Strategy:

Nice buzzword, but it is surely one of the most mis-used words in the business lexicon.  And, as Forbes columnist John Rutledge says, “ .. every new management buzzword brought into the boardroom reduces shareholder value by 10%.”  Buzzwords are a short-form for ideas, but let’s understand the ideas before we get enamored with the words.

The difference, in economics at least, between a “plan” and a “strategy” is that:

a strategy explicitly takes into account the expected actions and reactions of others—customers, competitors, suppliers, either individually, or group-wise according to some model of expected, presumably rational, behaviour. 

Plans, on the other hand, typically assume a passive environment or an environment where the actions of others, if incorporated, are assumed independent of the planning process. 

You can have a plan to dig a hole in the ground—the dirt you dig out isn’t going to change its properties to thwart your efforts—but if you’re the government and you want to re-structure the tax system, you’d better have a strategy! 

Most business planning starts with some assumptions, but it is all too easy to overlook that these assumptions can change—and you end up with a plan for an assumed future, not a strategy for an imaginable but essentially unknowable future!