Balancing Strategic and Operational Planning

A common situation is that the manager is completely focused on the flurry of daily tasks. There is no time or ability to plan for the long-term, as it is taking 100% effort to keep things together. The owner is so focused on “fighting fires” that there is not an opportunity to take a step back and make improvements to daily operations. Add the extra complications involved in a transition to organic production, and you can have a recipe for chaos and stress.

Business planning and the transition to certified organic production both have a ‘strategic’ and an ‘operational’ element. In order for your business to succeed you must be able to balance the different roles and utilize strategic and operational plans.

A Strategic Plan is an organization's summary of the development process and the presentation of core directions

An Operational Plan is an annual work plan explaining how the goals of the strategic plan will be implemented and what budget and processes are required.

Strategic planning helps you to pull back the lens, get a big picture view and consider future scenarios. It gives you the best opportunity to maintain control, avoid serious pitfalls and capture opportunities. Thinking strategically about your farm business involves creating a vision for where you want to be in 2, 5 or 10 years, Strategic planning is not just for big companies and has benefits no matter what your scale or goals. Your defined goals might include increasing the farm’s size, sales or family on-farm employment. Goals may also include environmental and sustainability targets or to sell the business.

Operational planning focuses tightly on the day to day operations with no more than a 12 month cycle. Depending on the farm’s activities, the manager might want to further break things down to daily, weekly, monthly or seasonal activity segments (e.g. farm staff activities during harvest season). Operational planning focuses on adjusting and developing controls, increasing efficiencies and reducing time and dollar costs. The purpose of an operational plan is to effectively execute the goals identified in the strategic plan. Operational planning will determine where to focus attention and where you can take a step back. In addition to informing human resource decisions (such as hiring additional help), operational planning can identify areas where you should look at outside professional assistance (accountant, farm business advisor or shared administrative assistant).

Operational plans answer key questions such as “Who is doing what?”, “What are the day to day activities?”, “How will the suppliers and vendors be used?”, “What are the labour requirements?” and “What are the sources of raw materials?” Specific plans can be developed for human resources, production, post harvest handling, facilities, logistics and distribution.

The key to developing both strategic and operational plans is for the business owner to step back from the daily activities. It requires the allocation of time and a mental shift to ensure objectivity.

The decision and the rationale for making the switch to certified organic production will be a part of your strategic planning process. The mechanics and the implementation, and how it will affect your production, marketing, human resources and other systems will be a part of your operational plan. Much of the information in your operational plan will also be required for your certification body, but has management uses far beyond compliance.

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