A Summary of Strategic Planning Practices in High Performing HealthCare Organizations
Academic and business literature is filled with models of strategic planning, most of which are well thought through and provide guidance for leaders. In practice, it is pointless to hold up one as the “best” practice. Rather, we need to understand the elements of many and overlay what has been proven to produce sustainable value.
Over the past 35 years I have seen the good, the bad and the ugly. I’m sure you have too. Experiences and discussions suggest that there are five factors that high performing organizations across industry sectors, including healthcare, demonstrate.
- Facts and real experience inform strategy. Understanding the market is foundational. This is about physicians, patients, the community, regulators and potential partners. It also demands a view of roles and players today, as well as a projection of how they may shift over time. It requires a detailed comparison of sources and uses of capital, technology and talent, as these are strategy fuel. When all is said and done, experience counts. There is nuance in every market that is contained in the tribal knowledge of organizations and people. This needs to be integrated to create a comprehensive view of market reality. A critical internal SWOT assessment is an essential part of the process and should not be done by only a few staffers. Rather it should be done in facilitated meetings with a cross section of associates, caregivers, and physicians, etc. to ensure that the truth is heard, understood, and integrated into the situation assessment. It also ensures that people believe their voices are heard and cool-aide is not consumed in large quantities by senior leadership.It is also important to gauge the pace of change for fee-for-service to fee-for-value and understand the events that could change that pace. Certainly the demographics of populations needs to be mapped as connecting with individuals who will certainly have more informed choice in the future is essential. We live in an uncertain healthcare market space. Market consolidations, mergers and acquisitions, clinical innovations, emerging information technologies, etc. could radically change the landscape and often surprise health systems that have not embedded scenarios as a means of testing the ability of the organization to survive something unanticipated.
- A strategy should take you someplace great, while demonstrating differential advantage. Plans that do not serve illustrate how an organization is actually going to achieve success are usually budgets with a lot of unproven assumptions. It is simply not practical to try to be all things to all people at all times. A strategy should reflect tough choices regarding what to start and fund, as well as stop or defer and de-fund. These decisions should not be a secret, but rather communicated throughout the organization. Part of that process includes celebrating the sunset of efforts that created past value. These past efforts or strategies comprise an organization’s building blocks and have helped shape your organization into what it is now. Recognizing these contributions builds confidence across all levels of an organization and serves as a way to show all employees that leadership actually recognizes past efforts and is not just asking people to do more.Why is this so important? Because if the place you are asking me to go is not better than where I am, I will resist change. If you don’t offer something that is different than your competitors do, why would I bring my business to you? The days of buying physician loyalty with that new piece of equipment are gone. And, in many cases it produced infatuation that was short lived. We live in a world where patients, caregivers and communities are increasing making choices based on the quality of the experience. It is about a differential clinical and interpersonal experience.
- Think, plan and systemically. Healthcare organizations are complex business systems, and therefore strategic plans should be grounded in a realistic set of financial, operational, clinical, organizational and longer-term development objectives. These objective serve to populate a balanced scored for the organization. Successful healthcare organizations see the interdependencies across the continuum, functions and facilities and think, plan and act in the white space—where the real value is created. Leaders know the connections and work them constantly to ensure success. Behavior shapes culture and culture is the underpinning of strategic success. There are three core elements of culture that must be addressed in development and measurement of culture. Focus is evident when associates throughout the organization understand the objectives, connecting all to what success looks like and the role that it plays in achieving the planned outcomes. All work activities must be linked to that which is critical. Drive is evident when the motivations of people connect with the performance requirements of the organization. Certainly compensation and benefits are important, yet there are also more intrinsic recognition systems that are modeled by leaders and managers. Capability is evident when the resources, time, funding, talent and tools are sufficient and aligned with what the organization must accomplish. Culture is experienced by those your organization serves. If the experience is great, culture is a differential advantage.
- Inspect what you expect and remember it is jazz, not classical music. Jazz musicians understand interdependencies and the need to support one another while preparing for surprises. Too much planning takes the joy out of the gig. Similarly, a 70% strategy executed with precision will produce a result superior to a 100% strategy that takes forever to develop and is too complicated for most to understand. Don’t attempt to think through and orchestrate every detail. It’s not possible. Engage the right people to do the real work and have them fill in the detail that they will be responsible to execute. Engage and empower folks. Conduct regular reviews of progress with teams working specific initiatives. Interact with then as the basis to coach, learn and support modifications of plans as appropriate. Celebrate incremental progress and recognize early failures as learning opportunities.
- Develop and maintain a network. As noted, change is here to stay. Building the right network of colleagues locally, regionally and nationally is critical. Start by asking yourself what it is that you want to know about your business and your market going forward. Don’t restrict yourself to leaders in similar roles and think about other industries/companies that have or are experiencing similar strategic challenges. Engage the leadership team in this dialogue as more than just the CEO needs a “kitchen cabinet” network of advisors and mentors. Set quarterly meetings to share learning and discuss implications for how your leadership team thinks, plans, acts and measures.
Feel free to contact me if you would like to discuss these practices in more detail.