As the healthcare field continues to exceed the rate of change, organizations must find new ways to bring strategy and vision to execution. Historically, organizations have experienced significant gaps in strategic performance due to the disconnection of strategy development from execution. Those that are successful have realized that effective strategy execution requires cascading corporate strategy in a way that aligns executives, business units, and employees to common goals. Having an approach to adapt and test the strategy becomes even more important to stay relevant and plan for changing competition.
What approach provides the best adaptability and flexibility for strategy development and execution? Many readers are familiar with traditional strategic planning, which follows a standard three to five-year calendar, where strategy is reviewed occasionally for progress. Strategic management, a more active process, enables strategic plans to evolve and grow as the environment changes. It is the continual analysis, planning, and monitoring required to successfully meet goals and objectives. A typical strategic management process generally includes four components.
- Analysis and assessment – analyze the current and internal environment assessment
- Strategy formulation – develop the strategic plan
- Strategy execution – translate the plan into tactical plans and actions
- Evaluation – conduct ongoing evaluation of performance to strategy
Strategic management also provides several benefits for healthcare organizations to become more proactive with strategy:
1. It allows organizations to be nimble. A good strategic management approach ensures that communication and feedback on performance against strategic goals occur on a regular cadence. By having a strategic management framework, your organization has “pivot-ability”. In other terms, when your environment changes (new market entrants, new regulations, etc.), strategic management allows organizations to hit the pause button and review current strategic initiatives for impact and relevancy.
2. It encourages continual dialogue on strategy. Many organizations have a strategic planning process. However, once the strategy is developed, future dialogue on environment changes, competitor actions, and industry trends tends to happen once every three to five years. By focusing on strategic management, executives can move to an annual process that requires continual reflection and scanning of the industry and review of performance.
3. It focuses on performance and results. Performance reviews against strategy become either a monthly, quarterly, or yearly process. A key component for many strategic management approaches is action planning for variances between goals and performance. These goals are inextricably tied to the achievement of strategic ends. Monthly senior executive meetings become the forum for review of performance tools, such as scorecards, that will highlight performance gaps and trends.
4. It engages the entire organization. Older models for strategic planning consists of a variety of processes carried out by functions or business units that are in isolation. This model does not foster collaboration or communication between functions, and strategy can become disconnected from those responsible for execution. To assist with the integration of strategy, organizations have established a project management office (PMO) or strategy management office to coordinate responsibilities of strategic management and make connection points between functional groups.
Do you agree? How has strategic management impacted your organization’s ability to execute and perform? Has it become a true accelerator of strategy? What lessons learned can you share about your experience?
Download SHSMD’s Bridging Worlds: The Future Role of the Healthcare Strategist to learn more.