Strategic vs Operational Planning: What's the Difference?

Strategic management is a process that works to create a path for a company to follow in the future. It helps the organization find new ways to be competitive and stay ahead of the competition. Good strategic planning is essential for companies to remain competitive in the long term. The board of directors should always keep in mind what the future competitive space will look like, which will most likely be very different from the current one.

Operational planning, on the other hand, is based on the present and serves to translate the ideas of the strategic plan into actions. For instance, an operational plan can explain how an organization will create and implement a new pricing strategy, such as designating a department and a developer to lead the change and assigning deadlines for specific tasks to manage the transition. Operational objectives will lack cohesion with each other and with the overall mission of the organization if they are not designed to affect the achievement of strategic objectives. In other words, operational management is “what a company does”, while strategic management is “how it does things”.

The most important distinction between a strategic and an operational objective is its time frame; operational objectives are short-term goals, while strategic objectives are longer-term goals. Leaders who make the mistake of paying too much attention to strategic planning or operations put the entire organization at risk because one process works harder than the other. If you're tempted to let go of a strategic plan, keep in mind that you might create a strategic plan that masquerades as an operational plan or that becomes a combined strategic and operational plan. While this starting point is both necessary and admirable, management doesn't usually use it until the mission is translated into a strategic plan that is then used to guide operations.

Because strategic and operational plans work well together, it's ideal to create both for your organization. If leaders don't dedicate enough time and energy to strategic management, operational efficiency is sure to suffer. Strategic plans and operational plans have significant differences in their form, function, and creation. From some point of view, their business approach may seem like a gradual change (focusing on quality, reducing costs and prices), but behind these operational objectives was a larger strategic objective that made sense of all the other operational objectives.

The questions you answer when developing your strategic plan allow you to create a solid operating plan. Strategic and operational plans go hand in hand, but for many companies these terms seem interchangeable at first glance. An organization is unlikely to achieve a strategic objective if it does not effectively translate it into viable operational objectives. It's essential for businesses to understand the difference between strategic and operational planning in order to remain competitive in today's market. Strategic planning involves creating long-term goals that will help guide an organization's decisions in order to achieve its mission.

On the other hand, operational planning focuses on short-term goals that are designed to help an organization reach its long-term objectives. Both types of planning are necessary for businesses to succeed; however, it's important for leaders to understand how they work together. When creating a successful business strategy, it's important for leaders to consider both short-term and long-term goals. Strategic planning helps organizations identify their mission and set long-term goals that will help them achieve it. Operational planning then takes those goals and translates them into actionable steps that can be implemented in order to reach those goals.

By understanding how these two types of planning work together, businesses can create effective strategies that will help them remain competitive in today's market.