Most companies I have worked with have standard strategic planning systems. These are normally covered in their annual plans crafted after a series of off site business strategy sessions attended by senior executives where the strategic directions of the company for the next three years are signed off.

The typical planning activity kicks off from this exercise and the strategic directions are then translated into three-year business objectives detailed into operating and financial action plans. This ends up as the annual budget. The current year’s business plan document is typically the output of this exercise.

In most organizations, a single set of strategies and business objectives is applied throughout the planning process. The single strategy model, however, is focused on the here and now. It aims to align the business functional units in order to attain operational excellence and achieve short-term growth and profit targets, typically within two years. In single strategy planning, it is expected that this will lead to a sustainable dominant market position.

Most businesses have been successful in running and growing using a single strategy. This was possible only because in the past, business environments have remained stable over long periods with occasional moderate changes. Not so today. Since the eighties, competitive pressures within the domestic industry and from globalization have made it impossible for most companies to craft and implement a single strategy that will be adequate for its current and future needs. The current global financial turmoil has changed all our belief that business conditions will remain stable.

The concept of having dual strategies is not new, something like forty odd years. Many successful companies like Nestle, SKF, Amazon.com and even some local companies have been adopting it for years. Interestingly, this concept initially received little attention until recently mainly because it is only during the last two decades that information technology has allowed businesses to adapt to rapidly changing business environments.

It is really quite simple: strategies for “today’s business” are different from the strategies for “tomorrow’s business”. To put it another way, the decisions of yesterday determine how effectively and efficiently a business is run and will perform today. Extending the thinking, business decisions today will determine how the business will perform in the future. It is important to note that the distinction between single and dual strategic models is not in the time horizon. The thought process utilized and the areas of focus are completely different. Both processes, however, complement each other. A business will not succeed if it does not have both processes in place and adequate attention is given.

Many years ago, in an article written by Dereck Abell for the Sloan Management Review, he propounded the distinctions between the two. The difference is in the vision. Today’s business needs a vision focused on how the business has to operate given its resources and target markets and what roles each functions will play to do these. Tomorrow’s business, on the other hand, is built on the vision for the future and on the strategy of getting from here to there. He compares this to a military general who upon surveying the battlefield, knows that not only strategies but also tactics and proper deployment of military resources are necessary to win the battle. At the same time, he also must realize that to win future battles, he needs to be able to reconfigure his resources and organization.

According to him, there are four major differences between “today’s business strategies” and “tomorrow’s business strategies”. First planning today entails that the business model is defined in terms of target customer and how their needs would be satisfied effectively and efficiently. Planning for tomorrow requires that the business model be redefined for the future. Second, today’s planning focuses of shaping the business to meet the needs of the customers. Planning for the future calls for reshaping the business to compete in the future. Third, planning today needs alignment of all the resources of the business with today’s strategies. Tomorrow’s planning requires an organization that is aligned with current business needs while tomorrow’s planning will need a reorganization of the business that will address prospective business challenges. Taking the business into the future requires attention is given to both strategy planning systems. One should be careful of falling into the trap of leaving one for the other. Email: rbo811@yahoo.com