What Is The Distinction Between Strategic And Operational Planning?
Strategic And Operational Planning: When working with businesses, the distinction between strategic and operational planning is a common misunderstanding. While the two are inextricably will link, it’s essential to understand how they differ and how your company can use both types of plans to achieve its objectives.
After meeting with their team and creating a list of tasks and projects for the short, medium,. And long term, many businesses mistakenly believe they have developed a strategic plan.
On the other hand, strategic planning is a high-level macro activity that focuses on your company’s priority strategic areas and goals for the medium to long term.
A solid strategic plan acts as a road map to get you from where you are now to where you want to go. On the other hand, an operating program focuses on micro or daily and weekly actions that can assist your staff in meeting organisational goals. As a result, strategy is in your business. While operations are in your industry. We get a lot of questions like this. Are they the same? No, what’s the distinction? Do you require both?
A strategic plan outlines your organisation’s mission, vision, and high-level objectives for the next three to five years. It also considers how you’ll measure those goals and the major projects you’ll undertake to achieve them.
An operational plan summarises what your department will focus on shortly, usually the following year.
Your strategic plan shares your vision for the future, while your operational planning lays out how you’ll get there daily or weekly.
Both concepts describe your company’s plans for the future but in different contexts.
Here are five main differences between them that you can use as guides to make sure you’re using these two concepts the right way.
Table of Contents
Strategic Planning Vs Operational Planning: The Five Main Differences
Your strategic plan outlines long-term goals for the next three to five years. What you will do to achieve those goals in the short term (usually the next fiscal year) will outlin in your operational planning.
Focus On Objectives
Your strategic plan aims to outline the company’s long-term vision and how all departments should work together to achieve it. The focus of your operational planning is not company-centric but department-centric. There can be an overlap between the departments, but that is the exception and not the rule. Large departments may require multiple operating plans.
Generation Of Plans
- Your organisation’s senior leadership team (the executive team or city council, for example) is responsible for creating the strategic plan.
- Once created, the strategic plan will drive cross-functional teams to work together to ensure the strategy is successful.
- Each department should have a leader or team responsible for its operational planning.
- Although each operating plan will design for a single department, its successful implementation will lead to the entire organisation’s success.
- For example, your marketing team has a set of activities to increase visibility.
- These activities should translate into more sales opportunities and, ultimately, more revenue for the organisation.
- The budget for your strategic plan comes from your strategic budget, not your operating budget.
- Your organisation can implement a budget that aligns part of your budget directly with your projects or strategic initiatives.
- This is a different approach from putting a budget into each of your divisions or departments.
- The budget for your operational planning comes from your department’s annual budget.
- If your department’s annual budget needs cuts, consider what items don’t align with your strategic plan and cut those first.
- For example, suppose your strategic plan defines a marketing goal to establish a solid online presence. In that case, your trade show budget should receive budget cuts before I publish an article on your blog.
- When you report on your strategic plan (usually both annually and quarterly), your strategic planning committee or executive team will want to see how your company performs on your chosen measures.
- These discussions should stay pretty high depending on the meeting, so they don’t get bogge down in the details.
- On the other hand, your operational reports summarise hundreds of projects or tasks that people in the department are working on.
- Monthly operational debriefing meetings give leadership, and the rest of the department, an indication of the status of each project.
- Unlike your strategic report, updates on operational projects can be anecdotal or qualitative (as it is often challenging to quantify actions that will not linke to measures).
- Some companies have a running text comment, either in an Excel field or a Word document.
This commentary will updat weekly or monthly, even if there are no direct measures for that part of the operational planning.