Health Strategy & CE LHIN€¦ · Objectives and 3-5 key performance indicators (K.P.I.s) per K.P.A. Balance leading (early warning) vs. lagging (outcome) indicators Alignment, planning

Health Strategy & CE LHIN1

Larry Chester

Symposium Objectives2

Provide an opportunity for networking and learning as planning partners continue to implement the priorities identified in the Integrated Health Services Plan (IHSP) and prepare to align shared activities for continued implementation in the coming year. The goal is to share information on activities to date and further equip health service provider leadership (governance, administration and clinical), planning partner volunteers and priority project teams with additional tools and information for continued success.

Project Management

Doing the project rightDoing the right projectThe right project is often defined as the one that best advances your strategy

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Definitions3

Management is doing things right; leadership is doing the right thingsLeaders make change happen; managers do everything elseStrategy is What you want to become (and why), not How you will do it

Competency Hierarchy

Technical skillsAction planning

Problem solvingDecision making

Situation Assessment

Environmental scanningIssues management

Strategy formulationStrategic deployment

Individual contributor

Manager/ supervisor

Senior manager

Communicating with othersConflict and collaboration

Performance management

Project Management

Strategy implementationLeadership and involvement

Transition 1

Transition 2

Strategy Asks The Big Questions

Where is this organization going?What customers will we serve?What products or services will we offer?What are our priorities over the next five years?What is our value proposition?What competencies must we possess or acquire?How will we position ourselves in the health care field?What is our business concept?

OH-6

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So that everyone pulls in the same direction!

Why do we need a strategy?

Michael Porter’s View8

The organization without a strategy is willing to try anythingThe essence of strategy is choosing what not to doStrategy must have continuity. It cannot be constantly changing

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STRATEGY(WHAT)

PROCESS(HOW)

CULTURE(HOW)

Leadership Thinking

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WHATLow Clarity & Commitment

High Clarity & Commitment

HOW

High Efficiency & Effectiveness

Low Efficiency & Effectiveness

1

3

2

4

Will deliver its

mandate

May deliver the wrong mandate

too quickly

Needs to develop delivery

processes quickly

Will fail to meet their mandate

We need a clear strategy well delivered

OH-11

Strategy

Future StateCurrent State

InitiativesProjects

ProcessesPerformance

Change

The acid test: Is strategy clear enough to see where projects, processes, and people fit?

Scan

Decisions support strategy9

It’s about daily decisions by managers and individual contributors in CE LHIN and its partners in delivery

Is my decision aligned

with strategy?

Opportunities

•Hiring someone

•Building a hospital

•Implementing a program No

Cancel

YesProceed

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CE LHIN Strategy

Alignment in your organization11

How well are our decisions aligned?

Very confident that they are

Believe that they are

Believe that they are not

Very confident that they are not

Don’t know

Executive level

Very confident that they are

Believe that they are

Believe that they are not

Very confident that they are not

Don’t know

Middle Management

Key Issues in Developing Understanding…12

Because executives don’t say what they mean or test the assumptions they really hold. (This) inhibits a resolution of the important intellectual issues embedded in the strategy.

Chris Argyris, Harvard Business Review, Sept/Oct, 1986

Senior managers at consistently excellent companies such as Emerson and GE seem to be able to question each other’s assumptions without undermining each other’s confidence or authority.

“Survey of Management,” The Economist, March 9-15, 2002

Deployment ProcessesOH-16

How well do your deployment processes enable the questioning of strategic assumptions?

Very confident that they do

Believe that they do

Believe that they do not

Very confident that they do not

Don’t know

The SolutionOH-17

We need a process and tools that involve:Participation by all, in groupsEveryone pools knowledge and asks questions in “low stakes” mode, where assumptions can be questionedCommon understanding of the big picture as basis for defining goals, plan, projects, etc. for groups and individualsEasy communication within and between groups

Current deployment processesOH-18

How well do your current processes enable:

Very confident that they do

Believe that they do

Believe that they do not

Very confident that they do not

Don’t know

Widespread Participation

Very confident that they do

Believe that they do

Believe that they do not

Very confident that they do not

Don’t knowPooled Knowledge

Very confident that they do

Believe that they do

Believe that they do not

Very confident that they do not

Don’t knowCommon Understanding

Dilbert’s View

Communications-friendly?OH-20

How easy is it to communicate your current strategy to others?

Very confident that it is

Believe that it is Believe that it is not

Very confident that it is not

Don’t know

Balanced ScorecardOH-21

Kaplan and Norton Book (Early ’90s)Depends on vision/strategyFinancial and non-financial Key Performance Areas (K.P.A.s)Six K.P.As (financial, customer, process, innovation, learning , employee)Objectives and 3-5 key performance indicators (K.P.I.s) per K.P.A.Balance leading (early warning) vs. lagging (outcome) indicatorsAlignment, planning and evaluation

OH-22

Example: Balanced Scorecard

INNOVATION LEARNING

PEOPLEPROCESS

CUSTOMER

• Transaction database integrity/scope

• Complete, correct, on-time product delivery

• Documented and signed off customer cost savings (technical, supply management

• Customer project implementation

• Mutual value creation (suppliers)

• Cost of each core processes• Improvement status each

core process

Finance rapid growth and maintain a strong balance sheet

Innovate a stream of customer inspired products, services and processes

Foster employee satisfaction and performance excellence

Acquire the right knowledge and skills, continuously and cost effectively

Build, execute, and improve processes for customer value and performance

Provide superior customer value and performance and win market share

• Customer relationship and knowledge

• Segment revenue growth• Account share

• Customer satisfaction

• Employee satisfaction survey and follow-up

• Turnover/retention• Competency level progress

• Employee productivity

• Progress against skill development plans

• Market knowledge/skill sharing (via database)

• Internal best practice sharing (via database)

• Revenue growth• Asset management• Profit

• Company investment in trials, tests, experiments of new products/processes

• Number of new products/processes introduced per year

• Average speed to market/cost of new products/processes

FINANCIAL

Strategy MapOH-23

Visual, group-oriented technique

Developed on flipchart paper with post-it notes

Links all six Key Performance Areas together

Clarifies our thinking and builds consensus

Identifies issues and unanswered questions

Starts with the ”customer,” fills in other KPAs, and makes connections (what drives what)

Strategy Map – Key Performance AreasOH-24

•Financial:What are the desired financial outcomes that will enable our organization to resource our growth at low risk?

•Customer:What are our customer segments, what are their requirements and what is our value proposition to each of them? How will each segment contribute to achieving the financial outcomes?

•Process:What are our core business processes and how does each one play its part in delivering the value proposition to each segment?

•Innovation:What are the innovation systems that we use to create new products, services, and processes to render existing ones obsolete. How do these support the core processes?

•Learning:What are the systems that we use to ensure that the organization is learning by capturing, and leveraging knowledge and acquiring new strategic skills and technologies? What is the linkage between this learning and innovation and process execution.

•People:What is the contribution that we expect from our people and what is our commitment to them? What is the linkage between this and learning, innovation and core process execution?

Veterans AdministrationOH-25

InnovationOH-26

Innovation is the process of creating something so new and different that it renders OBSOLETE comparable processes, products, or services.

3 types of innovationOperational excellence (process, cost focus)Increase customer value (product, customer focus)Build the franchise (partnership, capability focus)

Sony ExampleOH-27

Operational ExcellenceManagement structure redesignManufacturing consolidationStreamline media content production

Increase Customer ValueCreate next big product (walkman, play station…?)Avoid enabling content piracy

Build the FranchiseCreate and manage alliances to enable leverage of Sony technologyEnhance Sony brand image

Economist March 1st, 2003

InnovationOH-28

Innovation structures, systems and skills are needed forGetting the organization to think about innovation on an ongoing basisCreating a culture of, open questioning of why and how things are doneTesting of breakthrough ideas under conditions as close to future reality as possible.Implementing the changes needed to make the new idea successful

Innovation – Mobil (North America ) M.A.R. example

OH-29

Build the Franchise

•Enhance brand image

•Increase understanding of customer segments

Increase Customer Value

•Best-in class retail support teams

•Increase number of new value added products

Achieve Operational Excellence

•Industry cost leadership

•Improve hardware performance

•Improve inventory management

•Environmental health and safety

Innovation Your Organization

OH-30

Build the Franchise

Increase Customer Value

Achieve Operational Excellence

FinancialOH-31

Managerial accounting systems are the resource allocation and evaluation mechanism of the business

The choice of financial measures and the period over which they are optimized is a key decision the knowledge of results is only a measure of past performance,being organized to anticipate or at least react to future events is critical

LearningOH-32

“Learning is a strategic choice; it doesn’t just happen. Learning is a capability. It requires skills. It requires processes and it requires leaders who value it.”

Judy Rosenblum from:

Will Companies Ever Learn

OH-33

We need to identifyCritical skills neededCompanywide methodologies/disciplines neededLeadership behaviour

Learning

OH-34

The people most likely to be successful have a sense of personal responsibility and accountabilitySee the best route to personal security and professional growth as skill enhancement and developmentAre willing and able to embrace changeShare the common values and attitudes of the organization

Contribution Expected From People

Commitment to People OH-35

Our people are integral and indispensable part of our ability to add value to customersrequire ongoing education and trainingneed interactive communication with co-workers, customers, and suppliers to continuously update their skills and sense of missionwill have personal growth opportunities

PeopleOH-36

“ The motivator factors that are intrinsic to the job are: achievement, recognition for achievement, the work itself, responsibility and growth or advancement”

Frederick Herzberg from:

One more time: How Do You Motivate Employees?

Leadership & Strategic Planning

OH-37 1. MOBILIZE CHANGE THROUGH EXECUTIVE LEADERSHIP

• MOBILIZATION• GOVERNANCE PROCESS• STRATEGIC MANAGEMENT

2. TRANSLATE STRATEGYINTO OPERATING TERMS

• STRATEGY MAPS• BALANCED SCORECARDS

3. ALIGN ORGANIZATION WITH STRATEGY

• CORPORATE ROLE• BUSINESS UNIT SYNERGIES• SUPPORT UNIT SYNERGIES

4. LINK STRATEGY TOEVERYONE’S JOB

• STRATEGIC AWARENESS• PERSONAL SCORECARD• BALANCED PAYCHEQUES

5. MAKE FORMULATINGSTRATEGY A CONTINUALPROCESS

• LINK BUDGETS & STRATEGY• STRATEGIC LEARNING• ANALYTICS & INFORMATION

SYSTEMS

InnovationLearning

Customer Financial

BALANCED SCORECARD

Process

People

Final Measurement of Strategy

However beautiful the strategy, you should occasionally look at the results

Winston Churchill

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