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Escalate Growth through Strategic Planning (Part 2)

By Gabrielle DeTora, for HealthLeaders Media  
   March 12, 2010

Strategic planning begins with forming a process of regularly scheduled meetings with executive, physician, administrative, service-line director and functional leadership. But in order for those meetings to be successful, structured systems for compiling and reporting internal and external data will be necessary.

Using nonlinear methods such as sophisticated modeling; scenario studies; financial analytics; operational, primary and secondary research; and knowledge management systems will keep the strategic planning efforts focused and knowledge-based. Information is imperative. We explored the importance of having a long-term vision, conducting an internal and external environmental assessment, a critical issues analysis, and how to begin the strategic development process.

Now, having a better understanding of the regional environmental shifts and competitive factors will help identify barriers to success. Competitive information has not been introduced before this phase because it creates too much temptation for hospital leaders to become distracted from the long-term vision of what "should be" by the pressure to react to immediate competition.

Secondary Research
Secondary research will take a close look at healthcare trends, shifting dynamics and best practices. I recommend site visits for this, which will provide a clear understanding of where your competition and affiliates stand in the marketplace. This research should encompass:

  • Competitive analysis
  • Clinical quality
  • Service offerings
  • Competitive media spend
  • Share of voice
  • Competitive advertising
  • Competitive service offer set, awards, key differentiations
  • Competitive positioning strategy and messaging
  • Market trends
  • Marketing audit

Primary Research
Primary research gathered through data analysis, executive interviews, and secondary research will undoubtedly lead to important questions—and will likely expose differences of opinion. Ultimately, your hospital will need to create a strategic plan based on servicing all of its stakeholders. To determine the most effective approach for your business, you need to go right to the source by conducting quantitative surveys to your consumers, physicians (referring and non-referring) and employees; then conduct a GAP analysis on differences between your target audiences. You may want to follow up with the qualitative focus groups of each audience to glean further understanding as to why certain responses were chosen and how your hospital may reinforce or change those opinions or behaviors. Primary research encompasses:

  • Consumer research
  • Physician research
  • Employee research
  • GAP analysis
  • Cross-tab analysis

Once the data analysis is complete, executive interviews will reveal subtle issues not uncovered in the data, including political issues, cultural dynamics, physician alliances, as well as answers to questions developed in the data analysis phase.

Strategic Service Line and Cross-Functional Teams
After the strategic planning team is fully aware of competitive, political, clinical, financial and operational issues creating barriers to achieving goals around the critical issues, the next step is to form specific service-line teams to divide and conquer the strategic planning process. Each team should have executive and administrative representation, as well as service-line-specific representation with physicians, nurses, director/managers and community leadership.

Each team should work together to analyze data, provide opinion leadership, set direction and be champions of building organizational buy-in and support. This is where the tactical work around "how are we going to get there?" is really conducted.

If your health system has support service departments with individuals dedicated to specific service-lines, such as a marketing department with individual strategic planners and marketers dedicated to women's health and other service lines, then those individuals would serve on the service line teams. Penn Medicine, for example, has a highly integrated, cross-functional marketing department with teams dedicated to specific service-lines. They have established a planning structure that features deep integration with service line teams on an ongoing basis.

If your hospital has smaller support service departments that service the entire health system, then it would be best to form a cross-functional team of finance, marketing, information technology, human resources and other support services to work with each service line team. This team's job is to answer important questions and conduct scenario studies for service line teams to make important decisions on strategy and tactics. This stage dips into the realities of what it takes for an organization to execute—essentially: what is it going to take to get the job done? If the service line determines executional barriers are too high, they may need to reconsider the overall strategy. As Stephen M. Case, a director of Time Warner and the former CEO of America Online stated, "A vision without the ability to execute is probably a hallucination."

Throughout this process, the entire strategic planning team will convene on a regular basis to provide status reports of service-line and cross-functional teamwork. This is to keep the entire team informed of work process and status, as well as to provide support and feedback on direction. Again, some Six-Sigma tools can be useful to the work of these teams. Using the definition of success from the Critical Issues Analysis, one can use the QFD or The House of Quality tools to help assess the degree to which service line recommendations are expected to contribute to this success.

By the conclusion of this phase, which could take several months, each service-line team should have identified how to achieve the overall vision by meeting or exceeding defined goals within their individual service lines or functions. Strategies, tactics, timelines and budgets should have been developed. Marketing communications, clinical, technological, human resources and other needs to achieve success should be clearly defined.

Competitive Differentiation
At this point, all initiatives should support the long-term vision. This phase is called the competitive differentiation stage, because at this point, the initiatives get prioritized by what creates the most significant competitive advantages.

Competitive differentiation is not just important for market positioning—it is important for business success. Conveying to your internal and external stakeholders how your organization is different from the competition leads to preference and loyalty—in physicians, employees and consumers. Why should physicians, nurses and other potential employees choose your hospital over your competitors? Why should patients? Why should affiliate hospitals develop transfer agreements for your hospital's higher-level clinical services? Why should the government prioritize your institution when providing certificates of need, dividing charity care reimbursements, and so on?

Differentiation is necessary on all levels of business development. Having a keen awareness of the competition, developed through the research noted above, will keep the service-line teams focused on building differentiation of services in their efforts.

At the competitive differentiation stage, all of the service-line teams and the cross-functional teams will reconvene with the overall strategic planning team. This is when big-picture vision meets reality. All service-line strategies, goals, tactics and budgets are discussed in macro terms of how the organization can accomplish the work. Due to the realities of financial requirements for the totality of work, another set of prioritization may need to occur. Given the complexities of most healthcare systems, using a tool like the Pugh-Concept Selection can help keep assessments structured and tied to the critical success factors as well as facilitate identification of hybrid or combination approaches across service lines. Timelines may need to be realigned so that you end up with a one-, two- and three-year timeline.

This phase is considered complete only when the exact vision, prioritized strategies, tactics, timelines and budgets have been approved. At the conclusion of this phase, there should be no unanswered strategies, such as: What is our suburban strategy? Is our goal to be acquired by the academic quaternary hospital? Are we developing a clinical cancer network with community hospitals? Should we invest in dual-trained neurosurgeons and "byplane" technology to launch a new cerebrovascular center? If you don't have the answers to these types of questions at this point, and you merely have an understanding that hospital leadership needs to make a decision about these issues, then you don't have a strategy—just more questions.

Trackable Benefits After the final decisions have been made and strategies, goals and critical success factors have been established, a clearly articulated message about the strategic plan's benefits to all stakeholders, and how those benefits will be tracked and reported, must be concluded before moving forward. This work should be conducted in conjunction with the marketing department. Establishing a metric for benefits and success tracking will lead to the implementation messaging strategy used in the next few stages.

At this time, the individual service line teams with the support of the cross-functional support team will be responsible for finalizing the organizational and service line-specific CSFs to achieve the strategic goals and the timing of the CSF initiatives. Based on the long-term vision and the initiatives of the critical issues, questions may arise, such as:

  • What exactly are critical achievements to gain the benefits of the initiative?
  • What service lines, departments or functions are responsible for achieving each CSF?
  • How is the achievement of each CSF tracked and reported?

All of this operational planning is conducted in the trackable benefits stage.

Penn Medicine, for example, has an integrated master spreadsheet which outlines every service line initiative, each CSF, the team responsible for achieving each CSF, which person on the team is responsible for what action, how success is tracked, who is responsible for oversight and reporting and when each task is due. This detailed information is rolled up into a system-wide dashboard for executive leadership. Throughout the process, Penn Medicine also conducts periodic checks of CSFs and other strategic and tactical planning against the overall vision and goals.

Spotlight on an Excellent Strategic Planning Process
AtlantiCare uses a similar strategic planning process, but on a three-year continuous rolling process. They kick off the first quarter of each year by reviewing the prior year's strategic planning initiatives, CSF results and where they stand in terms of forward thinking. They overlap their continual three-year strategic planning with the one-year executional process. AtlantiCare uses information gathered from the most current internal and external environmental assessments to tweak their current one-year strategic planning executions as well as planning two and three years out.

At AtlantiCare, Vice President of Marketing Communications and Customer Service, Rene Bunting, is part of the senior leadership strategy team that designs and implements the strategic planning process and its execution. Her team is critical in gathering, aggregating and analyzing "Voice of the Customer" data, which is part of the environmental assessment step in their strategic planning process. Throughout the course of the year, Bunting and team conduct formal and informal VOC methods such as consumer research, which is tracked over time, community advisory groups, traditional customer satisfaction surveys, focus groups, and stakeholder interviews. This data is shared throughout the planning process with key leadership and with business unit and service line leaders and staff who are closest to the customers. The VOC data focuses the strategies around customer and stakeholder needs and expectations.

AtlantiCare's strategic planning and execution is deeply grounded in clear communications strategies, building brand ambassadors and "ownership" of the strategic plan within every employee on every level of the health system. Their process is dynamic, information-based and entirely rooted in their long-term vision with little competitive distractions. Their strategic decisiveness has fostered the passionate commitment of physicians and employees, as well as generating significant patient loyalty. AtlantiCare has approximately 60 percent market share in most service areas and is continuing to grow.

Bunting and her team also develop communications strategies to ensure that the plan is fully deployed to all stakeholders. The integrated health system located in southeastern New Jersey was recently recognized as a Malcolm Baldrige National Quality Program recipient and deployment of the strategic plan was a critical success factor in AtlantiCare achieving its goal of being "Baldrige-worthy."

AtlantiCare had received two prior Baldrige site visits in which they learned from their feedback reports. One of our opportunities for improvement was deployment of our strategy to their staff. AtlantiCare addressed this OFI by researching best practices around communicating strategic plans and developed what we refer to as "strategy maps." Each employee carries a strategic planning "roadmap" in his or her badge holder that outlines the organization's goals and exactly how the respective department's and the individual's work helps in achieving organizational success. There is a deep employee pride in AtlantiCare's vision and the strategies they need to employ to achieve it. Individual and business unit goals are aligned to the overarching strategic goals or the goals that support Best Quality, Customer Service, People and Workplace, Growth, and Financial Performance.

For example, a nurse on the joint institute unit identifies how she would drive Best Customer Service by answering call bells within a certain time frame and therefore achieve the department's goal around achieving top performance for customer service. These goals align directly to the strategic goal of achieving top performance in customer service in all areas of the organization.

David Tilton, CEO of AtlantiCare, can walk up to any employee at any time and ask the questions noted above, and all employees are able to show him their roadmap and discuss how their contributions are making a difference to their organization and the community it serves. What is more powerful than having everyone in the organization pushing in the same direction toward achieving the goals laid out in the strategic plan?

Multiple communication strategies used throughout the year reinforce strategic priorities for leadership and staff and identify environmental factors that may influence execution of the plan. Through its use of scorecards to track progress, AtlantiCare can share its progress during the planning cycle—annual or longer term.

Finally, AtlantiCare communicates and celebrates its results to all stakeholders through an end-of-year meeting with all 400 members of its leadership team called "Review Preview" and to all staff during widely held town meetings. The "Share the Success" program also rewards staff and leadership for attaining their goals by tying their bonuses to organizational and business unit performance.

Getting to Work
Every hospital and health system is different, so a strategic planning process and its outcomes will vary widely based on the organization's culture and dynamics. Gaining perspective from outside counsel such as a consultant will avoid biases leading to prioritization based on politics instead of opportunity. This person will oversee process quality control, information gathering, analysis and presentation, which takes significant time.

It is vital for organizations to use a systematic approach with data analysis and knowledge management practices to avoid setting a course that is not backed by factual evidentiary support. Keep in mind the value is not just in the end product or plan, but in the journey to get there. The development of a compelling message in the next step can be very difficult without a deep understanding of the issues and decisions which led to the plan. Creating an environment of innovation and creativity for the strategic planning team and supporting a "bottom-up" feedback of information from frontline employees is also important. Lastly, shifting from a static to a dynamic strategic planning approach will allow for new ideas to be introduced midstream, based on changing competitive, financial and political dynamics.


Gabrielle DeTora is a strategic healthcare consultant in Philadelphia. She may be reached at 908-447-9231 or info@GabrielleDeTora.com.
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