The last post examined the use of SWOT analysis techniques to define a hospital's current advantages and disadvantages in environmental sustainability. Armed with this institution-specific information, the next step is to define a sustainability program's strategic objectives.
A Few Essential Definitions
Before we start, let's define a few planning terms. If you've been around the healthcare industry for a while, you know that nearly every plan – irrespective of topic, scope or position within the hierarchy – ends up being erroneously called a "strategic plan". But, in an organizational management sense, not all plans and their elements are strategic; there are also tactical plans, operational plans and project plans, too. It really is important to distinguish between the various types of plans, as well as their various elements and functions. It is also important to understand the relationships between these plans, elements and functions.
Why the fuss? When hospital leaders at any level fail to distinguish between the functions of strategies, tactics, operations-level plans and implementation projects, they risk almost certain failure in successfully linking strategic intentions to operations-level activities. Without an effective linkage structure, strategic objectives remain nebulous hopes, dreams – and, yes, sometimes institutional hallucinations – rather than measurable successes. As Stanford University professor, Jeffrey Pfeffer, said in his book, The Human Equation:
“More important than having a strategy is the ability to implement it.”
Here are some functional definitions of planning elements that distinguish between strategies, tactics, operations-level plans and project plans.
· A strategic objective is a high-concept statement of what the whole organization will achieve to:
o Create a new capability or
o Resolve a major poor-performance issue.
Strategic objectives are sometimes expressed quantitatively, such as time-constrained waste and energy-use reduction targets, but that isn't always necessary.
· Drilling down from high concepts, tactical plans mandate the goals and targets that must be reached by specific organizational functions and units to contribute to the achievement of each strategic objective. Focusing on specifics, there may be several goals within tactical plans to achieve a single strategic objective. Further, these goals are quite often expressed quantitatively.
· With strategic objectives and tactical goals raining down on an operations or administrative unit, an operations-level plan – which is produced by a unit's leadership – specifies how it will actually achieve its assigned requirements in terms of who will do what by when and how success will be measured.
Because an operations-level plan is produced at the "working level" of an organization, its authors are able to inject day-to-day realities – including their unit's own most-pressing needs – into the planning and execution processes. These are the kinds of issues often identified on unit-specific dashboards, balanced scorecards, and other financial and managerial accounting reports.
· A project plan is a detailed sequence of steps along with a schedule and budget that enables a specific unit – as well as cross-functional teams – to achieve one or more of its assigned tactical goals and/or operations-level-plan requirements.
A Leadership Dilemma in Healthcare
Take a look at that list of definitions again. Now, for discussion purposes, remove the second and third definitions, which are the planning process links between strategic intentions and operational activities. Think about how difficult it is for a unit manager – especially a clinician who has never spent a day in business school – to figure out what the senior leaders want her or him to do. Regretfully, this is a common situation in far too many healthcare delivery organizations.
Now, in the event a reader ever thinks I'm being critical of hospital unit managers, I'm not. When it comes to the management arts and sciences, they simply don't know what they don't know. How could they? For their entire careers these dedicated, self-sacrificing people have spent most of their waking hours working healthcare miracles. This is in contrast to focusing on systematic planning, organizing, controlling and leading, which of course are the four primary functions of management.
I'm fond of preaching:
"Never punish people for the sins of the work process."
But, we do punish these superb clinical professionals by promoting them to leadership positions, yet providing them little in the way of useful, quality education and experience in managing organizations. However, to fix this problem most hospitals don't have the resources to send their unit managers back to school to earn a management degree.
So, instead, hospitals need to create management structures that enable leaders to make the right kinds of decisions at the right times and thereby learn by doing. This is especially true for somewhat exotic programs, like sustainability, where not only management concepts are apt to be misunderstood and ill-applied, but so, too, are basic sustainability concepts.
Converting SWOT Analysis Findings into Sustainability Strategic Objectives
The last post explored a process to define high-priority sustainability strengths, weaknesses, opportunities and threats sorted into these five planning elements:
· Program – Findings about the sustainability program itself
· Compliance – Environmental, health and safety (EHS) -- as well as industry standards -- compliance findings for value-chain lifecycles
· Efficiency – Green efficiency findings for value-chain lifecycles
· Revenue – Green revenue-generation findings for value-chain lifecycles, and
· Transparency – Corporate transparency findings.
Now, we'll explore ways to convert them into high-concept strategic sustainability objectives. The sustainability program champion along with the hospital's strategic planning director – plus, any other key players they deem appropriate – do the actual conversion of SWOT findings into a draft slate of objectives. This draft slate of objectives is submitted for review and amendment by the hospital's senior leadership.
Why include the strategic planning director when the sustainability program has a designated champion? Because the sustainability program must be integrated at some point into the broader organization's planning and management processes. Who knows how to do this better than the strategic planning director?
Compared to the SWOT analysis, the conversion of SWOT findings into strategic objectives is actually quite easy. The strengths, weaknesses, opportunities and threats boil-down into two planning categories:
· Advantages – The strengths and opportunities findings, and
· Disadvantages – The weaknesses and threats findings.
The advantage findings are converted into active-voice statements declaring:
· What strengths need to be built-up or enhanced, and
· What opportunities need to be expanded or exploited.
Here are some examples with and without quantitative mandates. The first objective assumes a hospital's internal ability to effectively control expenses and a favorable external energy infrastructure. The second objective seeks to exploit a hospital's training-and-development expertise to leverage an external competitive advantage through corporate transparency concepts.
· Within the next 3 years the hospital will reduce its energy expenses by 20 percent while sourcing 50 percent of its energy from sustainable producers.
· The hospital will become a recognized industry leader in "green management" by developing sustainability experts within its rank-and-file.
The disadvantage findings are likewise converted into active-voice statements declaring:
· Which weaknesses need to be resolved or reduced, and
· Which threats need to be avoided or thwarted.
Here are additional examples of objectives that seek to resolve internal performance issues and external risks with and without quantitative mandates.
· The hospital will reduce its waste disposal expenses by 25 percent within the next 3 years through aggressive applications of the reduce, reuse and recycle principles (The 3R's).
· The hospital will become the healthcare industry benchmark for achieving all EHS regulatory requirements with least cost, effort and risk.
What about Performance Breakthrough Objectives?
You may be thinking that these are fairly pedestrian strategic objectives. Have a cigar! You are correct and you aren't alone. In producing these run-of-the-mill objectives, the sustainability program champion, the strategic planning director and, eventually, the senior leaders will also begin wondering: "Shouldn't there be more to this?" Indeed there should be more in terms of breakthrough performance objectives, which are sometimes called "stretch goals."
It is a rare group of senior leaders that does not have a collective epiphany while reviewing draft strategic objectives. During such events, they collectively realize that they must think bigger and bolder. An easy way for them to start is to step back and look from their holistic leadership perspective for strengths, weaknesses, opportunities and threats that fell through the cracks earlier in this process. Then, it is a simple matter for them to word-smith a few extra objectives.
Once the holes in the set of objectives are filled, senior leaders need to turn their attentions to making sure most, if not all, draft objectives mandate performance breakthroughs. As you might imagine, there are lots of opinions on how to do this. My opinion is based on the Deming-inspired principles and methods of the Japanese Union of Scientists and Engineers (JUSE). In case you didn't know it, the JUSE approaches provide the conceptual foundation for Lean and Six-Sigma methods.
The following JUSE-based questions provide a process for senior leaders, the sustainability program champion, the strategic planning director and others to define breakthrough performance objectives even when they are not feeling particularly creative or well informed about sustainability topics.
· For any major performance problem, what does ideal performance look like?
· Next, what has kept the hospital from already achieving ideal performance?
· Then, what are the root causes of these obstructions, as defined through a brutally honest Ishikawa analysis?
· Lastly, what are the specific sustainability objectives needed to eliminate these root causes?
As you might imagine, this kind of questioning can create eye-popping new objectives and beef-up the wimpiest of milquetoast draft objectives.
O.K., What's Been Produced Here?
By this point, the process produces sustainability program objectives under the five sustainability plan elements of program, compliance, efficiency, revenue and transparency. Now, senior leaders and their agents simply need to make one last pass to:
· Cull-out redundancies
· Remove any weak objectives that really do not rise to a level of significance
· Combine similar objectives, and
· Re-prioritize the remaining set.
The result is a sustainability program's final set of strategic objectives. These final objectives will be used in the next post to start building the critically important links between strategic intentions and day-to-day work activities.
IN THE NEXT POST: The First Linkage Step: Defining a Hospital's Sustainability Tactics