Hope Is Not a Strategy: A Primer for Anesthesia Groups on Strategic Planning
Will Latham, MBA
President, Latham Consulting Group, Inc., Chattanooga, TN
One of the most important responsibilities of any anesthesia group’s governance is to develop a strategic plan for the group. For some groups this is the role of the Board. In other groups, all shareholders participate in this process.
Unfortunately, it appears that for many groups, “hope” is their strategy.
We are continually surprised to find groups that have never (or rarely) conducted strategic planning retreats on an annual or semi-annual basis. This is especially surprising given:
- Almost all of many physicians’ compensation comes from their group.
- Almost all of many physicians’ clinical work life is associated with their group.
- Moving ahead with significant initiatives requires the collaboration of the members of the group. There is often little that one physician can do by themselves.
And yet, many physicians won’t allocate one day a year for a group planning session.
Why Is Planning Avoided?
Why don’t they? We think there are several reasons:
- Many physicians don’t see the need for strategic planning. They think the group should be able to develop plans at their monthly meetings. They don’t recognize that they typically use those (overly long) monthly meetings to fight day-today fires.
- Many physicians are conflict avoiders. They don’t want planning meetings because they fear that uncontrolled, unproductive conflict will break out.
- The idea of “planning” sounds too business-like, or the term “retreat” sounds too much like Kumbaya.
Critical for Success
The decisions that anesthesia groups face today are significant and have longrange implications. They involve such things as whether or not the group will stay independent, who the group might align with, the need to pursue new facilities, the addition of physicians, decisions related to billing and collections, implementation of electronic medical records, the addition of new services and a host of other issues.
Decisions related to each of these issues require substantial resources and lead times. In addition, the decisions are often interrelated. For example, the decision to add new sites of service can be directly impacted by the group’s ability to recruit.
But the significance of the needed decisions is only one factor highlighting the importance of long-range planning. Without planning, physicians in anesthesia groups rarely have a common vision of the direction their group is moving. This can result in inefficient utilization of resources, lack of direction for the administrative staff and lack of any progress for the group.
There are other reasons that successful anesthesiology groups conduct planning efforts:
- Significant changes in the environment can hurt or help the group. Planning helps identify these issues and prepare for them.
- The planning process allows each physician to communicate their vision of the future and work to develop consensus in their objectives and goals.
- Key issues are highlighted, discussed and resolved.
- The plan provides direction and sets priorities for the administrative staff for implementation.
- The planning process and completed plan improves communication to both physicians and staff.
- If progress is tracked against the plan, performance measurement can be improved.
- Physician recruitment may be enhanced as potential recruits can quickly understand if their longrange goals are in line with the group.
The Strategic Planning Process
Strategic planning includes the following major elements:
- Developing mission and vision statements for the group.
- Considering internal strengths and weaknesses and external opportunities and threats.
- Discussing key issues.
- Developing objectives and strategies to achieve those objectives.
- Creating action plans to implement those strategies.
Step 1: Mission and Vision Statements
We know that some of you will gag at the thought of developing mission and vision statements for your group. Maybe you have spent a whole weekend developing a mission statement for a hospital and come up with “We serve patients.” Maybe your group has tried to develop such statements in the past but the result has been so ethereal that individuals don’t see the connection between these statements and what the group is doing.
This is not Kumbaya stuff. Mission and vision statements serve hard-core business purposes. Mission and vision statements help the group by:
- Identifying how to properly allocate and utilize resources.
- Elaborating group thinking and identifying gaps in agreement that need to be negotiated.
- Setting the stage for all other planning.
- Serving as a guide when setting strategy and making decisions. The group’s leadership should always be asking “Is this taking us toward our vision?”
- And most important, giving the leadership something to hang their hat on when they ask a physician to do what is best for the group rather than the individual.
We have found that, in developing these statements, the best results come from working through a set of questions as outlined below:
A mission statement is a statement of the group’s purpose and reason for being. Anesthesia groups develop a mission statement to help them communicate with themselves (and sometimes others) why the practice exists and to set parameters for what the group hopes to accomplish.
A mission statement answers the following questions:
- Who does the group wish to serve? Consider geographic area, types of patients, health systems, and other factors.
- What “customer” needs does the group wish to satisfy? “Customers” may include patients, surgeons, health systems and others.
- What physician and staff needs does the group wish to satisfy?
- What are the core values and requirements for being a member of the group?
- What principles or policies guide the group?
A mission statement is intended to provide motivation, general direction, an image, a tone and/or a philosophy for the group.
A vision statement addresses where a group is heading by answering the following questions:
- What is your preferred future? What does the group intend to become?
- Looking out three to five years:
- What services and specialties do you plan to offer?
- What geographic region do you intend to serve?
- How many locations are you likely to serve?
- How large will the group become? Will you grow to fill the service needs of the market, or will you set a limit on the number of physicians in the group?
- What type of relations will you have with others? Will you remain an independent group?
- What benefits do you hope to provide for the owners and employees?
You may have heard the quip “The difference between a hallucination and a vision is the number of people who see it.”
This is why we recommended that developing these statements be a group activity. Yes, most group leaders can create vision and mission statements on their own. But when they present these statements to their group, the result is usually “that’s nice” and the group moves on to other issues.
Instead, development of these statements should be a group activity for two reasons:
- Answering the questions noted above often leads to a rich discussion about what the group is about and where it is heading.
- When the group members discuss these questions and develop these statements they are more likely to embrace them.
Once mission and vision statements are developed, the next steps are to look at the group’s strengths and weaknesses, review the environment for opportunities and threats and identify the key issues that need to be addressed in the planning process.
Step 2: SWOT Analysis
Once you have developed the group’s mission and vision statements, it is time to identify the important issues that need to be addressed in the planning process. The first step in that effort is to conduct a SWOT analysis.
“SWOT” stands for strengths, weaknesses, opportunities and threats. As part of the strategic planning process, most groups conduct this type of analysis to identify internal and external situations, events or trends that positively or negatively impact the group. Let’s further define terms:
- A strength is a capability, resource or capacity the organization can use to achieve its vision.
- A weakness is a limitation, fault or defect in the organization that will keep it from reaching its vision.
- Opportunities are any favorable situations in the environment that support demand for a service or permit the organization to enhance its situation.
- Threats are any challenge posed by an unfavorable trend or event that, in the absence of purposeful action, would lead to the stagnation, decline or demise of the group or one of its services.
When scanning for opportunities and threats, you are looking for three things:
- A significant need, event or trend that could positively or negatively affect the group;
- How that item will impact your organization; and
- What response might be required.
Why conduct a SWOT analysis? Most planning efforts use this information to develop plans to:
- Fix significant weaknesses.
- Pursue key opportunities.
- Avoid important threats.
- Leverage group strengths.
Therefore, by analyzing the SWOT, the group can identify the key issues that need to be addressed in the next steps of the planning process.
How do you develop the SWOT? There are several sources for this information:
- Typically the group’s management and leadership are very knowledgeable about both internal and external issues that can affect the group.
- In preparing for the planning process, it makes sense to interview or survey the group physicians for their viewpoints on group strengths and weaknesses, and regional opportunities and threats.
- Sometimes research needs to be conducted to identify demographic changes, moves by competitors and specific opportunities in the marketplace.
Step 3: Key Issues
The key issues to be addressed in the planning process are different for every group. This is because the results of the SWOT analysis are different for every group.
However, we find that anesthesia groups typically need to address the following issues in their planning process:
- Is it our goal to remain independent?
- Who should we consider affiliating with (other groups, hospitals, etc.)?
- Geographic coverage:
- What market area are we trying to serve?
- Should we consider satellites or new service locations?
- How large should we become? How many physicians, CRNAs, other providers should we have?
- What specialties or sub-specialties should we have?
- What is our recruitment plan?
- How can we leverage our strengths to pursue new opportunities?
- What other sites of service should we pursue?
- What type of additional services should we be offering?
- How should we best position ourselves for the future?
- What key threats exist in the region, and how should we avoid them?
- How can we use our strengths to counter threats?
- Internal issues:
- Compensation system
- Alternative work programs (part-time, shared positions)
Once the key issues are identified, the group needs to discuss the issues, develop objectives and create strategies and action plans to achieve those objectives.
Step 4: Objectives and Strategies
We have addressed setting group mission and vision and identifying key issues that need to be addressed in the planning processes. These two steps are necessary but not sufficient to move the group forward. Both vision and tasks to achieve that vision are required.
Therefore, the next step in the planning process is to work on the “task” part. This involves setting objectives, and, in turn, establishing strategies and action plans to achieve those objectives.
Objectives and Strategies
An objective is a description of some situation in the future that you would like to see come about, which you can reasonably expect to accomplish and which is in line with your group’s mission and vision.
Strategies are the major decisions, policies and/or action programs employed by the organization to meet its objectives.
Let’s look at an example.
A group we worked with recently agreed that it was their vision to stay independent and grow in a certain region to achieve that. The group recognized that there were a number of other practices providing similar services in the region.
As part of its planning retreat, the group set an objective to attempt to merge or form other relationships with the other groups in the region over the next three years. The group’s strategy was to pursue the groups A and B, and then consider the other organizations.
Determining which objectives to pursue is a complex and challenging process. Quite often, anesthesia groups identify many objectives they would like to pursue and therefore need to prioritize those objectives.
Naturally, objectives should be developed using the “SMART” characteristics:
- Specific: Target a specific area for improvement.
- Measurable: Quantify or at least suggest an indicator of progress.
- Assignable: Specify who will do it.
- Realistic: State what results can realistically be achieved, given available resources.
- Time-related: Specify when the result(s) can be achieved.
One point of caution: Sometimes when anesthesia groups develop objectives and strategies, they get so excited that they plan for every objective to be achieved in the next three months! As you develop objectives and strategies, the group must keep in mind the level of resources (management and physician leaders) available to implement these plans. If there are not enough resources, then the group has only three choices:
- Add resources.
- Change the objective/strategy.
- Take more time to implement.
Remember: “Nothing is impossible for the person who doesn’t have to do it.” Set realistic objectives and strategies.
Step 5: Action Plans
Once you have developed goals, objectives and strategies, you need to map your specific action plans to achieve them. Actions plans should address:
- What will be done?
- Who will do it?
- What will be the costs?
- What will be the benefits?
- When will it be completed?
A strategic plan based on these five steps will give your practice the cohesion and sense of direction needed to stay on track for years to come.
Will Latham, MBA is President of Latham Consulting Group, Inc., which helps medical group physicians make decisions, resolve conflict and move forward. For more than 25 years Mr. Latham has assisted medical groups in the areas of strategy and planning, governance and organizational effectiveness, and mergers, alliances and networks. During this time he has facilitated over 900 meetings or retreats for medical groups; helped hundreds of medical groups develop strategic plans to guide their growth and development; helped over 130 medical groups improve their governance systems and change their compensation plans; and advised and facilitated the mergers of over 120 medical practices representing over 1,200 physicians. Mr. Latham has an MBA from the University of North Carolina in Charlotte. He is a frequent speaker at local, state, national and specialty-specific healthcare conferences. Mr. Latham can be reached at (704) 365-8889 or email@example.com.