“Strategy without tactics is the slowest route to victory; tactics without strategy is the noise before defeat.”
It was true when ancient Chinese military strategist Sun Tzu said it over 2000 years ago, and it’s true now. Whether you are crafting an overall growth plan for your practice, focusing your marketing spend, evaluating a merger possibility, or simply thinking of hiring more staff, a strategic plan will increase your chances of success many times over.
Unfortunately, this is a place where many physician-owners stumble, because strategic planning is intimidating. It takes time that you may not feel you have. It takes thinking about problems that you may have successfully ignored until now. But strategic planning is essential to the financial health of your practice, and the best place to start is with a SWOT analysis.
What is a SWOT?
A SWOT analysis is a decision-making tool. It helps you identify and understand factors that influence your decisions and actions. These factors fall into four categories:
- Strengths: Positive attributes of your practice that are under your control. You should capitalize on your strengths whenever possible.
- Weaknesses: Negative attributes of your practice that are under your control. Weaknesses prevent you from reaching your goals and must be reduced or eliminated
- Opportunities: Favorable circumstances you should seek to develop or take advantage of.
- Threats: Factors that pose a risk to your practice. Threats are external and beyond your control, while weaknesses are internal. For example, a competitor opening in your area is a threat, while a poor location is a weakness.
Why Use a SWOT:
A SWOT can help you plan and act more effectively. By listing and analyzing your practice’s strengths, weaknesses, opportunities, and threats, you can more easily set priorities, assess your options, make better decisions, and take decisive action. A SWOT also helps you to organize information clearly, and communicate that information to everyone involved in strategic decision-making at your practice. For example, if you regularly conduct patient satisfaction surveys, a SWOT can help you determine what to do with that data.
Often, you and other stakeholders will have a ‘gut feeling’ of how your practice is doing, but a SWOT will help you shore that up with data-supported evidence. “The point is to objectively look at your practice, where it can go, where it shouldn’t go, trends you’ll need to examine, and where you could really capitalize to move beyond good or great to being a really extraordinary practice,” says Jen Godreau, VP of Programs for Eye Care Leaders.
3 Steps to SWOT:
A SWOT is typically conducted during a longer meeting or brainstorming session. And while this is serious business, try not to make the meeting too stuffy. You’re asking people to speak up, be honest, and share their opinions. The more relaxed and enjoyable the setting is, the more comfortable participants will feel contributing their knowledge. “Having an off-site day retreat with your top providers and administrators will get everyone thinking more outside the box,” recommends Godreau. “Being away from their usual setting encourages participants to look at your practice with a fresh perspective.”
Step 1: Gather everyone who will be providing input for the SWOT—the more perspectives, the merrier. You’ll want to include anyone who is a part of strategic planning for your practice, but don’t automatically limit participants to physicians or senior-level employees. Any staff member could offer new insights, overlooked information, or unique experiences that will be useful in understanding your practice’s current position and future direction.
Step 2: Brainstorm each of the four SWOT categories keeping in mind how they relate to the particular situation you’re aiming to address. If you have a larger group of participants, consider creating smaller subgroups to encourage full participation and then bring them together in a master list. “If you can break people into teams and mix participants’ roles, you’ll go back to the office energized with a list of top actionable growth strategies and plans,” says Godreau.
When listing your practices strengths and weaknesses, think about these five internal factors, advises the University of Kansas’ Work Group for Community Health and Development:
- Human resources: your staff, volunteers, patient population
- Physical resources : your location, building, and technology
- Financial resources: all sources of income
- Activities and processes: the systems you use to run your practice
- Experience: Your reputation, experiences you’ve learned from
When listing your practice’s opportunities and threats, think about these five external factors that are out of your control:
- Industry trends: i.e. online eye exams, in-office cataract surgery
- The economy: local and national
- Patient demographics: characteristics of the patient population you serve or could be serving
- Your physical location: is your area growing, shrinking, or changing?
- Legislation: how are federal and state regulations affecting your practice?
Step 3: Rank your list for each SWOT category in order of importance. For example, the MIPS program would be a higher priority threat or opportunity, while the national economy might be lower priority.
Once you’ve completed your SWOT matrix, it’s time to conduct the actual analysis. To build off of your SWOT matrix and develop a plan of action, consider how you could …
Use your practice’s strengths to take advantage of opportunities you’ve identified.
Example: Your patient retention and word of mouth referrals are so good that your practice’s waitlist is getting long enough to consider hiring an additional provider.
Overcome weaknesses that are roadblocks to those same opportunities.
Example: You don’t have enough office space to accommodate a new provider. Could you consider moving to a larger location or adding onto your current one?
Use your strengths reduce the influence of threats.
Example: Your practice has low debt. Consider investing in new software or technology that will better position you to thrive in the MIPS program, earning much needed incentive dollars.
Eliminate the weaknesses that may be exposing your practice to threats.
Example: Your lack of established processes and procedures leads long wait times, and frustrated patients are leaving for the new practice down the street. Reassess your front office procedures, document them, and re-train front office staff.
Remember: The SWOT grid itself is not the analysis—it is simply the starting point. The grid helps you capture all the relevant information. The analysis tells you what to do with that information. By exploring the relationships between items on your SWOT grid, you’ll be better able to position your practice to make better decisions and meet nearly any challenge.