Strategic Planning

What are the Components of a Strategic Plan?

A strategic plan is made up of several interrelated parts:

* The Vision Statement.
* The Mission Statement.
* The Values Statement.
* The Assessment Statement.
* The Goals/Objectives Statement.
* The Strategy Statement.
* The Outcomes Statement.

(See "Strategic Planning FAQs")

The Vision Statement

The vision statement describes desired future structure, size, services, and markets. It is a sketch, not a blueprint. It shows basic features, not specific dimensions. It is the strategic baseline. It must be challenging and compelling. It must "kick butt".

Effective vision statements capture "the dream". They are substantive and significant. They make you different.

The Mission Statement

The mission statement outlines markets, customers, and competitors. It broadly defines business scope and purpose. It presents "a desired position in a predicted future world" and represents the "bulls-eye or target of the strategy" (Yavitz & Newman, Strategy in Action, 1982). It sets down customer needs served and the range of services offered.

The mission statement answers: What is our future business? "A mission statement should not commit a firm to what it must do in order to survive but what it chooses to do in order to thrive" (Ackoff, Management in Small Doses, 1986). The greatest obstacle is narrow-mindedness, thinking of the future business as an elaboration of the present. (See "Ten Pitfalls of Strategic Planning in Home Care")

The Values Statement

Values are beliefs held by the company. Every organization has them. Values differentiate you from competitors. The values statement is a summary of the values that guide operations and staff. It is the basis for the ethical standards in dealings with employees, patients or customers, vendors, competitors, and payers. The values statement addresses corporate integrity and citizenship, customer benefit, quality, and employee relationships.

The Assessment Statement

The assessment statement is an appraisal of the outside forces and inside factors that will affect the company in making its vision and mission realities. The outside forces may be opportunities or threats. They may be changes in demographics, economic conditions, regulation, technology, or competition. The inside factors may be assets or liabilities, and are generally expressed as strengths or weaknesses. Strengths and weaknesses represent factors that are (or should be) under the control of the company.

The assessment of internal/external factors impacting present or future prospects is termed a "SWOT" (Strengths/Weaknesses/ Opportunities/Threats) analysis. This starts with an evaluation of how the present internal factors of the company stack up in relation to the organizational attributes to be inferred from the vision statement.

Next considered are the external opportunities and threats expected in the transition to the future. Whether an external change or development is an opportunity or a threat depends on the internal strengths and weaknesses of the organization. Some external issues can be both. The external environment of the company must be looked at in regard to:

1. Industry Environment - Trends affecting all industry participants.
2. Competitive Environment - Companies that can supply similar services to the same markets.
3. General Environment - Demographic and regulatory developments.
4. Organization-specific Environment - Developments in relevant markets and customer segments.

This is a lot of territory, which is why planning is best done by a team.

The Goals/Objectives Statement

The next step is a set of goals and accompanying objectives framing what needs to be done. A goal is a written statement describing a defined action. Goals are broad ends that an organization works towards on an ongoing basis. Goals are general rather than specific, qualitative rather than quantitative, directional rather than measurable, focal rather than achievable, and continuous rather than time-limited.

An objective is a written statement describing a specific result, event, or outcome to be accomplished to work towards a particular goal. Objectives are discrete aims to be completed in a preset time frame, they are stated in terms of "what," "when," and "who." Objectives are specific rather than general, quantitative rather than qualitative, measurable rather than directional, achievable rather than focal, and time-limited rather than continuous.

Goals and objectives are hierarchically related. A goals/objectives statement takes the form of several goals (usually three or more but less than ten) enumerated in terms of their significance with each goal related to three to five objectives in the order to be accomplished.

The Strategy Statement

A strategy is a statement of direction that serves as a central organizational theme guiding and coordinating functional actions. A strategy articulates the nature of a business and its main intentions for the future. A strategy is "the framework which guides those choices that determine the nature and direction of an organization"(Tregoe & Zimmerman, Top Management Strategy, 1980).

Strategy creates a reference point. It focuses on long-term direction, is qualitative, provides guidance for short-term plans, integrates functional plans into an overall scheme, is realistic and action oriented, and is understood at the top and middle levels of the organization (Yavitz & Newman). A strategy must be clear and lack subtlety.

The Outcomes Statement

Strategic planning closes the gap between where the company is and where it wants to be. This involves translating strategy into the realities of organizational structure, systems, policies, products, and operations. This will be done by getting answers to such questions as:

* What realignments in the organizational structure are indicated?
* What changes are suggested in leadership style?
* What new management skills are necessary?
* What will be the implications for policy?

These questions represent "critical issues" which are " those major changes , modifications, additions to the organization's structure and systems, to its capabilities and resources, to its information needs and management that result from setting strategy" (Tregoe & Zimmerman). What makes these issues critical is their functional relationship to the implementation of the strategy.

The final phase is identifying these critical issues and prioritizing them. The product is the outcomes statement, an explicit statement of the changes that the company must make to itself and the results that it must effect in its environment to fulfill its strategic imperatives. An outcome is a specific, vital, and hopefully positive organizational or environmental change that moves the company forward to its future form and domain. An outcome is a step towards strategic closure.

Now that you are better acquainted with the process, test your knowledge with our brief "Strategic Planning IQ Test."

From Strategic Planning: A Guide for Home Care Managers

Copyright 1998 HCMA, Ltd.

[Home Health Helper]

Ten Pitfalls of Strategic Planning in Home Care

1. Planning the future primarily on the basis of statistical and financial projections or forecasts.

2. Over-nighting a thick packet of forms to every branch to complete and return them to the corporate office in 10 business days.

3. Giving strategic planning lip-service, but not giving time or support necessary to develop or implement a credible plan.

4. Rolling out a new company-wide, long-term planning process and leaving incentive packages tied to short-term results unchanged.

5. Blaming competitors, customers, payers, regulators, or the sales force for the poor strategic performance of the agency or company.

6. Investing in training all line managers in techniques to build an exciting agency future and then downsizing.

7. Adopting a strategy inherited through the acquisition of a former rival or simply imitating a current competitor.

8. Starting with a vision or mission that fails to capture the imagination and ownership of the grunts in the field.

9. Letting the bean counters in the business office or in accounting or finance reduce the future to a series of monthly bottom lines.

10. Trying to step into the future with both feet planted firmly in past because of a myopic view of tomorrow as what we like about today.

Copyright 1998 HCMA, Ltd.,

What is your strategic IQ?

Give yourself "10" for each unequivocal YES,
"5" for each equivocal YES,
"0" for each NO or DON'T KNOW.

a. You have a clear mission statement, a challenging vision statement, and a meaningful and practical statement of your agency philosophy.

b. You have a current strategic plan based on your mission, vision, and philosophy and on a realistic assessment of your competitive environment.

c. You routinely involve owners, board and PAC members, consumers, staff, and other pertinent stakeholders in your strategic planning process.

d. You use your strategic plan in meeting competitive challenges, in considering business opportunities, and in responding to changes within your market.

e. You demonstrate accountability for achieving as well as not achieving stated strategic outcomes within the defined time frame.


50 = Strategically Gifted
40-45 = Strategically Functional
30-35 =Strategically Anxious
20-25 = Strategically Challenged
0-15 = Strategically Oblivious

Copyright 1998 HCMA, Ltd.

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Strategic Planning FAQs

1. What is strategic planning?

Strategic planning is an ongoing process whereby those responsible for an agency's success attempt to (i) define its desired future and set the course for making it happen or (ii) having already determined the desired future in the form of an existing strategy, engage in the planning process to make it a reality. Strategic planning is adaptive activity by which a provider continuously tries to assure its future relevance. Strategic planning involves trying to anticipate the key environmental variables impacting the agency's preferred future and the organizational actions necessary to ensure an optimal fit to expected conditions.

2. How does it differ from business planning?

Business plans are principally (but not exclusively) for an external audience; strategic plans are basically intended for internal users, and are seldom shared with outsiders (except in publicly funded entities). Business plans assume the presence of a strategy and are more concerned with action consistent with a strategy. Also business planning is typically more centralized in terms of participants than strategic planning. Lastly strategic planning always encompasses the provider as a whole; business planning may be concerned with a single program or with the provider's entire services mix. Both are necessary.

3. What's the point of strategic planning since things change so much?

Change makes strategic planning a necessity. A client once told us that their marketing plan was a waste of time. It called for growing managed care through fee-for service contracts with HMOs. However, the HMOs were now delegating home care to large capitated physician groups. The problem was that the company developed a marketing strategy for how their market was not what it became. They took the status quo for granted. If they had proceeded from a strategic perspective they would have taken a harder look at managed care trends beyond their area.

4. Who should do strategic planning?

Any entity that has its own business needs strategic planning. This means that there is a mission, product mix, discrete customer base, and competition. It may be a free-standing enterprise, a subsidiary, a branch, or a program. Whatever the form it should be thought of as a separate firm which must differentiate itself from competitors. Where the entity is part of a larger organization its planning should be coordinated with its parent. However, it must still attend to its strategic needs if it is to fulfill its mission and meet its goals and objectives. This is especially true in the case of branches which operate in geographically distinct markets. They need a strategy that fits.

5. What is the branch role in strategic planning?

If a branch is a business unit it must have its own strategy. Branches originate as part of a larger strategy and represent the means of penetrating geographic markets. They are best regarded as micro-companies. However, with centralization and micro-management, the strategic identity of the branch may be lost. When a branch lacks a strategy it may be successful in the short-run, but it will fail over time as it confronts conditions for which it is unprepared. It is not enough to package a strategy for a branch. Strategies must be "owned" by those responsible for them. Ownership comes through involvement. This produces understanding and sharing as well as commitment.

Copyright 1998, HCMA, Ltd.