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6 MANAGERIAL AND SUPERVISORY PLANNING Preparing for the Road Ahead
Starting Point
Go to www.wiley.com/college/Lombardi to assess your knowledge of the basics of planning. Determine where you need to concentrate your effort.
What You’ll Learn in This Chapter ▲ The benefits of planning ▲ Common types of plans ▲ The five steps of the planning process ▲ Widely used planning tools and techniques ▲ The importance of SWOT analysis
After Studying This Chapter, You’ll Be Able To ▲ Demonstrate how organizations can improve by using planning ▲ Analyze the critical factors that distinguish different plans ▲ Distinguish the importance of each step of the planning process ▲ Compare the relative merits of planning tools and techniques ▲ Examine how plans can be adapted to account for uncertainty and change
Goals and Outcomes ▲ Master the terminology, understand the steps, and recognize the tools of
the planning process ▲ Distinguish among types of plans based on their time horizon, scope, and focus ▲ Organize planning activities around the planning process ▲ Use tools and techniques to analyze parts of the planning process ▲ Discuss the results, implications, and limitations of specific plans ▲ Collaborate with others to carry out a SWOT analysis ▲ Apply proper planning techniques to real-life situations ▲ Evaluate real plans and use planning tools to produce on-going process
improvement
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INTRODUCTION While all managers must monitor the day-to-day flow of work and resources, good managers are also always looking ahead. A thorough plan, based on an accurate understanding of the current workplace and focused on achievable goals for the future, helps everyone in an office, department, or workgroup to work effectively, meeting today’s demands and tomorrow’s challenges. Plans can vary in length and scope, depending on the needs of the organization. A five-step planning process often yields the strongest plans. Organizations utilize numer- ous standard tools and techniques to create high-quality plans, including the popular and effective tool of SWOT analysis.
6.1 Why Plan?
Successful managing requires thorough planning. Planning is the process of deciding exactly what you, your team, or your department wants to accomplish and how to best go about meeting your goals. Planning is the foundation on which all other managerial responsibilities rest.
6.1.1 Successful Plans
All successful plans have four components. They
▲ organize processes, procedures, and staff for efficient and effective work. ▲ influence and lead team members or employees who report to you. ▲ monitor work progress, schedules, and budgets. ▲ identify problems and suggest corrective actions.
The following explores the importance of planning, the basic types of plans health care managers work with, the step-by-step way plans are created, and a host of special tools and techniques that can make plans more effective and effi- cient for everyone who utilizes them.
In today’s demanding health care workplace, your department, team, or work- group needs to consistently meet goals both large and small to help improve the overall company as well your specific group. Meeting—and, hopefully, exceeding these goals and expectations—enables your department and company to become ever better at what they do, staying one step ahead of the competition.
Health care organizations face pressures and challenges from many sources, all of which increase the importance of good planning. External forces include competition, increased government regulations, ever-more complex technologies, the uncertainties of a global economy, and rising labor and resource costs. Inter- nal forces include the demand for greater efficiency, increased diversity in the workforce, and the introduction of new processes, structures, and work arrange-
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6.1.3 IMPROVED COORDINATION 165
ments. In today’s ever-changing work environment, good planning offers a num- ber of benefits and advantages for your employees, your teammates, and even your own career.
6.1.2 Greater Focus and Flexibility
Good planning improves focus and flexibility for both you and your organization.
▲ Focus: An organization with focus knows what it does best, knows the needs of its customers or patients, and knows how to serve them well. An individual with focus knows where he or she wants to go in a career or situation and is able to keep that objective in mind, even in difficult circumstances.
▲ Flexibility: An organization with flexibility is willing and able to change and adapt to shifting circumstances and operates by looking toward the future (rather than the past or present). An individual with flexibility bal- ances his or her career plans with the problems and opportunities posed by new and developing circumstances—both personal and organizational.
6.1.3 Improved Coordination
Good planning improves coordination, or the way in which various people and departments interact and work together. Most health care organizations are buzzing hives of activity with many different individuals, groups, and depart- ments each pursuing different tasks and objectives. However, everyone’s accom- plishments must collectively meet the needs of the organization as a whole.
F O R E X A M P L E
Paying Attention to ADD Cincinnati Children’s Hospital Medical Center (www.cincinnatichildrens.org) recently decided to address an increasingly common behavior disorder for U.S. kids and teens: attention deficit hyperactivity disorder (ADHD). Swamped with referrals for pediatricians and family physicians outside Cincinnati Chil- dren’s, a new task force developed evidence-based mental health guidelines for diagnosing and treating ADHD outside of Cincinnati Children’s Mental Health Clinic. In addition to helping local pediatricians and family practice physicians make accurate diagnoses, the guidelines also help reduce wait time for patients otherwise being referred to Cincinnati Children’s for their condition. For 1 year following the introduction of the guidelines, trained Cincinnati Children’s staff will be available for phone and on-site consulta- tion, supporting the guidelines and empowering local physicians.
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A comprehensive plan creates a hierarchy of objectives in which the goals for each area of the organization are linked together, scheduled chronologically, or ranked in terms of importance. Figure 6-1 shows a hierarchy of objectives in a large health care organization. The objective for the Records Management group in a health insurance provider is “to store, organize, retrieve, and share vital patient data efficiently and appropriately.” This objective fits within the insur- ance provider’s corporate objective to “facilitate timely and cost-effective health- care treatment for our clients 100% of the time.” This objective also translates down the hierarchy to the level of the patient-interaction representative, where the specific job objective becomes a formal commitment to “assist patients in locating and better utilizing their medical records to receive superior medical treatment.”
6.1.4 Enhanced Control
Control means meeting the desired outcomes as efficiently as possible (on bud- get, on time, etc.). Good planning facilitates control. Without planning, the con- trol process lacks a framework for measuring how well things are going and determining what can be done to make them go better.
A good plan clearly defines the desired objectives and performance results, and identifies specific ways and actions to reach these goals. If results are less than expected, you can evaluate the original objectives, the actions being taken, or both and then adjust the objectives and actions to improve future accom- plishments. Good plans help you compare results with original expectations, sug- gest actions improve future accomplishments, and refine future objectives.
6.1.5 Better Time Management
Good planning helps with time management. You’ve probably experienced the difficulties of balancing your available time with numerous commitments, oppor- tunities, and obligations. Each day, health care workers are bombarded by a mul-
Manufacturing division quality
objectives
Become a preferred supplier by
achieving 100% on-time delivery of all products.
Plant quality objectives
Increase percent accepted by 16%
to meet customer’s delivery
requirements.
Shift supervisor quality objectives
Assess capabilities of machine
operators and provide/arrange
appropriate training.
Corporate quality objectives
Deliver error-free products that
meet customer requirements
100% of the time.
Figure 6-1
A sample hierarchy of objectives for a medical records management group.
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6.1.7 READY FOR ACTION 167
titude of tasks and demands in a work setting that abounds in interruptions, crises, and unexpected events. A manager’s job is especially subject to such com- plications. Managers can easily fall prey to “time wasters,” such as allowing oth- ers to dominate your time or completing nonessential procedures and reports.
“Basically, the whole day is a series of choices” says Lewis Platt, former chair- man of Hewlett-Packard. Platt offers a philosophy for dealing with the dilemmas many managers face: you must make choices that allocate your time to the most important priorities. Platt encourages you to be “ruthless about priorities,” con- tinually adjusting what you’re doing and how you’re doing it to maximize your efficiency.
6.1.6 Solution-Focused
Good planning provides managers with more than a set of processes and pro- cedures. A good plan offers immediate solutions that managers can utilize quickly. As a manager, you should expect certain problems to arise fairly often. Most problems can be classified as structured or unstructured.
▲ Structured problems: familiar situations; the information needed to resolve these problems is straightforward and clear. You can plan ahead and develop specific ways to deal with structured problems, or even take action to prevent their occurrence. In the workplace, “personnel” prob- lems are common whenever decisions are made on pay raises and pro- motions, vacation requests, committee assignments, and the like. Know- ing this, proactive managers plan ahead so they can handle complaints effectively when they arise. A well-crafted plan offers prepared responses (based on successful past experience, of course) that are appropriate for specific problems.
▲ Unstructured problems: unexpected and ambiguous situations that lack critical information. Unstructured problems require novel solutions. Proactive managers can get a jump on unstructured problems by recog- nizing situations that may be susceptible to problems and then making plans that can be implemented if unfavorable results occur. Taken to the extreme, an unstructured problem can become a crisis: an unexpected and demanding problem that can result in disaster. In today’s post-9/11 world, no one can avoid or even anticipate all potential crises. However, managers at many progressive organizations now anticipate that crises will, unfortunately, occur and have developed early warning systems and crisis-management plans to deal with problems in the best possible ways.
6.1.7 Ready for Action
Good planning helps create an action orientation, which means you and your organization act and react confidently and quickly to new situations. When
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you’re working from a well-crafted plan, you don’t need to spend hours lament- ing what went wrong or assigning blame. Instead, you can refer to your plan as a resource and determine next steps or possible solutions.
Additionally, a plan helps you and your organization avoid the “complacency trap” of simply being carried along by the flow of events or being distracted by the successes or failures of a given moment. When you’re always looking toward the future, you have clear performance targets and you can often anticipate deci- sions that need to be made before difficult situations or problems arise.
• Identify and define focus, flexibility, hierarchy of objectives, and unstructured problem.
• Cite the characteristics of successful plans.
• Explain the main benefits of successful planning.
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6.2 Types of Plans
Health care organizations utilize a wide variety of plans. These plans vary in terms of time spans, scope, and level of application. In all cases, plans must be both well made and well implemented for success. You can describe most plans as either short-range or long-range, and strategic or operational.
6.2.1 Short-Range versus Long-Range
Short-range plans cover 1 year or less, intermediate-range plans cover 1 to 2 years, and long-range plans look 3 or more years into the future. For best results, plans at each time range mesh together, with short-range goals and activities helping to satisfy some portion of intermediate and long-range goals. Top man- agement usually sets long-range plans and provides general direction for lower- level managers. In turn, lower managers formulate and execute short-range plans, while still keeping mindful of the organization’s long-term objectives.
6.2.2 Strategic versus Operational
Plans throughout an organization differ in terms of scope. Strategic plans address long-term needs and set comprehensive action directions for an organi- zation. Top-level managers typically offer strategic plans, determining objectives for the entire organization and then deciding on the actions and resource allo- cations to achieve them. By contrast, operational plans define what needs to be
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6.2.4 SCHEDULES AND BUDGETS 169
done in specific areas to implement strategic plans. Operational plans frequently found in the health care industry include
▲ product plans: methods and technology needed to create valuable goods or services;
▲ financial plans: dealing with the money required to support various operations;
▲ facilities plans: buildings, major equipment, and work layouts required to support business activities;
▲ marketing plans: activities and efforts required to sell and distribute goods or services;
▲ human resource plans: recruitment, selection, and placement of people into various jobs.
Working in the health care field, you encounter dozens of different types of plans. Policies, procedures, schedules, and budgets are some of the common plans that managers work with, refer to, and enforce on an almost daily basis.
6.2.3 Policies and Procedures
Organizations typically operate with many policies and procedures. These stand- ing plans are used over and over again to direct behavior in certain types of sit- uations. However, a policy and procedure have distinct differences:
▲ Policy: communicates broad guidelines for making decisions and taking action in specific circumstances. To cite an example, human resource policies cover matters such as alcohol and substance abuse or sexual harassment. These guidelines help ensure that all employees’ daily actions and decisions are consistent with organizational values, strategies, and objectives.
▲ Procedure: describes exact rules for dealing with specific situations. Pro- cedures are often published in employee handbooks or manuals as stan- dard operating procedures, or SOPs. Clearly written procedures ensure that everyone receives fair, equal, and nondiscriminatory treatment.
To cite an example: A sexual harassment policy sets expectations for employee behavior; sexual harassment procedures define precise actions to be taken when someone believes he or she has been harassed on the job. Both policy and pro- cedure need to be clearly documented and agreed to by all.
6.2.4 Schedules and Budgets
Increasingly, today’s workplace focuses on projects, specific goals that can be accomplished by teams working under tight deadlines. Good plans are essential
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in order to manage resources (time, money, materials, workers, and so on) and to accomplish defined tasks.
▲ Project schedules: identify the activities required to accomplish a specific major project. In a health care organization, project schedules may guide the shift of a medical office staff from paper-based patient files to electronic files or rollout and integration of new federal regulations on patient pri- vacy. In either case, a project schedule defines specific task objectives, activities, due dates, and resource requirements. A good project schedule sets priorities so everyone involved knows not only what needs to be done but also in what order so that the entire project gets finished on time.
▲ Budgets: plans that commit resources to activities, projects, or programs. They are powerful tools that allocate scarce resources among multiple and often competing uses. Good managers are able to bargain for and obtain adequate budgets to support the needs of their work groups or teams. They are also able to achieve performance objectives while keep- ing resource expenditures within the allocated budget.
Projects and departments sometimes have fixed budgets that allocate a set amount of resources that can be used, but not exceeded, for a specified purpose. If the department head allotted you a $25,000 budget for equipment purchases for the year, you couldn’t spend more on equipment unless you had approval.
A flexible budget, by contrast, allocates resources based on the need level of various departments or activities. A project leader’s budget may increase to allow for hiring temporary workers during a time of transition for a customer service center. However, in subsequent years, the project leader’s budget may
F O R E X A M P L E
Setting Priorities at the National Cancer Institute The overarching mission of the National Cancer Institute is to “reduce the incidence of cancer and integrate early detection through the development and effective delivery of medical approaches and the promotion of effective, evidence-based public health interventions and policies.” To better pursue this worthy goal, the NCI in 2003 realigned its efforts to focus first and fore- most on cancer prevention and early detection. While NCI continues to fund state-of-the-art biological research and technological development, the orga- nization’s renewed emphasis on prevention and detection affects a greater portion of the population and identifies cancer early on, when it is most curable. Visit http://plan.cancer.gov for a comprehensive listing of NCI’s numerous initiatives, goals, and programs.
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6.3.1 IDENTIFY AND DEFINE THE PROBLEM 171
decrease because new computer systems and improved processes should elimi- nate the need for costly temporary workers.
In a zero-based budget, a project or activity is budgeted as if it were brand- new. All projects must compete anew for available funds in each budget cycle. Managers operating within a zero-based budget cannot assume that resources pre- viously allocated will simply continue in the future. Dynamically changing busi- nesses, government agencies, and other organizations use zero-based budgets to ensure that the most desirable and timely programs receive the most funding.
• Identify and define plans, policies, procedures, schedules, and budgets.
• Name the specific characteristics of the different types of opera- tional plans.
• Explain the relationship between policies and procedures.
• Identify and compare the different types of budgets.
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6.3 The Planning Process
At its most basic, planning is decision making. When you plan, you use infor- mation to make plans that address significant problems and opportunities. Fig- ure 6-2 shows a typical approach to decision making as applied during the plan- ning process. The planning process begins with identification of a problem and ends with evaluation of implemented solutions. This section covers each step of the planning process in detail, addressing the key responsibilities of managers at each phrase. The following are five steps in the planning process:
Step 1: Identify and define the problem.
Step 2: Generate and evaluate possible courses of action.
Step 3: Choose a preferred solution.
Step 4: Implement the solution.
Step 5: Evaluate results.
6.3.1 Identify and Define the Problem
During the first step of planning and decision making—finding and defining the problem—you gather information, evaluate information, and deliberate. Problem symptoms usually signal the presence of a performance deficiency or opportunity.
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During this step, you need to assess the situation properly by looking beyond symptoms to find out what is really happening. Take special care to not just address a symptom while ignoring the true problem. The way you define a prob- lem originally can have a major impact on how you go about resolving it. Poor problem definition can lead to poor or ineffective plans. The following are three common mistakes:
▲ Focusing on symptoms instead of causes. Symptoms indicate that problems may exist, but don’t mistake them for the problems themselves. Most managers can spot problem symptoms (like a drop in an employee’s performance). Instead of treating symptoms (such as simply encouraging higher performance), good managers need to address the symptom’s root causes (in this case, discovering that the worker’s need for additional training in how to use a complex new computer system).
▲ Defining the problem too broadly or too narrowly. To take a classic example, the problem stated as “build a better mousetrap” can be more broadly defined as “get rid of the mice now.” That is, managers should define problems so as to give themselves the best possible range of plan- ning options.
▲ Choosing the wrong problem to deal with. Managers need to set prior- ities and make plans that deal with the most important problems first. Focusing on several small, less-important initiatives divides you and your team’s focus. Your efforts may not yield the greatest possible benefit to your department or organization. By contrast, managers also need to give planning priority to problems that are truly solvable. While many health care managers may want to overhaul the Medicare system, focusing on streamlining the Medicare billing processes for your department is a much more doable goal for you and your teammates.
Step 1
Find and define the problem
or opportunity
Step 2
Generate and evaluate
alternative courses of
action
Step 3
Select preferred course of action
and conduct ethics double-
check
Step 4
Implement the planned
course of action
Step 5
Evaluate results
Recycle process as necessary
Figure 6-2
Making decisions during the planning process.
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6.3.4 IMPLEMENT THE PLANNED COURSE OF ACTION 173
A variety of tools and techniques help managers identify and define problems. Section 6.4 discusses several commonly used tools and techniques for planning.
6.3.2 Generate and Evaluate Possible Courses of Action
After you define the problem, you can begin formulating one or several poten- tial solutions. At this stage of planning and decision making, you may need to gather more information, evaluate data, analyze internally and externally gath- ered statistics, and weigh the pros and cons of each possible course of action. Involving others during this planning stage is critical in order to develop a range of solutions, get the most out of available information, and build future com- mitment for the plan.
Your plan will only be as good as the quality of the alternative solutions you generate during this step. The better the pool of alternatives, the more likely a good solution can be achieved. A very basic evaluation used at this step is
▲ cost-benefit analysis, which compares alternative costs (time, money, resources, human capital, etc.) to the expected benefits. At a minimum, the benefits of a preferred alternative should be greater than its costs. Although cost-benefit analysis is often quantitative (based on measurable facts and figures), the results need to be tempered by your subjective, qualitative judgments to ensure full evaluation of the options.
6.3.3 Choose a Preferred Course of Action
At this stage in the planning process, you must make a decision and select a particular course of action. Exactly how you make a decision and who may need to weigh in on the decision varies for each planning situation. In some cases, you may determine the best alternative by using cost-benefit analysis criterion; share this choice with your manager, and then proceed with executing your plan. Other times, numerous criteria may come into play, and you may need to pre- sent the case for your decision to multiple committees and managers, gradually getting others to buy into your solution. However, after you generate and eval- uate the alternatives, you must make a final choice to continue on in the plan- ning process.
You should test any decision to follow a particular plan of action by per- forming an ethics check. This evaluation ensures that you properly consider the ethical aspects of working in today’s complex, fast-changing work environment.
6.3.4 Implement the Planned Course of Action
After you select the preferred solution to a problem, you next establish and implement appropriate actions to meet your final goal. This is the stage at which you finally set directions and initiate problem-solving actions.
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Nothing new can happen according to the plan unless action is taken. Man- agers not only need the determination and creativity to make a plan, but they also need the ability and willingness to implement it. Additionally, most suc- cessful plans require managers and others to take some sort of action. Many plans fail at this stage because a manager didn’t adequately involve others and gain their support. Managers who use participation wisely get the right people involved in decisions and problem-solving from the beginning. When they do, plans are more likely to be implemented quickly, smoothly, and to everyone’s satisfaction.
6.3.5 Evaluate Results
Planning and decision making are not complete until you evaluate the results. In this final stage, you compare your accomplishments with your original objec- tives. If the desired results are not achieved, the process must be reviewed and renewed to allow for corrective actions.
Remember to examine both the positive and negative consequences of a cho- sen course of action. If the original solution appears inadequate, a return to ear- lier steps may be required to generate a modified or new plan. Evaluation is also made easier if the original plan includes objectives with measurable targets and timetables.
F O R E X A M P L E
Office of Minority Health, U.S. DoHHS As the U.S. population becomes increasingly diverse, health care organiza- tions must respond with sensitivity to the needs of patients from diverse cultural backgrounds and languages. In 1997, the Office of Minority Health undertook the developments of national standards to provide consistent and comprehensive health care for all Americans. After reviewing and analyzing existing procedures throughout the United States, an advisory committee drafted new standards. The standards were published in the Federal Regis- ter in December of 1999, and the committee requested feedback from any organizations, agencies, or individuals affected by the standards. By means of three regional public meetings, an interactive Web site, and extensive mailings, the committee incorporated feedback from 413 individuals or organizations over a 4-month period. By working carefully and gradually building consensus, the final version of the Culturally and Linguistically Appropriate Service (CLAS) standards effectively combines the input of a broad range of stakeholders. You can review the final standards by visiting www.omhrc.gov
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6.4.1 FORECASTING 175
6.4 Planning Tools and Techniques
Planning is challenging in any circumstances, and the difficulties increase as the work environment becomes more uncertain. To help master these challenges, managers make use of a number of useful planning tools and techniques during the planning process and after a plan is put into place. Some of the most com- mon planning tools and techniques include
▲ forecasting; ▲ contingency planning; ▲ scenario planning; ▲ benchmarking; ▲ participation; ▲ strategic planning.
6.4.1 Forecasting
Forecasting is the process of making assumptions about what will happen in the future. A forecast is a specific vision of the future. All good plans involve forecasts, particularly during Steps 1 and 2 of the planning process.
Some forecasts are qualitative and use expert opinions to predict the future. In this case, a single person of special expertise or reputation or a panel of experts may be consulted. Other forecasts are quantitative and use mathematical and statistical analysis of data to predict future events.
In the final analysis, forecasting always relies on human judgment. Even the results of highly sophisticated quantitative forecasting still require interpretation and are subject to error. Forecasting is not planning—it is a planning tool. Treat forecasts cautiously, reviewing all information with a critical and questioning eye.
• Cite the five steps of the planning process.
• Name the three common mistakes of problem definition.
• Define cost-benefit analysis.
• Explain how you might determine the ethical implications of the decision you plan to adopt.
• Describe how a plan is put into effect.
• Explain how a plan’s effectiveness is determined.
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6.4.2 Contingency Planning
Planning always involves thinking ahead. But the more unstructured the prob- lems and more uncertain the planning environment, the more likely that your original assumptions, predictions, and intentions may prove to be in error. Even the most carefully prepared plans may prove inadequate as experience develops. Unex- pected problems and events frequently occur. When they do, plans have to be changed.
As a manager, you are better off anticipating problems than being surprised by them. Contingency planning is the process of identifying alternative courses of action that you can implement if and when an original plan proves inadequate because of changing circumstances. Sometimes contingency plans are created by good forward thinking on the part of managers and staff. At other times, a devil’s advocate method, in which you formally assume the worst-case forecasts of future events and brainstorm responses can yield effective contingency plans.
Whatever methods you use to establish contingency plans, remember that the earlier the need for changes can be detected, the better. Look for “trigger points” in regular processes and procedures that can indicate that your existing plan is no longer desirable and needs to be closely monitored.
6.4.3 Scenario Planning
Scenario planning is a popular and long-term version of contingency planning. Scenario planning involves identifying several alternative future states of affairs that may occur. Managers and staff then deal hypothetically with each situation and formulate possible plans.
The creative brainstorming process helps organizations operate more flexi- bly in dynamic environments. Royal Dutch/Shell has been doing scenario plan- ning for many years. The process began years ago when top managers asked themselves a perplexing question: “What would Shell do after its oil supplies ran out?” The question was approached by creating alternative future scenarios while remaining sensitive to the nature of growing environmental changes. Although recognizing that planning scenarios can never be inclusive of all future possibil- ities, a Royal Dutch/Shell planning coordinator once said that scenarios help “condition the organization to think” and remain better prepared than its com- petitors for “future shocks.”
6.4.4 Benchmarking
Another important influence on the success or failure of planning is the frame of reference used as a starting point. All too often, managers and planners have limited awareness of what is happening outside their immediate work setting. Successful planning must challenge the status quo; it cannot simply accept things the way they are.
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6.4.7 MISSIONS, VALUES, AND OBJECTIVES 177
Benchmarking is a technique that uses external comparisons to evaluate one’s current performance and identify possible future actions; it is one tool that broadens a work group and organization’s field of view. The purpose of bench- marking is to find out what other people and organizations are doing very well and plan how to incorporate these ideas into your own operations. Health care- specific benchmarking programs and Web sites—such as www.healthdat- acheck.com—have emerged as useful tools to help health care managers track and compare performance.
6.4.5 Participation and Group-Involvement
Participation is critical to the planning process. Participative planning involves the people who are affected by a plan or who are required to help implement the plan to aid in the planning process. Participation can increase the creativity and information available for planning. It can also increase the understanding, acceptance, and commitment of people to final plans. Indeed, planning in orga- nizations should rarely, if ever, be done by individuals. To create and implement the best plans, others must be genuinely involved during all planning steps. Even though participative planning takes more time, it can improve results by improv- ing implementation.
6.4.6 Strategic Planning
A strategy is a comprehensive action plan that identifies long-term direction and guides managers and staff in ways to best utilize the organization’s resources. Successful strategic plans using resources focus an entire organization’s energies on a clear target or goal. Usually strategic plans originate in the uppermost man- agement and executive levels of a company. Smaller, more specific plans in departments, teams, or work groups need to mesh with and build on the over- arching strategic plans.
6.4.7 Missions, Values, and Objectives
Mission statements, core values statements, and objectives are all strategic planning tools that help managers create plans that fit the organization’s vision for the future of its business endeavors.
▲ Mission: an organization’s reason for existence as a supplier of goods and/or services to society. A good mission statement is precise in identify- ing where the organization intends to operate, who the organization serves, and what products or services it provides. The best organizations have clear and compelling missions. At the Breast Cancer Program of the Dana-Farber-Harvard Cancer Center, the mission is “to reduce death due to breast cancer and lengthen and improve the quality of life of women with this disease.” At Merck it is “to preserve and improve human life.”
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▲ Core values: affect and guide the action of an organization. Often posted along with the organization’s mission statement, these values reflect the organization’s broad beliefs about what is and is not appropriate. The presence of strong core values gives character to an organization, backs up the mission statement, and helps guide the behavior of members in meaningful and consistent ways. For example, core values at Merck include corporate social responsibility, science-based innovation, honesty and integrity, and profit from work that benefits humanity.
▲ Objectives: direct activities toward key and specific results. Whereas a mission statement sets forth an official purpose for the organization, objectives are usually shorter-term targets against which actual perfor- mance can be measured. Examples of business objectives may include producing at a certain level of profit, gaining and holding a specific share of a market, recruiting and maintaining a high-quality workforce, or making a positive contribution to society.
F O R E X A M P L E
Mission and Core Values The mission of the Massachusetts Consortium for Children with Special Health Care Needs (CSHCN) is “to improve systems of care for children with special health care needs and their families throughout the Commonwealth of Massachusetts.” To further explain how the Massachusetts Consortium goes about achieving its mission, it promotes eight specific core values in all its endeavors: diversity of membership, flexible participation, respect for differ- ences of opinion, an informal welcoming atmosphere, collaboration across organizations and patient families, building connections across organizations, shared leadership, and big-picture thinking. To find out more about the Mass- achusetts Consortium’s programs, visit www.neserve.org/maconsortium/index.
• Cite six common planning tools and techniques.
• Define contingency planning.
• Describe the purpose of benchmarking.
• Define strategic planning.
• Compare mission, core values, and objectives.
S E L F - C H E C K
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6.5.2 EXTERNAL FACTORS 179
6.5 SWOT Analysis
In order to produce effective plans, managers and staff must have a clear picture of what’s happening within the organization and within its greater business envi- ronment. SWOT analysis (strengths, weaknesses, opportunities and threats) is a common tool used to analyze strengths and weaknesses inside the organization, and opportunities and threats outside the organization.
6.5.1 Internal Factors
A SWOT analysis begins with a systematic evaluation of the organization’s resources and capabilities. A major goal is to identify core competencies in the form of special strengths that the organization has or does exceptionally well in comparison with competitors. Simply put, organizations need core competencies that do important things better than the competition and that are very difficult for competitors to duplicate. Core competencies may be found in special knowl- edge or expertise, outstanding technologies, unique products, or superior distri- bution systems, among many other possibilities.
▲ Strengths: the resources and capabilities an organization can use to develop competitive advantage.
▲ Weaknesses: the absence of strengths.
A major strategic goal of any organization is to create processes that highlight core competencies for competitive advantage by building upon organizational strengths and minimizing the impact of weaknesses.
6.5.2 External Factors
A SWOT analysis is not complete until opportunities and threats in the exter- nal environment are also analyzed.
▲ Opportunities: include possible new markets, a strong economy, weak- nesses in competitors, and emerging technologies.
▲ Threats: include the emergence of new competitors, scarce resources, changing customer demands, and new government regulations, among other possibilities.
For the purpose of a SWOT analysis, the external environment includes macro environment factors such as technology, government, social structures, popula- tion demographics, the global economy, and the natural environment. The exter- nal environment also encompasses developments in the industry or business environment, which includes resource suppliers, competitors, customers, and patients.
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180 MANAGERIAL AND SUPERVISORY PLANNING
In a stable and predictable external environment, you can more successfully implement a strategy for a longer period of time. By contrast, in a more dynamic and uncertain environment, you must choose flexible strategies that can change and evolve over time. Given the nature of competitive environments today, strate- gic management must be considered an ongoing process in which strategies are formulated, implemented, revised, and implemented again in a nearly continu- ous manner.
• Define SWOT.
• Identify the internal and external factors of a SWOT analysis.
• Define core competencies.
• Cite important macro environmental factors.
S E L F - C H E C K
SUMMARY Planning is the process of deciding exactly what you want to accomplish and how to best go about doing it. Successful plans have common characteristics, and good planning helps improve an organization’s focus, coordination, control, time management, and attitude. Plans can be classified as short or long term, and strategic or operational. They comprise policies, procedures, schedules, and budgets. The five steps of the planning process are: (1) identify and define the problem, (2) generate and evaluate possible courses of action, (3) choose a pre- ferred solution, (4) implement the solution, and (5) evaluate results. Planning tools and techniques make the difficult task of planning more manageable. SWOT analysis systematically compares the internal and external factors affect- ing an organization.
KEY TERMS Action orientation A state of mind in which you and your organization act
and react confidently and quickly to new situations.
Benchmarking Using external comparisons to evaluate an organiza- tion’s current performance and identify possible future actions.
Budget Financial plans that commit resources to activities, projects, or programs.
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KEY TERMS 181
Contingency planning The process of identifying alternative courses of action that you can implement if and when an original plan proves inadequate because of changing circumstances.
Control Meeting the desired outcomes as efficiently as possible.
Core competencies Special strengths that an organization has or does ex- ceptionally well in comparison with competitors.
Core values Principles that affect and guide the action of an organi- zation.
Cost-benefit analysis Comparing alternative costs (time, money, resources, human capital, etc.) to the expected benefits.
Crisis An unexpected and demanding problem that can result in disaster.
Fixed budget A financial plan that allocates a set amount of resources that can be used, but not exceeded, for a specified pur- pose.
Flexibility The willingness or ability to change and adapt to shift- ing circumstances.
Flexible budget A financial plan that allocates resources based on the need level of various departments or activities.
Focus Knowing what an organization does best, knowing the needs of customers and patients, and knowing how to serve customers and patients well.
Forecasting The process of making assumptions about what will happen in the future.
Hierarchy of objectives Plans in which the goals for each area of the organization are linked together, scheduled chronologically, or ranked in terms of importance.
Intermediate-range A plans that covers 1 to 2 years. plan
Long-range plan A plan that looks 3 or more years into the future.
Mission statement Precisely worded declaration that identifies where an organization intends to operate, who it serves, and what products or services it provides.
Objectives Short-term targets that direct activities toward key and specific results.
Operational plan A plan that defines what needs to be done in specific areas to implement a strategic plan.
Opportunities External factors of a SWOT analysis that include possi- ble new markets, a strong economy, weaknesses in competitors, and emerging technologies.
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182 MANAGERIAL AND SUPERVISORY PLANNING
Participative planning Involves the people who are affected by a plan or who are required to help implement the plan to aid in the planning process.
Planning process Deciding exactly what you, your team, or your depart- ment wants to accomplish and how to best go about meeting your goals.
Policy Formal statements that communicate broad guidelines for making decisions and taking action in specific cir- cumstances.
Procedure Statement that describes exact rules for dealing with specific situations.
Projects Specific goals that can be accomplished by teams working under tight deadlines.
Project schedules Time-focused places that identify the activities re- quired to accomplish a specific major project.
Scenario planning Identifying alternative future states of affairs that may occur and then dealing hypothetically with each situa- tion and formulating possible plans.
Short-range plan Plan that covers 1 year or less.
Strategic plan Action plans, usually from uppermost management or executive management, that focus an entire organiza- tion’s energies on a clear target or goal.
Strategy A comprehensive action plan that identifies long-term direction and guides managers and staff in ways to best utilize the organization’s resources.
Strengths Internal factors of a SWOT analysis.
Structured problem Familiar situations.
SWOT analysis A common planning tool used to analyze strengths and weaknesses inside an organization, and opportunities and threats outside the organization.
Threats External factors of a SWOT analysis that include the emergence of new competitors, scarce resources, changing customer demands, and new government regulations, among other possibilities.
Unstructured problem Unexpected and ambiguous situations that lack critical information.
Weaknesses Internal factors of a SWOT analysis.
Zero-based budget A budget in which all projects or activities must com- pete anew for available funds in each budget cycle.
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SUMMARY QUESTIONS 183
ASSESS YOUR UNDERSTANDING Go to www.wiley.com/college/Lombardi to evaluate your knowledge of the basics of planning. Measure your learning by comparing pretest and post-test results.
Summary Questions
1. Successful plans help organizations organize processes and influence employees. True or false?
2. Well-run organizations use plans to monitor work progress, set schedules, and prepare budgets. True or false?
3. Plans are rarely used to identify problems and suggest corrective actions. True or false?
4. Plans can address both structured problems and unstructured problems. Which of the following is true? (a) Unstructured problems are highly predictable. (b) Structured problems don’t require planning. (c) Structured problems often involve many unknowns. (d) Unstructured problems typically arise in unexpected or ambiguous
situations. 5. Short-range plans cover 1 year or less, intermediate-range plans cover
1 to 2 years, and long-range plans look 3 or more years into the future. True or false?
6. Strategic plans address the direction of an organization; operational plans define specific actions that help move the organization in the right direc- tion. True or false?
7. The planning process begins with identification of a problem and ends with evaluation of implemented solutions. True or false?
8. Which of the following is NOT a common error when identifying problems? (a) Focusing on symptoms instead of causes (b) Defining the problem too broadly or too narrowly (c) Choosing the wrong problem to deal with (d) Defining the problem in quantifiable terms
9. An important part of the planning process is evaluating the results. This step is made easier if (a) the plan includes objectives that are certain to be achieved. (b) the plan includes objectives that are intangible.
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184 MANAGERIAL AND SUPERVISORY PLANNING
(c) the plan includes objectives with measurable targets and timetables. (d) the plan doesn’t define objectives.
10. Common planning techniques include forecasting, scenario planning, and benchmarking. True or false?
11. Contingency planning is the process of identifying alternative courses of action in anticipation of (a) accurate forecasting. (b) playing devil’s advocate. (c) changing circumstances. (d) successful completion of the plan.
12. SWOT is a common method of comparing internal analyses with external analyses. True or false?
13. Core competencies are (a) an organization’s opportunities. (b) an organization’s ability to plan. (c) an organization’s ability to overcome weaknesses. (d) an organization’s special strengths.
Review Questions
1. Good planning improves organizational focus. Define focus. 2. How does good planning improve coordination? 3. Enhanced control and better time management are characteristics of good
planning. How are they related? 4. How does good planning help you resolve problems? 5. How do policies relate to procedures? 6. What are the most important attributes of a good project schedule? 7. Budgets are plans that commit resources to activities, projects, or programs.
There are fixed, flexible, and zero-based budgets. What is a fixed budget? 8. Put the five steps of the planning process in proper order. 9. What is cost/benefit analysis?
10. The third step of the planning process entails making decisions about the particular course of action you need to take. Who should participate in these decisions?
11. Good plans include forecasts, particularly during which steps of the plan- ning process?
12. What is the key element of a successful strategic plan? 13. In general terms, what are an organization’s objectives?
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APPLYING THIS CHAPTER 185
14. What is one of the main objectives of a SWOT analysis? 15. What can a SWOT analysis help an organization do?
Applying This Chapter
1. Members in the billing and customer-service groups at your organization are going to spend one afternoon a week “cross-training” so customer- service representatives know more about billing procedures and billing employees learn more about working directly with customers. What ben- efit of planning is in effect here?
2. You need to introduce new organization-wide procedures for online pro- cessing of invoices to the other employees in your department. What benefits of planning might you highlight for your teammates in order to get them in favor of the new procedures?
3. The Johnson Country Health Foundation holds an off-site brainstorming session in which staff discusses ways it can increase its public awareness by 15% over the next 2 years. Which of the five planning steps does this activity best relate to?
4. You manage a patient referral helpline in which callers receive recommendations for physicians who treat special conditions or who have special training or skills. In the last year, the number of calls your helpline receives has doubled. While you don’t have the budget to hire additional staff, you have an additional $20,000 to spend on your department to improve efficiency and customer satisfaction. Using the five-step planning process in this chapter as your guide, discuss how you will improve efficiency and customer satisfaction in your organization.
5. The Colorado Eldercare Initiative recently conducted a patient satisfaction survey for its in-state patients as well as patients from more than 300 nursing care facilities across the United States. What planning tool or technique might the Colorado Eldercare Initiative be attempting to use?
6. As a project manager at a not-for-project public health organization, you’ve been selected to lead the development of a new Web site to encourage teens to avoid or quit smoking. What tools and techniques would be essential to include in your planning for the Web site?
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YOU TRY IT
Is Your Plan up to Par? Plans are in place just about everywhere—in work- places, schools, public building, churches, and more. Many plans detail how work should be performed or what to do in specific situations. Visit the Web site for St. Cloud (MN) hospital at www.centracare.com and click the patient safety link (or go directly to www.cen- tracare.com/sch/quality/judge_quality.html) to examine St. Cloud (MN) Hospital’s patient safety and quality plan. Consider the following questions:
• Does the plan deliver on the promises outlined in section 6.1?
• Specifically, will the plan help someone work with greater focus or flexibility?
• Does the plan improve time management or control of resources?
• Does the plan offer solutions and inspire action?
• How can the plan be improved?
Locate another formal plan by reviewing an employee or student handbook, a committee’s bylines and char- ter, or an official Web site.
Centers for Disease Control and Prevention Budget Go to www.cdc.gov/fmo/fmofybudget.htm to review the current operating budget of the Centers for Disease Control and Prevention.
• What is the total operating budgeting of the CDC?
• What are the three top-funded programs at the CDC?
Symptom and Problems What might be some possible problems causing the symptoms described in this following scenario: A small dental office waiting room fills with patients most after- noons. Patients tend to get restless and irritated be- cause most must wait 45 to 60 minutes past their scheduled appointment times before seeing the dentist.
Minding Mission Statements A mission statement should identify where the organi- zation intends to operate, who the organization serves, and what products or services it provides. Evaluate the following mission statements and see whether each covers all the bases:
1. “To achieve and maintain full immunization pro- tection for each child in San Francisco in order to promote community health and wellness.” (San Francisco Immunization Coalition)
2. “To ensure the quality of life at the end of life through compassionate care for all individuals and their families in Central Iowa.” (Hospice of Central Iowa)
3. “To provide balanced, credible information about public policy issues that affect healthcare cover- age.” (Blue Cross/Blue Shield HealthIssues.com)
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