Strategy and Leadership

1. Strategy and Leadership Edward F Crooks MD, CMQ,CLSSBB

2. Strategy and Leadership Total Quality Management • Strategic, integrated management system, which involves all managers and employees and uses quantitative methods to continuously improve an organization’s processes to meet and exceed customers needs, wants and expectations. (Stamatis, 1996) • IOM have identified six aims for healthcare improvement: • Safe • Effective • Patient-centered • Time-bound • Efficient • Equitable

3. Strategy and Leadership Healthcare Organization as Complex System • “System is a regularly interacting or interdependent group of items forming a unified whole” • System thinking • Discipline for seeing the whole • Framework • For seeing interrelationships rather than things • For seeing pattern of change than static snapshots. • Benefits of system thinking • Aid in identifying and understanding the “big picture” • Facilitate the identification of major components • Identifying important relationships and providing proper perspective • Avoid excessive attention to a single part • Allows for a broad scope solution • Fosters integration • Provide basis for redesign (Ginter, Swayne, & Duncan, 2002)

4. Strategy and Leadership • TQM practices influence all processes, functions, and departments within an organization. • Making changes in one process or department will require changes in other processes, functions and department. • HCO – are among the most complex entities, with ever-changing relationships among professionals, disciplines, department and organizations. • Complex Adaptive System • Complex –a wide variety of elements • Adaptive – the capacity to alter or change/ ability to learn from experience • System – a set of connected or interdependent things • HCL must consider the science of CAS in order to effectively manage and improve their organizations.

5. Strategy and Leadership Leadership Task in Classic Design and Complex Adaptive Systems

6. Strategy and Leadership Framework for Studying Healthcare Systems System Models – Which one?

7. Strategy and Leadership Donabedien’s Framework • Founder of QA • Researcher and Physicist at University of Michigan • Developed a theoretical framework for patient care evaluation.

8. Donabedian’s Framework

9. Strategy and Leadership Baldrige Healthcare Criteria for Performance Excellence Framework

10. Strategy and leadership Malcolm Baldrige National Quality Award • It was established by an act of Congress (Ronald Regan 1987) and was named after the recently deceased Secretary of Commerce who believed in the importance of quality management to America’s prosperity and strength. • This award is administered by the NIST (National Institute of Standard and Technology and the American Society for Quality. • Awards was given in three categories initially: manufacturing, service and small business. • Since 1999, healthcare and education were added.

11. Baldrige Healthcare Criteria forPerformance Excellence Framework

12. Strategy and Leadership Organizational System Model Ron Axtell & Starr Eckholdt (2003) Transform or Die The Core Competence of Corporate Reinvention and Redesign

13. Organization System Model Mission and Vision Values and Guiding Principles Environment What the Organization should do What the organization wants to do Customer Focus Strategy Goals and Objectives

14. Organization System Model Structure Culture People Subsystem of the Organization Principles of Leadership What the organization can do Resources Renewal Reward

15. Strategy and Leadership

16. Strategy and Leadership HCO • Dynamic and complex • External forces • Reform efforts and reduction in healthcare cost • Growth of Managed Care Organizations • HMOs • PPOsPHOs • Significant shift away from acute care hospital to a focus for delivery of care to subacute and ambulatory settings

17. Strategy and Leadership Strategy • Defined as “the plans and activities developed by an organization in pursuit of its goals and objectives, particularly in regard to positioning itself to meet external demands relative to its competition” Shortell, Morrison, & Robins 1985

18. Strategy and Leadership Goals of Strategic Management ( Ginter et al., 2002) • Provide a framework for thinking about the “business” • Create a fit between the organization and its external environment • Provide a process for coping with change and organizational renewal • Foster anticipation, innovation, and excellence • Facilitate consistent decision making • Create organizational focus.

19. Strategy and Leadership Strategic Management Process • Includes all the decisions and actions required to meet the strategic goals. • Before a strategy is formulated, leaders need to consider the following: • What they want to do • What they should do • What they can do

20. Strategy and Leadership What the organization wants to do • Mission and Vision • Mission refers to the organization’s purpose or reason for existing. • Why are we here?, Whom do We Serve? and What do we do? • Vision is an organization’s statement of goals for the future, described in measurable terms, that clarify the direction for everyone in the organization.

21. Strategy and Leadership What the organization wants to do • Guiding Principles and Core Values • The Guiding principles define the organization attitudes and policies for its employees – help to direct the vision. • Core Value – a principle that guides an organization’s internal conduct as well as its relationship with the external world. • Patient-focused excellence • Managing for innovation • System perspective

22. Strategy and Leadership What the organization wants to do • Goals and Objectives • Goals and objectives are essential components of the planning process – they guide actions. • Serve as a yardstick for measuring the organization’s progress and performance. • “You cannot manage what you cannot measure ……. and what gets measured gets done” – Bill Hewlett, co-founder of Hewlett-Packard

23. Strategy and Leadership What the organization wants to do • Goals and Objectives • Goals are broad, general statements specifying a purpose or desired outcome and may be abstract in nature. • Goals need to be • Observable • Measurable • Challenging but attainable • Controllable • Visible • Time-limited

24. Strategy and Leadership What the organization wants to do • Goals and Objectives • Objectives are specific statements that detail how the goals will be achieved; they therefore are relatively narrow and concrete • Objectives • Represent the organization’s commitment to achieving specific outcomes • Should be written as action-oriented statements. • Should outline specific activities to be carried out. • Should measure and observe qualitative or quantitative performance outcomes.

25. What Organization Wants to Do Define and Formulate Goals What Organization Should Do Assess the External Environment What Organization Can Do Assess Organizational Resources Identify Strategic Opportunities and Threats Strategic Management Process Gap Analysis Determine changes for current strategy Strategic Formulation Strategy Implementation Measure and Control Progress Adapted from Dunham & Pierce, 1989

26. Strategy and Leadership Guidelines for writing goals and objectives • Keep the statements short and simple. • State the end results or desired outcome (not just the activity) • Specify the action to be taken, the condition under which the action is to be performed, and the criteria for successful completion • Write precisely in order to determine, to what extent the objectives have been accomplished, and what remains to be accomplished. • Prioritize the objectives.

27. Strategy and Leadership Assessment of the External Environment (What the Organization should do) • Environment influences what the organization wants to do. • Organization must adapt to the forces of the external environment in order to survive, stretch and grow. • Adaptation includes maintaining good relationships with key constituents who can influence its ability to meet the stated objectives.

28. Potential Environmental Influence on QI Governmental Customers Social Values Religious Competitors QI In HCO Political Regulatory Suppliers Economic Employees Providers Research Legal Technological

29. Strategy and Leadership • The outer ring pertains to the overall environment in which the organization exists. • Sociocultural • Political • Legal • Economic • Technological • global

30. Strategy and Leadership • The second ring represents immediate environment in which the organization operates: • Customers • Competitors • Regulatory • Employees • Providers • suppliers

31. Strategy and Leadership Assessment of the Internal Environment (What the Organization Can Do) • Once the organization has establish what it wants to do, and what it should do, it needs to know what it can do. • Requires a look at the internal environment that looks at the • Resources • Tangible – human, financial, physical • Intangible - reputation • Capabilities • Core competencies

32. Strategic Formulation Strategic Goals Objectives Evaluation of External Environment Evaluation of Internal Environment Identify strategic opportunities and threats Perform Gap Analysis

33. Strategy and Leadership Strategic Formulation • Strategic formulation stipulates actions to meet the goals and objectives. • Performing a gap analysis will evaluate the extent to which the present strategy would have to be changed in order to meet the goals and objectives. • The various subsystems in the organization will have to undertake these actions to help the organization reach its goal.

34. Organization System Model Subsystems of the Organization Structure Culture People Subsystem of the Organization Resources Renewal Reward

35. Core Hoshin Planning Process Strategy Implementation Deployment to departments to develop plans Heart of Hoshin planning process Implementation of department plans Plan Do Act Regular process review – monthly + quarterly Check Annual review

36. Strategy and Leadership Strategic Implementation • Departments and units need to develop their own strategies that will contribute to the overall goals and objectives of the organizations. • Integrate TQM/QI with strategic planning and ensure that the plans and strategies are carried out. • Hoshin planning is one approach to integration

37. Strategy and Leadership Hoshin Planning • A component of TQM/QI system • Used to ensure that the vision set forth by top management, is being translated into planning objectives and actions, that both management and employees will take to accomplish long-term organizational strategic goal. • Planning is performed at three levels: • General - Senior management • Intermediate – Middle management • Detailed – Implementation teams

38. Core Hoshin Planning Process Vision set forth by top management Translated Planning objectives and actions Use to accomplish Long-term organization strategic goals

39. Strategy and Leadership Measure and Control • Management seeks to evaluate the extent to which the strategy is accomplishing the goals set forth in the first step of strategic planning and take any necessary corrective action. • Actual performance is evaluated and compared to the performance goals and objectives established as part of the strategic plan • Gaps between desired performance and actual performance require action.

40. Strategy and Leadership Leadership: Translating Strategic Goals into Quality Outcomes The Role of the Board in TQM/QI • Organization’s board of trustees bears ultimate responsibility for setting policy for financial and strategic direction, and for quality of care provided by all of its practitioners. • The Board, organization’s management and medical staff leaders sets priorities for TQM/QI activities. • The development of meaningful board involvement in TQM/QI requires assessment of the board’s knowledge regarding TQM/QI. • This is a key role of HQPs – responsible for organizing and coordination quality management and performance improvement activities for the organization and its medical staff.

41. Strategy and Leadership Leadership: Translating Strategic Goals into Quality Outcomes • HQPs can promote the board’s commitment to quality by providing useful information in a format easily understood by members, who lack familiarity with healthcare terminology and procedures

42. Strategy and Leadership American Hospital Association (AHA) • Outline six broad categories or responsibilities and functions of the board and top leaders (Orlikoff, 1990) • Organization • Public policy and external relationship • Strategic planning • Resource management • Human resource development • Education and research

43. Strategy and Leadership Organization The governing body is responsible for: • Organizing itself effectively • Selecting a qualified CEO • Ensuring that the Medical Staff is appropriately organized. Public Policy and External Relationship The governing body is responsible: • Maintaining productive external relationship • Influencing policies related to healthcare

44. Strategy and Leadership Strategic planning The governing body is responsible : • To determine the organization’s mission, goals and objectives. • For and the authority to develop a strategic plan. Resource Management The governing body has oversight for the organization resources including: • Development • Utilization • Maintenance

45. Strategy and Leadership Human Resource Development The governing body is responsible for the protection and enhancement of the institution human resources. Education and Research The governing body is responsible for ensuring access to education and research programs that support the organization’s mission.

46. Development of a Meaningful Board Assess current knowledge Develop a plan based on that assessment Conduct ongoing evaluation of the board’s effectiveness

47. Strategy and Leadership The development of board involvement is a process that requires: • Careful planning • Thoughtful implementation • Continual refinement Day to day leadership is delegated to the • CEO • Senior Management • Elected/appointed members of the medical staff • Administrative and Clinical staff

48. Strategy and Leadership Fundamental Principles of Leadership Leadership • “the ability to influence an individual or group toward achievement of goals” (Robbins 2001) • “working with people and systems to produce needed change” (Wessner 1998). • Coping with change by developing a vision for change and aligning the subsystems of the organization.

49. Organization System Model Subsystems of the Organization Structure Culture People Subsystem of the Organization Resources Renewal Reward

50. Strategy and Leadership Management • “working with people and system to produce predictable results” • It differs from Leadership • Is about coping with complexity through planning and budgeting. • Setting of goals. • Organizing, staffing, and creating a structure to foster goal attainment. • Setting up the mechanism for monitoring and controlling results.