How to review the progress of your strategic and operating plan

Plans are the glue that hold together the aspirations and activities of the various groups of people that work in any organisation.

There are three key elements of any plan that make it an actual plan (as opposed to a shopping list of things we hope happen).

The first element is the activity, and the context in which that activity occurs. For example, the operating plan works within the context of the strategic plan. The strategic plan works within the context of the vision/purpose statement.

The second element is the time frame around each of these activities. This time frame should always include a start date (when do we need to start having a laser focus on this activity), and an end date (how long should this activity take before we know it is creating the desired outcomes). Time frames can always change, but there needs to be an approved reason for any change.

The third element is the Outcome measure or the Key Performance Indicator (KPI) for each activity. This outcome measure should describe the outcome desired, the measurement technique and the level of achievement that would be satisfactory. (Note: the outcome measure should not measure activity, but the outcome of that activity.)

These three elements (context, timeframes and outcome measures) are what provide accountability to the plan and legitimacy to the actions that are undertaken in response to the plan. The strategic plan is the key accountability mechanism for the board, and the operating plan is the key accountability mechanism for the staff.

The planning sequence 

Organisational planning has three distinct elements that work together, but have very different timeframes and purposes. 

First element: The role of vision / purpose as a long-term strategy filter (10-20 years) 

Your vision or purpose statement should articulate the difference your organisation wishes to make with the stakeholders you serve. This is your long-term plan. 10, 20 maybe 50 years in the future. How you get there will change over time, but nevertheless it is unwavering in its focus, and the board is the custodian of this vision/purpose. This is your BHAG (Big Hairy Audacious Goal). It should be used as a key business filter for all projects and programs submitted to the board, the staff should use it to align their operational programs, the Board should use it to inform discussion, questions and monitoring, and the organisation should use it to inform stakeholder engagement. 

Second element: The role of the strategic plan as a short-term strategy filter (2-3 years)

We define a strategic plan simply as 'the top 3 or 4 things the Board agree have to occur in the next 2 to 3 years'. This simple definition allows us to focus on the most important 3 or 4 key “things” (or strategies) that have to be achieved in the next few years. Strategic plans these days typically have a 3-year time frame but often get substantially completed within 2 or 2.5 years due to the sheer pace of change. Regular updates at the board level, and the more formal annual strategic plan review ensures the strategic plan is updated as required, with a full reset typically every 3 years. 

Third element: The role of the operating plan to actualise the strategic plan (1 year) 

The annual operating plan (or business plan) provides the detail for the staff to operationalise the strategic plan, prepare the budget and allocate resources.

Learn how to build your operating plan here

Framework for reviewing your strategic plan 

Each year, it is recommended that the board and senior leadership team undertake a formal review of the strategic plan. Note, this is an extremely powerful process to include as a part of induction for new directors, soon after the AGM and as soon as possible after new appointments. This is a process where five questions are posed for each strategy: 

The board needs to continually question the assumptions behind the strategic plan to test their continuing validity and be willing to change components of the plan if other variables change. The process for such an annual review could include the following:

1. Review vision / purpose statement and its usefulness in decision making for board and senior leadership team 
2. CEO and executive team to present a succinct report on their insights of achievements against the current strategic plan and relevant business plans. They should identify new opportunities and risks, utilising the 5 questions "what has worked", "what hasn't worked", "what have we missed", "what do we need to add", and "what do we need to take out". 
3. Discuss strategies for ensuring that the strategic plan is carried out at the various levels (board, staff, committees etc), including reviewing the strategic plan regularly, strategic thinking processes and embedding the strategic plan into performance measures and job descriptions at all levels of the organisation.

It is also becoming more common for Boards with their Executive Teams to allocate a half or full day every 6 months to discussing emerging key strategic issues, in depth. Typically, this meeting is not minuted and does not have any other Board business attached to it. This also is a key opportunity to reflect on how emerging issues may shape existing strategies into the future, and review the existing plan.

Framework for reviewing your operating plan 

Any review of the operational plan should not just be about an update on what is happening, and maybe adding some new initiatives. It should be a review against the following aspects

1. Your vision / purpose statement 
2. Your strategic plan 
3. The outcomes or key performance measures from each of your operating plan tasks 
4. A review of what has worked, what hasn't worked, what we missed, what we need to add, and what we need to take out of the plan

1. Reviewing your operating plan against your vision / purpose 

A vision or purpose statement is an expression of what your organisation would like to create as the future for the community and stakeholders you serve. Having created the vision statement, then all decisions, projects and services can be filtered through the vision statement. You can assess whether they are truly 'vision-driven' and hence creating the strategic awareness of possible futures and the impact that your organisation desires. Any review of operating plans then should be about how well we map our existing programs against the key elements of our Vision statement, and how we 'walk the talk”' This discussion should focus on the strategic issues that are raised, and the awareness that is required to drive the organisation towards creating the future and the possibilities that the Vision articulates.

2. Reviewing your operating plan against your strategic plan

Your strategic plan provides guidance on the key priorities for the organisation over a certain time period (typically 2 or 3 years). These key priorities should then be reflected in all activities of the organisation, from service delivery, to finance, to front office staff, right throughout all levels of the organisation. The operating plan then should reflect the key activities over the next 12 months that support the strategic priorities.

3. Reviewing outcome measures 

This is one of the most critical components of the operating plan to ensure you deliver real outcomes, rather than optimistic aspirations. Identify what the senior leadership team would consider a suitable outcome for each of the elements of the operating plan. Success measures help you gauge whether or not your activity was a success. This is not a ‘tick the box when completed’ exercise either. Success measures provide the accountability mechanism for the staff and can also feed into the Performance Framework for staff reviews and remuneration changes.

Do a review of each outcome measure, asking the questions:

(1) What would a great job look like with this activity?

(2) How would we measure it (remember, everything is measurable)?

(3) What level would we be happy with?

These outcome measures then provide the opportunity to develop dashboard reports that summarise the most relevant information into an easily understood format.

Top Hint: Sit down with each staff member and have a conversation with them about how they can -contribute to the various Board-approved strategies with the work they are doing currently. For example (in fact a real live example!), as CEO I would always sit down with my staff and go over the strategic plan with them, and simply ask “With the area you are currently responsible for, what can you do to further align what you do with each of these strategies?” In one case, I had this conversation with our receptionist. The strategy that really “pinged” for her, was a focus on increasing member retention. When we discussed what her typical responsibilities were, she mentioned her first activity when she went to the reception desk was to listen to voice messages and respond accordingly. When asked what the majority of messages were for, the key trend was members wishing to resign, and so she resigned them. I asked what she would need to do to keep some of these members, and she described a list of support mechanisms that would allow her to manage the retention process in her area of responsibility. The outcome of this was an increase in member retention by over 2%.

Where to next?

• Find answers to the top operating plan FAQs
• Download a copy of the 'How to undertake powerful progress reviews against your strategic and operating plan' white paper