10 Operational Planning Steps That 85% of Corporations Wish They Knew

Posted by admin on June 29, 2011

Considering that 85% of corporate strategic plans fail to deliver on their intended results (according to KPMG), it’s no wonder that operational planning has come to the forefront of the minds of CEOs across the globe. Data suggests that most organizations would certainly benefit from adopting a more formalized approach to strategic planning and that many companies have routinely failed to successfully and fully implement their strategic goals due to poor operational planning. What can be done to correct the problem?

 A Call For Change:

  • A great majority of executives (64% of a recent Booz & Company Inc. survey) say that their biggest frustration factor is "having too many conflicting priorities." followed by these executive challenges: 
    • (a) ensuring that day-to-day decisions are in line with the strategy (56%)
    • (b) allocating resources in a way that really supports the strategy (56%)
  • The Harvard Business Review estimates the ROI from traditional planning approaches to be 34% or less.
  • The Economist Intelligence Unit estimates that organizations realize just 60% of the potential value of their strategies. 
  • Kaplan and Norton research suggest that 90% of organizations fail to successfully implement their strategies.

You see, many times, it’s not the strategy that’s flawed; it’s the execution of the strategy that causes the plan to fail. And since it’s the operations side of the business that’s responsible for executing on the strategic plans of the corporation, finding a way to do operational planning and strategy execution better is something many have taken a keen interest in.  

Globally speaking, we all need to see stronger performance from the business and government sector. To contribute towards that success, the list below summarizes 10 critical steps to pay careful attention to during the operational planning process. Operational planning and strategy execution picks up from the point where the strategy, strategic priorities, and goals of the organization have been set. The list provided below is fully explained along with other operational planning guidance in our complimentary downloadable PDF, "Strategy Implementation Essentials: A Guide to Operational Planning". The steps outlined below, at a minimum, must be followed as they are imperative to setup successful strategy execution.

Here is the list:

1. Define all initiatives required to fulfill goals of the strategy

The first step in operational planning is to define the tactics you’ll use to bridge the gap between where you are today and where you want to be.  You’ll have defined those “wheres” in your strategic plan; now it’s time to decide the “hows.” Keep in mind that each of your enterprise goals will be require supporting operational plans with defined tactics that can be executed, managed, and measured so this “definition” stage is really just the beginning. Processes, such as Card Storming, can be used to generate an initial list of projects and tasks that must be planned for.

2. Break the initiatives down into projects

The initiatives you’ve defined above need to be broken down into bite-size projects that can be estimated, understood, and eventually – managed. This is where we start to get much more detailed in our planning to define the time frames, HR requirements, technology requirements, and other details necessary to pave a successful path.

3. Estimate the raw resources required for all strategic initiatives

Every project requires a set of resources to see it through. Having defined the "wheres" and the "hows", it is time to define the "whos", as the operational plan needs to realistically define the resources needed to accomplish each of the projects defined above. Remember that project you thought would take 2 months that ended up taking 6? Those kinds of misjudgments can have dramatic effects on the success of your initiatives. How much time and effort will the organization put forth for each of your defined initiatives? The accuracy of your answer is critical in determining the success of your plan. Since the best predictor of future performance is past performance, be sure to look back at the organization’s past metrics to determine how well your resources “horsepower” can be utilized, how much horsepower you have, and the productivity you can realistically expect.

4. Determine fully-loaded resource costs and attenuate operational budgets to support strategic initiatives

Financial constraints are something most every organization runs into during the tactical planning process.  We all operate within the constraints of enterprise, division, line-of-business, and/or departmental budgets that drive the resources that are available to invest in a particular project or initiative. At times, we have to adjust or scale back our plans to meet the constraints.  Cost-benefit and ROI analysis should be performed early on to avoid getting half way down the road on a key initiative and discovering it lacks the resources necessary to see it through.

5. Group related projects into logical programs

Grouping projects into programs provides a big-picture way of tracking, managing, and reporting on the tens, hundreds, or thousands of projects that can arise from a corporate strategic plan.  Group projects in terms of how they support the overarching strategy and goals. To do so, consider translating plan goals into strategy statements that the organization can embrace and enact, then relate those to specific programs.

6. Determine program time lines, inter-dependencies, and sequence

Since the operational plan will serve as the go-to plan for accomplishing the organization’s big picture strategy, it must contain reasonable and specific time lines that take into account dependency relationships and resource constraints.  This step cannot be ignored.

7. Assign program and budget responsibilities

Without accountability we cannot expect success. In creating accountability for the operational plan the following must be true:

All who are affected by the plan and have a role in its delivery understand what is to be accomplished and in what time frame.

Positive and negative consequences must be defined and governed. Tools such as RACI models can help you map out Responsibility, Accountability, Consult and Inform roles relative to the programs or initiatives supporting the plan.

8. Implement employee-to-manager accountability contracts

People who have sufficient incentive and understanding related to their roles and responsibilities in the organization are much better equipped for success. Empower your people by helping them understand what is being done, why, when, and how they can contribute.  Create “accountability contracts” between employees and managers to bring further clarity to their roles and back it up with job descriptions that further support this accountability.

9. Put in place governance to manage performance to objective metrics

Probably the most important step in the operational planning process is this one.  Plans need effective oversight and governance to ensure accountability for goals being met.  Whether implemented as an official Plan Management Office or through a less formal structure, everything involved with selecting, managing, and measuring the entire portfolio of programs and initiatives needs to be governed.

10. Adjust the plan, continually

Plans are never set in stone. Effective operational planning involves periodically refreshing the strategic and supporting operational plans along the way – as goals are met and new programs are born. Develop your plans with shorter time horizons to encourage more focus on execution and the delivery of more timely and better outcomes. A rolling 12-month plan that is refreshed quarterly is best suited for operational results.

Creating a strategic plan that actually delivers results is not easy.  But with effective operational planning it can be done! Method Frameworks’ clients experience success many times the rate of average because we help organizations link strategy to effective execution. Contact us to discuss your needs and let us share our success stories with you. Better yet, let us make your organization our next success.


For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.

About the Author:

Joe Evans is the President and CEO of Method Frameworks.  Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.


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