Chapter 10 COMMUNICATING THE STRATEGY AND DEVELOPING ACTION PLANS

CHAPTER 10
Communicating the Strategy and

Developing Action Plans
Dr. Asima Faisal
Strategic Management of Health Care Organizations

Learning Objectives
• Describe the interrelationship among situation analysis, strategy formulation, value
adding service delivery and support strategies, and action plans.
• Understand the manner in which strategies are translated into action plans.
• List the components of an action plan and explain the function of each component.
• Cite some reasons that cause strategies to be difficult to implement in health care
organizations.
• Suggest some effective ways to overcome barriers to the implementation of strategies.
• Understand the need for contingency planning and know when contingency plans
should be undertaken.
• Relate the map and the compass metaphor to strategic thinking, strategic planning, and
managing the strategic momentum.
Chapter 10: Communicating the Strategy and Developing Action Plans Strategic Management of Health Care Organizations
Strategic Thinking Map
PLANNING THE IMPLEMENTATION
Implementation strategies have been referred to by various terms.
LIKE:
• Tactical plans
• Business plans
• Action plans
“Action plans” is the most descriptive term as it connotes the actions required
to carry out strategies and meet objectives.
ACTION PLAN
An action plan is a detailed plan outlining actions needed to reach one

or more goals.
OR
An action plan as a "sequence of steps that must be taken, or activities
that must be performed well, for a strategy to succeed".
en.wikipedia.org › wiki › Action plan

WHAT DRIVES
ACTION PLAN
The mission, vision, and values, are directional strategies that provide
focus for the organization
Adaptive, market entry, and competitive strategies are designed to

accomplish the strategic goals and move the organization in the desired
direction
Value adding service delivery and support strategies further shape the
strategy and provide guidance and direction
Action plan
“Strategic insights are ‘bled off’ and converted into
tasks and work assignments.”
Peter Drucker
STRATEGIC LEVEL – ACTION PLANS
A large integrated health care system may develop strategy at a number of levels so the
action plan to implement these strategies will be developed at different levels, like:
• Corporate level - Action plans will be for entire divisions

• Divisional level - Action plans will be for individual Institutions or organizations
comprising the division
• Organizational level - Action plans will be developed by functional units within the
hospital
EFFECTIVE AP – OBJECTIVES
An effective action plan, regardless of level, consists of objectives that specify:
• How the unit (division, hospital, pharmacy) is going to contribute to the strategy?
• What actions will be required to achieve the objectives?
• What time period?
• Who is responsible for the actions?
• What are the resources required to achieve the objectives?
• How results will be measured?
Perspective #1
Manage Simply
“Everything should be made as simple as it possibly can and no
simpler.”
Einstein
Perspective #1 : Manage Simply
• Managing is controlling, but controlling may not be managing. When overdone, control
is the dark side of management.
• Create teams and promote teamwork by teaching the team how to manage itself.
Minimize rules, policies, and procedures.
• Constantly keep “what’s ahead” in front of the team by communicating a vision in
terms that they understand.
• Goals and objectives are the ends, focus on the ends.
• Reward innovation and change. Never permit “It’s always been done this way” to
remain an acceptable process.
• Interpret striving for perfection as continuous improvement. Never make perfection a
prerequisite for progress.
• One size does not fit all. Although some order is necessary, blind application of one
solution or pattern leads to a dysfunctional workforce.
Perspective #1 : Manage Simply
• Do what is best for each individual and the organization will prosper. Usually what is best
for the organization is the sum of what is best for the individuals in the organization.
• Encourage learning and fun.
• Practice “one-level” management. Although someone must be the boss, don’t make the
organizational hierarchy seem important. Everyone in the organization should be treated
as a peer – this is equality.
• Make the manager’s job harder and others easier. Identify and satisfy internal customers.
Remember that subordinates are customers, too.
Perspective #2
Stages of Resistance to Change
“Resistance to change is always the biggest obstacle”
Chris paine
Perspective #2 : Stages of Resistance to Change
Stage One: Resistance
• Often the first reaction to something new is to resist the change.
• Employees see the new program or management effort as another fad that will soon go
away.
• “This will never work” and “We tried this ten years ago.”
Stage Two: Passiveness
• Employees are not resistant; they simply do not want to get involved
• In many cases these people do not understand the vision for the future, or they have
never been told about it or how they fit in it.
• “This is just a job” or “I put in my eight hours” or “I’ll be here when they’re gone.”
Stage Three: Convince Me
• Some people in organizations are ready to change and will work hard if they believe it
will really improve the organization
• These people will give it their best if
management can show them that the result will
be worth their effort.
• “Show me that we can improve the way we work and I’ll be your biggest supporter”
Stage Four: Hope
• Many people, especially when they start their careers, want to be a part of something
important – to make a difference.
• These people are usually willing to try anything and want to be a part of meaningful
change.
• “I don’t know if we can succeed but look at the possibilities if we do”
Stage Five: Involvement
• People typically understand that the organization must change and continually
renew itself if it is to succeed.
• They understand that some new things do not work very well and therefore other
change agents must be tried.
• “I don’t know if this will work, but we have to try”
Stage Six: Advocacy
• People in this stage believe not only that change is important in a changing
world but that this program can really make an important difference.
• These people will convince others to be a part of the change and will keep the
process on track.
• “This is our chance for real long-term success”
Perspective #3
Performance Appraisal and Compensation
“People in organizations do what they get rewarded for doing and
ignore most other organizational dictates.”
Steve Kerr
Perspective #3 : Performance Appraisal and Compensation
• Strategic management should be translated into individual efforts and acknowledged
through the performance appraisal and reward systems.
• It is necessary to rewrite job descriptions and performance appraisal standards.
• An effective way to accomplish this linkage is to create duties within the job
description related specifically to strategic management processes.
• JD should have sections entitled:
• Contribution to Vision
• Contribution to Mission
• Contribution to Values
• Contribution to Strategic Goals
• Contribution to Strategy
• Contribution to Strategy Implementation
Perspective #3 : Performance Appraisal and
Compensation
• An effective way to redesign job descriptions is to ask three strategic questions
for each position:
1. To make the maximum contribution, what is this person not doing now that
he or she should be doing?
2. To make the maximum contribution, what is this person doing now that he
or she should not be doing?
3. To make the maximum contribution, what is this person doing now that he
or she should continue to do but in a different way?
Perspective #4
The Balanced Scorecard
“Is a strategic management performance metric used to identify and improve
various internal business functions and their resulting external outcomes..”
Evan Tarver
Perspective #3 : The Balanced Scorecard
• The Balanced Scorecard approach links the organization’s strategy to short-term
actions.
• As the concept evolved, four processes were identified for transforming the Balanced
Scorecard into a strategic management implementation system:
• Financial perspective
• Customer perspective
• Internal perspective
• Learning/growth perspective.
Health
Care
Provider :
Balanced
Scorecard
Source: Adapted from Robert S. Kaplan and David P. Norton, “Having Trouble with Your Strategy? Then Map
It,” Harvard Business Review 78, no. 5 (2000), pp. 168–169.
Perspective #5
Plan and Re-plan
Perspective #5: Plan and Replan
• Strategic planning should be a dynamic process – not a once a year activity.

• The plan may look ahead for three to five years, it has to be updated periodically
and reviewed constantly.
• The plan must provide for flexibility to cope with rapid, unexpected changes.
• Planning requires management to think about issues that could derail the
organization.
The most important reason for strategic planning is, “If you’re planning for growth,
you can bet the other guy down the street that you’re competing with, is doing the
exact same thing.” If you are not thinking and planning, you are likely to be left
behind.
Strategic Thinking Map: Evaluating the Action Plans
1. Has the organization’s overall strategy been well communicated to all members of
the organizational units?
2. Do the organizational units have the resources required for successful
implementation of the strategy?
3. Is there a high level of commitment to the strategy within the organizational unit?
4. Has the organizational unit developed action plans, including realistic objectives,
timelines, responsibilities, and budgets?
5. Are the unit objectives consistent and compatible with the strategy?
6. Do the organizational units have the managerial and employee capabilities required
for successfully implementing the organization’s strategy?
7. Do all the action plans together accomplish the overall strategies of the organization?
Perspective #6
Strategic Management Paradoxes
Perspective #6 : Strategic Management Paradoxes
• The more chaotic (unpredictable) the external environment, the more strategic
planning is needed.
• Strategic management is a top-down, bottom-up process.
• Strategic management is a democratic process where the boss (CEO) is in control.
• Strategic management is an organized/messy process.
• Strategic management is about defining the “big picture” and emphasizing the details.
• Strategic management concerns destruction and renewal.
• The rules for success are written outside the organization (in the environment), but
competitive advantage is created inside the organization.
• People cannot perform strategic management until they “get it” (understand the
process and its implications); and people cannot “get it” until they perform strategic
management.
Contingency Planning: Seven-step Process
1. Identify both favorable and unfavorable events that could possibly derail the
strategy.
2. Calculate a likely timetable for contingent events to occur.
3. Assess the impact of each contingent event by estimating the potential benefit or
harm.
4. Be sure that contingency plans are compatible with current strategy and are
economically feasible.
5. Assess the counter-impact of each contingency plan. Doing so will quantify the
potential value of each contingency plan.
6. Determine early warning signals for key contingent events.
7. For contingent events with reliable early warning signals, develop advance action
plans to take advantage of the available lead time
Contingency Planning: Seven-step Process
• Strategic management is easy but difficult. The processes are not complicated
but it is often difficult to get people to overcome their fear of change.
• Strategic management is a philosophy composed of techniques.
• Strategic management concerns effectiveness and efficiency.
• Managers seek quantifiable data, but strategic management is fundamentally a
qualitative art.
• Strategic management controls and empowers.
Perspective #7
The Dos and Don’ts of Strategic Management
Perspective #7 : The Dos and Don’ts of Strategic Management
Do
• Strategic management is a philosophy or way of managing, not simply a technique.
• The process (strategic thinking) is more important than the product (a plan).
• It should involve everyone in the process.
• People within the organization take ownership of the process and its results.
• It may take years before people really manage and think strategically.
• It is about organizational renewal.
• Expect things to get worse before they get better
• It is about constant organizational rethinking, reinvention, re-creation, and renewal.
Perspective #7 : The Dos and Don’ts of Strategic Management
Don’ts
• Strategic management is not a magic bullet that will fix everything
• Don’t start with full commitment
• Don’t expect perfection
• Don’t rely on outsiders
• Don’t follow the process of strategic management blindly
• Don’t expect immediate results
• Don’t expect that everyone will understand the full implications of strategic management
THANK YOU
“The greatest danger in times of turbulence is not the
turbulence; it is to act with yesterday’s logic”
Peter F. Drucker

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Chapter 10 COMMUNICATING THE STRATEGY AND DEVELOPING ACTION PLANS

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CHAPTER 10

Communicating the Strategy and

Strategic Management of Health Care Organizations

An action plan is a detailed plan outlining actions needed to reach one

en.wikipedia.org › wiki › Action plan

Adaptive, market entry, and competitive strategies are designed to

• Corporate level - Action plans will be for entire divisions

• Encourage learning and fun.

• Strategic planning should be a dynamic process – not a once a year activity.

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