In the view of many physicians, strategic planning is a bureaucratic, amorphous undertaking run out of a hospital administrator's office. There is usually a flurry of interviews, some retreats and then lofty commitments. Physicians rightly ask, "What has that got to do with me?" And, too often, the answer may be, "Very little."

In truth, strategic planning, well applied, involves some of the most important deliberations that occur in a hospital. Physicians who are not part of the strategic planning process may find themselves isolated from conversations and decisions that have direct and important impacts on them and their patients. A strategic plan ultimately is a leadership tool. For physician leaders in particular, strategic planning is a cornerstone of the management armamentarium and one they must master.

Forcing Decisions

There is no single definition of strategic planning. In my firm, we define it as "the allocation of scarce resources to your best opportunities." As such, it involves deciding what's most important. Strategic planning is a systematic process for defining a pathway into the future. Taking one path precludes taking others. Strategic planning forces choices—and that is what makes it both so difficult and so beneficial. It generates focus.

The decisions embodied in a strategic plan typically have a horizon of three to five years. Out of these strategic decisions cascades a hierarchy of supporting decisions, which must be aligned.

Just as there is no single definition of strategic planning, there is no right way to do it. The approach generally taken consists of five phases:

  • Collecting and analyzing information, usually culminating in the production of a document designed to provide a nonprescriptive picture of the hospital's environment. (Major sources of information at this point consist of personal interviews and existing data.)
  • Defining critical issues.
  • Developing an overreaching vision.
  • Identifying the strategies, tactics and actions necessary to accomplish the vision.
  • Ensuring effective implementation, including monitoring and accountability.

Methods are incorporated in the process to create participation and input as well as understanding and commitment to the results. The whole process is usually run through a steering committee of eight to 12 people—members of the hospital's executive team, the board of trustees and physician leaders.

The Journey Is Important

The ancillary effect of a solid strategic planning process may be as valuable as the plan itself. That effect is ownership. An effective hospital strategic plan incorporates the perspectives and desires of a variety of stakeholders, including physicians. People tend to own and support what they help create.

A process that is open and responsive cultivates physician trust. Indeed, in my experience, no undertaking can so effectively build trust as an honest strategic planning process. There are a number of reasons for this. A solid process solicits physician input. If that input is reflected in the emerging plans, physicians begin to accord credibility to the process.

A good strategic planning process, because it is focused on what is most important, involves conversations and deliberations that are themselves important.

Physicians experience their participation as dealing with important decisions, and thus, a worthy use of their scarce time.

An effective process creates alignment for a common destination and a shared view of how to get there. This common view is reassuring to physicians who often feel uninformed and suspicious about the hospital's intentions. So a shared vision can reduce a lot of anxiety and nonproductive energy. Furthermore, most physicians want to know that their hospital has a plan for the future and they want to influence the shape of that future.

Finally, a good strategic plan is more than a to-do list. The planning process also educates. It incorporates principles of strategy that are relevant not just to the hospital organization but that physicians can also apply to their practices.

Advice for Physicians

Physicians who participate in their hospital's strategic planning process should do so with certain perspectives in mind:

  • The practice of medicine is central to the purpose and viability of a hospital. No hospital will prosper if its physicians are not thriving clinically and economically. There is a direct connection. Hospitals unwilling or unable to invest in their medical staffs will suffer. Conversely, physicians unwilling or unable to participate in ensuring the success of their hospital will be burdened by their association with an underperforming institution.
  • Physicians should recognize that they are the most credible voice in the strategic planning process when it comes to their needs and those of their patients. It is a mistake to assume that nonphysicians understand the physician's world. With the exception of nurses and other caregivers, no one is closer to the patient perspective than the physician and no one has more influence on the hospital's relationship with the patient.
  • Physicians, particularly those in private practice, should recognize that the business of medicine is much different from that of a hospital in both its scale and its orientation. If hospitals often feel bureaucratic, it is because they are. Physicians should not be alienated or intimidated by this difference. When it comes to securing strategic success, the view from the solo practice is as important as the view from the hospital's executive suite. But it is a different view.
  • Physicians should recognize that some hospitals attract lay board members of exceptional talent and experience. It is not unusual to find executives of some of the world's most successful corporations involved in the governance of hospitals. These individuals are high achievers, and they want to do a good job. Physicians can set this talent loose by helping acclimate lay board members to the world of medicine and the hospital. Lay trustees are hungry for insights related to medicine. Most lay trustees have a very limited perspective on health care and are often confused by its language and complexity. Physicians who take time to patiently explain medicine's technical aspects and relationship dynamics to lay trustees will often find they have created strong allies. Many hospital executives are equally hungry for such insights but embarrassed to ask for them.
  • While physicians should not overestimate what lay board members and members of the hospital's executive team know about medicine and technology, they should also not overestimate what their colleagues know. Technology and clinical methods advance along specialty lines and, as a result, such knowledge tends to be highly specialized. A cardiologist is unlikely to know much about the state of technology in oncology, for example. And subspecialists often have little appreciation for the challenges facing primary care physicians.
  • Physicians should not assume that the executive team at their hospital understands the importance of a strategic plan. Indeed, many hospital executives have backgrounds that are largely operational. Because of this, they tend to focus on what they know, which are operational issues with relatively short time horizons. Operational excellence is important, but, ultimately, a well-run ship that doesn't know where it's headed just gets there sooner. Sometimes "there" means the wrong port or piled up on the rocks somewhere. A strategic plan is designed to define a picture of where the hospital is headed and how it's going to get there.
  • Conflicts of interest are a reality in health care. A conflict occurs when personal interest interferes with or gives the appearance of interfering with the best interests of an organization. Conflicts are particularly problematic when the organization is nonprofit. Every hospital should have a conflict of interest statement and apply it. Although diplomacy is always in order, physicians should be prepared to declare a conflict if they feel they have one or to point out those of others. Nothing sucks the credibility and integrity out of a strategic plan like unresolved conflicts of interest.

Focus Is Essential

Physicians should insist that the strategic planning process make good use of everyone's time and stay on schedule. A typical process is likely to take four months to complete and will incorporate three or four planning sessions, each consuming the best part of a day. Because of time constraints and the need to have balanced input, facilitators and participants have to be disciplined in avoiding speeches and sermons. Dialogue should be purposeful, direct and economical. An agenda should be developed and adhered to for each planning retreat.

Physicians and others who cannot commit to consistent participation in planning retreats should decline involvement. Intermittent participation is disruptive and wastes everyone's time. It gives rise to backtracking and revisiting questions that may have already been addressed.

As has been suggested earlier, wide ownership for the strategic plan is a desired outcome. But there's not a lot of ownership that can be built if only eight to 12 people are involved.

Involvement can be significantly expanded by taking the work of the steering committee and "testing" it with key stakeholders, including physicians. The steering committee leaders say, "Here's what we've come up with so far. What do you think?" This input goes back to the steering committee and is used to shape and refine the emerging plan. This usually happens a number of times throughout the process. Through this approach of "develop, share and refine," hundreds of people can be involved in creating the plan.

Accountability for the Plan

Involving others in the planning process recognizes that more input means a more robust plan and wide ownership means greater commitment. Yet, it's important to point out that it is the hospital's executive team, and particularly its CEO, who are responsible for the plan. It is they who will be accountable for its implementation. And it is the board that ultimately must approve the strategic plan.

Smart executive teams invite lots of input and involvement. Less secure executive teams tend to play things close to the vest and limit strategic planning to a tight circle. Because some CEOs don't recognize the importance of strategic planning or view it as threatening, it is sometimes the board of directors that pushes to undertake a strategic planning process.

A vital hospital is a key component of a successful system for delivering health care. The effectiveness of that system depends on the well-being of each component (hospital, physicians and community). Struggling physician practices contribute directly to a struggling hospital. And a struggling hospital drags down physician practices. Physicians have a strong interest in ensuring the future of their hospital. Participating in developing the hospital's strategic plan and advocating for it are invaluable contributions to that future.

Dan Beckham (beckhamcompany@verizon.net) is president of The Beckham Company, a strategic consulting firm based in Bluffton, S.C.