Completing Strategic Plan Execution

Completing Strategic Plan Execution

Making Major Choices

[These slides are intended to be used in conjunction with Health Care Management by Donald J. Lombardi and John R. Schermerhorn, Jr. with Brian Kramer (the Text).    Please refer  to the Text for a more complete explanation of the materials covered herein and for all source material references.]

Copyright by John Wiley and Sons, 2006

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  • Competitive advantage: an attribute or combination of attributes that allows an organization to outperform its rivals.
  • Sustainable competitive advantage: an attribute that is difficult for competitors to imitate.
  • Strategic management: the process of formulating and implementing strategies that create competitive advantage and advance an organization’s mission and objectives.
  • Strategy formulation: assessing existing strategies, organizations, and environments to develop new strategies and strategic plans capable of delivering future competitive advantage.
  • Strategy implementation: acting upon strategies successfully to achieve the desired results.

Understanding Levels
and Types of Strategy

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The Strategic Management Process

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Levels of Strategy

Successful health care organizations formulate strategies at several specific levels:

  • At the level of corporate strategy, top management directs an organization as a whole toward sustainable competitive advantage.
  • At the level of business strategy, top- and mid-level management set the direction for a single business unit.
  • At the level of functional strategy, middle- and low-level management guide the use of resources to implement business strategy.

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Types of Strategies

  • Growth strategies pursue larger-size and expanded operations.
  • some organizations grow through concentration
  • others grow through diversification
  • Retrenchment strategies reduce the scale of operations in order to gain efficiency and improve performance.
  • retrenchment by turnaround
  • retrenchment by divestiture
  • retrenchment by liquidation
  • Stability strategies maintain the present course of action without major operating changes.
  • Cooperation strategies are becoming increasingly popular, and include
  • strategic alliances
  • outsourcing alliances

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Formulating Strategies
and Making Decisions

  • Major opportunities for competitive advantage include the following areas:
  • cost and quality
  • knowledge and timing
  • barriers to entry
  • financial resources
  • Five essential values drive the decision-making process for managers:
  • accountability
  • adaptability
  • dependability
  • responsibility
  • visibility

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Utilizing the
Portfolio Planning Approach

  • Portfolio planning approach: a basic method of formulating strategy and making decisions, in which managers allocate scarce organizational resources among competing opportunities.
  • The figure summarizes a portfolio planning approach developed by the Boston Consulting Group known as the BCG matrix.

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Tools for Making Strategic Decisions

  • Collecting Data: data collection and analysis should happen early in the strategic decision-making process. Managers must collect as much information as possible, and then make a timely decision based on the information at hand.
  • Two guidelines when collecting data:
  • try to obtain valid, realistic information
  • recognize that the time frame for making a decision is as important as the decision itself
  • Studying Established Past Actions: utilize past action—including the actions of predecessors or peer managers—to help formulate new strategies.

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Tools for Making
Strategic Decisions (con’t)

  • Researching Formal References: formal references include information sources such as journals, management texts, or an organization’s manual of standard operating procedures.
  • Analyzing Hard Data: hard data can include any information that may have been generated by a questionnaire, form, or survey.
  • Predicting Advantages and Potential Disadvantages
  • Following Your Instincts

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Analyzing Information
and Action Analysis

  • Action analysis allows managers to examine the viability of their plans and try to predict whether their decisions are sound and the courses of action will be effective.
  • Action analysis begins with a data review within the context of four essential factors:
  • the environment
  • the various functions involved in the action plan
  • the business consequences of the action taken
  • the historical precedent of the action.
  • Environment analysis takes into account the theoretical and physical environment in which you operate and the action plan that will be undertaken.

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Action Analysis (con’t)

  • Function analysis basically asks, “Who can do what to make this happen?” Four considerations are helpful:
  • consider function analysis on your immediate department
  • expand the function analysis to include related departments and colleagues
  • consider what participation you need from your supervisor
  • consider benefits to the overall organization
  • Business analysis involves analyzing business-related dynamics.
  • First, consider the impact of your decision and its subsequent effect on patients.
  • Two key quality-related themes underlie all aspects of business analysis:
  • continuous quality improvement (CQI)
  • continuous business development (CBD)
  • Identify any potential negative impacts and business consequences.

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  • Historical analysis takes into account past precedents established in the organization.
  • Also consider the relevance and contribution to the organization. After you make a strategic decision and plan a course of action, you should still take time to consider the ramifications of your decisions on the organization, from the perspective of what it can contribute to the organization’s goals.

Action Analysis (con’t)

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  • Any strategy—no matter how well formulated—can achieve long-term success without proper implementation.
  • Common strategic planning pitfalls that hinder implementation include both:
  • failures of substance
  • failures of process

Models for Implementing
Strategies and Decisions

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The following four processes can be used:

  • SWOT analysis
  • The Military Model
  • The Parliamentary Model
  • The QUICK Decision Model

Models for Implementing
Strategies and Decisions (con’t)

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The Military Model and
the Parliamentary Model

The military model involves the following five-part sequence:

1. Define the objective.

2. Identify resources.

3. Establish the plan.

4. Lay out the course of action.

5. Provide closure.

The parliamentary model eight-step process is as follows:

1. Establish need.

2. Define the optimum outcome.

3. Conduct a stakeholder review.

4. List pros and cons.

5. Make an option review.

6. Review potential consequences.

7. Formulate a step-by-step plan.

8. Analyze achievement.

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  • The QUICK Decision Model: in an effort to create an easy-to-remember model that utilizes the best military and parliamentary models (as well as several other less-used models), health care management consultant and author Donald N. Lombardi devised the QUICK decision model.
  • Each letter of the acronym QUICK stands for an activity:
  • Q = Question appropriate parties
  • U = Understand your objective(s)
  • I = Investigate all options
  • C = Communicate clearly to all concerned parties
  • K = Keep on top of things, monitoring and reporting progress

The QUICK Decision Model

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  • Communicating with Stakeholders
  • Communication is a key element of any strategic decision.
  • Communication must be comprehensive, open, and (when necessary) repetitive.
  • In particular, four communication keys are critical to executing action plans:
  • clarity
  • closure
  • cohesion
  • command
  • Quantifying Outcomes
  • As you move closer to your goal, review progress periodically.
  • After you reach your goal and desired outcome, clearly and objectively quantify the gains your action has helped achieve.
  • Recognize any action-oriented process is, in a sense, a trial-and-error education, even under the best of circumstances.

Completing Strategic Plan Execution

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Copyright Notice

Copyright by John Wiley and Sons, 2006

Copyright by John Wiley and Sons, 2006

 
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