Prompt: Strategic Issue Analysis & Diagnosis for a Healthcare Organization:Good strategy requires good input and analysis. It also requires good decision making. Select a healthcare organization and then find a problem that exists in healthcare today. In the role of a Healthcare Administrator apply Strategic Management principles in order to solve the problem. Begin by appraising and assessing the problem. Then determine how you might use strategy and innovation to come up with a solution. Finally provide a call to action that guides the organization on how to make it happen. In order for problem to be raised and resolved effectively,the organization must be prepared to deal with the conflicts associated with the problem. Strategic problems that impact the organization become strategic issues within the organization. These issues need to address the ends (“what”); means (“how”); philosophy (“why”); location (“where”); timing (“when”); and who might be helped or hurt by the different ways of resolving the issue (“who”). According to Ansoff, Dutton and Duncan “strategic issues can be defined as developments, events and trends having the potential to impact an organizational strategy” (Ansoff, 1980; Dutton & Duncan, 1987). Here is a list of places to begin researching problems that exists in healthcare today (not exhaustive):? Here are the major issues facing healthcare in 2021, according to PwC:
https://www.healthcareitnews.com/news/here-are-maj…
? The Biggest Issues Facing Healthcare Today:
https://www.managedhealthcareexecutive.com/view/bi…
? 8 Major Problems with the U.S. Healthcare System Today:
https://www.medifind.com/news/post/problems-us-hea…
Additionally, how can the use of survey tools like the CAHPS® Hospital Survey (https://www.hcahpsonline.org) be useful for healthcare administrators as they align the external healthcare problem, the internal strategy and the patient impact?Some questions that you may want to consider addressing in your report include: Does this problem impact the current strategy, structure or processes? How does this problem impact the organizations’ ability to deliver patient-centered care?What specific decisions need to be made within the Health Care Delivery Model?How does this problem and the solution impact the healthcare administration team? How does this impact the future of healthcare and the direction of the organization? Building a
Leadership Team
for the Health
Care Organization
of the Future
April 2014
Resources: For information related to health care leadership, visit www.hpoe.org.
Suggested Citation: Health Research & Educational Trust. (2014, April). Building a leadership team for
the health care organization of the future. Chicago, IL: Health Research & Educational Trust. Accessed at
www.hpoe.org
Contact: hpoe@aha.org or (877) 243-0027
Accessible at: www.hpoe.org/futureleadershipcompetencies
© 2014 Health Research & Educational Trust. All rights reserved. All materials contained in this publication
are available to anyone for download on www.hpoe.org for personal, noncommercial use only. No part of this
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1
Building a Leadership Team for the Health Care Organization of the Future
Table of Contents
Executive Summary………………………………………………………………………………………………………………………………………..3
Introduction……………………………………………………………………………………………………………………………………………………5
Strategic Priorities and Capabilities for the Second Curve of Health Care ……………………………………………….7
Challenges to Achieving Strategic Priorities…………………………………………………………………………………………………10
New Leadership Roles, New Capabilities: The Emerging Health Care Organization ………………………………11
Traditional Roles Evolving……………………………………………………………………………………………………………………………16
More Clinicians in Leadership Roles …………………………………………………………………………………………………………..18
Broad Leadership Skills Needed……………………………………………………………………………………………………………………20
Overcoming Organizational Barriers ………………………………………………………………………………………………………….22
Building the Leadership Team for the Future Health Care Organization …………………………………………………23
Evaluating Board Composition…………………………………………………………………………………………………………………….28
Conclusion……………………………………………………………………………………………………………………………………………………29
Appendix………………………………………………………………………………………………………………………………………………………30
Endnotes……………………………………………………………………………………………………………………………………………………….32
2
Building a Leadership Team for the Health Care Organization of the Future
Executive Summary
As a follow-up to the American Hospital Association’s reports “Hospitals and Care Systems of the
Future” and “Metrics for the Second Curve of Health Care,” Spencer Stuart and the AHA examined
how the shift toward health care’s “second curve” is impacting the leadership, talent and organizational
models of hospitals and care systems. A survey of senior hospital and care system executives and
additional interviews with more than two dozen leaders in the eld reveal the ways health care
organizations are responding to changes within the eld and building the teams needed to achieve their
strategic priorities.
Identifying capability gaps and evolving the executive team to address them
•
Nearly 70 percent o hospital and care system leaders surveyed expressed condence that their
current senior management team has the experience and skill sets to help the organization
achieve its strategic priorities.
•
Experience in leading nontraditional health partnerships and population health management was
seen as the most common capability gap, followed by change management experience, advanced
nancial expertise and data analytics.
•
Sixty percent of health care leadership teams are larger than they were three years ago.
•
Physicians and nurses are being tapped more often for leadership roles, including many of the
new senior executive positions that organizations are creating to address specic strategic
areas, or to participate in management dyads or triads and co-lead with administrators newly
established or existing service lines.
•
Traditional hospital roles are changing and becoming more strategic and larger in scope, to
respond to the changing demands o the eld. CMOs, CNOs, CFOs and COOs are being asked
to develop a broader set of leadership and technical skills and increase their understanding of
health care delivery beyond the hospital setting.
Experimenting with different organizational approaches
3
•
Hospitals and care systems are experimenting with different organizational models, with the
goal of identifying best practices, promoting innovation and collaboration, improving patient
outcomes, increasing operational eciency and standardization, and ensuring that care is
coordinated across the continuum of services.
•
Management dyads and triads, in which clinical leaders are paired with administrators to jointly
oversee service lines or clinical areas, are intended to encourage systems thinking and align
clinical and operational resources to improve outcomes and eciency.
•
Matrix organizations and multiple reporting relationships also are becoming more common, as
are system-level leadership roles charged with standardizing practices and purchasing across the
entire organization.
•
Some health care organizations are creating physician strategy groups, executive strategy
committees or councils on clinical innovation to encourage broader clinician participation in
strategic initiatives.
Building a Leadership Team for the Health Care Organization of the Future
Building teams through selective hiring and training
•
Executives with experience in community and population health management and experts in
change management will be hardest to nd within the health care sector, according to
survey respondents.
•
As they seek leaders in new disciplines, some health care organizations today are more willing
to consider candidates from outside the sector for certain capabilities; these capabilities include
retail and customer insight experience, analytics, enterprise risk management and insurance
expertise.
•
Organizations can improve their success hiring executives from outside health care or
promoting internal candidates into rst-time leadership roles by careully dening the technical
knowledge and leadership skills that are required and consistently assessing candidates against
those capabilities.
•
Cultural t is an important consideration; ideally, organizations will dene the cultural traits that
need to be developed in the organization and select leaders with traits that match the direction
in which the culture needs to move.
•
Seventy-nine percent of survey respondents said their organization has established in-house
customized training programs for senior management during the past three years, and nearly 80
percent said training programs are focused on developing leadership skills.
Evaluating the composition of the board and whether it includes representatives with the
most relevant experience
4
•
Many boards, especially those of regional health care systems and corporate health care entities,
are adding expertise in new areas.
•
Board members with expertise in consumer businesses, marketing, social media, change
management and the payer side of the business all are in demand.
•
Boards of national and larger regional health care organizations with sophisticated governance
practices and procedures are best positioned to attract members with these proles. However,
all boards can benet rom adopting best-in-class governance processes and practices that allow
members to contribute at a higher level.
Building a Leadership Team for the Health Care Organization of the Future
Introduction
Health care reform is presenting unprecedented challenges and opportunities for U.S. health care
organizations. Health care delivery is moving away from the traditional fee-for-service system, designed
around “sick care” and hospital stays, toward a population health management system with valuebased reimbursement and a ocus on improving the quality, saety and eciency o patient care. As the
American Hospital Association detailed in two reports, “Hospitals and Care Systems of the Future” and
“Metrics for the Second Curve of Health Care,” success in health care’s “second curve” will require
developing and executing new business and service models, forging new partnerships and alliances, and
developing new capabilities and approaches to organize effectively around these new models.1,2 See
Figure 1.
Figure 1. First Curve to Second Curve
Source: Adapted from Ian Morrison, 2011.
Such a ar-reaching shit in the eld o health care must drive similarly dramatic changes in the
leadership, talent and organizational models of hospitals and care systems. Inspired by the AHA reports,
Spencer Stuart, a leading senior executive search and leadership advisory rm, explored the talent,
leadership and organizational implications of health care reform to answer questions such as:
5
•
What leadership capabilities will become more important for health care organizations
transitioning to new care delivery, nancial risk and population health management models?
•
How are traditional roles, such as the chie nancial ocer, chie medical ocer and chie
nursing ocer, evolving in response to changing business needs?
•
How might physician and nurse leaders be tapped to play a larger role in the uture?
•
What new roles and titles are emerging?
•
How is the structure o the executive team evolving?
•
What new capabilities will health care organizations need to develop or acquire?
•
From where will executives with newly required leadership skills and competencies come?
Within the health care system or rom other industries? Or through recruitment or training?
•
Do hospital and care system boards have the expertise needed to provide valuable guidance and
perspective to management teams?
Building a Leadership Team for the Health Care Organization of the Future
To address these questions, Spencer Stuart and the AHA conducted an online survey of more than
1,100 executives, primarily from large health care systems across the United States. In addition, followup, one-on-one conversations were conducted with a group of more than 25 senior health care leaders,
including chie executive ocers, chie medical ocers, chie nursing ocers and chie human resources
leaders, to understand how they are responding to these questions and structuring their leadership
teams for a dramatically changing health care marketplace. (See the appendix for survey methodology
and respondent breakdown.)
6
Building a Leadership Team for the Health Care Organization of the Future
Strategic Priorities and Capabilities for the
Second Curve of Health Care
As health care organizations focus on the Triple Aim — better care, better health, lower costs — and
shift toward value-based contracting and away from fee-for-service plans, top priorities are: improving
the quality and eciency o health care delivery, providing better patient care, and aligning with partners
to share risk and provide services along the continuum of care. In the survey of hospital and care system
leaders about their priorities, one strategic imperative rose to the top: Improving eciency through
productivity and nancial management was cited by more than hal o respondents. See Figure 2.
Figure 2. Key Strategic Priorities
What are the key strategic priorities for your organization over the next three years?
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
7
Building a Leadership Team for the Health Care Organization of the Future
Discussions with executives largely reinorced the survey ndings, as summarized below. In many cases,
implementing these strategies will require organizations to build new capabilities.
8
•
Improving cost management and efciency. Clinical and operational eciency will be critical in
an environment in which health care organizations expect to serve more patients with lower
reimbursements. Indeed, 56 percent o survey respondents said improving eciency through
productivity and nancial management is a key strategic priority or the next three years. Since
hospitals and care systems will have to be prepared to manage costs very effectively and accept
more nancial risk, they will need leaders who understand changing risk models and can manage
care from a total-cost-of-care perspective. Clinician engagement and support will be critical for
the success of cost-management initiatives, including pharmacy and supply chain management.
With change on the horizon, many health care organizations have spent the past several years
putting in place the infrastructure, processes and people to operate in a value-based model
ahead o market demand. In the years ahead, these organizations will have to make dicult
decisions about when to shift to the new value-based payment model.
•
Increasing clinical integration and expanding coordinated care. The movement toward population
health management models requires health care organizations to expand their focus beyond
the inpatient setting to the entire continuum of care. To that end, organizations are making
acquisitions and forging partnerships with physician groups, rehabilitation services and other
post-acute providers, and reestanding emergency care organizations to create a unied
enterprise with complete systems of care. These activities will continue to be a priority:
46 percent of respondents cited joining and growing integrated provider networks and care
systems as a top strategic priority for the next three years, and 45 percent said aligning with
other organizations across the continuum of care will be a key strategy. Hospitals and care
systems will need deal-savvy executives who are well versed in due diligence, deal structures and
nance, and administrators will have to partner with physicians and other clinicians to manage
the clinical enterprise together. To ensure that patients receive the right care in the right setting
and at the lowest cost, health care systems will need to improve quality, service and eciency
across the system and be able to coordinate care across these services. Collaboration and
partnership development will be critical to clinical management and improving patient care.
•
Improving quality and patient safety. The whole structure of health care payments is changing, and
this has enormous implications for how care is delivered, the incentives that physicians receive
and the infrastructure and capabilities that are needed. In a value-based environment, payment
models will shit toward compensation based on patient health outcomes, eciency and quality
across specic populations. In short, quality will have an impact on reimbursement. More than
one-third of survey respondents, 39 percent, said a key priority for their organizations over the
next three years will be to adopt evidence-based practices to improve quality and patient safety.
In addition to improving quality amid greater transparency, organizations will need to adopt a
more holistic approach to health care and prevention, requiring capabilities in care management,
chronic disease management, and data analytics.
•
Integrating information systems and becoming more data savvy. To improve eciency, organizations
are building capabilities in data analytics, population health management and process
improvement. Enhanced data analytics capabilities and integrated information systems will
support risk-bearing activities and provide real-time nancial and clinical inormation to help
health care organizations establish benchmarks and understand their performance against
quality and eciency targets. For that reason, 32 percent o survey respondents said integrating
information systems will be a top strategic priority. In addition, the ability to interpret data and
apply it to the most important issues for the organization is a growing expectation for all senior
health care executives.
Building a Leadership Team for the Health Care Organization of the Future
9
•
Ongoing innovation and change management. The sheer magnitude and velocity of change is
challenging many health care organizations, as they try to keep pace and manage amid many
competing priorities. Not only are changes in reimbursement and care delivery testing
organizations, traditional health care organizations also have to keep an eye on new competitors
emerging from the retail and technology sectors — and evaluate whether and how to compete
or collaborate with these recent entrants. As they rethink and build strategy, health care
organizations need to address many more scenarios and be prepared to respond to changing
assumptions. For some, responsibility for innovation and strategic thinking is dispersed across
the leadership team, while other organizations place primary responsibility for innovation with
committees or specic senior leadership roles. Change management also will need to be a core
competency.
•
Increasing patient engagement. In a changing competitive landscape, hospitals and care systems
are looking for ways to provide more convenient access to services and a smoother, more
engaging patient experience. Expertise in customer insight and retail will be increasingly
valuable as organizations strive to truly understand the patient (customer) and apply those
insights to patient experience innovations, especially providing more personal and memorable
customer service. Many health care organizations are hiring experts in retail, marketing and
communications to improve their ability to reach and communicate with current and potential
patients, develop pricing strategies and provide new technology-based services.
Building a Leadership Team for the Health Care Organization of the Future
Challenges to Achieving Strategic Priorities
As health care organizations pursue these strategic priorities, what potential challenges do they ace?
Among survey respondents, nancial constraints and physician buy-in and engagement are seen as the
most signicant hurdles to achieving their organizations’ strategic priorities, each cited by more than
one-quarter of respondents. Other challenges include organizational barriers to collaboration, lack of
the necessary capabilities for key roles and cultural impediments to change. See Figure 3.
Figure 3. Strategic Challenges
What do you anticipate will be the primary hurdle to achieving the organization’s
strategic priorities?
Physician buy-in and engagement
Lack of talent/skill sets
for key roles
Financial constraints
Organizational barriers
to collaboration
Cultural impediments
within organization
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
10
Building a Leadership Team for the Health Care Organization of the Future
New Leadership Roles, New Capabilities:
The Emerging Health Care Organization
Despite the breadth of capabilities health care organizations need to build, the hospital and care system
executives who responded to the survey were largely condent in their senior management team.
In act, nearly 70 percent expressed condence that their current senior management team has the
experience and skill sets to help the organization achieve its strategic priorities.
Do you feel your current senior
management team has members with
the right experience, skill sets and talent
needed to achieve these strategic priorities?
Yes 68%
No 32%
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
The interviews revealed that building the leadership team and organizational capabilities to respond to
changes in the eld has been a major priority or many health care organizations during the past several
years. Specically, health care organizations have been ocusing on six primary areas:
•
Identifying capability gaps and evolving the executive team to address them
•
Expanding the management team by creating new executive roles with a broader set of
experience and perspectives, including more clinicians and executives bringing new functional
expertise
•
Updating the expectations or and responsibilities o traditional hospital leaders to refect
changing organizational priorities
•
Experimenting with different organizational approaches to stimulate collaboration, improve
operational eciency and promote standardization
•
Establishing mechanisms to promote clinician engagement in quality, eciency and innovation
initiatives
•
Evaluating the composition of the board and whether it includes representatives with the most
relevant experience
New Perspectives on the Management Team
Despite expressing condence in their senior executive team, survey respondents pointed to a number
o gaps in their organizations’ capabilities. More than hal, 54 percent, identied experience in leading
nontraditional health partnerships, such as joint ventures or strategic partnerships with payers and
retailers, as a primary capability gap for their organizations. In addition, 48 percent of respondents
identied community and population health management experience as a talent gap. Experience in
transformational change and change management was cited as a gap by 41 percent of respondents, and
37 percent said their organization lacked advanced nancial expertise. Innovative thinking and creativity
and data analytics experience were cited as talent gaps by 34 percent and 29 percent of respondents,
respectively. See Figure 4.
11
Building a Leadership Team for the Health Care Organization of the Future
Is the senior management team of your
organization bigger than it was three
years ago?
Yes 60%
No 40%
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
Figure 5. Roles Represented in Senior Management Team
What roles are represented in today’s senior management team?
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
14
Building a Leadership Team for the Health Care Organization of the Future
Figure 6. Roles in Decision-Making Processes
Which of the roles below are always involved in the regular decision-making process?
Which of the roles below are engaged in the decision-making process when necessary by topic?
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
15
Building a Leadership Team for the Health Care Organization of the Future
The chie operating ocer (COO) is becoming the “integrator in chie,” as noted by the AHA’s Hospitals
& Health Networks magazine.3 The COO is responsible for overseeing the coordination of a range of
operational activities, including managing population health outcomes and nancial risk and coordinating
inpatient care with physician oces and nonacute services. In addition, the COO’s command o
operational issues frees more time for the CEO to devote to strategic and external responsibilities,
including advocacy, philanthropy and partnerships.
Figure 7. Changing Roles for Health Care Leaders
Historical
Today
Chie medical ocer
Medical staff management
More operational and strategic, focusing
on quality and eciency targets, strategic
planning, partnerships, long-range
forecasting and decision analysis
Chie nursing ocer
Advocate for nursing and
patient care
Broader and more operational role; integral
member of the management team in many
organizations
Chie nancial ocer
Scorekeeper, nancial
gatekeeper
Business partner to the enterprise, advising
on risk, insurance and strategic decisions
Focused internally
“Integrator in chief,” overseeing a range of
operational activities across continuum, e.g.,
population health outcomes, coordination
o inpatient care with physician oces and
nonacute services
Chief operating
ocer
Source: Spencer Stuart / AHA Interviews, 2013.
17
Building a Leadership Team for the Health Care Organization of the Future
Figure 8. Critical Skills for Future Health Care Leaders
Skills that will be most critical in the next three years
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
21
Building a Leadership Team for the Health Care Organization of the Future
Building the Leadership Team for the Future
Health Care Organization
How are health care organizations building leadership teams with the capabilities that they need today
and or the uture? Typically, hospitals and care systems are relying on a combination o external
recruiting — including executives rom outside the health care eld — and leadership development and
training.
Recruiting and Promoting Senior Leaders
Because o the health care eld’s complexity, including the regulatory ramework that organizations
operate within, hospitals and care systems traditionally have recruited from within the sector for
senior-level roles. As they seek leaders in new disciplines, some organizations have become more willing
to consider candidates rom outside the eld or certain roles that require skills that have been less
developed within health care.
Nearly 60 percent of respondents said community and population health management experience will
be hard to nd within the broader health care eld, and more than hal said transormational change
and change management capabilities will be the hardest to nd. Innovative thinking and creativity,
nontraditional health partnerships and advanced nancial expertise were other capabilities that
respondents said they nd lacking in the health care sector.
In the interviews, retail and customer insight experience, enterprise risk management and insurance
expertise emerged as capabilities or which organizations may have to look outside the eld. Senior
positions in data analytics, “lean” operations, customer engagement, and supply chain and logistics may
need to be lled by candidates rom outside health care, or example. Even clinical innovation leaders
need not come rom a hospital setting i they are ocused on research in the eld; or example, a
physician from a pharmaceutical background or from the medical device business may be considered.
23
Building a Leadership Team for the Health Care Organization of the Future
Figure 9. Skill Sets Within the Health Care Field
Which skill sets will be the hardest to fnd within the broader health care feld?
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
Executives from outside health care may bring much-needed skills and a fresh perspective on the
business, and many hospital and care system leaders express a preference for executives from outside
the sector for marketing, strategy and innovation roles, for which creativity and innovative thinking are
critical. But there are risks to these hires — namely, that health care is a complicated and regulated
eld that can represent too steep o a learning curve or newcomers, particularly or hospital operations
and nance roles. Frequently, health care leaders gravitate toward job candidates with at least some
health care experience. Spencer Stuart continues to see a preference for nonhealth care candidates for
certain roles, especially marketing, innovation and strategy leadership roles, when candidates with pure
health care backgrounds do not seem as fresh by comparison. Meanwhile, hospitals and care systems are
becoming a more attractive career option for some executives outside the sector, some of whom are
interested in being part o a eld undergoing a major transormation.
Similar risk calculations have to be made when considering internal candidates moving into a senior
leadership role or the rst time. By denition, these executives do not have experience in the specic
role for which they are being considered, and many roles are evolving to include new skill sets. For
example, it is not unusual for physician leaders to be tapped for new roles for which clinical experience
is critical, but many such roles are now broader in scope with more responsibility.
24
Building a Leadership Team for the Health Care Organization of the Future
Organizations can minimize the risk when promoting internally or hiring from outside the sector
by careully dening the technical knowledge and leadership skills that are required and consistently
assessing candidates against those capabilities. Given the pace of change in health care, both external
and internal candidates should have a track record of working in environments of change and ambiguity.
Another important consideration is cultural t, both with the leadership team and the broader
organization; ideally, organizations will dene the cultural traits that need to be developed in the
organization and select leaders with traits that match the direction the culture needs to move.
The route to the top of organizations is less structured than in the past, and new paths to the CEO role
are emerging. More hospitals and care systems are developing succession plans so that high-performing
executives can grow proessionally without needing to leave to nd new opportunities. However,
executives with strong track records are in great demand and have many opportunities available
to them.
Also in high demand are physician leaders, executives who have a successful track record of managing
risk and those with experience working in pre- and post-hospital environments as well as acute care.
One challenge in recruiting is a growing cautiousness among candidates about relocating during this
tumultuous time or the eld. Opportunities need to be particularly exciting to draw top perormers out
of good situations. As a result, the price to attract top talent continues to escalate against a backdrop of
growing tension over executive compensation across all industries.
Leadership Development and Training
Most senior- and mid-level hospital leaders now being confronted with the dramatic shifts in health care
payment and delivery grew up in the fee-for-service environment. As a result, training and leadership
development are priorities for many organizations. Seventy-nine percent of survey respondents said
their organization has established in-house, customized training programs for senior management during
the past three years, and 76 percent said they offer access to conferences.
Much of the focus of these efforts is on developing leadership skills. Nearly 80 percent of survey
respondents said training programs are focused on developing leadership skills; 65 percent said training
programs are ocused on building knowledge in specic unctional areas. In-house, customized programs
and sector-based conerences are the most common training approaches, ollowed by specic job-skill
courses and executive coaching. Respondents said their organizations prioritize training in service and
patient focus (73 percent), quality/patient safety (62 percent), data analytics (53 percent) and critical
thinking/strategic planning (51 percent).
25
Building a Leadership Team for the Health Care Organization of the Future
Figure 10. Management Training
What kind of training options has the organization put in place for members of the senior
management team during the past three years?
What has been the focus of these training programs?
26
Building a Leadership Team for the Health Care Organization of the Future
Which of the following skills will your organization develop internally with training
and education?
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
While leadership development and training are a growing priority for health care organizations,
interviews revealed a wide range of training capability and sophistication. “Leadership training and
development are a major emphasis for us; in the past two years, we have recruited new people in
leadership development and offered new courses for internal groups,” explained one human resources
executive. Other executives describe leadership development as more of a “work in progress” in their
organizations. One common challenge health care organizations face: getting time-strapped clinical and
administrative leaders to devote time to these initiatives.
Given the growing cadre of physician and nurse leaders, some health care organizations offer programs
targeted specically to clinical leaders. Physician executive academies, mini-physician-MBA programs,
skill development boot camps, and physician leadership universities are a ew o the examples identied
during the interviews. Many of these programs incorporate coursework and team projects and cover
negotiation, basic nance, team work dynamics, communication, leading other physicians, trends in
health care, and technical and soft skills. Many health care organizations also have established physician
and nurse mentorship programs, which pair new clinical executives with experienced leaders to provide
them with a resource to navigate relationships and answer questions.
Other leadership development programs bring together clinical leaders with administrative and business
executives, with the goal of promoting integrated thinking and mutual learning, or target particular
development needs, such as change management, employee engagement, service excellence and lean
management techniques. One health care system, for example, sends 20 to 30 people at a time from all
levels of the organization to an intermediate improvement science program. Over the past several years,
this initiative has created a small army of improvement gurus scattered throughout the organization.
27
Building a Leadership Team for the Health Care Organization of the Future
Conclusion
As the health care eld continues to move toward the second curve, hospitals and care systems are
putting in place the structures, processes and teams to compete in a value-based health care model.
This model ocuses on quality, saety, eciency, population health management, patient engagement and
seamless care delivery across the continuum. To be successful, health care organizations will need to do
the following:
•
Dene their value proposition to patients (customers) and develop strategies to deliver on
those customer service expectations and execute at a very high level. Organizations must dene
long-term strategies while protecting the short-term nancial picture.
•
Adopt fexible organizational structures, processes and cultures that allow them to adapt quickly
and eciently to market opportunities and changes. This is a time to be nimble. Each member o
the team must more than carry their own weight in a changing environment.
•
Develop change management as a core competency. Executives across the organization need
to have business judgment, strategic insight, comfort with uncertainty, social intelligence, selfawareness and people management skills to manage in a changing environment. Embracing
change and taking prudent risks are musts in today’s environment.
•
Based on the strategic priorities and direction o the organization, dene the capabilities that
will be needed by the senior leadership team going forward. Identify talent gaps and thoughtfully
consider how to best address gaps, whether through training, leadership development or
targeted recruiting o leaders rom outside the health care eld.
•
Experiment with different organizational approaches to stimulate collaboration, improve
operational eciency and promote standardization across the organization in order to provide
high-quality, coordinated care for patients. Senior executives must work together as a team and
realize that the organization’s leadership roles and management structures must adapt to the
new demands on hospitals and care systems.
The American Hospital Association and Spencer Stuart will continue to monitor the leadership and
organizational changes occurring at hospitals and care systems and promote dialogue among leaders in
the eld as they continue on this journey.
29
Building a Leadership Team for the Health Care Organization of the Future
Appendix
About the Survey
The online survey was sent to 1,140 health care executives in April 2013 and received 111 responses, a
9 percent response rate.
Figure 11. Respondent Role
What is your title or role with your company?
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
Figure 12. Respondent Organization
Organization type
Source: Spencer Stuart / AHA Leadership Survey, 2013. (n=111 respondents)
30
Building a Leadership Team for the Health Care Organization of the Future
Interviewee Organizations
Survey ndings were supplemented with interviews o more than 25 senior health care executives,
primarily rom large health care systems, including chie executive ocers, chie medical ocers, chie
nursing ocers and senior human resources executives rom the ollowing organizations:
31
•
Advocate Home Health Services –
Advocate Healthcare
Oak Brook, Illinois
•
Advocate Physician Partners –
Advocate Health Care
Oak Brook, Illinois
•
Medical University Hospital Authority
Charleston, South Carolina
•
Memorial Hermann Health Center
Houston, Texas
•
Mercy Hospital Springeld
Springeld, Missouri
•
Aroostook Medical Center
Presque Isle, Maine
•
•
Baptist Health South Florida
Coral Gables, Florida
Northwestern Memorial Hospital
Chicago, Illinois
•
•
Beth Israel Deaconess
Boston, Massachusetts
Ochsner Clinic Foundation
New Orleans, Louisiana
•
•
Carolinas HealthCare System
Charlotte, North Carolina
Providence Health & Services
Renton, Washington
•
•
Cedars-Sinai Medical Center
Los Angeles, California
St. Mary’s Health System
Lewiston, Maine
•
•
Cincinnati Children’s Hospital
Cincinnati, Ohio
Texas Health Resources
Dallas, Texas
•
•
Desert Regional Medical Center
Palm Springs, California
UCLA Health System
Los Angeles, California
•
•
Eaton Rapids Medical Center
Eaton Rapids, Michigan
University Hospitals Health System
Cleveland, Ohio
•
•
Franciscan Health System
Tacoma, Washington
University of Wisconsin Hospitals and
Clinics
Madison, Wisconsin
•
Wyoming Medical Center
Casper, Wyoming
•
Intermountain Medical Group
Salt Lake City, Utah
•
Lakeland Regional Medical Center
Lakeland, Florida
Building a Leadership Team for the Health Care Organization of the Future
Endnotes
1 American Hospital Assocation. (2011, September). Hospitals and care systems of the future. Chicago, IL: American
Hospital Association. Retrieved on April 23, 2014, from http://www.aha.org/content/11/hospitals-care-systems-offuture.pdf
2 American Hopsital Association. (2013, April). Metrics for the second curve of health care. Chicago, IL: American
Hospital Association. Retrieved on April 23, 2014, from http://www.hpoe.org/Reports-HPOE/Metrics_Second_
Curve_4_13.pdf
3 Larkin, H. (2012, January 1). Focus on the C-suite: Integrator in chief. Hospitals & Health Networks. Retrieved
on April 23, 2014, from http://www.hhnmag.com/display/HHN-news-article.dhtml?dcrPath=/templatedata/HF_
Common/NewsArticle/data/HHN/Magazine/2012/Jan/0112HHN_FEA_boardroom
About HRET
Founded in 1944, the Health Research & Educational Trust (HRET) is the not-or-prot research and education
aliate o the American Hospital Association (AHA). HRET’s mission is to transorm health care through research
and education. HRET’s applied research seeks to create new knowledge, tools and assistance in improving the
delivery of health care by providers and practitioners within the communities they serve.
About HPOE
Hospitals in Pursuit of Excellence (HPOE) is the American Hospital Association’s strategic platform to accelerate
performance improvement and support delivery system transformation in the nation’s hospitals and health systems.
HPOE shares best practices, synthesizes evidence for application and engages leaders in the health industry
through education, research tools and guides, leadership development programs and national engagement projects.
About Spencer Stuart
Spencer Stuart is one o the world’s leading executive search consulting rms. Privately held since 1956, Spencer
Stuart applies its extensive knowledge of industries, functions and talent to advise select clients — ranging
rom major multinationals to emerging companies to nonprot organizations — and address their leadership
requirements. Through 55 oces in 30 countries and a broad range o practice groups, Spencer Stuart consultants
focus on senior-level executive search, board director appointments, succession planning and in-depth senior
executive management assessments.
32
Building a Leadership Team for the Health Care Organization of the Future
The International Technology Management Review, Vol. 5 (2015), No. 1, 28-39
Formation and Identification of Strategic Issues in Organizations:
A Review and Classification of Current Studies
Bahareh Abedin
Faculty of Management and Econimics, Tarbiat Modares University, Iran
Asadollah Kordnaeij*
Faculty of Management and Economics, Tarbiat Modares University, Iran
naeij@modares.ac.ir
Hasan Danaee Fard
Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran
Seyed Hamid Khodadad Hoseini
Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran
Abstract
Identification of strategic issues assists organizations to pay attention to what is actually important in their long term decision making.
The domain of strategic issue identification is broad, disperse and unclear. Since strategic issues are not predefined, the process of
assigning the meaning to these issues and finding solutions for them is dynamic. Thus, the type of strategic issues faced by the
organization, as well as how these issues are diagnosed and are formed influence which issues are included in the organization
decision maker’s agenda and which ones are ignored. The present research aims to take a step to fill the research gab in this context
through representing a coherent picture of the subject matter literature on strategic issue area and how they are formed. Through a
review of the current literature, this research outlines the process of formation and identification of strategic issues in three main
categories: Environment sensing, issue sensing, and agenda formation.
Keywords: strategic management, strategic issues formation, organization
*
Correspondent Author
E-Mail: naeij@modares.ac.ir
Published by Atlantis Press
Copyright: the authors
28
2. Research Problem
1. Introduction
The concept of strategic issues was introduced when
strategic planners faced a gap between SWOT analysis
of Harvard model and strategy formulation (bryson,
2004). Strategic issue identification is important as it
has a particular effect on the organization’s present and
future
strategies
and
could
put
problems
or
opportunities in the way of organization’s decisionmakers (Miller & Lin, 2014).
Bryson (2004) argues that the way based on which
strategic issues are framed and formed could improve
the process of decision-making organization’s strategies.
Also, if these issues were formed well, then subsequent
option of decision and actions more likely would be
more acceptable and defensible in terms of the
organization’s policies. Strategic decision-makers’ type
of view of issues faced by the organization and haw
these issues are diagnosed and formed, as well as
dimensions which are considered for identifying these
issues, could influence which issues are incorporated in
the organization decision-makers’ agenda and which
issue are not considered as important. As a result,
perhaps, success or failure of organizations operating in
the same environment could be sought in the paradigm
of formation of strategic issue in those organizations.
Accordingly,
understanding
how
organization’s
managers and decision makers give sense to the events
and issues faced by the organization and how they react
against them, would lead to extension of their view
range and their strategic thinking capacity (Athukorala
& Ekanayake, 2014). Familiarity with the process of the
strategic issue formation and the dimensions of interest
in diagnosing these issues would further extend
decision-makers’ range of view, improving the quality
of substantial organizational decisions.
By identifying strategic issues, organization’s attention
is paid to what that is actually important. But,
unfortunately, organizational decision-makers often are
sacrificed by the 80-20 rule, i.e. they spend 80 percent
of their time on the 20 percent of the least important
tasks, and as a result, many of the organization’s rare
resources are often wasted. as a result, If managers can
identify factors affecting their understanding of issues,
they will be able to divide their attention among issues
that no actions are necessary for them at the present
time , but they should be paid attention continuously,
issues that could be considered as part of the
organization’s current strategic planning cycle, and issue
which require immediate response and therefore they
could not take action on them in the current day-to-day
manner to solve them (Miller & Lin, 2014).
Filley (1975) and Fisher and Ruy (1981), have
asserted that, since serious disagreements over issue
solutions are often manifested without full awareness of
them, one benefit of awareness of the process of the
strategic issue formation and identification is that it
draws the organization’s attention into the issues rather
than responses. With regard to what has been said,
paying attention to strategic issues and how they are
formed is very effective on the quality of organizational
actions and decisions, but among the studied carried out
on strategic issues, no certain ideas have been offered
about how to determine them except for their diagnosis
through situation analysis (Fearon et al., 2012; Bryson,
2004).
Regarding what was said, the authors saw it
necessary to take a step toward clarifying the process of
strategic issue determination, through a review of areas
of studies conducted on how to determine strategic
issues and how they are formed, as well as through
representing amore- coherent picture of this study area.
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29
Abedin, Kordnaeij, Danaee Fard, Khodadad Hosseini
Table 1: Strategic issues definition
definition
Researcher
Strategic issues can be defined as developments, events and trends having the
potential to impact an organizational strategy
Ansoff, 1980; Dutton &
Duncan, (1987)
a matter the decision of which involves important consequences
Oxford
dictionary,
(1989)
Dutton and Dukerich,
1991
Issues are events, developments and trends that an organization’s members
collectively recognize as having some consequence to the organization
emerging developments, trends or events which in the judgment of some
Dutton
&
ashford,
strategic decision makers are likely to have a significant impact on the
(1993)
organization’s present or future strategy
strategic issues typically have the following characteristics:
Pearce II & Robinson
– Require large amount of the firm’s resources,
(1994)
– Often affect the firm’s long term prosperity,
From
– They are future oriented,
Nooraie , (2012)
– Usually have multifunctional consequences,
– They require consideration of the firm’s external environment, and
– Require top management decisions.
A strategic issue is an analytically distinct sub-system of a strategic problem,
Meyer ,(2007)
pertaining to a specific topic.
especially in early stages. Because it is not predefined,
So, the research problem is “what are the main
activities in the process of strategic issue formation and
some perceptions or assignment of the meaning to these
their entrance into the organization’s agenda? And how
issues are required to design, select, and apply a
could we present a more-coherent picture of them?”
solution for them. Also, it is obligatory for the
In what follows, first, strategic issue introduction as
well as a review on some of the most important
definitions represented about these issue and their
dimensions, have been carried out and then literature
review of strategic issue has been done.
organization’s managers and main decision-makers to be
3. Strategic Issues: Definition and Dimensions
Among the researchers in the context of strategic
management and organizational cognition, Dutton and
his colleagues have paid special attention to the notion
of strategic issues. In their view, no issue is inherently
strategic unless when managers believe that that issue is
associated with organizational performance (Athukorala
& Ekanayake, 2014, Motii & Sanders, 2014). In table 1,
some of the most important definitions represented
about strategic issues are shown.
In Birkelund’s (2003) view, deduction domain of a
strategic issue could be broad, disperse, and unclear,
able to decode various aspects of the complex
environment they deal
Through a literature review of strategic issues, as well
as empirical study on a group of managers, Dutton and
her colleagues (1989), classified dimensions of the
strategic issues, which are of the most importance to
managers.
with and to reach the beneath structure of it (from
Meyer, 2007).
In another study which was performed by Dutton and
his colleagues in 1990, the result was that managers
tend to invest in issue that they think them to be of the
highest efficiency. A manager’s evaluation of an issue
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30
Strategic issues formation
Table2: Strategic issues dimensions, Dutton et all, (1989)
strategic issues dimensions
Issue content
Issue action
Issue source
Analytic dimensions
e.g. Abstractness, age of issue,
Geographical
Amount of
Chosen versus externally
certainty, complexity, decision
referent, type,
payoff from
induced, responsibility,
maker’s interest, direction of impact,
competitive
action, certainty influence, strategic location,
duration permanence, locus: internal/
forces
of payoff from
personal attachment,
external, interconnectedness,
action,
relevance
pervasiveness, scope, time pressure,
controllability,
visibility, label: threat/ opportunity
feasibility
efficiency is highlighted in his/her evaluations of the
environment monitoring as part strategic planning, as
emergency, feasibility, and interdependency of a issue
follows:
with other issues Emergency of an issue refers to the
“About events and relationship in a company’s outside
decision-makers’
from
environment, the knowledge of which would assist top
investment on that issue. While issue feasibility is
management in its task of charting the company’s future
related to the probability of its success accomplishment.
course of action.”
evaluation
of
the
value
Managers learn that investments in an issue frequently
influence other issues as well. One of importance, the
emergency and the duration of
posing an issue,
understanding the necessity of its evaluation would be
4. Review of the Literature
In order to review the literature on strategic issue
formation, the study areas around this topic were
divided into 3 main groups. Each of these groups is
related to activities which cover from the phase of
evaluation
and
strategic
issue
identification up to their entrance into the organization’s
strategic agenda. These three groups refer to three main
activities: environment sensing, issue sensing, and
agenda formation; they are described below.
which decision-makers examine, scan, and monitor the
organization’s environment (Miller, K. D., & Lin, 2014;
al.,
1989).
Aguilar
with respect to which he/she doesn’t have any particular
goals in his/her mind and he/she is unaware of what
issues may occur. Undirected viewing is usually
ambiguous, temporary and merely warn the manager of
what has happened and requires further examination. In
the conditioned viewing, the manager encounters some
information about the selected areas or some particular
kinds.
of information. This viewing sometimes applies as a
required. In informal search, the manager is involved in
Environment assessment refers to activities based on
et
informal search, and formal search.
sign or cue implying that further examination is
4.1. Environment Sensing Activities
Dutlon
as follows: undir- exted viewing, conditioned viewing,
In directed viewing, the manager faces information
greater proportionately.
environmental
He specifies 4 styles of the environmental monitoring
(1967),
defined
a limited and unstructured effort for acquiring specific
information or information for a specific goal. The
informal search is different from conditioned viewing,
mainly in terms of the fact that the needed information
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31
Abedin, Kordnaeij, Danaee Fard, Khodadad Hosseini
is pre-found. Finally, formal search refers to a deliberate
Organization differences in interpretation are rooted in:
effort that sometimes
a) management ideas about analyzability of the external
follows a trend, methodology or schema to obtain
environment (Daft & Mackintash, 1981) and b) the
particular information related a particular topic.
extent to which the organization permeates into the
Like other organizational activities, the environmental
environment in order to understand it.
monitoring process is effective on organizational
Weick claims that interpretation is different from
perception. Heugens (2001), has stated that the
sense making. However, sense making may sometimes
perceptual
how
encompass interpretation. In other words, Weick
organization high-level decision-makers assign their
believes that sense making concerns the ways in which
limited cognitive capabilities to issues. He argues that
people offer their interpretations. Interpretation further
two modes of environmental scanning exist: passive
seeks to discover or approximate data, but sense making
scanning and prospective scanning.
is more about invention rather than discovery. For
selection
process
indicates
that
The purpose of prospective scanning is to determine
participating in sense making, we should create, filter,
issues that are still incomplete, thus they warn the
frame, realize, and interpret the subjectivity to a more
organization about potential issues. The other mode of
tangible thing. Thus the concept of sense making is
environmental scanning is passive in nature. In this
valuable because it shows an invention that is superior
mode, issues are paid attention by the organization
to interpretation (from kunnas, 2009).
when they have completely happened. Organizations
Activities which lie in this class of actions related to
choose one of these scanning modes with regard the
strategic issue formation, are classified into two
managerial understanding about organizational position
categories: A group relates to sense making activities
in the environment (Motii & Sanders, 2014).
that are associated with issue diagnosis in the research
4.2. Issue Sensing Activities
literature; and a group is related to sense giving
The second phase of the process of strategic issue
activities that are associated with the strategic issue
formation, i.e. issue sensing, is associated with two
selling.
giving.
According to the definition by Thomas et al. (1993),
Interpretation means the process of trams formation the
sense making and sense giving are two supplementary
events, development of models for understanding,
and mutual processes. Sense making refers to the way
discovering the meaning and cresting conceptual
based on which managers understand, interpret, and
schemas among key managers (Fearon et al., 2012; Daft
create meaning of the information available about
& Weick, 1984). In the present study, like the study by
strategic changes, whereas sense giving concerns their
kunnas (2009), the interpretation has been considered as
efforts for influencing outcomes, transferring their
a separate phase of environmental scanning. While
thoughts about the change to others and obtaining their
some investigations have defined interpretation as part
support. The boundaries of these two processes are
of environmental scanning (e.g. Kiesler and Sproull,
interwoven, and like discourse and practice, sense
1982: 548). Organization could be inferred as
making and sense giving are less distinct such that one
interpretation
implies the other and their existence is not possible
concepts
of
interpretation
systems
that,
and
like
sense
very
particular
information receivers, interact with the environment.
without each other (Rouleau, 2005).
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32
Strategic issues formation
In this respect, a number of researchers sought to find
context, and how to take action about them. On the
out that how do managers make sense of the past,
other hand, they are the managers that confirm the
encounter the present, and plan for future (Dunford &
existence of these transformations and events in their
Jones, 2000; Huisman, 2001; Jameson, 2001), and that
surrounding environment, interact with them, and are
how sense making and sense giving occur socially over
influenced by them (Motii & Sanders, 2014, Dutton,
time (Hopkinson, 2001).
1993).
Previous studies have attributed the strategic issue
4.2.1 Strategic Issue Diagnosis
Strategic issue diagnosis is a process during which
diagnosis to various organizational characteristics; for
managers give sense to the continual flow of ambiguous
example, culture and the structure of strategy and
and complex environmental data, which determines the
information processing (Dutton and ottensmeyer, 1987;
organization position (Kent & Lin, 2014). Dutton and
Thomas and McDaniel, 1990), the extent of diversity in
her colleagues (1983), believes that the importance of
the chief management team (Dutton and Duncan, 1987;
strategic decision- makings. This influences the
plambeck and weber, 2009), and resource dependencies
strategic decision-making process and subsequently
(Milliken, 1990). Olambeck and weber (2010), have
organizational selection and performance (Fearon et al.,
also pointed out the role of previous experiences in data
2012; Thomas, Clark, and Gioia, 1993). In other words,
processing.
how managers diagnose environmental events and
4.2.2 Issue Selling
transformation, is a vital issue because different
Brown and Aisenhart (1997), depict organization as a
diagnoses could lead to different strategic responses
plurastic market of ideas, in which issue are sold
(Dutton and Dukerich, 1991; Gutton and Duncan, 1987;
through managers’ and individuals’ persuasive efforts
Lant, Milliken, and Batra, 1992).
and are bought by chief managers who adjust the
Gilbert (2006), has stated that managers investigate
organization’s strategic direction. In such a picture,
their environment changes, interpret them, and label
effective management is achieved through proper
them according to cognitive mechanisms. He has
understanding of the elements of the key process of
acknowledged that CEO’s framing of environmental
issue selling.
changes in the of positive and negative terms affects
When an issue has been determined, then a specific
reasoning is required to be made by organizational
organizational changes.
Also, some diagnoses may be more effective on
participants to specify the excellence of the issue
strategic decisions and they may result in higher levels
(Fearon et al., 2012). The process of strategic issue
of performance, than other diagnoses (Fearon et al.,
selling refers to activities that are performed to
2012, Gooding and kinicki, 1995).
influence others’ awareness in issue understanding.
In Dutlon’s idea, there is a mutual relation between the
Issue selling could be considered as the main basis for
and
the explanation of why and how superior managers
transformations in strategic issue diagnosis. In one
assign their awareness and time to a particular issue
hand, environmental transformations are partially in the
(kunnas, 2009). In fact, issue selling points to the
form of objective realities that influence how issues are
process by which individuals influence on others’
diagnosed and understood, limitations existing in this
attention to events and on their understanding of events,
manger
and
the
environmental
events
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33
Abedin, Kordnaeij, Danaee Fard, Khodadad Hosseini
transformations and trends related to the organization
superior decision-makers, but also it is the product of
performance (Ansoff, 1980; Dutton and Ashford, 1993).
forces who in multiple levels of the organization,
Dutton and Ashford (1993) and Field and woldridge
consciously or unconsciously, lead an issue to be
(1996), assert that Because any problem is not strategic
legitimated, resources be assigned to that, and
by itself, individual’s claim about what is important (for
consensus be established about it (Motii & Sanders,
example, issue selling) determines which change plan is
2014).
activated in the organization (Dutton et al., 2001)
The label which has been considered in this study for
One of the main indicators concerning the issue selling
this phase is “agenda formation” and the aim of
success is the amount of time and attention that superior
applying this label is to show that agenda is influenced
manager devotes to an issue. Attraction of collective
by activities of affective force in strategic issue
attention toward an issue is displayed by types of
formation, as a result of which it can be said that the
behaviors: (a) issue naming; (b) collecting data related
agenda is formed too. Understanding this process and its
to the issue; (c) talking about the issue; and (d)
probable outcomes, people could manage it and thereby
establishing role or task-force specific to the issue.
take advantage. For example, facilitating or limiting the
Drawing the attention of the superior management is
entrance of an issue into the agenda is a robust tactic to
the progress needed for their fundamental taking which
make changes with particular intentions. Accordingly,
may be to assign more material resource to an issue. one
by understanding how the agenda is formed, individuals
of the groups who could have an important effect on the
can manage ambiguities existing about problem
process of issue in trance into the strategic agenda is the
regulation (adjustment) in the organization (Metcalfe,
middle managers. Kaunter (1989), believes that the
1981).
potential ability of middle managers is to influence the
Strategic agendas are formed in two ways. One of
strategizing
them is through individual’s actions, who attempt to
organizational
obtain others’ attention and confirmation for a strategic
situation. Because the middle managers have the pulse
issue to be counted. As was mentioned in the previous
of the organization performance, so they can convince
phase, this kind of actions is called issue selling
others and pose new ideas which many not discovered
behaviors (Dutton & Ashford, 1993). Dean (1987), calls
by the superior managers.
individuals involved in this activity as architects who
4.3. Agenda Formation
have a good combination of validity and commitment to
The last phase of this study concerns the step strategic
incorporate an issue into the agenda. Other researchers
issue entrance into the organization’s agenda or
call these individuals as champions (Motii & Sanders,
organization agenda formation followed by assigning
2014; Howell and Higgins, 1990) or elsewhere they are
the scarce organizational resources to this issue
named “policy entrepreneurs” (Kingdon, 1984). They
category. In the research literature, the process of
are individuals who can draw the superior managers’
assigning attention to the strategic issues has been
attention to an issue through communication and
conceptualized
interpersonal influence and temporal sensitivities (from
superior
managers’
(strategy-making)
as
perception
based
the
on
and
their
agenda
building
process.
According to Bower (1972) and Burgelman (1983), the
Dutton and Penner, 1993).
agenda is not solely captured by the organization’s
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34
Strategic issues formation
The second way the strategic agenda formation is
determining how much an issue is important, practical
through group or collective actions .some authors like
and legitimate (Fearon et al., 2012; Dutton and Suncan,
Narayanan and Fahey (1982), have named These actions
1987; Milliken, 1990).
as “coalitions mobilization around the issue”. Both the
On
the
other
hand,
people’s
beliefs
about
issue selling and coalition mobilization processes are
organizational identity are counted as an important
focused on individuals or groups who influence agenda
reference in determining whether an issue is legitimated
formation out of the superior manager team (from
in the view of the organization. Also, the organizational
Dutton and penner, 1993).
identity raises expectations for individuals in and out of
According to the model that Dutton (1993), has
the organization, about which issue is the organization
represented in relation to factors influencing the issue
committed. These expectations create motives for the
incorporation into the organization’s agenda influential
organization’s
factors are: perceptual importance and greatness for an
worthwhile to devote time. People’s beliefs about
issue, abstractness of an issue, perceptual complexity of
organizational identity are also associated with their
an issue, the emergency of examining an issue, the
perceptions of the issue’s personal of the issue’s personal
power of the issue sponsors, the extent of sponsor’s
importance.
personal linkage with the issue, size of agenda and
When organization identity is threatened by actions
diversity of issues incorporated in the agenda.
related to the issue, people’s personal identity is
individuals
whether
an
issue
is
These factors, which are focused on the specific
jeopardized. This reaction occurs because there exist a
features related to an issue, allow one to predict how
close relationship between people’s personal perceptions
different strategic issues in an organization receive
and the organization they work for (Ashforth and Male,
different amount of attention resources. However, to
1989; Gutton et al, 1991).
focusing
In summary, since the organization’s strategic agenda
attention to issues, the organizational context in which
(Dutton, 1988) refers to a set of issues which have
the strategic agenda forms, should be considered too.
attracted superior organizational decision-makers in a
predicting
organizational
differences
in
Also, in Dutton’s (1988) view, two factors are of
section of time, so knowing how and when strategic
importance in incorporating an issue in the agenda: 1)
issues draw the main decision-makers’ attention would
issue context 2) Organization context. By the issue
be a lever to understand how the organization changes
context, it is meant that how an issue’s features and the
(Dutton & Guncan, 1987). Also, assigning the
characteristics of a political context shape the level of
organization’s resource or information processing
representing and of drawing attention toward an issue.
capacity to the issued is an important sign specifying
For example, Dutton asserts that, issues which are
that how capacity to the issues is an important sign
understood to be more important, as well as more
specifying that how issue are embedded in agenda
abstract and simpler issue, have more ability to be
(Simon, 1971).
incorporated in the tragic agenda.
How an issue is named, how much time is devoted to,
Evidence from previous research acknowledges that
and how information is collected about that issue,
organization context and especially the genus of the
indicate how managers’ attention is assigneed to issued
organization
(Dutton, 1988, p.127).
members;
beliefs
are
pivotal
in
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35
Abedin, Kordnaeeij, Danaee Fard,, Khodadad Hossseini
Acccordingly, itt could be saaid that the importance
i
of
n and Future Research
5. Discussion
ideentifying strattegic issue fo
ormation is duue to its effect
In the view of Mintzbergg and some oother researchhers
onn the organizzation’s decisiion and its potentiality
p
too
gnosis is the starting pointt to
(1976), strateegic issue diag
chhange managgers’ perceptiions about organization’ss
formulate straategy and thee strategic deccision-making
g in
intternal and external environm
ment.
the organizattion. Fahey et
e al. (1983) believe that the
Thhus, the way in which thesse issues are formed couldd
importance oof this topic iss due to its eppidemiology and
a
im
mprove the org
ganization’s deecision-makinng and strategyy
centrality in tthe organizatiion’s strategic decision andd its
sellection process. if these issues
i
were w
well-formed, ,
effect on decision-makin
d
ng steeps, as
a well as its
suubsequent deccisions and actions, will be
b technicallyy
potentiality ffor changing managers’ peerceptions about
appplicable and executively possible.
p
Alsoo, they will bee
the organizattion’s internal and external environment.. In
addopted with thhe organizatioon’s values and so they willl
their view, strrategic issue diagnosis
d
is foor the purposee of
bee morally and legally defenssible (Bryson,, 2004).
its critical efffect on both the
t process annd the contentt of
In the presentt study, we attempted too depict how
w
stages
a
and,
a formed inn three main phase.
p
We didd
strrategic issue are
a
and
so through a liiterature revieew and througgh classifyingg
to
the
stuudy areas abouut strategic isssue.
e
eventually,
the
afteer
strategicc
consequently,
decision-making
organizaational
performance.
In
organization’ss
environmeent
other
recruitment
words,
and,
ressponse
organizationaal performancee may dependd o the manageers’
ability
in
noticing
thee
transformaations
and
in
representing and approppriate interprretation of the
organization’ss strategic ennvironment (M
Motii & Sandeers,
2014, Kuvaass, 2002).
Fig. 1. Conceptual
C
moddel of strategic issues
i
formationn process
Published by Atlantis Press
Copyright: the authors
36
Abedin, Kordnaeij, Danaee Fard, Khodadad Hosseini
It could be said that the beginning of the strategic issue
In summary, the research literature review shows that
formation process is from the environment sensing
strategic issues are not something to be a priori prepared
phase. However, according to the model, this phase
and packaged, but also managers identify, interpret and
itself is affected by the final phase (i.e. strategic agenda
formulate them through paying selective attention to
formation). In fact, organization’s previous experiences
some environmental aspects and ignoring some other
about strategic issues and past agendas, could affect the
aspects (Fearon et al., 2012; Thomas et. Al., 1993).
way of environmental evaluation, or in other words, past
Therefore perhaps it could be said that one of the
experiences could make the managers’ information-
reasons why different organizations in the same
receiving antennas more sensitive to some kind of
environment make different decisions and employ
environmental information, transformations and events.
different strategies is due to organizations’ difference in
This has been emphasized in the research literature as
paying attention to issues they face.
well. Some authors like Dutton (1993), think that
With regard to strategic issue importance in the
of an issue with previous issue or that
strategic decision making process, the present study was
current ones, as well as managers’ familiarity with
conducted with the aim of representing a simple and
issues they faces, are effective in drawing manager’s
coherent picture of how strategic issues are formed and
attention toward an issue. The next phase in strategic
determined, as well as how they are incorporated into
issue formation process is issue sensing. In this phase,
organization’s agenda. Also, the aim of this research was
in
the
to fill the familiarity of the organization’s decision-
organization’s managers and decision makers (which
makers with what occurs during this period, they would
was referred to as strategic issue formation), some
have a better understanding of behaviors and activities
dynamics also flow among strategic issue middlemen or
happening around these issues formation.
entrepreneurs or individuals who peruse a person’s or
In summary, with regard to work done in strategic issue
group’s benefits. In the research literature, these
scope and research gap existing in the research
dynamics are known as strategic issue selling. Issues
empirical background, the following suggestions are
that under the effect of actions and reactions occurred in
offered for future studies:
this phase obtain the chance to attract the organization’s
– Paying attention to different dimensions of the
decision-makers, would be incorporated into the
organizations’ structure in strategic issue understanding;
strategic agenda in the final process phase and so,
– Paying attention to manager’s decision-making style in
various
strategic issue determination;
relationship
addition
to
resources
expenditure, etc.
semantic
including
dynamics
time,
among
human
force,
Would be assigned to them.
– Performing deeper research in strategic issue selling
Experience obtained in this phase would be effective in
scope and its related dynamics;
the organization’s future issue identification. Actually,
– Deeper investigation to determine the strategic issue
the organization learns from its previous experience
role in formulating company’s strategies
how to interpret its environment dynamics and how to
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Published by Atlantis Press
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39
The great acceleration in healthcare: Six
trends to heed
Shubham Singhal, Cara Repasky
“The fault lines between industries and business models that we understood
intellectually before the COVID-19 crisis have now become giant fissures,
separating the old reality from the new one.” Our colleagues in the Strategy
practice wrote this in their article, “The Great Acceleration.” We see seeds being
sown of a similar acceleration in healthcare during the COVID-19 era. As US
healthcare leaders set the direction for their organizations, six trends stand out.
These six trends are likely to shape post-COVID-19 healthcare.
Reform
Next generation
managed care accelerated
Health for all
Fragmented, integrated,
consolidated care delivery
Era of exponential
improvement unleashed
The big squeeze
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1. Reform
2. Health for all
3. Era of exponential improvement unleashed
4. The big squeeze
5. Fragmented, integrated, consolidated care delivery
6. Next generation managed care accelerated
7. What actions could you take?
Reform
COVID-19 has potentially set the stage for healthcare reform along three
dimensions: COVID-19-era waivers that could become permanent; actions that may
be taken to strengthen the healthcare system to deal with pandemics; and reforms
to address the COVID-19-induced crisis.
To enable the healthcare system to respond to the pandemic, the Centers for
Medicare & Medicaid Services has introduced more than 190 waivers and
modifications since the beginning of March 2020. 1 These actions impact the
clinical practice of medicine and the financing and reimbursement for services.
Many of these measures are only relevant during the crisis (for example, the waiver
of intensive care unit death reporting). A retrospective assessment of others (for
example, expansion of telehealth access) could reveal beneficial innovation worth
preserving.
The frontline workers and leaders in healthcare took heroic action to save lives. At
the same time the crisis has revealed areas that could improve the resilience of the
system. Some of these opportunities include ramping up measures to control the
spread of such a fast-moving virus, greater resilience in the healthcare system to
avoid being overwhelmed (for example, addressing weak links within the medical
supply chain and developing the ability to flex up critical care capacity and clinical
workforce), as well as ways to improve the baseline health of the population (for
example, offering services to mitigate the prevalence of chronic conditions and
obesity rates).
The economic impact of COVID-19 is unprecedented in the last 75 years, creating
historic economic pressure across federal and state governments, corporations, and
American households (Exhibit 1). Furthermore, in some cases the impact of
COVID-19 may cause up to roughly 10 million Americans to lose employersponsored healthcare coverage by the end of 2021. 2 In the United States, such
economic dislocation has often been followed by major healthcare reform (Exhibit
2). If the United States embarks on new reform, the contours are unclear at this
time. However, given the substantial shifts in relative market positioning among
industry players that prior reforms have created, leaders would do well to plan
ahead now, as we discussed in the article “Getting ahead of the next stage of the
coronavirus crisis.”
Exhibit 1
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Exhibit 2
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website. If you would like information about this content we will be
happy to work with you. Please email us at:
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Health for all
COVID-19 has amplified existing inequitable health outcomes. These five
intersecting health and social conditions are correlated with poorer health
outcomes.
• Physical health status. People with chronic conditions, the
immunocompromised, and the elderly make up most COVID-19 deaths in the
United States. For example, obese patients, defined as those with a Body Mass
Index above 35, are 2 times more likely to be hospitalized and 3.5 times as
likely to be admitted to the intensive care unit due to COVID-19. 3
• Behavioral health challenges. Individuals at an increased risk of
developing severe COVID-19 symptoms are nearly twice as likely to have a
behavioral health condition, including mental health and substance abuse
disorders. 4
• Unmet social needs. Americans living in areas with significant unmet
social needs (for example, food insecurity, housing insecurity) account for 15
percent of the population but 28 percent of COVID-19 deaths. 5 In areas with
high unemployment levels, COVID-19 deaths per 100,000 are 2.4 times
higher than in areas with low unemployment.
• Racial inequity. Compared with white Americans, the estimated ageadjusted COVID-19 mortality rate for Black Americans is 3.8 times, for
American Indians 3.2 times, and for Hispanic/Latinx Americans 2.5 times. 6
• Access to care. Challenges in access to care continue across the United
States, with around 60 million Americans living in counties with low physical
access to care. 7 Furthermore, around 63 percent of all counties in the United
States have a shortage of psychiatrists. 8 Telehealth offers a great opportunity
to expand access: inadequate physical access to care could be redressed for up
to an additional 50 million Americans. However, 10 million Americans still do
not have broadband access and live in areas with low physical access to care
(Exhibit 3). 9
Exhibit 3
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Era of exponential improvement unleashed
As we previously highlighted in “The era of exponential improvement in
healthcare?,” technology-driven innovation may improve our understanding of
patients, enable the delivery of more convenient, individualized care, and create
from $350 billion to $410 billion in annual value by 2025. While the pace of change
in healthcare has lagged other industries in the past, potential for rapid
improvement may accelerate due to COVID-19. An example is the exponential
uptake of digitally enabled, virtual care. Our analysis presented in “Telehealth: A
quarter-trillion-dollar post-COVID-19 reality?” showed that health systems,
primary care, and behavioral health practices are reporting increases of more than
50–175 times in telehealth visits, and the potential market size for virtual care could
reach around $250 billion (Exhibit 4).
Exhibit 4
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Proliferation of digitally enabled, virtual care could further contribute to the rise of
personalized and intuitive healthcare ecosystems. As we shared in “The next wave
of healthcare innovation: The evolution of ecosystems,” ecosystems in healthcare
have the potential to deliver an integrated experience to consumers, enhance
productivity of providers, engage both formal and informal caregivers, and improve
outcomes while lowering cost.
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would like information about this content we will be happy to work with you. Please
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The big squeeze
While the aftermath of the 2008–09 financial crisis led to a net outflow due to the
transition of commercially insured employees to uninsured, the Affordable Care Act
brought an injection of $130 billion-plus of funding into healthcare (for example,
Medicaid expansion, funding for the marketplace). However, a similar injection of
funding to mitigate the $70 billion and $100 billion outflow (for example,
coverage shifts, state budgetary pressures) due to COVID-19 may not take place
by 2022. This outflow is expected to be primarily driven by coverage shifts out of
employer-sponsored insurance and possible coverage reductions by employers as
well as Medicaid rate pressures from states.
We estimate that COVID-19 could depress healthcare industry earnings by between
$35 billion and $75 billion compared with baseline expectations. Select highgrowth segments will remain attractive (for example, virtual care, home health,
software and platforms, specialty pharmacy) and will disproportionally drive
growth. These high-growth areas are expected to increase more than 10 percent
over the next five years, while other segments may stagnate or decline altogether. 10
Despite the pressure in earnings, organizations with businesses that operate in the
lower-growth segments may still outperform and deliver higher-growth returns by
improving productivity. We estimate between $280 billion and $550 billion in
opportunity within healthcare delivery by 2028 achievable through productivity
gains. More details can be found in our publication “The productivity imperative for
healthcare delivery in the United States.”
Fragmented, integrated, consolidated care
delivery
The shift of care out of hospitals is not new but has been accelerated by COVID-19.
Care in the next normal could be increasingly delivered in distributed sites of care
(Exhibit 5), integrated around the patient through digital and analytics across
patient-centered ecosystems, and driven by at-scale players pursuing proven
models to outperform. Larger, geographically diversified providers are weathering
the financial impacts of COVID-19 better. 11 These systems also own an outsized
share of the distributed, outpatient assets that could drive earnings growth in the
next normal. For example, the largest 25 percent of health systems generate 60
percent of revenue from outpatient assets compared with around 40 percent for
smaller systems. 12 Furthermore, large payers have rapidly become major owners of
non-hospital care delivery assets, with nine out of ten top payers already owning
distributed, outpatient assets. 13
Exhibit 5
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Next generation managed care accelerated
Payers pursuing the next generation managed care model (through deep integration
with care delivery) demonstrate better financial performance, capturing an
additional 50 basis points of earnings before interest, taxes, depreciation, and
amortization above expectation (Exhibit 6). This next generation managed care
model has been driven in large part through Medicare Advantage, where positive
outcomes have been delivered to beneficiaries.
Exhibit 6
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As discussed earlier, the current crisis is placing substantial pressure on employers’
economics. However, the primary lever of shifting costs to employees to promote
value conscious consumption has run out of steam. In 2019, average employee
contribution for family coverage was 32 percent at employers with more than 500
employees and 53 percent for smaller employers with less than 500 employees. The
intense pressure on household financials makes the overall healthcare exposure
larger than many consumers’ ability to absorb (Exhibit 7). Employers and payers
could consider fundamentally rethinking how employer-sponsored health coverage
is structured. Learnings from Medicare Advantage (Exhibit 8) could provide
inspiration for such a reimagination.
Exhibit 7
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Exhibit 8
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What actions could you take?
• Launch a plan-ahead team to collect forward-looking intelligence, develop
scenarios, and identify decision points for action to navigate uncertainty in
the path to the next normal. As we outlined in “Getting ahead of the next stage
of the coronavirus crisis,” planning ahead for crises requires a dedicated
effort, with a full-time senior executive leading and accountable for a team of
high performers located “next door” to the CEO.
• Question everything about your role in healthcare and future business
model as your organization transitions from “wartime” to “peacetime.” More
details on the transition can be found in our article “From “wartime” to
“peacetime”: Five stages for healthcare institutions in the battle against
COVID-19.”
• Ramp up capabilities to transform your business, including
acquisitions and alliances. Our two decades of research outlined in the
article “The power of through-cycle M&A” show that a through-cycle mind-set
to M&A can enable and accelerate the strategic shifts necessary to emerge
from the COVID-19 crisis healthy and profitable.
• Reimagine your organization to lock in the speed of decision making
and execution achieved during the crisis. In “Ready, set, go: Reinventing the
organization for speed in the post-COVID-19 era,” we share nine discrete ways
companies can get faster.
• Lean forward on actions to drive health equity. We expressed the criticality
of tracking the damage of COVID-19 and the recovery from the pandemic
along racial lines in “COVID-19: Investing in black lives and livelihoods.” It is
incumbent on all stakeholders to take proactive action to mitigate disparities
and push toward health for all.
While the challenges are numerous, leaders who seize the mindset that “disruptive
change provides an opportunity to separate yourself from the pack” will build
organizations meaningfully stronger than the ones they ran going into the crisis.
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