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.
A strategic plan outlines an organizations long-term mission and goals. They’re grandiose. They’re high-level. They establish a vision. It lays out how the organization plans on meeting these goals and how the organization will measure success.
Typically, the strategic plan has a longer time horizon, meaning it will outline your goals over the next three-to-five years. 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. They’re tactical. They’re detailed. They involve action! And they’re typically single-use. Operational plans support the strategic plan by laying out an action plan for a particular goal or project. They can also map out how individual business units or departments will contribute to organizational goals.
Typically, operational plans have a short-term time horizon, typically a fiscal year. These plans are created by mid-level management and provide specific answers related to execution: who, what, when, where, and how much. Operational plans serve as a roadmap for daily operations.
What’s the relationship between strategic vs. operational plans?
Operational plans provide a pathway for business units and departments towards meeting the goals established in the strategic plan. Thus, you need to build a strategic plan before operational plans. Strategic plans give operational plans direction and help keep business units, departments and functions working towards a cohesive vision, even if their day-to-day activities and short-term objectives are different.
Strategic planning vs operational planning compared
Goal
The goal of the strategic plan is to lay out the path towards the organization’s vision. It outlines long term vision, mission, objectives — and how everyone in the organization should work together to achieve it.
The goal of operational planning is to support the strategic plan with day-to-day activities and tactical plans that focus on execution. It supports organizational goals through detailed plans for short-term activities related to a specific department, unit, or function.
Time horizon
Strategic planning is long term, typically three to five years. Operational planning is done on the short-term, typically yearly, quarterly, or monthly.
Modification and updates
The strategic plan evolves every three to five plus years, with potential for small changes year over year. The operational plan undergoes frequent evaluation and pivots, changing every year, quarter, or month.
Created by
The strategic plan is created by top-tier management, like the CEO, CFO, and other members of the C-Suite. Operational plans are created by mid-level management and department heads.
Scope
The strategic plan considers the business' external business environment: Competition, long-term market trends, customer needs, and technology innovation. The operational plan considers internal business environment: Technology, KPIs, budget line items, projects, tasks, and the individuals responsible.