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Strategic Planning
Strategic Planning
Process of determining where an organization intends to be in the future and how it will get there.
It is a way of finding the best possible future course for the institution and then outlining the best possible path of moving toward that destination.
Strategic Planning Process
•What might we do (in terms of environmental opportunity)?
•What can we do (in terms of ability and strengths)?
•What do we want to do (in terms of personal preference)?
•What should we do (in terms of social responsibility)?
Strategic Planning
Output - long-term plans (2-5 years)
Planning Approach –
Traditional (centralized)
Decentralized
Ultimate goal – sustainability of organization
Strategic Planning Process
Situational Analysis
Evaluate current mission, goals and strategies
SWOT Analysis
Scan internal environment – core competencies, synergy, values creation
Scan external environment
Identify strategic factorsS – Strengths
W- Weaknesses
O – Opportunities
T – Threats
Strategic Planning Process
Environmental Analysis
SWOT
Internal environment
STRENGTHS What do we do well?
WEAKNESSWhat is wrong now?
External environment
OPPORTUNITIESWhat possibilities exist
THREATSWhat can go wrong?
Strategic Planning Process
Situational analysis
Define / redefine mission, goals, grand strategy
Formulate new strategy (corporate, business, functional)
Formulate key result areas and evaluation parameters
Strategic Management Process
Evaluate Current:•Mission•Goals
•Strategies
Step 1: Situational Analysis
SWOT
Strategic Management
Scan External Environment
Scan Internal Environment:•Core competencies•Synergy•Value Creation
Identify strategic Factors:•Opportunities•Threats
Identify Strategic Factors:•Strengths•Weaknesses
SWOT
Strategic Management
Define New:•Mission•Goals•Grand Strategy
Situational Analysis
Step 2: define new mission, goals and strategy
Strategic Management
Define New:•Mission•Goals•Grand Strategy
Formulate Strategy:•Corporate•Business•Functional
Situational Analysis
Step 3: Formulate new strategy
Strategic Management
Situational Analysis
Implement Strategy via changes in:•Leadership/culture•Structure•Human Resource•Info and control •systems
Define New:•Mission•Goals•Grand Strategy
Formulate Strategy:•Corporate•Business•Functional
Step 4: Implement new strategy
SWOT
Scan External Environment
Identify strategic Factors:•Opportunities•Threats
Evaluate Current:•Mission•Goals•Strategies
Scan Internal Environment:•Core competencies•Synergy•Value Creation
Identify Strategic Factors:•Strengths•Weaknesses
Define New:•Mission•Goals•Grand Strategy
Formulate Strategy:•Corporate•Business•Functional
The Strategic Management Process
Implement Strategyvia changes in:•Leadership/culture•Structure•Human Resource•Info and control systems
Operational Goals / PlansLower Management
(Departments/Individuals)
Tactical Goals/PlansMiddle Management
Major Divisions, functions
Strategic Goals/PlansSenior Management
(Organization as a whole)
Mission Statement
Tactical plansDesigned to help execute
Major strategic plansAccomplish specific
Part of the Company strategy
Tactical GoalsDefines the outcomesThat major divisions
and departments must Achieve in order for The organization to
Meet its overallgoals
Operational Goal
Specific, measurable results expected from departments
work groups and individuals withinthe organization
Operations PlansDeveloped at the lower level of organization that specify
action steps towards achieving operational goals
and supports tactical planning activities
Sample of Strategic Planning
Manila Doctors Hospital
1999; 2003
VisionManila Doctors Hospital
Leading center of excellence and wellness in the Philippines providing
holistic quality patient care
Gives a picture of what an organization wants to be;Serves as a guiding light for managers, employees, and others in bringing about change;Creates a sense of enthusiasm;INSPIRING
MISSIONManila Doctors Hospital
To operate a world class hospital.To undertake training and research programs to
continually improve quality services.To pursue corporate social responsibility programs.
what we stand for;who are our primary clients/beneficiarieswhat are the unique products/services that our organization can offer our clients?what activities are we in? What will become of us 5 years from now?what are our basic values?what are the key performance objectives such growth by which we measure our success?
Goal
specific thrust or emphasis
that an organization takes within a particular time and space in order to live its mission and thus eventually attain its vision
expressed in non-behavioral terms and start with TO …….
Example: know, realize, appreciate
GoalManila Doctors Hospital
To serve as a health and wellness center for all Filipino and international clients.
ObjectivesManila Doctors Hospital
1. To provide health care services that meet the needs of Manila Doctors Hospital’s clients or customers; all pertinent statutory and regulatory requirements; and the expectations of MDH Top Management.
ObjectivesManila Doctors Hospital
2. To conduct training programs that will continually improve services.
3. To conduct researches that will continually improve services.
4. To provide competent staff at all times.
ObjectivesManila Doctors Hospital
5.To establish and continually improve a quality management system.
6.To provide corporate social responsibility programs for the underprivileged and underserved in the community.
Manila Doctors Hospital
Strategies
Strategy Formulation
Strategies
to Achieve
Vision-Mission
of
MDH
I. To build the best private general hospital with specialty units.
II. To ensure customer satisfaction through efficient quality service.
III. To strengthen financial viability and sustainability.
IV. To develop an organization structure responsive to current and emerging needs.
V. To develop social service programs in order to enhance the social responsibility of the institution by strengthening and systematizing the social services and community outreach programs.
VI. To strengthen and innovate research programs.
VII. To strengthen human resources.
VIII. To evaluate and enhance current pastoral program.
IX. To develop Manila Doctors College in terms of registration and courses.
Strategic Planning for Hospital
Other Input / Info Needed
Health-care IndustryHospital Financial Sustainability
Financial Management
Overview of the Health Care Industry
Health Care Industry
organized activities
going on in the field of health care
in the community
Health Care Industry
Elements:
–Health care services–Suppliers for the health care services–Users of the health care services–Logistics for the health care services – suppliers and users–Factors affecting all of the above – such as demand, supply, regulations, sustainability, etc.
Health Care Industry
For a physician-to-be for a physician-manager-to-befor a physician who will establish a private medical practice after graduationfor a physician who will be administrators of health care programs and organizations
it will be helpful to have an overview of the health care industry. Knowledge of such will be useful in the planning of the physician in any of the above roles.
Health Care Industry
What is a health care service?
It is a service intended for the prevention, treatment, and management of illness and the preservation of mental and physical well-being of human beings.
Health Care Industry
What are different types of health care?
Personal /private health care – benefits only the user of the service directly. Most of curative care will be in this category.
Public health care – benefits the community as a whole, whether or not they are conscious user of the service. For example, spraying for mosquito control benefits the entire community
Health Care Industry
Who are the suppliers of the health care services?
Physicians, nurses, and allied health professional providers.
Health Care Industry
Who are the users of the health care services?
Direct users – persons in immediate need of health care services.
Indirect users – people or organizations providing the pre-need and in-need health services of their clients, staff, and loved ones.
Health Care Industry
What are the logistics involved in providing health care services?
•Cost in establishing an infrastructure for the health care services.
•Cost in providing health care professionals in health care organizations.
•Cost in delivering the health care services.
•Cost in marketing the health care services.
Health Care Industry
What are the logistics involved in acquiring health care services?
Direct users pay for the cost of the health care services.
Indirect users pay for the cost of the health care services.
Health Care Industry
What are the usual sources of funds for health care services?
Direct users
Health insurances
Government thru taxes and other funds
Health Care IndustryWhat are the factors affecting all of the above?
•Demands – amount of users (number of people in need of health care services; number of people who can afford; etc.)
•Supply – amount of health care providers (physicians, nurses, and allied medical professionals)
•Accrediting and regulatory bodies such as Department of Health and PhilHealth; BIR (taxes)
•Competition
•Sustainability
HospitalFinancial Sustainability Model
Hospital Financial Sustainability Model
Clients
Clients
Clients
Utilization of hospital services
Financial Sustainability
Health care
system
MD
Hospital
Input Thruput Output Impact
Walk-in
Clients
Clients
Clients
Utilization of hospital services
Financial Sustainability
QMS
“Good” MDs
Hospital
Walk-in
HCS
Right No.
Patronizing MDs
Strong Patient Following
MD
Main factors
that will attract clients and lead to utilization of services
Requisites for attaining factors that will lead to sustainability
Financial Sustainability
QMS
“Good” MDs
Hospital
HCS
Right No.
Patronizing MDs
Strong Patient Following
Training for QMS
ISO 9001 Certification
PhilHealth Benchbook
Joint Commission International (JCI)
Requisites
Requisites for attaining factors that will lead to sustainability
Financial Sustainability
QMS
“Good” MDs
Hospital
HCS
Right No.
Patronizing MDs
Strong Patient Following
Requisites
Professional Competency
Spend most of the time in the hospital
Affiliated with one or few hospitals
Love/like the hospital
Recruitment/Attraction
Hospital Financial Sustainability Model
Financial Sustainability
QMS
“Good” MDs
Hospital
HCS
Right No.
Patronizing MDs
Strong Patient Following
Training for QMSISO 9001 CertificationPhilHealth Benchbook Joint Commission International (JCI)
Requisites
Professional Competency
Spend most of the time in the hospital
Affiliated with one or few hospitals
Love/like the hospital
Recruitment/Attraction
Spend most of the time in the hospital
Affiliated with one or few hospitals
Love/like the hospital
Attraction
Opportunity for
•Occupational contentment
•Teaching - med school
•Research
•Administration
Attractions for making MDH a second home
Strategies for MDs
No. of MDs
No. / specializations
No. holding clinic at least 3x/wk
No. holding clinic more than 3 hrs/day
No. of MDs with 48 admissions/yr
200+
more needed
70%
40%
50%
500+
Increased
90%
90%
90%
Present Target
Sample
Considerations in the Planning for Recruitment/Attraction of MDs
Control vacant offices
Mgt Policy
Entice MDs to share office Create spaces in the
present MD offices
Control vacant offices
Create spaces in the present MD offices
Allow more MDs to hold
office
Attract Screen Recruit
No more stocks or assigned stocks
Performance - Financial Sustainability
Financial Management System
Financial Management
Financial Management
operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.
Financial Management
For a physician-to-be for a physician-manager-to-befor a physician who will establish a private medical practice after graduationfor a physician who will be administrators of health care programs and organizations
it will be helpful to have an overview of the financial management system.Knowledge of such will be useful in the planning of the physician in any of the above roles..
The Financial Management Plan
Goal:
To ensure financial sustainability and stability through effective and efficient utilization of monetary funds.
The Financial Management Plan
General objective:
To effect a sound management of monetary resources in support of organizational goals.
The Financial Management Plan
Evaluation parameters and criteria:
Sound management of monetary resources
Positive incomeNo undue losses
The Financial Management Plan
Strategies:Accounting SystemCost ManagementAsset ManagementAccount ReceivablesBudgeting
The Financial Management Plan
Strategies:Accounting System
a bookkeeping system which tracks the money coming in vs. going out.
The Financial Management Plan
Strategies:Cost Managementthe process whereby companies use cost accounting to report or control the various costs of doing business.
The Financial Management Plan
Strategies:
Asset Management the management of the financial assets of a company in order to maximize return.
The Financial Management Plan
Strategies:
Account Receivablesthe money that is owed to a company for goods and services it has provided to customers on credit.
The Financial Management Plan
Strategies:
Budgetingthe activity of predicting how much money the organization will spend during a specified period.
The Financial Management Plan
Monitoring Reports:Financial StatementIncome StatementBalance SheetCash Flow
The Financial Management Plan
Monitoring Reports:Financial StatementA written report which quantitatively describes the financial health of a company.
Includes an income statement, a balance sheet,and often also includes a cash flow statement.
Usually compiled on a quarterly and annual basis.
The Financial Management Plan
Monitoring Reports:Income Statement
An accounting of sales, expenses, and net profit for a given period.
The Financial Management PlanMonitoring Reports:
Balance SheetA quantitative summary of a company's financial condition at a specific point in time, including assets, liabilities and net worth.
The first part of a balance sheet shows all the productive assets a company owns, and the second part shows all the financing methods (such as liabilities and shareholders' equity). Also called statement of condition.
Balance Sheet2003 2004
Assets–Cash and short-term investments–Accounts receivable–Inventories–Other
Px,xxxxxxxxxxxx
Px,xxxxxxxxxxxx
Total Assets Px,xxx Px,xxx
Liabilities–Accounts payable–Accrued compensation–Income taxes payable–Other
Px,xxxxxxxxxxxx
Px,xxxxxxxxxxxx
Total Liabilities Px,xxx Px,xxx
Shareholder’s Equity Px,xxx Px,xxx
The Financial Management Plan
Monitoring Reports:Cash Flow
A measure of a company's financial health.
Equals cash receipts minus cash payments over a given period of time;or equivalently, net profit plus amounts charged off for depreciation, depletion, and amortization.
BudgetA quantitative expression of a plan of action, specifically, a business plan with expression of goals and objectives in the short term.
It is usually stated in monetary terms and cover a period of one year.
It is an integral part of the overall management control process of an organization.
Objectives of Budgetary Programs
To provide a written expression, in quantitative terms, of the policies and plans of the unit
To provide a basis for the evaluation of financial performance in accordance with the plans
To provide a useful tool for the control of costs
To create cost awareness throughout the organization
Purpose of Budget Making in Departments
To determine the annual logistic requirements of the departments in achieving their annual objectives.
(Note: this assumes that there must be preset rationalized, specific, tangible, and achievable annual department objectives before the logistic needs are calculated.)
Purpose of Budget Making in Departments
To determine the annual logistic requirements of the departments in achieving their annual objectives.
This budget will be used as a guide in governance, in rational spending according to directions and purpose, not only by the managers of the departments as well as by the hospital administration.
Annual departmental business action plan as basis for budget proposal
The business action plan of the department for the incoming year should serve as a basis for the budget proposal for the incoming year.
The business action plan and performance results of the department for the previous year(s) should serve as a reference and basis for the incoming management action plan and budget proposals.
Annual departmental business action plan as basis for budget proposal
Thus, before the proposed budgets are put in, each department must have a business action plan for the incoming year as well as business action plan and performance results in the previous year(s) and the current year to date.
How to make a business action plan
Key Target Areas
Performance Objectives
Programs / projects / activities/needs
Proposed budget
Health Service Development
Health Care Delivery Services
Training
Research
Others