From plan to action

MGMA Connexion, Apr 2006 by Hertz, Kenneth T

A strategic plan is your organizational touchstone

reader take-away

* Learn the key components of an organizational plan

* Find out why having one - and sticking to it - is important

* Get a tool to help track the progress and success of a strategic operating plan

* Gain project management techniques to apply to an operational plan

* Understand the reasons strategic plans fail

The old saying "the proof is in the pudding" has particular resonance in the context of a medical group's strategic plan. How do ambitious objectives translate into action and results?

All too often, we work hard to draft strategic plans but pay little attention to implementation, monitoring and ongoing evaluation. In fact, strategic plans often fail at the implementation stage. While strategic planning may be right-brained - intuitive and emotional - the development and implementation of the operational plan is left-brained - analytical and logical. Once leaders have completed the creative component of a strategic plan, it's up to the rest of the practice's members to thrash through the details of execution.

Given the rapid rate of change in health care, your practice's capacity to succeed is based on its ability to adapt quickly; this, in turn, relies on the level of detail in the operational plan. A well-devised and detailed plan will enable your practice to navigate the waters of industry change.

Naturalist Charles Darwin said, "Survival under conditions of intense competition and accelerating change depends on the ability to adopt and take advantage of the environment better than others."

To follow that biological thought with one closer to the boardroom, Stephen M. Case, a director of Time Warner Inc. and former CEO of America Online, said, "A vision without the ability to execute is probably a hallucination."

Key components of an operational plan

The operational plan begins with the practice's vision, values and mission. It does not matter whether it's a three-physician practice or a 300-physidan practice - every operational effort must be executed before the backdrop of the organization's core beliefs: vision, values and mission.

Once the medical practice has established its core principles, it undergoes a process to develop the next component of the operational plan: the strategy. Typically, a group will convert the long-term goals and objectives of the strategic plan into two related plans - a budget (not within the scope of this article) - and an operating plan, laying out detailed tactics for achieving success.

The components of the operational plan include the basic strategy and the underlying tactics to achieve it. The tactics comprise action items, assignments of responsibility and time frames. A simple table can serve as useful tool to track the progress and success of the operating plan. (See page 36.)

Update this tracking tool on a regular basis. Each time the team meets to measure progress of the operational plan, the tracking tool should be the first item on the agenda. In fact, the tool should be updated prior to any meeting and not at the meeting, as some might be inclined to do.

What level of detail should the plan contain? In the strategic plan, we strive for a broad level of detail so as not to obscure the more important strategic issues.

On the other hand, more detail in the operational plan and more forethought into the tactics and contingencies increase the staff's ability to move forward without receiving instructions at every turn. Detail can help a practice monitor progress and make course corrections as necessary.

Not monitoring progress against benchmarks or milestones renders organizations unable to shift course in response to changes in competition or shifts in the industry. Failure to track steps forward is one of the key reasons that organizational plans break down. You must first know where you're going, then have a plan to get there, and then monitor your progress along the way. While this may seem obvious, it's amazing how many medical groups crumble at this point.

The difference between strategy and tactics

What's the difference between strategy and tactics? The short answer: It depends on whom you ask. Virtually every military and business writer has developed definitions. In the planning process, medical groups get hung up on the precise meaning of these terms. Don't. Understand their underlying meaning and adopt definitions that work for you. Be consistent. Move forward.

Strategy comes from the Greek word "strategia," meaning "generalship," and refers to putting the troops in place prior to the enemy's deployment. In the context of medical practices, it has a similar meaning: We're creating the overall plan and direction first, then developing the supporting tactics to accomplish the articulated strategies. Strategy generally has a longer time-frame than tactics. Strategy looks into the future, while tactics deal with immediate actions.

Therefore, tactics are more short-term: They deal with action items, shorter time horizons and individual responsibilities to attain measurable goals. Tactics are the duty of the management team, while strategies fall to the physician leadership and the board of directors.