The Executive Suite: Private practice strategy: A road map to success

A strategic plan is not just a document written by physicians and managers and then filed away for safekeeping. It is a vision for the practice, owned by the practice. For the practice to succeed, everyone must engage with and live and breathe the plan. Strategy should inform your operations, your structure, and how you go about practicing medicine. Your strategic plan should be the pillar against which you assess your priorities, your actions and performance. As such, it’s mission critical that your plan is comprehensive and up-to-date. Here are eight assessments for your strategic plan:

1. A strategy to beat the competition

Each year, perform a thorough analysis to get a clear picture of how the competing practices’ forces in your specialty are likely to play out. To grow at an accelerated pace, you will need a meaningful point of difference that can’t be easily copied or nullified. Mindlessly copying another practice’s business model is not a strategy — it is a recipe for mediocrity. Do you really have a winning strategy?

2. A sustainable competitive advantage

How will you make money in the future? Do you have a unique strategic position, a concept that you “own” in the minds of your target patients? Do you have special capabilities that can’t be easily copied? Remember that nothing lasts forever, so you need to focus on both today and tomorrow.

3. Focus on a clearly defined target market patient or referring physician

Push for the narrowest possible segmentation of your target market. You need to aim for the bull's eye to hit the target. Clearly defining and understanding your target market patient or referring physician is one of the most powerful things a physician practice can do to improve its strategy.

4. Develop a strategy that puts you ahead of the trends

Many strategies place too much weight on current trends. But as the founder of modern management Peter Drucker said, it is not the trends, but “the changes in the trends” that leaders must stay current with. These changes creep up so slowly that most practices fail to act until it is too late to mount an effective response, let alone take advantage of it. They are held back by sunk costs, an unwillingness to cannibalize a legacy business or an attachment to yesterday’s formula for success. Instead, you should always look to the edges. How are your patients shopping for healthcare? What are the innovative new entrant competitors doing? What innovations could change your entire specialty?

5. Embrace uncertainty

Prioritize all your current threats, things that could derail your strategy, as part of your annual SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Consider what action you would take if these worst-case scenarios came to fruition. Could you handle it? Do you have a contingency plan ready to implement?

6. Commitment and tradeoffs

Hedging your bets is not a strategy. A full commitment to a defined course of action is the only path to a sustainable competitive advantage. This requires tradeoffs, as you can’t be all things to all people. Remember to consider what you are NOT going to do, and accept those self-imposed limitations to stay focused on long-term success.

7. Confirmation bias

Confirmation bias refers to a tendency to cherry-pick information that confirms existing beliefs or ideas. The best way to avoid this is to ask an outside consultant to facilitate your strategy discussions. That individual has no emotional ties to your practice and will instead lead a rational discussion on your strategic plan’s viability.

8. Translate into a one- or two-page summary

Capture your key decisions on a very short document so that everyone in the practice can clearly see where your practice is going, how you plan to get there and what specific actions they need to take to play their part.

Strategic planning should be an ongoing process - not a rare event. Effective medical practices update their strategic plan at least annually to ensure relevance with the competitive environment and to re-align all their staff to the most important priorities each quarter. Strategic planning provides a physician practice with a real and lasting competitive advantage when treated as a work in progress rather than as a binder on a shelf or a file in a computer.A living strategic plan will help direct the business to where you and your partners or advisers desire it to go.

Creating a winning strategy is just the beginning. Spending time to invest in the future will result in a clear focus, a sense of joint purpose and agreed-upon priorities, consensus among stakeholders, and a basis for measuring progress and impact. Strategic planning is your practice’s road map to that shared vision. The real leadership challenge then becomes the successful execution of your strategy. But of course, you must start with a "real" strategy – if you want to have any chance of winning at the game of business. Are you ready to prepare a strategic plan?