Category Archives: Strategy

Strategy is about both the what and the how

When we put together our strategic plan for the children’s hospital four years ago we used a modification of the triple aim as a frame, expanding it to the quadruple aim a year or so later. Super Health for all children was established as our primary purpose and passion, Super Care was affirmed as a presupposition of being in the business of providing health care to children, and a Super Supportive Care Experience being what makes a children’s hospital different, would be what we would need to make us different from any local or regional competitors.  A year later we added the essential element of engagement of our colleagues, as well as the patients, families and communities we serve.  For our colleagues we felt that feeling joy and pride in their work was important.  We identified the 2 most important things as reliability in providing care and engagement of all those supporting, delivering and experiencing that care.

In our efforts to fully realize a children’s hospital we focused equally on what we would do and how we would do it.  For example, we chose as a frame for how we would achieve engagement and a super care experience child- and family-centered care and decided we would need a child-friendly environment and family support systems.  When it came to achieving reliability and super care we chose high-reliability principles and robust continuous quality improvement methods for the how .  We borrowed from the theories and philosophies of Deming and Covey, and the methods of Lean management.  We focused on how we would achieve our desired results more so on a daily basis than what those results were.   The best example of this is measuring safety behaviors and practices daily, while paying attention to the outcomes of hospital acquired conditions (e.g. days since last event) weekly.

We developed a set of high-level guiding principles: transparency, collaboration, alignment, ownership for excellence and fiscal responsibility (aka efficiency).  After reliability and engagement, efficiency has become an essential management focus today, and yet to not pay attention to how that is achieved is to lose out on reliability and engagement.

Our strategic plan has been very successful, reaching most of our goals and milestones, and on time.  Our secret sauce comes down to disciplined improvement, relentless alignment and empowering accountability.  For a best practice conceptual frame for management we’ve used the Shingo model.

Our strategic measure of success, as well as our means to justify and secure what it would take to realize a children’s hospital, has been growth, including inpatient and outpatient, subspecialties and primary care.  We’ve realized growth through increasing our capacity through recruitment of more clinicians as well as improving the efficiency of our key processes, all along keeping front of mind that if we didn’t stick to our mantra of super care and a super supportive care experience, we wouldn’t gain the needed respect and awareness from the public.  Our growth has been consistent year to year and has exceeded our target of 10%.

Strategic Planning and Hoshin Kanri

In health care we are facing a change in our collective theory of business. Peter Drucker wrote about the need for organizations to test and adjust their theory of business from time to time (HBR 1994). Checking three main assumptions needs to be a regular if not ongoing part of doing business: assumptions about the environment, about the mission of the organization, and about the core competencies needed to achieve success. Drucker suggests that the assumptions in all three areas must fit reality, fit each other, and be constantly tested.   An organization’s theory of business must receive preventive care using two interventions: abandoning parts of the business that are no longer needed for success and studying non-customers. There must also be early diagnosis of holes in the system. One of the early warning signs is unexpected failure. The other warning signs include unexpected success, rapid growth and attaining the current vision. In health care there is no shortage of unexpected failure. Time to check our assumptions.

The concept of strategic planning is well known to most leaders and managers. It’s a process whereby the organization aligns and coordinates its efforts towards the achievement of shared and cascading goals and objectives. This planning is formulated after careful consideration of shifts in the environment, namely competitive and consumer related, but also political and economical. Another important consideration is the gap between current performance and desired performance. And finally, given limited resources and seemingly unlimited possibilities, decisions based on business priorities and values are made, which typically requires guiding principles and a process for decision-making.

Across organizations approaches to planning differ and within organizations the approach may differ from one period to the next. Differences arise from a variety of factors including leader preference, recent events, culture, and whether the last strategic plan was considered a success or a failure. An organization could decide not to have a strategic plan, others might keep it very simple providing just a framework or keep it very focused on one decision, such as a merger or acquisition. Others may choose to get detailed and include tactics and describe specific projects. Regardless, all need to follow the hoshin kanri principles of direction management: 1) focus on shared goals, 2) communicate goals to all leaders, 3) involve all leaders in planning to achieve the goals and 4) hold participants accountable for achieving their part of the plan.  There are two fundamental tools used in the hoshin kanri approach: 1) hoshin tables, and 2) periodic reviews of progress.

The Baldrige Award is typically given to those organizations who are adept at horizontal and vertical deployment of their strategy (DA Garvin HBR 1991).  They have an element of hoshin kanri in their strategic planning and execution .


The enemies of transformation, the secret weapon and how to use it

Having been out of training and working in the real world of academic health care for only 16 years, I hesitate to make judgments or conclusions. Instead I make hypotheses or formulate theories. Having only 24 hours in a day, I can’t test every hypothesis. Thus, I have presuppositions.  My three presuppositions below describe the enemies of transformation, the secret weapon of trust and the means to acquire it

The first presupposition is that we have four enemies in health care: Hubris, Cacoethes Carpendi, Seorsum and Avaritia. Hubris speaks to the collective and individual excessive confidence and arrogance that is prevalent among health care professionals and organizations. Cacoethes Caprendi means compulsive habit for finding fault, which refers to the blaming culture that can be found in health care organizations with regularity. Seorsum means apart or not together, referring to the lack of alignment and the inability to integrate varied self-interests into shared goals and values, and (most importantly) shared expectations of behaviors and results. Avaritia is latin for greed. Greed is the elephant in the room no one seems to want to address (not addressing it may lead to it devouring us). Some don’t see these four as enemies, and some don’t see they exist in the first place.   There is variable penetration to be sure, but they are there.

The second presupposition is that trust is lacking in health care organizations today, which makes everything from timely decision-making to efficient and effective teamwork elusive. Have a vision? Great! Have a strategy? Good for you! Have an execution plan?   Wow, impressive! Have trust in your organization? No? Then forget it.  The lack of trust hypothesis is harder to test, because trust lies under the surface. I’m convinced it’s a real problem. Those organizations that work on building a trust culture will adapt to external forces of change faster and more successfully. Trust is the secret sauce or weapon (I prefer the weapon metaphor when it comes to fighting enemies).

The third presupposition is that leadership in health care is lacking capacity.  I attribute this to my Intelligence-Ego Ratio theory.  An individual’s leadership is more effective if their intelligence is greater than their ego.  The optimal ratio is 2-3 (2-3 times more intelligence than ego). It’s counter-productive in the long-run to be <2.   One with a ratio of <2 may get placed into a leadership position.  However,  the organization’s success will have a ceiling.   One with a ratio of >3 will find it hard to get recognized as a leader, but long-term success is more likely.   This theory essentially states that intelligence is incredibly important, but if you let your ego trump your intelligence, you’ll eventually look like an idiot.  Humility is key to being the best leader one can be.  It drives a desire to continuously improve every day.  It allows you to be more open to learning from mistakes or miscues.  It allows you to build trust.

Intelligence doesn’t just mean mental capacity or complex problem-solving abilities. It also means the insatiable desire to learn and continuously fill the head with data, information and experiences (not just your own).  It also refers to emotional intelligence, the capacity to understand where you are and where others are with regards to relationships; relationships with self, others, the organization and society.  Intelligence essentially refers to the capacity to expand your awareness and perspective larger than anyone else around you.

So, what do we do about these presuppositions?  Take the following steps: 1) Increase awareness regarding the enemies, the secret weapon of trust, and the importance of the right leadership, 2) Embrace humility as organizations and as leaders, 3) Be resolved to succeed, persevere and do the right things, 4) Accept the need to change, 5) Drive change through continuous improvement, 6) Have relentless focus on mission, vision, values and principles, and  7) Get results on the most important shared goals.  If you aren’t getting the right results, then go back to 1 and start over.

A Note on Health Care Reform and Children’s Health Care

The affordable care act was designed in part to reduce health care costs.   A principal strategy is to bring the issue of cost per “unit” of care to the table of decision-making in a much more transparent way, while shifting the burden of costs more directly to those receiving the care (the patients) and to those delivering the care (the providers). The presupposition is that if the patients share more of the cost they will utilize fewer health care resources and if the providers share risk they will make health care delivery more efficient and safe, with less overuse and waste.  With price as a more prominent driver of consumer choice, prices will drop in a competitive market place.  Disruptive innovations will be encouraged.

So, what does this mean for us involved in delivering children’s health care?  It means that in addition to improving health increasingly more effectively and on a larger scale, we must also lower the cost per unit of care.   Preventive care, subspecialty care, treatment of acute and chronic illness, procedures, and many of the things we do to help our patients, we must do at a lower cost. Preventable harm and complications, reworks and duplications of care, and inefficient use of people and resources must be minimized.

We have been rewarded on volume (fee-for-service) for a very long time. Our systems, processes, and the way we think are all geared towards producing high volumes.  Many physicians’ compensation is largely dependent on this one measure of work. This has created a way of doing things that will make it difficult for many health care organizations to do well in the new order of health care, whenever that might arrive.

And therein lies the conundrum, when will value based purchasing truly arrive?  Some are thinking it will be years and its best to not change things until it arrives.  What do you think Children’s Hospitals ought to do to position themselves for the future?

I for one think children’s hospitals need to lead the way.