Logo

Strategic Planning Vs Operational Planning: What’s The Difference?

Download our free Operational Strategy Template Download this template

Looking to learn the difference between strategic and operational planning and how to get better at each? 

You’re in the right place. 

In this guide, you’ll discover the key differences and how to keep up with the immediacy of operational tasks without losing sight of the strategic direction. 

We’ll cover:

  • What Is The Difference Between Strategic Planning And Operational Planning? 

The 4 Key Traits Of An Effective Operational Plan

Strategic and operational plan example.

Free Template Download our free Operational Strategy Template Download this template

What Is The Difference Between Strategic Planning And Operational Planning?

💡Strategic planning sets an organization's long-term direction and goals, considering market trends, business needs, and internal resources. Operational planning breaks down organizational goals into day-to-day activities and short-term objectives. The former establishes the high-level, organization-wide strategy, while the latter manages the roadmap to achieve it.

Let’s dive deeper by taking a closer look at the differences between strategic and operational planning.

strategic planning vs operational planning comparison table

What Is Strategic Planning? 

Strategic planning is the process by which an organization defines its strategy or direction and decides upon the allocation of its resources to pursue this strategy. It includes a high-level approach that shapes the organization's vision and long-term business goals to ensure its growth and position in the market. 

Responsibility for strategic planning rests with top-level management, including CEOs and Boards of Directors. These executives need to consider a variety of external factors—like market trends, economic conditions, and the competitive environment—as well as internal organizational capabilities and resources.

Strategic plan is typically reviewed annually or when major market shifts occur. Its planning time frame generally spans across the next three to five years.

📚Recommended read: Develop An Iterative Strategic Planning Process (+Template)

What Is Operational Planning?

Operational planning outlines the execution of your strategic plan. It includes specific, short-term actions, projects, and initiatives that contribute to achieving strategic objectives .

annual operating plan diagram

The responsibility for creating these operational plans rests with middle management and department heads. They are tasked with detailing the actions required to achieve the overall objectives and managing the allocation of resources to hit these targets.

Focusing on the immediate, day-to-day business operations, operational plans are generally developed for the current fiscal year and may be broken down further into quarters or monthly objectives.

To maintain alignment with long-term goals, operational plans need regular reviews and updates, ideally on a quarterly or monthly basis. 

📚Recommended read: How To Create An Effective Annual Operating Plan (+Template)

Here are some things you should consider both during and after your operational planning process to succeed in bridging the gap between the business strategy and operations: 

Execution-ready 

An effective operational plan is aligned with the strategic initiatives , but most importantly, it’s executable. To ensure your operational plan's success, increase accountability and focus of your team.

One effective way of doing this is to define one specific owner for every project, KPI, goal, or objective in your plan. That person will be responsible for the timely completion of the item. They might have contributors and a team working to achieve it, but they’ll be the ones responsible for its progress.

👉 How Cascade helps you: 

In Cascade , you can easily assign one (or more owners) to a specific initiative, project, or KPI. You can also add key milestones that should be achieved. This helps you enforce accountability and ensure everyone knows their responsibilities.

Communicated 

Successful execution of an operational plan requires that all team members are fully briefed on their roles and the plan's objectives. It must be documented clearly and shared on accessible platforms for easy reference. 

Regular meetings or messages to check in on progress help keep everyone on the same page. This transparency fosters a collaborative environment where contributions are recognized and roadblocks quickly addressed. 

With Cascade , you can build your operational plans with structure and ease by breaking down complexity into executable outcomes. You can bring in your different teams to speed up the collaboration and source progress updates to observe the execution of your operational plan in real time. 

cascade planner view

The main goal of an operational plan is to make the strategic objectives a reality. Creating a regional or departmental operational plan that doesn’t align with organizational goals costs time and money.

It takes up resources and splits the company’s efforts towards two (or multiple) distinct destinations. Aligning the entire organization with the company’s long-term vision and strategic goals is the toughest challenge large corporations face for one main reason. 

Most tools that most companies use are ineffective. Excel sheets and slides lack the dynamic properties to align actions and metrics with business objectives and goals. Updating these documents and redistributing them inside the organization takes weeks. Companies can’t afford this kind of delay in internal communication.

With Cascade’s Alignment & Relationships , you can visualize how your corporate strategy breaks down into operational and tactical plans. It allows you to directly link crucial business metrics and initiatives. By doing so, you can quickly identify misaligned initiatives and proactively address risks before it’s too late.

Monitored and evaluated 

Success of an operational plan is not guaranteed by the plan itself. What matters is the ongoing diligence in monitoring and evaluating its execution.  

In larger organizations, this approach usually meets four challenges: 

  • Static reporting tools like Excel cannot provide instant insights.
  • Departmental silos impede the free flow of information, essential for a holistic view of operations and real-time evaluations. 
  • Disconnected business software systems complicate the real-time collection and analysis of data.
  • Irregular and unstructured review meetings often miss the mark, concentrating on daily tasks rather than strategic alignment and key performance indicators (KPIs).

All of the above lead to delays and make the information less useful for real-time decision-making.

One way to get better at keeping execution on track is to build better reviewing habits on every organizational level. Run strategy review meetings on a quarterly or monthly basis. This is crucial to see actual results like improved accountability and focused execution . 

To make that habit stick, though, you’ll need to make it frictionless. For example, minimize the time it takes to collect data and build reports. 

👉 How Cascade helps you:  

With Cascade’s integrations , you can consolidate all your business systems and data sources in one place. 

Once you have all data centralized, you can use Reports and Dashboards to get an accurate and real-time picture of your organization’s performance. This will help you to quickly diagnose where you stand today and make fast, confident decisions.

What should an alignment between the overarching strategic plan and operational plans look like in practice? Here’s an example using Cascade’s Alignment Map . This map shows how operational plans are connected to, and support, the company's main objectives and primary focus areas within the strategic plan.

Alignment map in Cascade

Now, let's zoom in and examine a specific operational plan:

operational plan in cascade

In the example above, each strategic focus area contains several objectives. Each of these objectives breaks down into goals, projects, and KPIs. Every goal or project has a defined deadline, each KPI has a target value, and there is a designated owner responsible for achieving it. This granularity is crucial for any effective plan. 

The aim of using a dynamic digital environment for your strategy and operations is twofold: to enable real-time visibility and to decrease the number of tools used in the process.

A static graph showing how departmental plans align, without displaying their progress in real-time, is of little to no use.

What's the benefit of having three projects and their respective KPIs contribute to a higher-level KPI if updates to the children KPIs don't automatically reflect in the parent KPI?

Digitizing your operational plan addresses these inefficient activities by centralizing all information in one place.

Use Cascade To Centralize Your Strategy 🚀

Traditional approach to corporate strategy and planning often falters as it keeps strategy and operations in separate silos, struggling to synchronize them, particularly in larger organizations. Operational plan lags, failing to mirror rapid strategic shifts, and senior management is distanced from the frontline.

How can one expect spreadsheets and presentations to align thousands of employees worldwide? And how can leaders effectively manage business performance without a current snapshot of operations?

This alignment is impossible with static tools. Your strategy and operational plan must exist together in a centralized strategy execution platform like Cascade to bridge that gap.

Want to give it a try? Sign up today for free or book a 1:1 product tour with one of Cascade’s strategy experts.

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 in order to achieve them.

Popular articles

the links between business strategy and operational planning

How To Implement The Balanced Scorecard Framework (With Examples)

the links between business strategy and operational planning

The Best Management Reporting Software For Strategy Officers (2024 Guide)

the links between business strategy and operational planning

How To Set And Execute Strategic Priorities

the links between business strategy and operational planning

How To Implement Effective Strategic Planning In Healthcare

Your toolkit for strategy success.

the links between business strategy and operational planning

Links Between Strategic & Operational Plans

by Steve McDonnell

Published on 1 Jan 2021

A strategic plan defines what a company wants to do. An operational plan defines how it's going to do it. A company with a plan but no strategy and a company with a strategy but no plan for how to execute it are equally handicapped. Every element in each plan must be linked to the other to ensure that people spend their time working on the right activities and that those activities will make the company successful.

Strategic Plan

A company's strategic plan describes its vision for success. It focuses on the future of the company and how the future will be different from the company today. For example, a software company's strategic plan might be to provide industry-specific solutions that are tailored to the unique needs of each industry for five key industries. Another strategic goal might be to have at least 70 of the top 100 companies in each industry as a customer.

Operational Plan

An operational plan describes the tasks that people will carry out to accomplish the goals in the strategic plan. The plan helps employees understand what they need to do to help the company realize its vision. For example, the software company might plan to sponsor and exhibit at the main industry conference for each of the five industries. It might also implement training for software developers who work on each industry product to help them better understand the business issues that create the need for industry-specific features.

Link Strategy to Execution

Every goal in an operational plan should link directly to one or more goals in the company's strategic plan. If an operational goal can't be tied to a strategic company goal, it probably shouldn't be an operational goal. For example, if an operational goal of the software company is to develop a sixth industry solution but there's no strategic goal to expand to an additional industry, employees will spend time working on something that isn't a priority for the company. The quality of the solutions for the five key industries might suffer as a consequence.

Support Strategy With Actions

If you create a list of five goals you want to accomplish, but you only assign people to work on three of the goals, the success of the remaining two goals is doubtful. That's why every goal in a strategic plan must have one or more supporting goals in an operational plan. If a strategic goal isn't represented in any of the company's operational plans, it's highly unlikely that the goal will be realized, and executives should question why the goal is part of the company's strategic plan.

Bridging the gap between a company’s strategy and operating model

How well is your company’s operating model keeping up with its evolving strategy? Under pressure to respond more quickly to rapidly changing competitive circumstances, executives today are more likely to adopt a rolling strategic plan that they update as needed  instead of the three-to-five-year plan that was once standard. Reorganization follows, as often as every two years—followed by a new operating model that can take as long as two years to implement. Companies scarcely have time to complete one organizational redesign  before starting the next one.

Change at that pace can create a disconnect between a company’s strategy and its operating model—aggravating existing problems, creating arbitrary or disconnected reactions, and breeding organizational confusion. Efforts to redesign the operating model can be too tactical to create real value. They often move departments and individuals around and change reporting lines without fundamentally shifting how an organization functions to support its strategy. And the more the intuition and cognitive biases of executives shape the process, the more an operating model can lack the grounding in the business strategy, fact base, and competing perspectives that enable it to support a company’s goals. Instead of drawing out the link between the strategy and organization, the new design may merely confirm existing biases and social dynamics. 1 Chris Bradley, Martin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds , Hoboken, NJ: John Wiley & Sons, 2018.

Consider the case of one marketing-services company. After five years of rapid-fire acquisitions in an industry with a fast-changing business model, managers realized that they continued to lose ground to boutique competitors. They had acquired new companies to add similar capabilities and continued to believe in that strategy. Yet they also felt they weren’t getting the full benefit of all those acquisitions, even though business ticked up. They were at risk of failing in part because how they were working—their operating model—did not fully enable what they needed to achieve: their business goals. They knew they needed to update their operating model to keep up with the company’s evolving strategy, but they wanted to avoid the common pitfalls of operating-model design.

In situations like these, it is critical for managers to link a company’s strategy to its organization. Answering four questions will identify the capabilities and accountabilities required to enable a company’s operating model and unlock its strategy: What do we need to be able to do to create value? What distinctive capabilities do we need to create this value? Where do we have these capabilities today? And what are the implications for our operating-model design, especially on accountability and the corporate functions?

What do we need to be able to do to create value?

Strategy and operations in an airline.

Consider a major airline in the US market, where price wars and low product differentiation make it hard to maintain a competitive edge. Several years ago, executives there settled on a strategy to differentiate their airline by pushing costs down for passengers while maintaining a high-quality customer experience. A typical intuitive approach to designing an operating model might have led to one that cut costs across the board—stripping out overhead wherever possible and dropping support functions to bare-bones levels.

Instead, by answering the four questions linking strategy to organization, executives realized that a very different approach would help them achieve their goals. They determined that what was needed to create value against their strategy of being the lowest-cost carrier was keeping as many planes in the air as possible at any given time. Therefore, the distinctive capability they needed was to be able to turn planes around faster than any of their competitors. They knew that they only had this capability in pockets of the existing operating model, so they invested in creating the best trained and equipped ground crews in the industry. This had important implications for their operating-model design, including a need to reallocate resources to support training and ground operations, to ensure clear incentives for ground crews, and to ensure visible senior support for frontline operations and talent. This approach clearly linked the airline’s strategy to its organization.

Not all work is equally valuable, nor are all parts of an organization. In one airline example (see sidebar, “Strategy and operations in an airline”), executives determined that what they needed to be able to do to create value was to increase the time planes spent in the air moving customers and reduce the time spent on the ground. For any given company to achieve its strategy, there are always business units, process steps, or brand attributes that make outsize contributions to creating value relative to others.

This insight may sound simple, but companies often don’t know precisely what they do that creates the most value. They seldom sit down to identify two or three things that really matter, let alone to map the value chain of their industry to identify where the company needs to differentiate itself. That’s a critical step, since it determines not only how to design an effective operating model but also where to allocate resources.

In an example from the defense industry, completing this exercise revealed that the most important step for a major procurement organization was the very first one—having a clear, compelling, and well-designed purchasing strategy. If not done well, then subsequent steps in the value chain, lasting as long as 15 years for one product, would be painful, sluggish, and costly. To ensure that those steps could be completed quickly, effectively, and with minimal rework, the organization invested time, resources, and talent in the first step of the value chain—to ensure the up-front purchasing strategy produced a clear yet flexible direction for the product.

When the marketing-services company from our earlier example completed the value-mapping exercise, it realized that cultivating long-term high-revenue relationships was critical to its ability to meet its goals. Through analysis of the company’s accounts, the company concluded that its ability to serve large clients across multiple service offerings over consecutive years would create the most value and differentiate it from competitors.

For each of the above example organizations, the first and most important step in redesigning their operating models was to understand which specific parts of the work or steps in the value chain were most critical to creating value. Once they knew that, they could proceed to the next step and begin thinking through the capabilities they’d need.

What institutional capabilities do we need to capture this value?

Once a company understands where it creates the most value, it must identify the specific institutional competencies it needs. This usually means getting specific about what it needs to be able to do to deliver on the most important parts of the value chain:

  • For the airline that wanted to reduce customer costs, the institutional competency was exceptional ground operations. That included frontline employees with the technical expertise, problem-solving skills, and continuous-improvement mind-set—as well as the resources and authority—to increase plane-turnover rates.
  • For the defense-procurement organization, it was a clear and agile approach to designing strategy that included diverse stakeholders, such as engineers, program managers, contractors, and financial managers. These changes minimized costly delays and rework throughout the rest of the acquisition timeline.
  • For one food and beverage consumer-goods company, it was about rigorously managing supply and support-function costs to reinvest in digital capabilities and insight analytics while rethinking the innovation model to rapidly test new products and scale successful ones.
  • For the marketing firm, it was an ability to build enduring relationships with large, long-term clients by providing bundles, discounts, and related services.

Effective operating models are not designed to satisfy everyone; companies can’t be great at everything. Instead, they need to clearly identify where they can really excel in order to achieve their strategic goals.

Do we have these capabilities today—and where?

Here is where a company begins to look inward to understand whether the functions and capabilities it needs to create value currently exist—or need to be developed. Understanding whether there are distinctive institutional capabilities and where they lie involves answering a few further questions: Which functions and capabilities should reside within the corporate center versus within the business units? Who should be empowered to make key decisions and manage the budget or allocation of resources? What are the most critical roles within the organization, and do we have the best people assigned to those roles?

As agile ways of working become a source of value, executives in many industries will need to get better at identifying where the most desired capabilities already exist in their organizations, both organizationally and geographically. In this dynamic world, it is even more critical to map talent to value , putting people with the right skills and capabilities into the right jobs and the best people into the most critical roles. This will make it easier for executives to adapt to changes in strategy and operating model—as well as to address gaps between the current and desired future state.

Would you like to learn more about our People & Organizational Performance Practice ?

When executives in the marketing-services company looked closely at how their company created value, they learned that few of their existing account executives proactively opened doors for their colleagues, which limited their ability to build enduring, long-term relationships with their largest customers. In some cases, they lacked a clear understanding of what others could do. In other cases, they worried about damage to their own client relationships if their colleagues recommended services that fell short of expectations.

The company’s approach to profit-and-loss accountability exacerbated the problem: it booked revenues and costs entirely against individual service lines, rather than by customer. That reinforced existing silos of activity and limited the company’s ability to serve its largest customers in an integrated way. Without an account lead across all service lines, senior executives lacked structural or financial motivation to cross-sell services within large accounts.

What are the implications for our operating-model design?

Building a road map for operating-model design requires a company to prioritize existing strengths and redress strategic weaknesses—by reconfiguring, building, or acquiring new capabilities to ensure it can deliver on its strategic goals. Before embarking on the full operating-model redesign process , a company should articulate any implications coming out of the above assessment and ensure that the design of the operating model reflects them. For our airline example, these implications included ensuring frontline ground-crew employees were well paid and had clear paths to promotion. They also included narrowing the span of control for supervisors to emphasize coaching and support. And they included empowering ground-crew-operations leadership with decision rights.

For the marketing-services company, managers needed to develop and provide incentives for a group of client counselors who fully understood customers’ needs and could represent a wide array of marketing services. This meant higher pay, more training, and rewards for cross-selling and collaboration across service lines. It also meant creating a single senior account leader for each customer with clear lines of internal accountability and centralized communication with customers.

The company then shifted responsibilities to give account leaders time to develop their account-management skills and focus on relationship-building efforts. They updated their performance-evaluation process to encourage the right activities and outcomes. Finally, they brought together new business-development activities and project-delivery capabilities, which were previously scattered throughout the organization. This allowed teams to collaborate on integrative relationships with specific, high-revenue clients. These actions would boost the company’s ability to deliver on the function that created the most value for the company: delivering best-in-class project work across its various service offerings for the largest clients.

Experts in operating-model design have long known the importance of aligning a company’s operating model with its business strategy. Answering these four questions can unlock growth and provide clarity to what matters in an operating-model design.

Stay current on your favorite topics

Harris Atmar is a consultant in McKinsey’s New Jersey office, Camilo Becdach is a partner in the Southern California office, and Sarah Kleinman is an associate partner in the Washington, DC, office, where Kirk Rieckhoff is a senior partner.

Explore a career with us

Related articles.

Organizing for the age of urgency

Organizing for the age of urgency

Organizational health: A fast track to performance improvement

Organizational health: A fast track to performance improvement

Org_redesign_1536x1536_Original

Getting organizational redesign right

the links between business strategy and operational planning

  • Subscribe Today!
  • Current Issue
  • Machinery Lubrication Level 1
  • Machinery Lubrication Level 2
  • Oil Analysis Level 2
  • Oil Analysis Level 3
  • Machinery Lubrication Engineering
  • Online Training
  • International Training
  • Reliable Plant Conference
  • Machinery Lubrication Conference
  • Buyer's Guide

Click Here!

  •  Print

Connecting Business Strategy and Operations

Most companies have a strategic plan. However, over the years I have seen it time and again. Strategy, although perceived by some as defined, is largely misunderstood across the organization, not tied-in to operations and therefore poorly executed in operations and as a result ignored as the hour-to-hour, crisis-to-crisis mode of management becomes more firmly entrenched. Does your company have an operations strategy developed and being executed to carry the strategic plan? In all likelihood, the answer is no.

The most common missing ingredient to success in companies I have seen over the years is a well-planned and defined action plan for improvement that is being consistently and constantly well-executed. The symptoms can vary but, in essence, what is missing are: well-defined and agreed-upon business goals, operational objectives, action plans and performance measures.

As a result, some functions within the company are often diametrically opposed to one another and operate in a way that makes meaningful business performance improvement nearly to outright impossible.

Companies need a way to focus and stay focused. They need, in effect, a well-defined and well-executed strategy and action plan. No strategic plan in and of itself can help a company change and move ahead to capture more market share, improve products, increase customer satisfaction, or whatever is recommended within the context of a strategy.

Effective strategic business planning requires a dynamic, methodical process that keeps the organization focused on the right issues and actions. This means management must diligently define and redefine the four essential components of a successful strategy and tactical actions:

Strategic goals , which are brief statements of what top management wants to achieve in terms of growth, products, markets, profits and the like.

Improvement objectives , which are specific and measurable performance improvements set within certain timeframes and tied to specific strategic goals.

Action plans , which translate objectives into a specific set of steps, responsibilities, schedules and cross-functional teams for implementing the plans to achieve the objectives.

P erformance measures , which provide quantitative means of reviewing, evaluating and updating actions, improvement objectives, strategic goals, and process performance.

Done well and in concert, these four components allow an organization to think and manage strategically, to formulate objectives and action plans that mesh with strategic goals and to continually measure process performance results and to evaluate where there is need for further changes.

If a strategic plan is not translated and executed in this way, a company misses the opportunity to focus its entire organization on specific objectives and actions and to develop common values and beliefs.

Taking these steps requires courage, confidence, hard work and persistence, but the rewards can be nothing less than a winning strategy for your company and a focus on vision and a common purpose for the entire organization.

Putting operations into the loop

I’ve observed many times that top management feels far more compelled to focus on – and far more comfortable with – issues involving marketing, sales and finance than it does operations. Even if a company has actually developed objectives and actions plans for operations, it seldom has specific strategic impact results in mind.

Operational goals are, instead, couched in traditional performance measures that may have no correlating connection to the right goals, objectives and action plans. In today’s manufacturing environment, where supply chain management and lean manufacturing can contribute so much to customer satisfaction, working capital performance, lead times and profits, operations can no longer be left out of the strategic planning loop.

It is very common to find manufacturing companies operating with an implicit strategy that everyone “sort of knows.” Worse, when senior management is questioned about business strategy, what often emerges is that only a generic strategy exists.

But an unarticulated, generic business strategy is just not good enough. In fact, it can be a critical mistake. Clearly, manufacturing and supply chain management is where “big money” is spent and where major contributions in market share, inventories, customer service, lead times, profits and many other important measures of business performance must be achieved.

Now, and in the coming years, operations can no longer be left in a reactive mode to respond to whatever whims that keep changing direction. Operations is clearly an area where profits can be made or lost.

Planning operational objectives effectively

The very essence of planning operational objectives effectively is a continual process of ensuring that operations is constantly and consistently doing the “right things right.” This process involves continuously reassessing current strategies including objectives, action plans, and measurements. It also involves developing new or modified objectives, action plans and measurements, whenever needed. Effective strategic operations planning must continually and systematically perform the following two tasks:

Reassess the current strategies, objectives, action plans and performance measurements, and examine how well they are reflected in the company’s overall strategic plan.

Develop new or modified objectives, action plans and performance measurements that are well-connected to the overall strategic plan.

Like any continuous process, effective operational strategy planning must always be asking:

“Where do we want and need to go?” and,

“How are we going to get there?”

These questions are defined in concrete terms as you connect business strategy with operations strategy to form an overarching competitive strategy for increasing sales, profits, ROA, ROE, stockholder value, and market share (see Figure 1).

Once these goals are defined or redefined, you need to ask, “What operational performance improvements will be needed and when to achieve the strategy?”

To answer this question, you must be able to define quantifiable performance improvement objectives and timeframes in such areas as delivery improvement, cost reduction, decreased working capital, cycle time reduction, increased throughput, product improvement, quality improvement, supplier performance and management development.

This is the hard part. Defining the right objectives and developing and implementing the “right” action plans are the focal points of an effective planning process. Here you need to be very specific with objectives, such as decreasing order-to-delivery cycle time by a certain minimum amount, introducing a specific product at a certain target price, decreasing costs by a certain percentage, and/or reducing inventories to a specified level.

The next task is to define the action plans you’ll need. You’ll need to define steps, resources and timing. For example, you could plan to redesign the process of information and material flow to reduce order-to-delivery cycle times by 60 percent over the next six months, or introduce a methodology to decrease inventories by 35 percent in six months.

Action plans need to define the what, who, why, where, when and how. They need to be specific, for an objective, and set to established time frames. You also need to assign certain people to be accountable for the results, and you’ll need to define how those results are to be measured.

Measurements are a key step in this continuous process and a step just as critical as any of the others. Measurements start the feedback of information in each reassessment cycle of goals, objectives and action plans. They continually ask: “How are we doing?”

Next, you need to answer the question, “What operational process performance metrics are best to monitor our achievement toward realizing our company’s business strategy?”

A good performance measurement system will tell you how effectively your action plans have been in reaching objectives and goals. It is also part of the continuous monitoring of how the company in general is doing operationally.

A system for measuring overall business performance should have early warning signals. Measurement complements diligent management with precise, well-considered communications and clear feedback on are you doing the “right things right.” It is always critical to address two issues:

Get early warning on process performance appropriate metrics to remain proactive; and,

Be careful that management directives do not encourage action that is counter to your desired performance and overall strategy.

Getting started with shared vision

To create a shared vision, you need to analyze your current situation and reach a better understanding of your company’s strengths and weaknesses as well as the internal and external factors that affect the company’s performance.

Senior management cannot ask too often the questions that help keep everybody on track, including, first of all, questions that focus on your customers:

  • What do our customers value in supplier operational performance?
  • Are our customer’s wants and needs changing or going to change?
  • How can we help our customers be more competitive and profitable?
  • What is our current performance compared to what our customers need, want and value?
  • What are our strengths and weaknesses compared to our competitors’ strengths and weaknesses?

Top management also needs to continuously ask how the organization is going to effectively manage issues and responsibilities such as:

  • How do we remain competitive now?
  • How can we surpass the competition?
  • Are our current improvement initiatives appropriate to match our objectives?
  • Have we achieved the intended measurable results from our improvement initiatives?
  • What should we do differently to achieve the results we need?
  • What results can we achieve in six months or sooner?
  • What results can we achieve in the longer term?
  • What are the primary reasons for us to pursue lean supply chain management and what will the benefits be?

Answering these questions can help top management teams focus on the important issues. Then comes the hard work: Ask your entire top management team to answer the following seven questions and then get together for an open discussion. These questions may uncover the divisions and differences amongst your managers on key issues of beliefs, values and vision:

  • What specific customer satisfaction improvement action items need to be initiated immediately?
  • What measurable results must be achieved and when?
  • What specific business process improvements will we achieve over the next six months (12 months, 18 months, 24 months)?
  • In what three areas have we achieved breakthrough business results?
  • What five immediate actions are required to initiate, invigorate or enhance our operational performance?
  • Do we have clear, time-phased, measurable objectives for operational performance improvement, and is accountability clear?
  • What outside consulting assistance is needed to assist our organization to more quickly achieve business goals?

With rare exceptions, every CEO I have asked to perform this test has been very surprised at the diversity of opinion and the intensity with which those diverse opinions are held. Discussing these questions has led to some very stormy sessions.

Those very differences, however, show everyone the need to mutually define and implement an effective operational improvement strategy. While an immediate, easy consensus is unlikely, the process of thinking, discussing and reaching a conclusion is in itself a good learning experience and a major advance toward an essential singleness of purpose and vision for the entire management team.

Getting the entire management team to focus on doing the “right things right” is no easy task. Few organizations have evolved to the point where doing the “right things right” is part of their routine organizational behavior.

It is more likely to be the case that the management team, at least in part, is doing the “wrong things right.” This behavior happens for many reasons, not the least of which is driven by performance measurement, discussed more thoroughly in one of my other white papers.

After successfully working out solutions to the preceding seven questions, the management team should have a common, agreed-upon direction for running the business. But just because everyone seems to understand where the company is going does not mean that the organization knows what to do next.

Once the high-level assessment and agreement on a new direction is completed, it is time to start defining how to self-fund the entire improvement effort. This self-funding can come from current inventory, which is a sure cash generator for most, then reassessing major business processes, making sure to reduce non-value-added activities and cycle times whenever possible.

The redesign should convey to management how these changes affect issues like cost, quality, cycle time, customer satisfaction and competitive advantage. Finally, the team must develop objectives, action plans, assign resources and establish how to measure the success of these plans.

Developing your action plans

Operations strategy and overall business strategy are inextricably linked. While a well-defined operations strategy will not guarantee success by itself, not having one will almost certainly guarantee failure.

It has been demonstrated time and again that an operations strategy and the requisite skills to develop and implement that strategy are absolutely critical for achieving any lean supply chain objectives.

The prerequisite for action plans is specific improvement objectives tied directly to business goals. Requirements for action objectives are:

A specific action plan defines the sequence of time-phased activities or tasks and the resources necessary to reach the desired objective. In addition, each activity and task required to achieve the objective has a person who is accountable for it.

Everything required to achieve the objective is well-defined and set within a time frame with clear lines of accountability. Figure 3 is a format that I have found useful for documenting action plans.

Action plans can integrate operations with business strategy and they can provide a practical focus for shared vision. They can do this in several different ways including:

  • Traversing silos within organization
  • Minimizing tunnel vision
  • Providing a structure for solving problems
  • Encouraging people to think creatively in developing solutions
  • Driving the entire organization to come to grips with the real opportunities that require solving problems
  • Providing a methodology for conflict resolution
  • Establishing common values and beliefs across the organization
  • Creating a way for everyone to get on the “same page” and rapidly move forward.

Rethinking how your company should be run is no easy task. However, for the CEO and other senior executives, learning how to get and stay ahead of the competition should be a formalized, on-going transformational effort. Some of the issues that need to be addressed include:

Developing a thorough understanding of what is and what should be changing.

Making sure that the organization does not get stuck in the rut of just providing what customers want rather delighting your customers with products, features and services they had not thought of.

Establishing stretch goals and objectives and then executing action plans better and faster than your competition.

Creating core competencies that will give you a “faster, better, cheaper” advantage over your competition.

Trying to navigate a course as complex as operations strategy without a well-defined road map will most probably cost you a great deal in money and time. To avoid this problem, always utilize and improve on the following formula:

Innovative Strategy + Knowledge and Expertise + Objectives and Action Plans + Management Courage and Commitment + Execution = RESULTS

Operations strategy and action plan checklist

Use the following checklist to help you make sure your operations strategy and action plans are correctly established, well-coordinated, and well understood throughout the organization (see also Figure 4).

An operations strategy is clearly defined and has been communicated to everyone in the organization. ___YES ___ NO

Everyone in the organization understands why a particular operations strategy has been adopted. ___YES ___ NO

Methods for communicating up, down, and across the organization are easy, timely and effective. ___YES ___ NO

The operating strategy, objectives for improvement, and action plans are tied directly to the overall business strategy. ___YES ___ NO

Action plans are developed to achieve objectives which will strengthen the company’s competitive position and/or financial performance. ___YES ___ NO

The company’s use and application of technology are consistent with the operations strategy. ___YES ___ NO

Action plans for operations complement the action plans of all business functions. ___YES ___ NO

An operations strategy review is periodically conducted to evaluate strategic alignment across the business. ___YES ___ NO

Performance measures encourage and contribute to the organization’s efforts to achieve the action plan objectives. ___YES ___ NO

The company’s reward system does not encourage individuals and/or functions to deviate from the operations strategy. ___YES ___ NO

About the author:

R. Michael Donovan is the president of R. Michael Donovan & Co. Inc., an international management consulting firm. Contact him at 508-788-1100 or [email protected] . The firm’s Web address is www.rmdonovan.com .

Subscribe to Machinery Lubrication

Business Plan Vs Strategic Plan Vs Operational Plan—Differences Explained

Female entrepreneur sitting within a home studio drafting up individual plans for her business.

Noah Parsons

5 min. read

Updated October 27, 2023

Many business owners know and understand the value of a business plan.  The business plan is a key component  of the startup and fundraising process and serves as a foundation for your organization. However, it only tells part of the story. To get the whole picture and have a framework on which to build your business you also need a strategic plan and an operational plan.

  • What is a business plan?

In its simplest format, a  business plan  describes the “who” and the “what” of your business. It lays out who is running the business and what the business does. It describes the products and services that your business sells and who the customers are. 

  • What is a strategic plan?

A  strategic plan  looks beyond the basics of a business plan to explain the “how”. It explains the long-term goals of the business and how it expects to achieve those goals over the long term. A strategic plan explores future products and services that your business might offer and target markets that you might expand into. The plan explains your strategy for long-term growth and expansion.

  • What is an operational plan?

An operation plan zooms into the details of your business to explain how you are going to  achieve your short-term goals . It is the “when” and “where” of your planning process. The operational plan covers the details of marketing campaigns, short-term product development, and more immediate goals and projects that will happen within the next year.

  • What is the difference between a strategic plan and a business plan?

First, let’s look at the difference between a business and a strategic plan. For review:

A  business plan  covers the “who” and “what” of the business. The  strategic plan  gives us long-term goals and explains “how” the business will get there, providing a long-term view.

In broader terms, the business plan tells us who by showing us:

  • Who is running the business? What makes them qualified? What do they bring to the table that adds value?
  • Who is the competition? What do they offer and what makes you different?
  • Who is your customer? How big is the market? Where are they? What do they want and how will you give it to them? Also, how will you connect with your market?

The business plan answers the “what” by telling us:

  • What the business provides and how it’s provided. 
  • Product, services, and operations are all explained so that readers understand how customer needs are met.

The strategic plan, on the other hand, outlines long term goals and the “how”, focusing on the following:

  • Where will the business be in 3, 5, or even 10 years?
  • How will you expand to offer different products and services over time?
  • Will your market and industry change over time and how will your business react to those changes?
  • How will you grow your market and reach new customers?
  • What needs to happen so you can achieve your goals? What resources do you need to get there?
  • How will you measure success? What metrics matter and how will you track them?

So, your business plan explains what you are doing right now. Your strategic plan explains long-term aspirations and how you plan to transition your business from where it is today to where you want it to be in the future. The strategic plan helps you look more deeply into the future and explains the key moves you have to make to achieve your vision.

What’s your biggest business challenge right now?

  • What is the difference between strategic planning and operational planning?

While strategic planning looks at the long term and explains your broad strategies for growth, an operational plan looks at the short term. It explains the details of  what your business is going to do  and when it’s going to do it over the next twelve months or so. An operational plan covers details like:

  • What activities need to happen to achieve your business goals?
  • When will each activity take place, who will do it, and when do you need to reach specific milestones?
  • How will your business operate? What suppliers will you work with? When do you need to have them in place?
  • What marketing campaigns will you run and what will they cost?
  • What investments will you make in your products and services this year?

The bottom line, your operational plan is the short-term action plan for your business. It’s the tasks, milestones, and steps needed to drive your business forward. Typically an operational plan provides details for a 1-year period, while a strategic plan looks at a  3-5 year timeline , and sometimes even longer. The operational plan is essentially the roadmap for how you will execute your strategic plan.

  • How to use your business plan for strategic development and operations

A great business plan can encompass both the basic plans for the business, the long-term strategic plan, and the near-term operational plan. Using a lean planning method, you can tackle all three phases of planning and make the process easy to review and revise as your business grows, changes, and adapts.

Start with a simple plan

The lean planning methodology starts with a simple,  30-minute business plan  that outlines the fundamentals of your business: who you are, what you are doing, and who your customers are. It’s a great way to provide a brief overview of your business.

Expand your plan

From there, you can expand your plan to include your longer-term strategy. Adding greater detail to elements of the plan to explain long-term goals, milestones, and how your products and services will change and expand over time to meet changing market conditions.

Finally, your lean plan will cover  financial forecasts  that include monthly details about the short-term revenue and expenses, as well as longer-term annual summaries of your financial goals, including profitability and potential future loans and investments.

  • Use your business plan to manage your business

Regardless of the type of plan, you are working on, you need a team of players on hand to help you plan, develop, and execute both the operational and strategic plans. Remember, your business needs both to give it a clear foundation and a sense of direction. As well as to assist you with identifying the detailed work that has to happen to help you reach your long-term goals. 

Learn how  LivePlan  can help you develop a business plan that defines your business, outlines strategic steps, and tracks ongoing operations. You can easily share it with your team and all of the right stakeholders, explore scenarios and update your plan based on real-world results. Everything you need to turn your business plan into a tool for growth.

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

the links between business strategy and operational planning

Table of Contents

Related Articles

the links between business strategy and operational planning

3 Min. Read

How long should your business plan be?

the links between business strategy and operational planning

10 Min. Read

Why do you need a business plan?

the links between business strategy and operational planning

When should you write a business plan?

the links between business strategy and operational planning

12 Min. Read

The scientific benefits of business planning

The LivePlan Newsletter

Become a smarter, more strategic entrepreneur.

Your first monthly newsetter will be delivered soon..

Unsubscribe anytime. Privacy policy .

Garrett's Bike Shop

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

LivePlan pitch example

Discover the world’s #1 plan building software

the links between business strategy and operational planning

  • Get Started

Home >> #realtalk Blog >> Manage a business >> Business plan, strat…

Business plan, strategic plan, operational plan: why all 3 are important

By Andrea Nazarian

the links between business strategy and operational planning

When you’re in the early stages of running your business, it’s easy to get lost when thinking about all the things you need to organize in order to grow. This is where making a business plan, strategic plan and operational plan comes into play. 

A business plan outlines the “what” and “how” of your business, while a strategic plan sets the long-term vision. Operational plans dive into day-to-day tasks. We’ll explain their roles, differences, and how they work together. 

In this post, we’ll break down these concepts, explain the difference between them and why all three are important.  By understanding these plans, you’ll gain the tools to steer your ship, set big goals, and navigate the everyday waters with confidence and success.

Get your team in sync with our easy-to-use, all-in-one employee app.

What is a business plan?

A business plan, just like a blueprint for building a house, shows the general path for your business to follow. Besides the essential facts, it’s the tool that conveys your vision to potential investors, partners, and your own team.

A business plan is your business’s roadmap to success. It’s a detailed guide that helps you understand where your business is headed and how to get there. In this plan, you outline your business goals, what products or services you offer, who your customers are, and how you’ll reach them. 

Writing a business plan is one of many tips for starting a business you can tap into to get off the ground. 

Your business plan includes financials 

Your business plan also includes financial details, like how much money you’ll need and how you’ll make money. It’s important to outline everything because it helps you make smarter decisions, attract investors or loans, and stay on track as you grow. 

Think of your business plan as a game plan that keeps you focused and prepared for whatever comes your way.

What is a strategic plan?

A strategic plan is a detailed plan that lays out where you want your business to be in the future and how you’ll get there. In this plan, you outline your long-term goals, the actions you’ll take to move towards those goals, and the major steps to reach those goals.

A strategic plan helps you make smart choices about things like which products to focus on, how to stand out from competitors, and where to expand. It’s like your compass for making decisions that match your vision. 

Goal setting in your strategic plan 

Setting SMART goals (Specific, Measurable, Achievable, Relevant, Time bound) is a clear way to put your strategic plan into actionable tasks. 

This plan also keeps you flexible – you can adjust it as your business grows and the market changes. By having a solid strategic plan, you’re setting yourself up for success, making sure all your actions lead to reaching those big dreams you have for your business.

What is an operational plan?

An operational plan is where the nitty-gritty of running your business happens. An operational plan is like your playbook for your day-to-day tasks . 

It spells out exactly how you’ll execute your strategies outlined in your strategic plan and reach your goals outlined in your business plan.

In your operational plan, you break things down: who’s doing what, when and how. It’s like giving clear instructions to your team on tasks, deadlines, and responsibilities.

From managing the kitchen in a restaurant to handling customer orders in a salon, it’s all in the operational plan.

It also covers how you’ll maintain quality, manage resources, and handle any bumps along the way. Think of it as your action plan – turning your grand ideas into reality, step by step. 

What’s the difference between a business plank, strategic plan and operational plan?

Business plan.

  • Focus: This is the big blueprint for your entire business. It explains what your business does, who your customers are, how you’ll make money, and your long-term goals.
  • Timeframe: Usually covers a few years and includes financial projections.
  • Use: It’s your pitch to investors and guides your business decisions.

Strategic plan:

  • Focus: This is the long-term vision. It’s about where you want your business to go and the major steps to get there.
  • Timeframe: Often covers 3-5 years.
  • Use: It guides big choices like expanding, new products, and setting direction.

Operational plan:

  • Focus: This is the detailed game plan for your day-to-day business operations. It’s about how you’ll execute your strategies.
  • Timeframe: Covers the short term, usually a year or less.
  • Use: It’s the instructions for your team on tasks, deadlines, and responsibilities.

In short, a business plan is your overall roadmap, a strategic plan sets the direction for growth, and an operational plan makes sure everything runs smoothly day by day. They work together to keep your business on track and thriving.

Why is having a business plan, strategic plan and operational plan important?

Having a business plan, a strategic plan, and an operational plan is like having a superhero trio for your business. Here’s why they’re so important:

Business Plan:

  • Clarity: It gives you a clear path for your business journey. You know what you’re doing, who your customers are, and how to make money.
  • Guidance: It helps you make smart choices and stay on track to reach your goals.
  • Attractiveness: Investors and lenders like to see a solid plan before supporting your business.

Strategic Plan:

  • Direction: It’s like a compass for your long-term vision. It tells you where your business is headed and how to get there.
  • Big Goals: It sets ambitious goals like growing big, launching new things, and standing out from the crowd.
  • Adaptation: It helps you adjust when things change, keeping your business aligned with your dreams.

Operational Plan:

  • Smooth Sailing: It’s your step-by-step guide for daily tasks. You know who does what and when.
  • Efficiency: It makes things run smoothly and helps you manage resources well.
  • Quality Control: It ensures your products or services are top-notch and consistent.

Together, these plans are like your business’s superpowers. They make sure your business is not just surviving, but thriving..

Strategic plan example

Let’s say your restaurant, Brenda’s Bistro, wants to become the ultimate dining spot in your community, celebrated for your fantastic dishes and top-notch hospitality.

Brenda’s Bistro’s mission is to create unforgettable dining experiences by offering a diverse menu crafted from locally sourced ingredients, while delivering outstanding customer service.

  • Achieve a 20% increase in revenue within the next two years.
  • Expand the customer base by targeting families and young professionals through special promotions.
  • Introduce a new themed menu every season to keep customers excited and engaged.

Strategies and Initiatives:

  • Strengthen Brenda’s Bistro online presence by sharing engaging content on your website and social media accounts regularly.
  • Partner with local farmers to ensure your ingredients are fresh, sustainable, and support the community.
  • Launch loyalty programs and offer discounts to encourage repeat visits.

Key Performance Indicators (KPIs):

  • Monitor revenue growth every quarter to track progress toward your goal.
  • Collect customer feedback through surveys and online reviews to measure satisfaction.
  • Evaluate the success of your seasonal menus based on the number of orders and positive feedback.

How to make a strategic plan

Crafting a strategic plan isn’t a one-size-fits-all deal; each company’s unique goals require a tailored approach. 

Let’s break down the essential steps to shape that core plan.

1. Gather the key people

Start by bringing together the important voices. This usually includes your executive board, managers, and sometimes outside investors. 

Their insights and suggestions are like puzzle pieces that fit into a successful strategic plan.

2: Find your business’ strengths and weaknesses 

Your strategy needs to know where your company stands both inside and out. Begin with a SWOT analysis, checking your internal strengths and weaknesses, plus external opportunities and threats. 

Gather insights from gap analysis, looking at competitors, and listening to customer and employee feedback give you the bigger picture.

3. Set Goals

Now, create goals from all that info. Match these goals with your mission, vision, and values. 

Pick the ones that make a big impact, make sense for the long haul, and line up with your values. Examples can be reaching certain sales targets, or a certain number of followers on your business’ social media. 

4.Make a game plan 

Time for an action plan. Break down each goal into strategies, initiatives, and tactics. Depending on your goals, these could be marketing plans , tech upgrades, or smart partnerships. 

You don’t need tons of details here; that’s what the operational plan covers. Also, set up key performance metrics to measure your progress.

5. Review and and tweak

Schedule regular check-ins to review your plan. This is where you reflect and adjust if needed. Good financial info comes in handy here. 

How often you do this depends on your business’s rhythm – maybe monthly for new businesses or yearly for more established ones.

Remember, your strategic plan is your map to success. Tailor it, review it, and let it guide you toward your goals.

Now that your strategic plan is sorted, let’s dive into the power of operational planning to make those goals a reality.

How to make an operational plan

It’s time to take that big-picture strategic plan and break it into doable steps. First, check out the long-term goals. 

Figure out which departments need to team up to reach which goal. Ask questions like: What kind of resources does the business already have access to? 

What’s missing? Any money financial risks coming up? This helps you see which parts of your business need a boost to hit those goals.

1. Nail down your budget

Make a budget based on what each department in your business needs to reach the big goals. What does your kitchen staff need? How about front-of-house staff?

With your match-up between goals and areas, spread your budget where it’ll give the best bang for your buck. 

Remember to keep some cash aside for surprises and changes. A solid budget is like a shield against unexpected stuff.

2. Set targets

Each goal you’re chasing needs a target. Think carefully here – not too wild that your team loses heart, but not too tiny that the big plan stays out of reach. 

Realistic targets are your secret weapon. An example target could be selling 100 orders’ worth of a certain dish by the end of the month.

3. Check in with your team regularly 

Don’t just set and forget. Schedule regular check-ins with your staff to see how things are going. 

Are you hitting those targets? Are things humming along? 

These feedback sessions with your employees are like checkups for your plan. If things are off, you can tweak the plan to get back on track.

Homebase’s free mobile app has a built-in messenger tool to make it easy to stay connected. Send messages to individuals, groups, or your entire team.

3. Stay open and data-driven

Keep communication flowing during reviews. And don’t forget the data – it’s your treasure map. 

Numbers show where you’re doing well and where there’s room to improve. Use your POS software or an employee management tool like Homebase to help you make data-informed decisions on how to improve your business operations. 

With Homebase’s workforce forecasting and smart scheduling tools, you can save on labor costs for your business. 

With all this, your operational plan becomes a real powerhouse, making sure your business charges ahead toward those big dreams.

Make your business plan, strategic plan and operational plan work for you

In the bustling world of business, having a roadmap is essential for success. The triumphant trio of a business plan, strategic plan, and operational plan work together to steer your ship towards greatness. 

These plans aren’t just fancy paperwork – they’re important tools that guide your every move. 

By understanding each plan’s role and significance, you’re armed with the superpowers needed to navigate the complex business waters. 

A business plan provides clarity, a strategic plan offers direction, and an operational plan ensures smooth sailing. Together, they fuel your business’s journey from survival to thriving, making sure you’re not just a player in the game, but a true champion.

Here are 10 small business tools you can use to put these three plans into action. 

FAQs about business plan, strategic plan and operational plan

Why do i need a business plan.

A business plan acts as a roadmap for your business journey. It outlines your goals, customers, and how you’ll make money. It’s crucial for attracting investors and making smart decisions. 

What’s the purpose of a strategic plan?

A strategic plan sets your long-term vision and goals. It guides big choices like expanding and standing out. It’s like a compass, helping you stay on course towards success.

What’s the difference between a strategic plan and an operational plan?

While a strategic plan sets long-term goals, an operational plan focuses on day-to-day tasks. It’s like a playbook that tells your team exactly what to do to reach those goals.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

Related posts

February 15, 2024

10 Best Square Alternatives for 2024

Square is a popular software solution for small businesses in the retail, hospitality, and restaurant industries. You can use the…

8 Time Management Statistics Every Business Should Know in 2024

Time management—it’s something that we hear all the time. And if we’re being honest, it’s something we could all probably…

Bar Management 101: How to Manage a Bar in 2024

If you manage a bar business, you know how important successful bar management is — and just how difficult it…

Hiring a Family Member: A Guide for Small Businesses in 2024

Hiring a Family Member: Guide for Small Businesses You may consider nepotism unethical, but you’ve also probably shopped at a…

Salon Booth Rental: 3 Steps to Maximize Profit in 2024

So, you’re a new salon owner wondering whether to rent out booths to increase revenue. Or maybe you’re already renting…

February 14, 2024

Travel Time Pay for Hourly Employees (2024 Update)

When it comes to travel time pay for hourly employees, things can get confusing for both employers and employees. If…

Subscribe to our newsletter

Looking for ways to stay up to date on employment laws and small business news?

Homebase makes managing hourly work easier for over 100,000 local businesses. With free employee scheduling , time tracking , and team communication , managers and employees can spend less time on paperwork and more time on growing their business.

  • Hiring & onboarding
  • Team communication
  • Employee happiness
  • HR & compliance
  • Integrations
  • Food & beverage
  • Beauty & wellness
  • Medical & veterinary
  • Home & repair
  • Hospitality & leisure
  • Education & caregiving
  • Contact sales
  • Become a Partner
  • Careers – We’re hiring!
  • #realtalk Blog
  • Contact sales

Start free trial

Operational Planning: How to Make an Operations Plan

ProjectManager

The operations of your business can be defined as the sum of all the daily activities that you and your team execute to create products or services and engage with your customers, among other critical business functions. While organizing these moving parts might sound difficult, it can be easily done by writing a business operational plan. But before we learn how to make one, let’s first understand what’s the relationship between strategic and operational planning.

Operational Planning vs. Strategic Planning

Operational planning and strategic planning are complementary to each other. This is because strategic plans define the business strategy and the long-term goals for your organization, while operational plans define the steps required to achieve them.

What Is a Strategic Plan?

A strategic plan is a business document that describes the business goals of a company as well as the high-level actions that will be taken to achieve them over a time period of 1-3 years.

What Is an Operational Plan?

Operational plans map the daily, weekly or monthly business operations that’ll be executed by the department to complete the goals you’ve previously defined in your strategic plan. Operational plans go deeper into explaining your business operations as they explain roles and responsibilities, timelines and the scope of work.

Operational plans work best when an entire department buys in, assigning due dates for tasks, measuring goals for success, reporting on issues and collaborating effectively. They work even better when there’s a platform like ProjectManager , which facilitates communication across departments to ensure that the machine is running smoothly as each team reaches its benchmark. Get started with ProjectManager for free today.

Gantt chart with operational plan

What Is Operational Planning?

Operational planning is the process of turning strategic plans into action plans, which simply means breaking down high-level strategic goals and activities into smaller, actionable steps. The main goal of operational planning is to coordinate different departments and layers of management to ensure the whole organization works towards the same objective, which is achieving the goals set forth in the strategic plan .

How to Make an Operational Plan

There’s no single approach to follow when making an operation plan for your business. However, there’s one golden rule in operations management : your strategic and operational plans must be aligned. Based on that principle, here are seven steps to make an operational plan.

  • Map business processes and workflows: What steps need to be taken at the operations level to accomplish long-term strategic goals?
  • Set operational-level goals: Describe what operational-level goals contribute to the achievement of larger strategic goals.
  • Determine the operational timeline: Is there any time frame for the achievement of the operational plan?
  • Define your resource requirements: Estimate what resources are needed for the execution of the operational plan.
  • Estimate the operational budget: Based on your resource requirements, estimate costs and define an operational budget.
  • Set a hiring plan: Are there any skills gaps that need to be filled in your organization?
  • Set key performance indicators: Define metrics and performance tracking procedures to measure your team’s performance.

the links between business strategy and operational planning

Get your free

Operational Plan Template

Use this free Operational Plan Template for Word to manage your projects better.

What Should be Included in an Operational Plan?

Your operational plan should describe your business operations as accurately as possible so that internal teams know how the company works and how they can help achieve the larger strategic objectives. Here’s a list of some of the key elements that you’ll need to consider when writing an operational plan.

Executive Summary

An executive summary is a brief document that summarizes the content of larger documents like business plans, strategic plans or operation plans. Their main purpose is to provide a quick overview for busy stakeholders.

Operational Budget

An operational budget is an estimation of the expected operating costs and revenues for a given time period. As with other types of budget, the operational budget defines the amount of money that’s available to acquire raw materials, equipment or anything else that’s needed for business operations.

It’s important to limit your spending to stay below your operational budget, otherwise, your company could run out of resources to execute its normal activities. You can use our free operating budget template for Excel to track your operating costs.

Operational Objectives

It’s essential to align your operational objectives with your strategic objectives. For example, if one of your strategic objectives is to increase sales by 25 percent over the next three years, one possible operational objective would be to hire new sales employees. You should always grab your strategic plan objectives and turn them into one or multiple action items .

Processes & Workflows

Explain the various business processes, workflows and tasks that need to be executed to achieve your operational objectives. Make sure to explain what resources are needed, such as raw materials, equipment or human resources.

Operational Timeline

It’s important to establish a timeline for your operational plan. In most cases, your operational plan will have the same length as your strategic plan, but in some scenarios, you might create multiple operational plans for specific purposes. Not all operational plans are equal, so the length of your operational timeline will depend on the duration of your projects , workflows and processes.

Hiring Plan

Find any skills gap there might be in your team. You might need to hire a couple of individuals or even create new departments in order to execute your business processes .

Quality Assurance and Control

Most companies implement quality assurance and control procedures for a variety of reasons such as customer safety and regulatory compliance. In addition, quality assurance issues can cost your business millions, so establishing quality management protocols is a key step in operational planning.

Key Performance Indicators

It’s important to establish key performance indicators (KPIs) to measure the productivity of your business operations. You can define as many KPIs as needed for all your business processes. For example, you can define KPIs for marketing, sales, product development and other key departments in your company. This can include product launch deadlines, number of manufactured goods, number of customer service cases closed, number of 5-star reviews received, number of customers acquired, revenue increased by a certain percentage and so on.

Risks, Assumptions and Constraints

Note any potential risks, assumptions and time or resource constraints that might affect your business operations.

Free Operational Plan Template

Leverage everything you’ve learned today with our template. This free operational plan template for Word will help you define your budget, timeline, KPIs and more. It’s the perfect first step in organizing and improving your operations. Download it today.

ProjectManager's free operational plan template for Word.

What Are the Benefits of Operational Planning?

Every plan has a massive effect on all team members involved, and those can be to your company’s benefit or to their detriment. If it’s to their detriment, it’s best to find out as soon as possible so you can modify your operational plan and pivot with ease.

But that’s the whole point of operational planning: you get to see the effect of your operations on the business’s bottom line in real time, or at every benchmark, so you know exactly when to pivot. And with a plan that’s as custom to each department as an operational plan, you know exactly where things go wrong and why.

How ProjectManager Can Help with Operational Planning

Creating and implementing a high-quality operational plan is the best way to ensure that your organization starts out a project on the right foot. ProjectManager has award-winning project management tools to help you craft and execute such a plan.

Gantt charts are essential to create and monitor operational plans effectively. ProjectManager helps you access your Gantt chart online so you can add benchmarks for operational performance reviews. You can also create tasks along with dependencies to make the operation a surefire success.

A screenshot of a gantt chart in ProjectManager

Whether you’re a team of IT system administrators, marketing experts, or engineers, ProjectManager includes robust planning and reporting tools. Plan in sprints, assign due dates, collaborate with team members and track everything with just the click of a button. Plus, we have numerous ready-made project reports that can be generated instantly, including status reports, variance reports, timesheet reports and more.

project status report builder

Related Operations Management Content

  • Operational Strategy: A Quick Guide
  • Operations Management: Key Functions, Roles and Skills
  • Operational Efficiency: A Quick Guide
  • Using Operational Excellence to Be More Productive

Operational planning isn’t done in a silo, and it doesn’t work without the full weight of the team backing it up. Ensure that your department is successful at each benchmark. ProjectManager is an award-winning pm software dedicated to helping businesses smooth out their operational plans for a better year ahead. Sign up for our free 30-day trial today.

Click here to browse ProjectManager's free templates

Deliver your projects on time and under budget

Start planning your projects.

strategic vs operational planning

Strategic vs operational planning: How to determine and execute on your vision

Lucid Content

Reading time: about 7 min

Strategic and operational plans go together—but for many companies, these terms seem interchangeable at first glance. The distinction is important because both of these plans are truly essential aspects of planning inside organizations. Without the big picture and the tactical details, you simply don’t have a plan at all. 

What strategic plans and operational plans do within your organization makes a difference in reaching goals within your team, department, and company as a whole. 

What is a strategic plan? 

Strategic plans take a high-level approach to a company’s vision and apply it to the external environment to identify the right priorities. Your strategic plan helps you develop goals and coordinate internal resources accordingly to achieve those goals, generally over a specific time frame.

Within a strategic plan, you’ll typically find: 

  • Specific goals: Goals created from the mission and vision, directing organizational focus. 
  • Stakeholder perspectives: Input from people throughout your organization, bringing helpful and insightful viewpoints that shape the plan and content. 
  • Future projections: Overview of various scenarios you anticipate for the future and how the organization could respond. 
  • SWOT analysis: Strengths, weaknesses, opportunities, and threats that your organization faces. 

For example, a strategic plan may observe a threat such as a new competitor entering your market—in response to the increased competition, your plan says your organization will revise your current pricing strategy. 

the links between business strategy and operational planning

Learn how remote work has changed the way companies approach strategic planning—and why that's the better approach for the long haul.

What is an operational plan?

You can think of an operational plan as a “work plan” since it specifically directs work activities in your organization. Instead of working from projections and guesses about the future, your operational plan works within the present and serves to translate ideas from your strategic plan into action. 

Here’s what you’ll likely find inside an operational plan: 

  • Implementation tactics: With the strategic plan’s goals in view, the operational plan has more concrete goals along with specific approaches to implement operational goals. 
  • Short-term emphasis: Instead of looking far forward, operational plans highlight what your organization can do today. Operational plans are written frequently to stay relevant. 
  • Detailed action items: Operational plans might have hundreds of items in them. 

For instance, an operational plan may explain how your organization will create and implement a new pricing strategy, such as appointing a department and a champion to lead the change and assigning deadlines for specific tasks to manage the transition. 

Key differences between strategic and operational plans

Many people believe they have a strategic plan when they are actually creating an operational plan and vice versa. 

Essentially, the biggest distinction is in application. Strategic plans stay big-picture, and operational plans are specifically focused on implementation. As such, there are significant differences in how strategic and operational plans are designed:

  • Specificity: Strategic plans must stay relatively vague, but operational plans can be highly specific. Your operational plan is written for a department within your organization.
  • Time: In contrast to strategic plans, operational plans are very tactical and short term in nature.
  • Budgetary focus: With operational plans, short-term, department-level budgets are considered. Strategic plans involve budgets for the entire company. 
  • Authorship and reporting: Generally, your senior management writes your strategic plan, and individual departments write their own operational plans with input from leadership. Similarly, senior management will ensure that the company is on track to meet strategic planning goals while departments will do the same for their operational plans. 

As you can see, strategic plans and operational plans have significant differences in form, function, and creation. Both are important and allow your organization to stay focused on valuable goals for the company.

When to use strategic vs operational plans

Because strategic and operational plans work well together, creating both for your organization is usually ideal. Your strategic plan guides the creation of your operational plan, so consider starting with a strategic plan first and moving on to operational plans for different departments. Your operational plan allows you to execute on your strategic plan. Develop operational plans once you’ve used the strategic plan to determine where your organization is headed. 

Why a strategic plan isn’t enough 

If you’re tempted to stop with a strategic plan, keep in mind that it’s possible you’ll create a strategic plan that masquerades as an operational plan or that becomes a merged strategic and operational plan. Strategies are only effective if they’re implemented, and any tactics you develop for your strategic plan will just become an operational plan by another name. 

Or, worse, you could create a strategic plan and then create lists of implementation tactics without going through a systematic process of planning these operational approaches. 

This is risky for the following reasons:

  • Implementation uncertainty: With only a strategic plan, teams and individuals don’t know what to do. 
  • Misallocated resources: Time and other resources are easier to waste without tactics that are well thought out. 
  • Risk of conflict: Leaving strategic goals open to interpretation without an operational plan can introduce unnecessary conflict. Everyone could implement the strategic plan as they see fit, without sticking to guidance from an operational plan.
  • No road testing: In a sense, your operational plan also serves as a feedback mechanism for your strategic plan. A bad strategic plan will lead to problems at the operations level during implementation, giving your organization a chance to revisit the strategic plan if necessary. 

That strategic plan has value, even if you prefer to think about implementation tactics instead of a big-picture view. The questions you answer while developing your strategic plan enable you to create a strong operational plan.

Why operational plans aren’t enough either 

Similarly, your operational plan needs a strategic plan for guidance. Tactics should be directed towards specific goals that serve broader goals within your organization. 

With only operational plans, you may:

  • Win battles and lose wars: Tactics can work successfully and advance business goals, but without a compass, you may miss out on long-term steps your business needs. Strategic plans ensure your activities do lead somewhere beyond short-term planning. 
  • Collect KPIs without applying them: Metrics are important, but strategic planning helps to provide context that’s sorely needed to make sense of this data. 
  • Miss out on cumulative progress: Over the course of five years, your organization can be in a very different place. Think of how competitive pressures, your industry environment, and other influences can shape your business over time. 

For these reasons, an operational plan that can support your strategic plan is essential for any business. 

How to begin strategic planning

Given the value to your organization that these plans provide, you should seriously consider creating both types of plans and keeping them updated. Beginning with the strategic plan, these steps can guide you along the process: 

1. Involve stakeholders: Strategic plan creation is generally an activity for your senior leadership. Have them kick off the plan and gather input, as appropriate, from the rest of the organization to help with identifying the right strategic priorities.

2. Create a SWOT analysis: Exploring your organization’s strengths, weaknesses, opportunities, and threats will help you determine what should go inside your strategic plan. 

SWOT analysis

3. Develop your goals: By looking at your organization’s mission and vision, determine goals that are SMART: specific, measurable, achievable, realistic, and timely. 

4. Determine your KPIs: Know how to measure your progress as an organization towards goals in your strategic plan.

5. Document your plan: Write down your strategic plan and decide how often you’ll revisit it. 

6. Share with your organization: Be sure to share the strategic plan, as appropriate, with departments to help them develop their operational plans. 

After this process, individual teams can begin to create operational plans based on the strategy that’s been laid out. Each team or department should have its own operational tactics so they can stay on target. 

Strategic and operational plans are better together 

Using strategic planning and operational planning, you can keep your entire organization on track. Success as a business doesn’t happen by accident. The right plans allow you to measure your progress, set goals, and make important changes when necessary, helping your company stay competitive.

Take the first step by strategy mapping. We even have a Lucidchart template ready for you.

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

Bring your bright ideas to life.

or continue with

  • Coaching Skills Training
  • Coaching TIPS²™
  • Continuous Improvement Coaching
  • Courageous Conversations Workshop
  • Executive Coaching Program
  • Feedback 360
  • Safety Coaching
  • Sales Coaching Training Program
  • Free Consultation
  • Applied Strategic Thinking®
  • Strategic Leadership Course
  • Strategic Teaming
  • Strategy Development Processes and Services
  • Communication Training for Managers
  • Conflict and Collaboration
  • Confronting Racism Workshop
  • Delegation & Accountability
  • Diversity, Equity, and Inclusion Workshop
  • Flexible Leadership
  • Leading Change
  • Leading Groups to Solutions
  • Leading Innovation
  • Mid-Level Management Training
  • Qualities of Leadership
  • Bottom Line Leadership
  • Customized Leadership Development Programs
  • Leadership Development Program Design
  • Mini-MBA & Operational Finance
  • Problem Solving and Decision Making in the Workplace
  • Transition to Leadership
  • Virtual Leadership
  • High-Performance Teamwork
  • Leadership Team Alignment Workshop
  • Orienteering
  • Corporate Outdoor Training and Team Building
  • Retreats for Teams
  • Innovation Skills Training
  • Personal Impact Workshop
  • Supervisor Training Programs
  • Customization of CMOE’s Learning Library
  • Full Curriculum Development and Design
  • Learning & Development Advisory Services
  • Bottom Line Leadership Training
  • Consulting Services
  • Leadership Retreats
  • Learning and Development Consulting Services
  • Needs Analysis and Organization Assessments
  • Transformation & Change Solutions
  • Facilitator Training Workshop
  • Empathic Leadership
  • Supervisor Development Series
  • All Courses
  • Digital Learning
  • Books and Publications
  • Assessments and Surveys
  • Clients Served
  • History and Experience
  • Meet the CMOE Team
  • Testimonials
  • Articles & Tools
  • Scenario Templates
  • Certified Partners
  • Event Resources
  • Industry Insights
  • Resource Library
  • Video Library
  • News and Events
  • Professional Accreditation and Continuing Education Units
  • Surveys & Assessments

Strategy vs Operations: Understanding The Difference

In today’s competitive business world, effective managers need to understand the difference between strategy vs operations. Managers should become strategic leaders to bring together these different aspects of a business.

What is the Difference Between Strategy and Operational Effectiveness?

Expanded knowledge of how strategy and operations can work in parallel with one another will drive better performance and competitiveness for the organization.

We have observed many organizations in which the line between the operational and strategic engines of the business can become blurred and confusing.

Understanding the tension that exists between these two business functions will help managers recognize ways to reconcile those differences. When that happens, managers will see ways they can play a role in each of these important aspects of the business and will begin to identify strategic opportunities .

What is the Relationship Between Business Strategy and Operations Strategy?

To provide greater clarity, think of strategy and operations as two separate, but related, engines on a boat. Both engines propel the boat forward. While forward movement can occur with only one engine, the boat moves faster and is more responsive if both engines are running efficiently.

Each engine is important, and each engine requires fuel, maintenance, and skillful attention so the boat’s ability to deliver results is optimized.

Think of your organization as a big boat. If we focus all of our attention, effort, and resources solely on the operations side of the business, we put the whole organization at risk. This risk comes from the operational engine running harder.

Being so focused on operations may seem like the smart thing to do at the moment, but over the long run, your efficiency may suffer. Running one engine hard could quickly move you in a direction that will backfire, taking your future competitive advantage with it. The idea of focusing solely on the strategic engine is equally bad.

Without the operational capacity to implement or take advantage of our insights about future innovations, processes, or market needs, all efforts towards our strategy and planning will be for nothing. We must understand and balance both sides of the business, and to do that well, a greater depth of understanding is necessary. Let’s get started.

Strategy VS Operations:

The operational engine of the business.

Most individuals can successfully explain what the operational side of the business does.  Because many people are directly connected to and support the operational engine in one way or another, “operations” is easy to understand.

Think of the operational engine as the current value chain of activities that drives the delivery of business objectives. Those core business activities familiar to most people include:

The operational engine is concerned with executing on everyday activities and commitments. Think of operations as the “How’s” of the organization using the following questions:

  • How do we produce our product or service right now?
  • How do we respond to customer orders this week?
  • How do we improve efficiencies in our invoicing system this month?
  • How do we drive costs down and maximize profitability?
  • How do we sell to our current customers?

The purpose of the operational engine is to keep the current activities in the organization moving and functioning at peak levels. We focus a lot of our energy, resources, and brain power on how to best execute these activities today while also executing them well.

Most people can and do have a positive influence on the organization’s current activities. Contributing effort towards the organization’s daily business requirements provides value and organizations need to develop and maintain a culture of continuous improvement in order to constantly become better and more efficient along the value chain.

This is extremely important because if we are ineffective on the operational side, strategic positioning ultimately doesn’t matter.

How You Can Improve Your Execution in the Workplace? Download Your Free Assessment to Understand Your Tendencies to Become More Effective.

The strategic engine.

Strategy asks what you could be doing to equip and transform the operational engine in order to be competitive in the long run. Its intent is to help the organization discover new sources of competitive advantage.

In simple terms, the “strategy engine” is driven by four questions:

  • Where should we compete in the future? (The future space we will operate within)
  • How should we compete in the future? (The future space we will operate within)
  • What should we be doing?
  • How we should be doing it?

A business strategy defines how the business and its members should evolve in order to achieve long-term success. We are asked to discover new sources of competitive advantage and perform activities differently, better, and at a lower cost compared to our rivals in the market place.

A strategy asks questions concerning new solutions, services, and concepts the business may want to offer, as well as new markets and customers you may want to serve. The strategy engine needs to work in tandem with the operational engine, understanding threats and opportunities, experimenting with new processes and solutions, and shaping the future so the organization positions itself to win in both the short- and long-term.

The strategy engine tends to have a long-term outlook—typically 3 to 5 years—but strategy is not wedded to this time frame; each business and each function in the value chain of activities is different and, as a result, their strategic timing will vary widely.

For those in the consumer electronics industry, 10 months may be considered long-term. For those in the energy business, 10 years may be more realistic long-term timeframe.

The Strategic Engine helps the business make changes or adjust its direction to ensure that the organization is adding value for customers, owners, and employees and doing its best work while avoiding misfires. Strategic management skills include :

  • Offering quality products and services that customers will need in the future
  • Taking advantage of new technologies
  • Being prepared for future environmental factors or calamities
  • Responding to possible new substitutes or the predatory actions of rivals
  • Anticipating future needs before competitors do

Everyone in the organization needs to understand the strategy, offer ideas, and craft a supporting strategic plan that aligns with the overarching strategy of the business. The operational workforce will largely determine whether the strategic shifts will succeed or fail as the operation adapts to a brave, new strategic change .

If the strategic engine does its part, the organization will avoid the calcification and atrophy that occurs when a business doesn’t think ahead and disposes of strategic initiatives. If you give it proper attention, the strategic engine will take you in a direction that leads to:

  • Growth (of the people and the business)  {Insert Link Here}
  • Secure opportunities for people
  • Increased shareholder value for owners
  • Improved services for customers
  • Greater market share

It takes a lot of discipline to simultaneously manage the two engines that drive successful business forward. A perfect balance between operations and strategy will never exist; some days will require greater emphasis on operations; other days will be heavily focused on future-oriented strategic planning and execution .

IF you carefully manage and maintain both your operational and your strategic engines, you’ll find yourself clearly navigating your business towards the destinations on the horizon—and the future of your dreams.

Recommended For You:

Get exclusive content delivered straight to your inbox.

When you subscribe to our blog and become a CMOE Insider.

And the best part?

It's 100% free.

As Featured In:

The Better Business Bureau has determined that CMOE meets accreditation standards. These standards verify that CMOE’s product quality and competence enhance customer trust and confidence.

©2023 Center for Management & Organization Effectiveness. All rights reserved.

  • Key Differences

Know the Differences & Comparisons

Difference Between Strategic Planning and Operational Planning

strategic vs operational planning

Strategic Planning is concentrated towards attaining the long-term objectives of business. On the other hand, operational planning is done to achieve short-term objectives of the company. These are used to set priorities and align the resources, in such a way that leads to the accomplishment of business goals. Take a read of the article given below, to understand the difference between strategic planning and operational planning.

Content: Strategic Planning Vs Operational Planning

Comparison chart, definition of strategic planning.

Strategic Planning is a planning process undertaken by the top level management, to decide Where the organization wants to reach in future? And What should be done to pursue the organizational vision, mission, and objectives? It is an analytical process which examines the micro and macro environment of business. The process is used to define the company’s vision, ambitions, and set priorities to make a route that will lead the company towards its ultimate goal.

strategic planning process

Strategic Planning Process

The planning is not made for a particular department or unit, but it covers the entire organization. The strategic planning is done to determine the factors of the internal and external environment which directly influences the organization. The plan focuses on the enduring development of the organization. The tools used in this process are:

  • SWOT  Analysis  (Strength, Weakness, Opportunities, Threats)
  • Portfolio Analysis
  • PEST Analysis (Political, Economic, Social, Technological Environment)
  • Porter’s 5 forces Analysis (New Entrants, Rival Sellers, Substitute Products, Buyer Bargaining Power, Supplier Bargaining Power)
  • BCG Matrix (Boston Consulting Group)

These tools help the management to design a strategy considering various elements, that will lead the organization towards its vision.

Definition of Operational Planning

The process which predetermines the day to day activities of the business is known as Operational Planning. The planning is done to support the strategic planning to accomplish the organizational goals. In this process, short run objectives of the company are determined as well as a means to achieve those objectives are also discovered.

Middle-level management performs the function of the operational planning process. It includes planning of regular business activities and operations for a short period. Under this process, the organization is classified into the various department, division, unit, and center for which planning is performed individually, which is aligned with the strategic planning to reach the organization’s vision. The following are the features of Operational Planning:

  • Objectives need to be clearly defined.
  • Achievement of the desired result.
  • The activities are to be performed as decided.
  • Maintenance of quality standards.
  • Measuring performance.

Key Differences Between Strategic Planning and Operational Planning

The following are the differences between strategic planning and operational planning:

  • The planning to pursue the organization’s vision is known as Strategic Planning. The planning to achieve the tactical objectives of the organization is known as Operational Planning.
  • Strategic Planning is long lasting as compared Operational Planning.
  • Operational Planning is done to support Strategic Planning.
  • Strategic Planning takes into account the internal as well as the external environment of business. Conversely, Operational Planning is concerned with the internal environment of business.
  • Strategic Planning is done by top level management, whereas the Operational Planning is a function of middle-level management.
  • Strategic Planning covers the whole organization, but Operational Planning is done in a particular unit or department of the organization.

As we have discussed in the beginning that planning can be done for anything, so in a business organization it can be done for various purposes right from reaching the vision to its regular business activities, but their names, ways, and planning techniques are different. Strategic Planning and Operational Planning are two types of planning process performed by the managers and executives of the organization.

Strategic Plans are made to achieve the vision, mission, goals, and objectives. On the other hand, Operational Plans are made to effectively perform the basic activities of the business in order to achieve tactical objectives.

You Might Also Like:

Strategy formulation vs Strategy implementation

Sachin says

April 26, 2016 at 4:25 pm

Very true thanks

Tewabe Bayih says

November 24, 2017 at 6:59 pm

oh, it is good explanation and thanks !!

Nyame Asem says

January 22, 2019 at 10:37 pm

The distinction between strategic planning and operational planning is very clearly presented. Thanks

March 7, 2019 at 9:25 pm

Mukesh says

April 25, 2020 at 6:17 pm

Very nice topic

TSHERIING says

May 2, 2020 at 6:38 pm

dear all this is lock down period but found all write ups crisp and informative thanks

Debtor Finance says

May 20, 2020 at 3:57 pm

I think that it’s very important for us to know the difference between Strategic Planning and Operational Planning especially if we are in the business industry. This is a very helpful site. Thanks for sharing this article.

May 27, 2020 at 9:07 pm

Thank you for your explanation. I’m a student in healthcare finance right now and this helps tremendously!

JOSEPH Arrey Mbu says

April 24, 2021 at 2:17 pm

Clear and elaborate. Thanks.

CAO JIN says

September 24, 2021 at 1:30 pm

Learned great knowledge.

Taylor Hicken says

December 28, 2021 at 8:31 am

I appreciated it

gebreegziabher says

August 3, 2022 at 5:57 pm

October 5, 2022 at 1:14 pm

We well appreciate the effort thanks

Rajesh Chandan says

March 25, 2023 at 6:52 pm

Very well explained in simple manner

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

the links between business strategy and operational planning

Difference Between Strategic Planning And Operational Planning

Strategic planning and operational planning are instrumental to the success of any organization. Without strategic planning, organizations may fail to…

Difference Between Strategic And Operational Planning

Strategic planning and operational planning are instrumental to the success of any organization. Without strategic planning, organizations may fail to keep up in a fast-paced business environment with competitive pressures and fluctuating demand. Similarly, lack of operational planning can lead to confusion regarding responsibilities within departments and wasted time and resources. It’s important to understand the difference between strategic planning and operational planning to be able to use each to maximum advantage. But before we dive into a match of strategic planning vs operational planning and examine the difference between strategic and operational planning , let’s understand what each term means.

What Is Strategic Planning?

What is operational planning, strategic planning vs operational planning, rise fast at work.

Strategic planning refers to the process of determining the direction a business will take, establishing organizational goals and ascertaining the strategies necessary to achieve these goals in the long run. Organizations assess their strengths and weaknesses while gathering information on potential business opportunities and threats in the strategic planning process. This helps them make informed decisions on the future course of business, establish timelines for execution of the strategies and identify benchmarks that’ll help them evaluate progress. Strategic planning underlines the mission and vision of an organization and is essential to keep up in a rapidly changing business environment.

Operational planning is the process of drawing on an organization’s strategic plan and mapping out specific goals for each department within the organization. Such departmental goals and milestones guide the organization toward the successful execution of the overall strategic plan. In other words, an operational plan outlines the roles and responsibilities of departmental teams for a specified time period, deadlines for assignments and key performance indicators to measure performance. Operational planning is essential for an organization to tailor its strategic plan to each department within it. It helps the organization keep a tab on what’s working for them and what isn’t to make adjustments, if necessary.

The fundamental difference between strategic planning and operational planning lies in their very meaning. Now that we know what each entails, let’s examine strategic planning vs operational planning and look at the difference between strategic planning and operational planning :

Time frame is a major aspect of difference in an operational plan vs a strategic plan . Strategic planning involves planning for the long term. A strategic plan outlines an organization’s mission along with the business goals to be achieved in the future. Operational planning is planning for the short term. An operational plan focuses on the day-to-day operations of departments and immediate departmental objectives.

Environment

Another difference between strategic and operational planning is the type of environment involved. Strategic planning considers both the external and the internal business environment to develop a roadmap for future growth. Operational planning considers only the internal environment within an organization for effective utilization of resources to achieve strategic goals.

The management involved in an operational plan vs a strategic plan is another important difference between strategic planning and operational planning . Strategic planning is executed by top-level management, while operational planning is performed by middle-level management.

Frequency Of Change

While examining strategic vs operational planning , frequency of change emerges as another major difference between the two. Because strategic planning is for the long term, it’s unlikely to change frequently. On the other hand, operational planning is susceptible to frequent changes according to immediate departmental needs and projects.

The scope is another significant difference between strategic and operational planning . Strategic planning has a much broader scope than operational planning because it focuses on and carves out a roadmap for the organization as a whole. Operational planning has a narrower scope because it focuses on specific departments or functional units within an organization and programs them to meet organizational objectives.

Another significant difference that comes up while analyzing strategic vs operational planning is in terms of budget. Strategic planning has the entire organizational budget at its disposal, while operational planning takes place with department-level budgets.

Although sometimes used interchangeably, the terms ‘strategic planning’ and ‘operational planning’ are different, as we’ve seen while examining strategic vs operational planning . Strategic planning comes before operational planning. It establishes the big picture and sets the direction of the business. Operational planning determines and implements the steps necessary to follow the path laid out by the strategic planning.

Despite a significant difference between strategic and operational planning , both the processes are interconnected and complement one another. With Harappa’s Rise In An Organization program, you’ll be able to decode and master strategic and operational planning as you quickly build the critical skills required to rise in an organization. You’ll become a reliable team player who inspires trust from their team and be able to lead with influence.

Thrive Skills such as Managing Projects will help you combine strong methodology with deep expertise to predictably deliver high-quality results, while Instinctive Adaptability will allow you to efficiently respond to change and move fluidly within an organization based on need and skills. This pathway will also teach you how to face challenges head-on and bounce back stronger. You’ll learn to communicate with empathy, practice mindfulness and realize the best possible results of a strategy and its implementation.

Sign up today for Harappa’s Rise In An Organization pathway to get noticed and rise fast at work.

Thriversitybannersidenav

  • Get in Touch 1-800-589-4733

The Difference Between Business, Operational & Strategic Planning

Posted by Kristin Arnold on December 28, 2012

As a professional meeting facilitator who specializes in business, operational and strategic planning , I think it is only fitting that Joe and I conduct an off-site to do our planning.  Because of the size, scope and complexity of our business, two days should do it.  When done, then we’ll celebrate our new plans and then go to the beach.  (Believe it or not, Honolulu was the cheapest place to fly to on short notice as we both needed just a few more miles to make it to USAirways Chairman and Air Canada Super Elite status.  What a lovely place to conduct an off-site !).

First, we take a look at the Business Plan – the source document that describes the business that we are in.  I call it the “business basics” that should be reviewed and updated every year.  The key elements are:

  • The Business  including a general description of the business, the history, mission, vision and values
  • Products/Services including the relative importance and benefits of each product/service line, the life cycle, evaluation (performance, timeliness, ease of use, certainty), competitive comparison and differentiation from other products/services.
  • The Market including demographics on your current and targeted customers, your market segmentation, market research and trends, pricing strategies and marketing/sales strategy
  • Competitive Analysis including your nearest direct and indirect competitors
  • Physical Location of Business including building/space needs
  • Management including an organizational chart with key individuals and responsibilities, resumes, strengths and weaknesses. planned staff additions, other resources needed, payroll expenses
  • Personnel including Current personnel staffing and needs, future skills required, hiring and training plans, labor pool availability
  • Potential Risks and Problems including legal/regulatory issues
  • Financial Statements and Projections

The Operational Plan is an extension of the business plan, basically answering the questions: What are we going to do this year and how are we going to do it?  The resulting key activities then get folded into the annual budget.  I call this “blocking and tackling” – taking what you know to be true about your business this year and then making a plan that takes the business “to the next level.”  Typically, these plans forecast incremental improvement in the coming year.

The Strategic Plan , on the other hand, looks beyond the one-year horizon and extends your vision out three to five years (some extend even further out, but they have fairly robust strategic planning processes.  Most organizations I work with are keeping to the 3-5 year timespan).

Typically, there is a review of the business basics (some call this an internal scan) as well as an environmental scan – what’s happening in the outside world that could affect the business.  We then move into “Strategic Thinking” where we identify where we want to be in the next 3-5 years. It’s a position to be attained (your “vision” of the future) and you aren’t there yet!  Which means there is a GAP between where you are and where you want to be.  The Strategic Plan is created to close that GAP.  It also makes the assumption that you will continue to do what you have been doing through your business and operational plans (I call this “keeping the trains running”).  You may opt to stop doing some things, change the way your doing some things and even start doing some new things in order to support the strategic direction of the business.

Rather than think this year to the next, strategic thinking requires you to think long term and then ask, “What do we need to do in order to be successful in that preferred future?”  The strategic plan is about breakthrough improvements – figuring out where you want to be – and then determining the strategy to be successful in the long run.  These key initiatives and activities are then folded into the long term and operational budgets.

I have been in business for 20 years now – and I plan on staying in business for 20 more.  It would be absolutely ridiculous for me to think that I can keep on doing the same things and stay successful.  Actually, that’s a “go-out-of-business” strategy!  So I’ll invest a few days to work “on” vs. “in” the business and review and update my plans….and then go sit on the beach and celebrate the new year!

Happy new year to you!

Related Articles:

  • Stretch Your Leadership Teams’ Ability To Think Strategically
  • Wikipedia’s Definition of Strategic Planning

Share this:

  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to email a link to a friend (Opens in new window)

Contact Kristin about your Meeting Facilitation & Design, Interactive Speeches, or Facilitation Training Needs.

call

800-589-4733

  • Your Name *
  • Company Name
  • Phone Number *
  • Email This field is for validation purposes and should be left unchanged.

Connect with Kristin!

COPYRIGHT © 2024 ·Quality Process Consultants, Inc. · ALL RIGHTS RESERVED

the links between business strategy and operational planning

The Link Between Financial Goals and Strategic Planning: Impact on Business Operations

  • August 26, 2023
  • Achieve Your Goals

the links between business strategy and operational planning

In today’s dynamic business environment, the link between financial goals and strategic planning is crucial for driving innovation and achieving success. Companies that effectively align their financial goals with strategic planning are able to make informed decisions and allocate resources efficiently. CEOs play a pivotal role in setting and achieving these goals, while shareholders’ expectations shape the overall financial direction of the company. This article explores the impact of financial goals on various aspects of business operations, such as decision making, resource allocation, and efficiency. By understanding this link, businesses can unlock their full potential and thrive in a competitive marketplace.

Table of Contents

Key Takeaways

  • Financial goals serve as a foundation for strategic planning and help align business activities with these goals.
  • Financial goals have a significant impact on various aspects of business operations, including investment decisions, cost reduction initiatives, pricing strategies, and resource allocation.
  • Shareholders play a crucial role in setting financial goals through their expectations and monitoring of company performance.
  • CEOs have the primary responsibility for achieving financial goals and lead the implementation of strategies to meet these goals, collaborating with stakeholders and continuously monitoring and adjusting strategies as needed.

The Importance of Aligning Financial Goals With Strategic Planning

Aligning financial goals with strategic planning is crucial for effective business operations as it ensures that business activities are aligned with the long-term objectives of the organization. This alignment plays a vital role in driving innovation and growth within a company. Financial analysis serves as a key tool in strategic planning by providing valuable insights into the financial health of the organization and helping to identify areas of improvement or potential risks. By integrating financial goals into strategic planning, companies can establish a clear roadmap for achieving long-term company growth. Financial goals provide a framework for decision-making, resource allocation, and performance evaluation. They guide the development of strategies aimed at maximizing profitability, increasing market share, and enhancing shareholder value. Ultimately, aligning financial goals with strategic planning enables businesses to make informed, data-driven decisions that foster innovation and drive sustainable growth.

How Financial Goals Drive Effective Decision Making

Financial goals provide a clear direction and purpose for decision-making within a company. They serve as a roadmap for success and help guide the organization towards achieving its objectives. In today’s fast-paced and data-driven business environment, the role of data analysis in driving financial goals cannot be overstated. By analyzing and interpreting data, companies can gain valuable insights into market trends, customer behavior, and financial performance. This information enables them to make informed decisions that align with their financial goals and drive growth and profitability. Additionally, financial goals and risk management are closely intertwined. Setting clear financial goals helps companies identify potential risks and develop strategies to mitigate them. Effective risk management ensures that companies can navigate uncertainties and stay on track to achieve their financial objectives. By integrating data analysis and risk management into their decision-making processes, companies can optimize their financial performance and stay ahead in today’s competitive business landscape.

The Impact of Financial Goals on Resource Allocation and Efficiency

The impact of financial goals on resource allocation and efficiency within a company can be significant. When financial goals are clearly articulated and aligned with strategic planning, they provide a framework for optimizing resources and enhancing efficiency. This impact is further amplified by the actions taken by CEOs, who play a crucial role in achieving financial goals. Through their leadership, CEOs drive the implementation of strategies that guide resource allocation and decision-making. They collaborate with stakeholders to align efforts towards financial goals and continuously monitor and adjust strategies to ensure goal achievement. This focus on financial goals drives cost reduction and efficiency improvement initiatives, shaping organizational structure and resource allocation. By prioritizing resource optimization and efficiency enhancement, companies can effectively align their operations with their financial goals, fostering innovation and sustainable growth.

The Role of Shareholders in Shaping Financial Goals

Shareholders actively shape the financial goals of a company through their expectations and influence on stock market responses. Shareholder engagement is a crucial aspect of corporate governance, as it allows shareholders to voice their opinions and influence the direction of the company. Investor expectations play a significant role in shaping financial goals, as shareholders expect a return on their investment. They monitor and evaluate company performance based on these goals, and their reactions in the stock market can have a direct impact on the company’s financial goals. In order to meet these expectations, companies must effectively communicate with shareholders and consider their input when setting financial goals. By engaging with shareholders and aligning their goals with investor expectations, companies can foster innovation and drive financial success.

CEO Accountability in Achieving Financial Goals

CEOs are responsible for driving company performance and achieving the established financial goals. They play a crucial role in articulating and implementing these goals. In order to evaluate their performance and measure financial success, the following methods can be used:

Performance evaluations: CEOs undergo regular evaluations to assess their effectiveness in meeting financial goals. These evaluations help identify areas for improvement and provide feedback for future goal-setting.

Key performance indicators (KPIs): KPIs are used to measure specific aspects of the CEO’s performance, such as revenue growth, profitability, and shareholder value. These metrics help track progress towards financial goals and provide insights for decision-making.

Financial metrics: CEOs are evaluated based on financial metrics like return on investment (ROI), earnings per share (EPS), and cash flow. These metrics reflect the company’s financial health and the CEO’s ability to generate sustainable growth.

Peer comparisons: CEOs can be evaluated by comparing their performance to that of industry peers. This benchmarking helps assess their relative success in achieving financial goals and identifies opportunities for improvement.

Frequently Asked Questions

How do financial goals impact employee morale and motivation within a company.

Financial goals have a significant impact on employee morale and motivation within a company. When employees are aware of the financial goals and understand their role in achieving them, it can lead to a sense of purpose and job satisfaction. Financial goals also provide opportunities for performance incentives, such as bonuses or profit-sharing, which can further motivate employees to work towards achieving those goals. This can create a positive work environment and drive innovation and productivity among employees.

What Are Some Potential Risks or Drawbacks Associated With Solely Focusing on Financial Goals in Strategic Planning?

Solely focusing on financial goals in strategic planning can have potential risks and drawbacks. While financial goals are important for guiding business operations, an exclusive focus on them may neglect other crucial aspects such as customer satisfaction, employee morale, and innovation. It is essential to strike a balance between financial objectives and broader organizational goals to ensure long-term success. By considering a more holistic approach, companies can mitigate the risks associated with solely focusing on financial goals in strategic planning.

How Can Companies Ensure That Their Financial Goals Align With Their Broader Corporate Values and Social Responsibilities?

Companies can ensure that their financial goals align with their broader corporate values and social responsibilities by integrating corporate ethics and sustainability initiatives into their strategic planning process. For example, a hypothetical company could develop a set of financial goals that prioritize profitability while also incorporating sustainability practices, such as reducing carbon emissions or promoting fair trade. By aligning financial goals with corporate values and social responsibilities, companies can demonstrate their commitment to ethical and sustainable business practices while still driving financial success.

What Role Does Innovation Play in Achieving Financial Goals and Driving Long-Term Business Success?

In driving long-term business success and achieving financial goals, innovation plays a crucial role. The role of technology in achieving financial goals cannot be overstated. By embracing innovative technologies, companies can streamline operations, enhance efficiency, and create new revenue streams. Additionally, innovation is closely tied to customer satisfaction, as it enables companies to develop products and services that meet and exceed customer expectations. Ultimately, companies that prioritize innovation are better positioned to achieve their financial goals and ensure long-term success.

How Do External Factors, Such as Changes in the Economic or Regulatory Environment, Influence the Setting and Achievement of Financial Goals?

Changes in the economic or regulatory environment can significantly influence the setting and achievement of financial goals. Economic factors, such as market conditions and consumer behavior, can impact revenue generation and cost management strategies. Regulatory changes, on the other hand, can introduce new compliance requirements and affect resource allocation. Adapting to these external factors is crucial for businesses to stay competitive and align their financial goals with the evolving landscape. Successful companies embrace innovation to navigate these challenges and ensure long-term financial success.

  • Business strategy |
  • What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Julia Martins contributor headshot

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

How to build an organizational strategy

Get our free ebook and learn how to bridge the gap between mission, strategic goals, and work at your organization.

What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

[inline illustration] Strategic plan elements (infographic)

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

Related resources

the links between business strategy and operational planning

Business impact analysis: 4 steps to prepare for anything

the links between business strategy and operational planning

The beginner’s guide to business process management (BPM)

the links between business strategy and operational planning

Project portfolio management 101

the links between business strategy and operational planning

Marketing campaign management: 7 steps for success

Staying current is easy with Crain’s news delivered straight to your inbox.

Free of charge.

the links between business strategy and operational planning

February 20, 2024 8:31 AM

Sheryl Jaffee Halpern

Much Shelist

Sheryl Jaffee Halpern is an employment attorney, advising clients on employment issues with guidance to advance their business goals while ensuring legal compliance. As a management committee member, Halpern leads 160-plus employees, fostering diverse viewpoints and maximizing client service. She helped create Much Shelist’s five-year strategic growth plan, developing the people development aspect promoting operational excellence and professional growth. She was integral in rolling out 12 weeks’ paid parental leave for all firm employees. As founder, president and treasurer of Power Rainmakers NFP, she helps plan and host an annual two-day conference for female partners of law firms across the U.S. and Canada.

Get our newsletters

Staying current is easy with Crain's news delivered straight to your inbox, free of charge.

Subscribe today

With a Crain’s Chicago Subscription you get exclusive access, insights and experiences to help you succeed in business.

IMAGES

  1. Strategic Planning vs Operational Planning: Difference and Comparison

    the links between business strategy and operational planning

  2. Differences between strategic and operational planning

    the links between business strategy and operational planning

  3. Complete Guide to Operational Strategy

    the links between business strategy and operational planning

  4. Strategic, Tactical and Operational Planning

    the links between business strategy and operational planning

  5. Operational Planning: Key elements

    the links between business strategy and operational planning

  6. Difference Between Strategic and Operational Planning

    the links between business strategy and operational planning

VIDEO

  1. Animation Capacity planning Strategic to operational planning landscape

  2. DIFFERENCE BETWEEN STRATEGIC PLANNING AND OPERATIONAL PLANNING

  3. Managing Strategic Implementation

  4. Types of planning part 1

  5. US Marketing Strategy 😱🤫

  6. Animation Serialize the flow accelerate the loop

COMMENTS

  1. Strategic VS. Operational Planning: 7 Main Differences

    Strategic VS. Operational Planning: The 7 Main Differences Uncover the 7 key differences between strategic and operational planning, how each impacts your business and guides you in aligning them for success. Angel Oh January 17, 2024 Strategic Planning Strategic planning and operational planning are both vital to an organization's success.

  2. Strategic Planning Vs Operational Planning: What's The Difference?

    November 13, 2023 Looking to learn the difference between strategic and operational planning and how to get better at each? You're in the right place. In this guide, you'll discover the key differences and how to keep up with the immediacy of operational tasks without losing sight of the strategic direction. We'll cover:

  3. Links Between Strategic & Operational Plans

    by Steve McDonnell Published on 1 Jan 2021 A strategic plan defines what a company wants to do. An operational plan defines how it's going to do it. A company with a plan but no strategy and a company with a strategy but no plan for how to execute it are equally handicapped.

  4. Business Strategy and Operations: Definition, Types and Tips

    A business operational strategy is a decision-making process that shapes an organization's long-term plans to achieve the objectives in its mission statement. It comprises specific actions management wants to take to achieve a specific aspect of a company's operations.

  5. Bridging the gap between a company's strategy and operating model

    (PDF-929 KB) How well is your company's operating model keeping up with its evolving strategy? Under pressure to respond more quickly to rapidly changing competitive circumstances, executives today are more likely to adopt a rolling strategic plan that they update as needed instead of the three-to-five-year plan that was once standard.

  6. How To Turn A Corporate Strategy Into An Operational Plan

    Strategies are long-term goals for the company, while plans pertain more to the short-term objectives the company needs to meet in order to achieve the strategic goal.

  7. Connecting Business Strategy and Operations

    Most companies have a strategic plan. However, over the years I have seen it time and again. Strategy, although perceived by some as defined, is largely misunderstood across the organization, not tied-in to operations and therefore poorly executed in operations and as a result ignored as the hour-to-hour, crisis-to-crisis mode of management becomes more firmly entrenched.

  8. Business Plan Vs Strategic Plan Vs Operational Plan

    The operational plan covers the details of marketing campaigns, short-term product development, and more immediate goals and projects that will happen within the next year. What is the difference between a strategic plan and a business plan? First, let's look at the difference between a business and a strategic plan. For review:

  9. Business plan vs. Strategic plan vs. Operational plan (2023)

    A business plan outlines the "what" and "how" of your business, while a strategic plan sets the long-term vision. Operational plans dive into day-to-day tasks. We'll explain their roles, differences, and how they work together. In this post, we'll break down these concepts, explain the difference between them and why all three are important.

  10. Strategic and operational planning

    Strategic and operational planning CCH® Tagetik View A Demo What are strategic and operational planning ? Strategic planning and operational planning are vital to determining an organization's future. Not to be confused, strategic plans and operational plans have two different functions.

  11. Links Between Strategic & Operational Plans

    Looking for links between strategic and operational planning helps you create the right organizational setup and manage your staff to meet your goals. Typical Business Strategies...

  12. Operational Planning: How to Make an Operations Plan

    Operational plans go deeper into explaining your business operations as they explain roles and responsibilities, timelines and the scope of work. Operational plans work best when an entire department buys in, assigning due dates for tasks, measuring goals for success, reporting on issues and collaborating effectively.

  13. Strategic vs Operational Planning

    Strategic plans stay big-picture, and operational plans are specifically focused on implementation. As such, there are significant differences in how strategic and operational plans are designed: Specificity: Strategic plans must stay relatively vague, but operational plans can be highly specific.

  14. Learn how to do operational planning the right way

    If you haven't already, create a strategic plan first. You need a long-term vision and goals before you can break down the day-to-day details. There are four steps to creating a strategic plan: Determine your position. Develop your strategy. Build your strategic plan. Share, monitor, and manage your strategic plan.

  15. Bridging the Gap Between Business Strategy and Operations

    Strategic Alignment: BPM involves aligning business processes with strategic goals. This requires a deep understanding of the organisation's overarching strategy and objectives. Continuous ...

  16. Strategy vs Operations: What's The Difference? [Video]

    What is the Relationship Between Business Strategy and Operations Strategy? To provide greater clarity, think of strategy and operations as two separate, but related, engines on a boat. Both engines propel the boat forward.

  17. Difference Between Strategic Planning and Operational Planning

    Difference Between Strategic Planning and Operational Planning (with Comparison Chart) - Key Differences Difference Between Strategic Planning and Operational Planning Planning is an important activity, performed by the management, keeping in view, the vision, mission, goals and objectives of the enterprise.

  18. Operational vs. Strategic Planning: Definitions and Differences

    Updated June 24, 2022 If you're a top-level manager, you may be responsible for choosing the planning process for an organization or department. You may decide between operational planning and strategic planning, depending on the needs of the business and your leadership style.

  19. Difference Between Strategic Planning And Operational Planning

    Strategic planning involves planning for the long term. A strategic plan outlines an organization's mission along with the business goals to be achieved in the future. Operational planning is planning for the short term. An operational plan focuses on the day-to-day operations of departments and immediate departmental objectives.

  20. 7 Strategic Planning Models and 8 Frameworks To Start [2023] • Asana

    1. Basic model. The basic strategic planning model is ideal for establishing your company's vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

  21. The Difference Between Business, Operational & Strategic Planning

    As a professional meeting facilitator who specializes in business, operational and strategic planning, I think it is only fitting that Joe and I conduct an off-site to do our planning. Because of the size, scope and complexity of our business, two days should do it. When done, then we'll celebrate our new plans and then go to the beach.

  22. The Link Between Financial Goals and Strategic Planning: Impact on

    In today's dynamic business environment, the link between financial goals and strategic planning is crucial for driving innovation and achieving success. Companies that effectively align their financial goals with strategic planning are able to make informed decisions and allocate resources efficiently. CEOs play a pivotal role in setting and ...

  23. What is strategic planning? A 5-step guide

    Strategic planning is a process through which business leaders map out their vision for their organization's growth and how they're going to get there. The strategic planning process informs your organization's decisions, growth, and goals. Strategic planning helps you clearly define your company's long-term objectives—and maps how ...

  24. Benefits, elements and key factors of an operations strategy

    Related: What is a business strategy (and business strategy examples) Types of operational strategies. Below are the operations approaches you can use: Customer-driven strategies: This type of planning relies on customers' feedback about the company's goods and services. This strategy often works with sales and marketing strategies to achieve ...

  25. The Booming Business of Cutting Babies' Tongues

    It's essentially a small business, and they would get paid based on the patients that they saw. But increasingly, even in, for example, large hospital systems where you might think that a doctor ...

  26. Notable Women in Law 2024

    She helped create Much Shelist's five-year strategic growth plan, developing the people development aspect promoting operational excellence and professional growth.

  27. Russia's Advances on Space-Based Nuclear Weapon Draw U.S. Concerns

    The United States has informed Congress and its allies in Europe about Russian advances on a new, space-based nuclear weapon designed to threaten America's extensive satellite network, according ...