29
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June 2018
7 minutes

Operational or strategic planning?

How you can achieve operational and strategic planning at the same time

Operational and strategic planning are not mutually exclusive opposites! (Image: Viktoria Kurpas/shutterstock.com)

Medium-sized enterprises keep on telling me that they are so occupied with their operational business that there were only few opportunities to think strategically, to reflect and to be creative so the enterprise could make progress at last. Others simply mix up planning horizons. But: Operational and strategic planning are no opposite poles excluding each other!

However, many organizations have a different understanding of those concepts – the main differences are related to the scope of planning, the subject (What is planning? What is day-to-day business?) and the time frame. Frequently, even different terms are used when speaking of planning. As a consequence, “strategy”, “mission”, “business plan”, etc. are mentioned alongside “planning”. In most cases, organizations try to set goals within a certain structure (hoping to be more successful that way) and to categorize them against the background of the respective context, such as market environment, organizational performance, etc.

Scope, subject and connection of planning levels

First of all, operational planning presets the structure and the focus in reaching annual goals and helps to identify deviances and to react to them.  On this level of corporate planning, which involves a high level of detail, strategic objectives are also achieved and controlled, while strategic planning, which should include five to seven years, gives orientation when it comes to fundamental decision-making.

Illustration: From incremental management to strategic leadership

So it’s all about the chronology and the connection between the planning levels: Entrepreneurs should develop a strategy comprising several years, operationalize it with regard to the question “How do we reach strategic objectives?” and finally set annual objectives while considering budgets.

Can you even plan anything in a VUCA world?

What makes planning difficult and businesses stumble is the fact that in these volatile times, the requirements concerning planning are changing constantly. The world has gone VUCA – volatile, uncertain, complex and ambiguous. It’s not only the increasingly connected world, which leads to an increased speed of change, getting to us. It’s also the fact that there are so many things you cannot predict and so many developments which are hard to interpret.

Many question the purpose of planning, for why should you plan in the first place when you don’t know what will be tomorrow? I would like to retort to this that planning is essential to any leadership activity and will even still be sensible tomorrow. The way planning is understood has to change, however, in my opinion: Plans once made should not be sacrosanct in any detail but should be questioned and adjusted again and again. And the more difficult planning becomes, the more important is it to be prepared.

With plans describing concrete intentions to act and being seen as guidance, for example when it comes to important decisions, they as well and in particular play a key role in the agile world. For the day-to-day (operational) work this means:

  • Think in scenarios when doing the planning.
  • Set (operational) key objectives for a manageable span of time (e.g. with the help of a OKR logic).
  • Measure in how far objectives have been reached.
  • React to deviances and make adjustments.

When implementing a strategy, the objective & key results (OKR) method can be helpful. Objectives describe the condition to be reached in the future, while key results describe tangible, measurable essential outcomes on the way to achieve objectives. OKRs break down the organization’s superordinate strategic objectives to any hierarchic level and, at the same time, make sure that each individual objective supports the organization’s superordinate vision.

Our mission at Evolutionizer is to support strategic management in companies with innovative software.

Learn here more about our platform Solyp 4.0 – Enterprise Cloud for Strategy and how our technology can support you in the strategic decision-making process and implementation.

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29
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June 2018
7 minutes

Operational or strategic planning?

Operational and strategic planning are not mutually exclusive opposites! In many companies, however, there is a different understanding here.

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