- Planning
Thinking about a goal and organising activities and resources towards achieving it
- Strategic planning
‘A disciplined effort to produce fundamental decisions and actions shaping the nature and direction of an organisation’s activities within legal bounds’ (Olsen & Eadie, 1982, p. 4)
The Australian Commission on Safety and Quality in Healthcare (2011) defines 10 safety and quality standards for health services. Standard 2, which is concerned with ‘partnering with consumers’, requires that ‘the health service organisation establishes mechanisms for engaging consumers and/or carers in the strategic and/or operational planning for the organisation’ (p. 24). The standard also requires health service strategic planning as a criterion for accreditation. This is consistent with the Australian standard: Good governance principles, which indicates that governing bodies are responsible for ensuring the strategic direction of their organisations (Standards Australia, 2003).
While there are differences in operations between public and private health services, researchers have found that for-profit and not-for-profit hospitals tend to have similar strategic capabilities (Reeves & Ford, 2004). Therefore, this chapter does not distinguish between these types of health services; the tools and techniques discussed can be used in both public and private sector strategic planning and management.
Forward-looking organisations have evolved from episodic strategic planning to strategic management that effectively links the identified strategies with daily operations (Zuckerman, 2006). The intent of strategic management is that the managers assist their staff to understand the strategic direction and how their positions and job responsibilities are essential to achieving the organisational strategies. This suggests the need for communication to and involvement of staff throughout the strategic planning process, as well as during the implementation and monitoring of the strategic plan. Jasper and Crossan (2012) say that nurse managers have tremendous influence over the success or failure of a strategic plan and emphasise the need for nurse managers to translate the strategies into outcomes that will deliver high-quality care. This is true for all healthcare managers.
- Strategic management
‘An externally-oriented philosophy of managing an organisation that links strategic thinking and analysis to organisation action’ (Ginter, Swayne & Duncan, 2002, p. 13)
Framework for strategic planning
Despite the many strategic planning models available, all strategic planning follows the simple 10-step iterative process outlined in Figure 29.1 and discussed in detail in the following sections.
Figure 29.1 The strategic planning process
Preparing to plan
The first step requires agreement regarding the planning process. This includes identifying who will be involved, when the planning will take place, what the process will look like and the resources required. The literature suggests the need for governing board involvement in strategic planning (Nadler, 2004; Standards Australia, 2003) and for the staff responsible for the implementation to be involved (Baldwin & McConnell, 1988). In addition, as outlined above, the Australian national standards require consumer involvement (Australian Commission on Safety and Quality in Health Care, 2011). There are many recent examples of planning for new hospitals and other healthcare services in which consumers have been involved in all phases of the planning and development process.
Successful strategic planning requires a champion in a position of power in the organisation to legitimise the process; a planning team that has the time, energy and support to complete the process; willingness within the team to construct and consider a variety of arguments for the future for the benefit of the organisation; and the ability to pull information and people together at key points for important discussions and decisions (Bryson, 1988). It has been recognised that spending time at the beginning of the process outlining who should participate and how – that is, defined roles and responsibilities – leads to a strategic planning process that results in a more feasible strategic plan (Zuckerman, 2006).
Taking stock
This planning step requires an honest appraisal of the current position of the organisation in relation to similar organisations, with identification of its existing strengths and weaknesses. This appraisal contributes to the SWOT analysis, one of the most useful strategic planning tools identified by managers (Wright, Paroutis & Blettner, 2012). The participants consider the effects of the organisational strengths and weaknesses on the achievement of current plans. (The later environmental scanning step enables the external opportunities and threats that contribute to the SWOT to be identified.)
- SWOT analysis
Strengths, Weaknesses, Opportunities and Threats: a technique used to identify the internal and external aspects of the organisation that need to be addressed in the strategic plan
Confirming mandate, vision, mission and values
This step requires the confirmation of the externally imposed formal mandate, and the mission, vision and values. Organisational annual reports usually contain a mission statement and a vision statement. The mission and mandate need to be consistent and support each other, describing the purpose of the organisation. Many mission statements also include a statement of values. Organisational employees are expected to uphold the documented values in their role responsibilities.
- Mandate
The formal, externally authorised organisational purpose that is usually outlined in legislation, articles of incorporation, charters or regulations
- Mission statement
A translation of the mandate into the immediate purpose of the organisation
- Vision statement
A description of how the organisation will contribute to society through its mission
- Statement of values
An outline of how the purpose or mission will be achieved: the set of principles and beliefs that guide the operations
The vision statement is forward-looking and is meant to answer the question of what the organisation is striving to become in the larger environment in which it functions (Bryson, 1988). Collins and Porras (1991) stress that an organisational vision needs to include both a guiding philosophy and a tangible image. The guiding philosophy should communicate the organisation’s core values and beliefs, such as a religious or other foundation. The tangible image communicates the contribution the organisation will make to society if it is successful in achieving its mission.
A review of hospital vision statements finds that many hospitals want to be known for excellence or as leaders in the field. For example, one hospital’s vision is ‘to lead the transformation in healthcare’, while another wants ‘to be the clear first choice for medical care’. But these statements do little to communicate what decisions will be made in them. They can be seen to be self-serving and do not help staff and external stakeholders understand how the hospitals will make their impacts on society.
A vision that commits to improved health for the local community is in a better position to make strategic decisions for the good of the community and not for the good of the hospital. For example, the vision statement ‘Transforming lives and communities through health and wellness – one person at a time’ suggests a great deal to staff about their work roles in this hospital.
Environmental scanning
The strategic plan should provide direction for the organisation over a timeframe of three to five years. Therefore, it is important that the process includes consideration of factors likely to impact on the organisation during this period. A strategic plan will be most successful if it is designed with consideration of changes in the environment; this requires collection, analysis and discussion of information gained through environmental scanning. Researchers have found an association between more sophisticated environmental scanning and improved organisational performance (Subramanian et al., 2011).
- Environmental scanning
Monitoring, evaluating and disseminating information from outside the organisation to key managers within the organisation (Snyder, 1981)
The literature distinguishes between the micro-environment, or task environment, which includes direct organisational contacts such as customers and suppliers, and the macro-environment, or general environment, which includes the political, economic, ecological, societal and technological forces that surround the organisation (Subramanian et al., 2011; Vecchiato, 2012). Both must be considered in an environmental scan (see, for example, Friesen & Bell, 2007).
Organisations use a variety of environmental scanning techniques. They may be as simple as generating a list of current and future drivers of change using the framework of ‘politics, economics, ecology, society and technology’ to ensure all aspects are identified. The planning team reviews the list for completeness and uses it to foster discussion of the likelihood and potential impact of various changes on the organisation.
Scenario-building has been used since the 1970s in industries looking for ways to ensure that strategic planning captures future trends that may be difficult to identify. Various future scenarios are constructed that propose how the identified changes are likely to impact the organisation. Constructing scenarios involves defining the issues, confirming the major stakeholders, describing trends, identifying uncertainties and writing alternative scenarios (Schoemaker, 1995).
- Scenario-building
Constructing future scenarios that propose how the identified changes are likely to impact the organisation
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