Financial Management: Strategic Planning

Is there a universal strategy to help organizations better understand their strengths and weaknesses?
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Strategic planning is a critical component of organizations to be able to achieve their specific objectives and goals. In Nowicki (2017), strategic planning is discussed in great detail. “The value of strategic planning lies in its systematic approach to dealing with an uncertain future. Many organizations become disillusioned with strategic planning when their plans are not met. These plans often have too narrow a focus – the narrower the focus, the less likely an organization is to accomplish the plan. Strategic planning that establishes the organization’s overall direction without attempting to be specific has the following benefits:

It integrates the mission, vision, strategic thrusts, and primary objectives as described in the strategic plan with the secondary objectives, policies, procedures, methods, and rules of the operating plan.

It provides a process and time frame for making strategic decisions.

It provides a framework for the operating plan, budget, and capital budget” (pp. 306 – 307).

Organizations in the healthcare system must be able to see what would and should happen to their organizations in the three – ten-year timeframe. Therefore, strategic planning is a long-range plan that involves the board, the medical staff, and the organization’s employees. Healthcare organizations must take into account economic trends, technology that is evolving along with medicine, and government policy changes that affect the organization so that they can be able to successfully have a strategic plan for facing future challenges and problems in the long run.

The process for strategic planning involves 13 specific steps, of which see all aspects of every hospital department’s goal are incorporated into the organization’s strategic planning. “Validate mission and strategic interpretations, assess the external environment, assess the internal environment, formulate the vision, establish strategic thrusts or goals, identify critical success factors, develop primary or core objectives and develop the strategic financial plan” (Nowicki, 2017, p. 300). These are all the important factors to remember when developing a strategic plan so that healthcare organizations become flexible and prepared for the future’s uncertainty.

Likewise, these steps and the whole process of strategic planning have many benefits for the healthcare organization. As discussed by Strata Decision Technology (2017), a huge benefit for strategic planning is how it affects the organization’s performance and productivity as many areas of the hospital can be significantly improved. Company culture, goals and objectives, operating budgeting, service line decisions, risk management, capital planning, cost accounting, and long-range forecasting are some key areas that affect strategic planning the most in a positive way.

However, these areas might only improve in the best way when the right questions are also asked and considered by the healthcare organizations. The needs of the population and the patients must be addressed and should also be expected to have changed in the long run. The healthcare market should be researched regarding its current and future medical or governmental policies, and how it affects the industry. Understanding which areas can help the organization grow more will help the organization to solidify its mission and strategic interpretations, which is the first step of strategic planning. Of course, it is also important to develop a strategic financial plan within the whole strategic plan, but financial goals must also be assessed by looking specifically at their attainable financial goals.

There might be several reasons why strategic planning is not met. Lack of resources, a lack of understanding about strategic planning, a lack of accountability, a lack of follow up and a lack of flexibility are some of the causes why strategic plans are not often successful (Price, 2021). However, there are also ways to combat these findings, and these are ways that also reflect the 13 steps for making a strategic plan. Price (2021) discusses that “intuitive thinking” will help organizations understand their mission by understanding their true priorities. Furthermore, being “analytical” will also help by analyzing the limitations and strengths of the organization in terms of where they stand in the marketplace.

Is there a universal strategy to help organizations better understand their strengths and weaknesses?

References:
Nowicki, M. (2017). Introduction to the financial management of healthcare. Chicago, IL; Health Administration Press. 7th ed. 295-311.

Price, R. (2021). Why strategic plans don’t work…and what to do about it. Reliable Plant.
Strata Decision Technology. (2017). Strategic planning in hospitals. https://www.stratadecision.com/healthcare-and-hospital-strategic-planning/

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