THE COMPELLING CASE FOR STRATEGIC PLANNING Steven B. Reed, FACHE January 21,

2 Learning Objectives 1. Identify the four basic functions of management. 2. Learn the benefits of planning. 3. Review the definition of strategy. 4. Discuss the compelling case for strategic planning. 5. Identify the major components of the strategic planning process.

3 “If you don’t know where you are going, any path will get you there.” - Sioux Proverb

4 “No wind favors the ship that has no charted course.” - Nautical saying

5 “If you don’t know where you’re going, you might end up someplace else.” Toby Keith Bullets In The Gun

Strategic planning is like a giant puzzle...

H ow do the pieces fit together?

As we work to fit the pieces together...

... the picture becomes clearer.

We see the organization’s future...

... and the road to get there.

vision What is the organization’s vision? Image of what leaders believe the organization should be in the future when it is accomplishing its purpose or mission. Start with the end in mind

13 “Goals are the fuel in the furnace of achievement.” - Brian Tracy

14 “Goal setting is bringing the future into the present so you can do something about it now.” - Brian Tracy

15 “A key goal of strategic planning is to create a shared vision.” - Alan M. Zuckerman

16 What are the 4 basic functions of management?

17 1.Planning – choosing a goal and developing a strategy to achieve that goal. 2.Organizing – deciding where decisions will be made, who will do what jobs and tasks, and who will work for whom. 3.Leading – inspiring and motivating workers to work hard to achieve organizational goals. 4.Controlling – monitoring progress toward goal achievement and taking corrective action when needed. 4 Basic Functions of Management

Benefits of Planning Facilitates intensified effort – managers & employees put forth greater effort when following a plan. Provides direction – encouraging managers and employees to direct their efforts toward activities that help accomplish their goals. Leads to persistence – working hard for long periods of time. Encourages the development of task strategies. Proven to work for both companies and individuals.

19 What is Strategy?

20 Strategy 1.A carefully devised plan of action to achieve a goal. 2.Determining organizational goals and a means to get there. 3.The means an organization chooses to move form where it is today to a desired state some time in the future pursuant to achieving its vision, mission, goals and objectives.

21 Strategic Planning Process for assessing a changing environment and creating a vision for the future; determining how the organization fits into the anticipated environment based on its institutional mission, vision, strengths, and weaknesses; and then setting in motion a plan of action to position the organization accordingly.

22 Dynamic Healthcare Economy For any business to survive and prosper, it must respond to the changing environment in which it operates to meet the needs and expectations of its customers and stakeholders.

23 A dynamic environment drives the need for strategic planning. Agree? Disagree? What changes are taking place in the environment that are driving the need for strategic planning for health service organizations?

A dynamic environment drives the need for strategic planning Competition Consumers Regulation Market Technology Strategic Plan

A Compelling Case For Strategic Planning Always assume the competition is advancing. Organizations are either moving forward or backwards. The general environment is dynamic. The specific environment is dynamic. Strategic planning helps foster focus, direction, common purpose and effort. Helps to establish priorities. Helps to foster teamwork.

A Compelling Case For Strategic Planning – con’t Promotes participatory management. Establishes metrics for performance measurement. Facilitates communication. Encourages change & innovation. Promotes a common purpose & vision. Fosters budgeting & resource allocation. Helps leaders conceptualize the future & “Big Picture”. Improves operational performance.

Strategic Planning Can... Provide clarity amidst chaos. How?

Don’t employees want to... Work for an organization that has a future? Understand an organization’s goals and how they fit in?

What does the strategic plan represent to various stakeholders? Strategic Plan

Typical Involvement of Key Stakeholder Groups Entire board Planning committee of the board Physicians Senior management Other clinicians Other management Planning Consultant Approval Steering Committee InterviewsRetreats Strategy Development Implementation Oversight Support entire process Alan M. Zuckerman

“We greatly overestimate what we can do in one year. But we greatly underestimate what is possible for us in 5 years.” - Peter Drucker

A.Always wait at least a year after taking a new leadership role. B.Within 30 days of starting a new leadership position. C.When the current strategic plan needs updated or substantially redone. D.Every 3 years.

“The greatest detriment to many people’s success tomorrow is their thinking today. If their thinking is limited, so is their potential.” -John C. Maxwell Thinking For A Change

Distinguishing Between Strategic and Operational Thinking Strategic Thinking Operational Thinking Long term Conceptual Reflective & creative Assess external Identify “Big Picture” issues and opportunities Imagine what is possible Effectiveness Build a shared vision Long term Conceptual Reflective & creative Assess external Identify “Big Picture” issues and opportunities Imagine what is possible Effectiveness Build a shared vision Short term Details Immediate action Based on problems or performance (internal) Routine Reality of the “now” Efficiency Task-oriented Short term Details Immediate action Based on problems or performance (internal) Routine Reality of the “now” Efficiency Task-oriented

Environmental Assessment Service Area Competitive Analysis Directional Strategies Internal Analysis SWOT Analysis Strategy Formulation Strategic Implementation Plan

Strategic Planning Process

Creating a shared vision Bringing the future into the present Big Picture thinking What is possible Creating an image of what leaders want the organization to be when it is attaining its purpose or mission at a point in the future

39 Learning Objectives 1. Identify the four basic functions of management. 2. Learn the benefits of planning. 3. Review the definition of strategy. 4. Discuss the compelling case for strategic planning. 5. Identify the major components of the strategic planning process.