The word “strategy” derives from the Greek “strategia,” which means “generalship.” The early literature on strategy was almost exclusively military in nature. There are myriad articles, books, and seminars exploring strategy and strategic planning, with more than a thousand dedicated to healthcare strategy. Emergency leaders can choose from numerous definitions of strategy to determine the best approach to this subject.
“We have a strategic plan. It's called ‘doing things.’”
Herb Kelleher, Founder of Southwest Airlines12
For the purposes of this chapter, strategy is defined as the plan, path, or action chosen by healthcare leaders to differentiate their organization from others. A fundamental question when developing healthcare or ED strategy is:
“Among the many things, which could be done in moving forward, what will be done to differentiate the organization?”
Healthcare systems and EDs increasingly find themselves in capacity-constrained environments. The ability to differentiate an organization is more and more dependent on selecting the most appropriate courses of action. As Michael Porter, a respected voice in strategy has noted,
“Strategy is about making choices and trade-offs; it's about deliberately choosing to be different.”13
While there may be “no bad ideas” in the brainstorming sessions to determine vision, mission, and value statements, there are many bad ideas when forming strategies. For instance, if an organizational goal is to maximize return on investment (ROI), the leader must discern and eliminate the bad ideas (those with low ROI and poor capacity to differentiate the ED) from the good ideas (those high-leverage strategies most likely to produce positive and measurable results). Indeed, the capacity to develop and successfully implement strategy becomes a core competitive skill of healthcare and ED leaders. Again, Michael Porter's wisdom is helpful:
“The best CEOs I know are teachers, and at the core of what they teach is strategy. The chief strategist of an organization has to be its leader—the CEO.”14
ED medical and nursing directors are, in tandem, the CEOs who drive the success of the ED. It is therefore essential for them to successfully discover, implement, and sustain strategies to differentiate their ED.
Among the numerous authors who have written on the subject of strategy, 3 have framed their work in ways, which are particularly helpful for those pursuing strategic objectives in the ED:
- Henry Mintzberg
- Michael Porter
- Tom Peters
Henry Mintzberg's work was the first to clarify that strategic planning and strategic thinking are not synonymous, and in fact are in some ways diametrically opposed. He stated:
“Strategic planning, as it has been practiced, has really been strategic programming, the articulation and elaboration of strategies, or visions, that already exist.”15
Strategic thinking is similar to “innovation,” creatively synthesizing varying experiences into a novel approach. Strategic planning may be described as a calculating style of management. Strategic thinking is more of a committing style of leadership:
The following words from Mintzberg seem as if they were written specifically to address the nature of strategy in healthcare in general and EDs in particular:
“Real strategists get their hands dirty by digging for ideas, and real strategies are built from the occasional nuggets they uncover. These are not people who abstract themselves from the daily details; they are the ones who immerse themselves in them while being able to abstract the strategic messages from them. The big picture is painted with little strokes.”15
The very nature of the ED hierarchy requires effective nursing and medical directors to be immersed in the details of daily operations. Their insights are essential to meaningful ED strategic planning processes. Equally so, the insights and participation of the line nurses and physicians, who perform the work of caring for patients are necessary for meaningful strategic planning. “There is no ‘Office of Strategic Planning' in the emergency department!” Instead, as Mintzberg's insights point out, both the providers of clinical care and the leaders must be charged with ED strategy development and implementation.
In seeking differentiating factors, Mintzberg notes that there are at least 4 fundamental ways in which strategy may be viewed:
Strategy as a plan
Strategy as a pattern
Strategy as a position
Strategy as a perspective
Strategy as a plan means strategy is a guide, a course of action into the future, or a specified path to get from where the organization is to where it seeks to be. Perhaps the largest problem with “strategy as a plan” used alone is that the world of healthcare is complex, rapidly changing, and requires substantial commitment of multiple stakeholders. In other words, a plan is not the same as successful execution. For instance, an ED pursuing a “30-Minute Guarantee” as a strategy must utilize multiple resources to accomplish the goal. However, if appropriate processes, staffing changes, intensive oversight, etc do not support that plan, the strategy (plan) will fail.
Strategy can also be viewed as a pattern, a relatively consistent set of behaviors over the course of time. As Aristotle noted:
“Excellence is not a virtue but a habit. We are what we repeatedly do.”17
Consider a Level 1 Trauma Center ED with a strategy focused on providing excellent care to critically injured patients. Excellence requires delivering a consistent pattern of care. However, isolated focus on that pattern of care alone may adversely affect the care to patients with lower acuity problems. The lower acuity patients may experience inattention and long delays and find that they are “competing” for the scarce physician, nursing, radiology, and laboratory resources.
Both Minztberg and Chris Argyris have noted the importance of distinguishing between an “espoused strategy versus the strategy in action.”18 In a Fortune magazine article, Walter Kiechel notes that strategy consultants estimate that less than 10% of strategies are successfully implemented,19 a figure Tom Peters instantly described as “wildly inflated.”20 Prior to implementation of a strategy, an objective assessment of the current practice patterns can demonstrate the current and anticipated use of resources. For example, the Level I trauma center described previously has demand-capacity mismatches. While a conceptual strategy of pursuing more low-acuity patients may seem attractive, data from the current practice patterns would demonstrate a lack of additional personnel and resource capacity to care for additional patient volume.
Strategy as position, the determination of particular products in particular markets, is presented in the work of Michael Porter discussed later. As an example, an ED pursues a strategy to attract low-acuity patients through a dedicated Fast Track. The business plan recognizes significant profitability, based on high-volume and low-resource utilization (low utilization of lab and radiology services and use of allied health professionals rather than more expensive physicians). At substantial cost, the Fast Track is built, providers are hired, processes are changed, and the program is promoted to the community. However, in this particular market, there is an overabundance of options for low-acuity patients, including a few new community primary care providers and a nearby urgent care center with capacity. In this case, considering the strategic pattern of care in the community might have led to a different conclusion about the strategic position of this plan.
Finally, Mintzberg suggests that strategy may be viewed as perspective, an organization's way of doing things or, as Peter Drucker said, “its concept of the business.”21 This approach may be somewhat less applicable to EDs. As an example, tertiary-care EDs in academic medical centers may struggle to define a typical ED strategy, when the institution is pursuing national and international strategies:
- The Mayo Clinic has a reputation as a major diagnostic center with clinicians, who are well known for their ability to “figure out” complicated medical problems.
- The Cleveland Clinic and Duke Medical Center have enviable reputations as cardiac care centers of international renown.
- UCSF and the Barrow Neurologic Institute are held in high regard for their neurologic centers.
The ED might wish to develop a strategy to serve the local and regional needs of ED patients within their service areas. However, the EDs of these centers may have difficulty creating strategies that are separate from the broader, more national consultative approach of the healthcare system.
Another concept of strategy as perspective is demonstrated by the focus on service throughout the institution.
- Mayo Clinic describes “Patient First” focus22
- Studer Group uses evidence-based leadership principles23
- Many institutions embrace patient and family focused care24-25
These examples are all ways of pursuing an institutional strategy based on a specific perspective. The associated EDs must participate in the “perspective” and recognize their role within the larger institutional strategy, whether it is a focus on tertiary care, service, or other strategic areas.
Michael Porter on Strategy
Porter's work on strategy includes a rich background on general strategy as well as recent work concentrating on healthcare value and reform. This discussion reviews Porter's concept of strategic positioning, which comprises 3 key principles.14 Strategy
- is the creation of a unique and valuable position, involving a distinct set of activities
- requires trade-offs in competing—to choose what not to do
- involves creating “fit” among an organization's activities
Porter further defines strategic positioning as serving 3 key needs, including the
- Few needs of many customers/patients—patients with low-acuity problems receive minor, rather than in-depth care in an urgent care center.
- Broad needs of a few customers—specialty diversification in ED care (such as those described in Section 4 of this book, eg, pediatric, geriatric, fast track, trauma center, behavioral, etc).
- Broad needs of many customers in a narrow market—EDs in an underserved area, in which ED practitioners provide care to patients beyond their immediate emergency.
Porter also makes the important distinction that operational effectiveness and strategic positioning are not the same thing. Operational effectiveness may mean performing certain activities better, faster, more efficiently and with greater safety than competitor EDs. It is easy to recognize that operational effectiveness could be used to gain a competitive advantage, that is, strategic positioning. However, that goal would not be achieved if that operational effectiveness
- Is soon achieved by other competitors
- Remains unknown to the target community
- Cannot overcome the negative perceptions of the ED or hospital in the community
Strategic positioning seeks to achieve a sustainable competitive advantage by identifying, preserving, and amplifying what is distinctive about an ED, either by
- Performing different activities from the competition, that is, developing a dedicated pediatric area with specialists in pediatric emergency medicine, or
- Reliably and safely performing the same or similar activities in demonstrably superior ways, that is, adopting a highly-evidence-based approach to the most common ED clinical presentations can reliably decrease length of stay (LOS), increase reliability, decrease malpractice risk, and increase patient and staff satisfaction.26
“There is one key to excellence. It is called ‘a bias towards action.’”
Tom Peters and Bob Waterman, In Search of Excellence27
Since the publication of In Search of Excellence in 1982, Tom Peters' voice has been a unique, contrarian, and iconoclastic breath of fresh air in the leadership and management literature. In addition to the call for a “bias towards action” in that seminal work, Peters has incessantly stressed the importance of the people charged with executing the strategy over the strategy itself. Peters has consistently and relentlessly said,
“Get the people and the execution right and the strategy will take care of itself.”28
“Knowing who you are going with tops the list of imperatives in a world of whitewater and knowing that those who you're going with share your passion and determination tops that.”28
As Peters asserts the importance of choosing a team of people capable of thinking aggressively about problems, he quotes 2 additional germane sources:
“Reward excellent failures. Punish mediocre successes.”29
Phil Daniels, successful Australian businessman
Ready, Fire!, Aim
If it ain't broke, break it!
Ask dumb questions.
Lead, follow, or get out of the way.
Ditch your office.
Read odd stuff.
Kevin Roberts, CEO, Saatchi and Saatchi Worldwide30
Tom Peters' message is that all service is personal and that healthcare (emergency medicine in particular) is a personal service business. Strategies can only rarely create passion in people who have a “job” instead of a “calling” or a “passion for excellence.” Instead, it is the task of the leader to ignite passion in the strategy. In this sense, the leader is in the “talent arbitrage business,” leveraging the skills and abilities of the team to drive the strategy.31
“The most important strategy that healthcare CEOs can pursue is…people.”32
Jim Collins makes the same point in noting:
“First who, then what. First the people, then the direction. Start by getting the right people on the bus.”33
Putting Strategy to Work in the ED
It is necessary to combine the insights from each of these and other acknowledged visionaries to devise a strategy that differentiates one ED from another. A wide variety of strategies can be pursued, alone or in combination, to achieve effective differentiation:
- Speed: Fast track, 30-minute guarantees, free-standing EDs, etc
- Quality: Trauma and acute care
- Specialty care: Pediatrics, geriatrics, sports medicine
- Service: Dedication to patient first, caring and curing, call-backs, and the like
- Value: High-quality, low-cost provider of care, best quality per dollar spent
- Convenience: Multiple locations throughout a service area
- Flow: The ability to add value while eliminating waste in patient care
- Safety: Reliably delivering quality care consistently for every patient, every time
This is only a partial list of potentially differentiating strategies. The key to each of these strategies is specifically delineating how the ED will be differentiated from other EDs, either within the service area (to increase market share) or on a national basis (for those hospitals or groups which identify innovation of the entire specialty as one of their goals).
The Sentara example: Sentara Health System in Virginia pursues a formula for strategic positioning of its EDs based on the Sentara Vision:
“We improve healthcare every day.”
Using its vision as a foundation, each meeting is guided by a strategy, which addresses the 4 Ms in order to make strategic decisions:
- Mission: To make the communities we serve healthier places to live, work, and play
- Market: To be the number one choice for healthcare services in the market
- Medicine: To set the standard for medical excellence in the community
- Members of the team: To be the regional employer of choice
This framework guides the ED decision makers on their strategy decisions and aligns their strategic processes with the broader strategy of the hospital and healthcare system. Regardless of the framework utilized or the model of strategy employed, ED medical and nursing leaders should develop an articulated and easily understood strategy to become a fundamental aspect of their department's work.
Other specific examples of ED strategy are listed in Appendix 2-1.