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8 MAKING MAJOR CHOICES Performing Strategic Analysis and Making Decisions
Starting Point
Go to www.wiley.com/college/Lombardi to assess your knowledge of the basics of analyzing and making decisions. Determine where you need to concentrate your effort.
What You’ll Learn in This Chapter ▲ Two responsibilities of strategic management ▲ Three levels of organizational strategy ▲ Essential values for making decisions ▲ The Portfolio Planning Approach to decision making ▲ Tools for preparing to make decisions ▲ Strategies for analyzing situations ▲ Three models for implementing decisions ▲ Ways to effectively communicate strategic decisions
After Studying This Chapter, You’ll Be Able To ▲ Calculate the importance of competitive advantage in strategic decision making ▲ Examine typical levels, types, and steps of strategic decision making ▲ Apply common strategic decision-making tools and techniques ▲ Examine standardized procedures for formulating and implementing decisions ▲ Practice methods for communicating strategic decisions ▲ Distinguish methods of measuring the effectiveness of decisions
Goals and Outcomes ▲ Master the terminology and tools related to strategic decision making ▲ Describe the steps of strategic decision making ▲ Choose appropriate information-gathering tools for decision making ▲ Analyze situations as part of the decision-making process ▲ Compare methods for formulating and implementing strategic decisions ▲ Create plans and processes for strategic decision making ▲ Evaluate the appropriateness of strategic decisions
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8.1 UNDERSTANDING LEVELS AND TYPES OF STRATEGY 213
INTRODUCTION The ability to analyze situations strategically and make timely decisions is a key managerial responsibility. Strategic decisions are formulated and implemented at various levels within organizations and for several common purposes. Good deci- sions are driven by values and utilize standardized approaches. To make strate- gic decisions, managers have a range of tools and techniques they can use to gather information, analyze the information, and finally implement their deci- sions. Throughout the decision-making process, communicating with others and evaluating outcomes are both critical to successfully making strong, strategic decisions.
8.1 Understanding Levels and Types of Strategy
In order to successfully make good decisions, managers need to understand the strategic demands and expectations that all modern businesses—including health care organizations—operate under.
An organization with competitive advantage operates with an attribute or combination of attributes that allows it to outperform its rivals. The goal for any organization, however, is not just to achieve competitive advantage but to make it sustainable, even as rivals attempt to duplicate and copy a success story. A sustainable competitive advantage is one that is difficult for com- petitors to imitate. Competitors have trouble catching up, let alone getting ahead.
A strategy is a comprehensive action plan that identifies long-term direction and guides resource utilization to accomplish an organization’s mission and objectives with sustainable competitive advantage. It is a plan for using resources with consistent strategic intent; that is, with all organizational energies focused on a unifying and compelling target.1
To gain competitive advantage, an organization must deal with market and environmental forces better than its competitors.2 The task of crafting strategies with this potential can be daunting.
While a discussion of strategy and competition may seem extreme or out- of-sync with the essential care-giving services and purposes of most health care organizations, the truth is that all organizations—including health care organizations—are competing for limited resources, patients, and money. For example:
▲ When a teaching hospital’s public relations materials highlight the hospital’s alliance with a research university and its ability to provide “state-of-the-art cancer care” to patients, the hospital is capitalizing on its competitive advantage.
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▲ When a medical billing department partners with an outside collections service to begin offering three simple methods of low-term payment for its patients, the department is establishing a sustainable competitive advantage in the complex and often frustrating world of medical claims billing and collections.
▲ When a family planning clinic initiates a pilot program to facilitate adop- tion services (in addition to its already established birth-control and cri- sis-pregnancy services), the clinic is responding strategically to the needs of its patients.
8.1.1 The Strategic Management Process
The demands of intense competition call for strategies that are often bold and fast-moving. Strategic management is the process of formulating and imple- menting strategies that create competitive advantage and advance an organiza- tion’s mission and objectives.
The essence of strategic management is to look ahead, understand the envi- ronment, and effectively position an organization for competitive success in changing times. Figure 8-1 describes two major responsibilities in the strategic management process.
The first responsibility is strategy formulation, which involves assessing existing strategies, organization, and environment to develop new strategies
Identify current mission, objectives, and strategies
Analyze: • Mission and objectives • Values and corporate culture • Internal strengths and weaknesses • Environmental opportunities and threats
Implement strategic plans: • Mobilize resources • Utilize management systems and practices
Evaluate results and renew strategic management process
Revise mission and objectives and select new strategies: • Corporate • Business • Functional
Strategy Formulation— Creating strategies
Strategy Implementation— Putting strategies into action
Figure 8-1
The responsibilities involved in the management process.
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8.1.2 LEVELS OF STRATEGY 215
and strategic plans capable of delivering future competitive advantage. As management consultant Peter Drucker points out, this process asks five strate- gic questions:
1. What is our mission? 2. Who are our customers? 3. What do our customers value? 4. What have been our results? 5. What is our plan?3
The second responsibility is strategy implementation. After strategies are cre- ated, they must be acted upon successfully to achieve the desired results. As Drucker says, “The future will not just happen if one wishes hard enough. It requires decision—now. It imposes risk—now. It requires action—now. It demands allocation of resources and above all, of human resources—now. It requires work— now.”4 This work is the responsibility for actually putting strategies and strate- gic plans into action; it is the process of implementation. All this, in turn, requires a commitment to mastering the full range of strategic management tasks listed here.
▲ Identify organizational mission and objectives. Ask: What business are we in? Where do we want to be in the future?
▲ Assess current performance in regards to mission and objectives. Ask: How well are we currently doing?
▲ Create strategic plans to accomplish purpose and objectives. Ask: How can we get where we really want to be?
▲ Implement the strategic plans. Ask: Has everything been done that needs to be done?
▲ Evaluate results; change strategic plans and/or implementation processes as necessary. Ask: Are things working out as planned, and what can be improved upon?
For more information about the planning process, specifically mission state- ments, core values, and objectives, refer to section 6.4.
8.1.2 Levels of Strategy
Successful health care organizations formulate strategies at several specific levels.
At the level of corporate strategy, top management directs an organization as a whole toward sustainable competitive advantage. Corporate strategy describes
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the scope of operations by answering the strategic question, “In what industries, service sectors, and/or markets should we compete?”
In many of today’s large-scale, diversified health care conglomerates such as university hospitals and multiclinic partnerships, corporate strategy identifies the different areas of business in which the larger organization intends to compete. Top-level managers and vice presidents typically make these high level corpo- rate strategic decisions, determining resource allocation, new business acquisi- tion and divestiture, and the overall mix of the organization’s business portfolio. Increasingly, corporate strategies for large health care organizations include inter- national ventures and strategic alliances.
At the level of business strategy, top- and mid-level management set the direction for a single business unit. Business strategy typically describes strate- gic intent with respect to a given market or major service/department, such as a hospital’s surgery division or an inner-city’s emphasis on diabetic services for lower-income patients. The selection of business strategy involves answering the strategic question, “How are we going to compete for customers within this industry, service sector, or market?” Typical business strategy decisions include choices about product/service mix, facility locations, new technologies, and the like.
At the level of functional strategy, middle- and low-level management guide the use of resources to implement business strategy. This level of strategy focuses on activities within a specific functional area of operations, such as marketing, patient care, finance, human resources, or research and development. The strate- gic question to be answered in selecting functional strategies is, “How can we best utilize resources to implement our business strategy?”
8.1.3 Types of Strategies
The types of strategies that health care organizations pursue can be classified in several general types.
Growth strategies pursue larger-size and expanded operations. Growth strategies are popular in part because growth is necessary for long-term survival in some sectors. There is a tendency to equate growth with effectiveness, but that is not necessarily true. Management must manage any growth in order to achieve the desired results. Some organizations grow through concentration— that is, by using existing strengths in new and productive ways and without tak- ing the risks of great shifts in direction. Others grow through diversification, the acquisition of or investment in new businesses and services in previously unrelated areas.
Retrenchment strategies reduce the scale of operations in order to gain efficiency and improve performance. The decision to retrench can be difficult to make because some may (often incorrectly) perceive retrenchment as an admission of failure. But in today’s era of challenging economic conditions and
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8.1.3 TYPES OF STRATEGIES 217
uncertainty, retrenchment strategies have gained renewed respect. Some common retrenchment strategies include
▲ retrenchment by turnaround: A strategy of “downsizing” to reduce costs and “restructuring” to improve operating efficiency;
▲ retrenchment by divestiture: Selling parts of the organization to refocus on core competencies, cut costs, and improve operating efficiency;
▲ retrenchment by liquidation: Closing operations through the complete sale of assets or the declaration of bankruptcy.
Stability strategies maintain the present course of action without major oper- ating changes. Stability is sometimes pursued when an organization is doing well and the environment is not perceived to be changing. Stability strategies are also used when time is needed to consolidate organizational strengths after a period of growth or retrenchment. Of course, organizations can also pursue stability by default when decision makers are unwilling to make strategic changes.
Cooperation strategies are becoming increasingly popular, given the popular- ity of business networks and collaborative partnerships. Strategic alliances, in which two or more organizations join together in partnership to pursue an area of mutual interest, are becoming much more common in health care. One way to cooperate strategically is through outsourcing alliances, contracting to pur- chase important services from another organization. Many health care organiza- tions today, for example, have begun outsourcing their IT functions to technical firms in the belief that these services are better provided by a specialist firm.
F O R E X A M P L E
Emergent Strategies In the real world, strategy formulation is complex and demanding. Strate- gies are rarely developed at one point in time and then implemented step by step. Many strategies take shape, change, and develop over time as mod- est adjustments to past patterns. Such modern workplace realities have led management consultant Henry Mintzberg to identify what he calls emergent strategies,5 which develop progressively over time as “streams” of decisions made by managers as they learn from and respond to work situations. Emer- gent strategies allow managers and organizations to become good at imple- menting and combining strategies, not just formulating and discarding strategies in rapid succession. For more real-world insight from Mintzberg, visit his Web site (www.henrymintzberg.com), which features free excerpts from his research, books, and presentations.
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8.2 Formulating Strategies and Making Decisions
When strategies are being developed, savvy health care organizations remember to focus on achieving sustainable competitive advantage. Major opportunities for competitive advantage include the following areas:6
▲ Cost and quality: Where strategy drives an emphasis on operating effi- ciency and/or product or service quality.
▲ Knowledge and timing: Where strategy drives an emphasis on learning, innovation and speed of delivery to market for new ideas.
▲ Barriers to entry: Where strategy drives an emphasis on creating a mar- ket stronghold that is protected from entry by others.
▲ Financial resources: Where strategy drives an emphasis on investments and/or loss sustainment that competitors can’t match.
8.2.1 Appreciating What It Takes to Make Decisions
Managerial decisions have direct impact on the work lives and overall perfor- mance of other individuals. Given the limited resources in today’s health care arena, managers also often make decisions that concern a number of areas: human resources, operational equipment, and financial expenditures, to name a few.
Every decision you make has consequence, not only on the work life of oth- ers, but also on the long-term progress of your department or team. Although at first this responsibility may seem overwhelming, it is something managers must confront on a daily basis.
• Identify and define competitive advantage, strategy, and strategic management process.
• Compare competitive advantage and sustainable competitive advantage.
• Describe the two responsibilities of the strategic management process.
• List characteristics of strategies at corporate, business, and func- tional levels.
• Define various types of strategies, including growth, retrenchment, stability, and cooperation.
• Provide specific examples of growth, retrenchment, stability, and cooperation strategies.
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8.2.1 APPRECIATING WHAT IT TAKES TO MAKE DECISIONS 219
Team members look to managers to direct their work activity, and the orga- nization depends on managerial decisions to help effect positive action. Addi- tionally, patients rely on managerial decisions for positive outcome with the health care they receive.
Five essential values drive the decision-making process for managers:
▲ Accountability: Managers must use all the tools available to them in accomplishing their set goals. In addition, they must be accountable for how those resources are used. In analyzing data and taking into account the potential ramifications of their decisions, managers assume accountability on several levels. They must be accountable not only for the decision made, but also for how the decision was determined, what data were analyzed, and which course of action was pursued in arriving at the final decision.
▲ Adaptability: To demonstrate the flexibility needed for managing health care delivery in a turbulent business climate, managers must embrace a certain degree of adaptability. Adaptability means being flexible in consid- ering options, being able to deal with a wide range of people, and having a versatile business approach. Managers must take care, however, to avoid being too adaptable; that is, becoming wishy-washy or irresolute by constantly straying from an established course of action, or spending so much time considering options that the manager ultimately fails to arrive at a set course of action.
▲ Dependability: Staff depends on leaders to make timely decisions that, for the most part, are correct and specify a proper course of action. Con- stant reluctance to take stands or making decisions without communica- tion or staff input does not promote the perception among staff and the organization that a manager is dependable.
▲ Responsibility: A strong manager embraces responsibility for making decisions, takes ownership for decisions, and views the management role as a commitment to organizational excellence. These attitudes mandate selfless participation in the decision-making process so as to consider at all times what is good for the organization and to consider both the pos- itive and negative ramifications of a decision on staff and the entire orga- nization. (All decision making must be done while keeping in mind the organization’s objective of providing stellar health care service to all its patients.) Managers who shirk responsibility may be seen as being overly political, figureheads, or worse. Even when managers delegate a particu- lar task, they ultimately must take responsibility for the outcome.
▲ Visibility: Visible leaders are present and on the scene. In conducting their activities, they are around to hear the cheers and the boos. Further- more, a manager’s visibility does not diminish in critical times or in situ- ations that are out of the norm. At no time should a visible manager hear the question, “Who’s in charge?”
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220 MAKING MAJOR CHOICES
8.2.2 Utilizing the Portfolio Planning Approach
The portfolio planning approach is a basic method of formulating strategy and making decisions, in which managers allocate scarce organizational resources among competing opportunities. In the portfolio planning approach, resources include var- ious products, services, business units, and departments or divisions.7
Figure 8-2 summarizes a portfolio planning approach developed by the Boston Consulting Group known as the BCG matrix. The matrix ties strategy formulation to an analysis of business opportunities according to market growth rate and market share.8 The matrix shows the following four possibilities, with each linked to a possible strategic direction.
▲ Stars are high-market-share opportunities in high-growth markets. They produce large profits through substantial penetration of expanding mar- kets. The preferred strategy for stars is growth, and further resource investments in them are recommended.
▲ Question marks are low-market-share businesses in high-growth mar- kets. They do not produce much profit but compete in rapidly growing markets. They are the source of difficult strategic decisions. The preferred strategy is growth, but the risk exists that further investments may not result in improved market share. The most promising question marks should be targeted for growth; others are retrenchment candidates.
▲ Cash cows are high-market-share businesses in low-growth markets. They produce large profits and a strong cash flow. Because the markets
F O R E X A M P L E
Adapting at Sloane-Kettering Memorial Sloane-Kettering Cancer Center (www.mskcc.org) is known world- wide for its innovative research into the causes and treatment of cancer. In November 2004, the institution, frustrated by an ongoing shortage of excep- tional cancer researchers, decided to respond creatively and flexibly to the situation and create its own innovative doctoral program. Sloane-Kettering’s new Graduate School of Biomedical Sciences trains basic laboratory scien- tists to work in research areas directly applicable to human disease, partic- ularly cancer. “Right now, there aren’t enough basic scientists who under- stand the biological challenges faced by clinicians,” MSKCC president Harold Varmus said. “The new program we’ve designed will provide unpar- alleled opportunities to gifted and creative students who are inspired to attack clinical problems through research.” Beginning July 2006, 10 to 12 graduate students annually will enroll in the intensive program, which leads to the newly created degree of a PhD in cancer biology.
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8.2.2 UTILIZING THE PORTFOLIO PLANNING APPROACH 221
offer little growth opportunity, the preferred strategy is stability or modest growth. The choice of terms is very descriptive; “cows” should be “milked” to generate cash that can be used to support needed investments in stars and question marks.
▲ Dogs are low-market-share businesses in low-growth markets. They do not produce much profit, and they show little potential for future improve- ment. The preferred strategy for dogs is retrenchment by divestiture.
Question Marks—poor competitive position in a growing industry
Recommended strategy � growth or retrenchment; apply resources to accomplish positive turnaround or pull back if outlook poor
Stars—dominant competitive position in a growing industry
Recommended strategy � growth; add resources and build the business further based upon market projections
Dogs—poor competitive position in low- growth industry
Recommended strategy � retrenchment; divest, sell, liquidate the business to eliminate resource drain
Market Share of SBU Products/ Services
M a rk
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ro w
th R
a te
f or
S B
U P
ro du
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S er
vi ce
s
Cash Cows—dominant position in low- growth industry
Recommended strategy � stability or modest growth; maintain benefits of strong cash flow while keeping resource investments minimum
Low
SBU � Strategic Business Unit
Low
High
High
Figure 8-2
A portfolio model for corporate strategy formulation.
• Identify and define portfolio planning approach, opportunities, and resources.
• List four business areas in which organizations can have competi- tive advantage.
• Discuss the five values that drive managerial decision making.
• Explain the purpose of the portfolio planning approach to strategic decision making.
• Describe the four possible outcomes of the portfolio planning approach.
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8.3 Tools for Making Strategic Decisions
Managers can utilize numerous resources, strategies, and tools for data collec- tion and analysis during the process of formulating strategic decisions. The fol- lowing sections cover some of the most common and useful aids.
8.3.1 Collecting Data
Data collection and analysis should happen early in the strategic decision-mak- ing process. Managers must collect as much information as possible, and then make a timely decision based on the information at hand.
Often, health care managers have problems with this phase because they mis- takenly believe that a magical answer can solve all problems. For example, if your organization cut your department’s budget, as a manager, you may believe that some magical solution can help deal with limited financial resources and some- how make the department staff feel good about the cut. Unfortunately, no right answer exists toward addressing the dilemma imposed by a limited budget.
Managers can also make the mistake of believing that the more time that they spend collecting data, the more accurate their decision will be. Given the high visibility of a manager’s position, too much time can be spent collecting information and becoming involved in a research process that instead of signal- ing a leader may demonstrate a manager who is afraid to make a decision. Not only is this perception extremely harmful to the manager’s reputation, but also the manager who spends more time on research than action does not inspire confidence or generate positive results on a consistent basis.
Therefore, remember two guidelines when collecting data:
▲ Try to obtain valid, realistic information. Do not expect a one-size-fits- all solution from colleagues or other sources. By recognizing that each situation is unique, a manager brings his or her individual style and approach to problem resolution.
▲ Recognize that the time frame for making a decision is as important as the decision itself. After you have the information you need, rely on an intelligent gut feeling to arrive at an informed decision. Then initiate the action and begin implementation of your plan.
8.3.2 Studying Established Past Actions
Savvy managers utilize past action—including the actions of predecessors or peer managers—to help formulate new strategies. Assuming someone else’s decision was correct, you can gain some insight into your problem and a potential solution.
Keep in mind, however, that what worked in the past may not necessarily suit current or future circumstances. Nonetheless, the overall dynamics of the situation may be similar and give you some clue for constructing your own plan of action.
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8.3.4 ANALYZING HARD DATA 223
For example, in examining how other managers at your health care organiza- tions have responded to budget cuts, you can learn about potential reactions your staff may have toward working with reduced resources. By learning from others’ mistakes as well as their positive contributions, you gain insight into what did not work and what did work. In a similar vein, you can ask colleagues for their ideas on what they would do or, better yet, what they did in the past to help staff deal with departmental budget cuts. In both cases, you can find valuable information that provides a strong general frame of reference for formulating your strategy.
8.3.3 Researching Formal References
Formal references are anything that can be construed as “book knowledge,” including journals relevant to your technical area, management texts that offer pragmatic solutions, or your organization’s manual of standard operating proce- dures. Standard operating procedures typically include specific protocols and policies that your organization has adopted or specific bylaws applicable to the situation that you are currently confronting.
8.3.4 Analyzing Hard Data
Hard data can include any information that may have been generated by a ques- tionnaire, form, or survey. Measurable data, or quantitative information, can give you some outlook on the possible impact of your decision.
For example, a manager can gather hard data on departmental budget cuts by reviewing organizational history relative to adverse reaction to budget cuts
F O R E X A M P L E
Survey Data Points to Dramatic Increase in Peanut Allergies According to research published in the December 2005 issue of Journal of Allergy and Clinical Immunology (JACI), peanut allergies in children have increased 100% from 1997 to 2002. Scott Sicherer, MD, and Hugh Samp- son, MD, of Mount Sinai School of Medicine (www.mountsinaihospital.org) conducted 13,493 formal phone surveys and spend 2 years analyzing the hard data they collected. According to Sicherer and Sampson, their data shows that.4% of U.S. children were diagnosed with fatal peanut allergies in 1997, while.8% had been diagnosed in 2002. “This study confirms what we’ve been hearing from growing numbers of families, school administra- tors and other institutional leaders—food allergy is increasing,” said Anne Muñoz-Furlong, founder and CEO of the Food Allergy & Anaphylaxis Net- work. Additional research, surveys, and analysis is planned to determine possible causes of the dramatic increase in peanut allergies.
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and employee perceptions toward dealing with them. Whether a questionnaire is used or questions are asked informally in a meeting, a survey of staff attitudes to previous budget cuts generates data to assist you in making decisions. (Gath- ering hard data can also help strengthen the communication link between department colleagues and staff.)
8.3.5 Predicting Advantages and Potential Disadvantages
An important element of data collection is considering the advantages and dis- advantages of your options. Who will benefit from your action? How might pos- itive interpersonal effect best be achieved? Also consider when positive results may be realized, and set a time frame of realization of positive output.
Again using the budget-cut example, consider who would be involved with making the budget cuts, when some positive effects could be seen despite the cuts, and what the overall impact of the cuts might be. Set a projected implementation schedule and list the overall benefits, if any, that might emerge from the cuts.
At the same time, identify potential negative fallout, including adverse reac- tions and unfavorable perceptions that may arise. By anticipating negative fallout, you take the first step toward addressing problems and effecting positive action.
8.3.6 Following Your Instincts
The final element of data collection is trust in your instincts. Instinctual reaction gives credence to your insight into the problem at hand, the decision you have arrived at, and the action plan you implement. It also mandates a certain amount of introspection—that is, considering the impact a decision will have not only on staff but also on your own activities. Instinctual reaction also means trusting your intelligence and ability to consider the facts objectively, subjectively ana- lyze data, and use common sense to arrive at a course of action.
• Identify and define hard data and formal references.
• List and describe common tools for data collection and analysis.
• Discuss the process of data collection, including the two main guidelines for successful data collection.
• Compare the relative usefulness of studying past actions, reviewing formal references, analyzing hard data, making predictions, and following instincts as part of the decision-making process.
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8.4.1 ENVIRONMENT ANALYSIS 225
8.4 Analyzing Information
After collecting all significant data, you now must move to the action phase of the decision-making process. This phase entails reviewing all the information col- lected and setting a course of action and a specific plan for achieving the action. Action analysis allows managers to examine the viability of their plans and try to predict whether their decisions are sound and the courses of action will be effective.
Action analysis begins with a data review within the context of four essential factors: the environment, the various functions involved in the action plan, the business consequences of the action taken, and the historical precedent of the action. These four types of analysis allow you to examine every conceivable angle of a decision before taking action.
8.4.1 Environment Analysis
Environment analysis takes into account the theoretical and physical environ- ment in which you operate and the action plan that will be undertaken. Figure 8-3 shows the sphere of influence surrounding a health care team, as well as interaction between critical groups (represented as arrows).
An environment analysis allows managers to look specifically at workplace dynamics while making decisions. The example in Figure 8-3 shows a reha- bilitation unit at a metropolitan hospital. The model can assist managers in determining areas that may be most affected by budget cuts, identifying poten- tial areas of concern, and arriving at some suggestions for undertaking the action.
Information that is helpful to consider while conducting an environment analysis include the department’s size, the daily volume of patient services, and the revenue the department generates.
Less tangible environmental factors include the prevailing mood of the orga- nization, employee morale in your department, and the administration’s attitude toward your department. For example, a department that has direct patient con- tact traditionally has greater visibility within the organization and consequently gets quicker action and support for carrying out its actions. Hence, as a man- ager, you must consider your department’s status as a factor in your decision- making process.
Finally, environment analysis must take place over a time continuum. Seek to determine what the past status of the department has been, what its present conditions and objectives are, and what its future objectives may be. This view- point can be expanded to include the entire organization. Past, present, and future objectives that might bear on the decision at hand should be factored into the decision-making equation.
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8.4.2 Function (Role) Analysis
Function analysis basically asks, “Who can do what to make this happen?” In the following approach to function analysis, you evaluate every role affected by implementing and executing a strategic action plan.
1. Consider function analysis on your immediate department. Try to draw an accurate picture of how you can use various available staff resources, given the staff’s roles and functions. Do you have enough staff to carry out the action? Is the range of staff talent sufficient (for example, in technical ability) and balanced in terms of individual contribution? Consider the performance levels of the various individuals in your department. If your action plan is to be a group process, be certain to include the stronger players on your action team. If significant individual action is required, again consider various individuals’ roles, as well as their strengths and weaknesses, and then set your plan accordingly.
Figure 8-3
Sphere of influence for a health care team facing budget cuts.
A rehabilitation unit facing a budget cut
M anagem
ent input
A dm
inistrative dem ands
G roup process
S taff concern
New (possibly improved)
ways of interacting
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Empathy
Upper management
Work unit, staff
P eers
P at
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8.4.3 BUSINESS ANALYSIS 227
2. Expand the function analysis to include related departments and col- leagues. For example, a decision you are about to implement may require the support and participation of other departments. You also may need the participation of specialists and other peers within the organization. Try to specify what roles or functions need to be assumed by these individu- als and what is required from all participants in installing your plan.
3. Consider what participation you need from your supervisor. As your primary mentor, your supervisor is invaluable in guiding you as you implement and execute strategic designs. Also, you may require specific action from a supervisor (for example, influencing another individual within or outside the organization who can further empower your efforts). If you need political clout that only a supervisor can deliver, identify that role during function analysis and enlist participation as appropriate.
4. Consider benefits to the overall organization. Detail any specific advantages your organization may enjoy from your strategic decision. Brainstorm any contributions or roles the organization can assume in supporting your decision. Analyze any potential negative impact your decision may have on the organization.
8.4.3 Business Analysis
Before you can fully implement an action plan as a health care manager, you must analyze business-related dynamics.
First, consider the impact of your decision and its subsequent effect on patients. Specifically, what benefits will patients enjoy? What potential, short- term adverse outcomes may patients suffer as a result of your decision? (The qualifier short-term is key here: if any adverse impact falls to the patient, you have made a wrong decision.)
Two key quality-related themes underlie all aspects of business analysis:
▲ Continuous quality improvement (CQI) should drive all department activities. CQI dictates ongoing quality enhancement as the incentive that fuels everyday activities associated with optimum health care delivery.
▲ Continuous business development (CBD) connotes a building-block approach to all departmental activities in management efforts. Every effort undertaken by the department should be done to make the depart- ment a stronger, more progressive entity than it was prior to the effort.
Managers reinforce the dynamics of CQI and CBD asking the following questions:
▲ Will the decision mandate action that is quality conscious? ▲ Will the decision result in action that improves the quality of services?
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▲ Will the decision initiate action that facilitates departmental mission of progressive development?
▲ What future departmental or organizational goals may evolve from this decision?
▲ What will be the ultimate benefit of this action to the patient and the organization?
Finally, in developing a business perspective through analysis, identify any potential negative impacts and business consequences. Specifically, what adverse effect may compromise appropriate use of resources (human, fiscal, and equip- ment, for example)? Could patients perceive that their welfare is not a top orga- nizational priority? For example, does a construction project severely inconve- nience patients? These questions all speak to business dynamics that managers must analyze throughout the decision-making process.
8.4.4 Historical Analysis
Historical analysis takes into account past precedents established in the orga- nization. As a starting point, managers should consider precedents set by past action. What courses of action were taken that were similar in scope to the one you are contemplating?
Managers should review decisions from a political and psychological view- point in order to identify possible historical backers and detractors. Health care environments are not unlike other corporate cultures in that some individuals look with disdain on certain parts of their organizations. For example, in a met- ropolitan hospital, the human resource department may be discredited because, according to detractors, it never seems to fill open positions quickly enough. Hence, whenever the human resource department tries to enact a new program, the department experiences a certain resistance from individuals whose positions may be on the line. However, line personnel (such as medical support services) hold human resources in high regard because the department facilitates the train- ing and education that are so vital to the workers’ roles. Therefore, enlist the support of potential backers in your decision-making process; they can help sell your new plan.
Health care organizations are changing more dramatically and quickly than ever before. In light of ever-escalating competition and a variable fiscal climate, focusing on “how we’ve always done it before” can undercut a commitment to presenting new ideas openly and making decisions that explore new frontiers of organizational progress.
A commitment to making history is necessary in modern-day health care, where innovative problem-solving can mean the difference between success and failure.
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8.4.5 CONSIDERING RELEVANCE TO THE ORGANIZATION 229
8.4.5 Considering Relevance and Contribution to the Organization
After you make a strategic decision and plan a course of action, you should still take time to consider the ramifications of your decisions on the organization, from the perspective of what it can contribute to the organization’s goals. By stressing the benefits of your action and gathering the appropriate operational and moral support, you can transform your decision from idea to action.
To crystallize these ramifications, ask yourself the following 10 questions:
1. How do the decision and action enhance the organization’s commitment to patients?
2. How do the decision and action reflect the organization’s stated values? 3. How do the decision and action contribute to attaining the organization’s
stated mission? 4. Who should support this decision? 5. Who in the organization will automatically support this decision? 6. How can nonsupporters be convinced of the decision’s merits and posi-
tive contribution to the organization? 7. What are the overall benefits of the action to the organization? 8. How does the decision make the organization better in terms of effective-
ness and efficiency? 9. How does my decision make my department a larger contributor to the
organizational good?
F O R E X A M P L E
Business Analysis at Coastal Medical Like many private practices throughout the United States, the Rhode Island physicians who make up Coastal Medical Inc. (www.coastaldocs.com) began combining office facilities and support staff in the mid-1990s to meet cost pressures from private insurers and Medicare. Through the process of busi- ness analysis, Coastal Medical was able to focus on creating a profitable, sus- tainable business while still providing outstanding patient care. From its analysis, Coastal Medical identified lab testing and X-rays as expensive ser- vices that the organization was paying larger outside facilities to conduct. Instead, Coastal Medical decided to set up its own in-house lab and is in the process of developing its own medical-imaging center. Now, Coastal Medical not only conducts and processes its own laboratory tests (which saves the group significant costs), but Coastal Medical also supplies laboratory services to physicians outside the group, generating considerable new profit.
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10. What are two major benefits of this action that everyone in the organiza- tion can quickly recognize?
• Identify and define action analysis, environment analysis, function analysis, continuous quality improvement, continuous business development, and historical analysis.
• Describe how spheres of influence impact environment analysis.
• Explain the four steps of the function analysis process.
• Discuss the relationship of continuous quality and continuous busi- ness development to business analysis.
• Compare environment, function, business, and historical analysis.
S E L F - C H E C K
8.5 Models for Implementing Strategies and Decisions
Any strategy—no matter how well formulated—can achieve long-term success without proper implementation.
In order to successfully put strategies into action, the entire organization and all of its resources must be mobilized in support of them. Mobilizing the orga- nization involves the complete management process—from planning and con- trolling through organizing and leading.
Common strategic planning pitfalls that hinder implementation include both failures of substance and failures of process.
▲ Failures of substance reflect inadequate attention to the major strategic planning elements—analysis of mission, values and objectives, organiza- tional strengths and weaknesses, and environmental opportunities and threats.
▲ Failures of process reflect poor handling of the strategic planning process itself.
Strategies require supporting structures, well-designed tasks and workflows, and the right people. And strategies must be enthusiastically supported by lead- ers who can motivate everyone, build individual performance commitments, and utilize teams and teamwork to best advantage. Only with such total systems sup- port can strategies be implemented well enough to actually achieve competitive advantage.
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8.5.2 THE PARLIAMENTARY MODEL 231
Numerous management consultants and authors have developed models that managers can follow to implement strategic decisions.
In addition to the three processes described here, SWOT analysis (see section 6.5) can also be a useful tool for making and implementing strategic decisions.
8.5.1 The Military Model
The military model involves the following five-part sequence:
1. Define the objective. Specify the need or needs and identify the desired outcomes. In defining the objective, identify the optimum outcome and the maximum result that can be achieved.
2. Identify resources. Identify all available resources, list their potential contribution to your action, and consider all related resources from other departments within the organization.
3. Establish the plan. Write down the specific action you require and establish a time sequence within which the action is needed.
4. Lay out the course of action. Set up an incremental plan and establish time checkpoints in which certain objectives should be achieved. For example, if you delegate a particular task to an individual as part of your decision-making and action-execution process, you establish not only a final objective but also interim checkpoints for that individual.
5. Provide closure. Closure is made up of those final benchmarks of suc- cess that indicate that the plan was successful and the objective reached (such as an accomplished objective or attained goal).
8.5.2 The Parliamentary Model
The parliamentary model is used in many legislative bodies and is similar to the military model in terms of outcomes. The eight-step process is as follows:
1. Establish need. Define the needed action and ultimate problem being addressed by the decision and the action taken.
2. Define the optimum outcome. What are the best possible results? How can maximum results be achieved by your decision?
3. Conduct a stakeholder review. Who is involved? Who has a stake in this action? Who needs to be in on the communication loop?
4. List pros and cons. Delineate the positives and negatives of the action taken.
5. Make an option review. Review all possible actions and alternative actions. 6. Review potential consequences. Consider all adverse reactions to your
plan, as well as positive support that might be garnered.
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7. Formulate a step-by-step plan. Establish a plan and allow for a general preparation and time sequence as evidenced by the information collected in the data-gathering phase and confirmed by continuous contribution and communication with all parties involved.
8. Analyze achievement. After you reach the objective, analyze its results, considering the needed action and initial objective. This gives you a reli- able measure of success and provides an educational and developmental opportunity for future decisions.
F O R E X A M P L E
The QUICK Decision Model In an effort to create an easy-to-remember model that utilizes the best mil- itary and parliamentary models (as well as several other less-used models), health care management consultant and author Donald N. Lombardi devised the QUICK decision model. As the name suggests, the method focuses on quickly making decisions and executing action. Each letter of the acronym QUICK stands for one of five particular activities that you should do in order to get things done effectively at work:
▲ Q � Question appropriate parties ▲ U � Understand your objective(s) ▲ I � Investigate all options ▲ C � Communicate clearly to all concerned parties ▲ K � Keep on top of things, monitoring and reporting progress
• Identify and define military model, parliamentary model, and QUICK decision model.
• Discuss reasons that strategies sometimes fail.
• Compare failures of substance and failures of process.
• Sequence the five steps of the military model.
• Describe the process involved in the eight-step parliamentary model.
S E L F - C H E C K
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8.6.1 COMMUNICATING WITH STAKEHOLDERS 233
8.6 Completing Strategic Plan Execution
In the process of strategic analysis and decision making, much of your time as a manager is spend gathering information, evaluating options, formulating a plan, and executing that plan. However, the strategic decision making doesn’t end after you execute a plan. Ongoing communication with everyone affected by the deci- sion, as well as evaluation of all results are other important managerial respon- sibilities.
8.6.1 Communicating with Stakeholders
Regardless of which tools or models you employ as a health care manager, com- munication is a key element of any strategic decision. Savvy managers strive for maximum appropriate input from all parties involved in the decision-making process, during the initial data-collection process, and in later stages of execut- ing a plan.
Communication must be comprehensive, open, and (when necessary) repet- itive. You do not risk being redundant when you repeat the importance of the task and underscore the basic objective you are trying to achieve with your action. In addition to simply reviewing the goals and mission objective, review and present your expectations. Expectations make clear what specific level of achievement you want to accomplish toward your goal.
Make sure that you detail each aspect of the plan appropriately to key mem- bers of your staff and to other significant players in your action plan. Individu- als should be apprised of their part in the planning and execution phase, and of the roles of others with whom they may interact.
Be certain to set your goals realistically, without expectation of a perfect model of excellence in all your endeavors. By setting unrealistic and unattain- able expectations, you create false hope and will ultimately suffer the conse- quences of a disappointed staff and a disenchanted administration.
In particular, four communication keys are critical to executing action plans:
▲ Clarity: Be clear and comprehensive in all communication with your team.
▲ Closure: Bring all meetings and discussions to a positive end and leave no loose ends hanging.
▲ Cohesion: Make sure that your team works together as a focused unit by discussing their problems with each other in dedicated meetings. The key question to ask in eliciting this type of communication participation is, “What have we learned up to this point in the project?”
▲ Command: After you make a decision, take timely action. The speed with which you undertake a decision is vital, and although haste makes waste, you still must move quickly and positively toward your goal.
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Closely monitor progress throughout the project and get continuous feed- back. Doing so gives a clear indication about who is in charge and allows you to command the freedom to give direction and provide advice as needed. As you take command of the action-execution phase, avoid guesswork and unfounded assumptions. Remember, data collection is a continuous process, and it becomes even more important after you undertake action. Remember also that being in command mandates a certain amount of participative management. Therefore, allow all staff members to become involved in the process, but without relinquishing your own authority.
The concept of command calls for a kind of balancing act. As you assume command of action execution and watch your decision turn into the reality of performance, you must delegate a certain amount of control to your staff and other participating parties. While delegating control, do not delegate command. Ultimately, you alone are accountable and responsible for the action taken.
8.6.2 Quantifying Outcomes
As you move closer to your goal, review progress periodically. Hold regular meet- ings with all significant players to discuss your progress and address any prob- lems. Elicit the participation and suggestions of all players in resolving problems.
F O R E X A M P L E
Ongoing Communication at Saint Luke’s Hospital Introduced over the course of several years, the “Listening and Learning” process at Saint Luke’s Hospital of Kansas City (www.saintlukeshealthsystem. org) is now core to the hospital’s identity and success. Under the umbrella of its commitment to “Listening and Learning,” Saint Luke’s established the ongoing customer satisfaction research program to help the hospital gather patient-customer feedback, assess market demands, and measure customer satisfaction. By continually executing surveys, focus groups, and follow-up calls with patients, Saint Luke’s better understands how its patients want to be treated and has gone on to set up a series of 12 customer contact require- ments, which include expectations such as “Address patients/guests by last name unless otherwise told” and “Address all complaints within 24 hours or less.” To further incorporate the principles into Saint Luke’s everyday activities, employees now carry these requirements on a Very Important Principles Card, and permanent artwork with this theme is placed through- out the hospital.
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SUMMARY 235
After you reach your goal and desired outcome, clearly and objectively quan- tify the gains your action has helped achieve.
Begin by comparing outcomes to initial decision-making criteria. Announce the benefits gained, both from a short-term and long-term perspective. Work with staff to review what was learned—individually and as a group—as a result of your action. Try to list at least three or four lessons learned in the process. If your goals were reached, a need was fulfilled, or action was taken that led to improved patient service, then you have made a significant contribution to the health care delivery process, which, after all, is your mission as a health care manager. Do not lose sight of this essential reward system as you go about daily activities.
Recognize that no matter how effective your action was or how accurate your decision might have been, any action-oriented process is, in a sense, a trial-and- error education even under the best of circumstances. The more decisions you make, the better your judgment will become and, ultimately, the better your management style and performance effectiveness will be.
Decision making and action execution mark the scope of a health care man- ager’s responsibilities. By having the courage, foresight, and intelligence to make a decision, you are applying the basic building blocks used by effective health care leaders at the top levels of premier organizations.
• Describe tools and techniques for enabling open communication during the strategic decision-making process.
• List the four communication traits essential to executing plans.
• Explain the importance of quantifying outcomes as part of the strategic decision-making process.
• Discuss ways to gather results information.
S E L F - C H E C K
SUMMARY Making major decisions requires managers to analyze situations, gather infor- mation, evaluate options, determine a course of action, and then follow through on a plan. Strategic decision making is the responsibility of managers at every level of an organization; each decision can generally be classified as a growth, retrenchment, stability, or cooperation strategy. Competitive advantage motivates
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managers to make major decisions, while approaches such as portfolio planning provide guidance. Managers use a variety of information-gathering tools to help identify options. Analysis can take various forms, but the purpose of analysis is to evaluate situations and plot a course of action. Models can guide managers through the execution phase of a decision. Open communication ensures stake- holders understand decisions, while quantifying outcomes measures the effec- tiveness of decisions.
KEY TERMS Action analysis The process of a manager examining the viability of
a plan and predicting whether a decision is sound and the courses of action effective.
Business strategy Top- and mid-level management set the direction for a single business unit.
Competitive advantage An attribute or combination of attributes that allows an organization to outperform its rivals.
Concentration Growth strategy that uses existing strengths in new and productive ways.
Continuous business A building-block approach to all departmental development (CBD) activities in management efforts. Every effort under-
taken by the department should be done to make the department a stronger, more progressive entity than it was prior to the effort.
Continuous quality Ongoing quality enhancement as the incentive that improvement (CQI) fuels everyday activities associated with optimum
health care delivery.
Corporate strategy Top management directs an organization as a whole toward sustainable competitive advantage.
Diversification Growth strategy that focuses on acquiring or invest- ing in new businesses and services.
Emergent strategy Strategy that develops progressively over time as managers learn from and respond to work situa- tions.
Environment analysis Analysis that takes into account the theoretical and physical environment in which you operate and in which the action plan will be undertaken.
Formal references Information sources such as journals, management texts, or an organization’s manual of standard oper- ating procedures.
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KEY TERMS 237
Functional strategy Middle- and low-level management guide the use of resources to implement a specific business strategy.
Function analysis Analysis in which you evaluate every role affected by implementing and executing a strategic action plan.
Growth strategy Strategy that pursues larger-size and expanded oper- ations.
Hard data Any information that may have been generated by a test, questionnaire, form, or survey.
Historical analysis Analysis that takes into account past precedents es- tablished in the organization.
Outsourcing alliance Contracting to purchase important services from an- other organization.
Portfolio planning A basic method of formulating strategy and making approach decisions, in which managers allocate scarce organi-
zational resources among competing opportunities.
Retrenchment strategy Strategy that reduces the scale of operations in order to gain efficiency and improve performance.
Stability strategy Strategy that maintains a present course of action without major operating changes.
Strategic alliance Two or more organizations join together in partner- ship to pursue an area of mutual interest.
Strategic intent The focusing of all organizational energies on a uni- fying and compelling target.
Strategic management The process of formulating and implementing strategies that create competitive advantage and advance an organization’s mission and objectives.
Strategy A comprehensive action plan that identifies long- term direction and guides resource utilization to accomplish an organization’s mission and objectives with sustainable competitive advantage.
Strategy formulation Assessing existing strategies, organizations, and en- vironments to develop new strategies and strategic plans capable of delivering future competitive advantage.
Strategy implementation Acting upon strategies successfully to achieve the desired results.
Sustainable competitive An attribute that is difficult for competitors to advantage imitate.
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ASSESS YOUR UNDERSTANDING Go to www.wiley.com/college/Lombardi to evaluate your knowledge of the basics of analyzing and making decisions. Measure your learning by comparing pretest and post-test results.
Summary Questions
1. A competitive advantage can be considered sustainable when it (a) consistently enables an organization to outperform competitors. (b) strategically eliminates the need for further research. (c) consciously forces an organization to analyze its processes. (d) None of the above
2. The two main responsibilities of the strategic management process are (a) strategic formulation and strategic integration. (b) strategic initiatives and group motivation. (c) strategic formulation and strategic implementation. (d) competitive advantage and strategic alliance.
3. At the level of business strategy, top management directs an entire organization toward sustainable competitive advantage. True or false?
4. When an organization follows a growth strategy, it pursues larger-size and expanded operations, often through the process of concentration or diversification. True or false?
5. An organization has the opportunity to create competitive advantage in all the following, except (a) knowledge and timing. (b) cost and quality. (c) financial resources. (d) schedules and budget.
6. In the strategic decision-making process, managers are accountable for any decisions made as well as for how the decision was determined. True or false?
7. In the portfolio planning approach to decision making, cash cows pro- duce large profits and strong cash flow. The preferred strategy for cash cows is a growth strategy. True or false?
8. Data collection should happen continually throughout the decision-mak- ing process. True or false?
9. Which of the following information-gathering tools is most appropriate in an organization with a history of good leadership? (a) Analyzing hard data (b) Studying established past actions
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SUMMARY QUESTIONS 239
(c) Following your instincts (d) Collecting data
10. Hard data can be collected from (a) surveys. (b) tests. (c) questionnaires. (d) all the above.
11. Continuous quality improvement (CQI) means quality is always more important than speed or cost-effectiveness to responsible health care organizations. True or false?
12. Which type of action analysis strives to evaluate every role affected by implementing and executing a strategic action plan? (a) Environment analysis (b) Business analysis (c) Function analysis (d) Historical analysis
13. When using function analysis to help make a decision, you should start by considering the benefits to the overall organization, then move to benefits for your supervisor, related departments, and finally to your immediate department. True or false?
14. Strategic plans can fail for a variety of reasons. In a failure of process, (a) the execution process has unexpected errors. (b) the planning process was poorly handled. (c) the research process was poorly designed. (d) None of the above
15. The appropriate sequence of the military model is (a) identify resources, establish the plan, define the plan, lay out the
course of action, provide closure. (b) define the objective, establish the plan, lay out the course of action,
identify resources, provide closure. (c) define the objective, lay out the course of action, establish the plan,
identify resources, provide closure. (d) define the objective, identify resources, establish the plan, lay out the
course of action, provide closure. 16. During the strategic decision-making process, communication can be repetitive
in order to communicate the importance of the task at hand. True or false? 17. You can delegate some control during the execution phase of a decision,
but you must retain (a) command. (b) counsel.
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(c) critical judgment. (d) collective bargaining.
18. An activity that helps quantify the outcomes of a strategic decision is (a) reviewing with staff what has been learned from the decision. (b) announcing short- and long-term benefits realized because of the
decision. (c) writing a summary report about the impact of the decision. (d) all the above.
Review Questions
1. The process of strategic implementation has five main steps. What are these steps?
2. Business strategies set the direction for a single business unit. What levels of management typically devise business strategies?
3. Strategically speaking, middle and lower management are typically responsible for the use of resources to best implement a business strategy. What is this level of strategy?
4. Retrenchment strategies reduce the scale of operations in order to gain efficiency and improve performance. What are the three most common types of retrenchment strategies?
5. How does a strategic alliance differ from an outsourcing alliance? 6. Which essential value for decision making is a manager demonstrating
when she is around to accept praise as well as complaints and criticism? 7. Business opportunities that offer high market share in high-growth mar-
kets are known are considered stars. What is the preferred strategy for responding to stars?
8. The portfolio planning approach compares business opportunities on what two factors?
9. To effectively collect data as part of the strategic decision-making process, managers need to keep two guidelines in mind. One guide is to obtain valid, realistic information. What is the other guideline?
10. When a manager reviews department manuals and searches for a process that his staff can utilize to solve a current problem, the manager is using what information-gathering tool?
11. What sort of strategy is an urban hospital utilizing when it decides to build a state-of-the-art pediatric AIDS unit in response to recent rises in infant AIDS cases?
12. The third shift manager in an intensive care unit can probably make the greatest impact on what level of strategy for her suburban hospital?
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13. What are the four types of analysis that make up process of action analysis? 14. During environment analysis, managers look specifically at workplace
dynamics while making decisions. In particular, what sort of factors should managers pay attention to?
15. When a manager asks how instituting a new billing procedure will affect patients, positively and negatively, in the short term and long term, what form of action analysis is the manager engaging in?
16. In the parliamentary model, what is the equivalent of the final military model step of providing closure?
17. Plans usually fail because of substance or process. What are some aspects that can constitute a failure or substance?
18. Communication is especially critical during the execution phase of a strategic decision. What are the four communication traits to keep in mind during execution?
19. When is it appropriate for plan-related communication to become repetitive?
Applying This Chapter
1. A county hospital serving primarily rural patient-customers is concerned about losing market share to several new franchised walk-in clinics that have opened in the area in the last year. How might the hospital establish sustainable competitive advantage?
2. A mammography clinic wants to grow its business and effectively treat 35% more patients in the next year. In assessing ways to reach this goal, the clinic is considering offering a state-of-the-art digital scanning technique to its patients. The technique is new and will probably become an industry standard in 5 years. However, the clinic is known primarily for offering affordable mammograms to inner-city women. Based on the portfolio model, which opportunity has the clinic identified?
3. You’re the manager of a nursing staff at a large urban hospital. Your supervisors would like your input on a major report they’re preparing. You’ve been asked to present recommendations of the ways in which nursing staffs are and should be scheduled for work. What information- gathering tools should you consider utilizing as you prepare your recom- mendations for your supervisors?
4. What “sphere of influence” groups should the manager of a medical labo- ratory facility consider engaging as her department undergoes the process of construction and improvements that will close or limit laboratory function over the next fiscal year?
5. You manage the clerical and support staff in a small-town emergency room. In addition the daily challenges and rapid changes associated with
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emergency-room work, your hospital is undergoing construction and management reorganization in an effort to become the leading facility in the tri-country region. Which model—military, parliamentary, or QUICK—would you choose as you make strategic decisions for your department in the next year?
6. As the manager of a student health center at small private school, you and your staff have been charged with developing and introducing a plan for improving student health during winter months, when flu-infection rates typically rise to dangerously high levels. Who are the stakeholders that you and your team need to connect with in order to create an effec- tive winter-health plan? How might you interact with these stakeholders?
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YOU TRY IT
ramifications altogether, but you can work to minimize negative ramifications and maximize positive ramifica- tions. Consider the difficult situation of a manager who chose to respond to budgetary pressures by slightly re- ducing each employee’s wage, rather than eliminating one or more workers’ positions. Run through the 10 questions in section 8.4.5. How might this manager an- swer these 10 questions?
Following the Military Model Look back on a recent strategic decision your school or employer made. A strategic decision could be to reorga- nize a department; to reposition the organization to ap- peal to a different audience; or to invest money in a new program, equipment, or building. (If your school or work- place hasn’t made recent strategic decisions, check out press releases associated with the new Brain Institute at Providence Health System at www.providence.org/ brain.) In what ways was the military model followed? How did the organization define its objectives? How did the organization identify resources and establish its plan? Was a course of action clearly laid out? What about closure?
Your Stakeholders Every decision, large or small, has stakeholders—indi- viduals and groups that are affected by the decision and often play some role in making the decision. Who in your career or education are your key stakeholders? Create a list of all the people who would be impacted if you make a significant change in your course of study or your work situation. Add to this list people who may influence your educational or career decisions; you may want to in- clude instructors, professors, outstanding professionals, friends, co-workers and more here. Now, review your list of stakeholders and rank each person based on how im- portant he or she is in your decision-making process. Rewrite your list and keep a copy in a notebook, elec- tronic organizer, wallet, or purse. The next time you’re unsure of how to proceed on a decision, pull out your list and consider how you can involve your stakeholders in your decision-making process.
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Levels of Strategy at SSM Health Care Successful health care strategy involves planning at cor- porate, business, and functional strategic levels. Take a look at the strategic plans of your current employer or of a health care organization you’re interested in working for. If you don’t have or can’t locate a strategic plan, re- view the Recognized Best Practices for SSM Health Care (search for “best practices” at www.ssmhc.com). Identify at least one corporate, business, and functional strategic plan for the organization.
Your Essential Values The five essential values for making strategic decisions (section 8.2.1) apply to more than just business deci- sions. These five values can be essential to success in your career and your education—even your personal life. For example, consider how the five values might come into play in a job interview situation. If an inter- viewer asked you for a specific example of time in your educational or work life when you exhibited outstanding accountability, what would you say? What about adapt- ability, dependability, responsibility, or visibility? Look over your resume (or start drafting one if you don’t have one yet) and consider experiences that highlight each of the five values. Can you include some (or perhaps all) the descriptive words accountable, adaptable, dependable, responsible, and visible into your resume?
Formal and Informal References Formal references (books, journals, management texts, written documents, and so on) as well as informal refer- ences (insights, experiences, relationships, and so on) are important sources of data that can help you make strate- gic decisions more quickly and effectively. As the manager of an inner-city infant vaccination program (with nurse- practitioners, social workers, and administrative assistants on your staff), what are some formal and informal refer- ences you can capitalize on to increase the number of par- ticipants in your programs by 25% over the next year?
Considering Ramifications Strategic decisions almost always produce both positive and negative ramifications. Of course, you can’t avoid
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