Strategic vs Operational Planning (2023)

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.

Strategic vs Operational Planning (1)

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

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(Video) Differences between Strategic Planning and Operational Planning.

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:

(Video) Strategic Planning Vs. Operational Planning: The Main Differences

  • 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:

(Video) Operational Plan vs Strategic Plan

  • 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.

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.

(Video) Strategic vs Operational Management|Difference between strategic planning and operational planning

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.

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FAQs

Is strategic planning more important than operational planning? ›

You might create both types of plans to guide the success of an organization, but your strategic plans have a much wider scope than your operational ones. You can use strategic plans to work toward the goals of the entire company and decide what departmental projects might help the company achieve those goals.

What is the difference between strategic versus operational planning? ›

Simply put, your strategic plan shares your vision for the future, while your operational plan lays out how you'll get there on a daily to weekly basis. Both concepts describe your company's plans for the future, but in different contexts.

Why is it important to make a distinction between operational and strategic decision making? ›

Operational decisions are about how you're going to carry out your strategic decisions. They're considered medium-term decisions versus strategic long-term decisions. Like strategic decisions, they're focused on growth but they target the production process. They're “the how” of meeting your strategic goals.

What is strategic planning questions answers? ›

Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision.

Is operational effectiveness more important than strategy? ›

Too often in today's companies, managers mistake operational effectiveness with strategy. Both are important. Both help drive superior performance. But managers who neglect strategic positioning can wind up like a hamster on a wheel – running hard while standing still.

Why is strategic planning the hardest? ›

Difficulty of Planning the Sequence of Tactics

Implementation is a complex process because some strategies require a lengthy series of steps. A business strategy may also require a degree of timing to be successful, such as deciding the best time of year to launch a new ad campaign.

What is the value of strategic and operational planning? ›

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.

What is the link between operations management and strategic planning? ›

The functions of operations management work hand in hand with strategic management. Operation managers implement the company's vision on the ground. They ensure that all processes are optimised for efficiency. They handle staff and company objectives, ensuring company policies are upheld at all times.

How do strategic tactical and operational planning complement each other? ›

Operational planning is the process of linking strategic goals and objectives to tactical goals and objectives. It describes milestones, conditions for success and explains how, or what portion of, a strategic plan will be put into operation during a given operational period.

What is most important difference between a strategic and an operational objective? ›

The most important difference between a strategic and an operational objective is its time frame; operational objectives are short-term goals, while strategic objectives are longer-term goals.

What is the relationship between operational effectiveness and strategy? ›

Operational effectiveness means performing similar activities better than rivals perform them… In contrast, strategic positioning means performing different activities from rivals' or performing similar activities in different ways.”

How do you move from operations to strategy? ›

8 Tips to Move from an Operational Role to Strategic Role
  1. Meet the rising demands of data consumers. ...
  2. Operational thinking is for every role. ...
  3. Build a foundation of clean and clear data. ...
  4. Automation—the secret for moving past tactical to strategic. ...
  5. Become your leader's data confidant. ...
  6. You don't need the right answers.
27 Jul 2021

How do you answer a strategic question? ›

Here are some tips for answering strategy interview questions:
  1. Explain your thought process. ...
  2. Analyze past company strategies. ...
  3. Use hypothetical scenarios and examples. ...
  4. Be confident. ...
  5. Prepare for your interview. ...
  6. Decision-making skills. ...
  7. Leadership skills and initiative. ...
  8. Adaptability skills.

What are the 3 strategic questions? ›

He taught that the three most important strategic questions each company must answer are: What is our business? (Mission) What will our business be? (The changing environment that we are certain about) What should our business be? (Vision)

What are the three 3 strategic questions when doing a strategy? ›

Here are the three questions to get your strategic plan on track.
  • Question 1: What is the real problem here? ...
  • Question 2: Why is our solution better than everyone else's? ...
  • Question 3: How are you going to do it?
18 Sept 2015

Why operational effectiveness is necessary but not sufficient? ›

Constant improvement in operational effectiveness is necessary to achieve superior profitability . However, it is not usually sufficient . Few companies have competed successfully on the basis of operational effectiveness over an extended period, and staying ahead of rivals gets harder every day.

Why is operational excellence not a complete strategy? ›

Unlike other corporate initiatives, operational excellence doesn't stop once it's achieved. It requires constant communication, continuous improvements, and workforce engagement to sustain growth and keep your company ahead of the competitive curve.

What is the difference between strategy and operational efficiency? ›

Strategy takes planning, including creating financial budgets, project budgets and growth projections that divisions can use to keep operations on track. Operational efficiency is the execution of the strategic planning.

Is strategic planning a hard or soft skill? ›

Hard skills are teachable, most often technical, skills that no one is born with. Examples include economic analysis, strategic planning, design, coding, etc. These skills are ideal for showing why you'd be great for a specific job. They're also easy to describe and demonstrate.

What is the most difficult part of strategic planning? ›

What is the hardest part of strategic planning? The answer to that is clearly its implementation. But making the process a 'whole of organisation' experience can ensure buy-in and leadership across the business. Bringing in other stakeholders including both suppliers and customers can further enrich the process.

Why do strategic plans often fail? ›

Most plans fail because of poor communication between the management and their teams. The challenge here is to communicate your strategy across the organisation so everybody can get on the same page, together. This makes effective internal communications just as critical as the strategy itself.

How managers can contribute to an organization's strategic and operational planning? ›

Implementing corrective action where tasks are not achieved, or achieve on time. Checking that resources will be available when needed. Supervising, supporting and motivating the people of the organisation to ensure tasks are undertaken. Adjusting the operational plan if there is a need.

How does a company benefit from operational planning? ›

An operational plan ensures you can identify areas that aren't generating as much revenue as they should, or are causing losses, and can help you establish what needs to change.

What is the main goal of operational planning? ›

It clarifies organizational goals. Operational planning helps leadership define responsibilities, daily tasks, and activities in detail. It also sets out how individual team members support overall department and organizational goals and defines outcomes for them to measure daily tasks against.

How does operational planning affect strategic planning? ›

A strategic plan is developed to help the organization achieve its long-term vision. Conversely, operating plans involve the process of deciding what needs to be done to achieve the tactical objectives of the business. Operational planning is done to support strategic planning efforts.

Why it is important to link strategy people and operations? ›

Operational plans consist of policies and procedures to meet those strategic goals, according to ClearPoint Strategy. Looking for links between strategic and operational planning helps you create the right organizational setup and manage your staff to meet your goals.

Why is it necessary to develop the strategic plan into operational plans per department? ›

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company's larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs).

How do operational plans help an Organisation achieve its strategic and business goals? ›

An operational plan outlines the activities and targets which the organisation will carry out in order to work towards achieving the aims and objectives set out in the strategic plan. It provides the framework for an organisation's day-to-day operations. An operational plan usually covers a one year period.

Who comes first strategic plan or tactical plan? ›

Strategic planning and tactical planning actually complement one another. The main difference is that strategic planning happens first. You need to look at your larger objectives and see what you want to accomplish overall.

What is the difference between the two methods of planning do you believe strategic and operation planning should overlap just like leadership and management? ›

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.

What is the relationship among strategic planning tactical planning and operational planning? ›

Strategic planning is usually used for long-term operations, while tactical and operational planning are used in short-term goals and resource projection. Tactical planning is a significant part of the planning process, and it is the step in which employees identify and prioritize their goals.

What is the difference between being strategic and operational? ›

“Operational” is something that helps things to work smoothly today, and requires constant attention, while. “Strategic” is something from the world of top managers, defined for a longer-term, often less tangible, but still very important.

How can operational effectiveness be improved? ›

Key Takeaway: To improve operational effectiveness, define goals and create infrastructures that supports successful outcomes. Be sure to use data and analytics to assess if processes are optimised.

What are the 4 competitive priorities in an operations strategy? ›

It should be noted that each of the four competitive priorities (quality, cost, flexibility and delivery) contributes to improving and sustaining the competitive advantage of a firm, since such priorities are all linked to its corporate and functional strategies.

Does strategy fall under operations? ›

Strategic management and operational management are different and equally important aspects of the business. They're separate, but related processes that work in parallel to each other. Each process can run on its own and in poorly run companies, they sometimes do.

What are the five competitive priorities for operations strategy? ›

There are five common groups of competitive priorities namely cost, quality, time, flexibility and innovation. Finding the right competitive priorities does not happen overnight, many companies struggle for years when making decisions regarding different competitive priorities.

What is strategic planning short answer? ›

Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision.

How do you show strategic planning in an interview? ›

Sample strategic interview questions and answers
  1. How much time do you regularly invest in strategic planning? What methods do you use? ...
  2. How do you keep your team informed of strategic decisions? ...
  3. What factors do you consider when building a strategic plan? ...
  4. How do you measure whether a strategy is effective?

What is a good example of strategic thinking? ›

You can develop strategic thinking in your everyday life. For example, you go on a trip and pack our things, thinking ahead and assuming what you need to take in case of bad weather, an illness, losing documents or money.

What are the 3 elements of strategic planning? ›

During the strategic planning process, an organization performs three steps: Builds or modifies the foundational strategic vision and mission. Commits to goals that drive overall health. Develops a long-term plan to achieve the goals.

What are your top 3 key strategic challenges? ›

Top 3 Strategic Problems and How to Address Them
  • It's impossible to get everyone together.
  • I'm too busy working in my company to work on my company.
  • There are too many stakeholders.
  • An unclear or inaccessible strategy.
  • Poor communication channels for the strategy.
25 May 2017

What are the 4 strategic process? ›

The four phases of strategic management are formulation, implementation, evaluation and modification.

What are the three most common strategic decision making? ›

“Where am I?” ”What should I do?” “How should I do it?” These questions form the basis of good strategic decisions.

What are the 3 key areas of strategic management? ›

Strategic Management involves 3 steps: Planning, Execution & Monitoring.

Is strategic planning Important Why or why not? ›

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company's larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs).

Why is operational planning important? ›

Without an operational plan, you're out of the league. Being able to update and refer to a plan enables comprehensive understanding of goals. An operational plan ensures you can identify areas that aren't generating as much revenue as they should, or are causing losses, and can help you establish what needs to change.

What is the importance of the strategic plan to the operational plan? ›

A strategic plan helps your business outline long-term goals and fulfill the big vision. Operating plans define what processes need to be finished to achieve those goals. An operating plan supports the efforts of a strategic plan and makes sure everyone runs their day-to-day tasks as efficiently as possible.

Why is strategic thinking more important than strategic planning? ›

Strategic thinking helps you consider the long-term value and consequences of taking a particular approach. Strategic planning is about defining how you will implement your vision. It is useful for detailing the steps needed to solve a problem, improve a process, or deliver something new.

What would happen without strategic planning? ›

Without a strategic plan that includes concrete quantifiable, measurable goals, you have no way to measure success, and demonstrate results, value and performance. Instead, you'll focus on vanity or tactical indicators.

What makes strategic planning successful? ›

For a strategy to be successful, you need the right mix of people and it must be cross functional. This can include your board or leadership, finance, HR, operations, sales, marketing, etc. It's important to examine any potential biases that may impact the selection of your collaborators.

What will happen if one company does not have a strategic plan? ›

Without a strategy, there is no formal structure for communication and important information can get lost. Each employee will naturally focus on what he believes is important, which may or may not align with yours.

Is operational plan important in the business to succeed? ›

Yes! Think of an operating plan as a manual for running your business. It describes how human, financial, and physical resources will be allocated to achieve short-term goals for a single department or function — staffing, sales and marketing, production, and so on.

What is operational planning in simple words? ›

Operational planning (OP) is the process of planning strategic goals and objectives to technical goals and objectives.

Who is responsible for operational planning? ›

The operational plan is produced by the chief executive and staff of the organisation. The purpose of the Operational Plan is to provide organisation personnel with a clear picture of their tasks and responsibilities in line with the goals and objectives contained within the Strategic Plan.

What is the relationship between strategic and operational planning? ›

The strategic plan is created at the corporate-level by top-level management, like the CFO and CEO. It as serves as the guiding light for business operations and operational plans. An operational plan outlines the day-to-day activities of an organization at the project, business unit, functional, or department level.

How do you show strategic thinking in an interview? ›

Strategic-thinking interview questions and answers
  1. Set long-term objectives.
  2. Proactively identify and address potential risks.
  3. Use resources efficiently.
  4. Develop action plans in the face of obstacles.
  5. Successfully deal with competition.

What are the three benefits of strategic planning? ›

The benefits of strategic planning

Align everyone around a shared purpose. Proactively set objectives to help you get where you want to go. Define long-term goals, and then set shorter-term goals to support them.

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