The urgency for strong and executable strategy in today’s hospitals has never been more critical. The good news is there are many ways to develop a winning strategy. However, to be effective, practitioners must treat strategy formulation as a discipline and not a mere marketing communication exercise. What this means is there have to be some basics in place for the strategy to stand out as a problem solving, direction setting and executable body of work. In the end, a strategy must define the optimal plan of action that is executable by the organization.
If your process and techniques already work for you and your organization, you should consider keeping them. For others with an interest in changing how they enable strategy for their hospitals, here are three keys steps to consider:
Step 1: Include operational “blocking and tackling” improvements as opportunities in your strategic plan.
It is helpful to point out that “optimum” does not mean perfect. Instead, it is the best option under the known and expected conditions of the environment and capacity of the organization to change. Charting your path does mean taking stock of the “forces of change” or “headwinds” as well as the positive “tailwinds” which work to your advantage. In addition to the macro business environment, opportunities will exist within your hospital in operational areas. In some cases, operational improvements might not be included in strategy. In my view, this is a lost opportunity for planning departments and hospitals because knowing where to cut costs and reallocate budgets is a strategic issue. Furthermore, a portfolio of opportunities, from the most strategic to the most tactical, is an ideal approach to generating immediate, mid- and long-term return on investment of change.
Step 2: Engage senior leadership that will be responsible for sponsoring the strategy.
As the strategy team is evaluating opportunity areas, it is critical to begin sharing early findings with decision making executives. In addition to discussing early findings, take their input on what priorities they feel are needed in the upcoming year. More often than not, the strategic priorities senior executives share have a foundation is the same opportunity analysis the strategy team is performing. It will definitely take multiple conversations with decision makers to prioritize where the following year’s efforts will be focused. As a result, expect to develop clear options and recommendations as well as sharing them and incorporating feedback. If not, their long-term sponsorship is less likely to be sustained. While every organization has its own protocol, early and clear communication between the strategy team and the executive ranks is a basic enabler for downstream sponsorship and execution of strategy.
Step 3: Define and communicate the action plan.
Defining an action plan for a strategy goes a long way to establishing credibility needed to sustain implementation. If the action plan makes sense to stakeholders, they are more likely to buy into the direction because it has a reasonable chance of success. On the other hand, confusing or overly complex action plans will almost certainly sink the credibility of the strategy team. In every case, sharing an action plan, even at a high level, makes a vision more realistic, attainable and ultimately more supportable.
An effective action plan at the strategy formulation level has some specific characteristics, including:
- First, it has to be at the right level of detail to be specific enough but not technical or task-oriented.
- Second, all major disruptive considerations (risks) should be included in the dependencies and sequence of activities in order to establish credibility of the strategy.
- Third, the timing, activities and outcomes must be within the internal (or accessible) competencies of the organization to be credible.
In the end, an action plan is about the strategy team’s due diligence as it relates to execution. Knowing what the action plan roadmap consists of is a powerful statement of know-how and direction. Like the definition of options earlier, action plans should be developed through a similar collaborative process involving the appropriate operational level leadership who are the most adept at understanding and supporting the details of “how” to execute.
Finalizing what works for your organization
When it comes to strategy formulation, a practitioner should include what is needed for their organization to embrace and help execute it. Regardless of your definition of strategy, three principles will set the foundation for execution: (1) including internal tactical opportunities, (2) engaging decision makers early in the process and (3) defining an authentic action plan.
Luis Natal is the director at Philips Healthcare Consulting, North America. He holds an MBA from the University of Georgia and a BA in economics from the University of the South, Sewanee. Luis is a certified Six Sigma Black Belt and Project Management Professional (PMP). Contact Mr. Luis Natal at luis.natal@philips.com.
