Many hospitals and health systems have strong strategic plans in which they outline long-term goals and tactics to reach those goals. Where organizations tend to fall short is in the execution stage, primarily due to a lack of accountability, according to Scott Becker, CEO of Conemaugh Health System in Johnstown, Pa. "Everybody has a great strategic plan. The organizations that are successful are the ones that effectively operationalize it," he says.
Strategic plan execution structure
Scott Becker
Establishing a structure for the strategic plan that shows how specific actions meet objectives can help leaders implement the plan, measure progress and hold people accountable for reaching goals. Steven Mason, president and CEO of performance management software company OnFocus Healthcare, shares the following structure for managing execution of a strategic plan:
1. Goals and objectives. When developing a strategic plan, leaders need to first determine the critical priorities for achieving the organization's vision and long-term objectives, and then develop strategies and tactics to meet these goals. The goals set the organization's direction and keep leaders focused on the "big picture." For example, a hospital's goal could be to increase its overall financial performance.
2. Critical success factors and key performance indicators. Once goals are set, leaders need to determine the critical success factors to meet those goals. Critical success factors are major areas of work, initiatives or projects that when completed, ensure the success of each goal, such as increasing admissions or improving margins. Every CSF should have an assigned leader, a set of key performance indicators and action steps or tasks to be completed to achieve the CSF. KPIs track the quantitative progress or effectiveness of a CSF in achieving a measurable target. For example, increased margins may be measured by KPIs such as reduced expenses per adjusted admission, reduced readmission penalties and shorter length of stay.
3. Action plans. Hospital leaders need to measure KPIs to determine areas for improvement and then create action plans to meet KPI targets. Action plans are a chronological series of discrete activities that ensure the achievement of a critical success factor and its measurable objectives (KPIs). Each action step has a responsible leader, a start date and a target date. For example, length of stays that are longer than the local or national average may require hospital leaders to develop an action plan for creating new clinical protocols, communication strategies and other processes to reduce the length of stay. Hospital executives need to work with medical staff leaders and other stakeholders to develop specific plans to reach their objectives.
Steven Mason
4. Progress tracking. Once actions plans and completion dates are defined and assigned to employees, it is critical that individual action step owners score and report progress on their action steps in an automated system at regularly agreed-upon intervals, according to Mr. Mason. Typically, action step progress is updated monthly for strategic initiatives and weekly for more urgent corrective action plans, he says. Tracking progress on action plans not only creates accountability and ownership of the action plan by the employees who are responsible for them, but it also provides a real-time feedback loop for goal and CSF leaders who must monitor the action plan's effectiveness in achieving the desired KPI targets.
Building in accountability
Hospital leaders can build accountability into this strategic plan structure by assigning people to each goal, CSF and action plan item. An automated system can help track employees' progress on their assigned action plans and KPIs and instantly address performance variances before they become a problem. "Nobody has to cobble together a bunch of reports and synthesize them into a summary report," Mr. Mason says. "You're getting data in real time that shows everyone in the execution chain what's on- or off-target, whether there's an action plan in place and if it's working."
The execution structure also creates a closed-loop performance management process — "that cycle of goals driven by critical success factors driven by action plans," Mr. Mason says. By assigning leaders who report progress on action plans for each CSF, leaders can clearly see what tactics are successful and which need to be adjusted. Similarly, an automated system using this structure shows leaders where performance is lacking and who is responsible for that performance. "Typically everyone blames everyone else," Mr. Becker says. "This tool drives discipline and accountability throughout the organization."
Engaging employees in the strategic plan
In addition to driving accountability, giving people responsibility for specific actions engages staff as active participants in the organization's strategic plan. "It brings the rest of the organizational leadership to the strategic planning table. Service line leaders are now participating actively because they're moving dials on a monthly basis based on plans for their service lines," Mr. Becker says. Emphasizing the link between assigned actions and the hospital's overall goals helps employees understand how they personally contribute to the organization's mission and vision, which is essential for employee satisfaction and the hospital's ability to meet its goals.
Establishing consequences
While assigning people to specific action items is the first step in building accountability, assignments alone will not change an organization's culture. Hospital leaders need to create an expectation that employees will report on their progress; using an automated performance management system as the standard reporting platform at all meetings can demonstrate leaders' expectations, according to Mr. Mason. In addition, leaders need to establish consequences for assigned employees who do not report on measures or perform up to standards.
"It has to be reinforced by leadership of the hospital, meaning the CEO pulls it up in meetings and uses it as a single point of truth for the organization," Mr. Mason says. By setting clear performance criteria and expectations for individual accountability and combining it with real-time progress tracking through an automated system, hospitals can successfully and efficiently execute their strategic plan while creating a performance-driven culture of excellence across the entire organization.
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