Chapter 7

1. Chapter 7 Strategic and Operational Planning

2. Planning • Planning is deciding in advance what to do, who is to do it, how it is to be done, and when it is to be done • Planning is a proactive, deliberate process required of all managers • Planning is a guide for action in reaching a goal and requires flexibility and energy • Planning also requires management skills such as data gathering, forecasting, and transforming ideas into action

3. Without adequate planning, the management process fails, and organizational needs and objectives cannot be met Planning Is Critically Important to and Precedes All Other Management Functions

4. Barriers to Identifying Long-Term Needs in Planning • Health-care reform • Rapidly changing technology • Increasing government regulation of health care • Scientific advances

5. Factors Influencing the Future of Health Care • Robotic technology • Biomechatronics • Biometrics and smart cards • Point-of-care testing • Telehealth and the Internet • Growing elderly population • Nursing shortages in acute care hospitals

6. Proactive Planning • Reactive planning: occurs after a problem exists • Inactivism: seeks the status quo • Preactive planning: utilizes technology to accelerate change; future-oriented • Interactive or proactive planning: considers the past, present, and future and attempts to plan the future of an organization rather than react to it

7. Question Advocating against implementing a new hospital computer system is an example of which type of planning? • Reactivist • Inactivist • Preactivist • Proactivist

8. Answer Answer: Rationale:

9. Reminder • Managers who are uninformed about the legal, political, economic, and social factors affecting health care make planning errors that may have disastrous implications for their professional development and the financial viability of the organization

10. Strategic Planning • Planning has many dimensions, including time span and complexity or comprehensiveness • Complex plans are long-range or strategic plans • Strategic planning typically examines an organization’s purpose, mission, philosophy, and goals in the context of its external environment

11. SWOT Definitions • Strengths are those internal attributes that help an organization to achieve its objectives • Weaknesses are those internal attributes that challenge an organization in achieving its objectives • Opportunities are external conditions that promote achievement of organizational objectives • Threats are external conditions that challenge or threaten the achievement of organizational objectives

12. Simple Rules for SWOT Analysis • Be realistic about the strengths and weaknesses of your organization • Be clear about how the present organization differs from what might be possible in the future • Be specific about what you want to accomplish • Always apply SWOT in relation to your competitors • Keep SWOT short and simple • Remember that SWOT is subjective Source: Adapted from Marketing Teacher Ltd. (2000–2013). SWOT analysis: Lesson. Retrieved April 22, 2013, from http://www.marketingteacher.com/wordpress/swot-analysis/

13. Using a Balanced Scorecard • Strategic planners using a balanced scorecard: • Develop metrics • Collect data • Analyze that data from four organizational perspectives: • Financial • Customers • Business processes • Learning and growth

14. Steps for Using Strategic Planning • Clearly define the purpose of the organization • Establish realistic goals and objectives • Identify external constituencies and determine their assessment of the organization’s purposes • Clearly communicate the goals to the constituents • Develop a sense of ownership of the plan

15. Steps for Using Strategic Planning—(cont.) • Develop strategies to achieve the goals • Ensure that the most effective use is made of resources • Provide a base from which progress can be measured

16. Principles of Good Planning All plans must flow from other plans. Short-range plans must be congruent with long-range plans Planning in all areas of the organization must follow the mission, philosophy, and goals of the overall organization Planning involves the same process regardless of the period involved

17. Principles of Good Planning—(cont.) • The length of the plan is determined by what actions are necessary to make the plan successful • All planning must include an evaluation step and requires periodic reevaluation and prioritization • All people and organizational units affected by a plan should be included in the planning

18. Question Tell whether the following statement is True or False: The planning process differs depending on the period of time involved. • True • False

19. Answer Answer: Rationale:

20. Strategies for Successful Planning • Start planning at the top • Keep planning organized, clear, and definite • Do not bypass levels of people • Have short- and long-range plans and goals • Know when to plan and when not to • Keep target dates realistic • Gather data appropriately • Be sure objectives are clear • Remember, interpersonal relationships are important

21. Because a plan is a guide to reach a goal, it must be flexible and allow for readjustment as unexpected events occur Planning

22. Why Do Plans Fail? • False assumptions • Not knowing overall goal • Not enough alternatives • Inadequate time or other resources • Low motivation levels • Sound strategies not used • Inadequate delegation of authority • Not recognizing organizational goals and needs • Planning too narrow in scope—not recognizing community, legal, and licensing requirements

23. Question Which is an example of why plans might fail? • Not enough alternatives • Low motivation levels • False assumptions • Lack of sound strategies • All of the above

24. Answer Answer: Rationale:

25. Difficulty in Long-Term Care Needs and Health-Care Organizations • Rapidly changing technology • Increasing government involvement in health care • Changing population demographics • Reduced provider autonomy

26. Planning Types • Reactivists plan after a problem exists • Inactivists consider the status quo as the stable environment and they spend a great deal of energy preventing change and maintaining conformity • Preactive planners utilize technology to accelerate change and are future-oriented • Proactive planning style is always the goal

27. Proactive Planning • Is dynamic, and adaptation is considered to be a key requirement since the environment changes so frequently

28. Forecasting Using available historical patterns to assist in planning Examining present clues and projected statistics to determine future needs

29. SWOT Analysis The identification of: Strengths Weaknesses Opportunities Threats

30. Balanced Scorecard Strategic planners use a Balanced Scorecard to develop metrics (performance measurement indicators), collect data, and analyze that data from four organizational perspectives—financial, customers, internal business processes (or simply processes), and learning and growth

31. Question A Balanced Scorecard is used to: (Select all that apply) • Collect data • Gain clients • Develop metrics • Analyze data

32. Answer Answer: Rationale:

33. Strategic Planning as a Management Process Should Include the Following • A clear statement of the organization’s mission • The identification of the agency’s external constituencies or stakeholders and the determination of their assessment of the agency’s purposes and operations • The delineation of the agency’s strategic goals and objectives, typically in a 3- to 5-year plan • The development of strategies to achieve the goals

34. There is increasing recognition of the importance of subordinate input from all levels of the organization to give strategic plans meaning and to increase the likelihood of their successful implementation Subordinate Input in Strategic Plans

35. Unlike the 20-year strategic plans of the 1960s and 1970s, most long-term planners today find it difficult to look even 5 years in the future Length of Strategic Plan

36. The Planning Hierarchy • Mission • Philosophy • Goals • Objectives • Policies • Procedures • Rules

37. Organizational Philosophy Statement A person should be able to identify exactly how the organization is implementing its philosophy by observing members of the nursing staff, reviewing the budgetary priorities, and talking to patients

38. Goal, Objective, Policies, Procedures, and Rules Goal—the desired result toward which effort is directed Objective—how the goal will specifically be achieved (includes time frame and is measurable) Policies—plans reduced to statements Procedures—step-by-step process Rules—plans that specifically define acceptable choices of action

39. Rules as Part of the Planning Hierarchy • Because rules are the least flexible type of planning in the planning hierarchy, there should be as few rules as possible in the organization • Existing rules, however, should be enforced to keep morale from breaking down and to promote organizational structure