The board’s foremost responsibility is to own the organization’s mission and vision and ensure a consistent focus on the strategic path to achieve them. While the board is responsible for setting strategic direction, it is not responsible for creating or managing implementation plans. But this doesn’t mean that trustees’ work is done after the strategic planning process ends. Boards must continually monitor the plan’s progress, be alert to changes in the environment and be prepared to adjust the strategic course as needed.
Mission Comes First
Strategic plans often fail because the board does not make strategic thinking, planning and implementation high priorities. Once the strategic direction has been scrutinized by the board, trustees must ensure that the plan is communicated and embedded throughout the organization. Every employee, partner, affiliate and volunteer must understand his or her role in helping to carry it out. Trustees must demand that every board agenda include adequate time to review strategic performance indicators, assess progress toward objectives and discuss relevant new information. Hard and sometimes controversial questions should be addressed by board members. Throughout this process, the board must avoid wandering into operations.
Everyone’s on Board
Inspiring a sense of strategic partnership and accountability across an organization can magnify opportunities for success. All stakeholders must understand their link to the plan and leverage their role to achieve the organization’s initiatives. To gauge the executive team’s readiness, trustees should ask these questions:
1. What actions do you plan to take to ensure successful, on-time execution of the strategic plan accountabilities?
2. What leadership and management skills will you use or strengthen to achieve success?
3. In which areas are we most at risk of falling short of our planned outcomes?
4. In which areas do you think our organization most needs board leadership?
5. What resources do you most need and depend on to achieve the desired results?
Senior leaders also must communicate goals and plans and inspire participation.
Trustees, meanwhile, need to be strong advocates, educators and promoters of the hospital in the community — building awareness of and loyalty to the hospital and its role as the community’s most important health care asset.
Defining precise targets, consistently measuring progress, and identifying current and emerging strategic gaps will ensure that strategies are consistently at the center of governance attention. The executive team is responsible for establishing the most relevant performance measures as indicators of the hospital or health system’s progress in attaining its strategic objectives. These indicators should be driven by the critical success factors identified for each strategic goal.
If the goal is to maximize Medicare reimbursement under value-based purchasing, for example, a critical success factor may be to achieve the benchmark threshold for all quality measures. Key performance indicators would include measures of clinical quality as well as patient satisfaction and employee engagement. Other areas in which strategic performance measures are commonly developed include finance, operations, human resources and growth.
No single indicator can tell a complete story. The performance indicator dots must be connected for the board to monitor progress, ask the right questions and challenge questionable assumptions.
When progress falls short of expectations, trustees are responsible for redirecting the course to the desired outcomes. When significant gaps between projected and actual performance are identified, senior leaders should be ready to recommend to the board specific actions to close them.
Trustees and executive teams should expect the unexpected, and anticipate that challenges, change and complexity are more common than not as the health care system transforms itself. Engaging in scenario planning and creating contingency plans can strengthen the organization’s ability to respond quickly to change and achieve success in spite of the barriers it may encounter.
Strategic planning is a continual process of real-time responsiveness to change, not a finite task. What health care leaders know today will be different from what they will know tomorrow. Asking “so what?” questions will help to keep the board alert to unexpected events that might derail strategic plans; for example: “So, what are the implications of these new data for the hospital?” and “So, what new health care needs are emerging in the community, and how should we address them?”
Additionally, honing skills in scenario thinking and identifying critical “what if” variables to assumptions or dependencies allow trustees and executives to develop contingency plans, which will contribute to the board’s readiness to respond nimbly in the face of change.
According to the 2014 National Health Care Governance Survey by the American Hospital Association’s Center for Healthcare Governance, nearly nine in 10 board chairs and 85 percent of chief executives reported that, at least annually, their board assesses the hospital’s strategic performance using measures established at the beginning of the year. At the same time, 14 percent of CEOs reported that their board did not review the hospital’s performance at least annually, and a small percentage of CEOs and board chairs did not know whether this review took place.
Ideally, strategic planning and review is not a one-time annual event, but a thread woven through all board thinking and discussion. New information, data, perspectives and ideas should feed trustees’ strategic discussions at every meeting and generate a perpetual stream of strategic development opportunities.
The Board’s To-Do List
Change in today’s health care environment requires the board’s continual attention and oversight to achieve success. This includes the following responsibilities:
• Making strategic planning a top priority
• Ensuring that everyone recognizes and understands his or her role and the value of their respective contributions to the organization’s strategic plan
• Continually monitoring achievement of milestones and progress toward goals
• Holding executive management accountable, planning for uncertainty and rewarding success
• Making strategic planning a continual process of real-time responsiveness
• Exhibiting leadership; motivating, inspiring and providing the benefit of experience and expertise — C.F. and N.M.