How to Create an Operational Plan - Guide for Management

Today's businesses are comprised of complex operations with departments and teams working together to achieve shared goals. However, what makes a business successful is direction. According to research, lack of focus is one of the top ten reasons behind startup failure.

One way to ensure the business knows where it's headed at all times is to create an operational plan. While many business owners and managers understand how important strategic plans are, they often lack a critical logistical element. This is where an operations plan comes in.

Operational Planning Explained

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An operational plan is a comprehensive and actionable plan that defines how a department or team's functions and activities contribute to an organization's overall business goals. In a nutshell, operational plans outline the day-to-day tasks required to keep a business running.

When done correctly, an operational plan ensures that all managers and employees know their respective roles and responsibilities. The operational plan also details how people should execute their jobs within a specific time frame. Mapping out the daily processes and activities that happen in the organization creates a clear path for everyone to contribute to the company's business and operational goals.

Ideally, an operations plan should answer the following questions-

  • What tasks and strategies need to be accomplished?
  • Who is responsible for these tasks and strategies?
  • What is the timeline for each strategy to be completed?

In many ways, a company's operational plan can be likened to an instruction manual. It serves as a guide for the company and its key internal stakeholders (from the C-suite down to rank and file workers), helping them execute their daily operations in a way that's consistent with the organization's overarching, long-term goals.

Operational Planning vs. Strategic Planning

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Many companies often use the terms strategic planning and operational planning interchangeably. In truth, however, these terms refer to two very different things.

A strategic plan defines a company's high-level goals, its mission, and its vision. These plans look at the bigger picture, outlining how the company will measure its goals and the necessary projects to achieve them.

In contrast, an operational plan looks at the logistics side of things. These plans provide a granular overview of what the business should do to reach its goals, the people involved in these actions, and how long this process will take.

Time Frame

A strategic plan typically plots the organization's long-term goals for the next five years or more.

The operational plan, on the other hand, defines the specific actions to achieve these goals on a weekly, monthly, quarterly, or yearly basis.


A strategic plan's goal is to define the company's long-term vision and how the entire organization can achieve it.

In contrast, an operational plan goes deeper into the departments and stakeholder groups that make up the company. In other words, a large company can have multiple operational plans - one for each department and, if necessary, each team.

Plan Creation

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Generally speaking, the task of creating a strategic plan falls to high-level leadership. In most businesses, this would be the C-suite or executive team. Once the plan has been created, it will be disseminated and implemented by interdepartmental teams to ensure its success.

On the other hand, the different department heads and team leaders in the company are responsible for creating their operational plans. While each operational plan is tailored to its corresponding department or team, its successful implementation is vital to the strategic plan's success.

For instance, suppose the marketing department has outlined a series of activities for the next 12 months. The success of these activities translates to more sales opportunities and more revenue.


The budget for creating and implementing a strategic plan comes from an organization's strategic budget. This budget will typically break down spending annually, depending on the strategic plan's defined time frame.

Meanwhile, an operational plan's budget comes from the department's annual budget. If there is a need to reduce the department's annual budget, consider making adjustments in places that do not align with the strategic plan.

For instance, if one of the strategic plan's long-term sales goals is to increase online sales, then it makes sense to reduce the budget for brick-and-mortar operations before doing anything with eCommerce.


Reporting for strategic plans involves looking at the organization's performance based on the metrics and key performance indicators (KPIs) defined in the strategic plan. Reports and meetings typically occur on an annual basis and focus on high-level KPIs.

Conversely, operational reports provide an overview of the projects, tasks, and subtasks that team members have been working on. These reports can be conducted on a weekly, monthly, or quarterly basis.

Whatever the case, reporting is a critical process that lets leaders and team members know about the status and performance of each project.

How to Create an Operational Plan

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While different organizations have their unique approach to operational planning, the best plans all share one thing in common - a clearly defined objective for everyone in a department, group, or team to focus on.

To create a plan, department leaders and managers can follow these basic steps.

1. Plot the Operational Plan

Like any project plan, an operational plan starts with a high-level overview of its purpose. Begin by visualizing the plan's primary features, including required tasks, goals, staffing needs, and management processes to ensure everyone performs at optimum levels.

Starting with a vision makes it easier to proceed with goal-setting and researching the necessary steps to achieve these objectives.

2. Set Goals

After visualizing the plan, managers can proceed to the building phase, which typically involves researching and identifying goals. While every operational plan is unique, all plans seek to answer these common questions-

  • What is the department's budget? Compare this budget with the previous year, quarter, or month.
  • What is the current state of the team? Look at things from the perspective of budget, resources, and individual team members.
  • Where does the team need to be in the next month, quarter, or year?
  • What steps need to be taken for the team to get there?
  • What metrics and KPIs should be used to measure the department or team's progress? These performance indicators can include the number of manufactured goods, the number of acquired customers, customer acquisition costs, and the number of leads generated.

Answering these questions will require a combination of qualitative and quantitative research, including interviews with employees and analyses of historical data (e.g., sales, spending, staffing).

3. Plan the Budget

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After mapping the operational plan's goals, managers can then plan the necessary budget for all projects, tasks, and activities.

As mentioned earlier, an operational plan's budget should come from the department's annual budget. This makes the budget the top factor to consider when assigning tasks, allocating resources, and planning team members' salaries.

It's also a good idea to get feedback from the rest of the team. Some people may have been assigned roles that are better suited for others or certain stages may be better off being cut from processes entirely.

4. Create a System for Reporting

After mapping out the operational plan elements, from its goals and objectives to its deliverables, staffing needs, and time frames, department managers can build a system for reporting the plan's progress.

Reporting is a critical function that not only shows if the operational plan is working but also allows the department to hold itself accountable to stakeholders, leadership, and other department heads. These people will want to review the operational plan's progress.

5. Make Adjustments When Necessary

As with any project or undertaking, it's important to be ready to pivot and make adjustments. For instance, if the team hits the six or 12-month benchmark with less than desirable results, managers should drill down to the activities and processes that didn't perform as expected.

When making adjustments, it's also a good idea to involve team members and establish buy-in with stakeholders. This makes it easier to refine the operational plan based on real feedback.

Essential Elements of an Operational Plan

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Every operational plan has several common elements that give the plan purpose and direction. These elements include-


Ultimately, an operational plan is a tactical tool for implementing a strategic plan.

The strategic plan also provides the operational plan's mission, providing the "why" for any project, task, process, or activity a department or team works on. Without this foundational element, writing an operational plan will be a lot like planning a journey with no real destination in mind.

Value Proposition

A value proposition is a statement or brief description that answers why someone should become the organization's customer, client, or partner. It should also tell potential customers why the company's product or service offers more value for money than similar offerings from competitors.

In the context of operational planning, a value proposition emphasizes the company's strengths and mission. This helps the department or team focus on why the company is doing business.

Goals and Objectives

A common problem with operational plans is that the more complex they are, the less likely it is that people will follow them to the letter. The key to preventing this problem is to set specific goals for the operational plan and break it down into smaller objectives.

For instance, assume that a company's marketing team has an operational plan covering 12 months. Its goal is to increase sales by 25% year-over-year. The plan can be broken into monthly objectives, such as increasing website traffic in January, generating leads in February, improving conversion rates in March, and so on.

Metrics and KPIs

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No operational plan is complete without a system of measuring its effectiveness and success. This means that the plan should define a list of metrics and KPIs. However, it's just as important to measure the right things.

The best metrics and KPIs are leading indicators, which are measures that show what the team can expect in the future. By predicting future outcomes, leading indicators allow the team to make adjustments before it's too late.

In contrast, lagging indicators are measures that become apparent only when a significant shift has occurred - in other words, when it's too late to take action.

Constant Communication

The importance of communicating and establishing buy-in with the entire team can't be emphasized enough. After all, an operational plan is only effective when people are committed to executing it.

When rolling out an operational plan, take the time to discuss the selected KPIs with the entire department. This ensures that everyone understands why these KPIs were chosen, why they're important, and how they will help the organization achieve its business goals.

As things get going, make sure to hold regular meetings to check on the progress of these KPIs and discuss any blockers affecting the team's ability to function efficiently.

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With a detailed operational plan in place, any organization should have the tools and guidance to function efficiently and ultimately achieve its business goals.