Aligning Strategic Project Goals with Organizational Goals During Technology Implementations: Hospitals & Health Systems www.cherryroad.com Recently, a senior executive of a Midwestern Hospital & Health System was telling anecdotes as to why certain departments in the organization were not on the same page as they prepared for a major system implementation. He expressed his frustration by saying, Just once I d like to be involved with a project without any issues and where the planning is done properly not only do we lack defined goals for the project, but the department-level goals we have are not clearly stated, communicated or followed. Another executive had concerns prior to beginning a system upgrade. He wondered how there still could be so many disconnects among his HR and IT organizations-even though they had recently completed a new system implementation. This is not an uncommon problem. Alignment of strategy, operational and financial people, and core processes is a primary responsibility of the executive leadership of an organization. Misalignment of improvement initiative goals causes a lack of organizational focus, resulting in wasted resources and disillusionment. Alignment is difficult when bringing clinical, financial and IT areas together to agree on goals and objectives (e.g., clinical areas are most concerned with patient care, IT is interested in the best system, finance wants to control costs, etc.). The questions everyone on a technology project (and throughout the entire organization) want answered are: Why are we doing this? What are the project goals? What was bought? Why it was bought? And what are the benefits? It s that simple! And it s usually the seemingly simple or common sense items that, if not addressed properly, put the entire project at risk. Aligning Strategic Project Goals with Organizational Page 1 of 9
Unique Challenges to Hospitals & Health Systems When undertaking a technology implementation, executives at hospitals and health systems face numerous challenges including budget constraints, competing projects and initiatives, disparate and incompatible systems, political issues, and unique cultures (e.g. Physicians, Accountants, IT personnel). Missions and objectives such as patient care, community responsibility, and providing business benefits often compete for the same limited budget dollars and scarce human resources. There is a constant challenge between increasing the quality of patient care and decreasing the inefficiencies that exist throughout a business organization. The downfall for many healthcare organizations is that they become so encumbered with differing organizational priorities that they ignore their strategy. Their focus turns to cost control, reducing preventable medical mistakes, and internal politics. Meanwhile, issues related to the project such as developing consistent policies and procedures (e.g., remembering that clinical departments have disparate processes for procuring items when designing a new procurement function) and project management concerns (do we have the proper resources assigned to this project?) go unsolved. Often, large technology projects that cross both multiple hospital departments and numerous lines of business do not work towards the same goal (e.g., patient care vs. cost savings). Project success in this environment depends on understanding the overall corporate vision and defining measurable project goals to support that vision and diverse stakeholder goals. Using a strategic technique such as a Goal Alignment analysis increases the chances of project success in an environment that has disparate departments, personalities, and individual raison d'être. What is Goal Alignment Analysis? Goal Alignment analysis is an effective technique to gain insight around the challenges and issues within an organization. It provides bottom line benefits that increase the chances of project success. It can either be a focused analysis that is performed before a system upgrade or implementation, or a broad strategic analysis that aligns departmental goals with the goals and missions of the entire organization. The analysis takes three to four weeks and comprises the following: Interviews with key stakeholders: These focused interviews can be either individual or in small groups and are mostly with senior management at both the department and organizational level. Additionally, key internal partners are included to provide a crosssection of thoughts, ideas and risks. For example, if the project is IT focused, gaining insights from clinical and financial areas is key to understanding project perceptions. It is during these interviews where stakeholders communicate specific goals and challenges in the organization, voice internal and external perceptions about both the project and the organization as a whole, and get a confidential chance to voice their feelings to the senior management of the organization (quotes are used but not attributed). Aligning Strategic Project Goals with Organizational Page 2 of 9
Numerous types of questions can be asked during this analysis, and the most effective ones are those developed by both the hospital leadership and the strategy consultants. The first element is whether or not there is a stated goal or vision that has been espoused to the organization. If so, the results of the analysis will show whether the organization was paying attention or not. When speaking of organizational goals it is critical to focus on specific, measurable goals. It is especially important to establish the goals before buying software and to openly communicate the goals to the entire organization (What you bought, why you bought it, and what the benefits are). In this process it is critical to set expectations as to what functionality, for example, is being delivered with an upgrade or an implementation. Many in the organization may believe they are getting a fully-loaded Porsche with the new system, but if the true delivered functionality is only the equivalent of a Yugo (or your current system), there will be a backlash against the system and the critical stakeholders will not buy-in since they feel their needs were not met or worse, not even considered. Strategic Insight: The results of the analysis help to educate the management and staff of the perceptions and feelings throughout the organization. As one senior executive at a Midwestern health system stated, Getting everyone on the same page is critical for a crossdepartmental project to succeed unfortunately, most of the time I have no idea what is going on in other departments and how a large initiative will affect them. Most senior executives that participate in a Goal Alignment initiative find that direct and concise information about stakeholder wants and needs is one of the most valuable aspects of the exercise and helps the organization as a whole to quickly become more strategic. The Goal Alignment analysis results can provide a roadmap that shows the organizational needs that must be addressed. These inputs and opportunities can then be incorporated into the project plan and longer term strategic plans. Risk Assessment: Once the analysis has been completed and the results tabulated, the next step is to identify issues and risks, and recommend strategies for mitigating them. Issues and risks that are uncovered are usually based on both interview findings and the consultant s functional and industry experience. The value proposition here is that Goal Alignment analysis uncovers risks, issues, and opportunities before major initiatives begin and before systems are implemented so that any surprises, missed opportunities or serious roadblocks will be identified before funds are allocated for implementation activities. This awareness will help the organization proactively address all issues and risks that will keep them from achieving their stated goals. Additionally, the results of the analysis will help prioritize (or reprioritize) any action plans or project plans that have been created to ensure alignment with all parts of the organization. Finally, the analysis ensures that an appropriate amount of funding is allocated so that all appropriate goals and expectations can be met. Aligning Strategic Project Goals with Organizational Page 3 of 9
Expected Results The results will always contain surprises and their extent will be intriguing. For example, one senior executive knew there was a communication problem in his organization. Specifically, the IT & Finance did not talk. But that executive was extremely surprised to hear that 70% of respondents felt like the communication gap was his fault! Another surprise that a Goal Alignment analysis revealed was that during a Change Management initiative, most respondents indicated that process issues were one of the areas that most needed to be corrected. Unfortunately, the particular hospital had already started the implementation when they performed Goal Alignment analysis. The process work was not included in the original scope so it was too late to revisit without significant costs and time being incurred. However, even in this situation, the results allowed senior management to do two things: 1) set expectations that process issues were not in scope and 2) revise the future phases to address process concerns. There are a number of ways to extrapolate both qualitative and quantitative data from the interviews. The hard number survey data such as ranking the organization s change ability from 1 (low) 10 (high), or compiling the gaps cited most often in the organization will show overall trends and opportunities within the organization. But it s the qualitative data (specifically the confidential quotes) from interviewees that provide some of the greatest insight (and often some of the best humor) as to what stakeholders in the company are thinking about the project and the organization in general. For example, when a senior member of a Hospital project team was interviewed and asked what she thought of the project timeline, she stated, This interview is the first I ve heard about the Go-Live date." What do aligned goals look like? Figure 1-A on the following page shows a typical aligned organization (Note: Stakeholders were asked what their goals were for a particular project). When there is true alignment, the majority of responses fall into 2 or 3 categories, possibly with a few outliers that are more nice to haves. Figure 1-B shows misalignment with very little consensus among responses, and many goals having no connection to one another. Aligning Strategic Project Goals with Organizational Page 4 of 9
Interestingly, when results similar to figure 1-B are attained (misaligned goals) the interviewees are usually more aligned around the problems, issues or gaps that prevent alignment than the goals themselves. In other words, interviewees tend to be in perfect alignment with one thing what is wrong with the organization. So, if everyone knows what the gaps are, why not simply fix them and get in alignment? The reason is that disparate organizations such as hospitals usually do not perform exercises such as this and cannot develop a strategic roadmap based on information from other departments since politics, culture, and a variety of other factors prevent information from being shared. Aligning Strategic Project Goals with Organizational Page 5 of 9
Aligning Goals A Primer When asked about their goals for a particular system implementation, the CEO, COO, CFO, and CIO of a renowned hospital all had disparate answers. These answers varied by level, but there was also a wide range of views across senior executives. Not only did these senior executives have differing goals for the project, but they also had difficulty agreeing on why the system was purchased (e.g. ROI vs. upgrading technology vs. sunset of unsupported systems), and how the system would be used: COO (Patient Care), CFO (P&L), and CIO (Technology advances). These discrepancies get back to the fundamental factors of politics, budgets, and misaligned goals in differing lines of business (clinical vs. financial vs. IT) and the associated personalities in each area. Is it necessarily wrong to have different goals? Not if that is how you are incented to behave. The problem lies in the independence of the goals that do not mesh with the overall corporate strategy. For example, a recent Goal Alignment analysis at a 3,000-employee hospital was broken up into three teams along department lines (an IT team, a supply chain team, and a finance team). The lack of clear direction and communication between functions led to inconsistent design decisions and eventually caused the system go-live date to be delayed. More often than not, the incentives for senior executives in clinical, financial, and IT areas are independent of one another, and not shared among peers. For the most part, Director and VP levels in clinical areas do not know the metrics their financial and IT peers are accountable for, and everyone is focused on attaining different objectives. In some cases, cross-functional goals actually compete with one another! Before the first steps are taken to implement software or to draft strategic plans, all organizational levels, from top management to end users need to understand the organization s strategic business goals and how the implementation of new technology hopes to accomplish these goals. As the project continues, project goals and objectives need to be consistently communicated preferably directly from the project sponsor to stakeholders. Success needs to be measured and tracked through careful project management in order to realize the improvements and efficiencies originally planned. There is little value in implementing a new information system unless there is an understanding of what information is required from that system and how that information system will support organizational and functional goals. If the multiple organizational goals and information requirements are not understood at all levels of management, then the organization will end up with underutilized systems and managers who do not have sufficient information to effectively manage the organization. This is where the strategic value of a Goal Alignment really delivers. Aligning Strategic Project Goals with Organizational Page 6 of 9
Unfortunately, many organizations do not have this foresight when installing new technology. In other words, they bought before they thought. The result usually is the absence of proper direction for the project team, including the internal hospital organization and the implementation consultants, and by the time issues are ironed out it is often too late. Many major healthcare organizations have found out the hard way when their system golive dates were delayed due to untimely issue resolution. Any organization, whether it is a Health System, commercial business or a public sector entity, sets out to achieve certain goals. These goals may be explicit (stated and obvious to everyone) or implicit (unstated, as it is assumed that everyone knows them). Most of the time the goals are not known, and questioning usually results in an embarrassed response-and that is a cultural issue see sidebar on The Role Culture Plays. Keys to Success Clearly aligning implementation project objectives with strategic business goals at the project onset leads to project success. Doing so provides stakeholders with clear expectations and a consistent, focused approach. This is an area where Goal Alignment analysis can really add value. Depending on whom you ask, success can be defined in a variety of ways from positive ROI to just finishing the project alive. In this section we highlight the major factors that are especially important to the success of technology initiatives: Senior Management buy-in: Senior Management, for Goal Alignment purposes, is usually defined as the steering committee members or those at director level and above. Gaining consensus, especially in a Health System environment, is not an easy task. The project sponsor must not only be well respected by peers in clinical and business areas, but also must show that they are passionate about the project and that the desired results for the project are communicated before work begins. In our most effective Goal Alignment project, the Senior VP project sponsor was proactively involved by leading town hall meetings, presenting at steering committee meetings, etc., and openly communicating to his direct reports (VPs, Directors and Senior Managers) the need for them to be committed to project goals. How an organization is structured can also have an effect on the integration of the team and how communications are managed. At certain healthcare organizations, communication is just assumed and no one is responsible for it or too many are responsible. One major hospital system had project communications being delivered from their education department, the Marketing Department, and external consultants all with conflicting messages. Clear Expectations: Clearly aligning implementation project objectives with strategic business goals at the project on-set leads to project success. Doing so provides stakeholders with clear expectations and a consistent, focused approach. This is an area where Goal Alignment analysis can really add value. Aligning Strategic Project Goals with Organizational Page 7 of 9
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What is the end result? Once the Goal Alignment results have been tabulated and the risks have been identified, it is up to the Hospital or Health System organization to take the next steps. The Goal Alignment analysis will have direct impact to the bottom line by providing focus on specific, measurable goals that will assure increased productivity and avoid wasted time. The Analysis typically uncovers the following: Validation of past successes or confirmation of issues that will inhibit the success of future initiatives Additional opportunities not thought of during the planning and scoping phase of the project Stakeholder goals not previously considered in the original project definition The level of communication that has been performed to date, either identifying a need for more communication or validating the activities to date as adequate Newly identified issues or gaps in the organization that require further analysis such as fragmented Business Processes or lack of Change Management competencies A plan for alignment of organizational goals and project goals Once the healthcare organization is ready to take the first step, performing a Goal Alignment analysis can give organizations three to four weeks of preventative medicine for the six to nine month project pains that are in their future. Aligning Strategic Project Goals with Organizational Page 9 of 9