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Organizational Planning: How to Create an Organization Plan

July 3, 2024

8:57 AM

By Kimmie Meunier

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Organizational Planning

Strategic organizational planning serves as the bedrock of a successful organization. 

Organizational strategic planning should be revisited periodically to ensure the company remains relevant and successful in the future. 

We’ve put together a comprehensive, step-by-step roadmap to help you make progress towards your goals (in the best way possible). 

We’ll also cover best practices, potential challenges, and ways to incorporate technology during planning and rollout.

What Is Organizational Planning?

Organizational planning is the process of defining and redefining an organization’s goals, purpose, and strategies to achieve those goals (including resource allocation). 

There are several key components of an organizational plan. Later in this article, we will expand further on these.

  • Vision and mission statements: Define the direction and purpose of an organization as a whole. Used as a reference point for all operations. 
  • Objectives and goals: Identify what the organization wants to accomplish. Derived from the vision and mission statements. 
  • Plans and strategies: Offer ways to achieve an organization’s desired goals. Takes resources, capabilities, and competitive advantage into account.
  • Execution: Rolls out the plans at various levels of the organization. Successful rollout is dependent on the quality of the plans. 
  • Evaluation: Reviews an organization’s ability to accomplish the goals. Evaluates resource allocation, successes, and failures. May be incorporated into organizational analysis processes.  

Organizational planning is the guiding light of a business. Once organizational strategic planning is in place, it provides direction and clarity to the company’s operations. 

The Importance of Organizational Planning

At the outset of a new business, organizational planning ensures the company is heading towards its desired outcomes. Proper planning is also key to land funding. 

However, an organizational development plan continues to serve businesses at each stage, whether they are new or well established. 

Organizational planning serves businesses in the following ways:

  • Ensures goal alignment: Organizational planning helps align team efforts with overall goals, fostering collaboration and synergy.
  • Provides clear direction: A well-defined business organizational plan provides a clear roadmap for the organization, reducing confusion and increasing focus.
  • Allows for adaptation: Well-structured organizational plans allow businesses to adjust with changing customer preferences, competitor advancements, and economic shifts.
  • Improves operational efficiency: By identifying and improving inefficient processes, organizations can operate more smoothly and achieve better results.
  • Boosts effectiveness and productivity: Clearly defined plans help teams focus and work together, ensuring efforts are targeted, strategic, and effective in meeting desired outcomes.
  • Improves resource utilization: With a plan in place, resources can be allocated more effectively, leading to cost savings and improved outcomes.

And, here are some additional benefits to strategic organizational planning that many people overlook:

  • Better employee morale: Clear plans give employees direction and ownership, boosting morale.
  • Higher customer satisfaction: Planning aligns efforts with customer needs, leading to higher satisfaction.
  • Favorable financial gains: Resource allocation and risk management optimize processes for financial gains.

Types of Organizational Planning

Let’s look at different types of organizational plans and how they differ. 

Organizational Plan ExampleRole and Goal
Strategic planA plan detailing a company’s overarching objectives to achieve a particular goal. Created by top-level management.
Meant to unify efforts across divisions and departments with clearly defined parameters. Usually a 2-5 year outlook. 
Tactical planA plan detailing how a particular division will utilize their resources to achieve the objectives. 
Often created by mid-level management since they have insights about the resources and capabilities available. Usually a 6 month to 2 year outlook.
Operational planA plan detailing how a particular team will produce results, often derived from tactical plans. 
Usually mapped out by lower-level management with a 30 day to 6 month outlook. 
Contingency planA plan detailing next-step actions when an original plan is unsuccessful or unable to be executed. 
Contingency plans can be created for all levels of the organization (but consequences may arise). 

Understanding these differences will help you and your team delegate planning tasks and create strategic, informative plans.

Aux Report with FTE & Reporting Lines

How to Create an Organization Plan: Step-by-Step Process of Organizational Planning

Now that we’ve defined organizational plans and the various types, we’ve put together a step-by-step guide of organizational planning best practices. 

Step 1: Vision, Mission, and Goals

Before we dive deeper, let’s identify differences between vision statements and mission statements.

Vision StatementMission Statement
What you would like the organization to achieve now and in the future. Keep this short and concise. What purpose your organization serves. This could be what it does and why it is in existence. 
Example: Apple’s vision statement is “to make the best products on earth, and to leave the world better than we found it.”Example: Apple’s mission statement is “to bring the best user experience to customers through innovative hardware, software, and services.”

Both of these statements should be clearly defined. While many businesses develop these at the outset, they should be revisited whenever organizational planning occurs. 

The following organizational planning steps are best performed by top-level management:

  • Step 1a: Confirm that your vision and mission statements reflect the desired direction of the organization. Revise and improve them for accuracy, clarity, and conciseness. Involve key stakeholders at this step.
  • Step 1b: Identify what organizational actions can be taken to honor your vision statement and execute your mission statement. For established businesses, it may be helpful to also identify where the organization has strayed from these statements in the past.

Step 2: Goals and Objectives

Organizational goals and objectives are meant to unify efforts across the organization.

Just as before, the following steps are best performed by top-level management:

  • Step 2a: Define and prioritize organizational goals. Continue to check back with your mission statement to ensure these goals will fulfill your overall purpose. It may be a good idea to get stakeholder feedback during this stage. 
  • Step 2b: Establish several organizational objectives. Objectives should be clear, concise, and measurable so you can evaluate success or failure later on. An example could be: Achieve 25% revenue growth by the end of 2025. 

Step 3: Tactical Planning

Once the goals and objectives are in place, division heads can formulate tactical plans that are specific to their sect of the business.

  • Step 3a: Review the organizational objectives and define how the individual division can achieve these goals. You may need to create divisional goals and objectives for each organizational objective. 
  • Step 3b: Gather information about what resources, team members, funding, and other assets are available. To visualize and assess the capabilities of your people, consider using an intuitive org chart software like OrgChart. 
  • Step 3c: Define what divisional resources will be available during a specific time frame (usually 6 months to 2 years) and how these resources will support your ability to achieve your goals. 

Step 4: Operational Planning

Operational planning is typically performed by lower levels of management, which could be team or departmental heads, depending on your organizational structure. 

  • Step 4a: Review the tactical plans and consider how your team or department can best utilize the resources allocated to you.
  • Step 4b: Formulate plans for daily operations and list out practical action steps. You may also need to establish effective communication channels and a consistent monitoring strategy.
  • Step 4c: Consolidate all of this information into an implementation timeline, usually with a 30 day to 6 month time frame. 

Step 5: Contingency Planning

Once your initial tactics are in place, establish contingency plans at various levels of the organization. 

For your contingency plans, repeat the steps above, paying attention to details (just like you did with your original plans). 

Some contingencies to consider when planning:

  • Staffing issues: Layoffs, vacancies, changes in leadership, and more.
  • Financial challenges: Economic downturn, unexpected costs, clients loss, and more. 
  • Major disruptions: Natural disaster, IT shutdowns, supply chain problems, and more.
  • Market shifts: Changing customer preferences, new regulatory hurdles, competitor challenges, and more.
  • Public relations crises: Data breaches, damaged brand reputation, product recalls, and more. 

Each contingency plan should address a specific issue so you can effectively remedy the situation and get back on track. 

Step 6: Execution

Successful execution comes from a well-defined organizational plan. Here are some additional recommendations to help you transform objectives into results:

  • Be transparent: Clearly define why the organization chose its particular goals. This best comes from top management, since they are in charge of big-picture strategies. 
  • Communicate effectively: Messages can get muddied as they travel from the top of the organization down to your frontline workers. Implement ways to improve communication throughout all levels. 
  • Build a culture of accountability: Create an environment where everyone is invested in the success of the plan. Celebrate milestones and achievements, and hold individuals and teams accountable for assigned tasks.
  • Empower your people: Your workforce is more engaged when they feel like they are making a difference within the organization. Allow for employee autonomy and feedback when appropriate. 
  • Leverage technology: Technology should be incorporated into your original planning. However, as you progress through the execution phase, your management may find additional ways to streamline. 

Step 7: Monitoring, Evaluation, and Adaptation

Your original plans should clearly lay out a timeline for monitoring and evaluation. They should also clearly delegate these tasks to appropriate leadership. 

Here are things to monitor during the evaluation phase:

What to MonitorSignificance to Organizational PlanningAdaptation Strategy
Goal achievementIdentifies whether or not the organization fundamentally achieved what was intended.Consider revisiting all plans, objectives, and the goals themselves. 
Key performance indicators (KPIs)Provide measurable markers about the extent of success or failure. Consider revising your plans and action steps to improve KPI results.
FeedbackGenerates helpful insights from various perspectives (from operational logistics to opinions, etc.).Consider collecting feedback from frontline workers, stakeholders, customers, and consultants.
Qualitative dataPoints to additional, less “measurable” factors that influence goal achievement. Consider assessing factors like workforce morale, organizational design, and skills gaps.

With this information, leadership can adjust plans, roll out contingencies, and improve the organization’s efficiency and effectiveness. 

This ensures flexibility when internal and external factors are at play. 

Challenges in Organizational Planning (and How to Avoid Them)

As you build out your organizational plans, you may run into challenges, including:

  • Straying from your vision and mission: Make sure these statements are clearly defined and accurate. Expect various iterations of your statements and goals before deciding on the final version. Collect stakeholder input.  
  • Resistance to change: Convey information to stakeholders and leadership using evidence-based recommendations. Collect financial, market, customer, and employee data to encourage higher adoption to change. 
  • Ineffective planning: Follow our comprehensive organizational planning guide above! Expect to review and revise plans at all levels, and incorporate feedback.  
  • Lack of clarity in goal setting: Revisit your vision and mission statements to inspire better goal alignment. Identify the most important goals, and seek professional help in writing them.  
  • Inadequate resources: Go back to the drawing board to reconfigure resource allocation. Determine how to improve deficits, whether it’s training your workforce, changing suppliers, or opting into more automated processes. 

What Is the Role of Technology in Organizational Planning?

Technology can be a powerful engine in the organizational planning and execution process. 

Let’s discuss ways in which technology can amplify informed organizational planning from start to finish:

Technology ImprovementSignificance on Org Planning
Data analysisWhen your organizational goals and plans are derived from real data, you know you are making informed decisions. 
ForecastingHelpful for resource allocation and determining “what if” scenarios for contingency planning.
Communication and collaborationCan speed up communication and ensure clear messaging across teams. Can also make it easier for teams to accomplish tasks more efficiently.
VisualizationWhether it’s a valuation of data or your organizational structure and culture, you can harness valuable insights to inform your plans. Visualization is also helpful in stakeholder adoption.

By leveraging technology in organizational planning, your leadership can make data-informed decisions to create more effectiveplans.

Org Planning Example: Workforce Planning with Org Charts

Whether an organization is going through mandated changes, such as a merger or workforce reduction, or simply reevaluating its structure, organizational charts (or “org charts”) can provide invaluable insights.

How to use org charts in organizational planning:

  • Clarify employee roles and responsibilities
  • Enhance communication across different departments
  • Streamline management and reporting structures
  • Identify areas for growth and expansion
  • Provide an overall view of the company’s structure

Optimizing Employee Compensation Using Org Charts

Org charts can effectively assist HR professionals and managers in analyzing individual and group metrics related to salary. 

By utilizing org charts, management can answer critical questions like, “Are we paying a group of employees in Location A more than their counterparts in Location B with similar skill sets?” 

This kind of analysis enables a holistic comparison of groups with similar skill sets, and their salaries can be averaged and juxtaposed with industry standards. And from there, managers can devise an equitable compensation plan that retains talent and attracts it.

A well-planned and fair salary structure – guided by data from org charts – can significantly boost job satisfaction across the organization.

Leveraging Org Charts for Internal Mobility

One key element that adds to an organization’s strength is the breadth and depth of its employees’ experiences. 

Progressive companies often move employees across job functions to enrich their work backgrounds and increase their skill diversity. According to the Society for Human Resource Management, job mobility and the opportunity to utilize one’s skills contribute to job satisfaction.

Org charts can facilitate the identification of employees ready for a role change. These charts visually represent important metrics like work experience and tenure, assisting HR professionals in making informed decisions about internal mobility and promotions.

Succession Planning and Org Charts

Proactive and strategic HR management involves preparing for the future. This includes planning for inevitable transitions when key personnel leave due to retirement, transfer, or resignation. Succession planning is a strategic move to identify and prepare potential successors to step into vital roles seamlessly.

Org charts can help visualize employees’ skill and performance metrics across the organization. This graphical representation aids HR professionals in identifying potential successors or pinpointing departments where management potential needs further development.

The Role of OrgChart in Streamlining Organizational Planning

Transform how you manage your organization with OrgChart, the definitive tool for today’s forward-thinking HR professionals. 

Unlock the power of transparent, data-driven decision-making with these six core benefits:

  1. Effortless workforce planning: OrgChart streamlines planning, making it easy to forecast and understand your organization’s future.
  1. Enhanced visibility: Gain valuable insights into your organization’s structure. Visualize every layer with our intuitive, engaging charts.
  1. Unmatched integration: Bring together data from multiple HR and applicant-tracking systems. OrgChart offers seamless integration for comprehensive talent insights.
  1. Accelerated onboarding: With clear visuals, OrgChart accelerates onboarding. New hires understand their roles and your organization faster than ever before.
  1. Real-time collaboration: OrgChart encourages dynamic teamwork. Collaborate with key stakeholders to develop actionable workforce plans in real-time.
  1. Flexible customization: Tailor OrgChart to meet your unique needs. Enjoy options for access, security, automation, and customization.

With OrgChart, you’ll make better-informed, more strategic decisions that align with your organization’s objectives. 

Successful Organization Planning Starts with OrgChart

No matter how much success they’ve seen thus far, businesses cannot stay the same forever, especially if they want continued growth.

Organizational planning is an important tool that should be revisited periodically by every business – whether they are struggling or experiencing unprecedented success.

Start clearly defining what’s possible with OrgChart Software.

Book a demo today.

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  • The only comprehensive Org Chart software! Easy to set up templates, upload information, and build comprehensive charts. We have used the software to understand the span of control and ultimately organizational design.

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