First and foremost, making strategy and ensuring its effective implementation lie at the heart of what the CEO and the executive team are there to do. Indeed, strategic capability defines the essence of effective executive leadership. Making strategy and implementing it should define who is selected as an executive leader and who is rewarded. Group hugs are an inexcusable abrogation of the executive team’s most fundamental responsibility.
Second, most individuals outside the executive suite expect the organization’s leaders to define its future. And they get anxious when no one at the top seems to be able to articulate where the organization is going and how it intends to get there. There is, however, an important role for nonexecutives and front-line employees to play. Throughout the organization, their work needs to align with the institution's overall strategic direction. Their input is vital to the action plans needed to turn strategy into results. But that will happen only if direction is clearly articulated and performance appraisal methods are synched with the accomplishment of driving strategies, tactics and actions.
Easy to use
When well-developed, a strategic plan should fit on three pages. This makes it easy to convert into a trifold brochure. In the boardroom and throughout the organization, when big decisions and commitments are on the table, there should be willingness to hold the strategic plan up and say, “How does this commitment fit with our strategic plan?” Absent such a willingness, a strategic plan will be impotent.
Powerful organizationwide programs like Lean can enrich strategic perspectives and strengthen implementation. Such programs often bring their own unique concepts, methods and terminology. It’s important to relate these to other key concepts, methods and terminology in use throughout the organization and communicate those relationships. Otherwise, major initiatives can whiplash the organization as it’s compelled to shift from one program to another. Organizational whiplash produces anxiety and confusion, which, in turn, waste energy and erode focus. Organizationwide programs shouldn’t be positioned as distinct and different from the strategic plan. Instead, they should be embedded as a fundamental part of the strategic plan.
Putting a strategic plan on three pages shouldn’t override the need to convert it into a compelling story. A strategic plan, after all, is simply a chapter in the unfolding tale of the organization’s future. A good story has drama, heroes and protagonists. It has setbacks and victories. It is made up of aspirations and intentions with stretch in them. The three‑page version is the plot line of the story. It is important that leaders put flesh and muscle on its bones by personalizing it with stories people can relate to.
One of the most persistent criticisms related to strategic plans is that they don’t get implemented, that they have no legs. The reason is usually straightforward — the organization never designed an effective process for implementation and never established accountability. If everyone is responsible for implementation, then no one is responsible. When accountabilities are assigned, too often they are only at the level of tactics or actions — no one has responsibility for shepherding overall implementation of each driving strategy out of which tactics and action plans should flow.
I advise my clients to establish a “strategy leader” model to implement their strategic plans. This involves designating an individual, typically a member of the executive team, to orchestrate implementation of one of the five to seven driving strategies in the plan. In many cases, it makes sense to establish a dyad composed of an executive and a physician. Strategy leaders then select “strategy teams” of up to a dozen individuals to define supporting tactics and action plans that are then shepherded through implementation.
Some tactics are more intensive and consuming than others. These may require dedicated tactic leaders and tactic teams. Once a driving strategy is largely completed or becomes irrelevant because of a changing environment, it needs to be replaced. There should always be a steady state of five to seven driving strategies underway.
Another reason strategic plans stall out is that individuals essential to implementation already have full plates. The strategic plan should direct not only what the organization will do but what it will not do. It should help take things off the plate. And this can be difficult because many initiatives have well-established constituencies, powerful champions and resources that help perpetuate them. Sometimes it takes a concerted shove to get them off the plate.
Pay for work
Having physicians who participate as strategy leaders and on strategy teams is key. Physicians employed by a hospital or health system may have time built into their job responsibilities for committee work but can still be under the pressure of productivity requirements. Independent physicians must take time from their private practices, and this can have a direct impact on personal income, patients and family.
Executives often struggle with whether to pay physicians for the time they dedicate to strategic planning. My answer to that question is, pay them. To the lament that board members aren’t being paid, my response is that board members accepted their governance responsibilities voluntarily knowing they would not be paid. Although good citizenship is a reasonable expectation for physicians, it’s important to recognize that as participants on strategy and tactic teams, physicians are providing valuable technical expertise and judgment.
Physician participation in committee work, including strategic planning, is sometimes viewed as appropriate payback for provision of their “workshop.” In other words, physicians should participate without pay because the hospital or health system is providing them with the facilities, technology and staff they need to manufacture care.
In truth, the “workshop” is becoming increasingly irrelevant to growing numbers of physicians. Primary care physicians are busy in their practices and ever more reliant on hospitalists. Proceduralists, including surgeons, have built their own workshops. Today, one pressing challenge for hospitals is how to remain relevant in the work and lives of physicians. Part of the answer to that challenge lies in defining the hospital as the nexus for designing and achieving a compelling future rather than as a workshop.
Strategic plans are often ignored because they lack direct relevance. Their effects are too far removed, they don’t address the challenges stakeholders regard as most pressing or they fail to influence resource allocation. It is important to communicate that the strategic plan will be the primary tool by which scarce resources, including capital, will be allocated in the short and long terms. When the strategic plan is used to allocate dollars, time and attention, the skeptical or disinterested often begin to pay attention. Achieving such engagement requires consistent and disciplined application of the strategic plan to allocation decisions by executive leaders and board members.
Focus is one of the most important outcomes of an effective strategic planning process. Reflecting the consistent advice of Harvard Business School's Michael Porter, a strategic plan ought to guide not only “what to do” but “what not to do.” As one of my past clients once suggested, a strategic plan helped the client's organization avoid “chasing cars.” Another observed that a lot of fish come in over the transom, and a good strategic plan let the organization know which ones to throw back. Focused commitment to a few strategies must be maintained through thick and thin with adjustments made at a tactical level.
Strategic focus is evidenced by “flexible persistence” over time. Many driving strategies require time to fully implement. Because such initiatives often carry significant startup costs and may not produce results for several years, it is tempting to cut losses early and abandon a strategy. This not only sacrifices investments already made; it often snatches defeat from the jaws of victory.
A classic example of this is the number of hospitals that made significant investments in the employment of physicians in the early 1990s, then abandoned the strategy once costs began to mount. Within a decade, most hospitals were back to employing physicians but found themselves well behind those organizations that stuck to the strategy despite financial losses and other challenges.
Flexible persistence underpins the success of many hospitals and health systems. Sentara Health provides a compelling argument for the power of flexible persistence. More than two decades ago, it launched urgent care centers, employed physicians and built a powerful health plan — then never strayed from these strategic commitments. At the time, a member of Sentara’s executive team told me its strategies were so well-embedded that he saw them on the ceiling at night.
When strategic planning comes under fire, it’s often during periods when the rate of change is so high that planning horizons, out of necessity, begin to collapse. In such environments, the organizational attribute most needed is an ability to anticipate, respond and shape events quickly. During turbulent times, some organizations become like fish suddenly stranded on a dock and pursued by ravenous gulls. A decision to flop right or left can make the difference between living to flop again or becoming bird food.
But beyond reactive flopping, there had better be an overarching plan for making it back into the water. Absent such a plan, the fish might as well surrender early to the gulls.
There is a difference between flopping and agility. Flopping is action guided by the hope that the next move will be lucky enough to let you escape the birds. Agility, on the other hand, is bounded by intention — it is guided by purposeful forethought. For stranded fish, agility is action in the general direction of the shelter and sustenance of water. Organizations that choose flopping over well-considered strategic intention are likely to end up as lunch.
In the midst of what at the time seemed to be a particularly turbulent era, Business Week once posed a provocative question on its cover: “Is Strategic Planning Dead?” Time has proven the answer is no. Indeed, it’s when situations have become most volatile that having your hands around a solid plan becomes essential. An effective strategic plan will maintain an organization and its value advantage as long as the plan is thoughtfully developed and effectively implemented.
Dan Beckham is the president of The Beckham Co., a strategic consulting firm based in Bluffton, S.C. He is a regular contributor to H&HN Daily.