Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins Chapter 7 Strategic and Operational Planning

Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins

Chapter 7Chapter 7

Strategic and Operational Planning

Strategic and Operational Planning


PlanningPlanning• Planning is deciding in advance what to do, who is to do

it, how it is to be done, and when it is to be done

• Planning is a proactive, deliberate process required of all managers

• Planning is a guide for action in reaching a goal and requires flexibility and energy

• Planning also requires management skills such as data gathering, forecasting, and transforming ideas into action


Without adequate planning, the management process fails, and organizational needs and objectives cannot be met

Planning Is Critically Important to and Precedes All Other Management

Functions

Planning Is Critically Important to and Precedes All Other Management

Functions


Barriers to Identifying Long-Term Needs in Planning

Barriers to Identifying Long-Term Needs in Planning

• Health-care reform

• Rapidly changing technology

• Increasing government regulation of health care

• Scientific advances


Factors Influencing the Future of Health CareFactors Influencing the Future of Health Care

• Robotic technology

• Biomechatronics

• Biometrics and smart cards

• Point-of-care testing

• Telehealth and the Internet

• Growing elderly population

• Nursing shortages in acute care hospitals


Proactive Planning Proactive Planning

• Reactive planning: occurs after a problem exists

• Inactivism: seeks the status quo

• Preactive planning: utilizes technology to accelerate change; future-oriented

• Interactive or proactive planning: considers the past, present, and future and attempts to plan the future of an organization rather than react to it


Question Question

Advocating against implementing a new hospital computer system is an example of which type of planning?

A. Reactivist

B. Inactivist

C. Preactivist

D. Proactivist


Answer Answer

B. Inactivist

Rationale: Inactivists would rather maintain the status quo than take a risk with a new way of doing things. Reactive planning occurs after a problem exists. Preactive planners utilize technology to accelerate change and are future oriented. Proactivists consider the past, present, and future and attempt to plan the future of their organization rather than react to it


ReminderReminder

• Managers who are uninformed about the legal, political, economic, and social factors affecting health care make planning errors that may have disastrous implications for their professional development and the financial viability of the organization


Strategic PlanningStrategic Planning

• Planning has many dimensions, including time span and complexity or comprehensiveness

• Complex plans are long-range or strategic plans

• Strategic planning typically examines an organization’s purpose, mission, philosophy, and goals in the context of its external environment


SWOT Definitions SWOT Definitions

• Strengths are those internal attributes that help an organization to achieve its objectives

• Weaknesses are those internal attributes that challenge an organization in achieving its objectives

• Opportunities are external conditions that promote achievement of organizational objectives

• Threats are external conditions that challenge or threaten the achievement of organizational objectives


Simple Rules for SWOT AnalysisSimple Rules for SWOT Analysis• Be realistic about the strengths and weaknesses of your

organization

• Be clear about how the present organization differs from what might be possible in the future

• Be specific about what you want to accomplish

• Always apply SWOT in relation to your competitors

• Keep SWOT short and simple

• Remember that SWOT is subjective

Source: Adapted from Marketing Teacher Ltd. (2000–2013). SWOT analysis: Lesson. Retrieved April 22, 2013, from http://www.marketingteacher.com/wordpress/swot-analysis/


Using a Balanced ScorecardUsing a Balanced Scorecard

• Strategic planners using a balanced scorecard:

– Develop metrics

– Collect data

– Analyze that data from four organizational perspectives:

• Financial

• Customers

• Business processes

• Learning and growth


Steps for Using Strategic PlanningSteps for Using Strategic Planning

• Clearly define the purpose of the organization

• Establish realistic goals and objectives

• Identify external constituencies and determine their assessment of the organization’s purposes

• Clearly communicate the goals to the constituents

• Develop a sense of ownership of the plan


Steps for Using Strategic Planning—(cont.)Steps for Using Strategic Planning—(cont.)

• Develop strategies to achieve the goals

• Ensure that the most effective use is made of resources

• Provide a base from which progress can be measured


Principles of Good Planning Principles of Good Planning

• All plans must flow from other plans. Short-range plans must be congruent with long-range plans

• Planning in all areas of the organization must follow the mission, philosophy, and goals of the overall organization

• Planning involves the same process regardless of the period involved


Principles of Good Planning—(cont.)Principles of Good Planning—(cont.)• The length of the plan is determined by what actions

are necessary to make the plan successful

• All planning must include an evaluation step and requires periodic reevaluation and prioritization

• All people and organizational units affected by a plan should be included in the planning


QuestionQuestion

Tell whether the following statement is True or False:

The planning process differs depending on the period of time involved.

A. True

B. False


AnswerAnswer

B. False

Rationale: Planning involves the same process regardless of the period involved


Strategies for Successful PlanningStrategies for Successful Planning

• Start planning at the top

• Keep planning organized, clear, and definite

• Do not bypass levels of people

• Have short- and long-range plans and goals

• Know when to plan and when not to

• Keep target dates realistic

• Gather data appropriately

• Be sure objectives are clear

• Remember, interpersonal relationships are important


Because a plan is a guide to reach a goal, it must be flexible and allow for readjustment as unexpected events occur

PlanningPlanning


Why Do Plans Fail? Why Do Plans Fail?

• False assumptions

• Not knowing overall goal

• Not enough alternatives

• Inadequate time or other resources

• Low motivation levels

• Sound strategies not used

• Inadequate delegation of authority

• Not recognizing organizational goals and needs

• Planning too narrow in scope—not recognizing community, legal, and licensing requirements


QuestionQuestion

Which is an example of why plans might fail?

A. Not enough alternatives

B. Low motivation levels

C. False assumptions

D. Lack of sound strategies

E. All of the above


Answer AnswerE. All of the above

Rationale: These are just several of numerous mistakes that can cause plans to be unsuccessful


Difficulty in Long-Term Care Needs and Health-Care Organizations

Difficulty in Long-Term Care Needs and Health-Care Organizations

• Rapidly changing technology

• Increasing government involvement in health care

• Changing population demographics

• Reduced provider autonomy


Planning Types Planning Types

• Reactivists plan after a problem exists

• Inactivists consider the status quo as the stable environment and they spend a great deal of energy preventing change and maintaining conformity

• Preactive planners utilize technology to accelerate change and are future-oriented

• Proactive planning style is always the goal


Proactive PlanningProactive Planning• Is dynamic, and adaptation is considered to be a key

requirement since the environment changes so frequently


Forecasting Forecasting

• Using available historical patterns to assist in planning

• Examining present clues and projected statistics to determine future needs


SWOT Analysis SWOT Analysis

The identification of:

• Strengths

• Weaknesses

• Opportunities

• Threats


Balanced Scorecard Balanced ScorecardStrategic planners use a Balanced Scorecard to develop metrics (performance measurement indicators), collect data, and analyze that data from four organizational perspectives—financial, customers, internal business processes (or simply processes), and learning and growth


Question QuestionA Balanced Scorecard is used to: (Select all that apply)

A. Collect data

B. Gain clients

C. Develop metrics

D. Analyze data


AnswerAnswerA. Collect data, C. Develop metrics, and D. Analyze data

Rationale: The Balanced Scorecard assists strategic planners in developing metrics, collecting data, and analyzing the data. It does not help them gain clients.


Strategic Planning as a Management Process Should Include the FollowingStrategic Planning as a Management Process Should Include the Following1. A clear statement of the organization’s mission

2. The identification of the agency’s external constituencies or stakeholders and the determination of their assessment of the agency’s purposes and operations

3. The delineation of the agency’s strategic goals and objectives, typically in a 3- to 5-year plan

4. The development of strategies to achieve the goals


There is increasing recognition of the importance of subordinate input from all levels of the organization to give strategic plans meaning and to increase the likelihood of their successful implementation

Subordinate Input in Strategic PlansSubordinate Input in Strategic Plans


Unlike the 20-year strategic plans of the 1960s and 1970s, most long-term planners today find it difficult to look even 5 years in the future

Length of Strategic PlanLength of Strategic Plan


The Planning HierarchyThe Planning Hierarchy

• Mission

• Philosophy

• Goals

• Objectives

• Policies

• Procedures

• Rules


Organizational Philosophy Statement Organizational Philosophy Statement

A person should be able to identify exactly how the organization is implementing its philosophy by observing members of the nursing staff, reviewing the budgetary priorities, and talking to patients


Goal, Objective, Policies, Procedures, and Rules

Goal, Objective, Policies, Procedures, and Rules

Goal—the desired result toward which effort is directed

Objective—how the goal will specifically be achieved (includes time frame and is measurable)

Policies—plans reduced to statements

Procedures—step-by-step process

Rules—plans that specifically define acceptable choices of action


Rules as Part of the Planning Hierarchy Rules as Part of the Planning Hierarchy

• Because rules are the least flexible type of planning in the planning hierarchy, there should be as few rules as possible in the organization

• Existing rules, however, should be enforced to keep morale from breaking down and to promote organizational structure

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Copyright © 2015 Wolters Kluwer Health | Lippincott Williams & Wilkins Chapter 7 Strategic and Operational Planning