Which activity — service, delivery, or support — do you feel are most important in the organizational value chain?
HCA 407
Healthcare Planning
and Evaluation
Week Two Lecture
HCA 407 Healthcare Planning and Evaluation
Week Two, Chapter Five
Chapter 5
Directional Strategies
Develop a Strategy
External
Environment
Should
Do
Directional
Strategies,
Leadership
Wants
To Do
Strategy
of the Organization
Internal
Environment
Can
Do
The Strategic Planning Process
Strategic Planning
Situation Analysis
• External Analysis
• Internal Analysis
• Directional Strategies
Strategy Formulation
• Directional Strategies
• Adaptive Strategies
• Market Entry/Exit
Strategies
• Competitive Strategies
Implementation Planning
• Service Delivery Strategies
• Support Strategies
• Action Plans
Process for Developing Directional Strategies
Step 1 – Review Results of Situational Analysis – External
Analysis, Service Area Competitor Analysis, and Internal Analysis
Step 2 – Develop a Statement of Mission
Step 3 – Develop a Statement of Vision
Step 4 – Develop a Statement of Values as Guiding Principles
Step 5 – Develop Strategic Goals Based on Critical Success
Factors
Directional Strategies
Mission: a clear articulation of what the organization currently does.
Vision: articulation of the organization’ s collective hope for the future.
Values: description of the behavioral norms, beliefs, and ideals that are
important to the organization.
Directional Strategies
Mission Statement: distinctive purpose or
reason for the organization’s existence.
Descriptive and intent-filled.
Vision Statement: image of what the
organization will achieve or look like in the
future. Inspirational and aspirational.
Values Statement: announcement of the
organization’s beliefs and desired behaviors.
Moral compass for the organization. Belief-filled
and cultural.
Vision, Mission, and Values
Vision
=
Profile of tomorrow, our hope for the future.
Mission
=
Profile of today, our current products/services, customers, and philosophy.
Values
=
Profile of expected behaviors, our beliefs and ideals.
What We Want to Do
An organizational mission is a broadly defined but
Mission
relatively enduring statement of purpose that
distinguishes our organization from others.
Characteristics of a Mission Statement
• Clear and concise
• Concerned with the organization today
• Specific about products/services
• Enduring
• Underscores uniqueness
Description of Value Chain Components
Service Delivery
Component
1. Target customers and clients
2. Principal services delivered
3. Geographical domain of the services
delivered
4. Specific values
5. Explicit philosophy
6. Other important aspects of
distinctiveness/image
Key Words Reflecting Component
What We Want to Do
Vision is an expression of hope – a description of
Vision
what the organization will be like when it is
successfully fulfilling its purpose.
Characteristics of Vision
• Inspiring
• Challenging
• About Excellence
• Empower employees first and customers second
• Comes alive in the details not in the broad generalities
• Memorable and provides guidance
• Not limited by the present
Strategic Thinking Map for Writing a Vision Statement
Component
1. Clear Hope for the future
2. Challenging and about excellence
3. Inspirational and emotional
4. Empower employees first
5. Memorable and provides guidance
Key Words Reflecting Component
What We Want to Do
Values are the ideals organizations and people
Values
stand for – the fundamental principles that, along
with the mission, make an organization unique.
Characteristics of Values
• Reflect the organization’ s culture
• Consistent with the desired image
• Acceptable to stakeholders
• Consistent with vision
• Ethical
• Represent a clear commitment
Strategic Thinking Map for Writing a Vision Statement
Component
1. Desired behaviors
2. Organizational norms
3. Shared beliefs
4. Share assumptions
5. Explicit philosophy
6. Fundamental principles
Key Words Reflecting Component
Critical Success Factors
Critical success factors are similar for all members of a strategic group.
Usually there are four or five things that must be achieved for success.
Setting Goals
Strategic Criteria for goals
Goals Statement Criteria
• Address an external issue, trend, or force.
• Controllable by the organization.
• Concern a stakeholder.
• Measureable as possible.
• Help achieve acritical success factor.
• Able to be achieved in areasonable timeframe.
• Draw on a strength or fix a weakness.
• Fit with the mission.
• Be consistent with the values.
• Move the organization toward the vision.
• Have a reasonable level of stretch for the
organization.
The Process of Momentum Creation
“One worthwhile task carried to a successful conclusion is better than half- a-
hundred half- finished tasks”
– B.C. Forbes (Founder, Forbes Magazine).
Developing Action Plans
Goal #1: “Statement of Goal”
Action Necessary
to Achieve the Goal
Start Time/
End time
Unit/Individual
Responsible for
carrying out the
Action
Strategic Planning
Participant
Responsible for
Reporting at Next
Strategy Section
Five Behaviors Lead to Effective Boards
1. Engage in constructive conflicts (especially with the CEO)
2. Avoid destructive conflict
3. Work together as a team
4. Know the appropriate level of strategic involvement
5. Address decisions comprehensively
Managing Strategic Momentum: Evaluating Directional
Strategies
1. Are we not doing some things now that we should be doing?
2. Are we doing some things now that we should not be doing?
3. Are we doing some things now we should do but do in a different way?
4. Are our organization’ s mission and vision unique in some way?
5. Is our mission relatively enduring?
6. Do our mission and vision allow for innovation?
7. Do our mission and vision allow for expansion?
Managing Strategic Momentum: Evaluating Directional
Strategies
8. Is our scope of operations clear (market, products/services, customers,
geographic coverage)?
9. Do our mission, vision, and values fit the needs of our stakeholders?
10. Do our fundamental values make sense?
11. Are our strategic goals moving us toward achievement of our mission?
12. Are our strategic goals moving us toward achievement of our vision?
13. Have we addressed the critical success factors?
14. Is the image of the organization what it should be?
Conclusion
Key Terms
Key Terms
Corporate Governing Boards
Mission Drift
Critical Success Factor
Philanthropic Governing Boards
Creative Tension
Pioneering
First- Mover Advantage
Strategic Goals
Keeper of the Vision
Values
Liability of Newness
Vision
Mission
Vision- Led Approach
Mission Creep
Check Your Understanding
Vision is an expression of hope – adescription of what the organization will be
like when it is successfully fulfilling its purpose.
• True
• False
Check Your Understanding
Vision is an expression of hope – adescription of what the organization will be
like when it is successfully fulfilling its purpose.
• True
• False
You are done with Week Two
Interactive Presentation.
Please proceed back to Week Two in
Blackboard to finish the curriculum for
Week Two.
HCA 407
Healthcare Planning
and Evaluation
Week Two Lecture
HCA 407 Healthcare Planning and Evaluation
Week Two, Chapter Four
Chapter 4
Internal Analysis and Competitive Advantage
Develop a Strategy
External
Environment
Should
Do
Directional
Strategies,
Leadership
Wants
To Do
Strategy
of the Organization
Internal
Environment
Can
Do
The Strategic Planning Process
Strategic Planning
Situation Analysis
• External Analysis
• Internal Analysis
• Directional Strategies
Strategy Formulation
• Directional Strategies
• Adaptive Strategies
• Market Entry/Exit
Strategies
• Competitive Strategies
Implementation Planning
• Service Delivery Strategies
• Support Strategies
• Action Plans
Process for Internal Analysis
Step 1 – Review Results of External Analysis and Service Area
Competitor Analysis
Step 2 – Organize the Internal Analysis Process – Using
the Value Chain
Step 3 – Identify Organizational Strengths and Weaknesses
Step 4 – Determine Competitive Advantages and Disadvantages
Step 5 – Synthesize and Determine the Implications of the
Competitive Advantages and Disadvantages
Internal Analysis
Whereas external analysis asked “what should?”
We do?”, internal analysis addresses “what can we do?”
The Health Care Value Chain
Pre- Service
Point- of- Service
After- Service
Market Research Target
Market Services Offered/
Banding
Pricing
Distribution/Logistics
Promotion
Clinical Operations
• Quality
• Process Innovation
Marketing
• Patient Satisfaction
Follow- up Clinical
• Marketing
Billing
• Follow- on
• Clinical
• Marketing
Organizational Culture
Shared Assumptions
Shared Values
Behavioral Norms
Organizational Structure
Function Division
Matrix
Strategic Resources
Financial Human
Information
Technology
The Health Care Value Chain
Pre- Service
Point- of- Service
After- Service
Market Research Target
Market Services Offered/
Banding
Pricing
Distribution/Logistics
Promotion
Clinical Operations
• Quality
• Process Innovation
Marketing
• Patient Satisfaction
Follow- up Clinical
• Marketing
Billing
• Follow- on
• Clinical
• Marketing
The Health Care Value Chain
Organizational Culture
Shared Assumptions
Shared Values
Behavioral Norms
Organizational Structure
Function Division
Matrix
Strategic Resources
Financial Human
Information
Technology
The Health Care Value Chain
Pre- Service
Point- of- Service
After- Service
Market Research Target
Market Services Offered/
Banding
Pricing
Distribution/Logistics
Promotion
Clinical Operations
• Quality
• Process Innovation
Marketing
• Patient Satisfaction
Follow- up Clinical
• Marketing
Billing
• Follow- on
• Clinical
• Marketing
Organizational Culture
Shared Assumptions
Shared Values
Behavioral Norms
Organizational Structure
Function Division
Matrix
Strategic Resources
Financial Human
Information
Technology
Description of Value Chain Components
Service Delivery
Value Chain Component
Description
Service Delivery
Creation of value that is directly involved in ensuring access
to,
provision of, and follow- up for health services
Pre- Service Activities
These activities create value prior to the actual delivery
of health care.
Market/Marketing
Research
Identification of recognizable groups (segments) that
make up the market; information gathering to
improve quality.
Dissemination of information to prospective patients
and other stakeholders regarding the prices, range
of products, and location of available services by an
identified health care organization.
Target Market
Services Offered/Branding
Information dissemination to present to prospective
patients and other stakeholders regarding the range and
location of available services
Pricing
Determination of the charge schedule (prices) for
available
services.
Description of Value Chain Components
Service Delivery
Value Chain Component
Description
Distribution/Logistics
Actions that aid patient/customer entry into the health
care delivery system, including appointments,
registration, and parking.
Pre- Service Activities
Communication of information to customers concerning
the health care offering; includes advertising, events,
social media, and so on.
These activities create value at the point where health
care is actually delivered to the patient.
Point- of- Service Activities
Clinical Operations
Quality
Process Innovation
Delivery of health care to patients. The activities that
convert the human and non- human resources into
health services Improvements in existing or new
operational processes
Marketing
Patient Satisfaction
Determination of new products and prices; identification of
new customers; provision of information to customers.
Enhancement of the patient/customer health care
experience.
Description of Value Chain Components
Service Delivery
Value Chain Component
Description
After- Service Activities
These activities create value after the patient/customer
has received the initial health care.
Follow- up
• Clinical Marketing
Determination of additional services needed to
supplement the initial health care need.
Tracking of subsequent procedures and appointments.
Actions that provide information, assessment of
patient/customer
satisfaction, and continuous improvement in quality of
care.
Implementation of clear, easy to understand billing
procedures and documents.
Billing
Follow- on
• Clinical Marketing
Facilitation of patient/customer entry into another
health care
setting.
Referrals to the proper clinical settings.
Provision of information concerning follow- on clinical
settings for further (extended) care, tracking of
outcomes of care.
Description of Value Chain Components
Support Activities
Value Chain Component
Description
Support Activities
The activities in the value chain that are designed to aid in
the efficient and effective delivery of health services.
Organizational Culture
Values, norms, artifact, and assumptions that serve as a
guide for behavior.
The assumptions employees and others share in the
organization regarding all aspects of service delivery
(e.g., needs of patients, goals of the organization)
The guiding principles of the organization and its
employees The understandings people in the
organization have regarding excellence, risk taking, etc.
Understandings about behavior in the organization that
can create value for patients
• Shared Assumptions
• Shared Values
• Behavioral Norms
Description of Value Chain Components
Support Activities
Value Chain Component
Description
Organizational Structure
Those aspects of organization structure that are capable
of
creating value for customers/patients
Structure based on process or activities used by
employee (e.g., surgery, finance, human resources)
Major units operate relatively autonomously subject to
overarching policy guidelines (e.g., hospital division;
outpatient division; northwest division)
Two- dimensional structure where more than a single
authority structure operates simultaneously (e.g.,
interdisciplinary team with representatives from
medicine, nursing, administration)
• Function
• Division
• Matrix
Description of Value Chain Components
Support Activities
Value Chain Component
Description
Strategic Resources
Those aspects of organization structure that are capable
of
creating value for customers/patients
Structure based on process or activities used by
employee (e.g., surgery, finance, human resources)
Major units operate relatively autonomously subject to
overarching policy guidelines (e.g., hospital division;
outpatient division; northwest division)
Two- dimensional structure where more than a single
authority structure operates simultaneously (e.g.,
interdisciplinary team with representatives from
medicine, nursing, administration)
•
•
•
•
Financial
Human
Information
Technology
General Environment
Social
Political
Results
Industry
People
Competitors
Functions & Processes
Relationship
Economic
Customers
Technological
What do we mean when we talk about competitive
advantage?
Identifying Current and Potential Competitive Advantage
Resources
Competencies
Capabilities
Some Sources of Competitive Advantage
Tangible
Intangible
• Strong financial holdings or backing.
• Intellectual property
• Especially when protected by patents.
• Desirable location.
• State- of- the- art facilities or equipment.
• Reputation.
• Positive image.
• Difficult to obtain information.
• Name.
•
Recognition.
• Goodwill.
• Strong leadership/competent.
management.
• Effective communication
• A positive organizational culture.
Sources of Competitive Advantage
Strategic Thinking
Is the Value of the
Strength High or
Low?
High/Low
Is the Strength
Rare?
Yes/No
Is the Strength Easy
Can the Strength be
or Difficult to Imitate? Sustained?
Easy/Difficult
Yes/No
Strategic Thinking
Is the weakness of
High or Low Value?
High/Low
Is the Weakness
Is the Weakness Easy Can Competitors
Common (Not Rare)
or Difficult to Fix?
Sustain Their
Among Competitors?
Advantage?
Yes/No
Easy/Difficult
Yes/No
Questions for Evaluating the Internal Strategic
Assumptions
1. Have the strengths and weaknesses been correctly identified?
2. Is there a clear basis on which to compete?
3. Does the strategy exploit the strengths and avoid the major weaknesses of the
4. organization?
5. Are the competitive advantages related to the critical success factors in the
6. service area?
7. Have we protected our short- and long- term competitive advantages?
8. Has the competition made strategic moves that have weakened our competitive
advantages?
9. Are we creating new competitive advantages?
Description of Value Chain Components
Service Delivery
Key Terms
Key Terms
After- Service
Service Delivery
Capability
Strategic Capability
Competency
Strength
Competitive Advantage
Stretch
Competitive Relevant Strength
Support Activities
Competitive Relevant Weakness
Sustained Competitive Advantage
Leveraging
Threshold Competency
Point- of- Service
Value
Pre- Service
Value Chain
Resource- Based- View
Weakness
Resources
Check Your Understanding
One of the tangible sources of competitive advantage is strong financial
holdings or backing.
• True
• False
Check Your Understanding
One of the tangible sources of competitive advantage is strong financial
holdings or backing.
• True
• False
You are done with Week Two
Interactive Presentation.
Please proceed back to Week Two in
Blackboard to finish the curriculum for
Week Two.