When formulating strategies to improve your organization, it helps to differentiate between strategic and operational planning.
Strategic planning is commonly thought of as a long-term affair, whereas the execution of the plan might take months or even years. It’s akin to “command and control” initiatives, where military commanders issue broad orders to “take the hill.”
Operational plans generally encompass the short-term, day-to-day, or weekly actions that need to be performed in order to successfully execute the strategy. Teams break down the broad, strategic plan into actionable chunks, often using short-term projects with clearly defined targets and deadlines.
Something is awry here. What should be simple – isn’t.
Perhaps it would help to think of strategic vs. operational planning in a slightly different way, one that better aligns leadership with the rest of the organization, and gets everyone on the same page – quicker.
Strategic Planning Is About Being Different
When you boil it down, strategy is about being different than competitors through unique advantages. You figure out where you can gain a competitive edge, and you then develop a strategy to change your organization so you can differentiate yourself from others in your industry using this advantage. It’s all about what sort of organization you want to become.
Operational Planning Is About Being Better
On the other hand, operational planning is about doing things better than the competition through operational excellence.
Planners must allocate enough resources to the execution of the change strategy, while still running the current business and maintaining day-to-day commitments. Operational planning is, therefore, a big balancing act, but has continuous improvement as its hallmark. It is more immediate than dreaming up strategy, therefore it’s more flexible and adaptable.
Align for Execution
When leadership and the entire organization both understand both points (“we strive to be different” through strategic planning while “we work on doing things better” through organizational planning”) an amazing thing tends to happen: alignment.
Some Tips to Balance Strategic Planning and Operational Planning, Resulting in Alignment
Once strategic plans are developed, create an internal public relations campaign to get the message to all employees repeatedly. Let everyone know what the plan is to be different, and get feedback on how everyone expects to contribute.
When developing team plans, work out the alignment between departments involved in making the changes. This can be tricky, as groups are not used to communicating horizontally. A solution is to form dedicated project teams involving a few members of each department – using an agile framework.
Planning is not a static process. It is fluid, and the best companies are the ones that can adjust both strategically and operationally quickly based on feedback from customers, vendors, and employees on the front line. They are your eyes and ears, so use them.
To maintain margins in the long-term, avoid strategies that solely focus on doing things cheaper than the competition unless you expect to compete solely on volume for years to come. Instead, think in terms of delivering extra value to your customers, and focus on excellence in executing even the most mundane functions at all levels.
Planning is only half the battle. Once it is done and execution is underway, the real world kicks in, and this can cause some headaches.
Every organization that finds itself executing its strategy successfully will experience some new pains.
As you get bigger, you bring in more people, compete with a broader range of businesses, and expose yourself to larger risks. You’ll find yourself short-handed in certain areas, which might cause customer service or fulfillment issues.
People start to put out fires most of the time – working on the urgent rather than the important. The result? Operational excellence goes out the door. To keep this from getting out of hand, organizations need a performance management process to monitor and keep employees on track. This involves both self-assessments and manager review to determine whether each employee is on-strategy and if not, why?
Discovering employees whose performance is not aligned with either the broad strategy or the operational plans, can illuminate those areas where “growing pains” are taking place.
In summary, we seek change in order to be better than the competition. This leads to strategic planning. Following this, we seek to implement the strategy and run the business in a superior way, and this is where operational planning comes in.
Contact us today for a free consultation on how to better align your strategic and operational planning while managing performance. Six Disciplines has helped many firms like yours improve their execution and bottom line through our extensively field-tested, step by step approach – find out what makes us different.