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Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Chapter 7Chapter 7
Strategic and Operational Planning
Strategic and Operational Planning
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
PlanningPlanning• Planning is deciding in advance what to do, who is to do
it, how it is to be done, and when it is to be done
• Planning is a proactive, deliberate process required of all managers
• Planning is a guide for action in reaching a goal and requires flexibility and energy
• Planning also requires management skills such as data gathering, forecasting, and transforming ideas into action
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Without adequate planning, the management process fails, and organizational needs and objectives cannot be met
Planning Is Critically Important to and Precedes All Other Management
Functions
Planning Is Critically Important to and Precedes All Other Management
Functions
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Barriers to Identifying Long-Term Needs in Planning
Barriers to Identifying Long-Term Needs in Planning
• Health-care reform
• Rapidly changing technology
• Increasing government regulation of health care
• Scientific advances
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Factors Influencing the Future of Health CareFactors Influencing the Future of Health Care
• Robotic technology
• Biomechatronics
• Biometrics and smart cards
• Point-of-care testing
• Telehealth and the Internet
• Growing elderly population
• Nursing shortages in acute care hospitals
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Proactive Planning Proactive Planning
• Reactive planning: occurs after a problem exists
• Inactivism: seeks the status quo
• Preactive planning: utilizes technology to accelerate change; future-oriented
• Interactive or proactive planning: considers the past, present, and future and attempts to plan the future of an organization rather than react to it
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Question Question
Advocating against implementing a new hospital computer system is an example of which type of planning?
A. Reactivist
B. Inactivist
C. Preactivist
D. Proactivist
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Answer Answer
B. Inactivist
Rationale: Inactivists would rather maintain the status quo than take a risk with a new way of doing things. Reactive planning occurs after a problem exists. Preactive planners utilize technology to accelerate change and are future oriented. Proactivists consider the past, present, and future and attempt to plan the future of their organization rather than react to it
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
ReminderReminder
• Managers who are uninformed about the legal, political, economic, and social factors affecting health care make planning errors that may have disastrous implications for their professional development and the financial viability of the organization
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Strategic PlanningStrategic Planning
• Planning has many dimensions, including time span and complexity or comprehensiveness
• Complex plans are long-range or strategic plans
• Strategic planning typically examines an organization’s purpose, mission, philosophy, and goals in the context of its external environment
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
SWOT Definitions SWOT Definitions
• Strengths are those internal attributes that help an organization to achieve its objectives
• Weaknesses are those internal attributes that challenge an organization in achieving its objectives
• Opportunities are external conditions that promote achievement of organizational objectives
• Threats are external conditions that challenge or threaten the achievement of organizational objectives
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Simple Rules for SWOT AnalysisSimple Rules for SWOT Analysis• Be realistic about the strengths and weaknesses of your
organization
• Be clear about how the present organization differs from what might be possible in the future
• Be specific about what you want to accomplish
• Always apply SWOT in relation to your competitors
• Keep SWOT short and simple
• Remember that SWOT is subjective
Source: Adapted from Marketing Teacher Ltd. (2000–2013). SWOT analysis: Lesson. Retrieved April 22, 2013, from http://www.marketingteacher.com/wordpress/swot-analysis/
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Using a Balanced ScorecardUsing a Balanced Scorecard
• Strategic planners using a balanced scorecard:
– Develop metrics
– Collect data
– Analyze that data from four organizational perspectives:
• Financial
• Customers
• Business processes
• Learning and growth
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Steps for Using Strategic PlanningSteps for Using Strategic Planning
• Clearly define the purpose of the organization
• Establish realistic goals and objectives
• Identify external constituencies and determine their assessment of the organization’s purposes
• Clearly communicate the goals to the constituents
• Develop a sense of ownership of the plan
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Steps for Using Strategic Planning—(cont.)Steps for Using Strategic Planning—(cont.)
• Develop strategies to achieve the goals
• Ensure that the most effective use is made of resources
• Provide a base from which progress can be measured
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Principles of Good Planning Principles of Good Planning
• All plans must flow from other plans. Short-range plans must be congruent with long-range plans
• Planning in all areas of the organization must follow the mission, philosophy, and goals of the overall organization
• Planning involves the same process regardless of the period involved
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Principles of Good Planning—(cont.)Principles of Good Planning—(cont.)• The length of the plan is determined by what actions
are necessary to make the plan successful
• All planning must include an evaluation step and requires periodic reevaluation and prioritization
• All people and organizational units affected by a plan should be included in the planning
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
QuestionQuestion
Tell whether the following statement is True or False:
The planning process differs depending on the period of time involved.
A. True
B. False
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
AnswerAnswer
B. False
Rationale: Planning involves the same process regardless of the period involved
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Strategies for Successful PlanningStrategies for Successful Planning
• Start planning at the top
• Keep planning organized, clear, and definite
• Do not bypass levels of people
• Have short- and long-range plans and goals
• Know when to plan and when not to
• Keep target dates realistic
• Gather data appropriately
• Be sure objectives are clear
• Remember, interpersonal relationships are important
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Because a plan is a guide to reach a goal, it must be flexible and allow for readjustment as unexpected events occur
PlanningPlanning
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Why Do Plans Fail? Why Do Plans Fail?
• False assumptions
• Not knowing overall goal
• Not enough alternatives
• Inadequate time or other resources
• Low motivation levels
• Sound strategies not used
• Inadequate delegation of authority
• Not recognizing organizational goals and needs
• Planning too narrow in scope—not recognizing community, legal, and licensing requirements
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
QuestionQuestion
Which is an example of why plans might fail?
A. Not enough alternatives
B. Low motivation levels
C. False assumptions
D. Lack of sound strategies
E. All of the above
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Answer AnswerE. All of the above
Rationale: These are just several of numerous mistakes that can cause plans to be unsuccessful
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Difficulty in Long-Term Care Needs and Health-Care Organizations
Difficulty in Long-Term Care Needs and Health-Care Organizations
• Rapidly changing technology
• Increasing government involvement in health care
• Changing population demographics
• Reduced provider autonomy
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Planning Types Planning Types
• Reactivists plan after a problem exists
• Inactivists consider the status quo as the stable environment and they spend a great deal of energy preventing change and maintaining conformity
• Preactive planners utilize technology to accelerate change and are future-oriented
• Proactive planning style is always the goal
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Proactive PlanningProactive Planning• Is dynamic, and adaptation is considered to be a key
requirement since the environment changes so frequently
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Forecasting Forecasting
• Using available historical patterns to assist in planning
• Examining present clues and projected statistics to determine future needs
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
SWOT Analysis SWOT Analysis
The identification of:
• Strengths
• Weaknesses
• Opportunities
• Threats
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Balanced Scorecard Balanced ScorecardStrategic planners use a Balanced Scorecard to develop metrics (performance measurement indicators), collect data, and analyze that data from four organizational perspectives—financial, customers, internal business processes (or simply processes), and learning and growth
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Question QuestionA Balanced Scorecard is used to: (Select all that apply)
A. Collect data
B. Gain clients
C. Develop metrics
D. Analyze data
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
AnswerAnswerA. Collect data, C. Develop metrics, and D. Analyze data
Rationale: The Balanced Scorecard assists strategic planners in developing metrics, collecting data, and analyzing the data. It does not help them gain clients.
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Strategic Planning as a Management Process Should Include the FollowingStrategic Planning as a Management Process Should Include the Following1. A clear statement of the organization’s mission
2. The identification of the agency’s external constituencies or stakeholders and the determination of their assessment of the agency’s purposes and operations
3. The delineation of the agency’s strategic goals and objectives, typically in a 3- to 5-year plan
4. The development of strategies to achieve the goals
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
There is increasing recognition of the importance of subordinate input from all levels of the organization to give strategic plans meaning and to increase the likelihood of their successful implementation
Subordinate Input in Strategic PlansSubordinate Input in Strategic Plans
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Unlike the 20-year strategic plans of the 1960s and 1970s, most long-term planners today find it difficult to look even 5 years in the future
Length of Strategic PlanLength of Strategic Plan
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
The Planning HierarchyThe Planning Hierarchy
• Mission
• Philosophy
• Goals
• Objectives
• Policies
• Procedures
• Rules
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Organizational Philosophy Statement Organizational Philosophy Statement
A person should be able to identify exactly how the organization is implementing its philosophy by observing members of the nursing staff, reviewing the budgetary priorities, and talking to patients
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Goal, Objective, Policies, Procedures, and Rules
Goal, Objective, Policies, Procedures, and Rules
Goal—the desired result toward which effort is directed
Objective—how the goal will specifically be achieved (includes time frame and is measurable)
Policies—plans reduced to statements
Procedures—step-by-step process
Rules—plans that specifically define acceptable choices of action
Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins
Rules as Part of the Planning Hierarchy Rules as Part of the Planning Hierarchy
• Because rules are the least flexible type of planning in the planning hierarchy, there should be as few rules as possible in the organization
• Existing rules, however, should be enforced to keep morale from breaking down and to promote organizational structure