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Organizational leaders do a lot of planning. The ability to consistently design and implement project, program, and other plans can spell the difference between an organization’s long-term failure and success.
In our work with hundreds of leaders and dozens of organizations, Funding for Good has seen just how critical planning really is. But making sure you’re doing the right planning at the right times—and for the right purposes—is just as important.
With that in mind, we wanted to look at two types of planning that are not only essential but intertwined: operational planning and strategic planning.
For any organization to succeed, having robust operational and strategic plans is critical. But what exactly is the difference between operational and strategic planning?
Aligning these two types of planning is essential, yet can be challenging without a clear understanding of how each one uniquely contributes to organizational success. This comprehensive guide examines the key differences between operational and strategic planning and provides tips for syncing them up seamlessly.
What is Strategic Planning?
Strategic planning focuses on high-level goals and strategies for the future. It involves determining long-term objectives usually over a 3-5 year timeframe and identifying the general ways to achieve them.
The key components of a strategic plan include:
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Vision and mission statements: The vision articulates the desired future state of the organization. The mission defines the purpose and broader objectives.
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Core values: Principles and beliefs that guide actions within the organization.
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SWOT analysis: Evaluates internal strengths and weaknesses, and external opportunities and threats.
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Strategic priorities and objectives: Defines the major goals and focus areas.
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Strategies and initiatives: Outlines the general methods and projects to pursue the objectives.
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Key performance indicators (KPIs): Metrics to track progress on strategic goals.
Overall, strategic planning charts out a broad roadmap for where the organization aims to go and how it hopes to get there. It provides crucial direction and alignment across the entity.
What is Operational Planning?
While strategic planning looks at the bigger picture, operational planning deals with the nitty-gritty details of execution. Operational plans outline the specific actions and resources needed to reach strategic goals.
Key elements include:
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Tactics: The precise activities, projects, and steps used to accomplish each strategy.
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Resource allocation: Designation of budget, people, equipment, facilities, etc. for implementation.
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Milestones: Key interim targets to hit along the timeline.
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Performance metrics: Measurable indicators of progress on operational output and efficiency.
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Forecasts: Projections for revenues, costs, productivity, etc.
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Policies and procedures: Standard processes governing operations.
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Work schedules and budgets: Detailed allotment of time, money, and human capital.
Operational planning defines the granular how-to steps for strategy execution on a day-to-day and week-to-week basis. It turns broad strategic objectives into concrete action.
Key Differences Between Strategic and Operational Planning
While strategic and operational planning work in tandem, there are several key differences between the two processes:
1. Time Horizon
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Strategic planning defines long-term goals over 3-5 years.
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Operational planning outlines short-term actions over 1-2 years.
2. Scope
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Strategic planning covers the entire organization.
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Operational planning is done at the departmental or functional level.
3. Level of Detail
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Strategic planning sets directional and visionary goals.
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Operational planning provides precise, step-by-step activities.
4. Measurement
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Strategic planning uses high-level key performance indicators.
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Operational planning relies on task-based metrics and productivity targets.
5. Frequency of Update
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Strategic plans are revisited annually or quarterly.
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Operational plans are reviewed and adjusted monthly or weekly.
6. Ownership
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Strategic planning is driven by top leadership.
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Operational planning is done by line managers.
7. Budget Focus
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Strategic plans utilize dedicated strategic budgets.
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Operational plans work within departmental budgets.
While their timeframes, details, and owners differ, strategic and operational planning work together seamlessly when properly aligned.
Aligning Strategic and Operational Planning
Connecting strategic priorities to operational activities is vital for execution. Here are tips for aligning the two planning processes:
Cascade objectives down
Break down organization-wide strategic goals into specific departmental actions within operational plans. This connects the dots.
Align resources
Allocate budgets, staffing, and other resources to operational activities that move strategic objectives forward.
Establish metrics
Ensure departmental productivity and output metrics clearly link to strategic KPIs.
Communicate plans
Share both strategic and operational plans across the organization for visibility into how activities ladder up.
Review and re-calibrate
Continuously review operational plans against strategic priorities and adjust as needed.
Consolidate data
Use a centralized system to consolidate data from operational and strategic plans to enable integrated insights.
Lead from the top
Executives must champion the alignment between high-level strategy and ground-level operations.
Best Practices for Strategic and Operational Planning
Follow these best practices to maximize the value of strategic and operational planning:
Strategic Planning Best Practices
- Conduct regular environmental scans to identify risks and opportunities
- Survey internal and external stakeholders for input
- Benchmark competitors and industry trends
- Factor in long-term financial projections
- Build in 3-6 month strategy reviews to adjust course as needed
Operational Planning Best Practices
- Maintain open communication with strategy owners
- Plan for contingencies and scenarios
- Forecast resource constraints or gaps
- Analyze and apply customer feedback quickly
- Review productivity data and quality control regularly
- Conduct annual capability audits
With aligned strategic and operational planning, organizations can retain high-level perspective while still executing day-to-day with precision. Misalignments result in wasted efforts, mixed signals, and failure to hit strategic targets.
Syncing up these critical processes requires active collaboration between leadership and operations teams. But it enables organizations to orient all activities towards a shared strategic vision and reach their long-term goals.
Operational Plan vs Strategic Plan
While there is some overlap in content between an operational plan vs a strategic plan, the two have distinct goals and uses:
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- A strategic plan is a written roadmap for where an organization is going, how it will get there, and specific ways to determine if the organization has “arrived” at the destination. A strategic plan often covers 3-5-years and includes an organization’s vision, mission, goals, objectives and benchmarks over that period.
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- An operational plan also outlines an organization’s goals and objectives over a defined period. However, it then goes one level further into the details of how an organization will operationalize the activities needed to achieve those goals and benchmarks.
Here at Funding for Good we also call an operational plan an action and implementation plan.
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Are you ready to start the strategic planning process?
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Why a Strategic Plan Should Come Before an Operational Plan
A strategic plan should always come before an operational plan.
Imagine the two plans as the key ingredients for a successful road trip. Your strategic plan helps you figure out your destination and pick the right roadmap to get there. You know which states you’ll pass through, which route you’ll take, and about how long it’ll take to get there.
Then your operational plan comes into play. You’ll start figuring out exactly how long you’ll be on the road based on how much you want to drive each day. You’ll pick where you plan stay the night, and maybe even make reservations. You’ll make sure you have your phone charger, so you can get step by step driving instructions when you need them.
But what if a major highway is closed or you need to take a detour? That’s where you’ll pull your strategic plan back out and reassess your overall route. Rinse and repeat.
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Differences between Strategic Planning and Operational Planning.
What is the difference between strategic plan and operational plan?
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.
What is operational planning?
Operational planning is the process of making a detailed, short-term plan for your department’s business operations. How far you plan out your operations depends on your business needs, but many managers decide to plan a year in advance.
What is the difference between strategic and operational budget planning?
Strategic and operational plans have different budget planning processes and rules. You keep the budgets of your strategic plans separate from your operational ones, and you might organize a new expenditure category to ensure that you save certain funds specifically for strategic planning projects.
When should operational planning be done?
In short, operational planning can be done at the end of a strategic planning session, once the organizational priorities and goals are established – AND/OR – If the organization already has a strategic plan, operational planning can be done on an ongoing basis to remain aligned with the company’s strategic direction.
