May 26, 2015
In today’s complex business environment, management is also becoming more challenging and difficult. The functional areas of the business, namely, HR, marketing, operations, IT, strategic planning, facility mgt., and finance all need attention to properly balance an effective mgt. approach. Our challenge is trying to fit effective management of all these categories into less than half your time as manager. Over 55% of a manager’s time is spent resolving people issues, and another 25% resolving financial issues, leaving little time to plan, execute and monitor management issues in the remaining functional areas.
As constant barriers arise, they distract and create an opportunity cost for today’s manager. Our barriers to effective management can fall into one more categories including human, situational, communication, and financial. Human barriers include the veterinarians themselves, cultural, human-animal bond, training and leadership issues. Communication and financial barriers surround compliance and economic issues. Situational issues arise because of the nature of the practice environment itself and time management. If as managers we get too distracted by these barriers, we leave ignore or leave out impactful areas of focus for the practice. Some tasks are more impactful than others; balance between functional areas identified above is the key to ensure that you have effective planning and monitoring systems in place.
We hear that over 80% of organizational complaints are due to some communication issue. Whether it is internal communication among employees or external communication with clients, an effective communication protocol is a must to deliver clear messaging, avoid repetition and reduce incidences of misinterpretation. Internal communication however is the driver of external efficiency. If in your practice you feel nobody knows what is going on, changes are not communicated well, frustration results in lack of respect for the boss figure, client complaints go up, and there are unresolved frictions, you have an internal communication problem. It may be that your culture does not support agenda items like meetings, staff rounds or feedback forums. Clients can and will read into mixed messages and the practice can and should start simply with something like a commitment to structured meetings to improve internal communication.
Veterinary medicine is in fact a customer service business that happens to use animal health care as its platform. If veterinary team members are not aware of the evaluative criteria for customer service and educated on what those criteria are, it will be hard for them to deliver a level of service that meets customer needs. Clients subliminally make their value connection based on five criteria: reliability, responsiveness, assurance, empathy, and tangibles. We need to deliver what we promise, when we say we will, know our material, be empathetic and provide an experience in the practice clients associate with value. If your clients are turning over at higher than 15% each year, complaining about their bills, and not generating referrals, you likely have a customer service issues. How do you tell? Ask them. According to NCVEI data, less than 20% of hospitals ever survey their clients. We can’t address their perceptions and improve customer service if we don’t ask what is wrong.
Harvard Business Review has identified the number one stressor among new staff members and existing staff members trying to learn something new as training. Without proper training we get role confusion, increased job stress, higher staff turnover and costs associated with recruitment, poor customer service and poor financial results. Training needs leadership and a template that provides a menu or checklist for tasks to be learned. Training should be “phased” in and include a monitoring function so new employees’ behaviours can be confirmed as satisfactory. New and existing staff will be happier with an inclusive culture and more delegated responsibility for training. The second biggest stressor for staff members is lack of structured feedback. Without some sort of structured review or feedback forum negative behaviours persist, nobody is accountable, self worth and esteem decline, positive behaviours are not reinforced, and motivation declines. A consistent, practical measurement tool that measures the desired behaviours, not personality traits, should be implemented along with time set aside to do so. The so called “objective based performance measurement” can provide arm’s length objective input and behavioural/task based targets for staff to achieve. Categories to evaluate can include quality of work, communication, problem solving, judgement, initiative, and job knowledge among others. Rewards can then be anything from financial to time off, prizes, desired tasks, and personal growth initiatives.
Every business also needs leadership. No one style of leadership is right for all situations, but there is a preferred style for each situation. Without proper leadership cliques develop, position power individuals take over leadership roles regardless of which they are, circulating negative talk and gossip is a mainstay, and the practice becomes less productive without direction. Effective leaders do simple behavioural things to establish themselves: they are accessible, they compliment, and they are well organized, good managers, give firm direction and are achievement oriented.
Aside from leadership, every business needs some sort of plan and measureable goals. We spend so much time putting out fires and thinking short term, we lose sight of our purpose, vision and goals. Decisions are not as effective, goals are not visible to the staff, and there is no definable culture or end point for the staff to achieve. Each year every practice should consider writing a mini business plan. It can act as road map, a guide, an instrument to help make informed decisions, and an instrument of transparency and direction for the staff. The business plan itself will address all the functional areas of the practice and can remind managers what they need to be paying attention to.
Inside the business plan is one document that focuses strictly on planned spending, and that is a financial budget. Without one the business has no financial goal, and for practice owners who are the last to get paid, a financial goal particularly in volatile economic times is that much more important. Without a budget financial decisions are delayed, uncertain, or random. Profit is affected, return on investment cannot be measured, the entire enterprise value declines. The budget tool itself, once created, can be a real time device to track performance and variances and make better decisions either proactively or after the fact.
Much research has been done over the past few years to establish performance parameters for veterinary practices so they have not only a target to shoot for, but an idea of how they are doing when measured against their peers. Each activity in the practice represents a profit centre; i.e. radiology, anesthesia, surgery, retail, pharmacy etc. The templates exist to compare yourself against. We have excellent performers in our market and poor performers. Templates exist for both expenses and profit centres. You can garner information about your fees, client compliance, staff wages, and inventory control all by comparing to those benchmarks that represent the most profitable practices.
Perhaps the most difficult expense category to manage is inventory control. If flagged as higher than desirable by comparison to benchmarks, an inventory control system that defines your maximum holding quantities, reorder points, and a mini-budget for each order placed should be implemented.
Nothing is changing as fast today as the marketing environment in veterinary practice. Ineffective marketing will fail to generate the word of mouth and value perception we want and can potentially waste a lot of money and not maximize the client experience. Marketing is about creating a perception of value and capitalizing on what is hot or trendy in the current environment. Our marketing tactics should include an environmental scan to determine where the practice has a distinctive competency, a strength, or an opportunity to fill that sets it aside from competitors. An environmental scan can also identify weaknesses to shore up and threats to block. Marketing tactics themselves include external (to attract new clients) and internal (to create value for existing clients). There should be balance between both sets of tactics and the marketing budget is set within the overall budget. Marketing is a key piece of customer service. Currently nothing is as “hot” in marketing as social media. Social media is the latest trend that practices look to embrace and everything from websites, to facebook, blogs and eBooks are proving to have some value added.