STRATEGIC VISION CASTING

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STRATEGIC VISION CASTING
Making Dreams Come True
(A Look at How Strategic Vision Becomes Reality)
Lee University
Executive Leadership Class
October 27, 2003
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STRATEGIC VISION CASTING
Starring a Cast of Characters

• Mystic

• Risk Taker

• Forecaster
• Trend tracking
• Envisioning

• Pathfinder

• Innovator

Leaders are bridges that connect people to the
future.
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STRATEGIC VISION CASTING
Background Context
-The Company-

• Chattanooga based, not-for-profit, taxed,
  Tennessee Corporation
• Largest health insurer in the state with 2.4M
  members 2.0M Medicare recipients (Tennessee
  market share 45)
• Big company with 2.170B annual revenue, 2.095B
  annual expenditures, 4,100 employees in seven
  locations
• Competitors United Healthcare, Aetna,
  Cigna, Humana,
• John Deere, Cariten,
  Principal

include benefits expense, operating expense,
state premium tax and federal income tax
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STRATEGIC VISION CASTING
Background Context
-The Company-
(continued)
Our Purpose is Peace of Mind Our Business is
financing affordable health care coverage Our
Principles are We are a purpose-centered
company Our people are customer-focused and
committed to excellence We look for people with a
real passion for continuous improvement and
innovation We must have results with integrity
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STRATEGIC VISION CASTING
Background Context
-My Role-

• Business Operations
  Employees
• Claims Service
  1,570
• Information Services/IT
  400
• Business Engineering
  75
• Properties Corporate Services
  230

Run a world class business operation Expand
industry leadership Develop future leaders of
the company
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STRATEGIC VISION CASTING
What is Vision?

• Epiphany
• A sudden manifestation or appearance
• Dream
• I have a dream
• View of the Future
• A picture of the future with some definition or
  description on why people should strive to create
  that future. - John P. Kotter
• Foresight
• To see before hand (usually due to insight)
• Thought Process (Deduction or Induction)
• Let me see versus I see it!
• In all cases, its a Change Decree!

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STRATEGIC VISION CASTING
How Do Visions Come? A Strategic Thinking Process
Foresight
Served Market
Look
Product / service concept
Cause
Point of View (The way we see ourselves
tomorrow)
Vision
Concept of Self (The way we see ourselves today)
Imagination
Physical Indicators
Strategy
Driving Force (The factor that drives
momentum)
Critical Skills (Primary areas of excellence)
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STRATEGIC VISION CASTING
Strategic Thinking Process
Strategic Options
Competitors
Research
Scenario 1
A
Experimentation
Exploration
Internal
Tentative Strategic Profile

Current Profile
External
Scenario 2
Final Strategic Profile
B
Variables / Driving Forces
Scenario 3
C
Critical Issues
Strategic Profile Strategic Vision
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STRATEGIC VISION CASTING
BCBST Planning Process
Environmental Analysis
Jan.
Corporate Strategic Plan
Annual Business Plan
External
Internal

• Competitors
• Markets
• Legislation
• Stakeholders
• Economy

• Operations
• Finance
• Products

Operational
Strategic

• Principal directions
• Core strategies

Key Issues Rising costs, consolidation, etc.

• Goals
• Priorities
• Initiatives

Work Plans
(support corporate initiatives projects)
Forecast Budget Development
Extended Planning Group
Annual Board Approval
Primary Committees
Dec.
Assessment, Monitoring Feedback
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STRATEGIC VISION CASTING
Elements of Strategic Vision
Strategic Vision A picture of what we want the
company to look like/ be doing at some point in
the future.
Key elements of the Strategic part

• Positions the company for business advantage
• Makes the company unique from others in the
  industry
• Improves the economic model of the company
• Contains a compelling value proposition
• Compatible with mission and charter
• Sustainable and continuous over time

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STRATEGIC VISION CASTING
The Scope of A Vision
Broad
Wide
Multi-dimensional
Deep
Personal
Society
lt Visions Broad Range
gt
Products Services
Management Reengineering
Company or Organization
Industry
It is important not to mistake the edge of the
rut for the horizon. - ANONYMOUS
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STRATEGIC VISION CASTING
Characteristics of an Effective Vision

• Imaginable -- conveys picture of what the
  future will look like
• Desirable -- appeals to a long term interest of
  those who have a stake in the enterprise
• Feasible -- comprises realistic, attainable
  goals
• Focused -- is clear enough to provide guidance
  in decision making
• Flexible -- is general enough to allow
  individual initiative and alternative responses
• Communicable -- is easy to communicate

If you cant describe your vision to someone in
five minutes and get their attention, you have
more work to do.
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STRATEGIC VISION CASTING
Vision Leadership
Leadership
Management
Vision
Strategies
Plans
Budgets
(Picture)
(Logic)
(Implementation)
(Support)
The management equivalent to vision is planning.
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STRATEGIC VISION CASTING
Why is it Important for Corporate Leaders to have
a Future Perspective?
Get to the Future First!

• Market leadership
• Create and dominate emerging opportunities
• -Make the rules
• -Shape the industry or create a new one
• Stake out new competitive space called
  opportunity share
• Sustain the business

The real act of discovery consists not in
finding new lands but in seeing with new eyes.
Marcel Proust
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STRATEGIC VISION CASTING
Why is it Important for Corporate Leaders to have
a Future Perspective?
What Does it Take to Get to the Future First!

• An understanding of how competition for the
  future is different
• A process for finding and gaining insight into
  tomorrows opportunities
• An ability to energize the company top-to-bottom
  for what may be a long and arduous journey toward
  the future
• The capacity to outrun competitors and get to the
  future first, without taking undue risks.

Competing for the Future, Gary Hamel, C.K.
Prahalad
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STRATEGIC VISION CASTING
Looking Forward to the Future
an absolute imperative for business leaders
but How much time do executives spend thinking
about the future?
of time looking outward versus looking inward
40 of time looking outward
into the future
30 of time attempting to build a collective
view of the future 20
(40 x 30 x 20 2.4)
Senior management spends less than 3 of its
time and energy to building a corporate
perspective of the future. Is that nearly enough?
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STRATEGIC VISION CASTING
Management Questionnaire re Creating the Future
How does senior managements point of view about
the future stack up against that of competitors?
Conventional and reactive
Distinctive and farsighted

Within the industry, do competitors view our
company as more of a rule taker or a rule maker?
Mostly a rule taker
Mostly a rule maker

What are we better at, improving operational
efficiency or creating fundamentally new
businesses?
Operational efficiency
New business development

What percentage of our advantage-building efforts
focus on catching up with competitors versus
building advantages new to the industry?
Mostly catching up to others
Mostly new to the industry

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STRATEGIC VISION CASTING
Questions re Creating the Future
If a top management team can not clearly
articulate the 5 or 6 fundamental industry trends
that most threaten the firms continued success,
it is really not in control of the firms destiny
What is impossible to do in your industry, but if
it could be done, would fundamentally change it?
It is impossible to have a stake in the future if
one cannot imagine the future
A company must unlearn much of its past before it
can find the future
It is not enough for a company to get smaller,
better, and faster it must be capable of getting
different!
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STRATEGIC VISION CASTING
Company Visionaries
IBM
Fortunes Most Admired Corporations in
1980s Should be broken up early
1990s Missed PC revolution. Did not miss the
e-business or Internet revolution because of one
employees vision. David Grossman one of
first people to download the Mosiac browser and
experience the graphical world of the Web.
Sony (Ken Kutaragi Computer Entertainment
business)
Shell Oil Company (Georges Dupont-Roc Renewal
Energy business)
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STRATEGIC VISION CASTING
BCBST Principal New Strategic Directions
Long Range Financial Targets

• Earnings goal to support growth and strategies

Integrated Service Strategy

• New service model, integrating health care
  delivery to patients / members

Next Generation Health Care

• Address medical cost growth and improve care
  outcomes

National Account Business

• Improve capabilities to win and retain national
  accounts (located in multiple states)

Preparation for the Consumer Era

• Increase consumer involvement in own health care
  choices and treatments

Core Business
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STRATEGIC VISION CASTING
Integrated Service Strategy
Starting Point Total Customer Experience
Surveys
Advertisements
Prospect Calls
Grievances / Appeals
Presentations
Correspondence
Correspondence
Inquiries / Resolutions
Reports / Information
Coordination of Benefits
Proposals
Explanation of Benefits
Negotiations
Correspondence
Payments
Contracts
Claims
The Circle of Truth
New Applications
Treatments
Enrollment
Tests
Booklets
Specialist visit
Billings
Specialist Selection
ID Cards
Referral / Auth.
Member Education
Doctors visit
Physician Selection
Provider Education
Coverage / Elig. Checks
Call-A-Nurse (triage)
Drug Benefit Eligibility
Member / Decision Maker Touch Points
CONTACT METHODS
Mail in
This diagram represents the professional care
giver setting and the customers experience.
There are other settings, such as hospital or
outpatient surgery center settings that would
require additional touch points.
Telephone
Walk in
Automated Attendant (VRU)
Facsimile
Computer
Internet (new)
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STRATEGIC VISION CASTING
Our Integrated Service Strategy Vision
From this
To this
Provider
Provider
Customer
Supplier
Supplier
Health Care Exchange
Customer
Payer
Member
Member
Broker
Administrator
Administrator
An All Player Health Care Business
Communications Exchange
A BlueCross BlueShield of Tennessee Health
Information Network
Graphic idea from TriZetto Group, Inc.
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STRATEGIC VISION CASTING
Implementing the Integrated Services Strategy
Integrated Service Strategy (ISS)
Plus
Advanced
AFFORDABILITY
QUALITY
COMMUNITY
Online transactions Communications
Platform Personal Health Mgmt.
Tightly Integrated Suppliers Coordinated Care
Plan Services Tightly integrated PPMS
Online RX / contra-indications Electronic medical
record Consumer information
Higher
Lower
Degree of Difficulty, Complexity, and Investment
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STRATEGIC VISION CASTING
The Integrated Service Strategy Affordability
Phase
Delivery side involvement via Member
service integration
Financing Administration
Clinical Care Delivery
1
(Providers)
(Health Plans)
2
Initial ISS Activities
1
The connectivity zone -- current initiatives will
provide transaction and information flow
Penetration into the clinical and care delivery
areas will occur with care management and
personal health management initiatives
2
The ISS is intended to integrate service delivery
to the member through technology and information
flow not to integrate the care delivery system
itself. Our presence in this space however,
may uncover other value-added opportunities.
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STRATEGIC VISION CASTING
Confirming the Vision

• How does the vision affect customers, employees,
  and other stakeholders?
• If they are happy, will it keep them happy?
• If they are not happy, will it make them happy?
• For those not with us yet, will it make them want
  to be with us?
• Does the vision amaze people?

Customer excitement and amazement are the best
predictors of the success of a vision.
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STRATEGIC VISION CASTING
Communicating the Vision
Writing a Manifesto

• Demonstrate the inevitability of the cause
  heres why it is right, right now
• Speak to timeless human needs and aspirations
  heres why you should care
• Draw clear implications for action heres where
  to start
• Elicit support heres how you can contribute
• Capture peoples imagination. Paint a vivid
  picture of what could be. Inspire hope.
• Challenge people to look the future in the eye.
  Ignite a sense of possibility.

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STRATEGIC VISION CASTING
How A Vision Becomes Reality
Clarifies -- sets direction, simplifies
decision path
Motivates -- channels energy and action
in right direction
Coordinates -- brings people together, moving
in the same direction
Clarity
Focus
Unity
Critical Mass
Momentum
through effective Change Management
Execution
A compelling vision directs, aligns and inspires
people.
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STRATEGIC VISION CASTING
Vision Leadership
Leadership
Management
(Concept)
(Actuality)
Vision
Strategies
Plans
Budgets
(Picture)
(Logic)
(Implementation)
(Support)
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STRATEGIC VISION CASTING
E B W Z S M P O D L J F A U R V T C
G N Q X H Y I A E C S
T R A T E G
I C V I S
I O N I N
G