Hospitals Look for Executive Leadership, Investment in Technology to Reach Strategic Goals


All businesses face the task of meeting key financial and productivity goals in order to satisfy the expectations of customers and shareholders. Hospitals are no exception; like corporations, they must develop effective strategies and execute these plans efficiently to stay competitive. Linking high-level strategies to clinical and financial performance is perhaps one of the biggest challenges for busy hospitals. But, according to Michael Contrada, executive vice president of the Palladium Group (Lincoln, MA), recognizing the importance of strategy and its relationship to operations can go a long way in helping hospitals to achieve their goals.

"About nine out of ten organizations will fail to execute their long-range strategic plans," he says. "The difficulty of actually executing the plans we intend is a challenge for all of us in business. But, for hospitals especially, there is a huge opportunity here. By using I.T. to collect and organize information, managers can make decisions that will definitely determine their success."

Barriers to Executing an Effective Strategy
Contrada believes strategy execution is the single biggest area of concern for CEOs and, therefore, also for CIOs. One of the central reasons why it can be so difficult is what he terms 'the vision barrier.' "The lack of a clear vision and leadership in communicating the vision across the enterprise can hold hospitals back," he says. "If 90 percent of the people working at an organization don't understand its strategy—whether it's improving the bottom line or reducing medication errors—how can they possibly help to make it happen?"

Ineffective communication of the strategy, both among executives and between management and staff, can also hamper efforts. "On average, 85 percent of executive teams are spending less than one hour per month discussing how the strategy will fit into the organization," Contrada says. "It may be human nature to focus on short-term plans and priorities, but it doesn't help you get any closer to your overall goals. Most leaders say they don't have time to talk strategy, but they must find the time if they ever want to succeed on a broader scale."

Linking Strategy to Operations, Action, and Results
To achieve strategic goals and initiatives, it's important for organizations to link their strategy to concrete action and measurable results. By accomplishing this, CEOs with the help of their CIOs can satisfy the expectations of shareholders, patients, and caregivers alike. Contrada has some advice for hospitals wishing to take the leap.

"The first step is to clarify your vision across the organization, and then align tasks accordingly while actively engaging your staff in the process," he says. "When your overriding strategy is made clear to employees, their day-to-day activities will be aimed at meeting specific goals and standards. The more you involve your staff in the strategic course, the more motivated they'll be in helping to advance that plan."

Resource management, especially investing in the right I.T. tools, is also key to effectively executing a health care strategy. "As it has been proven in all industries, reliable technologies enable businesses to operate more efficiently," says Contrada. "If you use an objective process to link all your resources—both monetary and personnel—to your strategy, you will be able to get the most out of your intended strategy."

According to Palladium's Vice President Ann Nevius, no matter what quality or financial improvements a hospital undertakes, it is always essential to measure and manage progress. "Technology can be a very useful tool for reporting and gauging the effects of process changes," she says.

"One way to do this is using a balanced scorecard framework to take a multitude of ideas and data, and organize them around your strategy. Just like how a road map can bring you from 'point A' to 'point B', scorecards can be used to determine where the organization is now, and what must be done to get them where they want to go."

CIOs Take the Lead in Strategy Deployment
If communication is the glue which holds the organization together throughout its strategy execution, then CIOs are its applicators. "With the important role technology plays in the follow-through of an organization's strategy, CIOs are emerging as the predominant player in leading the way for the rest of the staff," says Nevius. "They are in the best positions to engage and align the organization from top to bottom."

Contrada agrees that in such a rapidly changing industry as health care, leadership can either make or break the business. "This is a dynamic field, so as CIOs, you'll need to be adaptive and flexible," he says. "But, once you have the information you need, you just need to figure out how to use it to drive your desired outcomes. That's what strategy is really all about."