The need for unparalleled leadership and oversight of our country’s health care systems is perhaps greater today than any time in the recent past. The ongoing impact of the COVID-19 pandemic continues to challenge our health systems operationally, clinically, and financially. Economic pressures from clinical and workforce shortages, escalating labor costs, and revenue disruptions have severely impacted operating margins.
Strategic planning amidst such turbulence may seem like a daunting task. Yet, the need to plan for an organization’s future has not changed. What has changed is the way health care organizations should approach strategic planning.
Board Takes Lead Role
As the past year has shown, the road to recovery will be long and bumpy. Challenging financial times like these warrant strategic decision-making that can be difficult or inconsistent with past strategy. This is why heightened involvement of the governing board is necessary as organizations struggle not just to thrive, but in some cases survive.
Boards should become more involved in strategic planning in partnership with the CEO, the rest of the leadership team, and physician leadership. In fact, it is fundamental that the board should always be a significant stakeholder and actually lead the strategic planning process. This approach sends the clear signal – both inside the organization and to the community – that planning is an organization-wide effort that will create needed change.
This most likely represents a change in the board’s work. The board will be involved in levels of detail that historically have not been part of its responsibility. The management team still performs the data analysis and conducts the work to develop key recommendations for consideration. But, the board, management team, and physician leadership should be in regular dialogue and partnership in determining the best course for the organization’s future.
Considerations for What to Include in a Strategic Plan
As the saying goes, “If you’ve seen one strategic plan, you’ve seen one strategic plan.” There is no one single type of strategic plan that can meet the varying needs of every health care organization. Each organization will have its own type of plan that meets its specific needs. What should be a common tactic is that is that the leadership team and board align on what a strategic plan should encompass.
What is the goal of strategic plan? What should be part of a strategic plan? What should the life cycle be?
One fundamental question is to what extent the strategic plan should focus on the “why” of the goals versus the “what” – the objectives and how will they be reached. Starting with the reason for each goal results in thoughtful, impactful discussion that clarifies and crystalizes why the organization should be headed in specific direction.
Another element to consider is the life cycle of the plan. It is increasingly common to see shorter cycles that range from two to three years vs. the traditional five-year strategic plan. The “constant” volatility of the past few years has prompted this need to revisit and revise plans on a more regular basis.
Likewise, plans should be nimble to address the churning environment. What should not be included in the strategic plan? If there are portions that no longer make sense to include, then the plan should be adjusted to make your organization more viable. For example, there is a reduced reliance on historical trends and volumes and a greater need to understand changing consumer health care habits and the way they consume care.
Do the strategic plan and the financial plan have to align?
Lastly, there is a need for planning for and embracing risk-based thinking to determine risks, plan actions to address risks, evaluate the overall effectiveness of those actions, and continue to stay focused on continuous quality improvement.
If your organization has a strategic plan in place, now is a good time to revisit the approach. Is the approach still a good fit for the organization? Are stakeholders (i.e, the CEO and board chair) aligned on what should be included? If not, start from the beginning by defining what elements should be included for a strategic plan in your organization.
In addition to actively overseeing the development of the strategic plan, the governing board should also maintain a strategic focus throughout its work. This can be accomplished through ongoing communication with the leadership team so that priorities are aligned. The board should be clear on how performance will be measured and how often it will receive reports on performance metrics. Time should also be set aside on the meeting agendas to discuss the implementation of the strategic plan. Finally, the board should consider the priorities of the strategic plan within all of its decision-making, by examining, for example, how a new program or investment will contribute to achieving overall priorities.
Next Steps in the Planning Process
Just as there is no single definition for a strategic, there is no one-size-fits all approach to the strategic planning process. The following high-level steps are an effective way to ensure that critical issues are reviewed and discussed, and final strategies have been thoroughly examined.
Review mission, vision, and values – Planning for the future should begin with an assessment of the current state by reviewing the three critical components of the hospital’s foundation: its mission, vision, and values. These three components should be carefully examined to ensure the current mission statement still accurately describes the core purpose of the hospital, that the values or principals underlying the mission are still relevant, and that the vision, or what the hospital is striving to achieve, is still realistic.
Assess the environment – A thorough scan of the internal and external (locally and nationally) environment will allow the board to explore the hospital’s strengths, weaknesses, opportunities, and threats and ensure that the goals and strategies under consideration take into account demographic and economic trends and forecasted community needs.
Define challenges/opportunities – The leadership team and board should then use the findings from the previous steps to define the primary challenges, barriers, and opportunities confronting the organization and determine the factors most critical to its future success.
Craft strategies – The leadership team should then adjust existing strategies or develop new strategies. The board’s role is to ensure that a thorough analysis has been undertaken for each strategy, examining whether the strategy is responding to the most significant opportunities or challenges before the organization.
Even pre-pandemic, the strategic plans of many organizations failed to yield the intended outcomes. The crisis, while upending to the entire health care industry, has provided an opportunity to take a fresh approach to strategic planning through greater governance involvement – something that health care organizations greatly need on their journey to recovery.
A Fresh Approach
And, while the inclination might be to skim over the first step, we believe that would be a missed opportunity. Alignment between the key stakeholders – the board and executive and physician leadership – on what should be included in a strategic plan is essential to setting up a strategic planning framework that can prepare an organization to withstand what’s next.
Brad Clarke, MPH (firstname.lastname@example.org) and Dave Oravec, MBA (email@example.com) each have more than 20 years of experience in the health care industry in such areas as strategic planning, quality improvement, operations, and business development. They are currently senior consultants with Via Healthcare Consulting, based in Lexington, Kentucky, and Cortland, Ohio, respectively.