Strategic Planning
A strategic plan — designed to work in conjunction with your marketing plan, your financial plan and your operational/management plan — is a valuable component of a comprehensive business plan that will lend stability and intentionality to the direction of your practice.
As you are well aware, physicians and their practices face new and complex challenges. Among these are the repercussions from: the emphasis on reducing the cost of health care while increasing access to care, the downward pressure on fees by third party payors, the increased competition among physicians, and the movement toward strategic alliances. And those are but a few. Where practicing quality medicine once assured a practice's success, it longer does. Building, or even just maintaining, a medical practice has become more a function of the practice's business acumen then its resident medical skills. This trend can only be seen as likely to continue, and, in that they must now more than ever view themselves as a business, a practice and its managers can only be seen as wise to look to the techniques, processes, and systems that have been developed and refined by the business community at large for some time.
Formal strategic planning, by its very definition, has been one of the critical processes employed by businesses both large and small to deal with the issues of tomorrow. Changes typically occur much too quickly to allow long-term survival if you are only being reactive. By contrast, strategic planning provides a proactive, orderly, systematic review of the organization and the environment within which it is – and anticipates – operating. It involves the development of best projections of how that environment is likely to change, the identification of what external factors are most likely to drive the change, and an assessment of the conditions within the organization that may impact its ability to adapt to the change.
In the end, it is identifying goals and objectives for the practice and the physicians; working out a "game plan" to accomplish those goals and objectives, and insuring that mechanisms are in place for the measurement of progress. In short, the Strategic Planning Process is:
An integrated set of activities or actions aimed at developing sustainable, competitive advantages for the medical practice.
The orderly review of the organization in the context of the environment in which it exists, developing its best projections of how that environment will likely change, and working out a game plan for how to accomplish thegoals and objectives defined by the strategic assessment.
When achievements are the result of carefully developed plans.
Why Strategic Planning Does Not Occur Enough.
So the need is clear, as are the basic planning processes, goals, and significant potential value of such a program. So why, I've often wondered, does it seem that a number of medical groups have never conducted a strategic planning session or seemingly even thought about having one? The question leads us to what is actually an outside advisor's first step toward getting a practice on the road to real strategic planning; the recognition –if not actual understanding – of the physicians' or managers' perspective or feeling of reluctance. Consider the following sample reasons:
First, physicians and managers have numerous other issues to attend to in today's operating environment, issues they often tend to view as more pressing than something they might perceive to be just a "management exercise". This is often why things like strategic planning do not get attention until a crisis or problem occurs. Second, many physicians and their managers have a basic tendency toward being reactive by nature. (I recognize that this is a very unscientific generalization, and one for which I can't offer even anecdotal explanation, but one nevertheless based on years of experience dealing with it). A third potential reason might be the fact that the strategic planning process requires a lot of honest self-assessment and objectivity to make the program work right; requirements which can sometimes seem to take physicians out of their comfort zone. Finally, there is to be found in some cases the attitude that strategic planning is either expensive, or even a total waste of time. Either view demonstrates both a lack of understanding of the potential benefit side of the equation that results from a properly designed and run planning program. It also highlights the need to provide – up front - some evidence and reason to believe in the effectiveness of the program you are proposing.
The Strategic Planning Process
There are, in essence, five steps to the strategic planning process:
Physician and staff interviews. Internal environmental analysis. External environmental analysis. The strategic planning retreat. Creation of the Action Plan.