BALANCEDALANCED SCORECORE ARDARD · Strategy = Balanced Scorecard. Barriers to Strategy ExecutionBarriers to Strategy Execution Only 10% of organizations execute their strategy Barriers

BALANCED SCORECARDBBALANCEDALANCED SSCORECORECCARDARD

Translating Strategy intoAction

By Walter Clark, MD, MSHCM

Translating Strategy intoTranslating Strategy intoActionAction

By Walter Clark, MD, MSHCMBy Walter Clark, MD, MSHCM

38 Years of Survival38 Years of Survival38 Years of Survival

Not Accidental!Not Accidental!

Strong leadershipStrong leadership

Traditional management toolsTraditional management tools

Strong balance sheetStrong balance sheet

Advanced quality programsAdvanced quality programs

Sustained position as a safety netSustained position as a safety netproviderprovider

Responsive & ReactiveResponsive & ReactiveResponsive & Reactive

Legacy of high responsiveness andLegacy of high responsiveness andreactivity to challengesreactivity to challenges

Patients and stakeholders are demandingPatients and stakeholders are demandinggreater levels of and more agility in ourgreater levels of and more agility in ourresponsivenessresponsiveness

Much of our time is spent beingMuch of our time is spent beingresponsive and reactiveresponsive and reactive

The remaining time (much less) is spentThe remaining time (much less) is spentbeing proactive and strategic in ourbeing proactive and strategic in ourperformanceperformance

Reasons For Alarm?Reasons For Alarm?Reasons For Alarm?

Patient approvalPatient approval ratings by thoseratings by thosesurveyedsurveyed droppeddropped substantially insubstantially in 20052005compared tocompared to 20042004 resultsresults

Satisfaction with physicians dropped toSatisfaction with physicians dropped to79.8%79.8% compared tocompared to 86.8%86.8% in 2004in 2004

Satisfaction with health center teamsSatisfaction with health center teamsdropped todropped to 64%64% compared tocompared to 74.2%74.2% inin20042004

Reasons For Alarm?Reasons For Alarm?Reasons For Alarm?

Satisfaction with xSatisfaction with x--ray and lab supportray and lab supportstaff dropped tostaff dropped to 66.3%66.3% compared tocompared to76.8%76.8% in 2004in 2004

Survey respondents indicated that a mereSurvey respondents indicated that a mere65%65% of the time that they wouldof the time that they wouldrecommend to a family member or friendrecommend to a family member or friendto come to a NEON Health Centerto come to a NEON Health Centercompared to merecompared to mere 67%67% in 2004in 2004

Reasons For Alarm?Reasons For Alarm?Reasons For Alarm? MedicaidMedicaid Managed Care enrollment hasManaged Care enrollment has

dropped to 16,174 (8/05) compared todropped to 16,174 (8/05) compared to20,294 (2/03)20,294 (2/03) [[--20%]20%]

UninsuredUninsured users are on target for 26,000users are on target for 26,000for 2005 compared to 18,000 in 2002for 2005 compared to 18,000 in 2002[+44%][+44%]

Federal GrantFederal Grant dollars are shrinking notdollars are shrinking notexpandingexpanding [[--5%]5%]

CostsCosts are increasing at a rate thatare increasing at a rate thatexceeds inflation, mainly due to risingexceeds inflation, mainly due to risinghealth insurance premiumshealth insurance premiums [+8][+8]

The Past versus The PresentThe PastThe Past versusversus The PresentThe Present

NEO

N

NEON

OBSTACLES OBSTACLES

Time for Change?Time for Change?Time for Change? Confluence of factors is forcing theConfluence of factors is forcing the

consideration for new organizationalconsideration for new organizationalcapacity and management vehiclescapacity and management vehicles

Nonprofits struggle to invest inNonprofits struggle to invest inorganizational capacity:organizational capacity:•• Seen as a zeroSeen as a zero--sum gamesum game•• Investment at the expense of directInvestment at the expense of direct

servicesservices

Balanced Scorecard (BSC)Balanced Scorecard (BSC) is ais a changechangevehicle that helps an organization to makevehicle that helps an organization to makestrategicstrategic, focused and efficient, focused and efficientinvestments in organizational capacityinvestments in organizational capacity

Time for Change?Time for Change?Time for Change?

““The survivors of any species are notThe survivors of any species are notnecessarily the strongest. And they arenecessarily the strongest. And they arenot necessarily the most intelligent. Theynot necessarily the most intelligent. Theyare those who are most responsive toare those who are most responsive tochange.change.””

Charles DarwinCharles Darwin

““Adapt or perish, now as ever, is natureAdapt or perish, now as ever, is nature’’ssinexorable imperative.inexorable imperative.””

H.G. WellsH.G. Wells

BSC OriginationBSC OriginationBSC OriginationThe philosophy behind the BSC, asThe philosophy behind the BSC, as

originally preached by Kaplan & Nortonoriginally preached by Kaplan & Nortonand evangelized by many others, is thatand evangelized by many others, is thatthe odds of corporate success can bethe odds of corporate success can beimproved substantially by informing,improved substantially by informing,inspiring, involving, and engaginginspiring, involving, and engagingemployees in the enterprise throughemployees in the enterprise throughexploiting a composite structure thatexploiting a composite structure thatembodies a performance measurementembodies a performance measurementsystem, a strategic management system,system, a strategic management system,and a communication tool, alland a communication tool, all--inin--one.one.

BSC OriginationBSC OriginationBSC Origination

Developing a BSC is:Developing a BSC is:

•• A JourneyA Journey

•• Not a projectNot a project

Value comes from opportunity forValue comes from opportunity forcontinuous selfcontinuous self--inquiry and ininquiry and in--depthdepthanalysisanalysis

BSC CompositeBSC CompositeBSC Composite

PerformancePerformanceMeasurementMeasurementSystemSystem

StrategicStrategicManagementManagementSystemSystem

CommunicationCommunicationToolTool

PerformanceMeasurement

System

StrategicManagement

System

CommunicationTool

PMSPMSPMS Strategic Establishment & Alignment ofProgram Goals & Objectives

ProgramAccomplishments

Planning

BudgetingProgramOfferings

ResourceExpectations

Performance Measurement System(Management by Objectives)

Corrective Actions

PerformanceExpectations

Performance Measurement

StrategicManagement System

StrategicStrategicManagement SystemManagement System

Vision &Strategic Goals

StrategicPlanning

OperationsBudget

ResponsibilityCenter

Activities

Reporting(Actual vs.Planned)

PositiveResults

NegativeResults

FeedbackRevision

RevisionReward

Revision

Communication and Double-LoopLearning Opportunities

External Input

Communication ToolCommunication ToolCommunication Tool

BSC communicatesBSC communicates ‘‘changechange’’ totoemployees in answer to the followingemployees in answer to the followingmeaningful questions:meaningful questions:

•• What do you want me to do?What do you want me to do?

•• How will this change affect me?How will this change affect me?

•• WhatWhat’’s in it for me?s in it for me?

•• What will you do to help me?What will you do to help me?

•• How am I doing?How am I doing?

Communication ToolCommunication ToolCommunication Tool

Communication is the Foodof Success!

BSC PurposeBSC PurposeBSC Purpose

The purpose of a BSC isThe purpose of a BSC is tto shine ao shine abright light on thebright light on the uniqueunique andandperhaps differentiating esseperhaps differentiating essentialntialingredients of successingredients of success for afor a pparticulararticularbusiness.business.

BSC ApplicabilityBSC ApplicabilityBSC Applicability

Appropriate for any size organization

Popularized for For-Profit companies

Very applicable to Not-for-Profits

Appropriate for any size organizationAppropriate for any size organization

Popularized for ForPopularized for For--Profit companiesProfit companies

Very applicable to NotVery applicable to Not--forfor--ProfitsProfits

BSC ConceptBSC ConceptBSC Concept

Alignment of:

• Mission

• Vision

• Values

• Strategy

• Customer & Stakeholder requirements

• Day-to-day work

Alignment of:Alignment of:

•• MissionMission

•• VisionVision

•• ValuesValues

•• StrategyStrategy

•• Customer & Stakeholder requirementsCustomer & Stakeholder requirements

•• DayDay--toto--day workday work

BSC = StrategyBSCBSC == StrategyStrategy

Our Mission is our destination, however far this pathway maytake us.

Our pathway is lit by our Vision by which we seeourselves in relationship to our journey and the future.

We pave our pathway with our Values.

Our BSC will be a navigation tool we useto keep us on the pathway and determinethe speed and distance of our progress.

Our Strategy is the roadmap, ourbest guess, on how we are to take

this journey.

MissionVisionValues

Strategy = Balanced Scorecard

Barriers to Strategy ExecutionBarriers to Strategy ExecutionBarriers to Strategy ExecutionOnly 10% of

organizations executetheir strategy

Barriers to Strategy Execution

Vision People Management Resources

Only 5% ofworkforce

understandsthe strategy

Only 25% ofmanagers

haveincentiveslinked tostrategy

85% ofexecutive teamsspend less than

1 hour per monthdiscussing

strategy

60% oforganizations

don’t linkbudgets to

strategy

BSC Balancing ActBSC Balancing ActBSC Balancing Act

MissionMission withwith MarginMargin

StakeholdersStakeholders’’ WantsWants withwith CustomersCustomers’’WantsWants

CustomersCustomers’’ WantsWants withwith OperationsOperations

OperationsOperations withwith Employee CapacityEmployee Capacity

Employee CapacityEmployee Capacity withwith FinancialsFinancials

LeadingLeading withwith Lagging IndicatorsLagging Indicators

BSC Construct SnapshotBSC Construct SnapshotBSC Construct SnapshotMission

Patients &Stakeholders

FinancialCapacity

Internal Business& ClinicalProcesses

Employee &Organizational

CapacityStrategy

BSC PerspectivesBSC PerspectivesBSC Perspectives

BSC allows an organization to translate itsBSC allows an organization to translate itsstrategy into 4 or more dimensions orstrategy into 4 or more dimensions orperspectivesperspectives

Typically 4 perspectives are employed thatTypically 4 perspectives are employed thatneatly fall into the categories notedneatly fall into the categories notedthroughout this presentationthroughout this presentation

MultiMulti--perspective or multiperspective or multi--dimensionaldimensionalview allows execs to lend sanity toview allows execs to lend sanity toendeavors at stewarding the growth andendeavors at stewarding the growth andstrategic needs of the organizationstrategic needs of the organization

BSC PreviewBSC PreviewBSC Preview

InitiativesTargetsMeasuresObjectives

“To satisfy our patients and stakeholders, at whichbusiness processes must we excel?”

Internal Business Processes


“To achieve our vision, how should we appear toour patients and stakeholders?”

Patients & Stakeholders


“To succeed financially, how do we add value forour patients and stakeholders; controlling costs?”

Financial Capacity


“To achieve our vision, how will we sustain ourability to change and improve?”

Employee & Organizational Capacity

Internal Processes

"Doing the right things..."

Employee &Organization Capacity

"If we have the rightstaff with the right stuff"

Financial Capacity

"And we will keep/getmore business..."

Customers &Stakeholders

"Then the customerswill be delighted..."

Theory Z

BSC Cause & EffectBSC Cause & EffectBSC Cause & Effect

High-Performance BusinessHighHigh--Performance BusinessPerformance Business

Stake-holders

Processes

ResourcesOrganization

Set strategies tosatisfy keystakeholders…

Set strategies tosatisfy keystakeholders…

… by improvingcritical businessprocesses…

… by improvingcritical businessprocesses…

… andaligningresources andorganization.

… andaligningresources andorganization.

Mission Impossible?Mission Impossible?Mission Impossible?

EliminateHealth

Disparities;Viable CHCReduce Health

Disparities;Viable CHC

No Change inHealth

Disparities;Viable CHC

Non-ViableCHC

NEON

BSC Navigation ToolBSC Navigation ToolBSC Navigation Tool

Aimless wanderingAimless wanderingwith the potential forwith the potential for'hit or miss'?'hit or miss'?

Strategic courseStrategic courseadjustments to reachadjustments to reachthe harder targets?the harder targets?

Feeling lucky?Feeling lucky?

How do we steer thisHow do we steer thisship?ship?

NEONNEON

BSC Instrument FlyingBSC Instrument FlyingBSC Instrument Flying

ATTITUDEATTITUDE determinesdeterminesdragdrag

Employee capacityEmployee capacityand abilityand abilitydetermines anddetermines andimpacts ourimpacts our ‘‘attitudeattitudetowards servicetowards service’’

Good attitude makesGood attitude makesfor less drag forfor less drag foremployees andemployees andpatientspatients

SPEED

ALTITUDEATTITUDE

FUEL

COORDINATES


ALTITUDEALTITUDE reducesreducesturbulenceturbulence

Patient satisfactionPatient satisfactiondetermines the heightdetermines the heightof their esteem andof their esteem andappreciation for usappreciation for us

The lower we fly, theThe lower we fly, themore hazards wemore hazards weencounter (i.e.,encounter (i.e.,competing interests)competing interests)

SPEED

ALTITUDEATTITUDE

FUEL

COORDINATES


FUELFUEL is needed to flyis needed to fly

Finances andFinances andresourcesresources fuel ourfuel ourability to remain viableability to remain viable

The more efficient weThe more efficient weare, the farther weare, the farther wecan fly towards ourcan fly towards ourMissionMission

SPEED

ALTITUDEATTITUDE

FUEL

COORDINATES

BSC Instrument FlyingBSC Instrument FlyingBSC Instrument Flying SPEEDSPEED must bemust be

maintained to stay inmaintained to stay inflightflight

Speed of internalSpeed of internalprocessesprocesses isisdetermined bydetermined by howhowwell our crew workswell our crew workstogethertogether

Degree of speed isDegree of speed isproportional to ourproportional to ourdegree of ease anddegree of ease andpreparationpreparation

SPEED

ALTITUDEATTITUDE

FUEL

COORDINATES


COORDINATESCOORDINATES mustmustbe established tobe established toreach a destinationreach a destination

Our MissionOur Missionestablishes where weestablishes where weare headedare headed

Our StrategyOur Strategyprovides theprovides thecoordinates requiredcoordinates requiredin order to minimizein order to minimizeobstacles and barriersobstacles and barriers

SPEED

ALTITUDEATTITUDE

FUEL

COORDINATES

What is NEON Worth?What is NEON Worth?What is NEON Worth?

1.1. Balance sheet Net Assets or FundBalance sheet Net Assets or FundBalance?Balance?

2.2. Net Assets + Additional MarketNet Assets + Additional MarketValue upon sale of property &Value upon sale of property &equipment?equipment?

3.3. Something else?Something else?

How About the People?How About the People?How About the People?

PREMIUMASSETS(Goodwill &Intellectual

Assets)

STANDARDASSETS Standard

Liabilities

Fund BalanceNet Assets

IntellectualCapital

IntellectualLiability

STAKEHOLDERVALUE(Market Value)

Intellectual CapitalIntellectual CapitalIntellectual Capital

75% of the75% of thevalue of avalue of atypical companytypical companyis notis not on theon thebalance sheetbalance sheet

Market Value

Net Assets Intellectual Capital

Human Capital Structural

Customer Organizational

Innovation Processes

Intellectual CapitalIntellectual CapitalIntellectual Capital

It would be a shame to ignore thoseIt would be a shame to ignore thoseelements that represent 75% of the realelements that represent 75% of the realvalue of an organization!value of an organization!

BSCBSC’’ss ‘‘hustle and flowhustle and flow’’ helps anhelps anorganization recognize and reflect on theorganization recognize and reflect on theimportance of the human system and onimportance of the human system and oncapacity building through trained andcapacity building through trained andknowledgeable employees and efficientknowledgeable employees and efficientinformation technology systemsinformation technology systems

2 Phases & Nine Steps2 Phases & Nine Steps2 Phases & Nine Steps

Phase 1Phase 1:: Build BSCBuild BSC

Phase 2:Phase 2: Implement BSCImplement BSC


Phase 1:Phase 1: Build BSCBuild BSC

•• Step 1Step 1:: Review and assess ourReview and assess ourMission, Vision, Values, core beliefs,Mission, Vision, Values, core beliefs,SWOT, external stakeholdersSWOT, external stakeholders ‘‘wantswants’’

•• Step 2Step 2:: Craft a Business StrategyCraft a Business Strategycomprised of overarching strategiccomprised of overarching strategicthemesthemes

•• Step 3Step 3:: Decompose strategy into theDecompose strategy into thegranularity of specific objectivesgranularity of specific objectives


Phase 1:Phase 1: Build BSCBuild BSC

•• Step 4Step 4:: Create Strategic Map ofCreate Strategic Map ofbusiness strategy using causebusiness strategy using cause--effecteffectlinkageslinkages

•• Step 5Step 5:: Craft Performance MeasuresCraft Performance Measuresto track progress on strategic objectivesto track progress on strategic objectives

•• Step 6Step 6:: Develop Initiatives (keyDevelop Initiatives (keyaction steps) to ensure achievement ofaction steps) to ensure achievement ofstrategic objectivesstrategic objectives


Phase 2:Phase 2: Implement BSCImplement BSC

•• Step 7Step 7:: Automate the BSC withAutomate the BSC withspreadsheets and/or databasesspreadsheets and/or databases

•• Step 8Step 8:: Pilot BSC at SoutheastPilot BSC at SoutheastHealth Center and within 2 monthsHealth Center and within 2 monthsbegin spread or cascade throughoutbegin spread or cascade throughoutorganizationorganization

•• Step 9Step 9:: Evaluate the businessEvaluate the businessstrategies to determine whetherstrategies to determine whetherexpected results were achievedexpected results were achieved

Overall BSC Process LogicOverall BSC Process LogicOverall BSC Process Logic

Customers

Stakeholders

MissionVisionCore Values

Perspectives STRATEGY Themes

Goals

ObjectivesStrategic Map

Input Process Outputs Measures Outcomes

TargetsInitiatives Budget

BSCBSC ResourcesResources Refraction LogicRefraction LogicEmployee &

OrganizationalCapacity

Magnification

FinancialResource

Focus Operations &Clinical Focus

StakeholderRequirements &Patient ‘Needs’

Patient‘Wants’

Mission = DestinationMissionMission == DestinationDestination

A journey without a destination isA journey without a destination ismere wanderingmere wandering

A mission statement defines the coreA mission statement defines the corepurpose of an organization; itspurpose of an organization; itsreason for beingreason for being

Our mission is to serve the publicOur mission is to serve the public’’ssinterestinterest

Mission StatementMission StatementMission Statement

Mission StatementMission Statement good attributes:good attributes:

•• Simple and clearSimple and clear

•• Not too simpleNot too simple

•• Inspire changeInspire change

•• LongLong--term in natureterm in nature

•• Easy to understand & communicateEasy to understand & communicate

•• Terminal answer to theTerminal answer to the ““5 Whys5 Whys””

‘5 Whys’ to Mission‘‘5 Whys5 Whys’’ to Missionto Mission

KEEP ASKINGHOW

KEEP ASKINGWHY (5X)

Goals

Activities

MISSION

Mission StatementMission StatementMission Statement

Even though the Mission StatementEven though the Mission Statementdoes notdoes not changechange (or does so(or does soinfrequently), it should inspireinfrequently), it should inspirechangechange..

ChangeChange is movementis movement

Mission ClarificationMission ClarificationMission Clarification

6 Questions6 Questions to clarify Mission:to clarify Mission:

1.1. Who are we?Who are we?

2.2. What basic social or political needs orWhat basic social or political needs orproblems we exist to meet?problems we exist to meet?

3.3. How do we recognize, anticipate,How do we recognize, anticipate,respond to these problems or needs?respond to these problems or needs?


6 Questions6 Questions to clarify Mission:to clarify Mission:

4.4. How should we respond to keyHow should we respond to keystakeholders?stakeholders?

5.5. What is our guiding philosophy orWhat is our guiding philosophy orculture?culture?

6.6. What makes us distinctive or unique?What makes us distinctive or unique?


GastGast’’ss LawsLaws to clarify Mission:to clarify Mission:

1.1. WhatWhat ““wantwant--satisfyingsatisfying”” service do weservice do weprovide and constantly seek toprovide and constantly seek toimprove?improve?

2.2. How do we increase the quality of lifeHow do we increase the quality of lifefor our patients and stakeholders?for our patients and stakeholders?

3.3. How do we provide opportunities toHow do we provide opportunities toproductively employ people?productively employ people?


GastGast’’ss LawsLaws to clarify Mission:to clarify Mission:

4.4. How do we create a highHow do we create a high--quality workquality workexperience for our employees?experience for our employees?

5.5. How do we live up to the obligation toHow do we live up to the obligation toprovide just wages?provide just wages?

6.6. How do we fulfill the obligation ofHow do we fulfill the obligation ofproviding a return on the financial andproviding a return on the financial andhuman resources we expend?human resources we expend?

Our Mission?Our Mission?Our Mission?

We exist to:We exist to: provide primary healthprovide primary healthcare, enabling services, and acare, enabling services, and agateway to secondary & tertiarygateway to secondary & tertiarycarecare

For:For: community residents who arecommunity residents who areeconomically challengedeconomically challenged

So that:So that: health disparities due tohealth disparities due toeconomic or racial factors areeconomic or racial factors areeliminated.eliminated.

Vision = FutureVisionVision == FutureFuture

Vision StatementVision Statement should be a wordshould be a wordpicture of our organization in thepicture of our organization in thefuturefuture

Vision statement is the basis forVision statement is the basis forformulating strategies andformulating strategies andobjectivesobjectives

““Only through a compelling visionOnly through a compelling visiondoes a deep sense of purpose comedoes a deep sense of purpose comealivealive”” (Peter(Peter SengeSenge))

Vision StatementVision StatementVision Statement

Vision StatementVision Statement good attributes:good attributes:•• ConciseConcise

•• Balances external and internal elementsBalances external and internal elements

•• Appeals to all stakeholdersAppeals to all stakeholders

•• Consistent with mission and valuesConsistent with mission and values

•• VerifiableVerifiable

•• FeasibleFeasible

•• InspirationalInspirational

Our Vision?Our Vision?Our Vision?

A health care organization thatA health care organization thatprospers because it excels at andprospers because it excels at andprides itself in being aprides itself in being a HealingHealingExperience & NurturingExperience & NurturingEnvironmentEnvironment for its patients andfor its patients andemployeesemployees

Our Vision?Our Vision?Our Vision?

A COMMUNITY HEALTHCENTER THAT IS AN

OASIS OF HEALING FOROUR USERS

&A SECOND HOME FOR

OUR EMPLOYEES

Values = BeliefValuesValues == BeliefBelief

Values are deeply held beliefs in anValues are deeply held beliefs in anorganization that are demonstratedorganization that are demonstratedthrough the daythrough the day--toto--day behavior ofday behavior ofits employeesits employees

““Every manEvery man’’s conduct is ans conduct is anunspoken sermon forever preachingunspoken sermon forever preachingto othersto others”” (Henri(Henri--FredericFrederic AmielAmiel))

The pathway of our Mission is pavedThe pathway of our Mission is pavedby our Valuesby our Values

Our Values?Our Values?Our Values?

How do we like ourHow do we like our R.I.C.E.R.I.C.E.??

•• RR == RRespectespect•• II == IIntegrityntegrity•• CC == CCommunicationommunication•• EE == EExcellencexcellence

BSC SWOT AnalysisBSC SWOT AnalysisBSC SWOT Analysis

Financial SWOT elementsFinancial SWOT elements

CustomerCustomer’’s perspective of NEON SWOTs perspective of NEON SWOTelementselements

Internal process SWOT elementsInternal process SWOT elements

From an employeeFrom an employee--enabling perspective,enabling perspective,culture, leadership, technicalculture, leadership, technicalinfrastructure, and competencies/skillsinfrastructure, and competencies/skillsSWOTSWOT

BSC SWOT AnalysisBSC SWOT AnalysisBSC SWOT Analysis

Our Strengths

Weaknesses

Opportunitie

s

Threats

WildCard

SWOT

BSC

Financial

Employee

Internal

Patient

Market ForcesMarket ForcesMarket Forces

NEONNEON’’ssstrategy isstrategy isshaped by theshaped by thepressures ofpressures ofthethe 5 market5 marketforcesforces

ProperProperresponse toresponse tothe forcesthe forcesleads to aleads to adiamond of adiamond of astrategystrategy

NEONDiamondStrategy

Stan

d-al

one

Com

mun

ity

Hea

lthC

ente

rs

KeyExternal

Stakeholders

Hospita

l

CHC

Imita

tors

CHC NewEntrants

Suppliers

5 R’s to Reacting to the Forces5 R5 R’’s to Reacting to the Forcess to Reacting to the Forces

1.1. RRecognition of market forceecognition of market force

2.2. RReinforcement our market positioneinforcement our market position

3.3. RRestructuring our business strategyestructuring our business strategyor operationsor operations

4.4. RRetaliation at the market forceetaliation at the market force

5.5. RRetreat from our position oretreat from our position orbusiness strategybusiness strategy

Who’s the Customer?WhoWho’’s the Customer?s the Customer? We exist to satisfy theWe exist to satisfy the ‘‘needsneeds’’

andand ‘‘wantswants’’ ofof keykeystakeholdersstakeholders

If we are not on target inIf we are not on target inserving their needs andserving their needs andwants, then our very ownwants, then our very ownexistence is jeopardizedexistence is jeopardized

Fulfilling the needs and wantsFulfilling the needs and wantsof ourof our key customerskey customersensures the continuation ofensures the continuation ofour missionour mission--directed journeydirected journey

Targeted StakeholdersTargeted StakeholdersTargeted Stakeholders

STAKEHOLDERS

EmployeesEmployees

PayorsPayorsPatients

ProvidersProviders

RegulatorsRegulators

PhilanthropiesPhilanthropies

ElectedOfficials

FinancialInstitutions

FinancialInstitutions

TrusteesTrustees

BPHCBPHC

Critical StakeholdersCritical StakeholdersCritical Stakeholders

Which external stakeholders, whenWhich external stakeholders, whencombined, are responsible for 90% orcombined, are responsible for 90% ormore of our economic fuel?more of our economic fuel?

SubSub--classify stakeholders into categoriesclassify stakeholders into categoriesthat reflect differingthat reflect differing ‘‘wantswants’’??

What do our Patient Satisfaction surveysWhat do our Patient Satisfaction surveystell us of thesetell us of these ‘‘wantswants’’, differing or not?, differing or not?

Do theseDo these ‘‘wantswants’’ demand different valuedemand different valuepropositions from us?propositions from us?

What can we learn of theseWhat can we learn of these ‘‘wantswants’’ fromfrom‘‘patient complaintspatient complaints’’??

Top 5 ‘Want’ PrioritiesTop 5Top 5 ‘‘WantWant’’ PrioritiesPriorities

List 10List 10 ‘‘wantswants’’ for each criticalfor each criticalexternal stakeholderexternal stakeholder

Consolidate above into 5Consolidate above into 5 ‘‘wantswants’’

PerformPerform ‘‘55--PACKPACK’’ assessmentassessment

•• PP= Process Adequacy;= Process Adequacy; AA= Ability of= Ability ofStaff;Staff; CC= Capacity of Organization;= Capacity of Organization;KK= Knowledge Base of Staff= Knowledge Base of Staff

•• LikertLikert Scale =Scale = 55

‘5-PACK’ Assessment(Chicken Feet)

‘‘55--PACKPACK’’ AssessmentAssessment(Chicken Feet)(Chicken Feet)

Limited nursingLimited nursingcapacity somecapacity somedaysdaysLack of MR infoLack of MR infoknowledgeknowledge

2. To be able to2. To be able totalk to a nursetalk to a nurseor doctoror doctorduring the dayduring the day

RegistrationRegistrationbogged downbogged downCapacity limitedCapacity limitedsome dayssome days

1. To be seen on1. To be seen ontime by thetime by thedoctordoctor

ExplanatoryRemarks

Assessment of Strength inMeeting those ‘Wants’

Priority ‘Wants’

5 CP

A

K

5 CP

A

K

**

**

**

**

Let’s Talk StrategyLetLet’’s Talk Strategys Talk Strategy

If our strategy is notdriven by ‘value’ thenthere is a good chanceit will get us no where.

Lifetime Patient ValueLifetime Patient ValueLifetime Patient Value

Lifetime patient value (LPV):Lifetime patient value (LPV):

•• Loyalty of patient extends valueLoyalty of patient extends value

•• Loyalty of patient increasesLoyalty of patient increases ‘‘word ofword ofmouthmouth’’ advertisingadvertising

Patient churn:Patient churn:

•• Patient defectionPatient defection

•• Decrease LPVDecrease LPV

•• How much does it cost to decreaseHow much does it cost to decreasechurn?churn?

Churn versus LoyaltyChurn versus LoyaltyChurn versus Loyalty

CSI=Customer Satisfaction Index

Perceptionof Quality

Expectations

Value forthe Price

Interactionwith

SystemCSI

Complaints

Loyalty

CHURN

‘The System’ Value Chain‘‘The SystemThe System’’ Value ChainValue Chain

InboundPatient

Logistics

Clinical &Non-

ClinicalOperations

OutboundPatient

Logistics

Marketing& Appts(a.k.a.,

pre-sales)

Service(i.e.,

phonetriage &non-visitservices)

Mission

&M

argin

ProcurementTechnology Exploitation

Human Resources ManagementNEON INFRASTRUCTURE

SupportActivitiesSupportActivities

Primary ActivitiesPrimary Activities

Value EquationValue EquationValue Equation

Value = (Quality + Service) - PriceValue = (Quality + Service) - Price

However, what is the price of ourservices if very few of our patients havedirect out-of-pocket monetary costs?

Value Equation (Patient’s View)Value Equation (PatientValue Equation (Patient’’s View)s View)

Value = (Benefits) / (Costs)Value = (Benefits) / (Costs)

= (Functional benefits +Emotional benefits) /(Monetary costs +

Time costs + Energy costs +Psychic costs)

Net Patient ValueNet Patient ValueNet Patient Value

To receivehealth care

Costs(time, psychic,energy, money)

Benefits(emotional &functional)

PatientNeedDeliveredPatient

Need

Reg

iste

rfo

rca

re

Get

anci

llary

test

ing

and/

or

mak

eap

pt

Hea

lthC

are

Rec

eive

d&

Dis

char

ged

Wai

tto

See

Pro

vid

er

Fixed (the more costs,the less 'net value')

V =B

C

Patient ‘AIR’ Value PropositionPatientPatient ‘‘AIRAIR’’ Value PropositionValue Proposition

Product/Service AttributesProduct/Service Attributes ImageImage RelationshipRelationship

Fu

nctio

na

lityFu

nctio

na

lity

Qu

ality

Qu

ality

Price

/C

ost

Price

/C

ost

Tim

elin

ess

Tim

elin

ess

Bra

nd

Imag

eB

ran

dIm

ag

e

Intim

acy

Intim

acy

What should be ourstrategic AIR mixture?

Strategic Patient ‘AIR’ MixtureStrategic PatientStrategic Patient ‘‘AIRAIR’’ MixtureMixture

CustomerIntimacy?

ProductLeadership?

OperationalExcellence?

25%25%

50%

Operational Excellence?Operational Excellence?Operational Excellence?

AAttribute of functionalityttribute of functionality

Focus is on lowest price,Focus is on lowest price,convenience, and oftenconvenience, and often ‘‘no frillsno frills’’

Examples: Costco, McDonalds, KaiserExamples: Costco, McDonalds, Kaiser

In Sum:In Sum: Best Total CostBest Total Cost

Operational Excellence?Operational Excellence?Operational Excellence?

Productivity Frontier(state of best practice)

low

low

high

high

Relative Cost Position

Non-priceCustomer

Valuedelivered

orperceived

Michael Porter

Productivity FrontierProductivity FrontierProductivity Frontier

Sum of all existing best practices atSum of all existing best practices atany given timeany given time

Improvement of operations movesImprovement of operations movesorganization toward frontierorganization toward frontier

Frontier is always shifting outwardFrontier is always shifting outwardwith introduction of new technologieswith introduction of new technologiesand management approachesand management approaches

Staying ahead based on operationalStaying ahead based on operationaleffectiveness is very difficulteffectiveness is very difficult

Terminal VelocityTerminal VelocityTerminal Velocity

Productivity frontier takes intoProductivity frontier takes intoaccount an organizationaccount an organization’’ss ‘‘terminalterminalvelocityvelocity’’

At a certain point, organizationAt a certain point, organizationmeets a level of resistance that limitsmeets a level of resistance that limitsthe speed at which it can operatethe speed at which it can operateinternally (i.e., chart pulls, intake)internally (i.e., chart pulls, intake)

To overcome terminal velocity, theTo overcome terminal velocity, thesource of resistance has to be dealtsource of resistance has to be dealtwithwith

Product Leadership?Product Leadership?Product Leadership?

IImage is everything!mage is everything!

Focus is on constant innovation andFocus is on constant innovation andhaving the best product in thehaving the best product in themarketmarket

Often very priceyOften very pricey

Examples: Mercedes, Sony,Examples: Mercedes, Sony,Cleveland Clinic FoundationCleveland Clinic Foundation

In Sum:In Sum: Most Innovative ProductMost Innovative Product

Customer Intimacy?Customer Intimacy?Customer Intimacy?

RRelationshipelationship

Doing what it takes to provideDoing what it takes to providesolutions to unique customerssolutions to unique customers’’ needsneeds

Price is not an issue for customersPrice is not an issue for customers

Examples: Nordstrom, a typicalExamples: Nordstrom, a typicalcosmetic surgeoncosmetic surgeon

In Sum:In Sum: Best SolutionBest Solution

Pleasing Limits!Pleasing Limits!Pleasing Limits!

There areThere arelimits tolimits to‘‘pleasingpleasing’’

CanCan’’t pleaset pleaseall the peopleall the peopleall the timeall the time

StrategicStrategicbalance mustbalance mustbe struckbe struck

Within Budget Constraints

Outside Budget Constraints

Patient'Wants'

BPHC'Wants'

Strategic

Action

Aligned

Performance

Objectives

& Measures

BSC

Mission

Vision

Strategy

BSC =>> Strategic ActionBSCBSC ==>>>> Strategic ActionStrategic Action

Translating Strategyinto Action

Meaning of StrategyMeaning of StrategyMeaning of Strategy

Strategy represents the broadStrategy represents the broadpriorities adopted by an organizationpriorities adopted by an organizationin recognition of its operatingin recognition of its operatingenvironment and in pursuit of itsenvironment and in pursuit of itsmission.mission.

(Paul(Paul NivenNiven))

Art of StrategyArt of StrategyArt of Strategy

The formulation of strategy is an art.The formulation of strategy is an art.The description of strategy, however,The description of strategy, however,should not be an art. If we canshould not be an art. If we candescribe strategy in a moredescribe strategy in a moredisciplined way, we increase thedisciplined way, we increase thelikelihood of successfullikelihood of successfulimplementation.implementation.

(Kaplan & Norton)(Kaplan & Norton)

StrategyStrategyStrategy

Some nonprofits develop a big pile of wellSome nonprofits develop a big pile of well--intentioned programs, ideas, andintentioned programs, ideas, anddirections that try to respond to everydirections that try to respond to everyneed and opportunity that comes alongneed and opportunity that comes alongand might vaguely fit under their mission.and might vaguely fit under their mission.

The hardest thing, is to have enough of aThe hardest thing, is to have enough of astrategy tostrategy to ‘‘just say nojust say no’’ and pass upand pass upopportunities.opportunities.

Strategy is not about being all things to allStrategy is not about being all things to allpeoples.peoples.

StrategyStrategyStrategy

Strategy is a:Strategy is a:

•• Road MapRoad Map

•• Game PlanGame Plan

•• Method of our MadnessMethod of our Madness

•• Our Plan of AttackOur Plan of Attack

•• Our Battle PlanOur Battle Plan

Strategic CompetencyStrategic CompetencyStrategic Competency

Cultural competency is veryCultural competency is veryimportant, but it does not pay theimportant, but it does not pay thebills.bills.

How well we weather the next stormHow well we weather the next stormof competition and competingof competition and competinginterests will depend on theinterests will depend on the ‘‘strategicstrategiccompetencycompetency’’ of our employees.of our employees.

Communication is the Foodof Strategy!

Competitive StrategyCompetitive StrategyCompetitive Strategy

Competitive strategy based solely onCompetitive strategy based solely onoperational effectiveness inoperational effectiveness inhealthcare can be mutuallyhealthcare can be mutuallydestructivedestructive

Competitive strategy is aboutCompetitive strategy is aboutbeing differentbeing different

Essence of competitive strategy isEssence of competitive strategy ischoosing to perform activitieschoosing to perform activitiesdifferently than rivals dodifferently than rivals do

Strategic ThemeStrategic ThemeStrategic Theme

A Strategic Theme represents aA Strategic Theme represents abroad prioritybroad priority within a BSCwithin a BSCperspective.perspective.

A Strategic Theme represents anA Strategic Theme represents anoverall goaloverall goal viewed through theviewed through thelens of a particular BSC perspective.lens of a particular BSC perspective.

Strategic Theme?Strategic Theme?Strategic Theme?

Patient Perspective:Patient Perspective: To achieveTo achieveour MVour MV22 (mission, vision, values)(mission, vision, values), which, whichpatient needs must we serve?patient needs must we serve?

Become a more patientBecome a more patient--focusedfocusedorganization and grow a loyal base oforganization and grow a loyal base ofpatients that reflect an appropriatepatients that reflect an appropriatefinancial mix?financial mix?


Financial Perspective:Financial Perspective: To satisfyTo satisfyour constituents, what financial andour constituents, what financial andregulatory objectives must weregulatory objectives must weaccomplish?accomplish?

With the sustained support of keyWith the sustained support of keystakeholders, grow financialstakeholders, grow financialresources available for programs andresources available for programs anduse these resources efficiently,use these resources efficiently,effectively, and strategically toeffectively, and strategically tosustain our mission?sustain our mission?


Operations Perspective:Operations Perspective: To satisfyTo satisfyour patients, in which businessour patients, in which businessprocesses must we excel?processes must we excel?

Continuously improve our clinical andContinuously improve our clinical andnonnon--clinical operations so they areclinical operations so they arealigned with thealigned with the ‘‘wantswants’’ andand ‘‘needsneeds’’of our patients and the requirementsof our patients and the requirementsof the BPHC and other keyof the BPHC and other keystakeholders?stakeholders?


Employee Perspective:Employee Perspective: To achieveTo achieveand accomplish core activities, howand accomplish core activities, howmust we learn, communicate, andmust we learn, communicate, andwork together?work together?

Build a positive work environmentBuild a positive work environmentand maximize employeesand maximize employees’’ capacity,capacity,abilities, and knowledge so that theyabilities, and knowledge so that theyare equipped and prepared toare equipped and prepared tocontribute efficiently and effectivelycontribute efficiently and effectivelyto strategicallyto strategically--aligned clinical andaligned clinical andnonnon--clinical operations?clinical operations?

Strategy Map DefinedStrategy Map DefinedStrategy Map Defined

““Strategy implies the movement ofStrategy implies the movement ofan organization from its presentan organization from its presentposition to a desirable but uncertainposition to a desirable but uncertainfuture position. Because thefuture position. Because theorganization has never been to thisorganization has never been to thisfuture place, the pathway to itfuture place, the pathway to itconsists of a series of linkedconsists of a series of linkedhypotheses. A strategy maphypotheses. A strategy mapspecifies these causespecifies these cause--andand--effecteffectrelationships, which makes themrelationships, which makes themexplicit and testable.explicit and testable.””

Kaplan & NortonKaplan & Norton

Performance ObjectivesPerformance ObjectivesPerformance Objectives

Strategic themes represent broadStrategic themes represent broadpriorities within a BSC perspectivepriorities within a BSC perspective

Performance objectives arePerformance objectives are actionactionstatementsstatements of what we must doof what we must dowell in order to achieve the strategywell in order to achieve the strategy(or an aspect of it)(or an aspect of it)

Progress on performance objectivesProgress on performance objectivesis tracked with respectiveis tracked with respectiveperformance measuresperformance measures

Strategy Map SnapshotStrategy Map SnapshotStrategy Map Snapshot

Develop needed skillsand competencies

Build a positive workenvironment

Foster customerpartnerships

Deliver servicesaligned with resources

Seek ContinuousQuality Improvement

Communicate regs,standards and op issues

Deliver pt-focusedsatisfying services

Strengthen patienttrust, respect, etc.

Meet legal andreg requirements

Plan & use resourcesstrategically

PatientPatient FinanceFinance

InternalInternal

Learning & GrowthLearning & Growth

To achieve our mission,which customer needsmust we serve?

To achieve our goals and accomplishcore activities, how must we learn,communicate, and work together?

To satisfy our patients, at whatinternal operations must we excel?

To satisfy ourconstituents, whatfinancial and regulatoryobjectives must weaccomplish?

Strategy Map SnapshotStrategy Map SnapshotStrategy Map Snapshot

Develop needed skillsand competencies

Build a positive workenvironment

Foster customerpartnerships

Deliver servicesaligned with resources

Seek ContinuousQuality Improvement

Communicate regs,standards and op issues

Deliver pt-focusedsatisfying services

Strengthen patienttrust, respect, etc.

Meet legal andreg requirements

Plan & use resourcesstrategically

PatientPatient FinanceFinance

InternalInternal

Learning & GrowthLearning & Growth

Performance ObjectivesPerformance ObjectivesPerformance Objectives

Strategic themes are brought to lifeStrategic themes are brought to lifeby linked hypotheses expressed asby linked hypotheses expressed asperformance objectivesperformance objectives

Performance objectives providePerformance objectives providegranularity for strategic themesgranularity for strategic themes

Performance objectives providePerformance objectives providethrust or pullthrust or pull for strategic themesfor strategic themes

Init

iat i

ves

Ini t

iat i

ves

Ini t

iat i

ves

Init ia

t ives

Init ia

tives

Init ia

tives

Strategic ThrustStrategic ThrustStrategic Thrust

PerspectivePerspective’’ssStrategicStrategicThemeTheme

(1 stage)(1 stage)

O1

M2M1

O2

M4M3

O = Objective

M = Measures

Strategic PullStrategic PullStrategic Pull

StrategicTheme

StrategicTheme

PerformanceObjective 1



How Many PerformanceObjectives?

How Many PerformanceHow Many PerformanceObjectives?Objectives?

MM33

•• ManageableManageable

•• MeaningfulMeaningful

•• MeasurableMeasurable

Generally, 10Generally, 10--2020

Realistically, 10Realistically, 10--12 for starters12 for starters

Weighing Performance ObjectivesWeighing Performance ObjectivesWeighing Performance Objectives

To what extent does the objective boostTo what extent does the objective boostand provide granularity for strategicand provide granularity for strategictheme?theme?

Knowing what we know to be in our realmKnowing what we know to be in our realmof possibility, to what extent is theof possibility, to what extent is theobjective realistic?objective realistic?

To what extent does the objective supportTo what extent does the objective supportthe strategic thrust or underthe strategic thrust or under--pinning ofpinning ofour Value Chain?our Value Chain?

Weighing Performance ObjectivesWeighing Performance ObjectivesWeighing Performance Objectives

To what extent does the objective supportTo what extent does the objective supportour Patientsour Patients’’ Value Chain?Value Chain?

Is the performance objective easilyIs the performance objective easilyunderstood?understood?

Is the performance objective measurable?Is the performance objective measurable?

Performance MeasuresPerformance MeasuresPerformance Measures

People

Systems

Information

Activity Activity Output Outcome

InputMeasures

ProcessMeasures

ResultMeasures

PerformanceMeasures

Inputs

Process Activities Results

Are we doing thingsright?

Are we doing theright things?

Measurement is the Foodof Communication!

Lead & Lagging IndicatorsLead & Lagging IndicatorsLead & Lagging Indicators

HistoricalHistoricalperformanceperformance

Revenues, patientRevenues, patientsatisfactionsatisfaction

Lack predictiveLack predictivepowerpower

Near presentNear presentperformanceperformance

Absenteeism,Absenteeism,missedmissedappointmentsappointmentsproductivityproductivity

Predictive in naturePredictive in nature

Time Horizon

LaggingIndicatorsLagging

IndicatorsLeading

IndicatorsLeading

Indicators

PASTNEAR

NOW

Objectives

Fin

anci

alP

atie

ntIN

OP

E&

OC

Lag Measures ... Lead Measures ...

Grow NEONand keep herviable

Develop aloyal clientbase

Improve andact onknowledge ofclientsIncreaseemployeestrategicproductivity

Measures

Revenuegrowth

Customerloyalty

Additionsto solutionsdatabase

Competencyattainment

Hours spent withcustomers

Solutions offered

System downtime

Ease of system use

Training results

PDP goals completed

The ‘Fish Sign’TheThe ‘‘Fish SignFish Sign’’

Leading Indicator(i.e., absenteeism,employeesuggestions)

Lagging Indicator (i.e.,employee satisfaction)

What’s our sign?

Good signGood signGood sign

The ‘Nose Sign’TheThe ‘‘Nose SignNose Sign’’

Leading Indicator(i.e., absenteeism,turnover)

Lagging Indicator (i.e.,employee satisfaction)

What’s our sign?

Bad signBad signBad sign

Weighing Performance MeasuresWeighing Performance MeasuresWeighing Performance Measures

To what extent does the measure support,To what extent does the measure support,contribute to, or pull performancecontribute to, or pull performanceobjective?objective?

To what extent is the measureTo what extent is the measurequantitative, realistic, not datequantitative, realistic, not date--driven anddriven anddoable?doable?

To what extent does the measure and itsTo what extent does the measure and itsresults support positive behavior asresults support positive behavior asopposed to dysfunctional behavior?opposed to dysfunctional behavior?

Weighing Performance MeasuresWeighing Performance MeasuresWeighing Performance Measures

Easy to understand and gives staff a clearEasy to understand and gives staff a clearsense of the root performance objective itsense of the root performance objective itsupports?supports?

Is the data reasonably accessible or is aIs the data reasonably accessible or is aplan in place to make it so?plan in place to make it so?

Is update frequency requirementIs update frequency requirementmanageable relative to the lead or lagmanageable relative to the lead or lagclass of the measure?class of the measure?

Measure is not reliant on theMeasure is not reliant on the ““Flaw ofFlaw ofAveragesAverages””, right?, right?

Patient Perspective MeasuresPatient Perspective MeasuresPatient Perspective Measures

Our patients wantOur patients want ‘‘EATSEATS’’

•• EEfficiencyfficiency (care that is completed easily(care that is completed easilyand accurately in one stop)and accurately in one stop)

•• AAccessccess (ease of availing themselves of(ease of availing themselves ofservices)services)

•• TTimelinessimeliness (provision of timely services)(provision of timely services)

•• SSelectivityelectivity (choice of services or(choice of services orproviders)providers)

Patient Perspective MeasuresPatient Perspective MeasuresPatient Perspective Measures

Our patients measure us byOur patients measure us by ‘‘PAPA33’’

•• PPartnershipartnership ((““on my side?on my side?””))

•• AAccuracyccuracy ((““service is on the markservice is on the mark””))

•• AAvailabilityvailability ((““when and where I needwhen and where I needthe servicesthe services””))

•• AAdvicedvice ((““just what I needed to pull mejust what I needed to pull methrough this conditionthrough this condition””))

Employees in the ‘SACK’Employees in theEmployees in the ‘‘SACKSACK’’

Satisfaction

Alignment

Communication

Knowledge Fill

SACKSACK measuresmeasuresare critical andare critical andso are criticalso are criticalaction plans thataction plans thatare directed atare directed atputting ourputting ouremployees in theemployees in theSACKSACK

Employee Perspective MeasuresEmployee Perspective MeasuresEmployee Perspective Measures Query observable behavior, not thoughtsQuery observable behavior, not thoughts

or motivesor motives

Measure behaviors that are linked toMeasure behaviors that are linked toperformance objectives or strategicperformance objectives or strategicthemesthemes

1/3 of questions should lead to a1/3 of questions should lead to anegative responsenegative response

AvoidAvoid ‘‘rankingsrankings’’ questionsquestions

Can be completed within 20 minutesCan be completed within 20 minutes

TAKE ACTION ON FINDINGS!TAKE ACTION ON FINDINGS!

Employee Perspective MeasuresEmployee Perspective MeasuresEmployee Perspective Measures

Leading Indicators:Leading Indicators:

•• AbsenteeismAbsenteeism

•• TardinessTardiness

•• Employee suggestionsEmployee suggestions

•• Assessment of strategic competenciesAssessment of strategic competencies

Lagging Indicators:Lagging Indicators:

•• Employee turnoverEmployee turnover

•• Employee satisfactionEmployee satisfaction

Internal Perspective MeasuresInternal Perspective MeasuresInternal Perspective Measures

Internal Operations measures should beInternal Operations measures should bedriven by operations directed at patientdriven by operations directed at patient--centered performance objectivescentered performance objectives

[At which processes must we excel in order[At which processes must we excel in orderto meet our patientsto meet our patients’’ ‘‘wantswants’’]] refers to therefers to thecritical processes that need to be performedcritical processes that need to be performedand measured for their degree ofand measured for their degree ofeffectivenesseffectiveness

Financial Perspective MeasuresFinancial Perspective MeasuresFinancial Perspective Measures

Measures should demonstrate effectiveMeasures should demonstrate effectivestewardship of financial resources so as tostewardship of financial resources so as toremain viable and appease external fundingremain viable and appease external fundingagencies (e.g., BPHC)agencies (e.g., BPHC)

Patient mix (Medicaid/Subsidy) as leadPatient mix (Medicaid/Subsidy) as leadindicator for revenue projectionsindicator for revenue projections

Provider productivity as lead indicatorProvider productivity as lead indicator

Balance sheet lagging indicatorsBalance sheet lagging indicators

Financial Perspective MeasuresFinancial Perspective MeasuresFinancial Perspective Measures

Base Patients

New Patients

Numberof encounters

OptimizeNet IncomeNet

value perencounter

OptimizeCapital Structure

Acquisitions

Cost perencounter

Targets for MeasuresTargets for MeasuresTargets for Measures

““To understand the heart and mind of aTo understand the heart and mind of aperson, look not at what he has alreadyperson, look not at what he has alreadyachieved, but at what he aspires to do.achieved, but at what he aspires to do.””KahlilKahlil GibranGibran

““Targets bring our aspirations to life andTargets bring our aspirations to life andgive us something to shoot for in the questgive us something to shoot for in the questfor improvement.for improvement.”” PaulPaul NivenNiven

““By comparing actual performance resultsBy comparing actual performance resultsagainst a predetermined target, we receiveagainst a predetermined target, we receiveinformation that is imbued with value andinformation that is imbued with value andmeaning.meaning.”” PaulPaul NivenNiven

Targets for MeasuresTargets for MeasuresTargets for Measures

Sources for targets to consider:Sources for targets to consider:

•• Trends and baselinesTrends and baselines

•• National, state, local, industry, BPHCNational, state, local, industry, BPHC

•• Employees who are close to the actionEmployees who are close to the actioncan provide insightcan provide insight

•• Other organizationsOther organizations

•• Feedback from patients andFeedback from patients andstakeholdersstakeholders

Strategic InitiativesStrategic InitiativesStrategic Initiatives

Strategic Initiatives propel performanceStrategic Initiatives propel performanceobjectives to help us achieve our targetsobjectives to help us achieve our targets

Strategic Initiatives vie for human andStrategic Initiatives vie for human andfinancial resourcesfinancial resources

Analyze and prioritize potentialAnalyze and prioritize potential SIsSIs ororcurrent initiativescurrent initiatives

Elimination of initiatives that donElimination of initiatives that don’’ttcontribute to strategic performancecontribute to strategic performanceobjectives frees up scarce resourcesobjectives frees up scarce resources

Init

iat i

ves

Ini t

iat i

ves

Ini t

iat i

ves

Init ia

t ives

Init ia

tives

Init ia

tives

Strategic Initiative PropulsionStrategic Initiative PropulsionStrategic Initiative Propulsion

PerspectivePerspectiveStrategicStrategicThemeTheme

(1 stage)(1 stage)

O1

M2M1

O2

M4M3

O = Objective

M = Measures

The Ship’s HullThe Bottom LineThe ShipThe Ship’’s Hulls Hull

The Bottom LineThe Bottom Line Our MissionOur Mission

changes rarely;changes rarely;however,however,barriers andbarriers andobstacles alongobstacles alongour routeour routechange often.change often.

So how do we:So how do we:•• Keep the right passengersKeep the right passengers

who need to go where wewho need to go where weare going on our NEON ship?are going on our NEON ship?

•• Keep the right crew to doKeep the right crew to dothe work?the work?

•• Keep a properly equippedKeep a properly equippedand fueled vessel?and fueled vessel?

•• Navigate properlyNavigate properly ““SteadySteadyas she goesas she goes””, such that both, such that bothpassengers & crew arepassengers & crew arecomforted and reassured?comforted and reassured?

Employee PerspectiveEmployee PerspectiveEmployee Perspective

SSkillskills

•• that should bethat should belearnedlearned

HHabitsabits

•• that should bethat should bebrokenbroken

IInformationnformation

•• that should bethat should beretainedretained

TTalentsalents

•• that should bethat should beexploitedexploited

Strategic Initiatives should faithfullypropel employees to know their:

Internal Operations (INOP) SIsInternal Operations (INOP)Internal Operations (INOP) SIsSIs

SIsSIs that are crafted for operationalthat are crafted for operationalactivities are poured into respectiveactivities are poured into respectivesections of thesections of the Strategic Value ChainStrategic Value Chain totohelp us remain on coursehelp us remain on course

SIsSIs must be activities that help us standmust be activities that help us stand--out from the proverbial packout from the proverbial pack

SIsSIs must be activities that helpmust be activities that helpdifferentiate us from others and develop adifferentiate us from others and develop aloyal patient base with the appropriateloyal patient base with the appropriatefinancial mixfinancial mix

Patient Intimacy INOP SIsPatient Intimacy INOPPatient Intimacy INOP SIsSIs

Establish and foster patientrelationship

Listen tounderstand patients’ needs, wants,

and wishes

Develop andimplement patient-specific plans

Consistently deliver apositive (‘healing’) experience at every

patient service level

Patient Touch PointsPatient Touch PointsPatient Touch Points

Moments of Truth (MOT)Moments of Truth (MOT)

From patientsFrom patients’’ experiences, our businessexperiences, our businesshas become a stagehas become a stage

A successful business creates positive andA successful business creates positive andmemorable eventsmemorable events

Each memorable event with respect toEach memorable event with respect topatient contact is a MOTpatient contact is a MOT

Sum total ofSum total of MOTMOT’’ss comprise overallcomprise overallpatient experiencepatient experience

MOT 2 MOT 3

MOT 4MOT 1

Positive Experience in MOTsPositive Experience inPositive Experience in MOTsMOTs

MOT 2 MOT 3

MOT 4MOT 1

Negative Experience in MOTsNegative Experience inNegative Experience in MOTsMOTs

Operational Efficiency SIsOperational EfficiencyOperational Efficiency SIsSIs

Develop consistent processeswith optimal cycle times

Understand and shapeclient’s needs and solutions

Educate client aboutbenefits of various service options

Meet client needs in a error-free,consultative, problem-solving fashion

Strategic Value ChainStrategic Value ChainStrategic Value Chain

InboundPatient

Logistics:How &Why?

Clinical &Non-

ClinicalOpera-tions:How &Why?

OutboundPatient

Logistics:How &Why?

Marketing& Appts(a.k.a.,

pre-sales):How &Why?

Service(non-visitservices):

How &Why?

Mission

&M

argin

Procurement: How & What?Technology Exploitation: What & Why?

Human Resources Managment: How & Why?NEON INFRASTRUCTURE

SupportActivitiesSupportActivities

Primary ActivitiesPrimary Activities

A Balanced Scorecard isthe Food of Strategy!


Our MissionOur Missionestablishes where weestablishes where weare headedare headed

CoordinatesCoordinates mustmustbe established tobe established tohead the right wayhead the right way

The BSCThe BSC providesprovidesthe coordinatesthe coordinatesrequired in order torequired in order tominimize obstaclesminimize obstaclesand barriersand barriers

SPEED

ALTITUDEATTITUDE

FUEL

COORDINATES

BSC AutomationBSC AutomationBSC Automation

Reporting needs necessitate pulling infoReporting needs necessitate pulling infofrom disparate sources into one arena forfrom disparate sources into one arena fordisplay and reviewdisplay and review

Software options can range fromSoftware options can range fromspreadsheets to databasesspreadsheets to databases

BSCBSC--specific software options exist on thespecific software options exist on themarketmarket

Organization size and complexity isOrganization size and complexity isultimate determinant of software needsultimate determinant of software needs

HighLow

Low

Hig

h

Internal Operations Employee & Org. Cap.

Financial PerspecticePatient Perspective

Mx11

Mx12a

Mx12b Mx1a

Mx1b

Mx2

Mx3aMx10b

Mx3bMx10a

Mx4aMx9b

Mx4bMx9a

Mx5Mx8

Mx6aMx7bMx6bMx7a

DartoGramDartoGramDartoGram

Hittingthemarksto getthepoints!

BSC Implementation PlanBSC Implementation Plan

At this point we have strategies, theAt this point we have strategies, themeasures, and the means.measures, and the means.

Now,Now, ‘‘JUST DO ITJUST DO IT’’..

Configure start for one location (championConfigure start for one location (championfacility) then spread to other facilitiesfacility) then spread to other facilities

Assign permanent BSC roles and teamsAssign permanent BSC roles and teams

BSC Implementation PlanBSC Implementation Plan

First things first:First things first:

•• Develop and launch a BSCDevelop and launch a BSCcommunication plancommunication plan for stafffor staff

•• Establish routine and schedule forEstablish routine and schedule forperformance measuresperformance measures

•• Perform baseline measuresPerform baseline measures

•• Launch preparation of staff for strategicLaunch preparation of staff for strategicinitiativesinitiatives

•• Launch strategic initiativesLaunch strategic initiatives

Regular BSC CheckRegular BSC Check--upsups

Create an analysis feedback routine to testCreate an analysis feedback routine to testassumptions laden in our BSC strategicassumptions laden in our BSC strategicthemes and objectives:themes and objectives:

•• Organizational learning is criticalOrganizational learning is critical

•• Consider adjustments to objectives, measures,Consider adjustments to objectives, measures,or initiatives based on trendsor initiatives based on trends

•• Add new costAdd new cost--effective strategic initiatives ifeffective strategic initiatives ifwe are not getting the proper propulsion fromwe are not getting the proper propulsion fromestablishedestablished SIsSIs

•• Link planning from feedback to budgetLink planning from feedback to budget

Overall BSC Feedback LogicOverall BSCOverall BSC FeedbackFeedback LogicLogic

Customers

Stakeholders

MissionVisionCore Values

Perspectives STRATEGY Themes

Goals

ObjectivesStrategic Map

Input Process Outputs Measures Outcomes

TargetsInitiatives Budget

Interactive

CommunicationCommunicationCommunication

Communication is more thanCommunication is more than ‘‘tellingtelling’’

Communication is knowing whether peopleCommunication is knowing whether peopleareare ‘‘receivingreceiving’’

BSC success is exceedingly and stronglyBSC success is exceedingly and stronglylinked to the effectiveness of thelinked to the effectiveness of thecommunication plancommunication plan

Strategic competency is fueled byStrategic competency is fueled bycommunicationcommunication

Communication of BSC measures letCommunication of BSC measures let’’sspeople knowpeople know ‘‘how am I doinghow am I doing’’ as anas animportant supplement toimportant supplement to ‘‘changechange’’ effortsefforts

Communication is the Foodof our BSC!

ConclusionConclusionConclusion

Maintainingthe integrity ofour BSC keepsus safely onour journey N

EO

NN

EO

N

Documents

BALANCEDALANCED SCORECORE ARDARD · Strategy = Balanced Scorecard. Barriers to Strategy ExecutionBarriers to Strategy Execution Only 10% of organizations execute their strategy Barriers