Strategic

Management
Public health department
Medical Faculty Unram
What is strategy?
Competitive moves and approaches to
produce success

A Game Plan to
Run the hospital (group practice, etc)
Strengthen position
Satisfy customers (patients)
Achieve targets
From here to there

Where do we stand
Where do we want to go
Financial outcomes to achieve
Strategic outcomes to achieve
How will we get there
Its not easy


If you have to eat an elephant, you have to
take one bite at a time.*



* Anonymous, South Africa
Five tasks*
1. Develop your vision and mission
2. Set your objectives
3. Plan of action: how to achieve objectives
4. Execute plan
5. Evaluate and adjust


* Richard D. Darwin Inc. 1995
Task 1: vision and mission
The task is to provide ourselves with a sense of
direction for the long term and a sense of
purpose, our reason for existence. Our vision.

Setting us apart from the rest

To provide us with an identity.
Who are we.
What are we.
Where were heading toward.


Vision and Mission
Communicate from the top
Clear, inspiring, challenging and
enthusiastic
Give it substance
An overly broad mission-statement is no guide
for managers at all
What is your department going to contribute?


Leaders


Be good and tell it!
Formulate mission statement?
Not so fast, first a few questions?
Whats our business at this moment?
What business do we (not) want to be?
What do patients and stakeholders want?
Who are our friends and competitors?
Whats happening around us and can we
influence this?

United we stand, divided we fall


Commitment to the organizations long-
term direction makes decisions at all levels
more likely to be in harmony with each
other.
Avoid confusion
A mission statement helps employees to
avoid moving in many directions at once
Confusion about an organization's direction
may result in no effective action at all
Too many plans,
Not clearly described
A lack of priorities
American Red Cross


Our mission is to improve the quality of
human life; to enhance self-reliance and
concern for others; and to help avoid,
repair, and cope with emergencies
Mc Donalds

To offer the fast-food customer food
prepared in the same high quality manner
world-wide, tasty and reasonably priced,
delivered in a consistent, low key dcor
and friendly atmosphere.
The WHO international federation of
oto-rhino-laryngological societies

To take concerted action to address the
problems of hearing loss in every aspect of
society through prevention, remedial action
and research

Hearing for all
X
We will excel in satisfying customers,
shareholders and the communities in which
we operate.

OK, but what is your business?*


*protective medical gloves
Task 2: objectives

Translate mission into concrete
performance targets
Making performance measurable
Challenging managers and employees with
achievable objectives
Financial objectives
Adequate financial reserves as a buffer in a
competitive health care delivery system
Hospital income increase of 12%
Decrease losses in outpatient care with at
least 15%
Increase and diversify for-profit clinics

But


Money has no ideas.*



* Sartre, 1956
Strategic objectives

Patient satisfaction up two points
Consolidate present position on the market
44% elective surgery patients
90% of the diagnostic services for GPs
Enter opportunity-markets
Private practice psychotherapy
Become a leader in specific fields
Micro-surgery (from 20 to 40% regional market)
Psycho-social rehabilitation war veterans
Teaching Hospital
Task 3: How, the plan of action

How to achieve objectives
How to get a competitive advantage
How to defend against threats of
organisations well-being
How to adjust to changing environment


How
Intended strategy: deliberate actions
Unintended strategy: reactions to the unexpected

Capacity to adapt to unanticipated developments
key people leave
new competitors
unexpected bad financial results
high mortality rate for routine patients reaches the press
Its happening in The Netherlands health care. And in your
country?
Elements of strategy today
McDonalds intended actions
Add 700 restaurants yearly
Old and new menu items: healthy salads
Low price specials
Highly selective in granting franchising
Well trained personnel
Equitable wages

McDonalds
Organizational environment
Static all around them
Political image: the US imperialist
Bad, unhealthy food
Waste and environmental threats
All that styrofoam!
All those cows!
Exploitation of young labor; slave wages
Vijverdal
Psychiatric care
Million Euro losses
Too ambitious and idealistic: bad mix
A history accenting innovation and care. Never
mind the money.
Arrogant, somewhat self-satisfied directors
The new liberal --but also strict-- national
economic policy
Insurance company comes calling!
Adapting to new situation
Elements of revised strategy
The financially troubled psychiatric hospital
Vijverdal
Consolidate instead of innovate
Develop the business side
Entire overhaul of accounting system
New management and management philosophy
Doctors responsibility
Less but more productive personnel
A leap towards high ICT standards
Accent strong points: academic research

How to make a strategy
Much depends on the quality of leadership
Understanding the organisation
Understanding the outside world
Managing the fit between them
Strategic leadership
The entrepeneur
Risk-taking, Out on a limb
Vantage point from high above
Contact at ground level
Creative business wise
Radar for opportunities and threats
Thinks in alternatives (contingency plans)
Spider in the web, hosting many flies. (But
knowing well not to eat them!)

A strategic leader



adapts to constant change
Constant change
Market mindedness
New and unpredictable competitors
Technological changes
Patient needs, wants and values
Demographic imperatives
Politics and regulations
Crises
The machine becomes an organism*

The biological analogy
Creating a fit with environment
Unity of the organism and the conflict nature of
organisations



*Morgan, 2004, recommended reading!


Task 4: executing the plan

Making the strategy work as intended

Strategy-supporting policies
Reallocating resources
Best practices
Quality improvement
Reward achievement
Clarity of purpose, process and progress
Task 5: evaluate performance
Events unfold
Better methods are introduced
New managers take over

Hence, constant monitoring is necessary, but also
the necessary adjustments.
Modify strategy
Introduce more realistic objectives
Reallocate resources if needed.
Remember
Its not about perfection, its
about quality
Whats your job?

Assuming you are all potential Directors of
the Board.
See to it that five tasks are performed adequately
Review strategic moves
Officially approve strategic plans
Ensure adequate analysis of plans and ensure
alternative back-ups
Evaluate top-management strategic skills
Monitor and adjust
Recapitulating
A strategic plan
Shows where youre heading
Makes the vision and mission public
Formulates financial and strategic objectives
Maps out short and long range performance
targets
Entails an action plan: who is responsible to do
what

Now


LETS LOOK AT YOUR WORLDS