Strategic Planning for the Clinical Laboratory

Strategic planning is partly an "art" -- thinking globally, taking yourself "out of the box", looking at your laboratory from a very broad, long-range perspective. Strategic planning also has a "technical" component -- assembling historical data and projecting new statistics to support your findings and recommendations. If you are a typical laboratorian, you will struggle with the "art" and excel at the "technical" step. I know there are exceptions out there, but most lab people are very comfortable with data, scientific theory, and linear decision-tree logic. Business and planning logic is circular in pattern, involving continual trial, evaluation, adaptation, and retrial. This thinking process is difficult at first, but keep working on it and it will become easier over time.

There are several motivators in today's environment which drive the need for a strategic plan:

The financially driven, cost conscious environment
Emphasis on organizational efficiency, coordination, and resource allocation
Increased competition
Changing payor, provider, and patient relationships

Today's health care professionals must make decisions based on a sound strategic plan that will guide operations and ensure financial viability. The plan itself is a written document that outlines the purpose, rationale, and assumptions underlying a strategic direction, covering all aspects of the concept in order to obtain support to move it from idea to action. It provides the basis for developing an operating plan, setting goals, establishing performance measures, and obtaining resources and approvals to move forward. Put in a simpler way, a strategic plan describes where you are now, identifies where you need to be to be successful, and outlines the steps you need to take to get there. A strategic plan has 5 major sections:

Executive Summary

This is the first section of the document, but it should be written last. The Executive Summary provides an overview of the plan and includes a background (or history), goals and objectives of the plan, and the projected outcome of following the plan. The Executive Summary is the most important section of the strategic plan because it is typically the first and only section read by key decision makers. You must be able to convince the reader that your ideas solve a real problem, exploit a real opportunity, and are aligned with organizational goals.

Overview

The Overview section provides information regarding the operating environment of your laboratory and defines your lab's operating characteristics, the primary problems that you want to work on, and the strategy which you want to take to begin to address these problems. This section's goal is to provide insight into the nature of your planning steps and the interrelationship between the plan and the operating environment. The next two sections of the report provide the detailed information which supports your ideas and planning steps.

External Assessment

The External Assessment should give a concise synopsis of what is going on in the laboratory industry today, outlining trends both locally and across the country and pointing out how these factors can be applied to your laboratory's situation. Depending on the planning steps you have devised, you may want to talk about some or all of the following issues:

What current or pending legislation may affect your laboratory?
How does regulatory compliance impact your planning decisions?
What will be the impact of changes in reimbursement / payment mechanisms?
What is the current market for your services? What is the market's size and location? (Estimating market size and location is a critical component to determine market opportunity. These estimates will drive financial outcomes!)
What are market needs in relation to the proposed planning steps? How does the plan meet these needs?
How will the hospital and / or the target market benefit from the project?
What are other alternatives to meeting the needs?
Why is the proposed plan the best solution?
Who are the potential competitors? What are their characteristics?
What is the plan's competitive position?
How does the plan enhance the hospital's competitive stance?

Internal Assessment

The Internal Assessment details the operational, organizational, and financial projections for the project. It's goal is to develop an understanding of how the planning steps will be accomplished and managed; it should include an assessment of the plan's viability and sustainability through valuation analysis. This section can also establish operating and financial milestones and benchmarks to evaluate the project's progress and viability. The internal assessment will need to answer most, if not all, of the following questions:

What are the facility, capacity, and capital needs?
What are the operating characteristics?
What are the human resource needs?
What types of control mechanisms should be established?
Who will have decision making responsibility?
What are the anticipated financial results in the next five to ten years? (Include balance sheet, income statement, and cash flow statement)

Appendices

Appendices include all supporting documents combined with sources of support, such as benchmarks, industry experts, literature searches, and detail which corresponds to key data, graphs, and charts which are incorporated in previous sections of the plan.

Start your strategic plan by describing the laboratory your hospital needs to support its goals and objectives (where you need to be). Do you need to reduce costs? Become more competitive in the marketplace? Support hospital initiatives in managed care contracting? Reduce facility space within the hospital? Expand your services to support new programs? Next define your lab's current situation (where you are now). Then outline the changes necessary to make the transition (what you need to do to get there). Support your ideas with hard data, logical thought, and financial analysis. Now you have a strategic plan!