Planning Is No Longer Optional

planningmeeting
By Paul Martin, PT, MPT, CBI, M&AMI

As we start heading into a new year, take the time to assemble your leaders and work out a one-, three-, and five-year plan. The competition from other companies can be fierce, and calculated planning is essential to maintain your independence. Here are some tips on a planning session that will take your company to the next level.

Create 5 KPIs for Your Practice

kpi_5minutefix
By Tannus Quatre, PT, MBA

There are hundreds of metrics you can use to gauge the performance of your practice. From employee production to customer satisfaction, profitability, and more—there’s really no limit to the ways in which you can generate a metric that quantifies your performance.

And therein lies the problem.

Generally speaking, metrics are an important tool used to understand your business and to make decisions about its future. However, without some constraints as to their use, two things will happen.

The first is becoming overwhelmed. Imagine trying to stay focused on 100 metrics, all of equal importance, and all at the same time—maybe you’ve been in this situation before. Beads of sweat start to form just thinking about it. How can you possibly maintain clear, calm focus when attempting to move dozens of dials all at the same time? The simple answer is, you can’t.

The second is paralysis by analysis. When you can’t maintain focus, you can’t make (good) decisions. By trying to focus on everything, you end up not focusing on anything. Paralysis by analysis applies here.

So, while on the one hand we have the brilliance of nearly infinite metric selection at our fingertips, this very characteristic of managing a business can also lead to our downfall. In order to be effective as a manager or owner, we need to focus on what is truly important, and those to whom we delegate decision-making authority must follow our lead.

To do this, I advise that you start with five (or fewer) key performance indicators (KPIs) that you know to be key to your success. Once these are well under control, you are free to add more, but we need to first remove the noise before we can get started.

A KPI is a metric critical to the success of your business. They are not the same for every business, even in like professions such as physical therapy.

As an example, we all know that patient visits are a critical driver of revenue, and as such this is a common area of focus with regard to KPIs. But the measure of visits alone may not be as useful as measuring the drivers of visits (what actually leads to them happening in the first place). This is where KPI focus can vary dramatically from practice to practice.

Here are a few tips to help you determine your five optimal key metrics:

Start at 10,000 feet, then work your way down to 10

At the highest level, ask yourself what one or two metrics are required for your success. This might be something related to revenue or profitability—accurate, but much too general for a useful KPI. Then ask yourself, “What is the driver of this metric?” Repeat the process several times until you narrow down to a useful and manageable metric that can be used as a KPI in your business.

Example: At the 10,000-ft level, my practice needs to have strong revenues. So I ask myself, “What are the drivers of my revenues?” Answer: patient visits. Next I ask, “What are the drivers of patient visits?” Answer: evals. Next, “What are the drivers of evals?” Answer: marketing contact with referral sources.

You can repeat this process as many times as necessary, and stop when you’ve come to a good KPI for your practice.

Now, or later

Narrow down to metrics appropriate for the stage of your business by asking yourself if your KPIs should be focused on the near term (read: survival), or longer term (growth and sustainability). Usually a mix of the two are appropriate; however, there’s little use in focusing on long-term growth KPIs if the business is at risk of failure over the near term.

Do I have the data?

It may seem obvious, but it’s worth stating that the ability to calculate a metric is a prerequisite to using it as a KPI. This can come into play with metrics that require data not made easily available through standard electronic medical record (EMR) and financial systems. Examples may include customer and employee satisfaction data. If you don’t have the data, you’ve got two options: (1) find a way to get it, or (2) focus on a different KPI.

KPIs are critical to the success of your physical therapy practice, but don’t let them overwhelm you.

vantage_TannusQuatre Tannus Quatre, PT, MBA, lives at the intersection of physical therapy and entrepreneurship, spending his time helping physical therapists build and operate successful practices through his company, Vantage Clinical Solutions. He specializes in marketing, finance, and business planning, and authors and speaks regularly for the APTA and PPS. He can be reached at tannus@vantageclinicalsolutions.com.

Mastering the Org Chart

5Minutes
By Tannus Quatre, PT, MBA

Does your physical therapy practice have an org chart (organizational chart)?

For those of you who do, your answer is probably something like, “Um, duh . . . how would I survive without one?!”

For those of you who don’t, your answer might be something like, “Hmm, I should probably read on.”

All teasing aside, if you don’t have an org chart, I don’t want to cause you panic, but I do want to be clear that you need one. No matter how large or small your practice is.

Org charts are critical to efficient business operation, and form the foundation for growth through clear delineation of responsibilities and reporting assignments. Furthermore, you will learn a ton about your business as you go through the exercise of building an org chart for your practice.

To highlight the importance of an org chart, imagine for a moment that you didn’t know to whom you were ultimately accountable within your business. You may have one direct supervisor, but maybe two or three. You’re not totally clear.

Perhaps when all appears to be working well, this may not seem to be much of an issue, but now take a scenario where performance falters. A productivity measure is unmet, a customer is unsatisfied, or financial stressors have made their way front and center. When performance breaks, somebody is going to be looking to hold staff accountable for resolving the issue. If you are the owner, that somebody is probably you.

But who is accountable?

An org chart is your road map. It’s a top-down and bottom-up chart that provides each member of your organization a direct reporting relationship to someone else within your company. The flow creates specific accountability in a simple, easy-to-understand format.

For managers, it provides clarity for whom they are responsible. For nonmanagers, it provides a clear hierarchy that allows them to understand to whom they are directly accountable.

I find good org charts to be in equal parts insightful, beautiful, and fun. Putting them together can be a challenge, but the end result is nothing short of an artistic (albeit quasi-corporate) overview of how your company works.

Follow these tips to create a simple and effective org chart for your physical therapy practice:

  • Start at the top. Somebody—possibly you—is ultimately responsible for the entire company. Place this person at the top. If it’s a board that governs your organization, place the board at the top. However or whoever your topmost responsibility is structured, determine next who reports directly to them. They will be your second-tier management structure in the org chart. Continue down the organization until all leadership roles are identified.
  • Respect the “one boss rule.” All (or at least most) within your organization should report only to one person. If you find that your org chart has a web of connections whereby one person reports to more than one supervisor, clean it up. This is usually a symptom of lack of clarity for those responsible for running the organization (this might be you!). With few exceptions, each member of your team should report only to one supervisor, and this will show through on your org chart.
  • Titles carry meaning. Your titles are meaningful; they should be succinct and accurate on your org chart. Making sure your team understands their titles, and the duties required of them, is critical to the creation of an org chart that works.
  • Be neat. I am a big believer in the mantra that “doing is better than perfect”; however, when it comes to an org chart, we are focusing on clarity. Clarity is facilitated by a clean, organized look that is professionally presented. Make sure that your final draft of your org chart is done in a software program that presents the chart clearly and can be easily updated and maintained.
  • Publish, publish, publish. You’ve got a beautiful org chart, but it is only as good as those who rely on it. Publish your org chart on your company’s intranet, bulletin board, or wherever else your employees consume company information. An org chart is a working, living document, and it should be easy to find for those who need to rely on it.

If you don’t have an org chart, commit to making one before the year is over. You will be amazed at the clarity it brings. If you do have one, get it updated and review the tips featured here to make sure it is ready for prime time as 2017 approaches.

vantage_TannusQuatre Tannus Quatre, PT, MBA, lives at the intersection of physical therapy and entrepreneurship, spending his time helping physical therapists build and operate successful practices through his company, Vantage Clinical Solutions. He specializes in marketing, finance, and business planning, and authors and speaks regularly for the APTA and PPS. He can be reached at tannus@vantageclinicalsolutions.com.

Success Is Never Perfect

5Minutes
By Paul Martin, PT, MPT, CBI, M&AMI

When I was a high school and college football player, I created elaborate plans for improved strength, speed, power, and ultimately improved sport performance. I worked hard implementing those plans by training almost every day. The actual workouts were never perfect, and the results were not always exactly as planned and graphed—but that was reality. The end result was a senior year in college where our team (the 1985 Gettysburg Bullets) and I displayed performance beyond our wildest dreams!

Plans and Reality

This reality also relates to business. In our experience, change in an organization does not always go as specifically outlined in a sterile plan as there are external factors out of our control that will impact execution. Success comes from the ability to know that you will get “off course” but can quickly redesign to get back “on course.”

Seek Success

Advice and strategy are lofty while action and execution are gritty. Seek success, not perfection. Accept that virtually nothing will be exactly as intended, but it will be better than before. Make midcourse corrections. Don’t be afraid to get your uniform dirty. No one ever won a football game with the crispest, cleanest, or brightest uniform.

Even in Adversity

We have worked with companies that have shown the discipline to work toward goals and work through adversity, and while they may be muddied, they showed million dollar–plus changes in their value. You’re next. Create a plan and follow your dreams.

paul_martin Paul Martin, PT, MPT, CBI, M&AMI, president of Martin Healthcare Advisors, is a nationally recognized expert on health care business development and succession planning. As a consultant, mentor, and speaker, Paul assists business owners with building value in their companies. He has authored The Ultimate Success Guide, numerous industry articles, and weekly Friday Morning Moments. He can be reached at pmartin@martinhealthcareadvisors.com.

Spell It Out

5Minutes
By Tannus Quatre, PT, MBA

You are going to spend 50 to 60 cents of every dollar on your staff. They are expensive because they are worth it, but if you don’t manage their time correctly, you will soon find that your bottom line is a little closer to the bottom than it should be.

It’s a plight business owners are all familiar with—getting the most out of our labor dollar.

We spend a lot of time focusing on the “P” word, productivity, and while strategies to optimize productivity are of paramount importance, not every moment on the clock can be measured with a billable unit.

What about project management, administration, training, and business development activities, which are much harder to track with traditional productivity measures? How do we ensure our investments in these areas achieve a positive return for our companies?

Many of us will be drawn toward quality or efficiency metrics which can (and should) be used to measure time spent by staff in these areas; however, it is what you do before the time is spent that is key to the wisest use of staff time. How clear are you being about how your staff’s time is to be used? It is the owner or manager’s job to ensure that staff know exactly what is expected of them and how their performance will be measured. Without this, how can we truly expect that their time on our clock will be used in a way most aligned with our business objectives?

Clarity takes a bit of work, but it’s worth the effort. Try these tips to ensure you are getting the most out of your staff.

  • Be specific. Ever require a member of your team to go out and “market” to referral sources or small businesses in your area? How much latitude did you provide them in how this was to be accomplished? Sure, your top marketers will have this dialed in, but if you expect the same from everyone without specific instructions, you will be sure to incur payroll expense that isn’t rewarding your business. Instead of saying “go out and market,” be specific: “I’d like you to share our pelvic wellness packet with five women’s health physicians within the area.”
  • Measurement. What gets measured gets managed. Without a specific measurement, it is impossible to know if one’s actions are in alignment with the business objectives. If you have asked your lead clinician to make recommendations for improved throughput of patients, define the measure that will be used to drive their work. “I’m looking to reduce our average time spent in the waiting room from 10 minutes to less than 3 by improving our patient throughput.”
  • Deadline. Without a deadline, everything is a priority. More specifically, without a deadline, nothing is a priority. Deadlines put needed pressure on projects and activities by letting your team know there is an actual finish line, and that you will be there to watch them cross it. If you have asked your office manager to train a new receptionist, let him or her know that you expect the new employee to be fully effective in their role within X number of days of the hire.

Being absolutely clear with your requests of staff time—actually spelling it out—is critical to the effective use of the most important investment we make in our businesses. It takes some discipline, but it’s worth it.

tannus_quatre Tannus Quatre, PT, MBA, lives at the intersection of physical therapy and entrepreneurship, spending his time helping physical therapists build and operate successful practices through his company, Vantage Clinical Solutions. He specializes in marketing, finance, and business planning, and authors and speaks regularly for the APTA and PPS. He can be reached at tannus@vantageclinicalsolutions.com.

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