5 Intangible Benefits Of Hospital Strategic Planning

The U.S. healthcare system is complex, confusing and difficult to understand, according to a majority of respondents to the 2012 Deloitte Consumer Survey. Many consumers don't understand what factors cause limited access or uncoordinated care; requirements and limitations involved with both public and private health insurance coverage; conflicting interests amongst healthcare providers; or even high charges that leave many dumbfounded, disillusioned or even financially broke. Those working in healthcare frequently see the industry as overly complex and confusing as well, with rapid changes in the external environment producing a sense of turmoil and chaos within the organization. The complexity and confusion — both outside and within the industry — are sure to increase as a result of the Patient Protection and Affordable Care Act of 2010 and related reforms to health policy, regulation and reimbursement.

Steven ReedMost hospital boards of directors, leadership teams, medical staffs and employees are feeling a sense of uncertainty in this turbulent healthcare operating environment — and for good reason. Healthcare reform and other numerous forces at play are creating a disruptive state in the healthcare operating environment, including significant cuts in governmental reimbursement; consolidation of the market and systemization; growing consumerism; increasing competitive pressures; physician practice variability and integration issues; the growing impact of social media; and our instant, in-a-hurry society. What does all this mean? For one, the critical and multifaceted role hospital strategic planning plays today is increasingly vital to a hospital's ability to proactively plan for and respond to dynamic changes and trends occurring in the external environment.

Hospital organizations — and their employees — want to know what the future of healthcare has in store, where the organization is going and how it will get there. Moreover, employees want to be reminded their work is important, and understand how it contributes to the hospital's mission and vision for the future. Understanding how the work they do connects with and supports the organization's vision is critical for employees to appreciate the valuable role they play on the healthcare team. Helping employees make this powerful connection takes effective leadership.

While effective leadership requires many essential elements, creating and executing a shared organizational vision may be more imperative today than in any other era in the history of healthcare. Given all these external changes, a strategic planning horizon of three years is probably optimal for most hospital enterprises with an annual process for updating. Strategic plans are most effective when they become dynamic, working documents that provide organization, structure and reporting for organizational planning and business implementation processes.

In addition to spotting key changes and trends in the external environment, there are multiple internal benefits a hospital can realize from a strategic planning process, plan development and implementation:

•    Clarity amongst chaos
•    Operating in vision, not circumstances
•    Employee motivation and engagement
•    Transformational leadership and accountability
•    Organizational collaboration

Clarity amongst chaos
During periods of dynamic environmental change like we are experiencing today, it is easy for an organization and its people to become bewildered and confused. Employees, physicians and other stakeholders want to know the organization has a bright future and what that will look like once the vision is achieved. In other words, they want to know where the organization is going and how it will get there.

An effectively developed and executed strategic plan can provide needed clarity amongst the chaos. A strategic plan should articulate key strategic issues, and provide a roadmap to the organization's vision for the future, as well as a game plan to get there. This helps give employees and stakeholders the confidence they need to make a financial, emotional and psychological commitments to the organization. In the case of employees, that commitment extends to their overall career as well as their daily work, and can result in increased productivity and a higher level of employee engagement in the workplace. In the case of patients, that commitment is about trusting the hospital with their health or even their very life.

Operating in vision, not circumstances
Developing and sharing a vision through a participatory process can have a powerful impact on all levels of the organization. Employees are inspired by a well-crafted and clear vision that vividly describes a compelling future state that is. There will be challenges, however, to bringing the organization's vision into fruition.

Just as individuals must confront challenges, every organization must deal with forces and circumstances of all kinds. An individual or organizational culture that operates or lives in circumstances won't ever see what's possible. Consequently, leaders who live in circumstances and not vision will prevent the organization from believing in an achievable future state or vision. A strategic plan and well-articulated vision that is properly developed, executed and communicated can elevate an organization above its circumstances and connect it and its people with a future of possibility — that is both inspiring and achievable. It is only when individuals and organizations live and operate in vision that they will ultimately realize a better future — one that is much more compelling and powerful than their current state.

Employee motivation and engagement

An aspect of organizational behavior getting more attention today — and increasingly being recognized as a critical success factor for organizational performance — is employee engagement. Employee engagement impacts everything from patient safety, quality and service delivery to innovation, problem-solving and financial performance. The level of employee engagement in the organization is an expression of employee beliefs and attitudes that is made manifest by the degree of effort teams and individuals give — otherwise known as discretionary effort.

Every employee makes a decision as to the amount of discretionary effort they give at work — every shift. Discretionary effort refers to the extra effort an employee has to give. Tapping into this employee discretionary effort inspires them to give over and above the "minimum acceptable standards" as outlined in a job description or performance evaluation form. Tapping into employee discretionary effort takes leadership; however, leadership alone isn't enough. Employees won't be inclined to give their discretionary effort for an organization that doesn't have an inspiring vision, or a game plan that is well communicated and understood as to how the organization will get there. For many employees it boils down to this thought: Why give extra effort for an organization going nowhere? This is a matter that moves beyond transactional leadership into the realm of transformational leadership.

Transformational leadership and accountability
Transformational leadership is about a leadership style that transforms an organizational culture and inspires its people to perform better. Transformational leaders use techniques well-documented in today's organizational behavior literature. Moreover, transformational leaders are skilled at communicating the organization's vision, the steps to get there  and each employee's key role for its realization. Transformational leaders are effective in getting followers to understand and believe in their own individual and collective abilities to achieve higher levels of performance.

Helping employees understand the important role they play in achieving the organization's mission and vision is crucial. Moreover, using a management-by-objectives or MBO process is needed to help everyone in the organization work together and create a common understanding. In this approach, individual employee objectives and plans are created in alignment with overall organizational. In addition, an effective MBO process includes regular reports on progress towards goals, along with holding individuals and teams accountable for effort and results. Therefore, transformational leadership takes both vision and accountability.

Organizational collaboration
Cooperation, collaboration and team unity are essential to deliver high quality patient care, great service and organizational performance. Employees must work from the same "playbook" and pull in the same direction. Teamwork is essential for hospitals to improve their performance in critical areas of operation. An effective strategic plan implemented using an MBO approach for organizational alignment can be a powerful tool that fosters organizational collaboration.

A word of caution here. Many times the strategic planning process breaks down during implementation. A strategic plan's execution involves clear communication and understanding at all levels of the organization; an organized, decentralized approach to push implementation and execution throughout the organization; responsibility, accountability and authority for implementation; evaluation metrics and reporting; and a supportive and collaborative spirit of cooperation and support.

The execution of a strategic plan takes organization, performance accountability and teamwork, just as quality care and service takes interdisciplinary professionals at all levels working together in a spirit of cooperation, collaboration and team unity — with a single-mindedness of purpose.

A well-crafted, properly executed strategic plan can provide numerous intangible internal benefits for an organization's culture, working environment and employees. In the dynamic healthcare operating environment of today, with expectations of hospital operating performance growing, the benefits create a compelling case for hospital strategic planning.

More Articles on Strategic Planning:

12 Steps to Create a Mission Statement
Developing a Regional Hospital Strategy: Key Lessons and Takeaways
Growth is the Answer: 3 Ways to Grow Your Hospital Business

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