Introduction

Planning is an essential function of business. Effective planning is crucial for every business to achieve the desired goals effectively.  Planning is essential to ensure objectives are effectively and efficiently achieved.

However, often, the terms “strategic planning,” “tactical planning,” and “operational planning” are used interchangeably when, in reality, they represent different levels and processes of planning. 

Types of Planning

1. Strategic planning

Strategic planning is the foundation upon which the entire organizational structure stands, establishing the company’s long-term vision and outlining the paths to achieve global objectives. 

In this sense, the company's mission, vision and values ​​are defined, in addition to analyzing the external and internal environment.

Strategic actions, designed for the long term, generally cover a period of 5 to 10 years. With a broad approach to the organization, excessive details that would be difficult to predict for such a distant horizon are avoided.

This process is essential to minimize disparities between planned and executed actions; providing a solid foundation for adapting to changes in the business environment.

However, it is crucial to continuously review and update strategic planning to ensure that the information remains relevant and can underpin decisions. 

Definition: Strategic planning is like a roadmap for a company’s long journey. It’s a big-picture plan that guides where the company wants to go and how it aims to get there.

Purpose: Think of it as setting the ultimate destination for a road trip. It defines the company’s goals, vision, and the main strategies to achieve them. It’s a big dream.

Main characteristics of strategic planning

• Comprehensive vision: Strategic planning involves a global view of the organization, considering its mission, vision, values, and long-term objectives.

• Executive responsibility: The responsibility for formulating and implementing strategic planning falls on the company’s senior management and key executives.

• Long-term: Strategic planning covers broader time horizons, usually five to ten years, allowing the organization to set and achieve long-term goals and adapt to changes in the external environment.

Key Details

• Who Makes It: Top-level leaders and executives in the company are like the masterminds behind this plan. They gather to brainstorm and set the course for the future.

• Importance: Imagine trying to build a house without a blueprint.  Strategic planning provides focus and direction. It helps a company grow, adapt to changes, and stay competitive.

• Example: Suppose a toy company decides it wants to be the leader in eco-friendly toys within five years. Their  strategic plan might include goals like designing sustainable toys, expanding into new markets, and improving their brand’s environmental image.

2. Tactical Planning

Tactical planning is responsible for establishing goals and conditions for the actions to be carried out outlined in strategic planning. Moreover, assessing and monitoring risks to address them effectively is essential.

While strategic planning covers the entire organization, tactical planning operates on a more limited scale. It is implemented at the departmental level, sometimes focusing on specific end-to-end processes.

Given its more specific focus, decisions in tactical planning can be made by leaders who hold positions between senior management and operational levels; such as board executives and managers.

A distinctive feature of tactical planning is the timing of when actions are implemented; usually 1 to 3 years, addressing a nearer future than strategic planning, that is, the medium term.

Definition: Tactical planning is like a playbook for a sports team. It’s about making specific, short-term moves to score points and win the game. In business, it’s all about the specific details of a business. 

Purpose: Think of this type of planning as breaking down the big goals from strategic planning into smaller, achievable actions. Tactical planning tells us exactly what to do, like a game plan for success. 

Main characteristics of tactical planning

• Specificity: Tactical actions are detailed and directed towards specific areas of the organization.

• Departmental responsibility: Each department or functional unit develops and implements its tactical strategies.

• Short and medium term: Tactical planning generally covers one to three years, adapting to changes and demands in the business environment.

Key Details:

• Who Makes It: Middle-level managers are like the coaches here. They take the strategic game plan and create tactical plays for their teams. They decide who does what, when, and how.

• Importance: Imagine playing chess without thinking about your next move. Tactical planning ensures that each part of the organization is working together efficiently. It’s all about executing the strategy and getting results.

• Example: If a tech company’s strategic plan is to dominate the mobile app market, tactical planning might involve setting specific targets for app downloads, designing marketing campaigns, and allocating resources to app development teams.

3. Operational planning

Operational planning is the starting point for implementing the actions and goals outlined by tactical planning; aiming to achieve the objectives established in strategic decisions. 

Additionally, this plan focuses on short-term activities, typically with a 3-6 month horizon.

All sectors of the organization are involved in this process, dedicating themselves to monitoring daily activities to ensure execution; according to defined procedures and achieve specific results.

Definition: Operational planning is the day-to-day plan that keeps the company running smoothly. It’s like the to-do list for each day, making sure everyone knows what needs to be done.

Purpose: If strategic planning is the big dream, operational planning is the practical step to make it happen. It’s about managing resources, tasks, and deadlines efficiently.

Main characteristics of operational planning

• Execution responsibility: The responsibility for implementing operational planning falls on supervisors, team managers, and operational staff who carry out the company’s daily activities.

• Short-term: Operational planning generally covers a short-term time horizon, ranging from weeks to a year, focusing on immediate actions and day-to-day operations.

• Specificity and detail: The actions outlined in operational planning are particular and detailed, aiming to optimize processes and resources to achieve short-term goals.

Key Details

• Who Makes It: Operational plans are crafted by managers and supervisors who oversee specific areas or teams. They take the big goals from strategic planning and break them into smaller, manageable tasks.

• Importance: Without operational planning, it’s like having a dream but not knowing how to take the first step. It ensures that everyone in the company knows their role, resources are used wisely, and things get done on time.

• Example: Consider a restaurant. The strategic plan might include a goal to become the go-to place for healthy dining. The operational plan for the kitchen staff would include tasks like sourcing fresh ingredients, creating daily menus, and maintaining kitchen equipment to serve healthy meals efficiently.