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©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…

!

About CFAR: Readying Organizations for the Challenges of the 21st Century

Engage Act Lead ! !


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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


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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


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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.


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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


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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





"! Determine plan for

engaging the

Board

Steering

Committee

Deliver

plan to

Board

Strategic Options


"! Administer



Develop Scenarios


#!Design

Sept. Board

Retreat #! Develop


Phase One: Data Gathering & Discovery


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August July September

Strategic Options


"! Administer



Develop Scenarios


#!Design

Sept. Board

Retreat #! Develop


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




"! Determine

plan for

engaging the

Board

Phase Two: Creating the Strategy


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Deliver

plan to

Board

Craft updated strategic plan

Dec Oct/ Nov

Steering

Committee &

Management

Team

Phase Three: Finalizing and Enacting the Strategy


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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.


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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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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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