Healthcare Executives, Is Your Success Really Successful?

There is more to assessing your ability to execute strategy than tallying the number of completed strategic initiatives.

Healthcare organizations, pressured to improve access and outcomes with fewer resources, often struggle to accomplish their strategic goals. So, when the president of a large healthcare system told me his organization is adept at executing strategic initiatives reliably and efficiently, I was eager to hear more and asked what metrics they use to gauge success. Their only metric was that the initiatives were complete.

I wasn’t surprised by his response. I’ve had the opportunity to meet with many healthcare executives and few of them use objective measures to determine their effectiveness at planning and executing critical initiatives that directly impact strategic goals. But how can you say you’re successful if the projects are late and over budget? What else could you have done with that time and money? Are you gaining the benefits you intended and able to sustain those benefits?

The failure to employ objective measures to assess strategy execution performance is not exclusive to healthcare. But it’s certainly more prevalent in this industry than others Integrated Project Management Company, Inc. (IPM) has served over the past three and a half decades. And while it may have been tolerable to give little attention to strategy execution in the past, that’s no longer possible. The dynamic and increasingly greater challenges in healthcare demand that organizations execute strategic initiatives well, reliably, and rapidly.

Start with Better Business Cases

Organizations demand that every strategic initiative they consider begins with a business case that defines the expected outcomes and benefits. However, too many allow assumed or theoretical outcomes without well-substantiated data.

A solid business case defines the financial justification, expected return on investment, and payback period. It should include any potential risks, impacts to culture, and other key information that supports the expenditure. A well-defined business case incorporating financial requirements and a planned implementation timeline is essential for establishing performance baselines and aligning executive expectations. Initiating any significant undertaking without a complete business case introduces risk and variability of outcomes.

Consider the Cost of Delays

Defining the payback period in the business case is important because you need to know when you will start realizing benefits. Project delays that extend this date will reduce the ROI. You must consider delays when measuring execution performance. In some cases, the negative impacts associated with missing a completion date compound and extend the financial loss—and lost opportunity—well into the future.

For example, if a competitor has a similar initiative (e.g., opening an immediate care center in a prime area) and you fail to be first to market, you may never realize the market capture you anticipated. In another instance, a healthcare system had an initiative to acquire a managed services organization. But because the system couldn’t plan and respond quickly, it lost a significant revenue capture opportunity to a competitor.

The inability or reluctance to objectively measure and improve execution performance places the organization at a competitive disadvantage. Additionally, the tendency to overestimate performance diminishes the motivation to improve, increasing the risks of failed strategy realization.

What Might Have Been

The lack of accountability in planning and executing critical initiatives within the desired and forecasted timeframe and budget produces another negative consequence: lost opportunity. Lost opportunity is real and should be quantified and accounted for when measuring success. What initiatives did you delay or cancel—and what benefits did you forfeit— while you devoted resources to an initiative that didn’t meet expectations?

Too often, organizations move the target to allow the arrow to hit the bullseye, which veils execution issues and diminishes value. Objectively measuring the ability to define, prioritize, and execute strategic initiatives that are critical to future clinical and financial viability is key to managing organizational challenges and reducing personnel stress levels.

When leaders track programs and projects within the strategic portfolio against baseline budgets and schedules that do not change, they can accurately assess the organization’s execution competency.

Beyond execution, there are challenges to getting the organization to adopt the changes and to achieving lasting benefits. These require applying an understanding of cultural enablers and inhibitors and using change management to aid “organizational absorption.” You can gain ongoing benefits by tracking and improving performance in these areas as well.

Are You the Exception?

Many healthcare organizations consider themselves successful if they simply accomplish their strategic goals. Is your organization an exception? Download this self-assessment, which may help you decide.

If you determine that your organization is an exception to the rule, congratulations! It is likely that your ability to identify, prioritize, and execute strategic initiatives and sustain them over time has allowed you to establish and maintain a competitive advantage.