Why is a strategic planning and management process important to an organization?
Read Me First HCS/586
Week One
Introduction
“If you don’t know where you are going, any road will get you there.” — Lewis Carroll
To know where you are going, you must analyze the present state of your organization and the competitive environment in which you operate. The results of that analysis provide the foundation for setting the future course of the organization. Strategic planning is a deliberate process designed to evaluate an organization’s current state and to map the future for long-term sustainability. The plan serves as a roadmap that shows the organization how to realize its mission and vision.
Figure 1 features a model used by the National Institute of Standards and Technology for the Baldrige Criteria for Performance Excellence. The model illustrates the role of strategic planning in achieving long-term organizational results. Organizations must deliberately set their sights on the results or outcomes and reach those targets through the strategic planning process.
Figure 1. Baldrige Health Care Criteria for Performance Excellence Framework: A Systems
Perspective. From Health Care Criteria for Performance Excellence and Innovation (p. iv) by Baldrige National Quality Program, 2009, National Institute of Standards and Technology.
The Poudre Valley Health System (PVHS) is a 2008 winner of the National Malcolm Baldrige Quality Award. PVHS is a locally owned, private not-for-profit health care organization serving residents of northern Colorado, western Nebraska, and southern Wyoming. The following demonstrates some sample outcomes achieved because of a successful strategic planning process:
- Patient loyalty ranks in the top 1% of U.S. hospitals, according to the U.S. Centers for Medicare and Medicaid Services (Poudre Valley Health System, 2009).
- Five Star Inpatient Care Award for the highest inpatient satisfaction score among 300 hospitals nationally (Poudre Valley Health System, 2009)
- Performs consistently in or near the top 10% of national performance standards for treating acute myocardial infarction, heart failure, and pneumonia (Poudre Valley Health System, 2009)
- The PVHS maintained competitive health care costs when compared to local competitors. In 2006, the average PVHS charge was $2,000 lower than its main competitor and $7,000 lower than the Denver metro rate (Poudre Valley Health System, 2009).
- Overall physician satisfaction ranks in the national 99th percentile, according to Gallup (Poudre Valley Health System, 2009).
- They received the Peak Performance Award, Colorado’s highest award for performance excellence, marking the second time in 5 years they received the honor. In 2008, Modern Healthcare Magazine named PVHS as one of “America’s 100 Best Places to Work in Healthcare” (Poudre Valley Health System, 2009).
- The American Nurses Credentialing Center (ANCC) awarded its Magnet Designation for Nursing Excellence in 2000 and again in 2004 (Poudre Valley Health System, 2009).
- In March 2008, Thomson Reuters, a national health care consulting firm, named Poudre Valley Hospital as a “100 Top Hospital” for the fifth year in a row (Poudre Valley Health System, 2009).
These favorable outcomes did not just happen. It took knowing where they wanted to go and mapping their course—their strategy—to get there.
This week in relationship to the course and the program
This capstone course integrates the knowledge, concepts, and skills associated with an entire sequence of study in the program. Creation of a strategic plan demonstrates your mastery of the critical elements required for effective leadership. During Week Five of this final course, you are encouraged to complete a survey that evaluates the program outcomes for the entire degree program and that includes information about your skills in preparing a strategic plan.
Week One focuses on the importance of the strategic management process. It sets the foundation for creating a plan and an implementation strategy.
Hints for a reading strategy of the assigned materials
As you read the assigned material this week, ask yourself the following questions:
- Why is a strategic planning and management process important to an organization?
- What are the essential elements that must be present for strategic planning to be successful?
The approach to strategic planning in organizations may be formal or informal. The Essentials for Strategic Management textbook illustrates four basic elements required to prepare a strategic plan. These elements include environmental scanning and analysis, strategy formulation, strategy implementation, and evaluation and control (Hunger, 2011, p. 5).
Similarly, Strategic Management of Health Care Organizations provides yet another model for consideration. Over the course of the next 6 weeks, we will explore and discuss each element of the strategic planning process.
Some questions to ask as you hone your critical thinking
As you read the material for Week One, ask yourself if there is a direct correlation between favorable outcomes in organizations that participate in strategic planning and management. What are some best practices exhibited by other organizations that you could apply to your own work setting?
Summary
Strategic planning is to a business what a roadmap is to driver. It is a tool that defines the routes or strategies necessary to move the business to where the owners or stakeholders want it to go. Strategic plans face obstacles that require organizations to adapt and adjust as the plan is implemented. Strategic planning is a process that brings to life the mission and vision of the enterprise.
References
Hunger, J. D., & Wheelen, T. L. (2011). Essentials of strategic management (5th ed.). Upper Saddle River, NJ: Pearson Education.
Poudre Valley Health System. (2009). Retrieved July 1, 2009, from Poudre Valley Health System Web site: https://pvhs.org/pvh
Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2008). Strategic management of health care organizations. (6th ed.). Hoboken, NJ: Wiley.
