www.cfar.com • Philadelphia 215.320.3200 • Boston 617.576.1166
©CFAR 2013
Propulsion: Moving from Strategy to Action Quickly
Lynn Oppenheim, PhD CFAR October 25, 2013
Carolinas Society for Healthcare Strategy and Market Development
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CFAR is a private management consulting firm that helps leaders create organizations in which talent and innovation flow freely across the enterprise—people own the changes they need to make, and behavior is aligned with strategy.
CFAR was spun off from the Wharton School in 1987 with academic roots in business and the social sciences.
Our clients are mission-driven organizations—including universities, foundations, health and hospital systems, academic medical centers, family businesses, and Fortune 500 companies.
We partner with our clients to understand what is getting in the way of their success and provide tools, resources, facilitation, ideas, and insights that improve outcomes and performance.
We help our clients…
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About CFAR: Readying Organizations for the Challenges of the 21st Century
Engage Act Lead ! !
Carolinas Society for Healthcare Strategy and Market Development
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We will focus on three aspects of strategic planning.
Planning at Pace
Engagement as a Tool
Bringing Networks to the Center
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Why? The pace of change is accelerating. How? Engagement in strategy readies the organization for action. Who? Authentic participation varies by role and purpose, and reaches outside the bounds of our organization. What? A plan that you have already begun to implement.
Propulsion: Moving from Strategy to Action Quickly
Carolinas Society for Healthcare Strategy and Market Development
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Why “Propulsion”? The Changing Nature of Change
Episodic Change
Objective Control Change
Strategy
Buffer and protect operations by building
redundancies, boundaries, and slack
resources
Disruptive Change
Objective Prepare for Change
Strategy
Build resiliency by planning for
contingencies and assuring a capacity
for recovery and renewal
Source: McCann, J.E. (2004, March). Organizational effectiveness: Changing concepts for changing environments. Human Resources Planning Journal, 42-50.
Continuous Change
Objective Embrace Change
Strategy
Build agility by opening the organization,
removing boundaries and barriers to
change
Carolinas Society for Healthcare Strategy and Market Development
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Why Planning Matters: Organizational Postures Toward Change
Source: American Management Association/Human Resources Institute (AMA/HRI), (2006’). Agility and resiliency in the face of continuous change: Report of a global study of current trends and future possibilities 2006 – 2016. New York: American Management Association.
11%
27%
16%
22%
23%
20%
46%
13%
13%
7%
0% 10% 20% 30% 40% 50%
We induce change and force others to react
We anticipate and plan for change before it happens
We are the first to react once change occurs
We first watch how others react, then react
We are not fast or effective in reacting
Percent
Higher Performers
Lower Performers
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The plan is not the purpose.
It is the planning process that propels us forward.
With the fast pace of change, we need to move from strategy to action quickly.
Engagement in the development of strategy readies the organization to implement quickly.
Consider Rita McGrath’s view that we need a good enough strategy quickly. Rita Gunther McGrath, “The End of Competitive Advantage”.
Harvard Business Review Press, 2013
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Leading Leaders: Strategy When Every Leader is a Volunteer
The challenge is to align the interests of the top people when every one of them “volunteers” their talents and energies to your organization.
Carolinas Society for Healthcare Strategy and Market Development
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Steering committee
Core group
Board
Participation must be authentic,
And there are many ways in which to participate . . .
Who Participates and How?
Other stakeholders
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©CFAR 2009 • 090402-C19-9641
Regional Health System Proposed Timeline & Process for Updating the Strategic Plan
Key Meetings
Overall Process Outline
April May June August July September
Deliver
plan to
Board
Craft updated strategic plan
Dec Oct/ Nov
Strategic Options
"! CFAR to develop survey
"! Administer
survey "! Analyze results "! Opportunity to
engage stakeholders throughout RHS
Steering
Committee
& Mgmt
Team
Develop Scenarios
#! Review survey results
#!Design
Sept. Board
Retreat #! Develop
communication strategy
Steering
Committee Board
Meeting "! Work with
Strategic Options results
"! Work with scenarios
"! Provide counsel
"! Conduct
interviews Research financials
"! Process and analyze research and interview data to develop current state of
the business
Board Meetings—Engage Board with the current state of the business, Strategic Options, (and case as appropriate)
Phase One: Data Gathering & Discovery
"! Prepare strategy "! RHS updates
current strategic plan
"! Review interview themes & current state
"! Determine
plan for
engaging the
Board
Steering
Committee
Phase Two: Creating the Strategy Phase Three: Finalizing and Enacting the Strategy
Carolinas Society for Healthcare Strategy and Market Development
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Regional Health System Proposed Timeline & Process for Updating the Strategic Plan
Key Meetings
Overall Process Outline
April May June
"! Conduct interviews
Research financials
"! Process and analyze research and interview data to develop current state
of the business
Board Meetings—Engage Board with the current state of the business, Strategic Options, (and case as appropriate)
"! Prepare strategy "! RHS updates
current strategic plan
"! Review interview themes & current state
"! Determine plan for
engaging the
Board
Steering
Committee
Deliver
plan to
Board
Strategic Options
"! CFAR to develop survey
"! Administer
survey "! Analyze results "! Opportunity to
engage stakeholders throughout RHS
Develop Scenarios
#! Review survey results
#!Design
Sept. Board
Retreat #! Develop
communication strategy
Phase One: Data Gathering & Discovery
Carolinas Society for Healthcare Strategy and Market Development
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Regional Health System Proposed Timeline & Process for Updating the Strategic Plan
August July September
Strategic Options
"! CFAR to develop survey
"! Administer
survey "! Analyze results "! Opportunity to
engage stakeholders throughout RHS
Develop Scenarios
#! Review survey results
#!Design
Sept. Board
Retreat #! Develop
communication strategy
Steering
Committee Board
Meeting "! Work with
Strategic Options results
"! Work with scenarios
"! Provide counsel
Board Meetings—Engage Board with the current state of the business, Strategic Options, (and case as appropriate)
"! Conduct
interviews Research financials
"! Process and analyze research and interview data to develop current state of
the business
"! Prepare strategy "! RHS updates
current strategic plan
"! Review interview themes & current state
"! Determine
plan for
engaging the
Board
Phase Two: Creating the Strategy
Carolinas Society for Healthcare Strategy and Market Development
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Regional Health System Proposed Timeline & Process for Updating the Strategic Plan
Deliver
plan to
Board
Craft updated strategic plan
Dec Oct/ Nov
Steering
Committee &
Management
Team
Phase Three: Finalizing and Enacting the Strategy
Carolinas Society for Healthcare Strategy and Market Development
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Part of Engagement is to Explore Reefs and Riptides
•! Every strategy process faces Reefs and Riptides—hidden assumptions and interests that can create obstacles to performance.
•! You can surface the underlying assumptions that drive differences in strategic choices.
•! You can use a form of crowdsourcing to learn a lot quickly.
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0%
36% 36%
18%
0% 3%
12%
18%
55%
9%
0%
27% 29%
22%
5%
Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree
Board Hospital Leadership/Administration Physicians
You can harness the wisdom of crowds—if you ask the right questions.
Tiered health insurance products will make us less competitive in the markets we serve.
Source: CFAR Strategic Options Survey and Stakeholder Interviews
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Take a Look at the Healthcare Ecology
Capital Markets
Research Pharma. labs
Research institutes and Centers
Academic medical centers
Foundations
RWJF Pew
Quality Improvement Organizations
IHI Leapfrog Group
Associations
AHA
CHA
AMA
Clinical Information Services
Service Suppliers
Care managers EMR/EHR
Disease management
Religious Institutions
Education Health care
Social services
ACCB
Government
Public health agencies
State gov. Local gov.
Federal gov.
CDC
Practitioners
PCPs Specialists
PAs
Nurses
Other care
providers Genetic counselors
CAM
Product Suppliers Pharmaceutical & biotechnology
companies Medical devices
Technology
Managed care/insurers
Payers
Employers Medicare/ Medicaid Other
agencies
Long-term care Health care facilities
Provider organizations
Acute-care hospitals
Specialty hospitals
Health Care Providers
Post-acute care
Allied health schools
Medical schools
Genetic counseling
schools Education
Public Health schools
Communities Patients
Families Clinics Schools Regulatory bodies
Joint Commission
Specialty boards
NCQA
Regulators
Patient and Community
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Identify two to three stakeholders who were previously peripheral, but are now at the center of your strategy.
These are organizations whose actions are critical to the success of your strategy.
In groups of two to three…
You’ll have a chance to share some of your observations with the full group.
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Deliver clinical care across
the continuum
Pursue the Triple Aim
Contribute to training and
research
Meet the needs of our community
Our network and our partners affect our ability to live into our missions. For example, they shape our ability to…
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Organizations face considerable challenges in making alliances and collaborative partnerships work.
30 – 70% of alliances fail, meaning they:
•! Do not meet the goals of their parent companies
•! Do not deliver on promised operational or strategic benefits
50% of alliances terminate
But forming alliances is far from easy.
Prashant Kale and Harbir Singh, Managing Strategic Alliances: What Do We Know Now and Where Do We Go From Here? Academy of Management Perspectives, 2009
Organizations need to form a greater number of alliances than before, and even rely on them as a way to enhance competitiveness and growth.
Carolinas Society for Healthcare Strategy and Market Development
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As you choose strategic partners, you want to anticipate their interests—and surface them.
Use interests to explore the value that you can create for yourself and for your partners.
$! Positions
$! Issues
$! Interests
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Hospital CEO
HPM Case Study: Interest Analysis as a Tool to Support Alliances
Three CEOs of three legally and structurally separate healthcare entities have committed to implementing a virtually integrated organization with a shared strategic plan.
Hospital system
Medical school
Physician group
Dean/CEO
Physician Group CEO
Highly competitive market
State budget is in shambles
The Environment…
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Interest analysis can lead to creative solutions.
Issue Priority My Interests What I believe are the interests of
Shared Interest Conflicting Interests
Partner #1
Partner #2
Specific areas where agreement about how to move forward is necessary. Example: Strengthen Cardiovascular Service Line
Assign each issue a priority # (1 is highest priority, 2 is second highest, etc.)
What do we need to feel comfortable moving forward with a potential partner? Be as specific as possible—no generalities.
E.g. Focus: What you are working toward?
E.g. Focus: How to achieve what you are working toward.
1 Creating centers/joint ventures
Provide better care for the patients you serve
Who contributes capital, and under what conditions?
2 Recruiting and retaining physicians
Attract and retain the best physicians to make the hospital more competitive
The physician recruitment strategy. Who is involved and how?
3 Supporting the academic mission
Everyone sees the value in allocating more money to support the academic mission
What is the fair balance of power and authority to address entity & system-wide needs?
4 Working with chairs Encourage the chairs to align their decision making with the system’s interests
What is the role of the hospital, school, and physician practice in making this possible?
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What are the issues critical to the alliance?
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What issues have highest priority for you? And which have high priority for partners?
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What are your interests?
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Who are the possible partners and what do you believe are their interests?
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HPM Case: Sample Interests Output
Carolinas Society for Healthcare Strategy and Market Development
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HPM Case: Sample Interests Output
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Interest Analysis Clarifies Interests— and Expectations
•! You’ll have better success identifying and negotiating with potential partners by more clearly and systematically thinking about your own interests, and fully understanding each others’ interests.
•! If we define trust as “tested expectations,” then clarifying interests builds a foundation of trust.
•! Exploring each others’ interests allows you to make good tradeoffs and discover options for agreement in terms of whether or how you go forward in a collaborative relationship.
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Strategic planning for the future will require us to build resilient organizations.
To accelerate our reactions to turbulence and disruptive changes.
By engaging people through authentic participation.
Including our network as well as ourselves.
Resulting in a plan you are ready to implement.
So that you can propel yourselves forward, moving from strategy to action quickly.
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It’s a great time to do strategic planning! Enjoy the ride.
Peter Vail and Greg Shea