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Strategic Strategic ManagementManagement
Prof E. B. Rillon
BG AFP (Ret)CPH 2011
ObjectivesObjectives After the session, participants will be able to;After the session, participants will be able to;
1.1. Provide a rationale for the importance of Provide a rationale for the importance of strategic management in healthcare strategic management in healthcare organizations.organizations.
2.2. Explain the concepts of strategic management , Explain the concepts of strategic management , strategic planning, strategic issues and strategic planning, strategic issues and concerns, strategy.concerns, strategy.
3.3. Discuss the strategic mgt/planning process Discuss the strategic mgt/planning process (Ginter et al.) (Ginter et al.)
4.4. Analyze strategic issues both external and Analyze strategic issues both external and internal environment.internal environment.
5.5. Understand how directional strategies are Understand how directional strategies are formulated.formulated.
White Water ChangeWhite Water Change
Definition of TermsDefinition of Terms Strategic ManagementStrategic Management
Management process with the objective of Management process with the objective of making the organization compatible with and making the organization compatible with and successful in its external environment. successful in its external environment. (Duncan, Ginter & Swayne.)(Duncan, Ginter & Swayne.)
Attempts to achieve a productive and Attempts to achieve a productive and creative fit between the organization’s creative fit between the organization’s external environment and its internal external environment and its internal environment.environment.
Definition of Terms cont.Definition of Terms cont. Strategic PlanningStrategic Planning
Is the set of processes used in an organization to Is the set of processes used in an organization to understand the situation and develop decision understand the situation and develop decision making guidelines (the strategy) for the making guidelines (the strategy) for the organization.organization.
Strategy Strategy A pattern in a stream of decisions positioning an A pattern in a stream of decisions positioning an
organization within its environment and resulting in organization within its environment and resulting in the “behavior” of the organization. It is a future-the “behavior” of the organization. It is a future-oriented plan that provides decisions-making oriented plan that provides decisions-making guidelines for managers.guidelines for managers.
Definition of Terms cont.Definition of Terms cont.
Key Performance/Result Area (KRA)Key Performance/Result Area (KRA) Identifies activities that must be accomplished to Identifies activities that must be accomplished to
achieve the mission e.g. adequacy in HR.achieve the mission e.g. adequacy in HR. Strategic IssuesStrategic Issues
Fundamental policy questions or critical Fundamental policy questions or critical challenges that affect an organization's challenges that affect an organization's mandates, missions and values, products, mandates, missions and values, products, clients, cost, organization and managementclients, cost, organization and management
4 Major Stages of 4 Major Stages of Strategic PlanningStrategic Planning
1.1. Analysis of the situationAnalysis of the situation External environment (opportunities External environment (opportunities
and threats)and threats) Internal Environment ( Strength and Internal Environment ( Strength and
weaknesses)weaknesses)2. Strategy Formulation2. Strategy Formulation3. Strategy Implementation3. Strategy Implementation4. Strategic control and Evaluation4. Strategic control and Evaluation
Planning JourneyPlanning Journey
Where Are We NowWhere Are We Now
How Shall We Get There?How Shall We Get There? How Do We Know How Do We Know That That We Are There?We Are There?
Where Do We Want To Go?Where Do We Want To Go?
Elements of Strategic Issue Elements of Strategic Issue Statement (Bryson: 1995)Statement (Bryson: 1995)
Describe succinctlyDescribe succinctly Be framed as question that the org. can do Be framed as question that the org. can do
something about it.something about it. Factors that make the issue a challenge Factors that make the issue a challenge
be listedbe listed What in the mandates, mission, values, What in the mandates, mission, values,
SWOT make it strategicSWOT make it strategic Statement of the consequences of failing Statement of the consequences of failing
to address the issue.to address the issue.
Examples of Strategic Issues
Issue Strategic Issue
Inflation How can we caution the effect of inflation in hospital organization?Failure to address the issue will lead increased cost of operations
External Environmental ScanExternal Environmental Scan1. External Environmental Opportunities/Threats1. External Environmental Opportunities/Threats
List of Issues/TrendsList of Issues/Trends EvidenceEvidence(Provide information (Provide information
regarding existence of regarding existence of issue/trend)issue/trend)
Impact to Impact to OrganizationOrganization
(1-10)(1-10)
Probability of Probability of continuing in next continuing in next
3-5 years 3-5 years (1-10) (1-10)
Internal Environment FrameworkInternal Environment Framework
Internal Environmental ScanInternal Environmental Scan3. Internal Environment Strengths/Weaknesses3. Internal Environment Strengths/Weaknesses
SubsystemSubsystem Issues/Issues/StrengthsStrengths WeaknessesWeaknesses
EvidenceEvidence Impact to Impact to OrganizationOrganization
(1-10)(1-10)
Probability of Probability of continuing in continuing in
next 3-5 years next 3-5 years (1-10) (1-10)
1.Organizational 1.Organizational CultureCulture
2. General2. GeneralManagement Management
3. Admin3. Admin
4. Marketing4. Marketing
5. Clinical5. Clinical
6. Physical 6. Physical FacilitiesFacilities
7. Financial7. Financial
8. Information8. Information
Stakeholder AnalysisStakeholder Analysis
Strat Mgt Process Con’tStrat Mgt Process Con’t
Directional
Strategy Types and RolesStrategy Types and RolesStrategyStrategy
DirectionalDirectional
AdaptiveAdaptive
Market EntryMarket Entry
PositioningPositioning
OperationalOperational
RoleRoleWho we are? Who we are?
What should we be?What should we be?
How the organization will expand, How the organization will expand, contract or stabilize operations.contract or stabilize operations.
Provide methods for access to the Provide methods for access to the market. Not necessary for market. Not necessary for contraction strategies.contraction strategies.
Positioning the organizationPositioning the organizationvis-à-vis other organizations within vis-à-vis other organizations within a marketa market
Developed for the functional areas Developed for the functional areas (marketing, finance, information (marketing, finance, information system, HRM, etc.)system, HRM, etc.)
Vision: a compelling, conceptual Vision: a compelling, conceptual image of the desired futureimage of the desired futureComponentsComponents1.1. A Clear Hope For the A Clear Hope For the
FutureFuture
2.2. Challenging and Challenging and Excellence ConcernsExcellence Concerns
3.3. Inspirational and Inspirational and EmotionalEmotional
4.4. Empowers Employees Empowers Employees First and Clients First and Clients SecondSecond
5.5. Prepares for the FuturePrepares for the Future6. Memorable and 6. Memorable and
Provides GuidanceProvides Guidance
DescriptionsDescriptions1. A future where communities, health agencies, 1. A future where communities, health agencies, and private sector cooperate to increase healthy and private sector cooperate to increase healthy life for all.life for all.2. Strive for excellence, display initiative and 2. Strive for excellence, display initiative and demonstrate achievement.demonstrate achievement.3. Forging alliances with public and private 3. Forging alliances with public and private sectors to ensure timely, cost-effective public sectors to ensure timely, cost-effective public health interventions.health interventions.4. Value employees.4. Value employees.
5. Catalyst for progress5. Catalyst for progress6. Memorable terms – catalyst, public health 6. Memorable terms – catalyst, public health leader, innovation, core values, etc.leader, innovation, core values, etc.
Vision Statement Vision Statement ChecklistChecklist
Yes No
Does the Vision statement provide a clear picture of the organization’s ideal future with respect to quality management?
Is the vision statement inspiring and challenging?
Is the vision statement brief enough to be memorable?
ISDH Health Vision ISDH Health Vision StatementStatement
The Indiana State Dept. of Health is The Indiana State Dept. of Health is committed to act as a catalyst for committed to act as a catalyst for progress that will resolve in healthier progress that will resolve in healthier people in a healthful environment.people in a healthful environment.
Mission: the reason for beingMission: the reason for being
Components Components 1.1. Target customers and marketsTarget customers and markets2.2. Indicates principal services deliveredIndicates principal services delivered3.3. Geographical areas which the organization Geographical areas which the organization
concentratesconcentrates4.4. Identifies organization philosophyIdentifies organization philosophy5.5. Confirms organizations preferred self imageConfirms organizations preferred self image
Mission Statement GuideMission Statement GuideWho:Who: We at VMMC are committed to provideWe at VMMC are committed to provideWhat:What: Comprehensive, quality, tertiary level of health care Comprehensive, quality, tertiary level of health care
servicesservices
To Whom:To Whom: To our veterans and their authorized dependentsTo our veterans and their authorized dependentsWhere:Where: All over the countryAll over the countryHow:How: To improve the quality of care given, we embark in the To improve the quality of care given, we embark in the
provision of continuous education and training to all our staff provision of continuous education and training to all our staff and would be providers of care and research both clinical and and would be providers of care and research both clinical and operational.operational.We strive to provide quality of life by giving our clients a We strive to provide quality of life by giving our clients a variety of supportive services to meet their physical, variety of supportive services to meet their physical, psychological and spiritual needs.psychological and spiritual needs.We also contribute to the promotion of health and welfare to We also contribute to the promotion of health and welfare to the community through periodic outreach programs.the community through periodic outreach programs.
Affirmation Affirmation of Value:of Value:
We are a caring community that values integrity and dignity of We are a caring community that values integrity and dignity of those who are served as well as those who serve.those who are served as well as those who serve.
Mission Statement Checklist
YES NO
Does it clearly state what you do and who you serve, that is, what business you are in?
Does it describe your setting (e.g. urban/rural/teaching/non-teaching)?
Is it broad enough so that all staff in the organization ca see how they contribute?
Will it make sense to average citizens of they see it on the hospital/clinic wall?
Will you be embarrassed if you see it on the front page of the newspaper?
Hierarchy of ObjectivesHierarchy of Objectives
Goals:-long term, positive statements that express an idealized vision of
a quality of life that is almost universally accepted. Purposely stated in a general and abstract form so that they remain constant throughout rapid social change.
EG
Strategic ConcernHow can we continue giving quality and affordable healthcare at
RMC in the midst of rising cost of operations?
Goal: Strengthen financial viability.
Hierarchy of ObjectivesHierarchy of Objectives
Objective:-specific, measurable, accurate, realistic, time bound statement
of how the goal can be achieved.
Objective 1. After 2 years, increase income by 100% from 1M to 2M.
(Can be policy/purpose, service/result; resource; implementation)
Objective 2. Establish streamlined billing and collection system after 2 years.
Activities:-demonstrate how project will be accomplished.
Strategic Implementation: Strategic Implementation: Operational StrategiesOperational Strategies
Deals with putting strategies to workDeals with putting strategies to workRequires coordinated efforts of the Requires coordinated efforts of the Organizational Organizational
FunctionsFunctions of: of: • • MarketingMarketing • • Information SystemsInformation Systems • • Human ResourcesHuman Resources • • Finance, andFinance, andOrganization-wide Efforts to Attain VisionsOrganization-wide Efforts to Attain Visions • • Organization CultureOrganization Culture • • Organization StructureOrganization Structure • • Facilities and EquipmentFacilities and Equipment • • Ethics and Social ResponsibilityEthics and Social Responsibility
Strategic ControlStrategic Control
A system to support managers in A system to support managers in accessing how well the organization’s accessing how well the organization’s strategy compare to its progress and in strategy compare to its progress and in the accomplishment of goals and how the accomplishment of goals and how well discrepancies are detected. It well discrepancies are detected. It monitors, evaluates, and adjusts the monitors, evaluates, and adjusts the strategic implementation, the strategy strategic implementation, the strategy and the situational analysis.and the situational analysis.
Fundamental Elements of Strategic Fundamental Elements of Strategic ControlControl
1.1. Setting objectives and pre-determined Setting objectives and pre-determined standardsstandards
2.2. Measuring performanceMeasuring performance3.3. Comparing the objectives and Comparing the objectives and
standards with actual performancestandards with actual performance4.4. Determining the reasons for deviationsDetermining the reasons for deviations5.5. Taking corrective actions if necessaryTaking corrective actions if necessary
Synergy FormulationSynergy FormulationStrategic Issues
Strategic Goals
Adaptive Strategy
Market-Entry Strategies
Positioning Strategies
Implementation Strategies
Control Strategies
1. Lack of competent and committed personnel
Proper training and proper recruitment
Recruitment standards and continuous training
Intensive recruitment efforts - nationwide
Added fringe benefits
Human Resource Performance Evaluation
2.
3.
4.
6.
STRATEGIC SCORE CARDGoals &
ObjectivesKRA Indicator Base
lineYear
(2010)Year
(2011)Year
(2012)Activity Milestone
Goal #1. Achieve financial viability by 2012 (20M)
Increased income
Rate of increase: Annual Income
10M 13M 15M 20M Intensify collectionsIncrease pay clients
Operational PlanningOperational Planning
Problem Tree
Increase of Infectious diseases
Low coverage vaccination
Poor service delivery
Poor motivation Of staff
Poor incentives
Insufficient supplyOf vaccines
Low demand of services
Poor knowledge of the program
Poor promotion
Poor acceptance of program
Afraid of side effects
Decreased confidence in Health Services
Increased demand for curative services
Increased cost for Health Services
Effects:
Core Problem:
Causes:
Objectives Tree
Decrease of Infectious diseases
Increased coverage vaccination
High quality service delivery
Increased motivation of staff
Good workingatmosphere
Adequate supplyOf vaccines
Inc. demand of services
Good knowledge of the program
Increased promotion
Acceptance of program
InformationAbout vaccination effects
Increased confidence in Health Services
Decreased demand for curative services
Decreased cost for Health Services
Ends:
Core Objective:
Means:
PROJECT PLANNING MATRIX 1
Summary of Objectives & Activities
Objectively verifiable indicators
Means/Sources of verification
Assumptions
Overall goal
Project purpose
Results /outputs
1.2.3.
PPM 2Main Activities Specification of
InputsCosts for each activity
1.11.21.32.12.2…
Ghant ChartActivities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
A-1
A-2
A-3
A-4
A-5
Schedule of Activities
No. Activity Indicator Time Frame
Responsibility
HR Needs
Material Needs
Cost Remark
1.1
1.2
1.3
MONITORING AND EVALUATION
Monitoring- An ongoing activity accompanying the process of
implementation of a project
Supervision -Control of the performance of the human
resources during the processCorrective and thus implies trainingRelated to how the human resources
work.
INDICATORS Measures that can be used to help
describe a situation that exists and to measure changes or trends over a period of time. Enables one to assess degree to which project inputs activities, outputs, effects and impacts have been achieved.
Indicators ( con’t) Purpose:
1. analyze/interpret present situation 2. make comparisons
3. measure changes over timeTypes: Input indicators- what is available( what we have). E.g. no of
staff, availability, access.
Process indicators- informs how project is doing.( source: prog. Planning matrix, operational plan. Activities needed
to achieve results are process indicators. E.g. TNA etc. Process indicators allow periodic check if on time.
Types of indicators (con’t)
Output Indicators- describe goods, svcs produced by project activities. E.g. immunization
Outcome/Impact- refer to the overall objective/goal of the project. Measures actual changes in conditions of core problem.
Good Indicator Relevant Valid- sensitive and specific Reliable Easily available
Monitoring TemplateWhat ?
Who
Where
How to collect Often analyze
To monitor (Focus)Is going to monitor?
To get data (source of verification)
tool
OVI
Reports, observationCheck list
Dummy table
Evaluation A punctual activity at any time of the
planning or implementing or project. Related with the structure/input, process,
and output/outcome.
EVALUATION
Input- staff, logistics required Process- how activities are carried out
within time allowed, resources specified at the volume and quality agreed upon
Output- objectives attained? achievement of obj. reduced
constraints to program
Evaluation is a critical analysis of the project that leads to certain conclusions about the program.
lagging behind inefficient ineffective proceeding as planned doubtful impact
Based on conclusion it leads to recommendations or proposal such as:
discontinue rectify difficulties and proceed give it one more try replicate in other areas can still be improved
Good Ethical and Social Ethical and Social Guiding Principles of HCOGuiding Principles of HCO
Robert Goldman:Robert Goldman:1. Put patient welfare first.1. Put patient welfare first.2. Avoid unnecessary services/2. Avoid unnecessary services/3. Maintain high standards of honesty and 3. Maintain high standards of honesty and accuracy.accuracy.4. Be accountable to the public.4. Be accountable to the public.
““Patients must come before profits if the hospital Patients must come before profits if the hospital is to profit.”is to profit.”
Thank You!Thank You!