THE OPERATIONAL
PLANNING PROCESS
Module 3
Learning Outcomes:
• Define the term operational planning;
• Describe and explain the operational planning process;
• Explain the important key characteristics of operational plans;
• Identify the contributing role of Key Performance Indicators and
Research and Analysis;
• Explain the importance of contingency operational plans for any
organization in PNG;
• Identify and explain the approval process for operational plans in the
Public Sector
What is Operational Planning?
• An Operating Plan is a step by step plan for implementing the
Strategic Plan.
• Operating Plans depend upon good strategic plans.
• If there are fundamental problems with the Strategic Plan, then
successful implementation will be extremely difficult.
• Since operating personnel must implement the Strategic Plan, some
level of involvement prior to this point should have taken place from
key employees at appropriate levels in the organization.
Developing Operating Plans
• Operating Plans are prepared for the short-term (usually one year).
• One major function of the Operating Plan is to allocate resources for
getting the work plan implemented.
• If resources are not available or there is an excess of resources, then
the Strategic Plan should be reevaluated.
• Operating Plans need to cover the functional areas which are required
for implementation - marketing, research & development, financing,
operations, technology, etc.
Also consider the following important points about Operating Plans:
1. Operating Plans usually assign responsibilities and define the roles people
will play in accomplishing the Strategic Plan.
2. Operating Plans are routinely changed as you learn more and gain
experience. An incremental, trial and error approach is often the best
approach.
3. Operating Plans need to be tight enough to meet strategic objectives, but
loose enough to allow for creativity and flexibility.
4. Operating Plans usually will include a timeline or deadline for completing
tasks.
5. Operating Plans should be communicated to everyone held responsible
for doing the tasks. If outside groups will assist, then include them in the
communication.
Key Performance Indicators (KPIs)
• Operating plans inputs will be drawn from the respective Key Performance
Indicators or KPIs for each business division or functional area which will be
used to come up with estimated resources requirements.
• The KPIs are derived from the strategic objectives or goals and strategies
that are included in the organisation’s strategic or corporate plan.
Research, Analysis and Documentation
• Based on the Key Performers Indicators the business division or functional
area can then identify and estimate their operational resource
requirements.
• These resource needs are to be researched, analysed and documented
before being included in the operating plan, as these source documents will
be required for justification purposes in many cases right down to the
individual employee resource needs.
Learning Activity
Group Discussion
At the operational level what resources are we talking about?
Please give examples of the resource needs by the main category
headings existing in organizations.
Each business division or functional area will submit detailed budgets
and work plans for inclusion within the Operating Plan. Detailed
functional plans should address the following:
Plans for establishing organizational size, structure, and staffing;
Plans for asset deployment and investment, such as vehicles, office
equipment, etc.;
Plans for promotion, pricing and marketing of products and/or
services;
Plans for production or operational changes and scheduling;
Plans for management development and training; and
Plans for raising capital or funding for major expenditures.
Generally, operating plans should be prepared by Managers responsible
for the business division or functional area but must be in full
consultation with other employees, supervisors and managers as may
be required by the nature of their operations.
They should not include areas outside the control of the Manager.
The key task for the Manager is to remain focused on the Strategic Plan
and not get lost in the detail.
The best operating plans tend to minimize the detail and tend to flow
directly from the strategies in the Strategic or Corporate Plan.
Contingency Operating Plans
• Contingency plans provide alternative actions that may be taken if
initially planned actions are not suitable or do not work in practice or
when being implemented. They are prepared based on “what if” type
analysis
• They cover the short-term and outline specific action steps to be
taken
Approval of Operating Plan
• All operational plans within an organization require endorsement and
approval from higher levels of the organization
• The operational plans for each function or business unit still require
top management endorsement and approval
Approval Process
• Function, Division, Branch or Section
• Senior Management Committee
• Council or Board
Group Activity
• In your groups, refer back to the organisations you were working on
and:
• Find out if they have any operational plan
• Discuss this operational plan
