Strategic Thinking vs. Strategic Planning: What’s the Difference and What Difference Does It Make?

By Ann Johnson
Director, Center for Nonprofit Management

Possibly no other operational function is changing as much as the way in which organizations and businesses create strategy. Unpredictable environmental changes make three to five year plans often hopelessly out of date after one or two years. And just trying to “keep up” while staying innovative and entrepreneurial in providing product or service; developing, understanding and reaching out to new audiences and community; and being flexible while creating stability, is often unsustainable.

Strategic direction, strategic thinking, strategic operations, and strategic planning describe a variety of concepts and functions to meet these and other challenges. And often, they are misused or misunderstood.

Appreciating the essential differences between strategic planning and strategic thinking specifically may help you discern if your organization can or should move from one into another and how your strategy development can help you deliver more successful, long-term results.

What is strategic planning and why do it?

Planning gives stakeholders a road map for the near future. It strengthens capacity to design services or products. It creates guidelines, opens dialogue, engages a broad spectrum of people in ownership (stakeholders and shareholders), and it builds a foundation from which to articulate baseline goals, values, performance, and results. Committed, well-trained people will govern, work, and thrive in environments where values and goals are clear and the road map is widely appreciated and understood.

Common terms used in strategic planning:

Mission describes the purpose of the organization—the reason it exists.
Strategic direction helps guide the organization toward its preferred future.
Values are agreed upon behaviors within an organization.
Goals are specific milestones set to reach in the near future.
Actions are specific activities or steps that move your work toward completing the goals.
Outcomes are early-, mid-, or long-term measurable results; these are used frequently in the nonprofit sector to help assess your impact in the community.

How will you know if your planning is working?

You will have created a future, short-term destination with guidelines for getting there. If your organization embraces dynamic planning, the road map itself will change as needed. You will design, change, and adapt the course to reach the destination.

When not to use strategic planning:

  • Your organization or company is in crisis — address the crisis first.
  • You are trying to avoid communication, leadership, power, or financial management problems.
  • Your resources are inadequate. Design a short-term plan to build people, time, and cash flow instead — then do strategic planning.
  • Intuition and instinct work well among the leaders. If leaders accurately assess what’s really going on in the organization — its strengths, internal/external influences, natural collaborators, and true competitors — then allow for and encourage the freedom for them to naturally focus on and link functions to goals.
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