Strategic planning in health care organizations involves outlining the actionable steps needed to reach specific goals. While there are different strategy types and levels, the purpose of all strategies is to bring an organization’s actions into alignment with its stated mission or values.
- Today, health care providers require more patient-centric, value-based approaches, whereas many of their current systems follow older, more traditional strategy models, according to Becker’s Hospital Review.
- Increasingly, organizations are having to recalibrate their health care strategies to suit current market trends and changing approaches to patient care.
Any professional looking to better understand the inner workings of health care institutions needs to know the different types of strategies used in health care, along with their importance for an organization’s success.
What is the main purpose of strategic planning?
2. The purpose of strategic planning – The purpose of strategic planning is to set overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.
What are the seven main purposes of strategic planning?
Here are the 7 basic elements of a strategic plan: vision, mission, SWOT analysis, core values, goals, objectives, and action plans.
What is the purpose of strategic planning in nursing?
Strategic planning enables an organization to look into the future in an orderly and systematic way, ensures that a hospital remains relevant and responsive to patient and community needs and provides a clear and consistent organizational focus. It also provides a basis for monitoring progress, results and impact.
What are the four main points of strategic planning?
The four most widely accepted key components of corporate strategy are visioning, objective setting, resource allocation, and prioritization.
What is the key to strategic planning?
Council Post: The Seven Keys To Successful Strategic Planning Strategic planning is a critical business practice for positioning an organization for success, aligning leaders to a common plan, and guiding management decisions. Most companies conduct some form of strategic planning event before starting a new year.
However, most strategic planning processes fail to deliver real value due to some common pitfalls. All too often, leaders view strategic planning as an event, not an annual process. This results in strategic plans that are not fully implemented since, once they are done, they are seldom reviewed throughout the year.
Managers who seemed to support the strategic plan may not be fully aligned to the organization’s goals and priorities, undermining execution. In addition, it is common that without a proper assessment of the industry and the organization’s capabilities, the plan lacks true strategic thinking, and becomes more of a projection of past performance into the next year.
To address these concerns, the following seven steps will guide the creation of a successful strategic planning process.1. Assess your industry, competitors and market trends. The initial step in creating an effective strategic plan is to assess the external forces shaping your industry, understanding the competitive and regulatory landscape and identifying market trends.
If data is not already available, conduct an efficient external assessment before the strategic planning event to provide insights and valid data to inform decisions and test assumptions. This results in more strategic conversations during the event.2.
Identify opportunities and threats by conducting a SWOT analysis. In conjunction with an external market assessment, an internal organizational review will ground the strategy and set a baseline for the organization’s culture and capabilities. A SWOT analysis will reveal the organization’s strengths, weaknesses, opportunities and threats.
With this information, leaders will be able to draw a set of offensive and defensive strategies that capitalize on opportunities and offset the risks of potential threats.3. Review your organization’s mission and vision. One of the values of a successful strategic event is to inspire leaders to achieve meaningful goals.
Reviewing the organization’s mission and vision is an important step at the start of the strategic planning event. An engaging envisioning session helps leaders collaborate in creating a shared story of success. This activity unites and inspires the leaders and ultimately everyone to embrace the organization’s greater purpose.4.
Set business goals and priorities. Leveraging the external and internal assessments and guided by a compelling vision, it is important to focus on the specific goals and priorities to achieve that vision. This is a critical stage for decision making. It is where leaders engage in rich decision-making conversations that define the big plays that will move the organization forward towards its goals.
- Having an objective, skilled facilitator can be useful at this point to help bring up, clarify, test and harmonize leadership’s views.5.
- Define functional objectives and key initiatives.
- With a clear set of business goals and priorities, the next step is to define the specific objectives and initiatives that activate the strategic plan.
This is best done at the functional level to enable alignment and increase ownership. It is important to keep the number of initiatives per function to what can be realistically done in a year. It is also important that these initiatives truly align and help deliver on the business goals.6.
Determine staffing, budgets and financing needs. The strategic plan is operationalized by assigning sponsors, champions and resources behind the plan. Senior leaders act as the sponsors of specific initiatives, managing their budgets and staff. At this point, it may be necessary to identify and deploy strategic activation teams representing the various functions charged to tackle cross-functional strategic initiatives.7.
Identify and track success measures monthly and quarterly. Tracking progress on strategic goals and objectives on a regular basis is key to ensuring that the plan is being implemented and to making course corrections as needed. The discipline to make progress and report on success measures on a regular basis ensures accountability and follow-through.
- It may be helpful to assign a person responsible for collecting, tracking and reporting progress on the strategic plan using scorecards and dashboards.
- A quarterly business review includes a status report on strategy implementation through key performance indicators.
- These seven steps will ensure that your strategic planning process is successful, and more importantly, that your organization is on the right track.
Making the right strategic choices will accelerate your organization to the next level. : Council Post: The Seven Keys To Successful Strategic Planning
What is a key element of strategic planning?
While the business operations framework is a continuous cycle in which each stage informs the next, developing a strategic plan is the best place to start. A strong strategic plan positions the organization for success and clearly defines it at every level.
What are the effects of strategic planning?
Around 1999, empirical researchers began to examine the performance and consequences of formal strategic planning (Thune and House, 1999; Ansoff et al,, 2000; Herold, 2001) and over 40 planning-performance studies have appeared since that time. How ever, in recent years this line of research has slowed to a trickle and with good reason: Previous studies lacked theoretical grounding, produced a bewildering array of contradictory findings, drew heavy criticism for inadequate methodologies and had little or no discernable net impact on strategic management research or practice (Shrader et al,, 1984; Pearce et al,, 1987a, b).
Nonetheless, it seems evident that the planning-performance relationship bears significantly on strategic management research and practice and that scholars should not abandon this line of enquiry altogether. This study re-evaluates the planning-performance research; the critical assessment of strategic planning and its impact on organizational performance which has effect on its survival.
Strategic planning can be defined as the process of using systematic criteria and rigorous investigation to formulate, implement and control strategy and formally document organizational expectations (Higgins and Vincze, 1993; Mintzberg, 1994; Pearce and Robinson, 1994).
Strategic Planning is a process by which we can envision the future and develop the necessary procedures and operations to influence and achieve that future. As in many other fields, strategic planning professionals often cloak their work in pseudo scientific jargon designed to glorify their work and create client dependence.
In reality, strategic planning processes are neither scientific nor complex. With modest, front-end assistance and the occasional services of an outside facilitator, organizations can develop and manage an on-going and effective planning program. Strategic planning consists of a set of underlying processes that are intended to create or manipulate a situation to create a more favourable outcome for a company.
This is quite different from tradition tactical planning that is more defensive based and depends on the move of competition to drive the company’s move. In business, strategic planning provides overall direction for specific units such as financial focuses, projects, human resources and marketing. Strategic planning may be conducive to productivity improvement when there is consensus about mission and when most work procedures depend on technical or technological considerations.
This study goes beyond the observation of some research that questioned the existence of direct casual relationships between the use of strategic planning and improved performance. This study draws from some of the many publications on the use of strategic planning in the private sector and from the growing number of those that deal with its uses and potential for the public sector.
- One of the major purposes of strategic planning is to promote the process of adaptive thinking or thinking about how to attain and maintain firm environment alignment (Ansoff, 1991).
- Firms, however, appear to gain more because they can derive considerable benefits not only from adaptive thinking, but also from integration and control.
Small firms can derive considerable benefits from adaptive thinking but probably gain less than large firms from the integration and control aspects of strategic planning. Evered (2000), suggested that the different uses of the term strategic planning vary from broad ones (which include the purposes of defining purpose, objectives and goals) to very narrow ones (namely, those that deal with the means for achieving given objectives).
Given Evered’s differentiation between broader and narrower definitions of strategy, Bozeman’s definition is a narrow one; one that assumes an ultimate mission of the organization. Bozeman’s definition assumes that the strategic planning/management process is triggered by changes in policies and priorities (Bozeman, 2003).
Hence, according to (Eadie, 2004), strategic planning may be defined broadly or narrowly. How ever, this formulation still does not help managers in the public sector, for now they need to decide not only whether they want to develop strategic plans but also whether they should approach such plans with a global perspective or with a narrower one.
Thus, what seems to be a problem of semantics masks a fundamental question about the inclusion or exclusion of goal definition from the strategic planning process. According to Berry (1997) Strategic planning is a tool for finding the best future for your organization and the best path to reach that destination.
Quite often, an organization’s strategic planners already know much of what will go into a strategic plan. However, development of the strategic plan greatly helps to clarify the organization’s plans and ensure that key leaders are all on the same script but far more important than the strategic plan document is the strategic planning process itself.
The strategic planning process begins with an assessment of the current economic situation. First, examining factors outside of the company that can affect the company’s performance. In most cases, it makes sense to focus on the national, local or regional and industry economic forecasts. This part of the analysis should begin early, at least a quarter or so before the formal planning process begins.
Hence, it’s been concluded that, strategic planning positively affects organizations’ performance, or more specifically, the amount of strategic planning an organization conducts positively affects it’s financial performance. Since the case study used for this research study is a bank, there is a need to understand strategic planning and financial performance relationships in banks.
The result from past researches suggested that the intensity with which banks engage in the strategic planning process has a direct positive effect on banks’ financial performance and mediates the effect of managerial and organizational factors on bank’s performance. Results also indicated a reciprocal relationship between strategic planning intensity and performance.
That is, strategic planning intensity causes better performance and in turn, better performance causes greater strategic planning intensity (Hopkins and Hopkins, 1997). There is a constant need for organizations, especially financial institutions like banks to think strategically about what is going on (Schmenner, 1995).
- This appears to be precisely what banks, in particular have begun to do in recent years.
- In response to increasing complexity and change in the financial services industry, banks have turned to strategic planning.
- The relatively new trend towards strategic planning in banks is viewed as a move designed not only to help them negotiate their environment more effectively, but to improve their financial performance as well (Bettinger, 1996; Bird, 1991; Prasad, 1999).
In consistent results of bank-related research, however, have not fully resolved the issue of whether strategic planning leads to improvements in banks financial performance. The intensity with which managers engage in strategic planning depends on Managerial (e.g., strategic planning expertise and beliefs about planning-performance relationships), Environmental (e.g., complexity and change) and Organizational (e.g., size and structural complexity) factors.
- The effects of these factors on strategic planning intensity have been suggested by several studies (Kallman and Shapiro, 1990; Unni, 1990; Robinson and Pearce, 1998; Robinson et al,, 1998; Watts and Ormsby, 1990b).
- Studies that have analysed the relationship between strategic planning and financial performance proved that the intensity with which banks engage in the strategic planning process intervene-that is cause an indirectness and lack of one-to-one correspondence-between factors such as strategic planning expertise and beliefs about planning performance relationships (managerial factors), environmental complexity and change (environmental factors), bank size and structural complexity (organizational factors) and bank’s financial performance.
As suggested by the inconsistent research findings, past studies have misspecified the relationship between strategic planning and financial performance in banks. Misspecification of this relationship might be attributed to past studies’ lack of attention to the relationship among these managerial, environmental, organizational factors and their potential impact on planning intensity and performance (Hopkins and Hopkins, 1997).
Subsequently, the consideration of such factors in the present study is viewed as a significant issue that holds implications for future research as well as for planning practices. Statement of Research Problem Past and recent research studies have made it clear that there is an increased internal and external uncertainty due to emerging opportunities and threats, lack of the awareness of needs and of the facilities related issues and environment and lack of direction.
Many organizations spend most of their time realizing and reacting to unexpected changes and problems instead of anticipating and preparing for them. This is called crisis management. Organizations caught off guard may spend a great deal of time and energy playing catch up.
- They use up their energy coping with immediate problems with little energy left to anticipate and prepare for the next challenges.
- This vicious cycle locks many organizations into a reactive posture.
- This research study is to assess the impact of strategic planning on organizational performance, which at the long run enhances organizational survival.
The first planning-performance studies emerged after the rapid expansion of formal strategic planning in the 1960s (Henry, 1999). Although the studies employed diverse methodologies and measures, they shared a common interest in exploring the financial performance consequences of the basic tools, techniques and activities of formal strategic planning, i.e., systematic intelligence-gathering, market research, SWOT analysis, portfolio analysis, mathematical and computer modeling, formal planning meetings and written long-range plans.
- The studies did not generally examine the relationship between performance and planning skill but rather the relationship between performance and the extent of formal planning; variously referred to as comprehensiveness, rationality, formality, or simply, strategic planning.
- However, Strategic planning is:,a continuous and systematic process where people make decisions about intended future outcomes, how these outcomes are to be accomplished and how success is to be measured and evaluated.
Strategic planning will help the organization capitalize on their strengths, overcome their weaknesses, take advantage of opportunities and defend against threats to the organization. Past studies of manufacturing firms (Ansoff et al,, 2001; Eastlack and McDonald, 2002; Herold, 2001; Karger and Malik, 2000; Thune and House, 1999) have indicated that strategic planning results in superior financial performance, measured in terms of generally accepted financial measures (e.g., sales, net income, ROI, ROE, ROS).
Subsequent studies (Armstrong, 1999; Greenley, 1996; Mintzberg, 1990; Shrader et al,, 1984; Akinyele, 2007) have contradicted the notion of a strategic planning-superior performance relationship. However, more recent studies (Miller and Cardinal, 1994; Schwenk and Shrader, 1993) provide convincing evidence that strategic planning does indeed result in superior financial performance.
The fact that these studies accounted for factors responsible for past research contradictions (e.g., methodological flaws, nonrobust statistical methods) provides additional support for their conclusions. One stream of strategic planning research has raised the issue of whether the length of time a firm or organization has been involved in the strategic planning process has any impact on performance.
- In their study of the banking industry (Gup and Whitehead, 2000; Burt, 1998; Kuala, 1996; Lenz, 1990; Leontiades and Tezel, 1994) tested the notion that strategic planning only pays off after a period of time.
- They found no statistically significant relationship between the length of time banks had been engaged in the strategic planning process and their financial performance.
With respect to firms in the banking industry, many have diversified into new markets in recent years. This has resulted in increased pressure for banks to offer new and better services to their customers, which has required them to become more focused on their market niche as well as their financial policies.
Moreover, bank managers are focusing more intensively on their bank’s external and internal environments, placing greater emphasis on setting direction (i.e., articulating a vision and a mission) and evaluating strategy alternatives more carefully (Hector, 1991; Robinson, 1994; Shepherd, 1997; Steiner, 1997; Thompson and Strickland, 1997; Armstrong, 1995).
These activities correspond precisely with the strategic planning process components (i.e., formulating, implementing and controlling strategy). The fact that bank managers are becoming more intensively engaged in these activities implies that they acknowledge (either consciously or unconsciously) a relationship between strategic planning intensity and improved financial performance (Hunger, 1990; Johnson, 2002; Kallman and Shapiro, 1998; McCarthy, 1997; Paley, 2004; Porter, 1989).
Indeed a recent study tested this relationship and found that banks that planned with greater intensity, regardless of whether their strategic planning process was formal or informal, outperformed those banks that planned with less intensity (Hopkins and Hopkins, 1994). In support of this position recent research (Miller and Cardinal, 1994; Chandler, 1998; Davis, 2004; Denning, 1997; Haveman, 1993; Hax and Majluf, 1991; Hayes, 2003; Hitt et al,, 1990; Hunsaker, 2001) set forth and tested the notion, with affirmative results, that the amount of strategic planning a firm or an organization conducts positively affects its financial performance.
For the purposes of the present study, strategic planning intensity is defined as the relative emphasis placed on each component of the strategic planning process. In conclusion, majority of the studies that have examined the relationship of strategic planning and performance have concluded that firms having a formal strategic planning process out perform those that do not.
What are the four main points of strategic planning?
The four most widely accepted key components of corporate strategy are visioning, objective setting, resource allocation, and prioritization.