Strategy vs tactics: what’s the difference?

In The Art of War, Sun Tzu likened strategy to the journey and tactics to the steps. The journey can be slow and defeating if you don’t take the necessary steps. In the realm of business, strategy is the general direction a company proceeds in to achieve the desired state. The tactics are the processes or systems they use to accomplish that end.

Strategic vs tactical planning components

The company vision is conceived and developed by the chief executive. Upper-level managers come up with plans for the organization. Strategic plan components include:

• Company mission and vision. The strategic plan states why your company exists and its purpose. You need to be able to state in clear language why the company came to be and what it needs to accomplish in offering its products or services.
• Core values. The company’s core values consist of the vital principles of all employees. These statements hone the company’s culture and keep them at the top of stakeholders’ minds.
• Goals and objectives. These are the long-term objectives and goals that take years to achieve.
• Strengths, weaknesses, opportunities, and threats (SWOT). This is what the company is facing in its desire to fulfill its mission. A SWOT analysis lets you know about the pitfalls and assets the company has to adapt to along the way.
• Directly responsible individuals (DRIs). While the strategic vision is for the entire organization, individual units are also responsible for fulfilling their parts. This states who is responsible for which part, including performance and output metrics.

Tactical planning

Strategic planning is the ‘what’, while tactical planning answers ‘how.’ These are the short-term processes that involve day-to-day activities that will roll up into the business unit’s strategic plan. Tactics are more narrowly focused. Each unit head must work individually on their own specific goals and collaborate with other units where necessary. Unit heads and lower-level managers come up with their own planning components, but in general, they need to consider:

• Timeline. If they’re dealing with a five-year goal, for example, then it makes sense to break it down into yearly goals with monthly or quarterly milestones.
• Tools necessary. The strategic vision is usually about doing something beyond the current capabilities. As a result, the tactical planning needs to include the tools they need to upgrade.
• Specific actions. Tactical planning requires careful thought about each subsequent step. These steps are going to rely on key performance indicators (KPIs) that help stakeholders know the business is making progress and achieving stated milestones.

The one thing to remember about tactical planning is that it has to be flexible.

Relationship between tactical and operational planning

Operational planning is the arrow that links strategic and tactical goals. These plans discuss milestones and detail the pieces of the strategic plan that will be implemented during a specific period. Operation plans answer:

• Where the company is at any given time
• Where it wants to be at each specific period
• How it intends to get to that destination
• How stakeholders will know how they’re progressing when compared to goals

Contingency Planning

Due to the length of strategic plans, uncertainties can creep in. Risks arising from fraud, environments or legal issues can affect both operational and tactical planning. That’s why it’s important to implement a contingency of planning answers. Contingency planning goes deeply into planning for the threats discovered during SWOT analysis.

Forms of contingency planning involve data loss and natural disasters. While it does add to the planning time, being able to get things up and running quickly gives your company a competitive edge.

Benefits of planning

Companies spend thousands of dollars to create or update their strategic plans because they understand the many benefits of doing so. Some of these benefits include:

• The ability to be more proactive. Because you’ll be using data and analysis to guide your planning, you set your organization up to be more proactive. This means you’ll become more competitive, rather than panicking.
• Improved efficiency. The narrow focus of tactical planning guides the company’s operations within a stated framework and leads to higher efficiency.
• A more durable business. Business is a boom-and-bust rollercoaster, where circumstances beyond your control can cause revenues to sink. Strategic and tactical planning builds in some foresight that can help it ride out the challenges.
• Increased profits. When you have insights on customer segments and how you can tailor advertising to your ideal customer, you can set your business up to capture more of the market and revenue.

Strategic and tactical planning process and example

There are five general steps in the planning process;

1. Assess your position. This requires both internal and external subject matter experts to properly assess your current position. This is where the research data comes in, and with the external expert, you have a more objective pair of eyes to gather insights.
2. Prioritize. Ask yourself which objective will have the biggest impact on your company and its position in the market. This will help you focus on that win and gain the necessary momentum to continue.
3. Start planning. Guided by your company’s mission and vision, develop a plan from the top down. Identify areas of improvement, ensuring that every initiative reinforces the long-term goal.
4. Manage the plan. Execute the plan, communicate with teams about metrics and stay on track.
5. Review and revise. Your plan is a living document that needs to change as circumstances warrant.

Quick Example:

Scenario: Company sales are down, and after some analysis, you realize that one of the main reasons is the quality of leads coming from the marketing team. It seems that the two teams are dealing with different sets of data, resulting in a mismatch.

Strategy: Improve alignment and collaboration between marketing and sales.

Some tactical plans include:

• Syncing data between the two departments
• Sharing the customer data with marketing
• Using that data to create more targeting lead generating assets
• Using A/B testing for the assets to find the best draw

Mastering your strategic planning is an ongoing exercise. Make it a priority to refresh company strategies and tactics regularly, to ensure relevance.