Part 1: Developing Your Strategic Plan
Part I of a series on strategic planning offers key pointers on developing a strategic plan that will help you accomplish and even exceed your practice goals.
By: Bruce Maller, President and CEO, BSM Consulting™
Health care is in a constant state of flux. Reimbursement and patient delivery systems, emerging technology, and competitive influences continually create new challenges for health care providers. The process of developing a business plan can bring clarity and objectivity to assessing the impact of these and other market dynamics. At the same time, the business planning process will provide a greater assurance of more efficient utilization of a practice’s human and capital resources. Ultimately, the process will bring order, discipline, and focus to practice stakeholders, increasing the likelihood of meeting or exceeding practice goals.
The Process
Developing a long-term business or strategic plan requires examining and evaluating options for the future of your practice. The resulting document can be contrasted with an operating or marketing plan, which focuses on near term (i.e. one year) objectives instead of long-term goals. Although the plans will differ in content, there should be linkage between the plans. In other words, short-term initiatives should relate in some way to assisting the practice in fulfilling its vision and meeting its longer-term goals.
The strategic plan should address the following questions:
Answering these questions will assist you in developing an awareness of the long-range implications of short-term events or emerging trends. This is the essence of thinking strategically. Most practices have a tendency to think too tactically and often lack perspective on how short-term issues or opportunities fit within the context of the long-term view. Learning to think and manage strategically requires an understanding and appreciation for the strategic planning process. Successful practices develop a “state of mind” characterized by continually evaluating events in terms of their long-range implications.
Some practices choose to make strategic planning an annual event. This can be useful since it ensures a certain amount of focus and discipline around the process. However, having a “designated” time may not be responsive enough to changes your practice may encounter. I tend to favor the annual event concept supplemented by periodic review sessions that focus on environmental or practice changes that may affect your practice strategy.
In order to think strategically, one must be able to separate from the emotional aspects of the present. To accomplish this objective, a series of preparatory or planning tasks are suggested.
Defining the Practice's Mission
Defining the mission of your practice involves:
Completion of these tasks should result in an action plan that will serve as a roadmap for the practice.
For many practices, defining your mission statement is often seen as an unnecessary or trivial task. However, if done properly, a well-designed mission statement can be an effective tool to assist in dealing with daily operational issues (see example). For example, a colleague has been acting in an inappropriate manner with a key referral source, or you have noticed that when calling the practice staff will place you on hold without asking if you would mind being placed on hold. Your mission statement can serve as a reminder to all stakeholders that these behaviors cannot be tolerated.
The process of developing a mission statement should not take untold days or weeks of deliberation or long unproductive meetings with partners or consultants. Whether you’re in solo practice or part of a group, honestly assess and answer these two questions:
Assessing Environmental Factors and Competitors
Environmental factors, both internal and external to your practice, will dictate whether what you hope to accomplish is feasible. A typical environmental assessment model focuses on market competition and a thorough practice analysis. The resulting data will allow you to evaluate strategic options and guide you in a specific strategic direction.
Market/Competitive Assessment:
Develop Your Strategy
Having completed your market competitive analysis and practice assessment, most major issues should be clear, which means you are now ready to identify or refine major strategy alternatives. You should now consider several questions:
An Exemplary Mission Statement
Our Mission: Our mission is to provide compassionate and personalized care to our patients while creating an environment that motivates and satisfies our employees and stimulates and rewards our physicians while ensuring financial stability for all stakeholders.
Our Patients: We will strive to consistently meet or exceed the service and patient care expectations of our patients. We will do so by investing in staff education and new treatment modalities. We will maintain a comfortable, warm, and pleasing environment for our patients. We will strive to be available and accessible and to ensure we provide an appropriate amount of time for each patient.
Our Employees: We will invest in the continuing personal and professional development of staff members. We will provide them the tools necessary to most effectively and efficiently perform their jobs while reinforcing the basic tenet of providing customer service excellence. We will reward our employees with above average compensation packages.
Our Services: We will strive to offer state-of-the-art services through our practice and our referral network of providers. In addition, we will ensure the most compassionate and convenient care setting for our patients.
Practice Financial Health: We will plan and invest wisely in the future of our practice. We will diversify our service lines and invest in new technology. We will do so in a conservative manner. We will put in place financial controls and benchmark our operating results internally and with our peer group while striving to provide an above average return to the shareholders.
By: Bruce Maller, President and CEO, BSM Consulting™
Health care is in a constant state of flux. Reimbursement and patient delivery systems, emerging technology, and competitive influences continually create new challenges for health care providers. The process of developing a business plan can bring clarity and objectivity to assessing the impact of these and other market dynamics. At the same time, the business planning process will provide a greater assurance of more efficient utilization of a practice’s human and capital resources. Ultimately, the process will bring order, discipline, and focus to practice stakeholders, increasing the likelihood of meeting or exceeding practice goals.
The Process
Developing a long-term business or strategic plan requires examining and evaluating options for the future of your practice. The resulting document can be contrasted with an operating or marketing plan, which focuses on near term (i.e. one year) objectives instead of long-term goals. Although the plans will differ in content, there should be linkage between the plans. In other words, short-term initiatives should relate in some way to assisting the practice in fulfilling its vision and meeting its longer-term goals.
The strategic plan should address the following questions:
- What do I (we) want the practice to be like in a few years?
- What types of products or services do we want to emphasize?
- How many and what mix of providers do we envision in the future?
- What environmental changes are occurring that may affect the practice in the future?
- What things need to be done now (i.e. skills acquisition, facility enhancement, staff development, etc.) in order to be successful in the coming years?
Answering these questions will assist you in developing an awareness of the long-range implications of short-term events or emerging trends. This is the essence of thinking strategically. Most practices have a tendency to think too tactically and often lack perspective on how short-term issues or opportunities fit within the context of the long-term view. Learning to think and manage strategically requires an understanding and appreciation for the strategic planning process. Successful practices develop a “state of mind” characterized by continually evaluating events in terms of their long-range implications.
Some practices choose to make strategic planning an annual event. This can be useful since it ensures a certain amount of focus and discipline around the process. However, having a “designated” time may not be responsive enough to changes your practice may encounter. I tend to favor the annual event concept supplemented by periodic review sessions that focus on environmental or practice changes that may affect your practice strategy.
In order to think strategically, one must be able to separate from the emotional aspects of the present. To accomplish this objective, a series of preparatory or planning tasks are suggested.
Defining the Practice's Mission
Defining the mission of your practice involves:
- Completing a competitive analysis for your market.
- Completing an assessment of your current environment.
- Completing an assessment of the financial health of your practice.
- Preparation of a SWOT (strengths, weaknesses, opportunities, and threats) analysis.
- A translation of your mission statement into specific long-term goals and short-term performance objectives.
- Identification of critical success factors.
- Development and/or refinement of your strategy.
Completion of these tasks should result in an action plan that will serve as a roadmap for the practice.
For many practices, defining your mission statement is often seen as an unnecessary or trivial task. However, if done properly, a well-designed mission statement can be an effective tool to assist in dealing with daily operational issues (see example). For example, a colleague has been acting in an inappropriate manner with a key referral source, or you have noticed that when calling the practice staff will place you on hold without asking if you would mind being placed on hold. Your mission statement can serve as a reminder to all stakeholders that these behaviors cannot be tolerated.
The process of developing a mission statement should not take untold days or weeks of deliberation or long unproductive meetings with partners or consultants. Whether you’re in solo practice or part of a group, honestly assess and answer these two questions:
- What are the reasons we are in practice?
- What are our professional and personal goals and priorities?
Assessing Environmental Factors and Competitors
Environmental factors, both internal and external to your practice, will dictate whether what you hope to accomplish is feasible. A typical environmental assessment model focuses on market competition and a thorough practice analysis. The resulting data will allow you to evaluate strategic options and guide you in a specific strategic direction.
Market/Competitive Assessment:
- What are the demographic characteristics of the market?
- What is your market share for your key service lines?
- Who are your competitors?
- What is their market share?
- What market strategies do they employ?
- What do you perceive to be their strengths and weaknesses?
- How are managed care trends affecting service delivery?
- What are our strengths and weaknesses? (See example below.)
- What do we perceive to be potential opportunities and threats for the practice?
- What is the state of our present financial health?
- Are we practicing in an efficient and effective manner?
- How do employees feel about their work environment?
- Does our physical plant meet our current/future needs
- How do patients feel about their experience with the practice?
Develop Your Strategy
Having completed your market competitive analysis and practice assessment, most major issues should be clear, which means you are now ready to identify or refine major strategy alternatives. You should now consider several questions:
- Is your present strategy still appropriate given the new fact pattern?
- What changes need to be considered to your strategy in order to deal most effectively with external threats and internal weaknesses?
- What opportunities can be pursued to improve the competitive position of the practice?
An Exemplary Mission Statement
Our Mission: Our mission is to provide compassionate and personalized care to our patients while creating an environment that motivates and satisfies our employees and stimulates and rewards our physicians while ensuring financial stability for all stakeholders.
Our Patients: We will strive to consistently meet or exceed the service and patient care expectations of our patients. We will do so by investing in staff education and new treatment modalities. We will maintain a comfortable, warm, and pleasing environment for our patients. We will strive to be available and accessible and to ensure we provide an appropriate amount of time for each patient.
Our Employees: We will invest in the continuing personal and professional development of staff members. We will provide them the tools necessary to most effectively and efficiently perform their jobs while reinforcing the basic tenet of providing customer service excellence. We will reward our employees with above average compensation packages.
Our Services: We will strive to offer state-of-the-art services through our practice and our referral network of providers. In addition, we will ensure the most compassionate and convenient care setting for our patients.
Practice Financial Health: We will plan and invest wisely in the future of our practice. We will diversify our service lines and invest in new technology. We will do so in a conservative manner. We will put in place financial controls and benchmark our operating results internally and with our peer group while striving to provide an above average return to the shareholders.
