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Operational planning bridges the gap between lofty ambitions and tangible achievements. This integral process serves as the foundation upon which businesses can thrive and surpass their goals, navigating complexities with precision and purpose.
According to research, having a strategic plan can make your company 16% more likely to succeed than businesses without it. Considering its high importance, we’ll discuss all of that in detail the essence of operational planning and its multifaceted methods. We will delve into the intricacies that empower organizations to steer their course amidst uncertainty and change.
What Is Operational Planning?
An operational plan can be defined as the process for transforming your strategic plan into a concise and detailed roadmap for your team’s daily, weekly, and monthly activities.
According to Pedabo, 50% of newly found companies fail within five years of inception. This is because companies lack responsibility and direction without a proper plan. Your operational plan helps divide your end goal into smaller chunks for your departments. These short-term goals help your team understand their tasks, milestones, and actions that will eventually account for long-term success.
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Why Is Operational Planning Important?
Let’s say you have a goal to reach a $100k revenue by the end of the year. You have several departments working towards reaching that goal. Having an operational plan will enable you to break down annual or long-term targets into monthly or quarterly milestones.
Operational plans allow you to outline the projects and activities of each of your departments and slice them into short-term goals. This helps team members remain aware of their responsibilities and meet deadlines. Then, you can assign managers to oversee those operations while you focus on budgeting and forecasting for the year.
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Key Elements of an Effective Operational Plan
Operational planning is generally short-term and aligned for team members so they are aware of their responsibilities. That means your plan should not be complex and easy to follow, so your team has no problem following it.
So, how do you build it?
Here are the five elements of a successful operational plan:
- Your objectives should be linked: Your operational plan should be made according to the strategy in place for your long-term goals.
- Your objectives should be properly aligned with the team: Who is responsible for a specific task, what are the goals, and how long should it take to complete the task? All of these should be delegated in an operational plan.
- Your objectives should impact a larger goal: Every short-term goal you set should help you reach a long-term goal.
- Your objective should show you the financial impact: Your shorter milestones should add up to the year-end goals. You can measure the actual business performance against your monthly or quarterly milestones (a.k.a. the operational plan), to see if you’re still on track to meet the year-end targets.
- Your objectives should be tracked regularly: How do you know if your progress is actually going according to plan? When you regularly analyze your progress, you can make immediate changes to your strategy to meet your end goal.
Steps Involved in Operational Planning
1. Build your strategic plan
A strategic plan is the end goal of your operational plan and serves as a purpose for your planning. This will define your long-term goal and help you effectively divide the strategy into workable goals. A strategic plan will also help you understand which elements of your operational plan are critical and deserve most of your team’s attention.
2. Identify your core KPIs
A clear and straightforward plan leaves less room for confusion, and your team will be more inclined to follow the strategy. When you breakdown your strategic operational plan, make sure you focus on the main KPIs, for example:
- Increasing delivery time
- Cost reduction percentage
- Sales growth rate
- Customer satisfaction score
- Budget adherence
The right KPIs can help you evaluate the performance of your operational plan and focus on the elements that will propel your business faster to achieve the main goal.
3. Choose between leading and lagging indicators
Creating an operational plan largely depends on the metrics you choose. If you choose leading indicators (creating KPIs to predict future outcomes), you will be able to forecast future predictions and adjust your strategy accordingly.
Contrarily, lagging indications (choosing indicators based on past trend shifts) will show how your company is progressing with the initiatives you have in place.
Depending on your company’s long-term goals, the indicators will either help you plan your strategy effectively or inform you of your progress for any immediate changes required if monitored regularly.
4: Commit to clear and timely communication
Your organization needs to be in the loop with your planning – why you’ve chosen certain metrics, how they will help, and your team’s expectations. Through open communication, your team will remain well aware of their responsibilities and understand that their efforts are being noticed.
You can use extended Planning & Analysis (xP&A ) tools to help you track progress your progress through analytical dashboards, feedback, etc. Using these technologies will not only keep your team in the loop with your plan but also show them how their progress is affecting the company’s long-term goals.
Operational Planning vs. Strategic Planning vs. Tactical Planning
There are three fundamental types of planning:
- Strategic Plan: This plan describes the organization’s 3-5 year goal. Through strategic planning, you can determine what direction your business should be going.
- Tactical Plan: These plans divide the strategic plan into monthly goals that your management is required to achieve. It allows you to set schedules and instructions for monthly success.
- Operational Plan: Operational plans are daily or weekly tasks assigned to employees so they can take small steps toward reaching the strategic plan.
Here are the differences in planning:
|Time Period||3-5+ years||1-2 years||Daily-one year|
|Scope||Entire organization||Departments||Teams/ individuals|
|Review Time||Annual/ bi-annual||Quarterly/ semi-annually||Daily/ weekly|
|Catering To||Top management||Middle management||Low-level management/ employees|
|Detail||High-level||Specific objectives||Very detailed|
Importance of Coordinating Operational, Strategic, and Tactical Planning
Your organization’s success depends on a well-strategized plan that helps you evaluate where your company aims to be in three to four years. By dividing that plan into smaller, easier-to-follow goals, you can align your departments to follow daily or monthly progress.
Why is it important?
According to HBR, businesses lose around 4.5% of strategy potential without tactical and operational plans. The reason is simple; tactical and operational plans work and track progress on short-term goals, thereby giving your management an understanding of the company’s inefficiencies and addressing them as soon as possible.
Operational and tactical plans feed on your organization’s strategic plan. Once you have a set goal for your company’s future, your tactical plan will provide you with the implementation process. A coordinated plan will help your business remain structured and allow departments to understand the goals they have to achieve to reach the strategic plan. It also allows your organization to grow with the market economy, immediately making the desired changes and reviewing the strategy.
In short: with a well-coordinated operational, tactical, and strategic plan, your business can scale beyond its desired goal.
Examples of Successful Operational Planning
Here is an operational plan example for the hospitality industry:
1. Define your hospitality business’s mission and objectives
- Clearly articulate your organization’s mission, vision, and values.
- Set specific, measurable, attainable, relevant, and time-bound (SMART) objectives aligning with your strategy.
- Train and empower your staff to provide outstanding service and handle guest feedback effectively.
- Streamline check-in/check-out processes, improve communication, and gather guest feedback by leveraging technology.
2. Optimize operations
- Develop efficient operational processes to ensure smooth workflows and minimize errors.
- Implement a robust property management system (PMS) to manage reservations, room inventory, and billing.
- Regularly review and update standard operating procedures (SOPs) to enhance efficiency and quality.
3. Implement marketing and promotional strategies
- Create a strong brand identity and develop a marketing plan to reach your target audience.
- Utilize various marketing channels, including online platforms, social media, and partnerships with local businesses.
- Offer attractive promotions, loyalty programs, and packages to attract new guests and encourage repeat visits.
4. Monitor and adapt
- Implement key performance indicators (KPIs) to track progress toward your objectives.
- Regularly analyze financial data, guest feedback, and market trends to identify areas for improvement.
- Stay flexible and adapt your strategies to meet changing customer demands and market conditions.
Event Management Industry
Here is an operational plan example for event management.
1. Define event objectives and scope
- Clearly define the purpose, goals, and target audience of the event.
- Create a detailed timeline and task list for all event activities.
- Secure necessary permits, licenses, and contracts with vendors and suppliers.
2. Implement marketing and promotion
- Develop a comprehensive marketing strategy to reach the target audience.
- Leverage partnerships and collaborations to extend the event’s reach.
3. Execute event operations
- Assign responsibilities and roles to event staff and volunteers.
- Manage event setup, registration, and coordination of activities.
4. Evaluate and improve
- Gather feedback from attendees, sponsors, and stakeholders.
- Analyze event success against predetermined objectives.
- Identify areas for improvement and implement changes for future events.
Gym and Fitness Industry
Here is an operational plan example for gym and fitness.
1: Define your gym’s mission and target market
- Identify your target market segments and develop customer profiles to tailor your offerings accordingly.
- Provide a clean and well-maintained facility with modern equipment and amenities.
- Offer various fitness programs, classes, and training options to cater to diverse member interests and goals.
2. Develop effective marketing and promotion strategies
- Create a strong brand identity and develop a marketing plan to reach your target audience.
- Utilize online platforms, social media, and local advertising to promote your gym.
- Offer membership deals, referral incentives, and special promotions to attract new members.
3. Ensure safety and hygiene protocols
- Implement stringent safety and hygiene protocols to create a clean and safe environment for members.
- Train staff on emergency response procedures and ensure equipment maintenance and regular inspections.
- Communicate and enforce health and safety guidelines to promote member confidence.
4. Monitor member progress and adapt offerings
- Implement member tracking systems to monitor progress and provide personalized feedback.
- Gather member feedback through surveys or suggestion boxes to identify areas for improvement.
- Continuously update and diversify your fitness offerings based on member preferences and industry trends.
Implementing Effective Operational Planning Strategies
1. Identifying Goals and Objectives
Your operational plan should be defined by each department’s strategic and financial goals. By analyzing your strategic plan, you can define which metrics are important. Your short-term goals should be relevant, time-bound, and specific, so it’s easier to track your progress.
2. Creating Action Plans
Let’s say you’ve built an operational plan, but have you defined what actions will help carry out the plan?
Enter action plans! Your action plan will outline the steps to help you reach your final destination.
With an effective action plan, you can better understand your tasks; which ones you need to delegate and those with the least priority. This will help you take structured steps toward your strategic plan. Action plans enable you to lay out a structure for your team to stay informed. Doing so will allow you to filter ideas, lay out the details, and reach a consensus for the company’s future.
3. Allocating Resources
On the surface, resource allocation sounds simple. However, it’s a critical part of planning that you schedule according to the availability of your resources. Through this, you can assign tasks that coincide with your project timeline.
Project scope can change, and you must be prepared to cater to these changes with the resources at hand. Resource allocation in the planning stage will increase productivity and decrease the costs of acquiring new resources.
4. Using the Right Tools
To effectively cater to your strategic, operational, and tactical planning, you need robust tools to help you visualize and administer the progress. Whether you are a large organization or a startup, planning requires in-depth knowledge, data, and time. Solutions that provide eXtended Planning & Analysis (xP&A) capabilities can significantly streamline your operational plans, allowing you to connect tasks across multiple departments and helping you measure the financial impact accurately.
That’s why most managers now rely on xP&A tools to help them. With the right tools, you can:
- Be efficient: Have a systematic approach to planning which will help you save time. For example, leveraging pre-designed templates and frameworks can expedite several planning-related tasks.
- Be organized: Organizations have several data and documentation scattered across different platforms. One of the key features of planning tools is they help you define tasks, make plans, and allocate resources.
- Analyze: Data analysis is a critical part of planning. Without analysis, your organization will not rely on guesswork. Tools have analytical capabilities which help make informed decisions and forecast future goals.
- Collaborate: Planning tools offer a centralized platform for team members to view the planning, provide feedback, track progress, and share information. This allows transparency and better positions your organization to move forward.
- Evaluate: Regular evaluation of operational plans helps you understand the execution and progress. With planning tools, you receive visualizations to track and forecast the team’s progress easily. You can also measure performance, make adjustments, and track and report inconsistencies.
5. Monitoring and Evaluating Progress
Monitoring and Evaluating (M&E) is crucial for the operational planning process. It lets you consistently see your team’s progress and evaluate changes beforehand. However, the frequency of monitoring largely depends on the organization.
If your organization undergoes rapid change, it’s better to M&E your plan’s execution monthly.
Operational planning lets your business take daily leaps toward a larger, long-term goal. With the help of the right tool, you can build and monitor a strategic operational plan to ensure your team is on the right track.
Acterys xP&A Suite can help you with that using end-to-end analytics and planning solutions. You get 1-click integrations to major accounting, ERP, CRM, and other systems that come packaged with a centralized data model. It also offers ready-to-use planning, reporting, and analytics templates to help you get started easily.
Try Acterys for your operational planning needs today.
- Operational planning is the process of breaking down long-term strategic goals into actionable weekly and monthly tasks. It provides a roadmap for teams to achieve objectives and helps organizations thrive amidst complexities.
- A well-structured operational plan enhances communication, defines responsibilities, and aligns the team with the organization’s strategic vision.
- The operational planning process involves building a strategic plan, identifying key performance indicators (KPIs), choosing between leading and lagging indicators, and maintaining clear and timely communication within the organization.
- The coordination of strategic, operational, and tactical plans ensures that short-term actions align with long-term objectives and enables organizations to adapt to changing market conditions and efficiently utilize resources.
- To streamline operational planning, organizations can leverage eXtended Planning & Analysis (xP&A) tools that provide templates, centralize data, offer analytics, promote collaboration, and facilitate progress tracking.
- The frequency of monitoring the progress of an operational plan can vary based on the organization’s pace of change but should be frequent enough to detect and address deviations from the plan.
1. What is the difference between operational planning and strategic planning?
Where the strategic plan is a long-term plan that considers external business environments – such as market trends, competition, customer pain points, etc. – operational plans are short-term and consider the internal environment, e.g., KPIs, budget, tasks, etc.
2. What are the benefits of operational planning?
An operational plan provides a comprehensive day-to-day guide for teams to accomplish. It offers a detailed outline that designates jobs to team members, helping them define their roles, deadlines, and contributions to the company’s success.
3. What are the key elements of operational planning?
The key elements of an operational plan is:
- It should be linked to your strategic plan
- It should be aligned with your team
- It should help you reach your long-term goal
- It should help you reach your financial goal
- It should be tracked regularly
4. How do you create an operational plan?
For a successful operational plan, you begin with a solid strategic plan, then narrow your scope and identify the stakeholders. Once completed, you can create your operational plan and update your team.
5. What is the role of operational planning in achieving organizational goals?
An operational plan helps in detailing tasks, responsibilities, and activities with insight on how individual team members can help in achieving the organization’s goals.
6. How does operational planning differ from tactical planning?
Tactical plans are monthly plans that specify the actions needed to reach the strategic goal. Operational plans tackle how individual members will be tasked to achieve the organization’s mission.
7. What are some examples of successful operational planning?
A few examples of successful operational planning include:
- Hospitality industry
- Event management industry
- Gym and fitness industry
8. How do you implement effective operational planning strategies in your organization?
With the use of tools, effective operational plans can be created, tracked, and shared amongst team members.
9. What is the importance of coordinating operational, strategic, and tactical planning?
With a coordinated strategic, operational, and tactical plan, you are informed on the key metrics to focus on to achieve the set goals and measure them for any required changes.