What Is the Difference Between Strategic Planning and Short-term Operational Planning?

In business, management establishes three types of objectives: short, medium and long-term. Long-term objectives look into the future and are addressed in the business plan, which defines the company's vision, mission and objectives. These objectives tend to be strategic in nature. Why is the company in business? What does it want to achieve? Shorter-terms objectives focus on the strategies to be used in achieving specific projects and milestones. They're essentially a tactical strategy to achieve the company's mission.

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Big-picture planning at the corporate level is called strategic planning. The view here is wide and long term. Operational planning is short-term planning which focuses on achieving the company's tactical objectives.

Strategic planning is based on establishing a long-term plan to achieve a specified mission, through the attainment of broad-ranging objectives. It's a big-picture process that focuses on the future: where does the organization want to be in five years' time? What value will it add to the economy or the community?

A strategic plan always looks out over an extended time horizon, three to five years or more. The plan establishes where the business is currently, where management wants to go, how they will get there and how they will know when they have arrived.

Within every long-term strategic plan there is a short-term operational plan. The purpose here is to plan the day-to-day activities that will satisfy the objectives in the strategic plan and, more importantly, will generate or create value.

Operational planning is by definition a short-term plan, which typically looks at goals or milestones of one to 12 months in the future. It does not stand alone from the strategic plan, however, as every objective must provide validation and evidence of success toward achieving the mission of the company.

In some instances, companies are very good at articulating or designing a strategic plan but fail to execute a short-term operational plan. So, they have no toolkit required to achieve the strategic plan. Likewise, having short-term plans without a long-term strategy results in a lack of direction or focus as to the corporate vision and values of the company.

By combining these two planning components, a company is able to set a general path based on company values, goals and objectives, while having the ability to adapt to changing environments.

Both long-term strategic and short-term operational planning are important to the future success of any organization. Focusing and implementing a strategic plan fails to account for the operational factors necessary in the short term to achieve the objectives of the company in the long term. Without a tactical short-term plan, operations management is unable to identify the milestones that are important to achieving the overall strategy set forth in the business plan.

Therefore, it is necessary to coordinate operational short-term plans to ensure that they are effective in achieving the basic mission of the company.