Operational planning is a useful tool for detailing the strategic goals an organization has. One of the problems with it is the fact that many people mistake an operation plan for a strategic one. For this reason, today we are going to shed some light on the topic. We will start by looking at an operational planning definition, see how it differs from a strategic plan, as well as analyze the different types.
Operational Planning Definition
Operational planning refers to the activity of preparing a plan by a part of an organization. The plan is meant to define clearly the actions the organization will take to support the strategic objectives and plans set by the upper management. Usually, it shows milestones, what conditions need to be fulfilled for success, etc. Furthermore, it’s the basis and the justification of the annual operating budget request. For example, a 5-year strategic plan needs 5 operational plans that are funded by 5 operating budgets.
The operational plan answers 4 questions:
- Where is the organization now?
- Where do you want it to be?
- How do you get there?
- How do you measure progress?
Purpose of Operational Planning
The purpose of this plan is to outline, in detail, the operations of the business, as well as future growth projections. It is, in fact, a framework that supports the management approach. Moreover, it covers a lot of aspects, from staffing, financial, marketing, as well as other resources required by a company. Without this plan, the business risks not staying focused or start losing its operating efficiency.
Types of Operational Plans
To offer a better understanding of operational planning, first, you need to look at the entire planning process that takes place within a business. There are three levels of planning:
- Strategic plan (Top Management) – company mission, future goals, ambitions, set in a general tone;
- Tactical plan (Mid-level Management) – specific actions to achieve the strategic plan objectives, but not in much detail. It refers to a specific division of the company;
- Operational plan (Low-level Management) – specific plans for activities and process that enable the tactical plan. It applies to a unit of the company, such as a department within a division.
Besides these, we should also include transition planning, which refers to the steps taken for a succession to happen.
The operational planning phase can further be divided into two forms:
- Single-use plan – carries out a course of action that, most likely, will not be repeated in the future. It is used to achieve unique objectives inside the business;
- Standing plan – covers activities that appear repeatedly over a certain period, with the purpose of solving repetitive problems.
What Does an Operational Plan Include?
Depending on the size of the project or business, the level of detail and formality can vary. What’s important is to think about the long-term development of the company. Here you have a couple of things you need to include in this plan:
- Risk assessment;
- Stakeholder priorities;
- Socio-cultural and gender issues;
- Financial requirements;
- Opening and closing procedures;
- Incident management advertising and marketing;
- Opening and closing time;
- Ordering and purchasing;
- HR management;
- Clear objectives;
- Calendar of events;
- Monitoring progress, etc.
However, this is just a brief list. The operational planning phase can include much more items, or much less. Finally, it all depends on your own priorities and objectives.
Operational Planning vs Strategic Planning
You may have noticed earlier, when we exposed the entire planning process inside a company, that operational planning isn’t the same thing with strategic planning. Indeed, they do have similar structures and goals, a reason for which many people mistake them for one another. However, let’s see how do they differ.
The first thing we need to mention is the period each of the plans covers. The strategic plans refer to a large span of time, even years or decades. Meanwhile, an operational plan is only set on one year. For example, the stock replacement procedure only covers a short time span, today, tomorrow, next week, etc.
As we mentioned earlier, strategic plans are very general. They are nonspecific and contain few details. Even so, it should be able to reflect the general direction set on the business operations. At the same time, an operational plan contains fine details about the way in which tasks need to be carried out each day
A strategic plan affects a large array of activities found at an organizational level. For instance, it would include the worldwide marketplaces chosen worldwide, the fiscal goals, as well as the size of the workforce. On the other hand, an operational plan has a restricted scope, referring only to the operations of one department.
4. Management Level
The top we presented above also included references to the level of management involved with each of the plans. Naturally, higher-level managers develop strategic plans. The main reason for this is the fact that they are very complex and refer to the broad-based goals of the business. At the same time, operational plans only have short-range objectives, which can be met in maximum one year. For this reason, they are assigned to middle- and lower-level managers.
How Does Operational Planning Impact Other Areas of the Business?
The operational plans of a company have a positive influence on other areas of the business. It helps set the goals in place and achieve certain targets and objectives. It has a positive impact on the operational and physical sides in what concerns staffing, the business appearance, daily procedures, etc. Consequently, many people choose to have an operational plan because it ensures all the areas of a business are being used to the maximum.
Check out this interesting TED Talk on this topic:
To draw a conclusion, operational planning isn’t just an option when it comes to organizing your company. It’s essential if you want to keep track of all the resources, as well as to align the lower-levels activities with the general goals of the entire company. Finally, remember that it’s not the same thing with the strategic plan, even though many people make this mistake.
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