Research each topic below as it related to your selected healthcare organization and actively research each topic in preparation for submitting a paper (recommended minimum of 12 p

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Chapter 10 Communicating Strategy and Developing Action Plans

Why Communicating the Strategy and Developing Action Plans Are Important

As suggested in the quote above, strategic plans must be translated into specific actions that will move the organization toward achieving its strategic goals, ful- filling its mission, and achieving its vision. Thus, action plans are a clearer and more specific articulation of the broader strategies tailored to the functions of the individual organizational units or departments. Unit managers will need a thor- ough understanding of the broader organizational strategies. Once these broader strategies (directional, adaptive, market entry/exit, competitive, service delivery, and support strategies) have been clearly communicated to unit managers, they will have detailed maps of the unit tasks that need to be accomplished. In the implementation, organizational momentum will have been created.

“If well-communicated action plans do not translate into reality, all the efforts devoted to the strategic planning process will have been wasted.”

—PeTer GInTer, JAck DUncAn, LInDA SwAyne, AUThOrS AnD PrOfeSSOrS

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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402 StrAtegiC mAnAgement of HeAltH CAre orgAnizAtionS

Of course, action plans are still just plans. Plans have to be carried out and man- aged. It is a day-to-day process – it is the work of the organization. yet, these plans have to be managed with an eye on the mission and strategic goals, guided by the organization’s values, and inspired by the vision. Unit managers must be strategic thinkers too! Therefore, action plan managers must be careful not to let the action plans become ends in themselves, mindlessly performed without an understand- ing of the organization’s broader objectives and goals and how the action plans fit with the organization’s competitive and value-chain strategies.

Often there is an operational, logistical, or other types of issue unaccounted for in the action plan or perhaps implementation does not work out as intended. In these situations, learning takes place, for we often only learn what works by doing. As managers learn what works, the planners must listen to the doers and be ready to develop new plans. Still, managers must have a plan to start their journey and they must be ready to modify the plan as it is implemented.

Use the concepts in this chapter to develop action plans and be ready to learn by doing!

learning objectives

After completing the chapter you will be able to: 1. Describe the interrelationships among situational analysis, strategy formulation,

value-adding service delivery and support strategies, and action plans. 2. Discuss how strategies are translated into action plans. 3. List the components of an action plan and explain the function of each

component. 4. Cite some reasons that cause strategies to be difficult to implement in health

care organizations. 5. Suggest some effective ways to overcome barriers to the implementation of

strategies. 6. Explain the need for contingency planning in health care organizations. 7. Relate the map and compass metaphor to strategic thinking, strategic planning,

and managing the strategic momentum.

Strategic Management Competency After completing this chapter you will be able to translate service delivery and support plans into specific action plans for a health care organization.

Implementation Through Action Plans

The situational analysis discussed in chapters 2 through 5 culminates with a series of strategic goals that, along with the mission, vision, and values, are directional strategies that provide focus for the organization. Adaptive, market entry/exit,

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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Chapter 10 CommuniCating Strategy and developing aCtion planS 403

and competitive strategies are designed to accomplish the strategic goals and move the organization in the desired direction. Value-adding service delivery and support strategies further shape the strategy, providing guidance and direction to managers who are responsible for implementing action plans.

The desired direction and organizational momentum have been discussed and consensus reached during the strategic planning process, yet no movement has occurred. for real progress to begin, action plans will have to be developed throughout the organization. As Peter Drucker stated, “[strategic] insights are ‘bled off’ and converted into tasks and work assignments.”1

Implementation strategies have been referred to by various terms. Some organi- zations refer to implementation strategies as “tactical plans,” although others may use “business plans,” and still others, many in health care, have adopted the term “action plans.” Action plan is the most descriptive term as it connotes the steps required to carry out strategies and meet objectives. In addition, the term “action plan” may be applied to the several different levels within organizations that must develop implementation strategies, and thus lessens confusion. More specifically, action plan may be defined as unit-based implementation activities that identify specific steps to accomplish the service delivery and support strategies.

The Level and Orientation of the Strategy

This chapter concerns communicating the overall strategy to those who must develop specific action plans to accomplish the strategy and providing managers with a consistent format for implementation. note, however, that the strategy is crafted, step-by-step, as managers at all levels commit resources to policies, pro- grams, people, and facilities.2 A large integrated health care system may develop strategy at a number of levels – a corporate level, divisional level, organizational level, and unit level. If the strategy has been developed at the corporate level, action plans will be for entire divisions. If the strategy has been developed at the divisional level, action plans will be for individual institutions or organiza- tions comprising the division, such as a hospital (within the hospital division) or a long-term care facility (within the long-term care division). If the strategy has been developed for an individual organization, such as a hospital, the action plans will be developed by functional units within the hospital (such as surgery or pharmacy). Because strategies may be developed for large, complex organiza- tions or small, well-focused units, action plans to implement the strategies will be developed at different levels as well. Trinity health, introduced in chapter 1 and illustrated in exhibit 1–5, portrays the organizational levels and the different orientations.

An effective action plan, regardless of level, consists of objectives that specify how the unit (division, hospital, pharmacy) is going to contribute to the strategy, what actions will be required to achieve the objectives and within what time period, who is responsible for the actions, the resources required to achieve the objectives, and how results will be measured. These elements are required whether the action plan is for entire divisions as part of a complex corporate- level strategic plan or for functional units contributing to the strategic plan of a

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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small organization. Identifying objectives, specifying the timelines and actions, determining who is responsible for accomplishing them, specifying the resources required, and defining how results will be measured is an approach that keeps the strategic plan straightforward and comprehensible. A simple understandable action plan is always preferable to a complex incomprehensible plan.

Decision Logic for Developing Action Plans As with all the previous strategies, there is a decision logic for the development of unit action plans as shown in exhibit 10–1. Specifically, unit action plans must accomplish the service delivery and support strategies as well as the competi- tive strategies. The strategic posture and position strategies may indirectly place demands on various units within the organization. certainly, a defender strategy requires that all units strive to keep entry barriers high through quality, efficiency, or differentiation. More directly, the value-chain implementation strategies require units within the organization to take specific supportive actions.

Action Plan Development Responsibilities every member of the organization cannot realistically be involved in the stra- tegic planning process. A few key players – senior staff, top management, or a leadership team – are needed to provide balanced and informed points of view. Therefore, the development of the initial plan is usually the product of a relatively small number of strategic thinkers. Margaret Meade challenged us to “never doubt that a small group of thoughtful, committed people can change the world; indeed, it’s the only thing that ever has!”3 A small group of thoughtful, committed people can reshape even the most rigid organization.

Because of its involvement in developing strategy, the strategic planning team determines the “broad strokes” of strategy. The team should shape the organiza- tion through: a review or revision of the organization’s mission, vision, values, and goals; development of strategy through service delivery and support strategies; and guidance for what needs to be accomplished. however, action plans should be left to the organizational units. Senior managers shape strategic direction less by deciding the specific strategic content than by framing the context – creating “a sense of purpose that not only provides an integrating framework for bottom-up strategic initiatives but also injects meaning into individual effort.”4 Others in the organization should use their resourcefulness to develop action plans and carry out the strategy. As George Patton once said, “never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”

Communicating Strategy to Initiate Action Planning Because everyone cannot be directly involved, many employees within the organization do not know the underlying issues and assumptions that were used to develop the strategy, nor do they know the goals for which they will develop objectives. Therefore, successive layers of management must commu- nicate the overall strategy and provide “maintain or change” guidance for the various units that will need to be engaged if the strategy is to be achieved. for example, if management has determined that an expansion strategy is required,

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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Chapter 10 CommuniCating Strategy and developing aCtion planS 405

EXHIBIT 10–1 Decision Logic for Developing Action Plans

Directional Strategies

Adaptive Strategies • Expansion of Scope • Reduction of Scope • Maintenance of Scope

Market Entry/Exit Strategies

• Purchase • Cooperation • Development • Market Exit

Competitive Strategies • Strategic Posture • Positioning

Unit Action Plans • Objectives • Timelines • Actions • Responsibilities • Resources • Results/Measures

Implementation Strategies • Service Delivery Strategies

Implementation Strategies • Support Strategies

Unit-level Strategies

Organization-level Strategies

Corporate- and Divisional-level Strategies

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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406 StrAtegiC mAnAgement of HeAltH CAre orgAnizAtionS

guidance is needed as to which parts of the organization have been identified for the expansion. Managers in the identified part or parts then determine the objectives to accomplish the expansion in that area. when different units have overlapping or integrated activities, multiple groups have to coordinate planning. communication from the top down and the bottom up – as well as across – is required to engage everyone to do his or her part. communication of the strategy and getting people who actually do the work to think critically about the strategy itself and its implementation and to express their concerns can help avoid classic communication problems (see essentials for a Strategic Thinker 10–1, “what Are the Abilene Paradox and Groupthink?”).

ESSEnTIALS fOR A STRATEgIC THInkER 10–1

What Are the Abilene Paradox and groupthink?

The Abilene Paradox is the inability to communi- cate honestly and manage agreement success- fully. The paradox can be recognized in a group decision-making context by its six symptoms: (1) organizational members agree on the nature of a problem or issue they are facing; (2) mem- bers agree on the steps that should be taken to address the problem; (3) members fail to reveal their true feelings regarding the problem or the steps involved in addressing it; (4) as a result decisions are made based on inaccurate infor- mation resulting from the lack of communica- tion; (5) counterproductive outcomes result and members become angry and frustrated; and (6) the group fails to resolve the lack of truthful com- munication and the cycle is repeated.1

The Abilene Paradox was popularized by Jerry B. Harvey, Professor Emeritus at George Washington University.2 Although Harvey intro- duced the idea with a somewhat homey experi- ence of how his family took a trip to Abilene, Texas when no one wanted to go, the phenom- enon is seen often in organizations and creates serious problems in the decision-making process.

Groupthink occurs when a collection of people makes faulty decisions because group

pressures lead to a deterioration of “mental efficiency, reality testing, and moral judg- ment.”3 The phenomenon of Groupthink was introduced by Irving Janis, a Yale psychologist, in his book Groupthink: Psychological Study of Foreign-Policy Decisions and Fiascoes.4 Similar to the Abilene Paradox, Groupthink can be recog- nized by its symptoms. These are: (1) illusion of invulnerability – extreme optimism in the group encourages taking extreme risks; (2) collective rationalization – members discount warnings and ignore reconsideration of assumptions; (3) belief in inherent morality – members believe in the rightness of their cause and ignore ethical consequences; (4) stereotyped views of others – outsiders as enemies; (5) direct pressure on dissenters – members are pressured not to present views that are counter to the prevail- ing group; (6) self-censorship – doubts and reservations are not expressed; (7) illusion of unanimity – majority views are assumed to be unanimous; and (8) self-appointed mindguards – members protect the group from information that is contradictory. Members of the group seek conformity and desire harmony even if it results in dysfunctional decisions.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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Chapter 10 CommuniCating Strategy and developing aCtion planS 407

Specific milestones in the strategic planning process should include updates for all employees, periodic discussions regarding how the process is going, and explaining expected timelines for the strategy to be handed over to those who will be responsible for carrying it out. In addition, successes should be shared and celebrated, and challenges should be identified and monitored. for example, some organizations hold weekly, monthly, or quarterly staff meetings to provide open communications with all employees present and encourage their ongoing commitment to carrying out the organization’s strategy. Other organizations have team meetings. It is challenging in health care to have a meeting of all employees because of patient care requirements; however, it is also challenging to implement a strategy if the employees are not engaged. If top management determines that it is impossible to hold a meeting for all employees, the question should be asked: “why isn’t it possible?” Then, much thought should be given to the question of how management expects to accomplish any strategy if the first decision is: “we can’t do that.”

The Process of Developing Action Plans

Although implementation strategies may be carried out at various organizational levels, implementation plans should have common characteristics. These plans concern translating directional, adaptive, market entry/exit, and competitive

The Abilene Paradox and Groupthink share some things in common but also share some important differences. The most important similarity is that both result in dysfunctional and sometimes irrational decisions. They differ in the sense that in Groupthink indi- viduals are not acting against their conscious wishes and generally feel good about the decisions the group makes. By contrast, in the Abilene Paradox the individuals are acting counter to their own better judgment and are likely to have negative feelings about the deci- sion reached.5 It has also been argued that the decision-making group in the Abilene Paradox is in a state of “low energy” and experiences hesitation, carelessness, and passive attitudes. In Groupthink, the group is in a state of “high energy experiencing high cohesiveness, esprit de corps, and euphoria.”6

RefeRences

1. Jerry B. Harvey, Rosabeth Moss Kanter, and

Arthur Elliot Carlisle, “The Abilene Paradox: The

Management of Agreement,” Organizational

Dynamics 17, no. 1 (1988), pp. 16–44.

2. Jerry B. Harvey, The Abilene Paradox and Other

Meditations on Management (San Francisco, CA:

Jossey-Bass, 1996).

3. Irving L. Janis, Victims of Groupthink (New York:

Houghton Mifflin, 1972), p. 9.

4. Irving Janis, Victims of Groupthink:

Psychological Study of Foreign-Policy Decisions

and Fiascoes, 2nd edn (Boston, MA: Houghton

Mifflin, 1982).

5. “Groupthink and Abilene Paradox.” http://cor-

porateveganblog.worldpress.com/2016/08/18/

first-blog-post/.

6. Y. Kim, “A Comparative Study of the ‘Abilene

Paradox’ and ‘Groupthink,’” Public Administration

Quarterly 25, no. 2 (2005), pp. 168–189.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-26 00:06:56.

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strategies into tasks and work assignments (specific actions that accomplish the mission, vision, values, goals, strategies, and value-adding service delivery and support strategies). In addition, these actions must be the responsibility of indi- viduals within the organization and made an integral part of their jobs. each job should be structured to show how it contributes to the strategic plan. In general, there are seven steps involved in developing action plans (see exhibit 10–2).

EXHIBIT 10–2 Process for Developing Action Plans

Step 1 – Review the Broader Strategic Decisions

Step 2 – Set Unit Objectives

Step 3 – Identify Actions Required to Accomplish Unit Objectives

Step 4 – Set Timelines to Accomplish Each Action

Step 5 – Assign Responsibility to Accomplish Each Action

Step 6 – Determine Resources Requirements to Accomplish Each Action

Ste

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