Transactional Planning or Operational Planning is the process whereby Strategic Business Units (SBUs) and their respective Business Units (BUs) within an organization align themselves with their organization’s Competitive Strategic Plan. Knowing how to do this is critical and in my experience it’s a process that is often misunderstood. So what’s the process? Step One: The leadership of the SBU needs to meet with his or her Management Team overseeing their BUs to review the organization’s Competitive Strategic Plan. Everyone at the meeting(s) should come out of the review with the same understanding of what the organization stands for, how its people will work together to achieve its Goals, and where the organization is going and why. They should also come out of the meeting with a Vision of where the SBU is going and its Goals. Step Two: The Management Team needs to take their understanding of the strategic direction of the SBU and share it, and the organization’s Competitive Strategic Plan with their team members. Step Three: The BUs then need to craft their Vision and set Goals and Objectives for the coming year that are aligned with their Strategic Business Unit’s Vision and Goals. Objectives are different than Goals. Goals are broad, over arching statements of what a business wants to accomplish while Objectives are: Results-oriented, Understandable, Measurable, Beyond, Achievable, and Time bound (RUMBAT). People or teams should be assigned to the Objectives and are therefore Responsible for achieving them while their Management on the other hand is Accountable for their BUs Objectives.
If an organization follows this cascading of Strategic to Operational Goals and Objectives it should have relative success in making gains towards it Competitive Strategic Plan. Within this Transactional Planning process are a lot of different process tools to help dissect the many variables and options before the Business Unit membership sets their annual Objectives.
In closing, this process needs to be done well with every member or representative of a group or team involved in the process. 100% buy-in from every member of the Strategic Business Unit is critical to the team’s success.