Str ate gic Mana gement Prof E. B. RillonCPH 2011 BG AFP (Ret)
Objectives After the session, participants will be able to; 1. Provide a rationale for the importance of strategic management in healthcare organizations. 2. Explain the concepts of strategic management , strategic planning, strategic issues and concerns, strategy. 3. Discuss the strategic mgt/planning process (Ginter et al.) 4. Analyze strategic issues both external and internal environment. 5. Understand how directional strategies are formulated.
Definition of Terms Strategic Management Management process with the objective of making the organization compatible with and successful in its external environment. (Duncan, Ginter & Swayne.) Attempts to achieve a productive and creative fit between the organization’s external environment and its internal environment.
Definition of Termscont. Strategic Planning Is the set of processes used in an organization to understand the situation and develop decision making guidelines (the strategy) for the organization. Strategy A pattern in a stream of decisions positioning an organization within its environment and resulting in the “behavior” of the organization. It is a future- oriented plan that provides decisions-making guidelines for managers.
Definition of Termscont. Key Performance/Result Area (KRA) Identifies activities that must be accomplished to achieve the mission e.g. adequacy in HR. Strategic Issues Fundamental policy questions or critical challenges that affect an organizations mandates, missions and values, products, clients, cost, organization and management
4 Major Stages ofStrategic Planning 1. Analysis of the situation External environment (opportunities and threats) Internal Environment ( Strength and weaknesses) 2. Strategy Formulation 3. Strategy Implementation 4. Strategic control and Evaluation
Planning Journey Where Are We NowHow Shall We Get There? How Do We Know That We Are There? Where Do We Want To Go?
Elements of StrategicIssue Statement (Bryson:1995) Describe succinctly Be framed as question that the org. can do something about it. Factors that make the issue a challenge be listed What in the mandates, mission, values, SWOT make it strategic Statement of the consequences of failing to address the issue.
Examples of Strategic IssuesIssue Strategic IssueInflation How can we caution the effect of inflation in hospital organization? Failure to address the issue will lead increased cost of operations
External Environmental Scan1. External Environmental Opportunities/Threats List of Issues/Trends Evidence Impact to Probability of (Provide information Organization continuing in next regarding existence of (1-10) 3-5 years issue/trend) (1-10)
Internal Environmental Scan3. Internal Environment Strengths/Weaknesses Subsystem Issues/ Evidence Impact to Probability of Strengths Weaknesses Organization continuing in (1-10) next 3-5 years (1-10)1.OrganizationalCulture2. GeneralManagement3. Admin4. Marketing5. Clinical6. PhysicalFacilities7. Financial8. Information
Strategy Types andRoles Strategy RoleDirectional Who we are? What should we be?Adaptive How the organization will expand, contract or stabilize operations.Market Entry Provide methods for access to the market. Not necessary for contraction strategies.Positioning Positioning the organization vis-à-vis other organizations within a marketOperational Developed for the functional areas (marketing, finance, information system, HRM, etc.)
Vision: a compelling,conceptual image of thedesired futureComponents Descriptions2. A Clear Hope For the 1. A future where communities, health agencies, Future and private sector cooperate to increase healthy life for all.4. Challenging and 2. Strive for excellence, display initiative and Excellence Concerns demonstrate achievement.5. Inspirational and 3. Forging alliances with public and private Emotional sectors to ensure timely, cost-effective public health interventions. 4. Value employees.7. Empowers Employees First and Clients Second8. Prepares for the Future 5. Catalyst for progress6. Memorable and 6. Memorable terms – catalyst, public health Provides Guidance leader, innovation, core values, etc.
Vision Statement Checklist Yes NoDoes the Vision statement provide a clear picture of theorganization’s ideal future with respect to qualitymanagement?Is the vision statement inspiring and challenging?Is the vision statement brief enough to be memorable?
ISDH Health VisionStatement The Indiana State Dept. of Health is committed to act as a catalyst for progress that will resolve in healthier people in a healthful environment.
Mission: the reason forbeing Components 2. Target customers and markets 3. Indicates principal services delivered 4. Geographical areas which the organization concentrates 5. Identifies organization philosophy 6. Confirms organizations preferred self image
Mission StatementGuide at VMMC are committed to provideWho: WeWhat: Comprehensive, quality, tertiary level of health care servicesTo Whom: To our veterans and their authorized dependentsWhere: All over the countryHow: To improve the quality of care given, we embark in the provision of continuous education and training to all our staff and would be providers of care and research both clinical and operational. We strive to provide quality of life by giving our clients a variety of supportive services to meet their physical, psychological and spiritual needs. We also contribute to the promotion of health and welfare to the community through periodic outreach programs.Affirmation We are a caring community that values integrity and dignity ofof Value: those who are served as well as those who serve.
Mission Statement Checklist YES NODoes 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 seehow they contribute?Will it make sense to average citizens of they see it on thehospital/clinic wall?Will you be embarrassed if you see it on the front page ofthe newspaper?
Hierarchy of ObjectivesGoals: -long term, positive statements that express an idealized vision oa quality of life that is almost universally accepted. Purposely stated in ageneral and abstract form so that they remain constant throughout rapidsocial change.EGStrategic Concern How can we continue giving quality and affordable healthcare atRMC in the midst of rising cost of operations?Goal: Strengthen financial viability.
Hierarchy of ObjectivesObjective: -specific, measurable, accurate, realistic, time bound statementof 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:Operational Strategies Deals with putting strategies to work Requires coordinated efforts of the Organizational Functions of: • Marketing • Information Systems • Human Resources • Finance, and Organization-wide Efforts to Attain Visions • Organization Culture • Organization Structure • Facilities and Equipment • Ethics and Social Responsibility
Strategic Control A system to support managers in accessing how well the organization’s strategy compare to its progress and in the accomplishment of goals and how well discrepancies are detected. It monitors, evaluates, and adjusts the strategic implementation, the strategy and the situational analysis.
Fundamental Elements ofStrategic Control 1. Setting objectives and pre-determined standards 2. Measuring performance 3. Comparing the objectives and standards with actual performance 4. Determining the reasons for deviations 5. Taking corrective actions if necessary
Synergy FormulationStrategic Strategic Adaptive Market- Positioning Implementation ControlIssues Goals Strategy Entry Strategies Strategies Strategies Strategies1. Lack of Proper Recruitment Intensive Added Human Resource Performancecompetent training and standards recruitment fringe Evaluationand proper and efforts - benefitscommitted recruitment continuous nationwidepersonnel training220.127.116.11.
STRATEGIC SCORE CARD Goals & KRA Indicator Base Year Year Year Activity Milestone Objectives line (2010) (2011) (2012)Goal #1. Achieve Increased Rate of 10M 13M 15M 20M Intensifyfinancial viability income increase: collectionsby 2012 (20M) Annual Increase pay Income clients
Problem Tree Increased cost for Health ServicesEffects: Decreased confidence in Increased demand for Health Services curative services Increase ofCore Problem: Infectious diseasesCauses: Low coverage vaccination Poor service delivery Low demand of servicesInsufficient supply Poor motivationOf vaccines Of staff Poor Poor knowledge of acceptance the program of program Poor incentives Afraid of side Poor promotion effects
Objectives Tree Decreased cost for Health ServicesEnds: Increased confidence in Decreased demand for Health Services curative services Decrease ofCore Objective: Infectious diseasesMeans: Increased coverage vaccination High quality service delivery Inc. demand of servicesAdequate supply IncreasedOf vaccines motivation Good Acceptance of staff knowledge of of program the program Good working Information atmosphere Increased About promotion vaccination effects
PPM 2 Main Activities Specification of Costs for Inputs 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 DecA-1A-2A-3A-4A-5
Schedule of ActivitiesNo. Activity Indicator Time Responsib HR Material Cost Remark Frame ility Needs Needs18.104.22.168
MONITORING AND EVALUATIONMonitoring - An ongoing activity accompanying the process of implementation of a projectSupervision -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 comparisons 3. measure changes over timeTypes: 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 TemplateWhat ? To monitor (Focus) OVI Is going to monitor?Who To get data (sourceWhere of verification) Reports, observationHow tool Check list to collect Often Dummy table analyze
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 SocialGuiding Principles of HCORobert Goldman: 1. Put patient welfare first. 2. Avoid unnecessary services/ 3. Maintain high standards of honesty and accuracy. 4. Be accountable to the public.“Patients must come before profits if the hospital is to profit.”