Strategic Planning - ROJoson

Strategic Planning

Strategic Planning

Process of determining where an organization intends to be in the future and how it will get there.

It is a way of finding the best possible future course for the institution and then outlining the best possible path of moving toward that destination.

Strategic Planning Process

•What might we do (in terms of environmental opportunity)?

•What can we do (in terms of ability and strengths)?

•What do we want to do (in terms of personal preference)?

•What should we do (in terms of social responsibility)?

Strategic Planning

Output - long-term plans (2-5 years)

Planning Approach –

Traditional (centralized)

Decentralized

Ultimate goal – sustainability of organization

Strategic Planning Process

Situational Analysis

Evaluate current mission, goals and strategies

SWOT Analysis

Scan internal environment – core competencies, synergy, values creation

Scan external environment

Identify strategic factorsS – Strengths

W- Weaknesses

O – Opportunities

T – Threats

Strategic Planning Process

Environmental Analysis

SWOT

Internal environment

STRENGTHS What do we do well?

WEAKNESSWhat is wrong now?

External environment

OPPORTUNITIESWhat possibilities exist

THREATSWhat can go wrong?

Strategic Planning Process

Situational analysis

Define / redefine mission, goals, grand strategy

Formulate new strategy (corporate, business, functional)

Formulate key result areas and evaluation parameters

Strategic Management Process

Evaluate Current:•Mission•Goals

•Strategies

Step 1: Situational Analysis

SWOT

Strategic Management

Scan External Environment

Scan Internal Environment:•Core competencies•Synergy•Value Creation

Identify strategic Factors:•Opportunities•Threats

Identify Strategic Factors:•Strengths•Weaknesses

SWOT

Strategic Management

Define New:•Mission•Goals•Grand Strategy

Situational Analysis

Step 2: define new mission, goals and strategy

Strategic Management

Define New:•Mission•Goals•Grand Strategy

Formulate Strategy:•Corporate•Business•Functional

Situational Analysis

Step 3: Formulate new strategy

Strategic Management

Situational Analysis

Implement Strategy via changes in:•Leadership/culture•Structure•Human Resource•Info and control •systems

Define New:•Mission•Goals•Grand Strategy

Formulate Strategy:•Corporate•Business•Functional

Step 4: Implement new strategy

SWOT

Scan External Environment

Identify strategic Factors:•Opportunities•Threats

Evaluate Current:•Mission•Goals•Strategies

Scan Internal Environment:•Core competencies•Synergy•Value Creation

Identify Strategic Factors:•Strengths•Weaknesses

Define New:•Mission•Goals•Grand Strategy

Formulate Strategy:•Corporate•Business•Functional

The Strategic Management Process

Implement Strategyvia changes in:•Leadership/culture•Structure•Human Resource•Info and control systems

Operational Goals / PlansLower Management

(Departments/Individuals)

Tactical Goals/PlansMiddle Management

Major Divisions, functions

Strategic Goals/PlansSenior Management

(Organization as a whole)

Mission Statement

Tactical plansDesigned to help execute

Major strategic plansAccomplish specific

Part of the Company strategy

Tactical GoalsDefines the outcomesThat major divisions

and departments must Achieve in order for The organization to

Meet its overallgoals

Operational Goal

Specific, measurable results expected from departments

work groups and individuals withinthe organization

Operations PlansDeveloped at the lower level of organization that specify

action steps towards achieving operational goals

and supports tactical planning activities

Sample of Strategic Planning

Manila Doctors Hospital

1999; 2003

VisionManila Doctors Hospital

Leading center of excellence and wellness in the Philippines providing

holistic quality patient care

Gives a picture of what an organization wants to be;Serves as a guiding light for managers, employees, and others in bringing about change;Creates a sense of enthusiasm;INSPIRING

MISSIONManila Doctors Hospital

To operate a world class hospital.To undertake training and research programs to

continually improve quality services.To pursue corporate social responsibility programs.

what we stand for;who are our primary clients/beneficiarieswhat are the unique products/services that our organization can offer our clients?what activities are we in? What will become of us 5 years from now?what are our basic values?what are the key performance objectives such growth by which we measure our success?

Goal

specific thrust or emphasis

that an organization takes within a particular time and space in order to live its mission and thus eventually attain its vision

expressed in non-behavioral terms and start with TO …….

Example: know, realize, appreciate

GoalManila Doctors Hospital

To serve as a health and wellness center for all Filipino and international clients.

ObjectivesManila Doctors Hospital

1. To provide health care services that meet the needs of Manila Doctors Hospital’s clients or customers; all pertinent statutory and regulatory requirements; and the expectations of MDH Top Management.

ObjectivesManila Doctors Hospital

2. To conduct training programs that will continually improve services.

3. To conduct researches that will continually improve services.

4. To provide competent staff at all times.

ObjectivesManila Doctors Hospital

5.To establish and continually improve a quality management system.

6.To provide corporate social responsibility programs for the underprivileged and underserved in the community.

Manila Doctors Hospital

Strategies

Strategy Formulation

Strategies

to Achieve

Vision-Mission

of

MDH

I. To build the best private general hospital with specialty units.

II. To ensure customer satisfaction through efficient quality service.

III. To strengthen financial viability and sustainability.

IV. To develop an organization structure responsive to current and emerging needs.

V. To develop social service programs in order to enhance the social responsibility of the institution by strengthening and systematizing the social services and community outreach programs.

VI. To strengthen and innovate research programs.

VII. To strengthen human resources.

VIII. To evaluate and enhance current pastoral program.

IX. To develop Manila Doctors College in terms of registration and courses.

Strategic Planning for Hospital

Other Input / Info Needed

Health-care IndustryHospital Financial Sustainability

Financial Management

Overview of the Health Care Industry

Health Care Industry

organized activities

going on in the field of health care

in the community

Health Care Industry

Elements:

–Health care services–Suppliers for the health care services–Users of the health care services–Logistics for the health care services – suppliers and users–Factors affecting all of the above – such as demand, supply, regulations, sustainability, etc.

Health Care Industry

For a physician-to-be for a physician-manager-to-befor a physician who will establish a private medical practice after graduationfor a physician who will be administrators of health care programs and organizations

it will be helpful to have an overview of the health care industry. Knowledge of such will be useful in the planning of the physician in any of the above roles.

Health Care Industry

What is a health care service?

It is a service intended for the prevention, treatment, and management of illness and the preservation of mental and physical well-being of human beings.

Health Care Industry

What are different types of health care?

Personal /private health care – benefits only the user of the service directly. Most of curative care will be in this category.

Public health care – benefits the community as a whole, whether or not they are conscious user of the service. For example, spraying for mosquito control benefits the entire community

Health Care Industry

Who are the suppliers of the health care services?

Physicians, nurses, and allied health professional providers.

Health Care Industry

Who are the users of the health care services?

Direct users – persons in immediate need of health care services.

Indirect users – people or organizations providing the pre-need and in-need health services of their clients, staff, and loved ones.

Health Care Industry

What are the logistics involved in providing health care services?

•Cost in establishing an infrastructure for the health care services.

•Cost in providing health care professionals in health care organizations.

•Cost in delivering the health care services.

•Cost in marketing the health care services.

Health Care Industry

What are the logistics involved in acquiring health care services?

Direct users pay for the cost of the health care services.

Indirect users pay for the cost of the health care services.

Health Care Industry

What are the usual sources of funds for health care services?

Direct users

Health insurances

Government thru taxes and other funds

Health Care IndustryWhat are the factors affecting all of the above?

•Demands – amount of users (number of people in need of health care services; number of people who can afford; etc.)

•Supply – amount of health care providers (physicians, nurses, and allied medical professionals)

•Accrediting and regulatory bodies such as Department of Health and PhilHealth; BIR (taxes)

•Competition

•Sustainability

HospitalFinancial Sustainability Model

Hospital Financial Sustainability Model

Clients

Clients

Clients

Utilization of hospital services

Financial Sustainability

Health care

system

MD

Hospital

Input Thruput Output Impact

Walk-in

Clients

Clients

Clients

Utilization of hospital services

Financial Sustainability

QMS

“Good” MDs

Hospital

Walk-in

HCS

Right No.

Patronizing MDs

Strong Patient Following

MD

Main factors

that will attract clients and lead to utilization of services

Requisites for attaining factors that will lead to sustainability

Financial Sustainability

QMS

“Good” MDs

Hospital

HCS

Right No.

Patronizing MDs

Strong Patient Following

Training for QMS

ISO 9001 Certification

PhilHealth Benchbook

Joint Commission International (JCI)

Requisites

Requisites for attaining factors that will lead to sustainability

Financial Sustainability

QMS

“Good” MDs

Hospital

HCS

Right No.

Patronizing MDs

Strong Patient Following

Requisites

Professional Competency

Spend most of the time in the hospital

Affiliated with one or few hospitals

Love/like the hospital

Recruitment/Attraction

Hospital Financial Sustainability Model

Financial Sustainability

QMS

“Good” MDs

Hospital

HCS

Right No.

Patronizing MDs

Strong Patient Following

Training for QMSISO 9001 CertificationPhilHealth Benchbook Joint Commission International (JCI)

Requisites

Professional Competency

Spend most of the time in the hospital

Affiliated with one or few hospitals

Love/like the hospital

Recruitment/Attraction

Spend most of the time in the hospital

Affiliated with one or few hospitals

Love/like the hospital

Attraction

Opportunity for

•Occupational contentment

•Teaching - med school

•Research

•Administration

Attractions for making MDH a second home

Strategies for MDs

No. of MDs

No. / specializations

No. holding clinic at least 3x/wk

No. holding clinic more than 3 hrs/day

No. of MDs with 48 admissions/yr

200+

more needed

70%

40%

50%

500+

Increased

90%

90%

90%

Present Target

Sample

Considerations in the Planning for Recruitment/Attraction of MDs

Control vacant offices

Mgt Policy

Entice MDs to share office Create spaces in the

present MD offices

Control vacant offices

Create spaces in the present MD offices

Allow more MDs to hold

office

Attract Screen Recruit

No more stocks or assigned stocks

Performance - Financial Sustainability

Financial Management System

Financial Management

Financial Management

operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.

Financial Management

For a physician-to-be for a physician-manager-to-befor a physician who will establish a private medical practice after graduationfor a physician who will be administrators of health care programs and organizations

it will be helpful to have an overview of the financial management system.Knowledge of such will be useful in the planning of the physician in any of the above roles..

The Financial Management Plan

Goal:

To ensure financial sustainability and stability through effective and efficient utilization of monetary funds.

The Financial Management Plan

General objective:

To effect a sound management of monetary resources in support of organizational goals.

The Financial Management Plan

Evaluation parameters and criteria:

Sound management of monetary resources

Positive incomeNo undue losses

The Financial Management Plan

Strategies:Accounting SystemCost ManagementAsset ManagementAccount ReceivablesBudgeting

The Financial Management Plan

Strategies:Accounting System

a bookkeeping system which tracks the money coming in vs. going out.

The Financial Management Plan

Strategies:Cost Managementthe process whereby companies use cost accounting to report or control the various costs of doing business.

The Financial Management Plan

Strategies:

Asset Management the management of the financial assets of a company in order to maximize return.

The Financial Management Plan

Strategies:

Account Receivablesthe money that is owed to a company for goods and services it has provided to customers on credit.

The Financial Management Plan

Strategies:

Budgetingthe activity of predicting how much money the organization will spend during a specified period.

The Financial Management Plan

Monitoring Reports:Financial StatementIncome StatementBalance SheetCash Flow

The Financial Management Plan

Monitoring Reports:Financial StatementA written report which quantitatively describes the financial health of a company.

Includes an income statement, a balance sheet,and often also includes a cash flow statement.

Usually compiled on a quarterly and annual basis.

The Financial Management Plan

Monitoring Reports:Income Statement

An accounting of sales, expenses, and net profit for a given period.

The Financial Management PlanMonitoring Reports:

Balance SheetA quantitative summary of a company's financial condition at a specific point in time, including assets, liabilities and net worth.

The first part of a balance sheet shows all the productive assets a company owns, and the second part shows all the financing methods (such as liabilities and shareholders' equity). Also called statement of condition.

Balance Sheet2003 2004

Assets–Cash and short-term investments–Accounts receivable–Inventories–Other

Px,xxxxxxxxxxxx

Px,xxxxxxxxxxxx

Total Assets Px,xxx Px,xxx

Liabilities–Accounts payable–Accrued compensation–Income taxes payable–Other

Px,xxxxxxxxxxxx

Px,xxxxxxxxxxxx

Total Liabilities Px,xxx Px,xxx

Shareholder’s Equity Px,xxx Px,xxx

The Financial Management Plan

Monitoring Reports:Cash Flow

A measure of a company's financial health.

Equals cash receipts minus cash payments over a given period of time;or equivalently, net profit plus amounts charged off for depreciation, depletion, and amortization.

BudgetA quantitative expression of a plan of action, specifically, a business plan with expression of goals and objectives in the short term.

It is usually stated in monetary terms and cover a period of one year.

It is an integral part of the overall management control process of an organization.

Objectives of Budgetary Programs

To provide a written expression, in quantitative terms, of the policies and plans of the unit

To provide a basis for the evaluation of financial performance in accordance with the plans

To provide a useful tool for the control of costs

To create cost awareness throughout the organization

Purpose of Budget Making in Departments

To determine the annual logistic requirements of the departments in achieving their annual objectives.

(Note: this assumes that there must be preset rationalized, specific, tangible, and achievable annual department objectives before the logistic needs are calculated.)

Purpose of Budget Making in Departments

To determine the annual logistic requirements of the departments in achieving their annual objectives.

This budget will be used as a guide in governance, in rational spending according to directions and purpose, not only by the managers of the departments as well as by the hospital administration.

Annual departmental business action plan as basis for budget proposal

The business action plan of the department for the incoming year should serve as a basis for the budget proposal for the incoming year.

The business action plan and performance results of the department for the previous year(s) should serve as a reference and basis for the incoming management action plan and budget proposals.

Annual departmental business action plan as basis for budget proposal

Thus, before the proposed budgets are put in, each department must have a business action plan for the incoming year as well as business action plan and performance results in the previous year(s) and the current year to date.

How to make a business action plan

Key Target Areas

Performance Objectives

Programs / projects / activities/needs

Proposed budget

Health Service Development

Health Care Delivery Services

Training

Research

Others