Arne Pedersen, MBA, FACMPE
The Benefits of Strategy
There are many forces affecting anesthesia groups today such as the pending Supreme Court ruling on the Patient Protection and Affordable Care Act, high unemployment, pending cuts in Medicare, and a very slow economy. Regardless of what one believes, strategically addressing these issues is paramount in providing the necessary road map for the future. Otherwise, a group may find itself in an unfavorable position. This article seeks to explore the benefits of strategy for anesthesia groups.
By definition, strategy is “a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result: a strategy for getting ahead in the world.” Clearly, developing strategy positions a group for success. Furthermore, Sun Tzu describes the importance of thinking through strategy as such, “the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose.” Again, in order to get ahead in the world, it is clearly better to take the proactive steps than not.
With that said, a strategic plan provides various benefits for anesthesia groups including:
- Appropriate venue to address issues
- A set of strategic objectives as part of the road map
- An avenue to coalesce a group around the strategic objectives
- An accountability tool for a group to see how the leadership is guiding for the future
It is important to note that a strategic plan is just that, a strategic plan. It is not set in stone. It is also not a detailed business plan. Business plans, however, are borne out of strategic objectives from a strategic plan.
The strategic planning process is an appropriate venue to address issues for three specific reasons. The group will have open and honest discussions about the strategic direction given a variety of issues. The group will also begin to form strategic objectives during this process. Finally, the group will focus on the development of the strategic objectives.
Since this is the venue for open and honest discussions, appropriate rules and etiquette are in order for the duration of the conversations. An informal use of Roberts Rules of Order is always applicable. Depending upon how a group interacts, it may be necessary to have an experienced facilitator who can help guide a group through these discussions. This leads to the next point of developing strategic objectives.
The discussions will need to converge on a set of strategic objectives for the group. Whether a group does it on its own or through a facilitator is not the point. The point is that the outcome from the discussions needs to be a set of strategic objectives. Strategic objectives are not specific business plans. They are objectives that a group will use to focus their practice toward in the future. These objectives may be offensive or defensive in nature. The objectives will have some parameters around them, which includes various factors. For example, a group may develop a strategic objective to address the issue of a very slow economy by taking both defensive and offensive approaches. The defensive approach may include a hiring freeze as an example. The offensive approach may include aggressively growing the practice through additional practice opportunities at other hospitals and ambulatory surgery centers. There certainly would be several factors involved including cash flow to take into consideration.
COALESCE A GROUP
Another benefit is that strategic planning will help a group to coalesce around the strategic objectives. The strategic planning process sharpens the vision for the group; clearly delineates the benefits of each strategic objective; and prioritizes those same objectives. Instead of looking at a landscape filled with issues and no clear direction, the process helps to sharpen the vision for the group. The group identifies its vision through the discussions. An example of the vision may be to remain an economically viable and independent group. Using this example, the group will develop a set of strategic objectives that support that vision. An example of a strategic objective for this vision might be to mitigate a hostile take over by the hospital. A group might perceive the benefits of this strategic objective as greater autonomy and control as an example. Finally, the group then would decide what priority to assign this strategic objective. Is this strategic objective the top priority, or in the top five, or even the top ten? The group decides this as part of the process.
Ultimately, the group holds the leadership accountable for implementing the strategy, guiding the group, and developing more concrete business plans from the strategic objectives. Depending upon the governance structure of the group, the leadership will execute this work in the board and various committee meetings. The leadership is responsible to communicate with the group regarding the ongoing progress of the strategy implementation.
One final point to make is the approach to completing the strategic planning process. With these benefits of strategy come several approaches to developing strategic plans. The two approaches for the purpose of this article are the McKinsey strategic problem-solving model and the decision-making model found in the book, Lead with Intent, by Arne Pedersen. Both models help in decision-making but also guide the user through strategic decision making for the purposes of strategic plans.
The McKinsey model begins with the business need that must be solved and moves through data analysis and interpreting the results to the final plan and implementation. This is a time-tested model with thousands of clients.
The decision-making model is similar with its seven steps: identify the problem, gather the information, develop courses of action, analyze and compare, make a decision, make a plan, and implement. This is also time-tested by military, civilian, and business leaders alike for multiple decades.
In both models, the focus on strategic objectives is a key to success as alluded to earlier. For a group doing this exercise, it is important to know who the group is, what the underlying culture of the group is, how and where the group fits in and what you see as the strengths, weaknesses, opportunities, and threats of the group. Additional data from the billing system and the hospital system(s) will aid in the analysis.
The strategic objectives that are developed from this process are the objectives a group will focus on. Each objective will address a specific strategic issue such as the pending Supreme Court ruling on the Patient Protection and Affordable Care Act. The objectives form the base for the plan, which the group will approve and then look to their respective leadership to implement.
In conclusion, a group can decide to do nothing with its future dictated. Conversely, a group can decide to take advantage of the benefits of strategy and dictate its own future. The group’s future rests upon this important and deliberate decision.