By Robert C. Moss – Executive Vice President, Paragon Health
Exit planning is all about how and when you get out of your current business model – or transition to the next iteration of your strategy. Exit planning is a powerful tool in your strategic planning arsenal, but few use it to its full potential. In this article, we want to give you some basic concepts you can use to gleen some of the benefits of exit planning.
Exit planning starts with measurement. As the saying goes, “you cannot manage what you cannot measure.” Indeed, in today’s healthcare environment we are inundated with measures imposed upon us from a wide range of sources including the federal government, payers, quality registries and more. So what measures are strategic? And what measures can we use to evaluate our exit strategy?
Step One: Desired Effects
Before we can measure, we need to have clearly articulated desired effects from our current programs. Do you have a clear, compelling vision that defines what success looks like? Once you have this in place it will give you the clear strategic criteria you need to know if you are winning, losing, or neutral – strategically speaking. Your desired effects must be measurable and they should be subordinate to the organizational or enterprise strategic plan. Once defined, understand up front what success looks like and clearly set these expectations.
Step Two: Measurable Components
Break down each desired effect into its core components and develop a measurement system that clearly identifies the range of performance that is acceptable – not too hot, not too cold – just right. Develop the measurement criteria that leads most directly to the desired effect; the frequency of measurement (monthly, quarterly, etc…); who is responsible for measuring. From this activity the critical actions will fall out to comprise the overall work plan to achieve the desired effect(s).
Step Three: Measure and Act
The discipline of measuring and acting are frequently disconnected in time. However, in dynamic and fast changing environments organizational agility many times defines competitive advantage. During the measurement cycle consider the following points:
- If the minimum level of performance is not achieved within a defined period of time, an immediate action is required.
- Understand the rate limiters: internal vs. external.
- Be dispassionate in your approach to determining how aggressively to pursue either course corrections or exiting the service area completely.
- If you are working within the targeted range, stay the course and continue development and measurement until the desired effect is achieved.
- If the maximum level of performance is achieved, quickly reinvest and re-set the bar.
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