Strategy and Operational Planning for the Long Haul

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I joined the board of a large non-profit this year and we recently spent several hours on planning for our year at the helm. Once we’d hammered out what we thought was a pretty near perfect vision and plan for the organization, a former board member dashed our enthusiasm with these words:

This is not a strategic plan. This is an annual plan.

And for the life of me and my cohorts, we could not get a straight answer out of this person as to what was missing from our so-called annual plan that would make it a strategic plan. I’m still grappling with the differences but here’s how I understand it so far.

Strategic plans address fundamental and directional issues. They are over-arching, visionary, and long term.

Annual plans (operational or management plans) target the day-to-day implementation of strategic decisions. These are the immediate (less than one year) objectives and imperatives.

Strategic plans take into account the unpredictability of the future, but plan for it anyway. They develop strategies based on the organization’s strength and weaknesses relative to the opportunities and threats in the external environment. Got it.

Annual plans take on future goals as something to accomplish now. They focus on short-term goals and go into greater detail about how specific tasks will be accomplished. Check.

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Okay, so for example, in our organization one strategic goal was to raise our profile in the community. And one of the corresponding annual plan goals to accomplish this was to develop our website as an external (marketing) tool. ┬áTo me that’s strategy and operations. But the former board member still says – nope, that’s not strategic. According to her, strategic is more like, ‘Become a benchmark organization for online communication”.

  • Is it just that we’re not thinking big enough?
  • Just how detailed should long-term goals be?
  • And must they always be measurable?

I’m still confused, and betting I’m not alone. Planning seems to get pushed to the back of the list in order to put out today’s fires and we all know that’s not the best practice. It’s exciting to be part of an organization with such a forward thinking planning model. Now if only I could wrap my mind around it!

Please, strategic thinkers out there – enlighten us! (Okay… me.)

Image Credit: Wolfgang Staudt, Flickr

  • I think you are partially correct.

    Consider your strategic plan a lens looking out 1 year – 3 years – 5 years – and what that future view would look like

    You don’t state what type of non-profit – but lets make up one that serves the homeless.

    Part of the strategic plan over 5 years could be reduce the number of homeless by x% by A, B, and C

    Part of your strategic plan for the year number 1 to reach the year 5 goal could be your ‘raise profile’ in the community

    Then operational – how??!!

    for example, web site, media events, outreach etc etc.

    Each branch of the organization will then have deliverables to the operational plan that relate back to the strategic plan.

    my two cents :-)

  • Strategic plan – Starts with the vision of where you are going and the large buckets that need to be filled to make it happen. It includes possible obstacles and potential solutions. Your strategic plan can be looked at once a year to make sure it is still relevant and unless things dramatically change.

    Annual plans are the things that have to be done short term to meet the strategic plans ideals. It should be broken down into monthly goals and metrics and daily activities even to get the most benefit from them.

    Vision drives the strategic plan which leads to the details that make up the annual plan. The annual plan may change dramatically but the strategic plan may still be intact. Annual plans should adjust for what worked and what didn’t from the previous annual plan while the strategic plan may not change at all.

    I have done a good bit of strategic planning all the way through annual and monthly planning so shoot me an email if you want to discuss it further.

    Scott

  • Lela Davidson

    Thanks, Elliot. I think one place we need to improve is in the ‘cross branch’ area. But do your long term strategic goals have to be measurable?

  • Lela Davidson

    This is helpful. I think our strategic plan may be more of a vision. I’m not quite sure we’ve made it to the bucket stage. To me these are great big goals right? I think we need more resources on this. I’m going to put together a list of books. Do you have any to recommend? Thanks!

  • I guess I might be thinking more of it a literal sense, but I do think there’s a difference between strategic plan, annual plan, and even vision.

    Vision to me is most similar to a mission statement–what is it that you want to do / accomplish at a macro level.

    The annual plan is just that–the actions you will take over the course of the next year.

    That leaves strategic plan, which to me isn’t necessarily time-bound. In a sense, the strategic plan connects the more specific details of the annual plan to the vision.

    So in your case, your vision might be “save the world”. One measure of success and way to do that strategically is to “become the benchmark organization.” And to help do that you want to “raise your profile” over the course of the year.

    Of course the reason you may not have been able to get a straight answer from the person was because they may also have trouble articulating the difference clearly = ).

  • I believe your long term plans must be measurable – but also **flexible** – the future is unknown, and unknowable. (making great buggy whips??)

    Getting locked into an inflexible strategic plan can kill you (Chrysler?)

    Your vision is the perfect envisioned future (think GE’s be number 1 or 2 in a particular market or exit the business)

    The *strategic plan could be increase revenue by X, reduce costs by Y and other issues over various time frames. (again in GE’s case, more “green initiatives” with their ecomagination strategy to drive new revenue sources.

    Those are all still measurable – either you reduced costs or you did not

    Then the tactical (operational) plans can be what tools, methods, etc will you use to increase that revenue, or decrease that cost.

  • One is : Execution: The Discipline of Getting Things Done ISBN:0609610570 Larry Bossidy and Ram Charan

  • An annual plan should be the next slice of a multi-year strategic plan. You never implement a strategic plan, you implement an annual plan based on the strategic plan.

    What is key about the strategic plan is that it point a long term direction, and include success measures along with goals. In my book STRATEGIC PROJECT MANAGEMENT MADE SIMPLE: PRACTICAL TOOLS FOR LEADER AND TEAMS (Wiley, 2009) I introduce the quintuple bottom line concept, which encourages setting goals/measures for financial, operational, customer, employee, and social categories. That makes it easier to align strategies against a balanced set of measures.

  • Lela Davidson

    @Office Humorist – I’m starting to understand that the whole process is much more matrix than pyramid.

    @Eliot – What’s interesting to me is when you have to jump from one way of thinking to another. I think this is what makes business both exciting and frustrating for entrepreneurs.

    @Terry – I love that quintuple bottom line concept! Love to know more.

  • In the business section, “strategic planning” was “invented” in the years of supplier-driven economy. Of course, its origin can be traced back to the military.
    Although the practices of strategic planning try to consider the various factors and predict/foretell/project the future and cater for its uncertainty, the world and the markets are now changing too rapidly that “traditional” strategic planning is having a hard time.
    Yes, strategic plans need to be flexible and responsive to the changing environment. But what good does it make when the assumption about the future are inevitably wrong or inaccurate?
    After working with both profit- and non-profit-making organizations for some years, I am a growing advocate of Russell Ackoff’s interactive planning and idealized design approach.
    Basically, you have your mission to set the organizations directions. Then, you build the “ideal” for what you really want your organization to be TODAY, not in 3/5/10 years. By doing so, you are constructing a model for today what the organization should best fit today’s environment in pursuing the mission, while be sustainable.
    Your plan will then be formulated to narrow the gaps between the ideal and the reality as soon as possible.
    Annually plans? No need. Interactive planning embeds the whole planning and review cycles into your daily work. Your plan becomes a major part of the management system, which regularly review the relevancy of the “ideal”, the progress towards the ideals, and the assumptions (on the environments).
    Only when your plan have a life and is part of your organizations operating system can it provide real value.

  • Many people including me before my handful of graduate qualifications get a plan and strategic plan mix up for developing an organisation. A strategic plan runs from 5 -10 years and provides a vision, mission and objectives you wish to meet at a certain point in the future. An annual plan is a map and details how you are going to achieve the strategic goals of the company, showing tasks and timelines over the year. Easy to mix up if you do not know. One key question is how you are going to achieve your goal?