Clinics and small hospitals, similar to Kirana stores in the retail sector earlier, dominated the Indian healthcare scenario. Of late, this healthcare scenario is undergoing a rapid and significant transformation with the corporatisation of medical services. These large establishments, backed by surplus investments, are increasingly dominating the market, thus posing a formidable challenge to small and mid-sized hospitals. These smaller entities, often ma-bap ka kind, family-run or community-based hospitals, risk being edged out due to their limited resources and infrastructure. However, with strategic planning and adaptation, small hospitals can not only survive but thrive amidst this wave of corporatisation. TheMcKinsey 7S Model offers a comprehensive framework for these hospitals to assess and align their organisational elements, ensuring sustainability and competitiveness.
Understanding the McKinsey 7S Model
The McKinsey 7S Model is a management framework that examines seven interdependent factors critical to organisational success: Strategy, Structure, Systems, Shared Values, Style, Staff, and Skills. These elements are interconnected, meaning that a change in one area necessitates changes in others. For small hospitals, understanding and leveraging these seven elements can be crucial in navigating the challenges posed by corporatisation.
- Strategy: Innovate and Differentiate
Small hospitals must develop a long-term strategy that differentiates them from larger corporate entities. While corporate hospitals may offer a broad range of services, small hospitals can focus on niche areas, such as specialised surgeries, chronic disease management, or community-based health programs. Emphasising personalised care and building strong patient relationships can create a loyal customer base. Additionally, small hospitals can collaborate with local governments and NGOs to offer subsidised services, thereby aligning with public health goals and ensuring a steady stream of patients.
2. Structure: Streamline for Efficiency
Small hospitals should streamline the organisational structure to promote agility and quick decision-making. Unlike large hospitals with multiple layers of management, small hospitals have a flat organisational structure, where communication flows easily, and decisions can be made swiftly. This structure allows them to respond to patient needs more effectively and adapt to changes in the healthcare environment with greater agility. Creating multidisciplinary teams can also help integrate care delivery and reduce operational silos, thereby improving patient outcomes and operational efficiency.
3. Systems: Leverage Technology for Better Management
Efficient systems are the backbone of any successful hospital. For small hospitals, investing in technology can level the playing field against larger competitors. Implementing electronic health records (EHR), telemedicine platforms, and hospital management software can enhance operational efficiency, reduce errors, and improve patient care. Additionally, data analytics can be used to track performance metrics, identify areas for improvement, and make informed decisions. Byembracing digital transformation, small hospitals can streamline their operations, reduce costs, and improve patient satisfaction.
4. Shared Values: Foster a Patient-Centric Culture
Shared values are the core beliefs and norms that guide an organisation’s actions. For small hospitals, fostering a patient-centric culture is vital. Unlike corporate hospitals, where patients can sometimes feel like just another token number, small hospitals have the opportunity to offer a more personalised and compassionate approach to care. By instilling values of empathy, integrity, and community service among their staff, small hospitals can build a reputation for high-quality, patient-centred care. These values should be reflected in every aspect of the hospital’s operations, from how patients are greeted at the reception to the follow-up care they receive after discharge.
5. Style: Leadership that Inspires and Motivates
Leadership style plays a crucial role in shaping the culture and performance of a hospital. In small hospitals, leaders must be visible, approachable, and hands-on. They should lead by example, demonstrating a commitment to patient care and operational excellence. A transformational leadership style, which focuses on inspiring and motivating employees to go above and beyond their job descriptions, can be particularly effective. Leaders in small hospitals should also foster a collaborative environment where staff feel empowered to share ideas and take initiative. This approach can lead to innovative solutions and continuous improvement, which are essential for staying competitive in a corporatised healthcare market.
6. Staff: Invest in Training and Development
The staff of a small hospital are its most valuable asset. Small hospitals must invest in their employees’ continuous training and development to survive in a corporatised environment. Providing opportunities for professional growth, such as specialised training programs, workshops, and certifications, can enhance the skills of the staff and improve the quality of care provided. Creating a supportive work environment where staff feel valued and recognised for their contributions can also boost morale and reduce turnover. By focusing on the development and well-being of their staff, small hospitals can maintain a dedicated and skilled workforce, which is critical for delivering high-quality patient care.
7. Skills: Build Expertise in Key Areas
To differentiate themselves from larger hospitals, small hospitals should focus on building expertise in specific areas of healthcare. This could involve developing specialised programs for managing chronic diseases, offering advanced surgical procedures, or becoming a centre of excellence for a particular medical speciality. By building a reputation for expertise in critical areas, small hospitals can attract patients who are seeking specialised care that may be readily available at larger institutions. Additionally, small hospitals can engage in community outreach and education programs, positioning themselves as trusted healthcare providers within their local communities.
End-note: Embracing Change and Innovating for Survival
The increasing corporatisation of healthcare in India presents significant challenges for small hospitals, but it also offers opportunities for those willing to innovate and adapt. By applying the McKinsey 7S Model, small hospitals can strategically align their internal elements with building resilience, enhancing patient care, and maintaining a competitive edge. The key lies in leveraging their inherent strengths—such as personalised care, community connections, and agility—while embracing new technologies and fostering a culture of continuous improvement. In doing so, small hospitals can not only survive but thrive in an increasingly corporatised healthcare landscape.
Prof. Dr. Prahlada N. B
17 August 2024
Celebrity Greens Society, Lucknow, UP.
Excellent views sir
ReplyWell said
Thank you, sir, for sharing your valuable insights.
ReplyThis is a need of the hour for small hospitals & clinics who want to maintain their identity overwhelmed by corporates.
I will add That reducing the cost for patients can also give an edge to small hospitals
Well penned Prahalad
ReplyIt is indeed very difficult to compete with these corporate set up
Unless v r a game for it
Well written
ReplyGreat idea
Reply