Let’s define Strategic, Tactical and Operational planning.
Apr 3rd, 2014
Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. Generally, strategic planning deals, on the whole business, rather than just an isolated unit, with at least one of following three key questions:
- “What do we do?”
- “For whom do we do it?”
- “How do we excel?”
For example, the first and third questions are those that motivate an acquisition. Acquisitions are thus strategic choices. Typically strategic choices look at 3 to 5 years, although some extend their vision to 20 years (long term). Because of the time horizon and the nature of the questions dealt, mishaps potentially occurring during the execution of a strategic plan are afflicted by significant uncertainties and may lie very remotely out of the control of management (war, geopolitical shocks, etc.). Those mishaps, in conjunction to their potential consequences are called “strategic risks”. Untapped opportunities can also be seen as strategic risks, but in this post we will not analyze those upward-risks aspects.
Tactical planning is short range planning emphasizing the current operations of various parts of the organization. Short Range is generally defined as a period of time extending about one year or less in the future. Managers use tactical planning to outline what the various parts of the organization must do for the organization to be successful at some point one year or less into the future. Tactical plans are usually developed in the areas of production, marketing, personnel, finance and plant facilities. Because of the time horizon and the nature of the questions dealt, mishaps potentially occurring during the execution of a tactical plan should be covered by moderate uncertainties and may lie closer to the control of management (next year shipping prices, energy consumption, but not a catastrophic black-out, etc.) than strategic ones. Those mishaps, in conjunction to their potential consequences are called “tactical risks”.
Operational planning is the process of linking strategic goals and objectives to tactical goals and objectives. It describes milestones, conditions for success and explains how, or what portion of, a strategic plan will be put into operation during a given operational period.
An operational plan addresses four questions:
- Where are we now?
- Where do we want to be?
- How do we get there?
- How do we measure our progress?
Operational risks are those arising from the people, systems and processes through which a company operates and can include other classes of risk, such as fraud, legal risks, physical or environmental risks. Operational risk are those resulting from inadequate or failed internal processes, people and systems, or from external events (man-made or natural hazards). A tailings dam failure, an open pit slide, a black-out (man-made or natural external hazard), and explosion in a processing plant are all operational hazards generating operational risks.
Since upper Management generally have a better understanding of the organization as a whole than lower level managers do, upper Management generally develops strategic plans. Because lower level managers generally have better understanding of the day-to- day organizational operations, generally they develop tactical and operational plans. Because strategic plans are generally longer term and are surrounded by more uncertainties in terms of their occurrence and consequences (one exception example: tailings management planned until closure, and after closure) strategic plans are generally less detailed than tactical plans. Thus the following can be inferred for a list of “top hazards” discussed in a report we reviewed recently:
Strategic, tactical, and operational planning example.
However, despite their differences, strategic, tactical and operational planning are integrally related. Manager need both tactical and strategic planning program, and these program must be closely related to be successful. Thus, it can be inferred that Entreprise Risk Management (ERM) should deal very closely with these relations and the use of multiple Probability Impact Graph (PIG) matrices with multiple arbitrary scales is definitely not a rational, transparent solution.
For more information on Strategic, Tactical & Operational planning and related risks see follow-up post.
Tagged with: black-out, making decisions, open pit slide, Operational planning, Operational risks, strategic planning, Tactical planning, Tailings Dam failure
Category: Consequences, Crisis management, Mitigations, Risk analysis, Risk management
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I like the intro paragraphs I agree with your premise. Let’s connect on linkedin!
that introduction was very specific and has enlightened me . thank you.
linkelin
Can i use this 3 planning in Information system (IS PLANNING)
Does strategic risk planning goes hand in glove with safety?
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Hello, I like your page and this page help for my assignment.Thank.
strategic planning is a long term plan of about 5-10 years, its cocerned with where the organization desires to be in the future.
Hello, I saw your informative post and then marveled the inane comments, so I feel compelled to leave an inane comment as well. Strategery is the most important part of tacticalizing your plans.
I appreciate your job well done. It is very figurative!
Very insightful!
awsome
Thank you, its really a complete explanation.
Thank you for the info. It was very informative, really enjoyed it. THANKS!
It takes a lot of courage to develop a strategy. These are national based and ounce executed effectively change the theater of operations.
hello; this is specifically spectaclous. tanx
Thanks so much, really helps a lot.
Woow thanks a lot it very formative it help me a lot.
Very good, clarified explanations, interesting and informative. easy to understand and interesting to study which helps to stay focused. Thank you.
I appreciate your framing. Few write about these different time horizons, and fewer relate the impact of strategy to investments and then to the consequences for daily planning. Thank you
This is very interesting
Very informative and straight to the point
is it safe to say we can differenciate the three types of planing depending on the period the take to be executed and also what they address eg for tactical we consider the type of product to be added interms of an organisation what capital de investment inoreder to meet strategic planings so on and forth
Nice introduction and precise notes
Hye, can anybody help me to solve this question ?
Do a comparison of those 3 level of planning by providing example and skills needed while implementing the planning process.
Hi,
Thanks for the post, insightful information.
In the organisational dimension, indeed we can classify activities in Strategic, tactical, operational and technique. It misses the technique which represents a technical plans to execute tasks in preciseness.
Thanks
Hi,
I have questions about “Operational control”, what is the function of operational control in management system, what is the impact on revenues and expenditures, which documents do we need to create to establish the operational control, which management tools we use, which are performance indicators of the operational control system?
Thanks !
I WOULD LIKE TO KNOW THE LEVELS OF MILITARY LOGISTICS PLANNING CORREESPOND DIRECTLY TO STRATEGIC, OPERATIONAL AND TACTICAL LEVELS OF WAR.
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Man…Very informative articles. You take a lot of time and effort into your business related writings. Thanks for that and spreading the knowledge.
What is I have 8 business units (8 operations within the VP Operations) that I need to align with the corporate strategy taking into consideration each business unit operational plan, sustainability, social relations, environment permits and commitments, long term resources and infrastructure needs, and so on… for the scale and scope I was considering this integration approach an Operational Strategy… does it make any sense to you?
Dear Ralan, we would advise you to deploy a convergent scalable drill able updatable quantitative risk management platform that would deliver to you a clear roadmap for risk informed decision making across the whole organization.
Contact us to learn more about ORE, our flagship methodology designed to deliver exactly what you need.
If an information system were to be designed for a Public Transport System in Dhaka,
i) What would be the strategic, tactical, statutory and operational information?
ii) What would be its elements for this system?
If an information system were to be designed for a Public Transport System in Dhaka,
i) What would be the strategic, tactical, statutory and operational information?
ii) What would be its elements for this system?
Dear Sir,
Thank you for these questions.
Dhaka is a city with 7M people.
It’s physical Public Transport System and related information system certainly require an attentive study based on its present and future desired state.
It would be unprofessional for us to attempt a definition of elements without that preliminary study.
As per strategic, tactical and operational information, these should be the results of a holistic risk assessment which would guide future studies and developments.
Let’s talk further if you need this type of support.
Kindest regards,
I really want to appreciate this wonderful elaboration as far as operational and strategic planning is concerned. with management questions, we shall always achieve and pass. thank you very much.
What are the strategic, tactical and operational activities in international logistics management
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Great article
Tactics are what we observe at logistical checkpoints and strategy is perceived with observations of more than 1 checkpoint. I skipped over any elaboration on excelling mentioned in your sharing the scope. Excellent resource for juggling documentation systems when first on the scene or beyond. I was looking for mapping advice; it could save some of my paper if Santa brings a lump of coal, as hazards go when we risk valuing purpose over meaning to excel.
1- experience in shaping and implementing operational logistics strategies?
what are the similarities between strategic farm business planning and Decision making?
what information you require to make effective decision in terns of strategic, management and operational controls?
Pwoli saanam