A Plan Verses A Strategy

by Ken Vincent, Featured Contributor

I HAVE FOUND that most managers at various levels in all businesses have developed some significant skill at devising plans.  Probably because they are forced into that by owners, bosses, lenders, and necessity.  However, few develop the same level of skill at devising strategy, and there is a big difference between a plan and a strategy.  Without a strategy the plan probably won’t be achieved.

Budgets, mission statements, and five year business plans are all just plans.  How you will get to those objectives requires strategic thinking.

StrategyIf your plan is to increase revenue by 5% over a defined period of time, you have a plan.  But, then you must devise the actions needed to achieve that.  It may involve deeper penetration into a given market, or opening a new market, and how you accomplish those requires strategy on several fronts.  More training of your sales team, restaffing, realigning your advertising focus, pricing changes, changes to the products and services you offer, and even cooperation with your competition.  It often requires negotiating in a different fashion and redefining trigger points where you walk from a piece of business and many other considerations.

Large hotels cooperate to secure a citywide convention, often through a convention and visitors bureau.  Then the hotels duke it out to be selected as the host or headquarters hotel.  However, while that hotel gets a lot of publicity, the large banquets, and most of the VIPs, they also have to give a lot to get that designation.  Comp suites, meeting space, free coffee breaks, and even rate reductions.  Your strategic planning may be to not push for being the headquarters of a given convention.  You will still fill your hotel without giving all the perks required to win the designation.

Lets take a simple example.  You are coming up to union negotiations.  You need to liberalize the restrictions on some work rules as they are becoming costly and burdensome as your business grows.  Okay, you have a plan.  But, the union isn’t likely to just say that is a good idea.  If they agree at all they will want trade offs.  What will you offer in exchange.  Another part of the plan.  Now comes the strategy of how do you introduce that idea without throwing up a brick wall at the outset?  If you simply offer X in exchange you have only told them that you really need the change and they can extract more from you in the process.  You have entered that slippery slope of no return.

So, you devise a strategy.  You know that the union wants three things, two of which are essential to sell the new contract to their membership.  You also know that there are some things they will never agree to.  So you open with giving one of their needs in exchange for taking some job titles out of the bargaining unit and eliminating the check off system.  That of course will never fly.  Then you move slowly to giving them their two must haves, and trading your first requirements for liberalizing the work rules.  Now you have a strategy.

Where else do you use strategy to achieve a plan?  How did you develop those skills and have you taught strategic planning to your staff?  Have you seen plans fail due to lack of good strategic planning?


Ken Vincent
Ken Vincent
KEN is a 46 year veteran hotelier and entrepreneur. Formerly owned two hotels, an advertising agency, a wholesale tour company, a POS company, a leasing company, and a hotel management company. The hotels included chain owned, franchises, and independents. They ranged in type from small luxury inns, to limited service properties, to large convention hotels and resorts. After retiring he authored a book, “So Many Hotels, So Little Time” in which he relates what life is like behind the scenes for a hotel manager. Ken operated more that 100 hotels and resorts in the US and Caribbean and formed eight companies. He is a firm believer that senior management should share their knowledge and experience with the next generation of management.

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  1. Nice article, Ken! It’s an important distinction to make, and that process of considering the tradeoffs we are willing to make in order to achieve our goals is important as it helps us stay the course when outside pressures or distractions threaten to knock us off.