Monday, March 19, 2012
Role Playing For Success
Does your team need a "crystal ball" to predict the future? Do you think you can't do strategic planning because you don't know exactly what is going to happen in the future? Well, there is no "crystal ball" that shows you what you should expect in the future – and you need to be planning, even where the "future" seems a bit hazy.
The interesting part is that not knowing the future isn't really the impediment to planning – it is knowing the timing of future events that is tricky from a business and investment perspective. We already have a pretty good idea about what the future of the health and human service field will look like, and I think there are eight developments in that future that most organizations can count on:
Market segmentation will emerge around consumer cost cohorts – the financing and service delivery systems for "high cost, complex consumers" versus "retail consumers" will look markedly different.
Most health care funding will be through "payers" (rather than 'safety net' sorts of grant funding) and most payer models will be based on managed care and ACO model – with reimbursement focused on "total cost of care" and "pay for performance."
The proportion of funding through Medicaid (due to health care reform expansion) and Medicare (due to demographics) will increase.
These shifts will force a redefinition of "social service" and "safety net."
There will be three big "macro" shifts in allocation of funding by payers:
Dollars will move from hospitals to community-based
From specialists to primary care
From face-to-face services to tech-enabled services and other technologies
Consumer "engagement" (not compliance) will become a key competency for both care management programs and service provider organizations.
Tech-enabled care models will become the 'norm' for retail consumers and for management of services for high-cost consumers.
Excellence in informatics will define the winners and losers.
The question for every executive team is, what will these developments look like in your specific market and how fast will these developments happen? Being too early in a market is a formula for a sea of red ink and being too late causes a loss of competitive advantage.
How do you plan for this change, how do you know when the market is shifting and how can you be ready when that happens? There is no easy answer. But, I've found that the best way to address the "uneven" evolution of the health and human service market is using scenario-based strategic planning informed by great market intelligence.
Scenario-based planning is a methodology developed by the petroleum industry – that has been successfully modified for health and human services. Essentially, in scenario-based planning your executive team outlines the likely scenarios in each market, develops a plan for each, and builds their action plan around the most likely scenario in the near term (one to two years). What scenario-based planning does is allow your team to identify the strategies, tactics, and investments that are common among most scenarios – and invest with confidence in those activities.
Market intelligence is the on-going process of acquiring, organizing, and analyzing information about a market in order to make strategic decisions (I contrast this to market research, which is market information at a point in time.) The best market intelligence tracks three key domains of market information:
Shifts in the marketplace – both within the field (policy, legislation, regulation, etc.) and outside the field (technology, scientific discovery, economy, demographics, etc.)
Customer tracking – both payers and consumers
Market intelligence is what executive teams use, both to identify future scenarios in their market and to know when the market has shifted from one scenario to the next. The advantage of market intelligence-informed scenario-based planning is that your management team understands possible future scenarios, your executive team has a plan for future shifts in the market; and your organization can prioritize investments based on their utility in the future.
For more on how to step up your planning process with a scenario-based approach, join my colleague OPEN MINDS Senior Associate Joseph Naughton-Travers on June 6, 2012 for "Creating Your Strategic Game Plan: Deciding What To Do, When To Do It & How" at the
2012 OPEN MINDS Planning & Innovation Institute.
Monica E. Oss
Chief Executive Officer, OPEN MINDS
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How Can You Lead, When You're Not Sure Where We're Going?
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