When creating a business plan, it’s important to understand the key types of plans to determine which will most benefit your specific business needs. Some plan types include operations plans, strategic plans, and tactical plans, each of which has a different focus and purpose. All three can fit together as part of the overall management planning process, although your business may need only one or two different plans. Here’s operational planning information and strategies to help you create them.
Operational planning involves defining and outlining the actions individuals will take to support the plans and objectives of the executive management team. An operations plan is extremely detailed, describing the who, what, where, and when involved in managing the day-to-day tasks and low-level activities of the business. This type of plan supports the tactical plan, which is more of a mid-level plan.
To qualify as an operations plan, the plan itself needs to meet certain criteria. We’ve listed important criteria below:
Operations plans can be further segmented into two categories:
A strategic plan is a business plan created by an executive management team which has a much wider scope than a tactical or operational plan. It is a plan that can outline the ambitions, future goals, and mission of an organization.
1. Strategic plans
Strategic plans tend to be broader and vaguer, although they may focus on the high-level and long-term goals that the company will work to achieve over the next three to five years. Strategic planning can also include the way an organization will measure its progress toward the established goals and any major projects that need to be completed to achieve the goals.
2. Tactical plans
A tactical plan is created by mid-level management professionals and includes the specific actions that employees must take to work toward the goals described in the strategic plan. This plan can also outline how a certain area or department of a business will support the strategic plan. A tactical plan isn't usually very detailed, but it will include more specific ideas and actions.
3. Operational plans
One of the main differences between a strategic and operational plan is the period of time covered. In a strategic plan, the goals are typically attainable in several years, while the operational plan goals are short-term ones and can be achieved during the next year in most cases.
Focus areas are the foundation of your strategy. They expand on your Vision Statement and start to create some structure around how to actually get your organization to achieve its goals. The focus of the goals and objectives in each plan differs.
A strategic plan exists to outline the long-term vision of the company and how each department will work together to achieve the goals.
An operational plan focuses on specific departments and their roles in achieving short-term goals. A large department may have multiple plans to maintain a clear and detailed focus.
Here are the most significant differences between the two ideas:
Time period
Your strategic plan outlines long-term goals for the next three to five years. What you’ll be doing to achieve those goals in the shorter term (typically the next fiscal year) is outlined in your operational plan.
Goal
The goal of your strategic plan is to outline the company’s long-term vision and how all departments should work together to achieve it.
Because of its narrower focus on specific departments instead of the entire company, an operational plan is more detailed and outlines how to reach the outlined goals.
Focus
A strategic plan distinguishes your organization’s direction as being different from that of other companies. In contrast, an operational plan is all about being better operationally.
Who creates each plan is another difference. Members of an organization's executive management team will handle the creation of a strategic plan, as those responsible for the overall vision and goals. Department heads may create an operations plan since they are the ones to implement the processes. Those involved in creating the plan are often more likely to work together to accomplish the necessary tasks.
Reporting is another key differentiator among the types of plans. When reporting on a strategic plan, which may happen as often as quarterly or once a year, executive management will outline how an organization is performing on specific measures. The reporting should be at a high level to avoid getting lost in details that don’t help an organization reach their goals.
An operational plan report is much more detailed and typically is prepared and reviewed more often. When you have a regular review of reporting, your team reviewing the reporting more frequently, individuals can make sure all team members remain on track and can handle the necessary tasks and processes to achieve the short-term goals related to the business operations.
Operational plans may not have specific measures to quantify results or report on, and these updates may be more qualitative or anecdotal.
When creating an operations plan, you want to follow some key steps, such as:
1. Focus on goals
First, focus on important goals that pertain to the specific department or division that will follow the plan. After identifying the goals, determine any key initiatives that will help achieve those goals. These initiatives will easily enable those following the plan to understand what they must do to work toward achieving the broader goals.
An effective operational plan should also include key performance indicators that permit progress monitoring. A key performance indicator (KPI) is a measurable value that shows how well a company is achieving the key business objectives it has outlined. The KPIs in an operational plan will lead the team members involved as long as the KPIs are communicated effectively.
2. Outline responsibilities and tasks
The operations plan must also clearly define who, what, where, and when in great detail. It should outline who is responsible for which tasks, what tasks need to be completed to achieve a goal, where the individuals involved will work on their assigned tasks, and when they must be completed to maintain the timeline. You also want to discuss whether the plan is an ongoing or single-use plan. This information will help to better define the estimated timeline for completion.
3. Define resources
The final step to create an operations plan is defining the resources needed to achieve the goals. These resources may include software programs to improve processes, tools to manage new tasks, or training to bring all team members up to speed on a certain task. Determining the necessary resources can help divisional leaders know how to proceed and provide their team members with what they need to succeed.
Don’t think that these types of plans are just for big organizations. Operational plans can be helpful in almost all industries and business structures. Your plan should be tailored to your unique business but many elements will be the same. You don’t have to reinvent the wheel - there are lots of plan examples out there. Below we've provided a simplified version to study.
By creating an operations plan, a business can outline its short-term, divisional, or departmental objectives and describe the initiatives required to achieve those objectives. Operations plans work together with other types of business plans to outline the overall goals of an organization as well as how the business plans to meet these goals.