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You've got to construct your strategic plan

January 1, 2007
by Paul R. Willging, PhD
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Two months ago we discussed the importance of strategic planning to the successful business enterprise (“You Can't Get There Without a Road Map,” November 2006, p. 14). But most of that discussion centered on the development of the company's vision and mission. These can be expressed as broad statements, to be sure, without which more concrete steps cannot be undertaken to achieve the company's strategy. I even suggested that vision and mission development are more reflective of a company's strategic “thinking,” while the steps undertaken to fulfill the corporate mission and achieve its vision are perhaps a better use of the term “planning”

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This month, I'd like to spend some time on the more concrete aspects of the company's strategy to fulfill mission and achieve vision—specifically, “goals” and “objectives.” Goals are quantifiable way stations we aspire to as we attempt to fulfill our mission—an example might be to assume the dominant position in our chosen market by 2011. Objectives are shorter-term (but equally measurable) activities required to reach one's goals. To achieve the goal of dominance, for example, might require that we reach a 90% customer satisfaction level in 2007.

There are reasons why most companies fail to achieve their planning goals and, interestingly, it depends more on the company's and CEO's ability to execute than the substance of the strategy itself. Bad management can't get even the best of plans to work, while good management can at least partially salvage even a badly constructed plan.

But more on that later. Let's focus for now on developing goals and objectives. You have your vision—what you want your world to look like in an ideal state. You have your mission—what it will take to achieve your vision. How do we develop goals and objectives to make it happen?

We start by establishing some longer-term goals. It's really not all that different from setting personal goals. How many of us don't have, as our personal vision, a reasonable level of financial comfort? And how many of us don't recognize that our mission in achieving financial comfort is doing effective financial planning and management? Where do the goals come in? One goal—at least in our younger years—might have been to assemble sufficient cash to afford a down payment on the home of our choice. That longer-term goal would then be supported by short-term objectives—e.g., maintaining a system of automatic payroll deductions directly deposited into a dedicated house account. Or we might set up yearly savings milestones.

There is a concept called “nesting” that applies to this. Our mission nests within our vision. Our goals nest within our mission. Our objectives nest within our goals. Each level of the plan provides a foundation for the next. Objectives are the short-term building blocks whereby we accomplish goals. Goals are the means by which we fulfill our mission. And an appropriately described mission will get us that much closer to realizing our vision.

Goals are usually described with nouns. A goal is a desirable situation or status, not a function. For example, 90% resident satisfaction is a goal, not how we achieve that 90%. Too many strategic plans set as their goals the engagement in some admittedly beneficial activity. A goal might be stated, for example, as providing quality care. That's not a goal. It's a means of achieving a goal.

Objectives can be, and usually are, enunciated by verbs. Objectives are the specific measures or processes undertaken to reach the goal. And it will usually take more than one objective to achieve a stated goal. Look again at our facility goal of customer satisfaction. This is not likely to be achieved with a single annual objective; it will take any number of them—for example, regularly surveying residents for current levels of satisfaction; establishing a quality management program; establishing and empowering a quality committee within that program; determining, in priority order, the key determinants of customer dissatisfaction; establishing a database for benchmarking. All are functions and/or processes (verbs) that will have to be launched as objectives to achieve the goal.

Now, let's apply this to the nursing home operator. Let's say part of your vision is to be the facility of choice for referring physicians within your geographic area. Within that vision “nests” part of your mission, namely, having a reputation for quality of care. What goals have you and your associates established within that mission statement? One goal might well be to be an upper decile provider in your area with respect to quality indicators (e.g., pressure sores, restraint use, pain management). Another goal might be a relatively stable staff, with turnover, particularly among nurse aides, no higher than 50%.

The need for data in working toward this becomes obvious. What is your current incidence of pressure ulcers? What is your current turnover? How will your staff monitor progress? How will you brief the owner or board of directors on progress? You do it all with data. The late business guru Peter Drucker once pointed out that “people think that they measure what they get. In fact, they get what they measure.” Measuring the wrong stuff is one of the primary reasons strategic plans fail.

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