Understand what Operational Planning is and how important it is for a company – WAU
Operational planning is essential for the success of a business, but it is often ignored, with only strategic planning being prioritized, which can jeopardize the entire schedule for the coming years and, consequently, business growth.
Competition, however healthy it may be, requires companies to invest more and more resources in managing operations to improve your processes and consequently, the company. But in some places, operational planning is simply ignored.
One of the stages of operations management is to develop a strategic plan. And, many times, a company’s timeline on strategies for the coming years goes downhill due to the lack of a simple step, which is operational planning.
The truth is that many are used to doing only strategic planning, which contemplates the tactics for the company’s growth, but forget to do the operational planning, which is as essential as it adds other important parts of your business.
Can be the determining factor for success strategic planning and, of course, your company. To prevent your company from falling into the same mistake, we will explain what operational planning is and how to execute it, in this article.
What is operational planning?
Before we explain exactly what operational planning is, we need to talk about strategic planning. He is responsible for describing the mission and vision, as well as setting long-range goals for a company’s next years. Usually the strategic plan is done every 3 or 5 years.
Operational planning, also known as work plan, is the part of strategic planning responsible for showing a daily workflow, that is, it transforms goals and goals strategic planning into smaller, executable tasks.
Because it is more practical and “hands-on”, operational planning deals with the company’s internal processes and resources, which can be human or financial, for example.
Operational planning is usually done by several professionals from one part of the company, but it needs to be approved by the department manager.
Why should I do operational planning?
The greatest importance of operational planning is in its own concept, which is the transformation of the vision and goals into a workflow for the coming year.
For example, if you are preparing a strategic plan from 2020 to 2022, you should also prepare the operational plan for 2020 and find out what needs to be done to make your company’s vision come true.
Besides that, you can better detect the company’s bottlenecks and what you can do to improve the company’s sectors so that the goals are met. That can make a difference between success in fulfilling strategic planning or not.
What is the difference between operational planning and strategic planning?
If during the elaboration of strategic planning, for example, the goal of increasing productivity was established, in operational planning there is a need to do training on this subject by the human resources department.
As there are not enough employees for such a demand, what needs to be done for it to be fulfilled? It is these types of issues that are resolved in operational planning.
Although complementary, strategic and operational planning differ. Look!
As we explained, while strategic planning is focused on 3 to 5 years, the operational planning is done annually, in general.
O strategic planning is done for the company as a whole, that is, it is the efforts of each department together that will make the goals be achieved.
The operational planning is done by department, that is, what each sector will do to contribute to strategic planning that year. In larger companies, it is common to find more than one work plan in the same sector.
Because they have differences in the concept itself, the leaderships involved in the two plans are also different. While the strategic involves senior leaders, operational planning is the responsibility of department managers.
The costs for carrying out strategic planning are taken from the strategic budget, a specific part of the company’s budget, while operational planning comes from the budget of each department from the company.
There is the possibility of having each department withdraw a portion of its budget to assist in the preparation of the strategic plan, but this is less common.
How each sector is responsible for creating its own work plan, it is up to the sector to allocate resources to prepare its individual plan. This also helps to make decisions that are more aligned with the strategic plan and, consequently, with the company’s objectives.
For example, if one of the company’s goals is to be environmentally responsible, the budget priority in departments is higher to develop activities that contribute to this goal, such as investing in processes that use less paper.
Difference in reporting
The difference in leadership also influences here, as the delivery of reports and the level of charging for performance are different. While the strategic plan has a steering committee, which requests specific and detailed reports, the operational planning of each department has greater flexibility in the data for each charged report.
This does not mean that it is done in any way or at a lower cost, but that the specificity of each department has an influence in the reports, which can even be transformed into other reports to be passed on to the committee responsible for strategic planning.
Which is better: strategic planning or operational planning?
THE comparison between one and the other is valid to understand the concepts and differences of each one. However, it does not mean that comparing them to see which is the best is the same.
They are complementary and for companies that want to be more strategy oriented, they need to have both types of planning for success in the construction, elaboration and fulfillment of their goals.
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How to put operational planning into practice?
The first step in preparing operational planning is to create strategic planning. After all, how to execute something that doesn’t exist? It is from the definition of the company’s vision for the coming years that the work plan for the following year begins to be scrutinized.
Each operational plan must address at least these 5 points to be effective. Follow!
1. Human resources
Who is responsible and who will execute each project? What are the necessary skills they need to successfully complete such a project?
2. Financial resources
What is the capital needed to implement the projects? Where will these values come from?
3. Time resources
What is the estimated time to do it and what are the start and end dates, as well as describing how to ensure it is done on time.
4. Performance indicators
How to measure the success of the project? What needs to be achieved? OKR-based management can be a viable way to improve the work plan.
5. Risk management
Try to predict what are the risks inherent in the project and describe how to solve them, in addition to specifying strategies to prevent them from happening.
In short, any operational planning must respond minimally: who, how much, when, how and the risks of each department project that needs to be carried out to carry out the company’s strategies.
But, make the objectives clear, with the activities that need to be carried out and by whom, in addition to establishing the quality standards and the expected results – with the planned budget, the start and end dates of the activities executions and how to monitor the projects – are the fundamental steps for the success of a department’s operational planning.
What are the most common examples of operational planning?
If you’ve never heard of operational planning and believe your company doesn’t have it in departments, you don’t need to be scared.
Even if you don’t have a work plan, properly speaking, at hand, business sectors usually have something similar, which helps them guide their activities throughout the year and can serve as a basis for those who want to start doing it.
Operational plans are generally divided into two types. The “Single-use”, which are those made for a short period or for a specific problem. A plan to cut waste or budget to renovate the office are examples of single-use.
The other type, the “Ongoing”, are those that need a slightly longer period of time and that can be changed according to the project’s feedback. An example is the plan to decrease layoffs and improve retention. Another example is a plan to improve employee satisfaction.
Strategic and operational planning must walk together to reduce the risks of the company not being able to reach its goals, using an efficient process management.
The departments need to collaborate side by side so that your goals are achieved. But how to do this integrated management work properly? Check out one more of our publications and understand what integrated management is and how to implement it in your company!