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A Primer on Strategic Planning for Your Practice

A Primer on Strategic Planning for Your Practice

Strategic planning, when treated as a work in progress, rather than as a binder on a shelf or a file in a computer, provides a dermatology practice with a real and lasting competitive advantage. An evolving strategic planning process will help direct the business in your desired direction. Strategic planning is your dermatology practice’s road map to your vision and to achieving a competitive advantage. But where do you begin? And what pitfalls should you be aware of before beginning?

Prerequisites for Strategic Planning
There are many different models and action steps for strategic planning. Attempting to “jump right in,” however, is ill-advised. Undertaking some basic prework will help to ensure better success for the strategic planning process. Here are three perquisites for strategic planning:

1. Agree on a strategic planning process. You should provide an understanding of what strategic planning is and how it is done as well as discuss its potential value to the practice, in terms of providing a common vision and focus, with agreed-upon goals and strategies.  Consider the costs of doing strategic planning, in terms of staff time and other resources, including what might need to be given up in order to develop a plan. If the practice is in crisis or is financially or organizationally unstable, it may be difficult or unwise to enter into a strategic planning process until the immediate problems and needs have been successfully addressed.  Consider whether the practice is “ready” for a long-range plan or whether it may best focus on a short-term plan, perhaps doing a one-year plan before undertaking longer-term planning at the end of that year. If strategic planning seems appropriate, consider what procedures or steps can be used to establish and implement a strategic plan. Next, agree upon a process and establish responsibilities for the various steps in the process.

Your practice may also want to include an outside facilitator or consultant who will assist with the process and preparation of the strategic planning document, but these steps may also be done by staff. Be sure to allocate sufficient staff time to the strategic planning process. Depending on the size of the practice, it may be necessary to reduce the regular workloads or responsibilities of staff and physicians who are expected to play a key role in developing the strategic plan.

2. Carry out a SWOT analysis (strengths, weaknesses, opportunities, and threats) in order to provide an understanding of how the practice relates to its patients, community, and competitors. Consider external factors, such as changing demographics, community values, economic trends, implications of new or changing laws and regulations affecting the practice, and consider their impact on your practice and the patient population it serves. Take into account opportunities and challenges related to practice resources and reimbursement. Also, look at actual and potential collaborators and competitors. Depending on the size of your catchment area, this process may involve something as extensive as a community needs assessment, with interviews, focus groups, and e-mail surveys, conducted by a consultant or may be limited to a small number of informal discussions with referring physicians and key community leaders.

The internal component of the SWOT analysis may include a number of factors or approaches. You may want to start by assessing current practice performance in terms of financial and staff resources, services offered, and outcomes. Try to understand how patients or stakeholders in the broader community view the practice, and be sure to further analyze the reasons for perceived weaknesses.

In addition, it is often valuable to identify critical success factors for the practice. This step is not always included in strategic planning, but it can be very useful. Try to understand what factors are necessary for the continued and future success of the organization: relationships with referring physicians, practice strategies, governance structure, and staff skills and personalities. Depending on your practice’s size, you might want to review or formalize organizational values and operating principles. Some practices have written values and principles that guide their decision making and ongoing activities. These can be very helpful in “defining” the practice.

A consultant can be hired to assist with the SWOT analysis, contacting stakeholders to provide an external view and staff to obtain an internal assessment. The result of the analysis should essentially be an investigation of practice strengths and weaknesses and external opportunities and threats. This may be oral or written and requires careful review and discussion by those involved in the strategic planning process. Everyone should be familiar with the findings before strategic planning decisions are made. 

3. Identify key issues, questions, and choices to be addressed as part of the strategic planning effort. This may mean specifying “strategic issues” or questions that the practice should address and setting priorities in terms of time or importance. If there is little disagreement about issues and priorities, it may be possible to move immediately to the practice vision and then goals. However, if there is no agreement on general directions and practice goals, it may be important to explore issue priorities and identify critical choices. This might be done in several ways. For example, you may want to ask those involved to identify strategic issues from the SWOT analysis, with individuals identifying a specified number of such issues and indicating why each is strategic, including the benefits of addressing it and the negative consequences of not addressing it. The consultant working with the group might work to identify strategic issues emerging from the SWOT analysis and then prioritizing them in terms of importance, timing, and feasibility. The result should be two sets of strategic issues: one set to be addressed as part of the strategic planning process, and another that will not be addressed or will receive limited attention during the process that will be considered by physicians or appropriate staff.  Whatever the method used, the discussion should generate some level of agreement about issues or choices to be considered and decisions to be made as part of the strategic planning process.

Four Common Strategic Planning Mistakes
Strategic planning is an essential business activity. However, several common mistakes must be understood so that dermatologists can guard against them. Pointing out these mistakes is not a criticism of the process but acknowledgement of improper implementation. Dermatology practice owners must recognize both the benefits and potential pitfalls of strategic planning, because it is their responsibility to ensure that strategic planning is conducted properly to achieve the desired goals. Here are four of the most common planning mistakes we find:

1. Attempting to forecast and dictate events too far into the future. In part, this may result from the natural desire to believe we can control the future. It is a natural tendency to plan on the assumption that the future will merely be a linear continuation of present conditions, and we often underestimate the scope of changes in direction that may occur. Because we cannot anticipate the unexpected, we tend to believe it will not occur. In fact, most strategic plans are overcome by events much sooner than anticipated by practice leaders.

2.Trying to plan in too much detail. This is not a criticism of detailed strategic planning but of planning in more detail than the conditions warrant. This pitfall often stems from the natural desire to leave as little as possible to chance. In general, the less certain the situation, the less detail in which we can plan. However, the natural response to the anxiety of uncertainty is to plan in greater detail, to try to cover every possibility. This effort to plan in greater detail under conditions of uncertainty can generate even more unknowns. The result can be an extremely detailed strategic plan that does not survive the friction of the situation and that constricts effective action.

3.Tendency to use planning as a scripting process that tries to prescribe actions with precision. When practice leaders fail to recognize the limits of foresight and control, the strategic plan can become a coercive and overly regulatory mechanism that restricts initiative and flexibility. The focus for staff members becomes meeting the requirements of the strategic plan rather than deciding and acting effectively.

4.Tendency for rigid planning methods to lead to inflexible thinking. While strategic planning provides a disciplined framework for approaching problems, the danger is in taking that discipline to the extreme. It is natural to develop planning routines to streamline the strategic planning effort. In situations where planning activities must be performed repeatedly with little variation, it helps to have a well-rehearsed procedure already in place. However, there are two dangers. The first is in trying to reduce those aspects of strategic planning that require intuition and creativity to simple processes and procedures. These skills cannot be captured in procedures, and attempts to do so will unnecessarily restrict intuition and creativity. The second danger is that even where procedures are appropriate, they naturally tend to become rigid over time. This directly undermines the objective of strategic planning: enabling the organization to become more adaptable. This tendency toward rigidity is one of the gravest negative characteristics of strategic planning and of strategic plans.

Indeed, strategic planning is an essential part of practice management, helping dermatology practice owners make decisions and act more effectively. As such, strategic planning is one of the principal tools used to exercise operational control. Remember, though, that strategic planning involves elements of both art and science, combining analysis and calculation with intuition, inspiration, and creativity. To plan well is to demonstrate imagination and not merely to apply mechanical procedures. Done well, strategic planning is an extremely valuable activity that greatly improves practice performance and is an effective use of time. Done poorly, it can be worse than irrelevant and a waste of valuable time. The fundamental challenge of strategic planning is to reconcile the tension between the desire for preparation and the need for flexibility in recognition of the uncertainty of the health care industry. n

Mr Hernandez is the chief executive officer and founder of ABISA, LLC, a consultancy specializing in strategic health care initiatives (

Disclosure: The author reports no relevant financial relationships.

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