Corporate planning season is upon us. With only about a hundred days left in the year, execs are limbering up for the annual marathon of meetings to decide next year’s goals, metrics, and resource allocations. Even those with financial years that don’t start in January are feeling the pull to plan.

In doing so, though, they risk falling into a common trap: confusing planning with strategy. 

Make no mistake, good planning is a crucial factor in any company’s success. But that planning should only be the result of a separate effort to review and revise the overall company strategy. With any luck, that strategy, in turn, grows out of a bigger vision of why the company exists and its place in the world.

Unfortunately, though, these very distinct ideas tend to get merged together under the comforting rubric of “strategic planning,” which in reality just means… planning. Strategy doesn’t get more than a cursory glance. And vision gets relegated to Super Bowl ads and success posters.

I recently had a conversation with a chief strategy officer at a media company that perfectly captured the issue. She wanted help figuring out how to confront her business’s growing competitive challenges. Core revenue is declining. New businesses have been slow to develop. And a raft of new competitors have appeared. In other words, she needed a strategy. But she needed to be finished in two weeks because that was the deadline for next year’s planning cycle.

My advice to leaders in that situation is to just go ahead with the planning, assuming whatever strategy is in place now. But once that’s underway, it’s time to take a step back and face the bigger questions head-on.

The Dangerous Comfort of Planning

Planning is the implementation of a strategy. It’s the process of agreeing and measuring specific actions, such as product launches, cost cuts, or geographical expansion, that over the next year should move an organization toward its longer-term strategic goals. My friend, the renowned management guru Roger Martin, describes planning as a “thoroughly doable and comfortable exercise” that doesn’t question assumptions.

Strategy is a very different beast. If planning is about templates and trade-offs, strategy is about insights and ideas.

A winning strategy should focus on how a business can play and win in a changing and uncertain world over a longer time horizon of 5-7 years. This makes it an inherently uncomfortable process, involving experimentation, risk, and coming face-to-face with painful scenarios such as how competitors or other threats could kill you.

Beyond that lies vision—the bigger “why” of a company’s existence. That could be a higher social purpose—such as Patagonia’s “to save our home planet”—or a more practical vision of where a company sees itself in the world over a longer time horizon stretching out a decade or more.

In short, if you know what you’re going to do and when, you have a plan. If you know what might kill you and what you’re going to do about it, you have a strategy. And if you know why you should even exist, you have a vision.

Strategy is the crucial bridge between vision and planning, but very few companies spend enough time on it and even fewer are really good at it. In a society that prizes doing things over learning things, planning feels good. It makes leaders and teams feel productive. It enables them to focus on the present rather than the future, which most of us are wired to do. And it’s much easier and more comfortable to tackle than the deep learning required for strategy work. 

To be sure, strong planning and execution are vital qualities for businesses to have, and are more important at some times and in some industries than others. During the pandemic, many companies succeeded by just focusing on execution issues like overcoming supply chain challenges. Good planning was a differentiator.

For pharma companies Novo Nordisk and Eli Lilly, the big challenge right now is the planning and operational one of meeting exploding demand for Ozempic and Zepbound, their respective GLP-1 weight-loss drugs. Similarly, Nvidia’s main challenge now is to make enough of its GPU chips to satisfy booming demand for AI capabilities. These companies can focus on execution because they have a winning strategy.

But many companies in a range of industries are crying out for a strategy rather than a plan. 

For example, dating apps are struggling as Gen Z singles desert them in droves, jaded by endless swiping and the lack of human connection provided by these sites. The Bumble CEO’s recent pitch for a near future in which personalized AI bots will “date” other users’ bots seemed tone-deaf to the fundamental reason why subscribers are leaving.

Companies like Hinge, Tinder, and Bumble don’t lack a vision—they see their place in the world as helping people to hook up and form relationships. And they have plans, which aren’t working so well. What they desperately need are new strategies centered on somehow restoring trust and humanity to the online dating experience.

Streaming platforms are in a similar mess. Many platforms spent big on content to compete with Netflix but are now losing subscribers who are overwhelmed with viewing choices and are only willing to pay for a couple of services rather than four or five. They need a strategy that differentiates them in a crowded market of similar services.

Why Planning Leads to Sameness

Therein lies one of the biggest problems of focusing solely on planning: when you focus solely on execution, you often end up copying the strategy of everyone around you. And that can lead to a sea of sameness.

Novo Nordisk and Nvidia may be coasting right now, but only thanks to a defining vision and strategy that were set years ago. 

In Novo Nordisk’s case, the Danish firm’s development of Ozempic was born out of its decades-old push to become the leading developer of more effective ways to treat diabetes. The seeds of Nvidia’s dominance were sown by CEO Jensen Huang’s strategy of differentiating the chipmaker at least as far back as 2006 when he announced the CUDA software technology. That enabled Nvidia’s GPUs to go from chips used in video gaming to more general purpose ones that could be used to power a range of computing functions.

But no company can rest easy in the planning phase and ignore strategy for long. Novo Nordisk needs to be strategically wary of recent progress by other pharmaceutical firms to develop GLP-1 treatments that can be swallowed as pills instead of being injected. AMD’s recent $4.9 billion acquisition of AI infrastructure company ZT Systems is the latest signal that Nvidia’s dominance may be under threat and that it will need a revised strategy to defend it.

For leaders who are crashing into their annual planning cycles now, this isn’t a call to tear everything up and begin a strategy and vision quest. That would likely be a recipe for confusion and chaos. They should go ahead with the planning, but with a clear awareness that it is just planning. Planning season is upon us. But strategy and vision need their own seasons, too.