MHSStrat（Strategic Planning in the Private Sector） .ppt

Strategic Planning in the Private Sector,August 19,2003,2,MHS.Strat,Agenda,What successful companies doExamples from the private sectorApplications to the MHS,3,MHS.Strat,Success is rare and few entities accomplish their goals,4,MHS.Strat,Keys to success,A well developed,differentiated strategy,A rigorous,fact based planning process to connect strategy with tactics,A well aligned,effective organization to execute,5,MHS.Strat,“Strategy”defined:Bain perspective,A dynamic plan to differentiate a business from its competitors profitably and sustainablyA proprietary set of actions that create and capture value by serving customers in a superior way relative to competitorsInforms virtually all decisionsPortfolio strategy:Where to play?Business unit strategy:How to win?,6,MHS.Strat,Strategy is about making choices,Where we will and wont compete,Where we will and wont invest,Businesses,Customers,Geographies,Activities,Markets,7,MHS.Strat,Companies who succeed are focused and are the best at what they do,0,20,40,60,80,100%,Multi core,None,Regional focus,One business,Channel focus,Percent of companies,Customer focus,8,MHS.Strat,Keys to success,A well developed,differentiated strategy,A rigorous,fact based planning process to connect strategy with tactics,A well aligned,effective organization to execute,9,MHS.Strat,75%of U.S.organizations believe they need to upgrade their strategic planning process,“Our strategic planning process is effective”,“Our strategic planning process is fully developed”,10,MHS.Strat,Best demonstrated strategic planning process,Mission,Define the mission,Rarely,Portfolio Strategy,Decide what businesses and markets to compete inDetermine success metrics by business,Every 5 years,Business Unit Strategy,Develop differentiated offeringIdentify changing dynamicsExternalInternalIdentify key gaps,Every 2-3 years,Tactical Planning,Set targets and timelinesDesign key initiatives Develop implemen-tation plansRealign organization,Annually,Execution and Tracking,Track performance against plansModify plans as necessary,On-going,11,MHS.Strat,Business unit strategy must be informed by the facts around the“3Cs”,Fact based diagnostic and value proposition,Customers,Competitors,Costs,What does our target customer value?,What can competitors offer and how can we beat this offering?,How can we provide our value proposition at minimum costs?,Market size,Market growth,Customer segments,Channel segments,Price experience,Cost experience,Product profitability,Channel profitability,Value chain economics,Systems cost,Cost position,Competitive position,Profitability,Strategy,Commitment,12,MHS.Strat,Strategic planning is often done without reference to facts,Actual average market growth,Forecast average company growth,Forecast average company earnings growth,13,MHS.Strat,Planning processes of best-in-class firms,Senior management devotes significant timeSystematic,with clearly defined stepsRigorous,fact-based approach,and a consistent view of the futureCoordinated across business units Enables quick decision making and course correction,Note:Examples include GE,Dell,Agilent,Abbott,Emerson Electric,Sun,14,MHS.Strat,Keys to success,A well developed,differentiated strategy,A rigorous,fact based planning process to connect strategy with tactics,A well aligned,effective organization to execute,15,MHS.Strat,A high performance organization aligns five elements,2.Drives effective decisions,4.Right people,Leadership,Decisions,Processes,People,Culture,1.Provides sustained leadership,5.Creates a high performance culture,16,MHS.Strat,Agenda,What successful companies doExamples from the private sectorApplications to the MHS,17,MHS.Strat,Successful strategic planning begins with a clear,focused mission,Force trade-offs between competing resource demandsTest soundness of a particular actionSet clear boundaries on what to do and what not to doMake clear what“the core”is,Memorable distillation of strategy clearly understood by all,18,MHS.Strat,Examples of clear,focused,private sector missions:Dell and Southwest,Southwest Airlines,Dell Computer,“Meet customers short-haul travel needs at fares competitive with the cost of taking a bus.”,“Be direct.”,19,MHS.Strat,In 1993,Dell strayed from its mission and its core,Situation,Only in the direct channel(“core”)PC market was explodingWanted to capture a larger part of the growth,Complication,Expansion into retail channel,20,MHS.Strat,Dell:Back to the core mission,Dell withdrew from retail,21,MHS.Strat,Examples of clear,focused,private sector missions:Dell and Southwest,Southwest Airlines,Dell Computer,“Meet customers short-haul travel needs at fares competitive with the cost of taking a bus.”,“Be direct.”,22,MHS.Strat,Southwest translated its mission into clear,measurable goals,Superior customer service,Achieve low cost position,30%lower,Affordable travel,40%lower,23,MHS.Strat,Southwest researched target customer segment needs and preferences,24,MHS.Strat,Southwest focused on key metrics for the target population petitors,Price,Schedule,25,MHS.Strat,Southwest aligned its cost structure to support its positioning petitors,One type aircraftSecondary airportsCustomer self serviceNo frills,no meals service,Cost Initiatives,26,MHS.Strat,Southwest ignored traditional airline measures that competitors focused on,Repeat purchase,27,MHS.Strat,Southwest aligned its organization to implement successfully,Leadership,Decisions,Processes,People,Culture,“Be low cost and deliver excellent service”,Selective hiring(2%acceptance)Peer recruiting to ensure fits,Flexible job descriptions Pilots and attendants“do it all”Rigorous customer service training,Decision making pushed to front linesEmployee loyalty focus to increase experience(50%less turnover),Emphasis on Importance of peopleEmployee recognitionHaving fun,28,MHS.Strat,Key learnings from Dell and Southwest,Define a clear mission and a clear core and stick to your core Translate your mission into measurable outcomesBuild a value proposition based on a fact based diagnosisCustomersCompetitors CostsAlign the organization to implement your strategy,29,MHS.Strat,Agenda,What successful companies doExamples from the private sectorApplications to the MHS,30,MHS.Strat,The NCA MHS is experiencing significant pressures from a number of directions,NCAMHS,Budget pressures,Changing demographics,Evolving missions,Regulatory changes,31,MHS.Strat,Best demonstrated strategic planning process,Mission,Define the mission,Rarely,Portfolio Strategy,Decide what businesses and markets to compete inDetermine success metrics by business,Every 5 years,Business Unit Strategy,Develop differentiated offeringIdentify changing dynamicsExternalInternalIdentify key gaps,Every 2-3 years,Tactical Planning,Set targets and timelinesDesign key initiatives Develop implemen-tation plansRealign organization,Annually,Execution and Tracking,Track performance against plansModify plans as necessary,On-going,32,MHS.Strat,It is critical to understand the MHS multiple missions and how they relate to one another,Peacetime mission,Wartime mission,Calls for providers to keep active duty fit and to provide casualty care in the theaters and at MTFs,Calls for a particular mix of providers,focused on general surgeons,orthopedic surgeons,etc.,Requires a significant amount of challenging civilian pathology,which may be optimized around 65+patients,Calls for peacetime providers to provide health care to active duty,their dependents and serve retirees,Calls for a certain mix of providers,including OB-GYN,pediatrics,etc.,Typically optimized along access for prime beneficiaries,33,MHS.Strat,Key outcomes are clear but they need to be translated into measurable goals,Readiness,Training/GME,Resource optimization,Customer service and access,Quality of care,Key Outcomes,?,?,?,?,?,Targets,34,MHS.Strat,Success for the MHS will likely require focusing on certain activities and clinical areas,Research,GME,HospitalsandClinics,Physicians,Health PlanMgmt,Service lines,Activities,Infectious disease,Physical therapy,Cardiology,Nephrology,Pain management,GI,Vascular surgery,Urology,Endocrinology,Neurosurgery,Rheumatology,Family practice,Mental health,Neurology,Hem-onc,General internal medicine,Dermatology,Orthopedics,Ophthalmology,ENT,Plastic surgery,Emergency medicine,CT surgery,Ob/gyn,General surgery,Pediatrics(all specialties),Pulmonary,Organ transplant,Pediatric surgery,35,MHS.Strat,The MHS must pick the service lines and activities on which it should focus,Invest orpartner,Focus,Exit,Divest orpartner or outsource,High,Low,Low,High,Critical to mission,Ability to succeed,36,MHS.Strat,The MHS should collect a rigorous factbase to set strategy and targets,Demand,Supply,Overall,service line and MTF levels,Academic and private practice benchmarks,Patient populationOutpatient visitsInpatient admissionsService line use ratesVolumes per providerPharmacy spendGME program accreditationNon-medical contracting costs,Provider mix and capacityProvider productivitySupport staff productivityClinical outcomesDirect and purchased care costsPatient accessGeographic resource distributionPatient satisfaction levels,37,MHS.Strat,A preliminary diagnosis suggests that various clinical areas have productivity below academic institution benchmarks,38,MHS.Strat,A number of service lines are also experiencing access issues,39,MHS.Strat,Redesign initiatives for the MHS may take many forms,Facilities rationalization,Clinical program consolidation,Contracting/collections from 3rd party payors,Resource allocations,Patient and provider retention,Shared support services,Specialization of facilities,Re-thinking outsourcing,Incentives across system,Preventative care/disease management,GME program design,Procurement efforts,40,MHS.Strat,Key questions for the MHS,What is(are)the missions and how can they be translated into measurable goals?What service lines and activities should be provided in the MTFs versus purchased from the civilian sector?Providers vs.hospital/clinic managementPrimary vs.specialty careHow is the MHS system performing vs.targets and the competition and what initiatives need to be put in place?What organizational changes are required to implement these initiatives?Which decisions should be made at an integrated versus at the Service(Army,Navy,Air Force)level?,41,MHS.Strat,A single,integrated healthcare supply strategy needs to be developed to serve a single patient population,Army,Navy,Air Force,Supply of care:,MHS Beneficiaries,Demand for care:,Tri-Service,Coordinated,IntegratedSupply of Care,