Linking hospital strategy to execution

As hospital leaders look at the next couple of years and think about strategy and market pressures to improve, one thing becomes vital to success– linking strategy directly to the "point of execution". Increasingly, organizations find themselves with noble and appropriate strategic objectives; consistent with those put forth by professors and strategy consultants. However, the difficult, and often missing step, is the conversion, communication, delivery and measurement of the interventions that drive the strategic objectives.

This article is designed to provide Hospital CEOs some detailed thought on how to convert the strategy into departmental interventions and deploy them in under ten (10) calendar weeks; increasing the speed and focus at all levels of the organization. Below is a high-level work plan for a multi-facility (4) hospital system.

Week 1: Data Collection and Analysis
Week 2: Strategic Assessment to Identify Alignment Gaps (Self-Reported/Blind)
Week 3-5: Department-by-Department Observations and Process Issue Identification
Week 6: Departmental Findings Linked to Strategic Plan Priorities and AOP
Week 7: Departmental Business Cases Developed and Validated by CFO & Departments
Week 8: Strategic Management Team and Reporting System Installed (Governance)
Week 9: Goal Deployment to Execution Level (Linked to HR, Development Goals, PIPs)
Week 10: Training and Floor Coaching

The work plan above enables leadership to clearly articulate objectives, communicate the roles staff play in the strategic direction, and manage the people, processes and systems assets toward the objective. Furthermore, once installed, it provides an operational management structure in which every employee is aligned and vested. Here is how it works:

Week 1: Alignment of Leaders: Like in most any business, the better integrated the data, the better the intervention and the higher the return on investment. Jack Welch, the celebrated long term CEO of GE, focused his organization on only 3-5 themes each year to maintain alignment and drive excellence year on year. He cascaded the objectives through the organization via goal deployment to the point of execution. However, before that, the actions were appropriately rooted in historical and predictive data (operational, financial, & market data).

Despite the advent of EMR and the millions spent on these systems, much of the data often required to achieve results is buried in the functional areas, is fragmented across the business or, in some cases, is missing all together. As such, Week 1 focuses on 2 things, data and the deconstruction the strategic plan into Themes, Functional Areas, Measurement Drivers and a written Definition of Success.

The Strategic Plan is divided quickly into Operational, Strategic and Tactical objectives. Functional areas are often segmented into OR, ED, Marketing, etc. based on the organization chart. Measurement Driver segmentations are often Vision, Alignment, Transformation, Satisfaction, Risk Mitigation and Productivity. A unit of measure for each departmental objective is then determined and historical baselines are created. Finally, a vision statement of the end-state is agreed for each item.

Succinctly, at the conclusion of Week 1, leadership has a department by department view of what needs to be done, a clear understanding of the levers to pull and has ranked the priorities by both fiscal impact and patient experience. All of this is aligned with the core strategic objectives.

Week 2: Engagement of Staff: To create a positive environment for continuous change, leaders need engagement and buy-in from all levels of the organization. Although change leaders intuitively and academically know employee engagement is vital to sustainability, leaders typically neglect to engage employees at the strategic level. This is a critical error most organizations make. As such, this is one of the primary purposes of Week 2-7.

In Week 2, the output from Week 1 is repurposed into an organizational survey. Participants typically are from the C-Suite to the "Supervisor" level. The purpose of this survey is to measure the current state in relation to absolute achievement of the strategic vision. This survey method enables clear identification of gaps, supports the prioritization of actions and helps predict the difficulty of the future improvements (fig.1).

fig2

Perhaps there is no better benchmark for an organization than the visualization represented in Figure 2. First, on a composite basis, the leaders see how much improvement is required to achieve stated objectives. Second, based on the survey responses, leaders can easily confirm potential interventions and determine where direct observation and validation efforts need to occur. Finally, the organization can now track progress over the strategy period (usually 3-5 years). This is very useful for the Board of Directors and at every level of the organization.

Weeks 3-7: Validation with Departmental Leaders: There is no question that, in the initial 2 weeks, the organization started a maturation process. However, Jack Welch once said, "God can have an opinion, all others must bring data". So, while the first 2 weeks are effective at defining the direction, finding the strategic gaps and engaging the staff, Weeks 3-7 endeavor match the "Data" to the improvement framework. In short, leaders may know where improvements need to occur and the measurement drivers, but may not know exactly HOW to intervene, HOW LONG it will take, the SEVERITY of the issues and the IMPACT (fiscal, risk, patient experience) of the items. Validation is designed to provide clarity to these items.

During validation, selected (if not all) functional areas of the Hospital are process mapped and critiqued by the upstream, downstream and specific department. Since your staff "live the daily problems", the validation uncovers the processes, systems, tools and human behaviors issues that impede daily work and/or detract from an ideal patient experience. This waste is then quantified by the CFO and deliberate actions are agreed with each functional leader.

At the height of Week 7, each functional leader presents an area "realization map" to the executive leadership team. This presentation contains ten (10) critical sections which all link directly to the Strategic Plan; effectively linking execution, finance and the overall strategy. The sections are: 1) Current State Process Map, 2) To-Be Process Map, 3) Current Management System Elements, 4) Future Management System Elements, 5) Statistical Data Demonstrating Evidence of the Improvement Opportunity, 6) High-Level Plan, 7) Detailed Work Breakdown Structure, 8) Required Outcomes, Benefits (hard & soft) and Measurement, 9) Skills Matrix and Roles and Responsibilities, and 10) Investments required (if any).

At the conclusion of the presentations, the leadership team now has tangible, realistic departmental execution plans that link directly to the Strategic Plan. Fascinatingly, leadership also successfully converted its "strategic will" into the "ideas" and "commitments" of its staff. This results in unparalleled alignment and leadership now must focus on empowerment and governance of the change process.

Week 8: Governance Model Installed. As with any business transformation, success requires C-Level, cross-functional involvement. Usually, the senior operational leader, the CEO or president, or the senior strategy officer chairs a Strategic Management Team (SMT) that meets every two (2) weeks. Short interval reviews drive accountability and allow for obstacles (real, perceived, political or financial) to be removed. Often, these detailed reviews also serve as a prime opportunity to identify talented staff. As such, the HR leader is often engaged as well.

In these reviews, the agenda focuses on project schedule attainment, issues & barriers to success, and the delivery of the financial, quality, productivity or service improvement desired. All of these outcomes are moving the organization consistently closer to its overall objective. As such, maintaining the cadence of these meetings is critical.

Week 9-10: Linking Outcomes to Income and Staff Development: In Weeks 9 and 10, the objective is to link organizational success to personal development plans (PDPs) and financial incentives. PDPs are underpinned by the skills matrixes and functional area measurements developed in weeks 3-7. Candidly, the use and architecture of compensation and recognition linkages is unique to each entity and needs to be consistent with the total compensation plan the organization offers. However, the following recommendations are useful as a guideline.

1.) Deliver the functional leaders their goals in writing and use the Week 7 presentation as the foundation for the conversation.
2.) Add the new managerial requirements to the job descriptions in a cascading fashion.
3.) Hold each functional leader accountable to deliver a staff development plan in support of achieving the goals presented.
4.) Add a compensation driver and/or recognition driver.
5.) Reward regularly and unexpectedly.

In Week 10, Functional area leaders, managers and supervisory staff should receive on the floor and classroom-style coaching and training on active supervision. As an extension of this training, the development of effective individual supervisory behavior profiles is also recommended. An effective supervisory behavior profile includes all the necessary hourly, daily, weekly, monthly activities required to actively manage an area of responsibility. This behavior profile includes, but is not limited to, performance rounding, metric reviews, reporting intervals, staff performance reviews, budgeting activities, meeting cadences, etc.

The training to support a strong behavior profile is designed to shift the organizational management style from a passive supervision orientation toward an engaged, active, timely supervision orientation. This implementation reinforces the culture change created by Weeks 1-9; enhancing speed, issues resolution, barrier removal and continuous improvement. An organization's behavior mirrors the actions of the individuals it employs.

Connecting any organization's strategy to the point of execution is often perceived as being a noble yet unattainable reality. Currently, many hospitals are experiencing "project overload", real resource constraints, and elevated market-driven change requirements. This 10-week strategy to execution method helps leaders manage deliberately, consistently and most importantly, based on validated data. In the end, when you look at the future of healthcare and the market pressures it represents, implementing this program bridges the missing step; the conversion, communication, delivery and measurement of critical interventions that drive strategic objectives.

For more information on this topic or to enquire about the tools required, please contact Charles.Reinighaus@renoirgroup.com

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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