Here we will review basic approaches to strategic planning, for the lack of better terms, I’ll label the first the traditional method (sometimes called the “SWOT approach” strengths, weakness, opportunities, and threats approach) and the second the balanced scorecard approach. Both rely on similar data points in terms of environmental analysis as well as analysis of the world in which the organization operates and hopes to operate.
Strategic planning is primarily concerned with the organization’s need to survive and flourish in a competitive, often quagmire-like environment. In one sense, strategic planning is a subset of general planning: but, because of the future shock that most healthcare organizations are going through, with breathtaking, seemingly simultaneous breakthroughs in technology and regulation, strategic planning has come to occupy center stage for many healthcare organizations. All strategic planning begins with a clear statement of organizational mission.
For the past several generations, it has appeared that the demand for healthcare services and the money to finance those services have been unlimited.
The next step in management’s strategic planning is to understand what is occurring in the environment around the organization and how that is likely to affect the organization.
Environmental changes can be classified into broad categories, such as technological changes, social and political changes, and economic changes. The health field is one that has become particularly sensitive to technological change. Consider how drug therapy has affected the mental health field, literally emptying hospitals and restoring people to the community.
Strengths and Weaknesses Analysis
The next step in the strategic planning process is perhaps the most difficult in that it requires the organization to identify its strengths and weaknesses. It is noted that the identification of strengths is psychologically easier that the identification of weaknesses. It is imperative, however, that those areas where the organization is vulnerable be identified; otherwise, the organization cannot be protected.
A framework for considering strengths and weaknesses might be (1) demand for services; (2) capacity for delivering services; (3) competition, both present and projected; (4) market position; and (5) cost position.
The Balanced Scorecard Approach
The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
The Learning and Growth Perspective
The Business Process Perspective
The Customer Perspective
The Financial Perspective
The balanced scorecard is more metrically driven and seeks to find ways of identifying and measuring progress toward definable goals. I have participated in strategic planning efforts utilizing both approaches and generally, am more persuaded the traditional approach is less expensive and more likely to get organizational buy-in. The balanced scorecard is too consultant-driven and is, from my perspective, too measurement based.