10 SURPRISING KEYS TO STRATEGIC THINKING FOR HEALTH CARE CEOS | H&HN
Healthcare is usually planned as an implementation exercise. However, strategy is no less important than other industries – even more so now that 24/7 interconnectedness allows us to move from a system of intermittent, reactive disease treatment to one of proactive optimisation of health.
1 – For a CEO, strategy is job one.
A CEO must ensure competencies and capabilities are at the forefront of their business. Other business areas such as human resources, marketing and finance are all jobs which should be delegated to others.
Often it is thought, quite incorrectly, employees will resent and resist the efforts of leaders who want to clearly set overall direction. They do not at all. They welcome and expect a clear direction and are far more likely to follow when insight and commitment come from the top of the organisation.
The commonest problem that I see in my daily work is frustration in employees lacking direction.
2 – Organisations succeed because they generate value.
Quality is assumed in healthcare – no one buys that, however they do buy value. There are so many high value competitors, out doing high quality organisations. Perception of value differs for employees, patients and physicians.
In the healthcare value equation this is more than clinical quality, it is also about the human experience, for patients, staff and physicians. This includes good access. A hospital is irrelevant if it is high quality or if it can’t be accessed.
3 – Clarity is key
Be clear. Describe what the organisation aspires to become, how it intends to do this and then enlist the help needed to turn all of that into reality. For example, Perioperative Healthcare Consulting (PHC) pursues improved risk, cost and healthcare experience for patients, staff and doctors.
4 – Compete to be different, not to be the best
Being different requires an entirely different operating system to others. Healthcare tends to try to do all things for all people – which leads to mediocrity. Joan Magretta from Harvard said:
‘ Competition demands that you do a better job than the alternatives. And doing better, by definition, means being different. Organisations do better and achieve superior performance, when they are unique, when they do something that no one else does’.
5 – Physicians are different
Physicians are of course fundamental to the success of a hospital. There are few high level initiatives in health that don’t require physician support to succeed. You don’t lead a physician – they don’t like that, so to get a far better result, you lead with them. The principles are similar for high-performing individuals in any organisation.
6 – You don’t need a strategy. You need strategies.
No organisation can only have one strategy. To be successful, you need several and they should all work together. Each is a linchpin. If several strategies are adhered to consistently by all, a unified vision and successful daily work of an organisation is achieved. Consider PHC’s strategy above.
7 – Economies of scale are a fiction
When it comes to hospitals, there are few chances to create economies of scale through merger.If an organisation is involved in merger discussions, you can pretty much guarantee that they’ll do very little for 2 to 3 years. The only areas in which this is possible is administration which normally makes up about 15% of total expenses.
Hospital culture is organic and adaptive. Personnel tend to identify with an individual facility, work there by choice, and resist an external ‘corporate culture’.
8 – Boldness is overrated.
Doyne Farmer, a professor at Oxford University and Santa Fe Institue, has suggested that whilst in an environment that is not certain and changing rapidly, you can predict short but not far. But he continues to say that bold leaps, are by definition, long leaps. Predicting long in the face of complexity is essentially gambling.
9 – A preference market share gap is a problem
‘Market share’ is how much people use you. ‘Preference share’ is how much people would prefer to use you. If the gap between the pair is sizeable with a higher number for ‘preference share’, this means there are people who would like to use you, but aren’t. Preference could be low due to a bad brand. Don’t waste money on expensive logos and brand material, this isn’t important. A brand needs to be different and to be authentic and meaningful. This takes a lot of time to build, but once done well and maintained, it lasts. PHC assists healthcare facilities to ‘Profit from Reputation’ for this reason.
10 – Strategic thinking is an acquired skill
Every CEO has the capacity for strategic leadership. Learning comes from the actual ‘doing’, by questioning what went wrong and why. A CEO must also get the leadership team to think strategically and provide frequent opportunities to discuss strategies. ‘Great leaders ask questions. The right questions’.
Engaging an external agency to help you think differently. Perioperative Healthcare Consulting would be delighted to help. Please book a Discovery Session to help us to understand your concerns and interests, to see whether we can help at www.perioperative.com.au/contacts