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Operating Plans Defined (and How to Create Your Own)

Interested in Learning More About Operating Plans? Here’s How They Differ From Strategic Plans and the Steps to Create Your Own.

Motion Blog
at Motion
Sep 28, 2023
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Ready to achieve your goals on time — without going over budget?

If so, then you’ve come to the right place.

Developing an operating plan is one of the best ways to ensure your business or project meets its goals, hits its deadlines, and stays well within budget.

In this post, we’ll go over what an operating plan is and the benefits of creating one. We’ll also distinguish it from a strategic plan and tell you why you need both. Finally, we’ll cover the steps you need to form your own operating plan.

What is an operating plan?

An operating or operational plan is a detailed document that outlines how a business will achieve its goals. It includes the actionable steps needed to achieve a goal and who will be working on them, as well as the deadlines those individuals face and the resources they will need to be successful.

There are several different types of operating plans.

  • business operating plan outlines the steps, employees, and resources a company needs to achieve a significant goal, such as an increase in revenue. These types of plans are often created annually.
  • project operating plan refers to a roadmap for a specific project. Timelines will vary based on the scope and size of the project.
  • An emergency operating plan informs employees of what must occur if something unexpected, dangerous, or serious happens. Workers may be assigned roles or responsibilities in it, such as completing role calls in the case of an evacuation.

An operating plan is sometimes referred to as a strategic plan. However, the two aren’t exactly the same. More on that next.

How does an operating plan differ from a strategic plan?

Strategic plans are the big-picture documents leadership creates. They include the business’s mission, values, and long-term goals and ensure everyone is on the same page and focused on the same outcome.

Operating plan vs. strategic plan

‎Strategic planning also includes the employees, resources, timelines, and actions needed to achieve the stated goals.

An operating plan, on the other hand, dictates the here and now. Long-term goals are broken down into short-term, digestible, and doable chunks.

Ultimately, a strategic plan informs your business of what needs to happen to achieve its long-term goals, which inform the shorter-term goals laid out in an operating plan. Without a strategic plan, developing an operating plan would be more difficult.

What are the benefits of an operating plan?

While creating an operating plan takes time and energy, it’s worth it.

Here are just some of an operating plan’s benefits:

Clarifies roles and responsibilities

A key element of an operating plan is that it clarifies the roles of each manager and employee involved.

Each person knows what they will be working on when they arrive at work each day. They also understand how the work they are doing aligns with the overall company objectives.

Clear expectations improve work satisfaction

‎Employees prefer to have clear expectations. Clearly stated responsibilities and team objectives lead to improved work satisfaction and reduced turnover.

A solid operating plan states action items, project steps, timelines, and deadlines transparently.

Depending on the type of operating plan you’re using, you might expect to see daily, weekly, monthly, and quarterly breakdowns to assist you with planning.

Identifies necessary resources

An operating plan lists the technology, materials, and tools employees will need to complete their work. Any training opportunities should also be identified and slotted into the plan.

Defining the plan now ensures that there won’t be any surprises later. Work won’t slow, production won’t halt, and deadlines won’t be missed if workers have access to what they need.

Including these details improves your workflow and overall efficiency.

Improves productivity and team alignment

Overall productivity increases when employees know who to go to for clarification, problem-solving, or support. Having your steps detailed in an operating plan increases your business’s opportunities to identify, react, and respond to problems in real time.

In addition, trust within an organization increases when everyone has a shared vision of what they are working toward.

22% of employees think direction is clear

‎Only 22% of employees feel the company they are working for has a clear direction. Even if you have a clear vision, mission, and goal, these things will be much harder to achieve if you don’t inform your workers of them.

Collaboration, engagement, and efficiency improve when employees work together to achieve goals and understand how those goals relate to the organization as a whole. This also leads to higher profitability and customer satisfaction.

Are there any disadvantages to creating an operating plan?

The short answer is that, yes, there are a few.

One of the downsides to creating an operating plan is that it takes time. Establishing a solid, actionable plan doesn’t happen overnight. Decide how and where you will find the time to focus on this task.

Second, you’ll need buy-in. Management and employees will need to support the plan to help ensure its success. Determine how you will present the plan and get everyone on board with it.

Lastly, you’ll need to cross-check. When creating an operating plan, there’s always potential for human error, especially when it comes to timelines and budgets. Identify which departments can provide helpful, actionable feedback before you start.

How do you create an operating plan?

Here are the basic steps to creating an operating plan:

1. Start with a strategic plan

Save yourself time by using a strategic plan to guide your operational planning.

Since your strategic plan was developed with the company’s mission, values, and long-term goals in mind, it offers a blueprint for the operating plan you want to develop. This blueprint, in turn, keeps you aligned with the company’s forecasted direction.

A strategic plan also includes the necessary resources. You will understand what you already have in place and can use this knowledge to guide the development of your operating plan.

Successful companies establish strategies

‎If you need proof of how important it is to start with a strategic plan, consider this. Successful companies are 1.6 times more likely to establish clear strategies and measurable outcomes from the onset.

2. Set the operating plan goals

Once you’ve aligned the strategic plan with the operating plan, determine how you’ll break down your goals.

While you’re drafting your goals, keep in mind that the operating plan shouldn’t last more than a year. Once you know your year-end goal, you can break it down into smaller chunks.

You can help set yourself up for success by implementing SMART goals.

Set SMART Goals

‎A SMART goal has five specific characteristics. It is:

  • Specific. The goal is clearly defined by what you want to achieve and the personnel you need to be successful. The goal also includes which resources are necessary.
  • Measurable. A specific metric is attached to the goal, such as a key performance indicator.
  • Achievable. The goal has to fit within the capacity of the team’s abilities and the established timelines.
  • Relevant. The goal should relate to both the organization’s strategic plan and its operating plan.
  • Time-bound. The goal should have a clear endpoint, with the accompanying objectives bound by timelines.

Narrow down and clearly define the focus of the business objective or project by ensuring you’ve met these criteria.

Once you have your goals in mind, you’ll need to identify the employees or team members you’ll need to meet them. Define their roles and responsibilities as they pertain to the operating plan. Then, if you haven’t already, collect the resources your team will need.

Establish the budget and notify the key stakeholders. Assess the project’s internal and external risks and how they could affect the outcome. For example, outline how the business will adapt if team members miss deadlines or leave the company. Determine your backup plan if the necessary resources get bogged down in a supply chain stall.

Additionally, determine the communication methods you will use to keep everyone in the loop.

3. Establish the necessary timelines

With your goals, resources, and team members established, you’re ready to determine your timelines.

Since an operating plan may run for a year, you’ll want to break your goals down into monthly, weekly, or even daily objectives. This attention to detail will help your team stay on track.

Your timelines should also include employee specifics. Identify who will be responsible for each part of the goal or project.

Determine the spaces your employees will need, too. Hybrid employees, for example, may need time in the office each week to collaborate or address specific responsibilities. Ensure each employee knows how they can access the resources they need.

Furthermore, determine how your team will stay accountable to the operating plan goals and include any systems they’ll use for data collection.

Establish a meeting schedule for regular team check-ins to report progress, brainstorm new ideas, or troubleshoot issues.

Graphic of the Motion Calendar

‎Motion’s Intelligent Calendar is the tool you need to stay on track. It can craft the perfect schedule based on your scheduled meetings, tasks, and priorities. It will even notify you if you’ve put too much on your plate.

4. Roll the plan out and revise it as needed

Once your operating plan is drafted, it’s time to introduce it to your team members and stakeholders. Schedule a kickoff meeting to introduce the plan, cover the objectives and timelines, and review the resources and budget.

Ensure you have added enough time for the participants to ask questions or share concerns.

Remember that all participants must have access to the operating plan throughout this process.

With Motion’s Project Manager, all team members can easily stay in the loop. The app stores all the information in a project and then assigns tasks to different members. Each member then receives a customized schedule with their priorities clearly stated. Then, as they move through their assigned tasks, team members can ask questions and leave comments.

As you go through the operating plan, you may discover that some revisions or adaptations are necessary. Update the plan as needed, again making sure that all members have access to the changes as they occur. Any changes or updates will also need to be communicated to leadership, contributing departments, or any other stakeholders who may be affected.

5. Wrap it up

Review the operating plan after the business goals are achieved or the project is completed. Ask the participants for feedback through surveys, follow-up meetings, and individual check-ins. Look at your customer satisfaction ratings, too.

Here’s what you’ll want to find out about your plan:

  • What went exceptionally well?
  • What problems did the team face?
  • Were those problems addressed and resolved in a timely manner?
  • Were the timelines and deadlines manageable?
  • Were the necessary resources accessible?
  • Was the budget reasonable for the size and scope of the goal or project?
  • What needs to be adjusted moving forward?

Use this data to inform your next operating plan.

Increase your operating plan efficiency with Motion

Forming a solid operating plan provides your company and team members with the strategies, timelines, and resources they need to reach the company’s goals and objectives.

Why not make this process even easier?

Watch your efficiency increase with Motion. The Project Manager provides each team member with a customized schedule and prioritized tasks, allowing for clarity and seamless communication. With it, you can also attach any relevant documents directly to the project or task.

Check out Motion’s 7-day free trial to see everything it can do for you and your business.

Motion Blog
Written by Motion Blog