It’s never just about the building…
The early 16th century definition of “fa-cil-i-ty” denotes “the means or unimpeded opportunity for doing something.”
Medical buildings are expensive tools that support our healthcare delivery systems, and they have very, very long useful lives. These “tools” exist to facilitate the delivery system’s longest-range strategic goals and ever-evolving operational strategies.
A challenge all healthcare delivery systems face is that the lead time, measured in terms of the years required to plan, program, design, finance and construct healthcare facilities, extends well beyond the typical strategic business planning horizons of most organizations. Yet, often annually, these delivery systems still need to determine which of their numerous facility recapitalization requirements and new facility investment opportunities are the highest priorities for investment.
To most effectively employ the limited capital dollars available, a process to prioritize the most essential investments to be funded in the near term is paramount to meet the longer-term strategic goals and operational plans of the organization.
Strategic Facilities Portfolio Management
This need to consistently evaluate your investment choices against your highest-level goals and strategies to prioritize funding is not unique to brick and mortar investments. Strategic Portfolio Management, most often applied to managing securities portfolios, is a discipline that can be useful to many types of investments, including facilities.
Strategic Portfolio Management is essentially a disciplined process of managing assets of an enterprise, including choosing the most strategically appropriate investments, allocating available funds accordingly, and then monitoring their performance.
When is a Strategic Facilities Portfolio Management process necessary?
- Resources are too limited to meet all requirements
- Numerous competing requirements and opportunities for investment need to be considered
- Significant investments of resources are on the line
- Documentation requirement of what priorities are and why they were prioritized
Facility capital strategy and planning are core services Innova has provided to healthcare clients for decades. Applying this Strategic Portfolio Management approach, Innova has assisted healthcare delivery systems to develop strategic criteria-based, data-driven processes to consistently evaluate all proposed facility investments across the system’s operating entities against the highest-level goals and strategies of the enterprise and prioritize investments accordingly.
One example of our work in this area is the Military Health System’s Capital Investment Decision Model (CIDM) process. Learn more about our work with the CIDM here. One of the biggest challenges we recognized in working with the MHS to implement and execute the CIDM process involves the “management art” of translating the high-level enterprise-wide strategic guidance into facility-specific evaluation criteria and metrics that can be tied directly back to the highest-level DoD and MHS strategic goals.
Four keys to doing this successfully as a facilities management team are:
- Defining the specific evaluation criteria and metrics that apply to the facility capital investments you are prioritizing;
- Clearly linking these criteria back to the highest-level strategic goals of the enterprise;
- Communicating this strategic logic to all the key stakeholders involved; and
- Keeping these criteria relatively consistent over time (as long-term strategic priorities should not really be changing from year to year)
How is your organization currently managing the challenge of prioritizing your facility investment requirements? Join the conversation below.
By Paul Breslin | September 2019