Operating Plan

An operating plan is a strategic document that describes the day-to-day operations of a business or organisation. Operating plans include details about the tasks that will need to be completed to reach operational objectives and the responsibilities each team member will be assigned. The goal of the plan is to define how each role in the organisation will work collectively to achieve the vision.

In addition to naming the individuals responsible for fulfilling the work, clear deadlines for each task and a description of any costs related to the work must be included in the plan. An operating plan translates strategic business practices into specific timelines, identifies existing and missing resources critical to completing the work, and assesses what is feasible in terms of program delivery.

A well-constructed operating plan is essential for ensuring that a business runs smoothly and efficiently. The operating plan should explain the processes and procedures team members must follow. It is critical to review the plan regularly to make sure that it remains relevant and that any changes to the business are clearly outlined.

Attributes of an Operating Plan

Some key elements are needed to ensure that the operating plan reflects the organisation and continues to meet its strategic goals. According to the Harvard Business School Kraft Accelerator, operating plans are built on three fundamental principles:

1. time, cost, and people
2. governance, and
3. change management.

Time, Cost, and People

The first principle requires identifying the individuals responsible for each program related activity such as fundraising, marketing, or communications. Specific activities the organisation will be accomplishing must be covered in the operating plan, as well as its milestones, timelines, and any gaps in capacity that would require partnerships or hiring staff. In addition, the operating plan must make clear the reporting metrics used to measure success. These elements will help to ensure that any issues that arise are quickly resolved, and the business activities remain on track.

Governance

The second element to include in operating plans is a section about the governance that supports the organisational goals and ensures the successful delivery of the program or project. The board holds individuals accountable by providing oversight and expertise about activities such as fundraising, reporting, data management, and compliance. The plan should describe how they fit into the operational goals and decision making and how progress reporting and program evaluation will support governance work.

Change Management

Operational planning involves developing a ‘living document’ that influences the direction of operations and how performance is measured. Adopting changes into the business culture is essential to successfully reaching operational goals. Regularly reviewing the plan to evaluate whether key milestones are on track is an important part of any operating plan. Things are likely to evolve and strategic communication with employees and other stakeholders should be part of the document.

Steps to Creating an Operating Plan

A well-constructed operating plan provides a clear roadmap for how the business will operate and helps to ensure that everyone is working towards the same goals. By following the steps below, any organisation or business can create an effective operating plan that will help to drive success. Set clear objectives, prioritising your objectives, and developing metrics indicators for measuring success.

• Develop your operating plan with your services, products and clients in mind, and align business goals with your strategic plan.
• Define the roles and responsibilities of each team member, including establishing procedures and protocols for how work will be done and how they will be held accountable for their work.
• Determine the resources needed to successfully carry out the work and reach strategic goals. This includes describing relevant equipment, materials, and personnel.
• Develop training or communication strategies that will ensure every team member understands their role, the operational goals, and the metrics and processes that will be used to do the work.

Examples of Operational Goals

An operating plan can be broken into smaller sections to address specific areas of the business or organisation. For example, you may wish to develop a strategy for financial operations, administrative processes, and evaluation practices. A Financial Operating Plan (FOP) is a financial operating plan that describes the revenue sources and expenses of an organisation or company for a specific period. Creating a FOP involves reviewing past results, revenue streams, and expenses to forecast what is likely to happen in the future.

Each area of the operating plan should clearly identify the goal, action, outcome metric, person responsible, and deadline for achieving results. Each goal should include a brief description of the area that needs change, the indicator used to show that the outcomes were achieved, and the actions individuals will take to achieve the intended results. As an example, if your goal is to reduce the cost of equipment maintenance without negatively impacting service delivery, a possible action would be to research alternative service providers and have a call for proposals process to find a less costly solution.

Related Terms

Governance

Board Evaluation