Chapter 7
Strategic and Operational
Planning
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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
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Planning Is Critically Important to and
Precedes All Other Management
Functions
Without adequate planning, the management process
fails, and organizational needs and objectives cannot be
met
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Barriers to Identifying Long-Term Needs in
Planning
• Health-care reform
• Rapidly changing technology
• Increasing government regulation of health care
• Scientific advances
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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
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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
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Question
Advocating against implementing a new hospital computer
system is an example of which type of planning?
A. Reactivist
B. Inactivist
C. Preactivist
D. Proactivist
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Answer
B. Inactivist
Rationale: Inactivists would rather maintain the status
quo than take a risk with a new way of doing things.
Reactive planning occurs after a problem exists.
Preactive planners utilize technology to accelerate
change and are future oriented. Proactivists consider
the past, present, and future and attempt to plan the
future of their organization rather than react to it
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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
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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
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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
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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/swotanalysis/
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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
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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
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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
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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
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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
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Question
Tell whether the following statement is True or False:
The planning process differs depending on the period of
time involved.
A. True
B. False
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Answer
B. False
Rationale: Planning involves the same process regardless of
the period involved
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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
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Planning
Because a plan is a guide to reach a goal, it must be
flexible and allow for readjustment as unexpected
events occur
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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
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Question
Which is an example of why plans might fail?
A. Not enough alternatives
B. Low motivation levels
C. False assumptions
D. Lack of sound strategies
E. All of the above
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Answer
E. All of the above
Rationale: These are just several of numerous mistakes
that can cause plans to be unsuccessful
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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
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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
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Proactive Planning
• Is dynamic, and adaptation is considered to be a key
requirement since the environment changes so frequently
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Forecasting
• Using available historical patterns to assist in planning
• Examining present clues and projected statistics to
determine future needs
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SWOT Analysis
The identification of:
• Strengths
• Weaknesses
• Opportunities
• Threats
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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
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Question
A Balanced Scorecard is used to: (Select all that apply)
A. Collect data
B. Gain clients
C. Develop metrics
D. Analyze data
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Answer
A. Collect data, C. Develop metrics, and D. Analyze data
Rationale: The Balanced Scorecard assists strategic
planners in developing metrics, collecting data, and
analyzing the data. It does not help them gain clients.
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Strategic Planning as a Management
Process Should Include the Following
1. A clear statement of the organization’s mission
2. The identification of the agency’s external
constituencies or stakeholders and the determination
of their assessment of the agency’s purposes and
operations
3. The delineation of the agency’s strategic goals and
objectives, typically in a 3- to 5-year plan
4. The development of strategies to achieve the goals
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Subordinate Input in Strategic Plans
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
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Length of Strategic Plan
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
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The Planning Hierarchy
•
Mission
•
Philosophy
•
Goals
•
Objectives
•
Policies
•
Procedures
•
Rules
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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
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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
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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
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