Operational versus Strategic Planning: What’s The Difference?

Are you curious about the distinctions between operational and strategic planning, as well as how to improve at each?

You’re in the proper location.

This article will help you understand the main distinctions and how to stay focused on the strategic direction for optimal operational efficiency while keeping up with the urgency of operational activities.

We will discuss:

• What Sets Operational Planning Apart From Strategic Planning?
• The Four Essential Elements Of A Successful Operational Plan
• Example of a Strategic and Operational Plan

How Do Operational And Strategic Planning Differ From Each Other? 

Strategic planning determines an organisation’s long-term course and objectives by considering internal resources, market trends, and business requirements. Organisational goals are divided into short-term and daily goals by operational planning. The former creates the overarching organisational strategy, and the latter oversees the plan of action to carry it out.

Let’s examine the distinctions between operational and strategic planning in more detail.

What Does Strategic Planning Entail?

The process by which a company determines its direction or strategy and how to allocate its resources to follow it is known as strategic planning. To secure the organization’s expansion and standing in the market, it incorporates a high-level strategy that moulds the organization’s vision and long-term business objectives.

CEOs and boards of directors are among the top-level managers who are in charge of strategic planning. These leaders must take into account both internal organisational competencies and resources as well as a range of external elements, including market trends, economic circumstances, and the competitive environment.

Every year or whenever there are significant changes in the market, the strategic strategy is usually evaluated. Planning typically takes place over the next three to five years.

Recommended Reading: STRATEGY LEVELS. What they are & HOW TO APPLY them

Operational Planning: What Is It?

The implementation of your strategic strategy is outlined in operational planning. It consists of targeted, time-bound activities, projects, and endeavours that advance the accomplishment of strategic goals.

Department leaders and middle management are in charge of writing these operating plans. They are in charge of overseeing the distribution of resources to meet these targets and outlining the steps necessary to accomplish the overall goals.

Operational plans, which concentrate on the immediate, daily company activities, are often created for the current fiscal year and can be further divided into quarterly or monthly goals.

Operational plans require regular evaluations and modifications, ideally, every quarter or month, to ensure alignment with long-term objectives. 

Recommended Reading: The Art Of Creating A Successful Annual Operating Plan

The Four Essential Elements Of A Successful Operational Plan

To successfully bridge the gap between the company strategy and operations, you should take into account the following factors both during and after your operational planning process:

Ready for execution

An operational strategy that works is both executable and in line with the strategic ambitions. Increasing team responsibility and concentration is essential to the success of your operational plan.

Establishing a single, identifiable owner for each project, KPI, aim, or target in your plan is a useful strategy for achieving this. That individual will be in charge of making sure the task is finished on time. They will be in charge of its advancement even if they may have collaborators and a team working towards it.

Communicated

An operational plan cannot be successfully carried out unless all team members have received a thorough briefing on their responsibilities and the goals of the plan. For convenience, it has to be shared on easily accessible platforms and thoroughly documented.

Keeping everyone informed is facilitated by holding regular check-in meetings or sending updates on progress. This openness encourages teamwork in a setting where accomplishments are acknowledged and obstacles are promptly resolved.

In line

An operational plan’s primary purpose is to achieve the strategic goals. It takes time and money to create an operational strategy for a department or area that isn’t in line with corporate objectives.

It consumes resources and divides the company’s focus between two (or more) different goals. The hardest thing big businesses have to do is get everyone in the organisation to align with the company’s long-term vision and strategic goals. There’s one simple explanation for this.

The majority of instruments used by most businesses are inefficient. The dynamic qualities of Excel sheets and presentations are insufficient to match measurements and actions with the aims and objectives of the company. It takes weeks to update these documents and distribute them again inside the company. Businesses must find a way to afford for internal communications to be delayed in this way.

Watched over and assessed

An operational strategy by itself does not ensure its success. What counts is the continuous attention to observing and assessing how it is being carried out.

This strategy typically encounters four obstacles in larger organisations:

Excel and other static reporting technologies are not able to offer immediate insights.

Departmental silos obstruct the open exchange of information, which is necessary for real-time assessments and a comprehensive understanding of operations.

Data gathering and analysis in real time are made more difficult by disconnected enterprise software platforms.

Review sessions that are irregular and unstructured frequently fall short of expectations by focusing more on daily chores than on strategy alignment and key performance indicators (KPIs).

Delays result from all of the foregoing, and the data is no longer as helpful for making decisions in real-time.

Developing stronger reviewing practices at every organisational level is one strategy to improve execution control. Have monthly or quarterly strategy review sessions. For there to be real benefits, such as increased responsibility and targeted execution, this is necessary.

But you have to make that habit frictionless if you want it to stick. Reduce the amount of time needed, for instance, to gather data and create reports.

Recommended Reading: The Operational Strategy: Making It Work For Your Organization

FAQ

What is the difference between business planning, strategic planning, and operational planning?

Business planning outlines a company’s go-to-market plan, financial projections, market research, and business purpose. Strategic planning is focused on determining the organization’s long-term goals and objectives. Operational planning is the process of breaking down the goals and objectives into specific tasks and activities that need to be completed to achieve them.