Operational Planning In A Nutshell

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

Key performance indicators (KPIs) are measurable values that determine whether an organization is achieving key objectives. KPIs will depend upon a business-specific context, as each company and industry will have its own core metrics to track. Indeed, the choice of the right KPIs that can positively affect the business’s long-term perspective is critical.

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:


Or the key actions that need to be carried out regularly to achieve strategic goals.


For each goal, it is important to set a timeline that encourages efficiency but that is also realistic.


A budget summary must detail the financial and material resources required to meet each goal.


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.


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

A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. A business strategy, in most cases, doesn’t follow a linear path, and execution will help shape it along the way.

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.

As expressed in three bullet points above, back in 2006, this master plan took over 15 years to roll out fully. And still in the process. This is the difference between strategy and execution. It takes a few thinking points as strategic assessment for the next ten or twenty years, yet it takes over a decade, at least, to fully roll out from the execution and operation standpoint!

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.

Connected Agile Frameworks


AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.


AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Bimodal Portfolio Management

Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.


DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

Feature-Driven Development

Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

eXtreme Programming

eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

ICE Scoring

The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.


Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

Rapid Application Development

RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Scaled Agile

Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

Spotify Model

The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.


Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.


Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.


Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Stretch Objectives

Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.


The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

Read Also: Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

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