Operational planning defines how human, financial, and physical resources will be allocated to achieve strategic objectives. That should answer some key questions, such as, what strategies must be completed? Who has responsibility for each task? When should the task be completed? What is the timeline? How should progress be measured? How many resources have been allocated to task completion?
Understanding operational planning
In planning, most businesses develop highly detailed strategies enabling them to realize long-term visions.
Unfortunately, these strategies often lack the support of a solid operations plan. While a strategic plan operates in the context of years, an operations plan is concerned with day-to-day tasks.
It should answer questions such as:
- What are the strategies that need to be completed?
- Who has responsibility for each task?
- When should the task be completed? What is the timeline?
- How should progress be measured?
- How many resources have been allocated to task completion?
Developing an operations plan
Developing an operations plan is a matter of following five best practices:
Begin by ensuring that a strong strategic plan is already in place
Writing an operations plan without one is akin to planning a vacation without knowing the destination.
Focus on the most important goals
Generally speaking, the more complex the goal the less likely it will be reached. Instead, the focus should be on simplification.
Break the strategic plan into one-year objectives and determine the key initiatives that will drive success.
Examples of key initiatives include new quality control measures, faster delivery times, and more resources devoted to professional development.
Use leading indicators

In operational planning, leading indicators that are predictive measures of success are most effective.
Create KPIs based on past success to ensure that milestones are regularly hit during the year.
Don’t develop KPIs in a vacuum
Instead, incorporate a wide gamut of skills and experience as the KPIs are created.
In smaller organizations, the entire staff may gather periodically to set intentions for the coming year.
In larger organizations, meetings may be held for leadership teams only.
In either case, diversity of input is non-negotiable.
Communication is paramount
Every employee must understand KPIs in the context of how they will assist in the organization achieving its goals.
The importance of buy-in cannot be overstated.
Regular meetings should be held to discuss progress on the personal and organizational level.
Meetings also ensure that daily operational tasks maintain alignment with the broader strategic plan.
The key elements of an operations plan
Let’s now take a more specific look at the structure of an operations plan. What should it contain?
A sound operational plan will detail:
Strategies
Or the key actions that need to be carried out regularly to achieve strategic goals.
Timeline
For each goal, it is important to set a timeline that encourages efficiency but that is also realistic.
Budget
A budget summary must detail the financial and material resources required to meet each goal.
Responsibility
A project manager will typically be responsible for ensuring that each goal is completed on time and within budget.
Roles or responsibilities that are delegated to others should be detailed in the plan.
KPIs
What does successful action look like? Remember to develop KPIs with input from a diverse range of sources.
A backup plan
What happens if circumstances change? Contingency plans should be developed under a sound risk management strategy.
Operational planning vs. strategic planning

Strategy is about the long-term goal of a business.
Of course, a strategy can be both short and long-term.
However, a proper business strategy might take years to roll out.
As a classic example, take the case of Tesla’s business strategy:

Tesla entered the market with a Roadster model back in 2008, and it slowly moved to make products that were appealing to a larger audience.
Tesla had to start from a small niche to prove the technology’s viability first.
Then, as demand built up, Tesla had to understand how to scale up its operations, enabling more EVs to be produced.
With the successive launch of the Model S, Tesla managed to jump from early adopters to the early majority.


This business strategy, expressed in three bullet points, by Elon Musk, back in 2006, took over 15 years to execute! And it’s still in the process of getting rolled out as Tesla ramps up its manufacturing capability.
Thus, this is the difference between strategy and operational planning.
Operational planning allocates the resources needed to execute a strategy. However, it also needs to move flexibly to make it executable in the short term!
Operational plan examples
Let’s conclude by detailing some hypothetical operational plan examples.
Book publisher
First, consider a company that prints and publishes books for clients. The company details three goals and their associated strategies and actions.
- Goal 1 – Reduce capital expenditure on raw materials for book pages based on a cost-reduction strategy. The company will renegotiate terms with paper suppliers to secure a more attractive deal.
- Goal 2 – Increase the number of proofread books by 15% based on a strategy to improve productivity. To achieve this, the publisher distributes manuscripts to more editors to spread the workload. It also conducts a recruitment drive to employ more staff.
- Goal 3 – Improve the quality of each book’s cover page based on a quality improvement strategy. The company decides to replace an old machine which has a tendency to misprint book covers.
Vehicle manufacturer
Here is what an operations plan may look like for a vehicle manufacturer:
- Goal 1 – Reduce shipping and packaging time by 25% based on a strategy to decrease order turnaround time. Efficiency will be increased with improvements to multiple shipping and packaging processes.
- Goal 2 – Increase employee productivity to $500 per hour in the paint shop and chassis departments. This productivity improvement strategy will require that both departments be reorganized and better integrated with assembly line operations.
- Goal 3 – Reduce the unit cost of each family SUV by $450 and reduce energy costs by 7% over the next three years. In the former, the cost reduction strategy involves renegotiation of terms with suppliers based on recent weakness in the price of iron ore. In the latter, the manufacturer builds a small solar farm to offset energy costs.
Football Club
In the third example, imagine a football club that wants to grow its membership base. It develops five key strategies as follows.
Strategy 1 – Conduct school visits
- Timeframe – three visits per month to selected high schools in the metropolitan area.
- Position responsible – PT development officer.
- Budget – $13,000 for employee salaries and $1,500 for a new trailer and promotional materials.
Strategy 2 – Advertise club events and functions via print and social media
- Timeframe – advertisements placed in city newspapers in the three months before season commencement with weekly social media posts.
- Position responsible – Promotions Coordinator and Social Media Marketing team.
- Budget – $25,000 for employee salaries and $700 for weekly newspaper ads for one quarter.
Strategy 3 – Establish a Masters League
- Timeframe – the competition will run over the off-season across August and September with games held weekly.
- Position responsible – Events Coordinator.
- Budget – $7,000 for umpire salaries, $1,000 for player trophies, and $1,500 for venue maintenance.
Strategy 4 – Contact former members to renew their membership
- Timeframe – former members of the club will be sent a letter annually. Individuals whose former teams make the playoffs will be sent an additional letter each year as extra motivation.
- Position responsible – Membership/HR Coordinator.
- Budget – $2,000 for employee salaries, $400 for paper and postage stamps, and $300 for printer ink and associated expenses.
Key takeaways
- Operational planning details the day-to-day actions that will support broader strategic objectives.
- Operational planning cannot begin until a strategic plan is in place. In developing the plan, businesses must focus on important goals, use leading indicators, and develop KPIs collaboratively.
- Operational planning must detail several crucial elements, including strategies, timeline, budget, responsibility, KPIs, and contingency plans.
What is operational planning and how is it used?
Operational planning defines how resources will be allocated to achieve strategic objectives. Effective operational planning should tackle how the resources will be used toward strategic goals, how responsibilities are distributed, and the key performance indicators.
Why is operational planning important?
Operational planning is critical from an execution standpoint. Indeed, where a business strategy looks at an organization’s long-term goals, operational planning enables the organization to execute the plan, making it possible to test the main business assumptions.
What are the objectives of operational plan?
For an operational plan to be effective, ensuring that a solid strategic plan is already in place, it needs to focus on the most critical goals. It needs to use leading indicators; those KPIs must be tied to the business, and communication is paramount. Thus, the essential operational planning elements are strategies, timeline, budget, responsibility, KPIs, and a backup plan.
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