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pp_01.ppt
STRATEGIC MANAGEMENT OF
HEALTH CARE ORGANIZATIONS 7TH EDITION
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The Nature of Strategic Management
Chapter 1
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Chapter 1 Learning Objectives
Explain why strategic management has become crucial in today’s dynamic health care environment.
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Chapter 1 Learning Objectives
Explain why strategic management has become crucial in today’s dynamic health care environment.
Trace the evolution of strategic management and discuss its conceptual foundations.
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Chapter 1 Learning Objectives
Explain why strategic management has become crucial in today’s dynamic health care environment.
Trace the evolution of strategic management and discuss its conceptual foundations.
Describe and explain the concept of strategic thinking maps.
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Chapter 1 Learning Objectives
Explain why strategic management has become crucial in today’s dynamic health care environment.
Trace the evolution of strategic management and discuss its conceptual foundations.
Describe and explain the concept of strategic thinking maps.
Define and differentiate between strategic management, strategic thinking, strategic planning, and managing strategic momentum.
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Chapter 1 Learning Objectives
Explain why strategic management has become crucial in today’s dynamic health care environment.
Trace the evolution of strategic management and discuss its conceptual foundations.
Describe and explain the concept of strategic thinking maps.
Define and differentiate between strategic management, strategic thinking, strategic planning, and managing strategic momentum.
Understand the necessity for both the analytic and emergent models of strategic management.
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Chapter 1 Learning Objectives
Understand how an organization may realize a strategy that it never intended.
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Chapter 1 Learning Objectives
Understand how an organization may realize a strategy that it never intended.
Understand the benefits of strategic management for health care organizations.
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Chapter 1 Learning Objectives
Understand how an organization may realize a strategy that it never intended.
Understand the benefits of strategic management for health care organizations.
Understand the importance of systems approaches.
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Chapter 1 Learning Objectives
Understand how an organization may realize a strategy that it never intended.
Understand the benefits of strategic management for health care organizations.
Understand the importance of systems approaches.
Explain the links between the different levels of strategy within an organization.
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Chapter 1 Learning Objectives
Understand how an organization may realize a strategy that it never intended.
Understand the benefits of strategic management for health care organizations.
Understand the importance of systems approaches.
Explain the links between the different levels of strategy within an organization.
Describe the various leadership roles of strategic management.
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Quote
“Somehow there are organizations that effectively manage change, continuously adapting their bureaucracies, strategies, systems, products, services and cultures to survive the shocks and prosper from the forces that decimate others … they are the masters of what I call renewal.”
Robert H. Waterman, Jr.
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Quote
“American Health Care is in a state of hyper-turbulence characterized by accumulated waves of change in payment systems, delivery systems, technology, professional relations, and societal expectations. It can be likened to an earthquake in its relative unpredictability, lack of a sense of control, and resulting anxiety.”
S.A. Shortell, R.R. Gillies, and K.J. Devers
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What has Changed?
| World? | Health Care? |
| 1. | 1. |
| 2. | 2. |
| 3. | 3. |
| 4. | 4. |
| 5. | 5. |
| 6. | 6. |
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What has Changed?
| External Environment | |
| TYPE OF CHANGE | CHANGES |
| Technological | The Internet and Online Banking |
| Social/Cultural | “On Demand” consumer preferences, desire for 24hr service |
| Demographic | Preferences/needs of Baby Boomers vs. Generation “Y” |
| Political/Regulatory | Security, privacy of financial data |
| Economic | Housing boom, housing bust, mortgage debacle |
| Competitive | Online-only banks (visual banks), Consolidation |
| Customer | With online banks, customer no longer needs to be “local” |
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“The Only Constant is Change”
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Greek word stratēgōs, meaning “a general” which in turn comes from roots meaning “army” and “lead”
Greek verb stratēgēō means “to plan the destruction of one’s enemies through effective use of resources”
Many terms we associate today with “strategy” (e.g., objectives, mission, strengths, weaknesses) were developed by the military
Foundations of Strategic Management
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Development of Strategic Management
Long-Range Planning
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Development of Strategic Management
Long-Range Planning
Strategic Planning
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Development of Strategic Management
Long-Range Planning
Strategic Planning
Strategic Management
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Development of Strategic Management
Long-Range Planning
Strategic Planning
Strategic Management
Strategic Management in the Health Care Industry
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Health Policy
Determines the rules that apply to all consumers and providers.
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Health Policy
Determines the rules that apply to all consumers and providers.
Develops and maintains an infrastructure to efficiently enhance the health of the public.
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Health Policy
Determines the rules that apply to all consumers and providers.
Develops and maintains an infrastructure to efficiently enhance the health of the public.
Defines the institutions that meet the preferences of most of society.
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Health Policy
Determines the rules that apply to all consumers and providers.
Develops and maintains an infrastructure to efficiently enhance the health of the public.
Defines the institutions that meet the preferences of most of society.
Develops the rules under which insurors and providers compete.
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Health Policy
Determines the rules that apply to all consumers and providers.
Develops and maintains an infrastructure to efficiently enhance the health of the public.
Defines the institutions that meet the preferences of most of society.
Develops the rules under which insurers and providers compete.
Is set by congress, state legislatures, executive branches, and agencies such as health departments, the Centers for Disease Control and Prevention, the Food and Drug Administration and so on.
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The Dimensions of Strategic Management
Strategic management is a way of thinking – an approach for managing complex organizations
Strategic thinkers draw upon the past, understand the present, and can envision a better future
Planners, on the other hand, figure out how to get where the strategic thinkers want to go
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The Map and the Compass
The Map
- Analytical or Rational Approach
- Logical Sequence of Steps
- Specific Processes
- Better in Known Worlds
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The Map and the Compass
The Map
- Analytical or Rational Approach
- Logical Sequence of Steps
- Specific Processes
- Better in Known Worlds
The Compass
- Emergent Approach
- Relies on Learning
- Leadership Sets Direction
- Better in Uncharted Worlds
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Map and Compass
| Map | Compass |
| Planned | Emergent |
| Rational | Non-rational |
| Sequential | Random |
| Performance | Learning |
| Consistency | Change |
| Logical | Illogical |
| Order | Discontinuity |
| Efficiency | Effectiveness |
| Prescriptive | Descriptive |
| Evolution | Revolution |
| Control | Risk |
| Present | Future |
| Management | Leadership |
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Analytical and Emergent Views
As the physicist David Bohm observed, the purpose of science is not the “accumulation of knowledge” but rather the creation of “mental maps” that guide and shape our perception and action.
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Strategic Management Processes
Strategic Thinking
- External Orientation
- Analyze data
- Question Assumptions
- Generate New Ideas
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Strategic Management Processes
Strategic Planning
- External Analysis
- Internal Analysis
- Directional Strategies
Situation Analysis
Strategy Formulation
Planning the Implementation
- Directional Strategies
- Adaptive Strategies
- Market Entry Strategies
- Competitive Strategies
- Service Delivery Strategies
- Support Strategies
- Action Plans
Strategic Thinking
- External Orientation
- Analyze data
- Question Assumptions
- Generate New Ideas
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Strategic Management Processes
Strategic Planning
- External Analysis
- Internal Analysis
- Directional Strategies
Situation Analysis
Strategy Formulation
Planning the Implementation
- Directional Strategies
- Adaptive Strategies
- Market Entry Strategies
- Competitive Strategies
- Service Delivery Strategies
- Support Strategies
- Action Plans
Strategic Thinking
- External Orientation
- Analyze data
- Question Assumptions
- Generate New Ideas
Managing
Strategic
Momentum
- Managerial Action
- Strategy Evaluation
- Emergent Learning
- Re-initiate Strategic
Thinking
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Strategic Management Processes
Strategic Planning
- External Analysis
- Internal Analysis
- Directional Strategies
Situation Analysis
Strategy Formulation
Planning the Implementation
- Directional Strategies
- Adaptive Strategies
- Market Entry Strategies
- Competitive Strategies
- Service Delivery Strategies
- Support Strategies
- Action Plans
Strategic Thinking
- External Orientation
- Analyze data
- Question Assumptions
- Generate New Ideas
Managing
Strategic
Momentum
- Managerial Action
- Strategy Evaluation
- Emergent Learning
- Re-initiate Strategic
Thinking
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Leading Strategically
Strategic Thinking – an intellectual orientation, a way of thinking or mindset
Strategic Planning – the periodic process of creating organizational momentum (a strategy)
Managing Strategic Momentum – a philosophy and process of continuously leading and managing an organization using strategic thinking and periodic strategic planning
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Leading Strategically
| Strategic Activity | Description | Orientation/ Scope |
| Strategic Thinking | Fundamental Strategic Skill - an Intellectual Orientation, a Way of Thinking or Mindset | Individual Leadership Process |
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Leading Strategically
| Strategic Activity | Description | Orientation/ Scope |
| Strategic Thinking | Fundamental Strategic Skill - an Intellectual Orientation, a Way of Thinking or Mindset | Individual Leadership Process |
| Strategic Planning | Process of Creating a Plan Using Strategic Thinking | Periodic Group Leadership and Management Process |
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Leading Strategically
| Strategic Activity | Description | Orientation/ Scope |
| Strategic Thinking | Fundamental Strategic Skill – an Intellectual Orientation, a Way of Thinking or Mindset | Individual Leadership Process |
| Strategic Planning | Process of Creating a Plan Using Strategic Thinking | Periodic Group Leadership and Management Process |
| Managing Strategic Momentum | Process of Leading and Managing the Strategy using Thinking and Planning | Organizational Management Processes |
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Strategic Thinking
Requires a mindset – a way of thinking that:
Acknowledges the reality of change
Questions current assumptions and activities
Builds an understanding of systems
Envisions possible futures
Generates new ideas
Considers fitting the organization to the environment
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Strategic Thinkers
Do not assume that the organization will continue to do what it is presently doing.
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Strategic Thinkers
Do not assume that the organization will continue to do what it is presently doing.
Determine what the organization should stop doing.
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Strategic Thinkers
Do not assume that the organization will continue to do what it is presently doing.
Determine what the organization should stop doing.
Determine what the organization should start doing that it is presently not doing.
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Strategic Thinkers
Do not assume that the organization will continue to do what it is presently doing.
Determine what the organization should stop doing.
Determine what the organization should start doing that it is presently not doing.
Determine what the organization should continue to do but perhaps in a fundamentally different way.
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Strategic Planning
Provides a sequential, step-by-step process for creating a strategy
Involves periodic group strategic thinking sessions
Requires data/information, uses consensus and judgment
Establishes organizational focus
Facilitates consistent decision making
Determines what is required to fit with the external environment
Results in a documented strategic plan
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Profile of Today
Mission
Profile of
Tomorrow
Vision (hope
for the future)
Strategy
year
1
year
2
year
3
year
4
year
5
plans
plans
plans
budgets
budgets
budgets
budgets
budgets
plans
plans
plans
plans
plans
plans
plans
budgets
budgets
budgets
budgets
budgets
Linking Today and Tomorrow
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Managing Strategic Momentum
Actual work to accomplish specific objectives
Concerns decision making process and their consequences
Provides the style and culture
Evaluates strategy performance
A learning process
Relies on and initiates new strategic thinking and new periodic strategic planning
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Quotes
“Organizations whose internal attributes fail to fit with their external environment for any extended period of time will be unsuccessful.”
“Leaders, like great athletes, must simultaneously play the game and observe it as a whole.”
Ronald Heifetz Harvard Professor
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Benefits of Strategic Management
Ties the organization together with a common sense of purpose and shared values
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Benefits of Strategic Management
Ties the organization together with a common sense of purpose and shared values
Improves financial performance in many cases
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Benefits of Strategic Management
Ties the organization together with a common sense of purpose and shared values
Improves financial performance in many cases
Provides the organization with a clear self-concept, specific goals, and guidance as well as consistency in decision making
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Benefits of Strategic Management
Ties the organization together with a common sense of purpose and shared values
Improves financial performance in many cases
Provides the organization with a clear self-concept, specific goals, and guidance as well as consistency in decision making
Helps managers understand the present, think about the future, and recognize the signals that suggest change
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Benefits of Strategic Management
Ties the organization together with a common sense of purpose and shared values
Improves financial performance in many cases
Provides the organization with a clear self-concept, specific goals, and guidance as well as consistency in decision making
Helps managers understand the present, think about the future, and recognize the signals that suggest change
Requires managers to communicate both vertically and horizontally
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Benefits of Strategic Management
Improves overall coordination within the organization
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Benefits of Strategic Management
Improves overall coordination within the organization
Encourages innovation and change within the organization to meet the needs of dynamic situations
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What Strategic Management is Not
Not a quick fix
Not a technique or gimmick
Not just a yearly planning retreat
Not paper intensive
Not a regulatory document
Not just an extension of last year’s plan
Not just based on forecasts of current operations
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Chapter 1 Conclusions
After reading Chapter 1, you should be able to define the following terms:
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