Many executives have participated in strategic planning exercises, but is designing a strategy the same as planning the activities of a company in order to improve its operational efficiency?

Designing a "Strategy" is associated with decision making, assuming risks and choosing between options. Many executives with the complicity of their respective boards of directors, have confused strategy design with an ordered planning process that lists where they plan on investing and how much will be spent. Projecting costs is something that the company can do more easily than project income. The amount spent is a decision made by the firm, but the amount sold, is a decision made by the client. To mitigate this anxiety, executives design very organized five-year plans and use a standard format. They start with a vision and a mission and follow it up with the launch of initiatives, geographic incursions, the development of projects and then these are turned into financial projections. While this project makes them feel satisfied for having planned their route, this does not constitute the design of a strategy and confusing these concepts is a dangerous practice, as stated by Roger Martin, in an excellent article in the Harvard Business Review. Dr. Martin qualifies "Strategic Planning" as a big lie. The actual strategic process means choosing between alternatives, making difficult decisions and its purpose is not eliminating risks, but making decisions to reach desired objectives.

The "Strategy" is the result of reasoning: What it would take to reach such objective and whether attempting it is realistic. Therefore, Martin warns us of 3 traps to be taken into account. The first, is confusing planning or budgeting and designing an effective strategy for the firm. The second, is focusing solely on costs, including confusing cost control with the remote ability to control sales and, the third, classifying themselves under predetermined models for strategic design by exactly following the guidance of certain "management" gurus. For example, confusing the "distinctive skills" of the firm with a strategy that consigns more clients to products or services with a high added value. While it is important to have "distinctive skills", these by themselves, do not constitute a strategy. To avoid these "traps", first we recommend that the strategic planning process be explained simply. In second place, accept that the strategy is never perfect and is not designed to precisely predict income and spending. In third place, ensure that the formulation of the adopted strategy fits a logical reasoning. The following questions must be answered. What do we know about our client's preferences? About the development of our industry? About current and potential skills? And above all, how our "distinctive skills" match up with the selected strategy. We will need to go outside of our comfort zone, brainstorm ideas, and question them over and over again, until we find the right road to take.