing them successfully is more important than evaluating them.

The challenge of setting strategic direction is primarily analytic.

7. Process and Outcomes

The planning process is a critical, value adding element.

The creation of the plan is the ultimate objective.