Chile

Handling Strategic Execution Like a Pro: Healthcare Innovator Plays to Win with Leading Risk Framework


By breaking processes and metrics down to this level, the strategy team was able to remove guesswork from revenue projections and better align goals and metrics with achievable and realistic outcomes. The result was an industry-leading framework for strategic execution risk with forward-looking forecasting tools and metrics.


Page Title: 
Handling Strategic Execution Like a Pro: Healthcare Innovator Plays to Win with Leading Risk Framework
Content Group: 
Chile
Case Study Title: 
Handling Strategic Execution Like a Pro: Healthcare Innovator Plays to Win with Leading Risk Framework
Country: 
Original Publish Date: 
Thursday, December 22, 2016
Title: 
Handling Strategic Execution Like a Pro: Healthcare Innovator Plays to Win with Leading Risk Framework
Secondary Contact: 
James W. DeLoach
Approach : 

In football, the great running backs have an uncanny knack for finding the lane that leads them on the right path to the goal line — even when that path first appears blocked. Knowing their teammates can clear the path, they capitalise on the opportunity by pushing forward with speed and agility even when there seemingly is nowhere to go. Such ability to find the hole in the line and break free is highly prized, not only in football but also in the business world, where stakeholders expect executives to scan the horizon for opportunities and set a course for success, even when at first glance opportunities may appear limited.

It’s fair to say that, unlike exceptional running backs, many executives fall short in their efforts to read the future and find the path to success. This difference between aspirational goals and eventual outcomes is known as the strategic execution gap — the risk of falling short.

At one international nonprofit healthcare system, the executive team had set ambitious goals for the organisation's future. They wanted to evolve the organisation beyond its roots as a traditional hospital network with success measured by occupancy, or “heads in beds”, to an integrated outcomes-based network of clinics, outpatient centers, long-term-care facilities, physician practices and other ventures across the entire continuum of care.

Recognising that the biggest challenges to transformative change are often operational, company executives turned to Protiviti to help them identify potential operational risks and develop a risk management framework with forward-looking metrics to monitor execution of the strategy and allow for timely corrective actions.

Process: 

The company CEO and the audit committee approached Protiviti during a regular internal audit engagement, inquiring about enterprise risk management (ERM). As the discussion progressed, it became apparent that the committee had a well-articulated strategy with accountabilities assigned all the way down to the lowest level of the organisation. In addition, executives had a forward-looking tool that enabled them to forecast new net operating income streams that aligned to their integrated strategy, and   they had a metrics structure that they used to monitor their operations closely over the course of the year. These tools enabled the executive team to assess the sufficiency of new earnings streams in offsetting losses resulting from the decline of the core hospital business. So, with regard to ERM and execution, it wasn’t a question of not looking at risks; rather, the CEO was concerned executives were looking at too many risks.

Over several rounds of discussion, company executives and Protiviti “peeled the onion” to get down to what the CEO and the audit committee were after — a framework that would allow the executive team to know when strategic execution risks were emerging so that timely course- correcting action could be taken.

Together with the company’s strategy team, Protiviti set out to develop a strategic risk profile, prioritize risks and align monitoring efforts with the company’s desired outcomes. Working closely with the CEO’s direct reports and various executives who owned different components of the integrated strategy, we came to understand their real concerns and developed a family of  new  metrics better aligned with the  organisation's strategies.

Development: 

This was an extremely detailed and iterative process that involved working backward from desired outcomes to identify all the contributing factors, develop a metric for each and determine whether that metric was worth tracking. For example, if the organisation is looking to expand its primary care network to align to its population health strategic objective and it knows there is a 20 percent acceptance rate among physicians who sign a letter of intent to join, it would have to determine how many additional physicians it would need to recruit, as well as whether there are enough qualified physicians within the targeted regions to meet the goal.

During the development of this risk management framework, it also was important to streamline the reporting process so that new metrics don’t pile on top of old ones, adding burden to the process. In the end, the total number of metrics was reduced by half, with most of the new metrics being leading, instead of lagging, indicators.

After a successful pilot, the process was replicated for each strategic initiative across the organisation. The audit committee approved the plan, and the executive team began the implementation in 2016.

With a new system for managing strategic execution risk that allows for more reaction time, this ambitious healthcare provider has positioned itself on the leading edge of the healthcare industry. The rules in healthcare are changing constantly, but at this company, executives are moving forward with the confidence of an early mover — a forward-looking enterprise with an eye on the metrics that matter.

Primary Contact: 
Susan Haseley
Description: 
In football, the great running backs have an uncanny knack for finding the lane that leads them on the right path to the goal line — even when that path first appears blocked. Knowing their teammates can clear the path, they capitalize on the opportunity by pushing forward with speed and agility even when there seemingly is nowhere to go. Such ability to find the hole in the line and break free is highly prized, not only in football but also in the business world, where stakeholders expect executives to scan the horizon for opportunities and set a course for success, even when at first glance opportunities may appear limited. It’s fair to say that, unlike exceptional running backs, many executives fall short in their efforts to read the future and find the path to success. This difference between aspirational goals and eventual outcomes is known as the strategic execution gap — the risk of falling short.