Developing and Leading Successful Growth Strategies 指導老師：馬震中教授學生：鄭博元系級：醫務管理學系碩士班一年級學號： 9651007M

Developing and Leading Developing and Leading Successful Growth StrategiesSuccessful Growth Strategies

指導老師：馬震中教授指導老師：馬震中教授學生：鄭博元學生：鄭博元

系級：醫務管理學系碩士班一年級系級：醫務管理學系碩士班一年級學號：學號： 9651007M9651007M

Developing and Leading Developing and Leading Successful Growth StrategiesSuccessful Growth Strategies

by Ellen F. Goldman and Mark J. Dubow by Ellen F. Goldman and Mark J. Dubow

Healthcare ExecutiveHealthcare Executive

MAY/JUNE 2007MAY/JUNE 2007

33

Introduction Introduction 1/31/3

Growth is an organizational necessity.Growth is an organizational necessity. It is required to keep up with changing customer It is required to keep up with changing customer

needs and wants.needs and wants. Growth marshals the organizations energy.Growth marshals the organizations energy. Profits from growth help fund nonrevenue Profits from growth help fund nonrevenue

producing activities and provide startup capital for producing activities and provide startup capital for further growth. further growth.

Growth enhances physician and employee Growth enhances physician and employee recruitment and satisfaction by providing an recruitment and satisfaction by providing an environment of momentum and successful environment of momentum and successful evolution. evolution.

44

IntroductionIntroduction 2/32/3

Finally, growth can be a catalyst for the Finally, growth can be a catalyst for the development of innovative organizational development of innovative organizational partnerships.partnerships.

The reality, though, is that not all growth efforts The reality, though, is that not all growth efforts are well targeted; not all are profitable; not all are well targeted; not all are profitable; not all succeed; and not all growth contributes to an succeed; and not all growth contributes to an organization's health and its ability to serve the organization's health and its ability to serve the community.community.

To develop and lead successful growth initiatives, To develop and lead successful growth initiatives, management must start with a sound management must start with a sound organizational direction and a quantifiable growth organizational direction and a quantifiable growth target.target.

55

IntroductionIntroduction 3/33/3

Clear strategies for achieving the target are then Clear strategies for achieving the target are then developed on the basis of understanding the value developed on the basis of understanding the value sought by key constituents (patients, physicians, sought by key constituents (patients, physicians, payors) and what is achievable given market payors) and what is achievable given market characteristics. characteristics.

Successful growth initiatives also include an Successful growth initiatives also include an effective organizing structure, well-designed effective organizing structure, well-designed processes to sequence and track growth results, processes to sequence and track growth results, the right people and skills to implement the the right people and skills to implement the initiatives, and incentives that reward results.initiatives, and incentives that reward results.

66

FOCUSING GROWTH EFFORTSFOCUSING GROWTH EFFORTS 1/3 1/3

Most fundamentally, any growth opportunity Most fundamentally, any growth opportunity considered by the organization should further its considered by the organization should further its desired direction. desired direction.

The first question to be asked when considering The first question to be asked when considering an idea for growth is: an idea for growth is: How How does this help us does this help us achieve our mission and vision?achieve our mission and vision?

Growth ideas that do not do this should be spared Growth ideas that do not do this should be spared further analysis and, more importantly, further analysis and, more importantly, management and staff time.management and staff time.

77


The second consideration for focusing growth The second consideration for focusing growth efforts is gaining an understanding of efforts is gaining an understanding of how much how much each initiative will contribute: What portion of the each initiative will contribute: What portion of the overall growth target will it help achieve? overall growth target will it help achieve?

The growth target is set on the basis of the The growth target is set on the basis of the organization's financial needs: What level of net organization's financial needs: What level of net revenue do we need to achieve the profitability revenue do we need to achieve the profitability that will enable us to continue to serve the that will enable us to continue to serve the community in a manner consistent with our community in a manner consistent with our mission and vision? mission and vision?

88


This is a different approach from traditional This is a different approach from traditional planning or financial feasibility studies, which planning or financial feasibility studies, which define in detail the associated revenue sources and define in detail the associated revenue sources and required expenses for each project and then required expenses for each project and then aggregate the information into a business plan.aggregate the information into a business plan.

Putting the revenue target first tells the Putting the revenue target first tells the organization which of a myriad of potential organization which of a myriad of potential initiatives it needs to achieve rather than those it initiatives it needs to achieve rather than those it might chase.might chase.

99

DEVELOPING AN OVERALL DEVELOPING AN OVERALL GROWTH STRATEGY GROWTH STRATEGY 1/61/6

Ideas for growth can come from many sources, Ideas for growth can come from many sources, reflecting the diversity of interests and expertise reflecting the diversity of interests and expertise within an organization.within an organization.

However, the most successful growth-oriented However, the most successful growth-oriented organizations know how to go beyond choosing organizations know how to go beyond choosing strategies based on the latest, loudest idea and strategies based on the latest, loudest idea and develop an overall growth strategy that makes develop an overall growth strategy that makes sense for the entity.sense for the entity.

Different types of growth inherently involve Different types of growth inherently involve various levels of risk and return and use an array various levels of risk and return and use an array of organizational competencies.of organizational competencies.

1010


For example, a low-risk strategy might be an For example, a low-risk strategy might be an effort to increase volume for an existing service effort to increase volume for an existing service within the same general market area by working within the same general market area by working with staff physicians to better meet their needs so with staff physicians to better meet their needs so that they make a higher proportion of their that they make a higher proportion of their admissions to a particular hospital.admissions to a particular hospital.

Such efforts are worthwhile and low-risk but also Such efforts are worthwhile and low-risk but also may have modest returns in terms of growth. may have modest returns in terms of growth.

1111


On the other hand, efforts to extend the On the other hand, efforts to extend the organization’s service offerings through vertical organization’s service offerings through vertical integration (for example, into extended care integration (for example, into extended care services outside the hospital) or broaden the services outside the hospital) or broaden the organization's reach through horizontal integration organization's reach through horizontal integration (for example, acquiring a hospital provider in an (for example, acquiring a hospital provider in an adjacent geographic area) clearly involve greater adjacent geographic area) clearly involve greater risks while having larger potential rewards and risks while having larger potential rewards and opportunities for revenue diversification.opportunities for revenue diversification.

In addition to risk and return, the selection of In addition to risk and return, the selection of growth strategies needs to include honest growth strategies needs to include honest consideration of the organization's competencies. consideration of the organization's competencies.

1212


Different strategies require distinct competencies. Different strategies require distinct competencies. Growth initiatives aimed at expanding into Growth initiatives aimed at expanding into

markets new to the organization require markets new to the organization require organizational skills in relationship building with organizational skills in relationship building with area healthcare providers, key civic leaders and area healthcare providers, key civic leaders and employers, tailoring of services to meet unique employers, tailoring of services to meet unique local needs, and continued involvement with the local needs, and continued involvement with the community to build trust with the organization. community to build trust with the organization.

Growth initiatives related to horizontal integration Growth initiatives related to horizontal integration require organizational skills related to achieving require organizational skills related to achieving economies of scale, supply chain management, economies of scale, supply chain management, pricing and cultural integration. pricing and cultural integration.

1313


Growth initiatives that push the organization in Growth initiatives that push the organization in too many different directions are likely to achieve too many different directions are likely to achieve lackluster results. lackluster results.

In addition to the human toll from the stress, In addition to the human toll from the stress, moving in too many directions simultaneously moving in too many directions simultaneously strains organizational capabilities.strains organizational capabilities.

Few organizations are skilled at what it takes to Few organizations are skilled at what it takes to achieve all types of growth strategies.achieve all types of growth strategies.

1414


Thus, careful evaluation and consideration of Thus, careful evaluation and consideration of possible growth opportunities in light of their possible growth opportunities in light of their consistency with mission and vision, contribution to consistency with mission and vision, contribution to net revenue target and fit with organizational net revenue target and fit with organizational capabilities is called for. capabilities is called for.

In sum, greater focus is better than more initiatives.In sum, greater focus is better than more initiatives. Figure 1 presents a framework of four categories of Figure 1 presents a framework of four categories of

growth strategies to consider. growth strategies to consider. Together with a selection of operational Together with a selection of operational

improvement strategies, they constitute the improvement strategies, they constitute the components of a complete strategic plan.components of a complete strategic plan.

1515

1616

GROWTH PROCESS AND IDEA GROWTH PROCESS AND IDEA GENERATION GENERATION 1/91/9

Successful growth requires organizations to be Successful growth requires organizations to be receptive to new ideas and the changes that likely receptive to new ideas and the changes that likely will result. will result.

Successful growth requires energy and leadership, Successful growth requires energy and leadership, and the organization needs to be prepared with and the organization needs to be prepared with both.both.

There are a wide variety of approaches There are a wide variety of approaches organizations use to identify new ideas for organizations use to identify new ideas for growth. growth.

1717


Some tend to follow a relatively linear process Some tend to follow a relatively linear process beginning with evaluating the past, reviewing beginning with evaluating the past, reviewing strategic direction, setting growth targets and then strategic direction, setting growth targets and then moving to the idea generation and evaluation moving to the idea generation and evaluation stages prior to idea selection, implementation and stages prior to idea selection, implementation and tracking.tracking.

Other organizations focus more on continuous Other organizations focus more on continuous idea generation, evaluating ideas as they are idea generation, evaluating ideas as they are identified. identified.

Both processes have their benefits and Both processes have their benefits and shortcomings. shortcomings.

1818


The linear approach is logical and easy to follow, The linear approach is logical and easy to follow, but it may not lead to creative or innovative ideas. but it may not lead to creative or innovative ideas.

The continuous approach allows for flexibility The continuous approach allows for flexibility and fast response but can be very confusing at and fast response but can be very confusing at times and lacks a sense of the whole.times and lacks a sense of the whole.

Regardless of how the organization approaches Regardless of how the organization approaches growth, opportunities can be identified from a growth, opportunities can be identified from a number of sources.number of sources.

Most organizations consult with their physicians Most organizations consult with their physicians and ask current patients and staff for their ideas. and ask current patients and staff for their ideas.

1919


Most organizations read or attend presentations Most organizations read or attend presentations regarding what others in the industry are doing. regarding what others in the industry are doing.

For greater creativity, other approaches to idea For greater creativity, other approaches to idea generation are required: generation are required: Connect the trend dots.Connect the trend dots.Think like a marketer.Think like a marketer.Think like a retailer.Think like a retailer.

2020

Connect the trend dotsConnect the trend dots 1/21/2

We live in a society of fragmented families: We live in a society of fragmented families: Mom's in Florida. Mom's in Florida.

She needs help managing her health needs, but She needs help managing her health needs, but her adult kids reside in California, New York and her adult kids reside in California, New York and Iowa (social trend). Iowa (social trend).

Hospitals continue to proactively reduce length of Hospitals continue to proactively reduce length of stay and are pushing chronic illness management stay and are pushing chronic illness management to the home (care delivery trend). to the home (care delivery trend).

The government and employers are applying The government and employers are applying incentives to migrate care to lower-cost settings incentives to migrate care to lower-cost settings (reimbursement trend). (reimbursement trend).

2121

Connect the trend dotsConnect the trend dots 2/22/2

Mom and other family members are very Mom and other family members are very independent-minded and are willing to use cash to independent-minded and are willing to use cash to enhance access to care (financing trend).enhance access to care (financing trend).

Identifying the connectivity between these Identifying the connectivity between these multiple trends was a catalyst for the development multiple trends was a catalyst for the development of growth strategies specific to home-based of growth strategies specific to home-based monitoring and the expansion of retirement monitoring and the expansion of retirement community-based ambulatory care centers. community-based ambulatory care centers.

2222

Think like a marketerThink like a marketer

Marketing is based on the concepts of Marketing is based on the concepts of segmentation and differentiation, among others. segmentation and differentiation, among others.

For each of your major services or service lines, For each of your major services or service lines, growth opportunities may be identified by asking: growth opportunities may be identified by asking: What niche is underserved in our market? What niche is underserved in our market?

What are the needs of patients who are "frequent What are the needs of patients who are "frequent fliers," "first-time users" or "live-alones?" fliers," "first-time users" or "live-alones?"

What would the top 20 percent of our customers What would the top 20 percent of our customers (including your payors) find extra special?(including your payors) find extra special?

2323

Think like a retailer Think like a retailer 1/21/2

To do so, ask: What else do our patients need while To do so, ask: What else do our patients need while they are using our services and once they leave? they are using our services and once they leave?

Related questions include: How is the customer Related questions include: How is the customer defining "health"?defining "health"?

Does it include services and products we do not Does it include services and products we do not currently provide, such as physical therapy exercise currently provide, such as physical therapy exercise equipment, home testing kits, and monitoring equipment, home testing kits, and monitoring devices and hearing aids?devices and hearing aids?

Are people leaving our emergency department, Are people leaving our emergency department, rehabilitation center, medical office building or rehabilitation center, medical office building or ambulatory care center and going somewhere on ambulatory care center and going somewhere on their way home to purchase these "health" services? their way home to purchase these "health" services?

2424

Think like a retailer Think like a retailer 2/22/2

Although healthcare organizations traditionally Although healthcare organizations traditionally have been most comfortable with growth related have been most comfortable with growth related to the clinical services delivered inside the four to the clinical services delivered inside the four walls of a hospital, successful revenue-generating walls of a hospital, successful revenue-generating organizations increasingly will need to expand the organizations increasingly will need to expand the continuum of health services where they are continuum of health services where they are provided and, more precisely, define and meet provided and, more precisely, define and meet customer needs as they relate to those services. customer needs as they relate to those services.

They will also need to become comfortable They will also need to become comfortable charging for nontraditional services and charging for nontraditional services and partnering with others experienced in managing partnering with others experienced in managing those services and delivery sites.those services and delivery sites.

2525

MEDICAL STAFF INVOLVEMENT MEDICAL STAFF INVOLVEMENT IN GROWTH IN GROWTH 1/31/3

To successfully develop and implement growth To successfully develop and implement growth strategies, the medical staff must play a significant strategies, the medical staff must play a significant role. role.

As is often the case, there is a direct relationship As is often the case, there is a direct relationship between the degree of a physician's time commitment between the degree of a physician's time commitment and impact on the success of a growth initiative. and impact on the success of a growth initiative.

Unfortunately, too often healthcare organizations Unfortunately, too often healthcare organizations have taken a tact that involves a low degree of time have taken a tact that involves a low degree of time and, therefore, a low degree of impact. and, therefore, a low degree of impact.

This low-impact strategy involves viewing physicians This low-impact strategy involves viewing physicians solely as the user of a service and involving them solely as the user of a service and involving them through limited interviews or focus groups. through limited interviews or focus groups.

2626


To design and implement significant growth To design and implement significant growth strategies, it is crucial that physicians devote time to strategies, it is crucial that physicians devote time to leading and having ongoing advisory or monitoring leading and having ongoing advisory or monitoring roles specific to those activities.roles specific to those activities.

Successful growth includes recruiting physician Successful growth includes recruiting physician leaders who contribute knowledge about state-of-leaders who contribute knowledge about state-of-the-art and emerging clinical practice, communicate the-art and emerging clinical practice, communicate with and transfer ideas to other medical staff, detect with and transfer ideas to other medical staff, detect and diffuse opposition, and achieve accountability and diffuse opposition, and achieve accountability from those assigned responsibilities related to from those assigned responsibilities related to specific growth strategies.specific growth strategies.

2727


When involving medical staff in the development, When involving medical staff in the development, prioritization and implementation of growth prioritization and implementation of growth strategies, physicians often show interest in and strategies, physicians often show interest in and request an opportunity for economic participation. request an opportunity for economic participation.

Figure 2 profiles five alternative approaches to an Figure 2 profiles five alternative approaches to an economic relationship and the circumstances that economic relationship and the circumstances that guide the selection.guide the selection.

2828

2929

ASSESSING AND SELECTING ASSESSING AND SELECTING IDEAS IDEAS 1/41/4

As noted previously, an organization oriented As noted previously, an organization oriented toward growth is likely to develop a greater range toward growth is likely to develop a greater range of ideas than it is feasible to implement. of ideas than it is feasible to implement.

Choosing from among the competing initiatives to Choosing from among the competing initiatives to pursue involves both an assessment pursue involves both an assessment (understanding what the initiative requires) and a (understanding what the initiative requires) and a selection process (evaluating the initiative against selection process (evaluating the initiative against the organizations requirements). the organizations requirements).

3030


Typical means of assessing initiatives in Typical means of assessing initiatives in organizations center on the core components of a organizations center on the core components of a business plan: the initiative's purpose and business plan: the initiative's purpose and description; market assessment and marketing plan; description; market assessment and marketing plan; operations plan; management and organization operations plan; management and organization plan; implementation plan; financial assessment and plan; implementation plan; financial assessment and success measures; and financing plan.success measures; and financing plan.

Preparation of this information is time-consuming: Preparation of this information is time-consuming: preparing a business plan for one initiative can take preparing a business plan for one initiative can take three to five months of several people's time. In the three to five months of several people's time. In the interim, windows of opportunity can close. interim, windows of opportunity can close.

3131


An alternative approach that speeds the analytic An alternative approach that speeds the analytic process is to concentrate on information that is key process is to concentrate on information that is key to decision making and at a level of magnitude that to decision making and at a level of magnitude that is reasonable but does not require undue precision. is reasonable but does not require undue precision.

Answers to the following are often all that is Answers to the following are often all that is needed to determine if the initiative warrants the needed to determine if the initiative warrants the organization's time:organization's time:Can we get the patient volume required for Can we get the patient volume required for optimum clinical outcome levels?optimum clinical outcome levels?What is the incremental income we can expect?What is the incremental income we can expect?Do we have the required competencies, investment Do we have the required competencies, investment requirements and support of key constituents?requirements and support of key constituents?

3232


These questions focus the organization on the results These questions focus the organization on the results and the potential of achieving them, not the details of and the potential of achieving them, not the details of what it will take to implement them.what it will take to implement them.

Once the evaluation is made, each opportunity can be Once the evaluation is made, each opportunity can be compared against others to select the few initiatives to compared against others to select the few initiatives to implement. implement.

At this stage key questions include: To what extent At this stage key questions include: To what extent does the initiative contribute to the organization's does the initiative contribute to the organization's strategic direction and growth target? What is the strategic direction and growth target? What is the probability of success? The opportunity cost of not probability of success? The opportunity cost of not proceeding?proceeding?

The result should be a list of growth initiatives clearly The result should be a list of growth initiatives clearly categorized into "must dos," "nice to dos" and "do not categorized into "must dos," "nice to dos" and "do not dos," based on their overall contribution to the dos," based on their overall contribution to the organization.organization.

3333

IMPLEMENTATION AND IMPLEMENTATION AND EVALUATION EVALUATION 1/41/4

Successful growth requires a thorough Successful growth requires a thorough implementation plan and effective follow-through. implementation plan and effective follow-through.

Not only does an implementation plan provide a Not only does an implementation plan provide a road map, but it ensures sufficient resource road map, but it ensures sufficient resource allocation and assigns leadership and other allocation and assigns leadership and other responsibilities. responsibilities.

The issue of leadership should not be overlooked. The issue of leadership should not be overlooked. For example, the leader of the growth strategy may For example, the leader of the growth strategy may

be chosen for technical skills in a clinical area but be chosen for technical skills in a clinical area but have underdeveloped teamwork or coordination have underdeveloped teamwork or coordination skills, requiring support from the organization. skills, requiring support from the organization.

3434


This support should be identified as part of the This support should be identified as part of the implementation plan.implementation plan.

The plan also should include a tracking mechanism, The plan also should include a tracking mechanism, providing the basis for measurement and providing the basis for measurement and accountability, and an exit strategy should one accountability, and an exit strategy should one become necessary. become necessary.

The tracking system should have several components. The tracking system should have several components. First, for each initiative to be implemented, it should First, for each initiative to be implemented, it should

include specific milestones relevant to various time include specific milestones relevant to various time periods.periods.

Whereas some milestones may be appropriate on a Whereas some milestones may be appropriate on a monthly or even weekly basis, others may be monthly or even weekly basis, others may be quarterly or annual measures.quarterly or annual measures.

3535


Regardless of the time period, the objective is to use a Regardless of the time period, the objective is to use a progress-monitoring process to determine when to progress-monitoring process to determine when to refine the implementation of each growth initiative. refine the implementation of each growth initiative.

Should the project fail to meet objectives within the Should the project fail to meet objectives within the timeframe specified by the implementation plan, then timeframe specified by the implementation plan, then the preplanned exit strategy would come into play.the preplanned exit strategy would come into play.

In addition to tracking the implementation and In addition to tracking the implementation and achievement of each initiative, tracking should also achievement of each initiative, tracking should also include a way of assessing what categories of growth include a way of assessing what categories of growth strategy are most effective (e.g., new markets vs. new strategy are most effective (e.g., new markets vs. new products vs. vertical integration vs. horizontal products vs. vertical integration vs. horizontal integration) and the progress in meeting the overall integration) and the progress in meeting the overall growth target (in dollars of net revenue and net growth target (in dollars of net revenue and net income). income).

3636


This will allow for an ongoing assessment of This will allow for an ongoing assessment of organizational capabilities related to organizational capabilities related to implementation, and provide important information implementation, and provide important information related to the organizations financial planning.related to the organizations financial planning.

A final part of implementation planning should A final part of implementation planning should include consideration of rewards for those who include consideration of rewards for those who implement the growth initiatives. implement the growth initiatives.

Consideration should be given to the extent to Consideration should be given to the extent to which rewards are individual versus team-based, on which rewards are individual versus team-based, on what basis they will be given (the specific goals—what basis they will be given (the specific goals—net revenue, profit, quality, service), and full versus net revenue, profit, quality, service), and full versus partial achievement.partial achievement.

3737

ONGOING GROWTHONGOING GROWTH

Growth is an ongoing process. Growth is an ongoing process. It does not begin and end with a single set of It does not begin and end with a single set of

initiatives. initiatives. As certain growth initiatives reach fruition, the As certain growth initiatives reach fruition, the

results merely feed the continuing evolution of the results merely feed the continuing evolution of the organization's development. organization's development.

The stage is set for learning from past successes The stage is set for learning from past successes and missteps; setting a new growth target; and and missteps; setting a new growth target; and continuing idea generation, assessment, selection, continuing idea generation, assessment, selection, implementation and tracking.implementation and tracking.

Q & AQ & A

Thanks for your attentionThanks for your attention

4040

ProverbProverb

You can say that You can say that again.again.

= I agree with you.= I agree with you.

(After the exam)(After the exam)

A: Let’s go to night A: Let’s go to night market.market.

B: You can say that B: You can say that again.again.

As full as a tick. As full as a tick.

= I’m full.= I’m full.

A: Oh, my god. I ate A: Oh, my god. I ate so much tonight. so much tonight. B: Me, too. I'm as full B: Me, too. I'm as full as a tick. as a tick.

Documents

Developing and Leading Successful Growth Strategies 指導老師：馬震中 教授 學生：鄭博元系級：醫務管理學系碩士班一年級 學號： 9651007M

Developing and Leading Successful Growth Strategies 指導老師：馬震中教授學生：鄭博元系級：醫務管理學系碩士班一年級學號： 9651007M