Strategic Strategic ManagementManagement

Prof E. B. Rillon

BG AFP (Ret)CPH 2011

ObjectivesObjectives

After the session, participants will be able to;After the session, participants will be able to;1.1. Provide a rationale for the importance of Provide a rationale for the importance of

strategic management in healthcare strategic management in healthcare organizations.organizations.

2.2. Explain the concepts of strategic Explain the concepts of strategic management , strategic planning, strategic management , strategic planning, strategic issues and concerns, strategy.issues and concerns, strategy.

3.3. Discuss the strategic mgt/planning process Discuss the strategic mgt/planning process (Ginter et al.) (Ginter et al.)

4.4. Analyze strategic issues both external and Analyze strategic issues both external and internal environment.internal environment.

5.5. Understand how directional strategies are Understand how directional strategies are formulated.formulated.

White Water ChangeWhite Water Change

Definition of TermsDefinition of Terms

Strategic ManagementStrategic Management Management process with the objective of Management process with the objective of

making the organization compatible with and making the organization compatible with and successful in its external environment. successful in its external environment. (Duncan, Ginter & Swayne.)(Duncan, Ginter & Swayne.)

Attempts to achieve a productive and Attempts to achieve a productive and creative fit between the organization’s creative fit between the organization’s external environment and its internal external environment and its internal environment.environment.

Definition of Terms cont.Definition of Terms cont.

Strategic PlanningStrategic Planning Is the set of processes used in an organization to Is the set of processes used in an organization to

understand the situation and develop decision understand the situation and develop decision making guidelines (the strategy) for the making guidelines (the strategy) for the organization.organization.

Strategy Strategy A pattern in a stream of decisions positioning an A pattern in a stream of decisions positioning an

organization within its environment and resulting in organization within its environment and resulting in the “behavior” of the organization. It is a future-the “behavior” of the organization. It is a future-oriented plan that provides decisions-making oriented plan that provides decisions-making guidelines for managers.guidelines for managers.

Definition of Terms cont.Definition of Terms cont.

Key Performance/Result Area (KRA)Key Performance/Result Area (KRA) Identifies activities that must be accomplished to Identifies activities that must be accomplished to

achieve the mission e.g. adequacy in HR.achieve the mission e.g. adequacy in HR.

Strategic IssuesStrategic Issues Fundamental policy questions or critical Fundamental policy questions or critical

challenges that affect an organization's challenges that affect an organization's mandates, missions and values, products, mandates, missions and values, products, clients, cost, organization and managementclients, cost, organization and management

4 Major Stages of 4 Major Stages of Strategic PlanningStrategic Planning

1.1. Analysis of the situationAnalysis of the situation External environment (opportunities External environment (opportunities

and threats)and threats) Internal Environment ( Strength and Internal Environment ( Strength and

weaknesses)weaknesses)

2. Strategy Formulation2. Strategy Formulation

3. Strategy Implementation3. Strategy Implementation

4. Strategic control and Evaluation4. Strategic control and Evaluation

Planning JourneyPlanning Journey

Where Are We NowWhere Are We Now

How Shall We Get There?How Shall We Get There? How Do We Know How Do We Know That That We Are There?We Are There?

Where Do We Want To Go?Where Do We Want To Go?

Elements of Strategic Issue Elements of Strategic Issue Statement (Bryson: 1995)Statement (Bryson: 1995)

Describe succinctlyDescribe succinctly Be framed as question that the org. can do Be framed as question that the org. can do

something about it.something about it. Factors that make the issue a challenge Factors that make the issue a challenge

be listedbe listed What in the mandates, mission, values, What in the mandates, mission, values,

SWOT make it strategicSWOT make it strategic Statement of the consequences of failing Statement of the consequences of failing

to address the issue.to address the issue.

Examples of Strategic Issues

Issue Strategic Issue

Inflation How can we caution the effect of inflation in hospital organization?

Failure to address the issue will lead increased cost of operations

External Environmental ScanExternal Environmental Scan1. External Environmental Opportunities/Threats1. External Environmental Opportunities/Threats

List of Issues/TrendsList of Issues/Trends EvidenceEvidence

(Provide information (Provide information regarding existence of regarding existence of

issue/trend)issue/trend)

Impact to Impact to OrganizationOrganization

(1-10)(1-10)

Probability of Probability of continuing in next continuing in next

3-5 years 3-5 years

(1-10) (1-10)

Internal Environment FrameworkInternal Environment Framework

Internal Environmental ScanInternal Environmental Scan3. Internal Environment Strengths/Weaknesses3. Internal Environment Strengths/Weaknesses

SubsystemSubsystem Issues/Issues/

StrengthsStrengths WeaknessesWeaknesses

EvidenceEvidence Impact to Impact to OrganizationOrganization

(1-10)(1-10)

Probability of Probability of continuing in continuing in

next 3-5 years next 3-5 years

(1-10) (1-10)

1.Organizational 1.Organizational CultureCulture

2. General2. General

Management Management

3. Admin3. Admin

4. Marketing4. Marketing

5. Clinical5. Clinical

6. Physical 6. Physical FacilitiesFacilities

7. Financial7. Financial

8. Information8. Information

Stakeholder AnalysisStakeholder Analysis

Strat Mgt Process Con’tStrat Mgt Process Con’t

Directional

Strategy Types and RolesStrategy Types and RolesStrategyStrategy

DirectionalDirectional

AdaptiveAdaptive

Market EntryMarket Entry

PositioningPositioning

OperationalOperational

RoleRoleWho we are? Who we are?

What should we be?What should we be?

How the organization will expand, How the organization will expand, contract or stabilize operations.contract or stabilize operations.

Provide methods for access to the Provide methods for access to the market. Not necessary for market. Not necessary for contraction strategies.contraction strategies.

Positioning the organizationPositioning the organizationvis-à-vis other organizations within vis-à-vis other organizations within a marketa market

Developed for the functional areas Developed for the functional areas (marketing, finance, information (marketing, finance, information system, HRM, etc.)system, HRM, etc.)

Vision: a compelling, conceptual Vision: a compelling, conceptual image of the desired futureimage of the desired future

ComponentsComponents

1.1. A Clear Hope For the A Clear Hope For the FutureFuture

2.2. Challenging and Challenging and Excellence ConcernsExcellence Concerns

3.3. Inspirational and Inspirational and EmotionalEmotional

4.4. Empowers Employees Empowers Employees First and Clients First and Clients SecondSecond

5.5. Prepares for the FuturePrepares for the Future

6. Memorable and 6. Memorable and Provides GuidanceProvides Guidance

DescriptionsDescriptions

1. A future where communities, health agencies, 1. A future where communities, health agencies, and private sector cooperate to increase healthy and private sector cooperate to increase healthy life for all.life for all.

2. Strive for excellence, display initiative and 2. Strive for excellence, display initiative and demonstrate achievement.demonstrate achievement.

3. Forging alliances with public and private 3. Forging alliances with public and private sectors to ensure timely, cost-effective public sectors to ensure timely, cost-effective public health interventions.health interventions.

4. Value employees.4. Value employees.

5. Catalyst for progress5. Catalyst for progress

6. Memorable terms – catalyst, public health 6. Memorable terms – catalyst, public health leader, innovation, core values, etc.leader, innovation, core values, etc.

Vision Statement Vision Statement ChecklistChecklist

Yes No

Does the Vision statement provide a clear picture of the organization’s ideal future with respect to quality management?

Is the vision statement inspiring and challenging?

Is the vision statement brief enough to be memorable?

ISDH Health Vision ISDH Health Vision StatementStatement

The Indiana State Dept. of Health is The Indiana State Dept. of Health is committed to act as a catalyst for committed to act as a catalyst for progress that will resolve in healthier progress that will resolve in healthier people in a healthful environment.people in a healthful environment.

Mission: the reason for beingMission: the reason for being

Components Components

1.1. Target customers and marketsTarget customers and markets

2.2. Indicates principal services deliveredIndicates principal services delivered

3.3. Geographical areas which the Geographical areas which the organization concentratesorganization concentrates

4.4. Identifies organization philosophyIdentifies organization philosophy

5.5. Confirms organizations preferred self Confirms organizations preferred self imageimage

Mission Statement GuideMission Statement GuideWho:Who: We at VMMC are committed to provideWe at VMMC are committed to provide

What:What: Comprehensive, quality, tertiary level of health care Comprehensive, quality, tertiary level of health care servicesservices

To Whom:To Whom: To our veterans and their authorized dependentsTo our veterans and their authorized dependents

Where:Where: All over the countryAll over the country

How:How: To improve the quality of care given, we embark in the To improve the quality of care given, we embark in the provision of continuous education and training to all our staff provision of continuous education and training to all our staff and would be providers of care and research both clinical and and would be providers of care and research both clinical and operational.operational.

We strive to provide quality of life by giving our clients a We strive to provide quality of life by giving our clients a variety of supportive services to meet their physical, variety of supportive services to meet their physical, psychological and spiritual needs.psychological and spiritual needs.

We also contribute to the promotion of health and welfare to We also contribute to the promotion of health and welfare to the community through periodic outreach programs.the community through periodic outreach programs.

Affirmation Affirmation of Value:of Value:

We are a caring community that values integrity and dignity of We are a caring community that values integrity and dignity of those who are served as well as those who serve.those who are served as well as those who serve.

Mission Statement Checklist

YES NO

Does it clearly state what you do and who you serve, that is, what business you are in?

Does it describe your setting (e.g. urban/rural/teaching/non-teaching)?

Is it broad enough so that all staff in the organization ca see how they contribute?

Will it make sense to average citizens of they see it on the hospital/clinic wall?

Will you be embarrassed if you see it on the front page of the newspaper?

Hierarchy of ObjectivesHierarchy of Objectives

Goals:-long term, positive statements that express an idealized vision of

a quality of life that is almost universally accepted. Purposely stated in a general and abstract form so that they remain constant throughout rapid social change.

EG

Strategic ConcernHow can we continue giving quality and affordable healthcare at

RMC in the midst of rising cost of operations?

Goal: Strengthen financial viability.

Hierarchy of ObjectivesHierarchy of Objectives

Objective:-specific, measurable, accurate, realistic, time bound statement

of how the goal can be achieved.

Objective 1. After 2 years, increase income by 100% from 1M to 2M.

(Can be policy/purpose, service/result; resource; implementation)

Objective 2. Establish streamlined billing and collection system after 2 years.

Activities:-demonstrate how project will be accomplished.

Strategic Implementation: Strategic Implementation: Operational StrategiesOperational Strategies

Deals with putting strategies to workDeals with putting strategies to work

Requires coordinated efforts of the Requires coordinated efforts of the Organizational Organizational FunctionsFunctions of: of:

• • MarketingMarketing

• • Information SystemsInformation Systems

• • Human ResourcesHuman Resources

• • Finance, andFinance, and

Organization-wide Efforts to Attain VisionsOrganization-wide Efforts to Attain Visions

• • Organization CultureOrganization Culture

• • Organization StructureOrganization Structure

• • Facilities and EquipmentFacilities and Equipment

• • Ethics and Social ResponsibilityEthics and Social Responsibility

Strategic ControlStrategic Control

A system to support managers in A system to support managers in accessing how well the organization’s accessing how well the organization’s strategy compare to its progress and in strategy compare to its progress and in the accomplishment of goals and how the accomplishment of goals and how well discrepancies are detected. It well discrepancies are detected. It monitors, evaluates, and adjusts the monitors, evaluates, and adjusts the strategic implementation, the strategy strategic implementation, the strategy and the situational analysis.and the situational analysis.

Fundamental Elements of Strategic Fundamental Elements of Strategic ControlControl

1.1. Setting objectives and pre-determined Setting objectives and pre-determined standardsstandards

2.2. Measuring performanceMeasuring performance

3.3. Comparing the objectives and Comparing the objectives and standards with actual performancestandards with actual performance

4.4. Determining the reasons for deviationsDetermining the reasons for deviations

5.5. Taking corrective actions if necessaryTaking corrective actions if necessary

Synergy FormulationSynergy Formulation

Strategic Issues

Strategic Goals

Adaptive Strategy

Market-Entry Strategies

Positioning Strategies

Implementation Strategies

Control Strategies

1. Lack of competent and committed personnel

Proper training and proper recruitment

Recruitment standards and continuous training

Intensive recruitment efforts - nationwide

Added fringe benefits

Human Resource Performance Evaluation

2.

3.

4.

6.

STRATEGIC SCORE CARD

Goals & Objectives

KRA Indicator Baseline

Year (2010)

Year

(2011)

Year (2012)

Activity Milestone

Goal #1. Achieve financial viability by 2012 (20M)

Increased income

Rate of increase: Annual Income

10M 13M 15M 20M Intensify collections

Increase pay clients

Operational PlanningOperational Planning

Problem Tree

Increase of Infectious diseases

Low coverage vaccination

Poor service delivery

Poor motivation Of staff

Poor incentives

Insufficient supplyOf vaccines

Low demand of services

Poor knowledge of the program

Poor promotion

Poor acceptance of program

Afraid of side effects

Decreased confidence in Health Services

Increased demand for curative services

Increased cost for Health Services

Effects:

Core Problem:

Causes:

Objectives Tree

Decrease of Infectious diseases

Increased coverage vaccination

High quality service delivery

Increased motivation of staff

Good workingatmosphere

Adequate supplyOf vaccines

Inc. demand of services

Good knowledge of the program

Increased promotion

Acceptance of program

Information

About vaccination effects

Increased confidence in Health Services

Decreased demand for curative services

Decreased cost for Health Services

Ends:

Core Objective:

Means:

PROJECT PLANNING MATRIX 1

Summary of Objectives & Activities

Objectively verifiable indicators

Means/Sources of verification

Assumptions

Overall goal

Project purpose

Results /outputs

1.

2.

3.

PPM 2Main Activities Specification of

InputsCosts for each activity

1.1

1.2

1.3

2.1

2.2

…

Ghant ChartActivities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

A-1

A-2

A-3

A-4

A-5

Schedule of Activities

No. Activity Indicator Time Frame

Responsibility

HR Needs

Material Needs

Cost Remark

1.1

1.2

1.3

MONITORING AND EVALUATION

Monitoring- An ongoing activity accompanying the process of

implementation of a project

Supervision

-Control of the performance of the human resources during the process

Corrective and thus implies training

Related to how the human resources

work.

INDICATORS

Measures that can be used to help describe a situation that exists and to measure changes or trends over a period of time. Enables one to assess degree to which project inputs activities, outputs, effects and impacts have been achieved.

Indicators ( con’t)

Purpose:1. analyze/interpret present situation

2. make comparisons3. measure changes over time

Types: Input indicators- what is available( what we have). E.g. no of

staff, availability, access.

Process indicators- informs how project is doing.( source: prog. Planning matrix, operational plan. Activities needed

to achieve results are process indicators. E.g. TNA etc. Process indicators allow periodic check if on time.

Types of indicators (con’t)

Output Indicators- describe goods, svcs produced by project activities. E.g. immunization

Outcome/Impact- refer to the overall objective/goal of the project. Measures actual changes in conditions of core problem.

Good Indicator

Relevant Valid- sensitive and specific Reliable Easily available

Monitoring Template

What ?

Who

Where

How

to collect

Often

analyze

To monitor (Focus)

Is going to monitor?

To get data (source of verification)

tool

OVI

Reports, observation

Check list

Dummy table

Evaluation

A punctual activity at any time of the planning or implementing or project.

Related with the structure/input, process, and output/outcome.

EVALUATION

Input- staff, logistics required Process- how activities are carried out

within time allowed, resources specified at the volume and quality agreed upon

Output- objectives attained?

achievement of obj. reduced constraints to program

Evaluation is a critical analysis of the project that leads to certain conclusions about the program.

lagging behind

inefficient

ineffective

proceeding as planned

doubtful impact

Based on conclusion it leads to recommendations or proposal such as:

discontinue

rectify difficulties and proceed

give it one more try

replicate in other areas

can still be improved

Good Ethical and Social Ethical and Social Guiding Principles of HCOGuiding Principles of HCO

Robert Goldman:Robert Goldman:1. Put patient welfare first.1. Put patient welfare first.2. Avoid unnecessary services/2. Avoid unnecessary services/3. Maintain high standards of honesty and 3. Maintain high standards of honesty and accuracy.accuracy.4. Be accountable to the public.4. Be accountable to the public.

““Patients must come before profits if the hospital Patients must come before profits if the hospital is to profit.”is to profit.”

Thank You!Thank You!