Recently i encountered this really interesting question, What is the difference between Long term Plan and Strategy? This is mostly because we are overdosed with startegy courses in our curriculum. But i think in a way college has succeeded in its goals as at least after 3-4 full credit courses and 5 trimesters, students are asking such type of questions and some one is actually thinking of answering it too.
Hmmm.. so here is my try at this. Long term plan is menifestation of your long term goals. Strategy is "how" and "why" of this goal. Always easier to understand with examples. Suppose i want to own a flat in mumbai then my long term plan is to have a flat in mumbai by 2015. The next obvious question anyone will ask me is "What is your strategy for this?" and i would say my strategy is to get a decent job and to earn a lot of money to do this. But before this there is another big question could be raised about the whole plan itself. "Why do you want to own a house in mumbai?" and i may reply "My strategy is to own a flat here for few years and as the mumbai property is witnessing exponential growth, i want to sell it at a very higher price to make a lot of money."
Suddenly someone can ask me "Indian job market is in big crisis because of financial turmoil, what's your strategy now to earn a lot of money to buy a flat here?" and i may reply " I have changed my strategy and now i will get into teaching profession as i see that as a good opportunity and insulated from whole financial mess." My long term plan remains same but my strategy to achieve that has changed now.
Mumbai property prices go down and someone can ask me "What about your strategy of selling flat and making a lot of money" and i may reply " The plan remains same but now my strategy is to not to sell it but to rent it out as rent prices have not seen great decline as compared to property prices."
I think its easier for individuals and corporates to set short and long term plans but what is difficult is to formulate startegy for same and even more difficult is to implement those strategies.
6 comments:
Taaliyan !!! Good perspectives i must confess.. Examples were good.. I would love to see a few finance related articles explained in such a lucid manner..
Yes strategy is the why and how part..as c.k prahalad says.. strategy is having something u want to get in say 10 years and then start a roll back process in order to get ways to achieve that.. same as what u say "how"
but then there is a difference between plan and objective.. owning a flat in mumbai in 2015 is a Objective - not a plan... Plan, according to the google definition is "a series of steps to be carried out or goals to be accomplished" so it is somewhat similar to strategy... as this also highlights the how part..
ya it may not say the "Why" part.. whereas strategy can have that component in its fold..
I have a classic HBR case on what is strategy... will surely read it up and comment on this piece again :D
@ Maddie.. Thanks, i surely will write on this financial mess
@ Bedi...Interesting...those small milestones i would call short term plans...long term plan can not be completed without having shorter milestones or short term plan in place...strategy is to question this series itself..why i am doing this..why this long term goal, why these milestones or not another set of milestones...
Looking forward for ur comments from HBR case
bhainss ki poonch... main dekh raha hun ki kaafi gyaan pell rakha hai maine...
Actually I have read the HBR on "what is strategy". And it is simply how you are different from your competitor and how you are ensuring that difference is maintained...
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