About Brian Thompson Expertise I am able to answer questions on the full spectrum in preparation of Business Plans. I have 30 years experience in senior management of public and private organisations and specific experience in strategic and busienss planning, corporate treasury and management accounting.
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Experience I provide a strategic and business planning service through my consultancy, Paraclete Consultancies focusing on SME.
Question am stumped! Can you help me out? What is the PRACTICAL difference between business planning and strategic planning for a business?
It seems to me that Business planning involves planning all aspects of the business including operations, finances, marketing, HR etc whereas Strategic planning is "determining the strategy for the success of the business."
Based on the above What is the difference?
I have asked aeveral professionals I know and NO ONE really knows the difference.
Answer You're essentially correct although your definition may be too simplistic.
Strategic planning is a high level process which deals with establishing the Vision and Mission of the organisation, its Values, key Objectives and Focus Areas, and Key Performance Indicators. If this is done well, there will usually only be minor tinkering as the Plan is revisited and revised each year.
A well constructed Strategic Plan may be reduced to a one page document which can be circulated throughout the organisation. Strategic Planning is part of the corporate govenance process as the plan will be signed off at Board level.
Business Planning is the process which carries the Strategic Plan to each level and functional area of the organisation, ensuring alignment with the Strategic Plan. If the Business plans of the functional areas are not fully aligned with the strategic plan, then wildcat objectives can be developed (managers pet projects) which can use up resources but not contribute to achieving the strategic objectives. It will extend over more than one year as some objectives may require long range planning.
A business plan will have an operational plan for each function as well as the financials and will produce lower level objectives and action plans which tie back into the Strategic Plan. Specific Key Perforance indicatiors will be developed for each functional area. These may or may not mirror the Strategic KPI.
The Strategic Planning process is often better accomplished with the help of a facilitator, particularly if it is being done for the first time.
It's important that both documents focus on strategic, not operational, issues. Managers are employed to deal with operational issues on a day to day basis. When it becomes strategic it becomes part of the plan. A Business Plan which deals with operational issues will lack the objectives to address the strategic issues. It's usual that a CEO would sign off the Business plans of the functional areas, These plans will have greater descriptive detail than the strategic plan and may include the Business Cases for specific courses of action.
A Business Plan will include sections such as market analysis, competitor analysis, product plan, Strengths, weaknesses, opportunities and threats analysis, Risk Management and other sections unique to the organisation.
I hope this helps you. Strategic Planning and Business Planning are like many functions a professional process.
