Although many healthcare finance leaders may feel that strategic planning is second nature to them, they can benefit from routinely revisiting the process to learn from the experiences of others and to ensure that are taking all the steps that are necessary for success.
Successful Healthcare Financial Management Requires Imagination and a Solid Plan
When it comes to strategic planning, there are many different approaches and schools of thought. Common elements, however, include scanning the environment for threats and opportunities, using the resulting information to determine goals, developing a plan for achieving those goals, and establishing performance indicators. Once all that is done, the plan is implemented, performance is evaluated, and the process begins again.
As healthcare finance leaders, this process is second nature. Most of what we do, after all, requires a strategic approach. The budgeting process is just one example. Another is managing merger and acquisition (M&A) activity—something I was involved with numerous times during my 23 years as CFO at Geisinger. One of the most memorable was the merger of AtlantiCare into Geisinger. A well-articulated strategy, multidisciplinary teams, sound financial plans, and a lot of hard work combined to improve both organizations.
Anyone who has been through the M&A process can attest: it is not for the faint of heart, and a solid plan is crucial to success. HFMA released a report late in 2017 that reinforced this message. The study, conducted in collaboration with the Deloitte Center for Health Solutions, provided helpful insights into the M&A process from the perspectives of both the acquiring and the acquired organizations. Particularly helpful were the strategies and business practices identified as correlating with successful mergers. At the top of the list was the need to develop a strong strategic vision for pursing the transaction. Also cited as key to success were explicit financial and non-financial goals, leadership accountability, clear and up-front decision-making, and implementation of project management best practices.
The list is powerful. It appears basic and simple, but in reality, it isn’t always followed—even by those for whom it is second nature to take a strategic approach to planning and implementation. That is why it is important to regularly revisit the topic, as this issue of hfm does. Learning from the experiences of others and reviewing best practices can help us successfully plan and execute our own initiatives and innovations.
It’s been said that hope is not a strategy. Imagination may not be either. It is, however, an important step in the process. So imagine that better tomorrow, but don’t forget to plan. You need both to make it happen.