Developing an Aged Care Strategy

Creating a strategy is about making a choice between two or more good options. If your strategy considers only one good option, you have created an operational plan, not a strategy.

It has never been more important in the aged care sector to have a rigorously thought through and tested aged care strategy.

The starting point for developing an aged care strategy is a thorough understanding of the external environment. It is good practice to use a formal techniques such as a PESTLE analysis as a starting point for developing that understanding.

mot_010_pestle analysis diagram

A PESTLE analysis uses a simple construct; to complete one, we need to assess and evaluate the Political, Economic, Social, Technological, Legal, and Environmental pressures on the aged care sector. The objective is to understand, as clearly as is practical, the landscape for the aged care sector in which we want to operate.

The input for the analysis comes from various sources including our own experience, research reports from groups such as CEPAR (the Centre of Excellence in Population Ageing Research), federal government reports, or, in some cases, bespoke research conducted on our behalf.

A note of caution. Data comes in four levels of increasing dependability: internal opinion, external opinion, internal fact, and external fact. The dependability level ranges from when three salesmen have a talk over a beer about what customers want (internal opinion), to quantitative research using appropriate quota samples (external fact). If we rely predominantly on internal opinion, it’s usually easier and faster to develop our strategy, but we assume a degree of risk because we aren’t operating on verifiable facts. Conversely, relying predominantly on external fact means it takes longer and is more costly for us to develop our strategy.

The output of the PESTLE analysis is a table summarising possible external impacts on the aged care sector under each heading, and the consequences of that impact on our choices; we might find that some choices are constrained by the external environment, or made more obvious. The analysis informs us of the risks and opportunities which exist in the sector. Think of it as providing the sketchpad upon which we are going to draw our strategy.

In addition to understanding the external environment, we need to complete the old standby of strategic planning, the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. It is important however, to treat the analysis seriously. I find that most organisations, at their first pass, seriously underestimate their weaknesses and use internal opinion to determine their strengths. Much better to talk to some clients or regulators to complete that analysis.

The benefits of a SWOT analysis become apparent when you ask the questions:

  • How can we use our strengths to take the opportunities available?
  • How can we reduce our weaknesses to take advantage of the opportunities?
  • How can we use our strengths to reduce the probability or consequences of the threats?
  • What weaknesses must we reduce to ensure that the threats do not pose an unacceptable risk?

The evaluation of our SWOT in this manner provides our first setting of boundaries of our strategy beyond our vision and mission, which we should already have very clear. It provides our first sets of choices.

The objective of our strategy may have already been clear from the time we articulated our vision and mission, but if it isn’t, we can use the information from the PESTLE and SWOT to create the business objective, or use it to test whether we did indeed have the right objective.

There are many generic objectives in aged care including but not limited to:

  • Financial value
  • Profitability
  • Reputation
  • Quality of care
  • Growth

The important point at this stage is to be clear about the prime objective; there can only be one. Think of it like a fish. The fish always swims in the direction of the head. The bones and muscles and fins which make up the rest of the fish only serve to push it in the direction of its head so that water flows over its gills to sustain its life. The prime objective is the head of the fish. The other complementary objectives are ribs and muscle and fins propelling the fish forward. You can create this by adapting the use of an Ishikawa diagram, used in manufacturing quality assurance analysis, from solving a problem to supporting an objective.

The next phase is to determine what strategic platforms, based on your PESTLE and SWOT analysis and possible a brainstorming session, will enable you to reach your objective. There should be, at this stage, about four key planks you need to fulfil to reach your objective. If there are much more than four you will find that your strategies overlap making it difficult to manage and allocate responsibilities and build sensible targets.

Two of the strategic platforms are often “Competent People and Policies” and “Processes and Procedures”. Other strategic platforms may include, but are not limited to:

  • Portfolio management, related to either growing your product/client mix or projects/initiatives to be undertaken
  • Compliance
  • Customer centricity
  • Quality assurance/continuous improvement
  • Financial stability
  • Capacity building
  • Brand/reputation management
  • Partnerships

At this stage, the better we can identify the tasks and resources required to ensure the strategic platforms are robust over the timeframe to meet your business objective, the better the connection will be between our strategy and our business planning.

The end result can be represented on one page for ease of communication.

mot_010_strategy on a page

The last task is to prioritise the tasks under each strategic platform to more easily link to business planning and reduce the risks of failure to execute. The prioritisation is completed against the impact on each task against the business objective and the ease of completing the task.

For those tasks which are easy to do, but have little impact on your business objective, don’t do them unless they are a precursor to something that does have a much higher impact.

It is a chance to reflect if the tasks you set out really are worth doing. In an organisation I worked for an exercise like this revealed that over 60% of the tasks we had underway or contemplated should not be done as they had minimal impact on our changed, more urgent, business objective.

Those tasks which are difficult to do and have little impact, should similarly not be undertaken. And if they are a precursor of something of a higher impact, they should be broken down into simpler, easier to do tasks.

Those tasks which are easy to do and have high impact, do them as soon as possible. Those which are difficult to do but have high impact, plan them assiduously as they are high risk, high reward tasks.

You may need to consider financial and resource modelling based on creating a work breakdown structure for the tasks required for each strategic platform, to truly understand their impact and ease of doing.

Creating an aged care sector strategy in this manner allows you to link easily with both business planning and project planning processes.

Comments are closed.