What Is Strategic Planning?
Simply put, strategic planning determines where a practice is going over the next year or more, how it’s going to get there and how it’ll know if it got there or not. The focus of a strategic plan is usually on the entire hospital, while the focus of a business plan is usually on a particular product, service or program.
There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the practice’s leadership, culture of the clinic, complexity of the hospital’s environment, size of the practice and expertise of planners.
In today’s highly competitive environment, a practice must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track.
Mission and Objectives
The mission statement describes the practice’s business vision, including the unchanging values and purpose of the hospital and forward-looking visionary goals that guide the pursuit of future opportunities.
Guided by the business vision, the practice’s leaders can define measurable financial and strategic objectives. Financial objectives involve measures such as revenue targets and earnings growth. Strategic objectives are related to the practice’s business position, and may include measures such as market share and reputation.
The environmental scan includes the following components:
- Internal analysis of the practice
- Demographics and feasibility analysis
- External analysis of the competition
The internal analysis can identify the practice’s strengths and weaknesses and the external analysis reveals opportunities and threats. A profile of the strengths, weaknesses, opportunities, and threats should be compiled and analyzed.
A full demographic and feasibility study should be performed to identify potential opportunities in pricing and services provided.
Given the information from the environmental scan, the practice should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats.
To attain superior profitability, the practice seeks to develop a competitive advantage over its rivals. A competitive advantage can be based on cost or differentiation.
The selected strategy is implemented by means of programs, budgets, and procedures. Implementation involves organization of the hospital’s resources and motivation of the staff to achieve objectives.
The way in which the strategy is implemented can have a significant impact on whether it will be successful. In a large practice, those who implement the strategy likely will be different people from those who formulated it. For this reason, care must be taken to communicate the strategy and the reasoning behind it. Otherwise, the implementation might not succeed if the strategy is misunderstood or if the practice manager does not understand why the particular strategy was selected.
Evaluation & Control
The implementation of the strategy must be monitored and adjustments made as needed. Evaluation and control consists of the following steps:
- Define parameters to be measured
- Define target values for those parameters
- Perform measurements
- Compare measured results to the pre-defined standard
- Make necessary changes