Chapter 6. Tactical and Financial Planning: Translating Strategy into Action

The will to win is useless, if you do not have the will to prepare.

Thane Yost

Tactical and financial plans constitute an organization's operating plan and serve as the primary mechanism for translating strategic objectives into executable actions. They also serve as the vehicle for adjusting priorities and resource allocations in response to events in the marketplace. Of all the elements of performance management, tactical and financial planning are the areas that have been found to be most wanting in recent years.


Defining tactical and financial planning is as simple as asking two questions:

  1. What tactics will be pursued to meet the performance targets emanating from the strategic plan?

  2. What are the expected financial results of executing the tactics?

Tactical plans describe the operations, initiatives, and actions that will be performed in order to achieve agreed-upon performance targets. Financial plans contain two elements: an operating budget and a capital budget. The operating budget defines the revenues and expenses that are projected from executing the tactical plan, and the capital budget defines capital investments required to support execution. The need for two financial plans is driven largely by the different accounting treatment of capital and operating expenses. This differentiation was brought into sharp focus in the summer of 2002, when the second-largest ...

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