Strategic planning needs to evolve over time

By Nick Hernandez bio

Some of my counterparts have a firm belief that strategic planning is a rigid process which should occur once every three to five years. The process they undertake is often done during an off-site planning session with the outcome being printed up in a large three-ring binder. In less than six months, those binders are sitting on a shelf somewhere collecting dust, never to again see the light of day.

I, on the other hand, believe that strategic planning should be a continuous process involving the ongoing adjustment of means and ends. We should also view planning as an evolutionary process involving continuous adjustment and improvement. We can think of strategic planning as a solution-by-evolution rather than solution-by-engineering. We should generally not view strategic planning as trying to solve a problem in one iteration because most healthcare business problems are too complex (especially in today’s environment) to be solved that way. To quote Helmuth von Moltke (German Field Marshal): “No plan survives contact with the enemy.”

Moving quickly

In many cases, it is more advisable to find a workable solution quickly and improve the solution as time permits. What matters most is not generating the best possible strategic plan (the polished edition for a revered binder) but achieving the best possible result. Oftentimes, a reasonable course of action executed quickly and aggressively is better than an optimal course executed too late. We should generally view strategic planning as evolving continuously and iteratively toward the best executable solution that circumstances allow until the process is interrupted by the imperative to act.

Bridging the gap

Strategic planning bridges the gap between where we are standing today and where we want to reach. It is a requirement for a sustained competitive advantage. Left to its own devices, however, strategic planning leads to rigidity. Following a predefined plan when circumstances are changed may not bring positive results for the healthcare organization. Effective strategic planning continuously refines and deepens the plan as time permits.

Uncertainty and time

The defining features of the strategic planning challenge are uncertainty and time. More than anything else, considerations of time and uncertainty dictate how we approach strategic planning. All strategic planning is based on imperfect knowledge and involves assumptions about the future. By definition, strategic planning is future-oriented, and the future by nature is uncertain. No matter how determined we are to be fully prepared for a situation, there are finite limits to our ability to plan for the future. The more certain the future is, the easier it is to plan. Alas, the difficulties with healthcare strategic planning.
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Uncertainty increases with the length of the planning horizon and the rate of change in the healthcare environment. By planning horizon, I am referring to how far into the future we try to shape events. In order to be of any use, strategic planning must try to anticipate and actively influence the future. By anticipating the future, strategic planning allows us to prepare and coordinate our actions. The farther into the future we can plan, the more time we can allow ourselves to prepare. However, the farther into the future we plan, the wider the range of possibilities and the more uncertain our forecast. A fundamental tension thus exists between the desire to plan far into the future in order to facilitate preparation and coordination, and the fact that the farther into the future we try to plan, the less certain we can be, and the less relevant our preparations may be.

Given the uncertainty of healthcare reform, we must recognize that the object of strategic planning is not to eliminate or minimize uncertainty, but to allow us to decide and act effectively in the midst of the uncertainty that is healthcare reform. While strategic planning contains an element of forecasting, we must recognize that the object of strategic planning is not to predict the future. To be clear, how accurately a strategic plan forecasts the future is not generally a measure of the plan’s effectiveness. Rather, the measure of effectiveness is how well strategic planning allows us to adapt to an uncertain future.

Not only is healthcare reform uncertain, it is (and will continue to be) always changing. Consequently, strategic plans tend to lose their value over time, and they must be updated as the healthcare landscape changes. The more frequently and quickly the healthcare landscape changes, the more often a strategic plan must be revised. We must use available strategic planning time wisely. All planning takes time, so remember that strategic planning done well in advance of the need to act may actually permit us to act more quickly when the time for action arrives.