Comments on Current Management Issues in the Healthcare C-Suite: “Culture Eats Strategy for Breakfast” But Probably Not Right Now

2022 and 2023 have been particularly difficult operating years for hospital providers. The financial challenges stand out but as we concluded in the August 7, 2023, blog, strategic planning and vision issues may be more compelling over the long term. We previously identified two strategic issues that need to be reckoned with:

1. Strategic Relevance. Has everything changed organizationally post-Covid or does it just feel that way? If your strategy still seems dynamic and relevant, how do you capitalize on that? If your strategy feels entirely lost, how do you recapture organizational excitement and enthusiasm?
2. Vision. How important is organizational vision right now? You know the old saying, "a camel is a horse designed by a committee." And many vision statements wind up looking more like that camel than like that desired horse. But be that as it may: Covid has been so disruptive to the organizational momentum of hospitals that finding a relevant and executable vision should be top of mind right now.

Given circumstances, one obvious conclusion is that any strategic exercise undertaken in the current moment needs to be well accomplished. Executive teams, clinicians and Boards are simply too distracted or too tired to spend time on planning processes that are not well thought out and highly directed. This immediate observation next demands a discussion that outlines post-Covid strategic principles, definitions and the creation of a vision that relates immediately to actionable strategy. It would be an understatement to note that for hospitals there is no "strategic time" to waste.

Start the post-Covid planning process with four very clear strategic definitions:

1. Vision: A time-bounded view of the future destination of your business.
2. Strategic Workstreams: The ways you devise to achieve the strategic vision.
3. Goals: Goals are the lag outcomes that you seek to achieve for your customers.
4. Metrics: Metrics measure the progress toward the goals.

Working from these definitions then allows you to move toward an organizationally appropriate vision and an actionable strategy that efficiently supports that vision as follows:

1. The vision should drive growth. Many hospital organizations have stopped growing organically. No growth is harmful financially, clinically, intellectually and creatively.
2. The vision should differentiate the business from that of competitors. Everybody and everything competes with hospitals these days: other hospitals, pharmacy companies, insurers, private equity. It has no end.
3. The vision should endeavor to solve a basic customer problem or problems. The problem list is pretty apparent. The list of helpful solutions has been harder to come by.
4. The vision should be either incremental or transformational. In all candor, most hospitals' post-Covid vision is going to be incremental. It takes considerable financial and capital capacity to move toward a transformational vision. That kind of capacity is available at only a small minority of hospitals nationwide.
5. Recognize that a transformational vision will require active management of culture and stakeholders. If you pivot to a transformational vision, you are likely to upset certain stakeholders and your existing culture may need to also adjust to the transformation.
6. Be prepared to modify or improve upon the vision, workstreams, and/or goals as you get ongoing feedback during the planning and execution process. Under any circumstances you need to be open to learning all along the way. For this to happen, your organization needs to be a listening organization and a learning organization. Not all hospitals and health systems are.

Does all this sound hard? It should sound hard because it is hard. Leading the hospital back to financial stability while finding a relevant post-Covid vison that proves to be competitive and, at the same time, energizes your team to find renewed purpose in your hospital's work; that is unforgivably hard. As Piet Hein, the Danish mathematician, profoundly said, "Problems worthy of attack prove their worth by fighting back." And fighting back is the hospital job of the moment.

Note: "Culture eats strategy for breakfast" is a quote attributed to management consultant and writer Peter Drucker.

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This post first appeared on Kaufman Hall's website. Reprinted here with permission. This blog post appears as a part of Vizient's strategic investment in, and collaboration with, Kaufman Hall to expand both companies' ability to support health systems with financial, operational and strategic insights needed to better serve their communities.