Deriving More Value from the Role of Strategy in Healthcare

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Ask any number of healthcare leaders about the role of strategy or the process of strategic planning in their organization and you’re likely to get a wide range of answers. Indeed, as observed over our decades of experience and in our conversations with health system executives, we find exactly that.

  • Some depict a textbook, linear approach of assessing strategic opportunities and vulnerabilities, linking goals and strategies to mission and vision, and creating tactics and resource requirements necessary to execute over a prescribed timeline—typically three to five years.
  • Others are less structured yet set in place a vision or strategy statement, design initiatives as guardrails, and are more focused on an analytics-based planning process to set priorities and drive annual budgets.
  • A few note that the organization’s strategy resides in the CEO’s head, played out in regular interactions with leaders and the board.
  • Still others, some with clear conviction and others somewhat blankly, state they do not engage in the formal process of strategy making, having abandoned it or perhaps never done it, as it doesn’t fit with the nature of healthcare, or perhaps their experiences haven’t been positive since the resulting plans “just sat on a shelf.” Organizations in this last group may still engage in strategy—they just don’t formally call it that or write it down.

The truth is that responses from leaders in other industries would likely follow a similar pattern.

Some academics and purveyors of strategy might muse at the diverse perspectives on the role and process of strategy. Think of Beatrice, the sweet elderly woman from the Allstate Esurance television commercial who, clearly not grasping Facebook, was literally posting photos to her living room wall, and her confused friend who just can’t stand it anymore, stating “That’s not how it works. That’s not how any of this works!” They’d be both right and wrong.

This is not an indictment on the role of strategy or the process of strategic planning in healthcare organizations, but rather a recognition that healthcare is a unique industry and that organizations have adapted the concept of strategy and its process to work for them. Our aim is to understand why the concept of strategy—what it is, how it is done, what its value is to an organization—is approached in so many ways by leaders across the healthcare industry. What can we learn, and perhaps most importantly, how do we see the role of strategy in healthcare organizations evolving in the future?

As the US healthcare delivery and funding model has evolved, so too has the role of the strategy function for healthcare organizations.

Our research demonstrates a strong desire in healthcare to drive greater value from the strategy-making process.

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