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I talk to a lot of Private Practice Physical Therapy Owners every week. Most describe feeling like a cast-away alone on a desert island, under the hot sun of regulations without shade, insufficient resources, and surrounded by sharks (declining compensation, rising costs, staffing challenges, productivity issues, moneyed competition, an un-level playing field, and more...). It seems the harder they work the less they have to show for it. Time for family, friends and the rewards of success continue to erode.
As long as PT practice owners continue to play a defense game alone, they WILL continue to lose and lose BIG!
It's time to take control, team up and go on offense!
All The Best!
Bob
(c) Copyright 2011
Performance Builders
Showing posts with label editorial. Show all posts
Showing posts with label editorial. Show all posts
Thursday, September 29, 2011
Tuesday, September 27, 2011
We're Breaking-Out...
The practice of physical therapy is controlled by payers not patients and professionals. Insurers (private and government) define PT practice. When you play a game defined by someone else, on their field, with their equipment, rules and referees, who do you think is likely to win? For decades PT has built walls to protect the interests of consumers and qualified providers. Today those walls are feeling less like a castle fortress and more like prison walls.
It's time to break out!
All the Best!
Bob
(c) copyright 2011
Performance Builders
It's time to break out!
All the Best!
Bob
(c) copyright 2011
Performance Builders
Monday, August 8, 2011
Compensation
David, in response to your question about negotiating compensation...
Fair question... here are my thoughts.
The underlying principle is fairness - win/win. When a one time transaction is involved, the issue of fairness is transient and short lived. But when the transaction is ongoing as with employment or service contract, the matter of fairness is always on the table and is likely to shift due to changing circumstances - what was fair yesterday may no longer be fair going forward. Thus periodic review is warranted. Employment is about mutual exploitation of value. When the value is no longer mutually beneficial or overly constraining it will end.
Compensation is all about contribution. At the heart of mutual value exploitation is the fairness of compensation relative to contribution. Increased compensation assumes there is a proportional increase in the creation of value. If one desires more compensation, one must be willing to contribute more value creation. Since one's compensation is assumed to be economic (i.e. not just heart felt gratitude), then one's contribution must also be economic. Just because someone is handsome, really liked, and smart does not mean they contribute economic value. The value of knowledge is proportional to its fruit. I frequently see GIFT Fellows who expect higher compensation because of the knowledge they have acquired. That knowledge is worthless in an employment situation unless it is translated into economic value - more clients, more revenue, better profit. That's just the way it is.
Professionals are not motivated primarily by money. Compensation needs to be adequate but it is not what drives knowledge based workers. In fact, financial incentives only work in manual labor. Financial incentives actually have a negative impact in knowledge based work. Professionals are motivated primarily by Purpose, Autonomy and Mastery.
Tenure has little economic value in employment. People are not worth more simply because they have been with a company for a long period of time. Their value is determined by their current level of contribution. As such annual increases make little sense unless they correct a market inequality or contribution has increased.
The first responsibility of a business owner is the survival of the business. Employees who demand too much compensation can and often do undermine the vitality of the business, reduce job security for all who are employed, and reduce the company's ability to serve its customers.
So with compensation there is the matter of contribution and business vitality.
Shift gears...
If I'm an employee and I want to earn more, first I must demonstrate incremental, or even better, exponential financial value creation. That is what justifies higher compensation. I need to be willing to give it before I get it. I need to prime the pump. Oh, and I also need to practice good loyalty, team work, and good company citizen ship. Employees with low productivity, who are high maintenance, demanding, or generally a "pain in the ass" are in a poor position to negotiate anything.
Next I must find out what I'm worth in the market place. To do that I can: ask around, seek other job offers, and research compensation databases (many available on the internet and through professional associations). This is all about benchmarking - where do I stand in comparison to others and how do I contribute in comparison to others. Keep in mind that compensation involves wages, benefits, working conditions, growth/advancement opportunities, flexibility, etc - compensation is the whole package. There is always variation across employment situations. Sometimes these are negotiable and sometimes not. Employers do have certain legal and practical fairness obligation.
As to actual negotiations, I'd recommend stating what financial compensation you want and why you deserve it - value creation, economic contribution, comparative compensation, commitment/loyalty, and willingness to share financial risk Then talk about the time line for achieving your financial goals - it may not be possible tomorrow, but can you at least launch on on a favorable trajectory. Be creative - what can you substitute for dollars, how else could you contribute, how much risk are you willing to accept in exchange for greater opportunity? For instance, would you be willing to risk a 20% reduction in compensation in exchange for a 20% upside opportunity depending on your financial contribution to the business?
One thing is for sure - if you go into a compensation negotiation with attitude, anger and threats it will backfire eventually. Conduct your negotiations professionally and respectfully. Be factual. Be creative. Be accountable. Be patient. Be fair!
I hope there's a nugget or two in all of this that you can use.
Fair question... here are my thoughts.
The underlying principle is fairness - win/win. When a one time transaction is involved, the issue of fairness is transient and short lived. But when the transaction is ongoing as with employment or service contract, the matter of fairness is always on the table and is likely to shift due to changing circumstances - what was fair yesterday may no longer be fair going forward. Thus periodic review is warranted. Employment is about mutual exploitation of value. When the value is no longer mutually beneficial or overly constraining it will end.
Compensation is all about contribution. At the heart of mutual value exploitation is the fairness of compensation relative to contribution. Increased compensation assumes there is a proportional increase in the creation of value. If one desires more compensation, one must be willing to contribute more value creation. Since one's compensation is assumed to be economic (i.e. not just heart felt gratitude), then one's contribution must also be economic. Just because someone is handsome, really liked, and smart does not mean they contribute economic value. The value of knowledge is proportional to its fruit. I frequently see GIFT Fellows who expect higher compensation because of the knowledge they have acquired. That knowledge is worthless in an employment situation unless it is translated into economic value - more clients, more revenue, better profit. That's just the way it is.
Professionals are not motivated primarily by money. Compensation needs to be adequate but it is not what drives knowledge based workers. In fact, financial incentives only work in manual labor. Financial incentives actually have a negative impact in knowledge based work. Professionals are motivated primarily by Purpose, Autonomy and Mastery.
Tenure has little economic value in employment. People are not worth more simply because they have been with a company for a long period of time. Their value is determined by their current level of contribution. As such annual increases make little sense unless they correct a market inequality or contribution has increased.
The first responsibility of a business owner is the survival of the business. Employees who demand too much compensation can and often do undermine the vitality of the business, reduce job security for all who are employed, and reduce the company's ability to serve its customers.
So with compensation there is the matter of contribution and business vitality.
Shift gears...
If I'm an employee and I want to earn more, first I must demonstrate incremental, or even better, exponential financial value creation. That is what justifies higher compensation. I need to be willing to give it before I get it. I need to prime the pump. Oh, and I also need to practice good loyalty, team work, and good company citizen ship. Employees with low productivity, who are high maintenance, demanding, or generally a "pain in the ass" are in a poor position to negotiate anything.
Next I must find out what I'm worth in the market place. To do that I can: ask around, seek other job offers, and research compensation databases (many available on the internet and through professional associations). This is all about benchmarking - where do I stand in comparison to others and how do I contribute in comparison to others. Keep in mind that compensation involves wages, benefits, working conditions, growth/advancement opportunities, flexibility, etc - compensation is the whole package. There is always variation across employment situations. Sometimes these are negotiable and sometimes not. Employers do have certain legal and practical fairness obligation.
As to actual negotiations, I'd recommend stating what financial compensation you want and why you deserve it - value creation, economic contribution, comparative compensation, commitment/loyalty, and willingness to share financial risk Then talk about the time line for achieving your financial goals - it may not be possible tomorrow, but can you at least launch on on a favorable trajectory. Be creative - what can you substitute for dollars, how else could you contribute, how much risk are you willing to accept in exchange for greater opportunity? For instance, would you be willing to risk a 20% reduction in compensation in exchange for a 20% upside opportunity depending on your financial contribution to the business?
One thing is for sure - if you go into a compensation negotiation with attitude, anger and threats it will backfire eventually. Conduct your negotiations professionally and respectfully. Be factual. Be creative. Be accountable. Be patient. Be fair!
I hope there's a nugget or two in all of this that you can use.
Sunday, July 31, 2011
Entitlement
It's been a tough week to escape the federal financial debate, no correct that, "Debacle". The country is less faced by a debt ceiling than by a leadership deficiency. At the heart of every conversation is the issue of entitlements. Nearly half of Americans pay NO taxes, but all want what is "entitled" to them... think social security, medicare, medicaid. The federal government more than doubled since 1965 - of course state and local governments have also grown. None of this is a surprise. The financial implications of baby boomer retirement has been well documented for decades by the Menniger Foundation and foretold by Kotlikoff in his book The Coming Generational Storm (2004). But somehow the inevitable is conveniently pushed aside.
There is another entitlement issue. It is one faced by nearly every physical therapy practice in the country. It is the entitlement of compensation driven by labor shortages but supported by third party reimbursement. Over the past 2 decades, I have had the pleasure of working with over 100 hospital systems, and several hundred private practices. Interestingly, I've never found a hospital based PT service that knows what its profit margin is - yes they know how they compare to budget with all its arbitrary and rationalized allocations but not whether they in fact are creating economic value or even covering their own expense. Likewise, it is rare indeed to find a private practice PT owner that can simply answer the same two questions. Then there are employed PTs... are they creating financial value for their employer and for their own job security? Is that value proportional to their compensation?
The US federal government will be paying over half of the entire US health bill by next year - that's even before national health insurance (2014). Do you think that the federal government solvency might impact Medicare spending? Do you think Medicare spending might impact PT provider reimbursement? Do you think PT provider reimbursement might impact PT compensation?
BELIEVE IT!
PREPARE FOR IT!
BEGIN NOW!
Are you entitled? Think again!
All The Best!
Bob
(c) Copyright 2011
Thursday, November 26, 2009
Happy Thanksgiving Day
Happy Thanksgiving Day!
May you recognize your blessings and name them. Begin with family and friends...
I've had the privilege to travel to some of the poorest regions of the world during the past year - Africa, Central America, and the Caribbean. In those travels I spent time with impoverished families who survived in mud huts with dirt floors, drinking water that made them sick and even caused their children to die, with not enough food, and too little hope. But, in being surrounded by family they found reason to celebrate and even to share with a stranger...
May you too find celebration in family, old and new friends, and in sharing today and every day.
Bob
May you recognize your blessings and name them. Begin with family and friends...
I've had the privilege to travel to some of the poorest regions of the world during the past year - Africa, Central America, and the Caribbean. In those travels I spent time with impoverished families who survived in mud huts with dirt floors, drinking water that made them sick and even caused their children to die, with not enough food, and too little hope. But, in being surrounded by family they found reason to celebrate and even to share with a stranger...
May you too find celebration in family, old and new friends, and in sharing today and every day.
Bob
Wednesday, November 18, 2009
Traveling
I'll be attending the Gary Gray Chain Reaction Transformation Seminar in San Diego this week... another opportunity to meet with clients, old friends, and new friends.
There's a lot of buzz in both the physical therapy and personal training community these days around national health programs, changes in reimbursement and payor networks, erosion of profitability, cash based business opportunities, increasing competition, variable compensation, and emerging business opportunities. Those conversations have been intense during my recent visits in Hartford, Boston, Manhattan, and Chicago. They have been repeated in my conversations with clients throughout the US. I expect more of the same in San Diego. If those topics are not part of your conversations and priorities they definitely need to be!
Performance Builders' clients tend to be of the progressive type - those that sense opportunity in difficult times. Most agree that significant change and challenge is imminent in the industry. While no one has a crystal ball, its pretty obvious that whatever the outcome, providers need to prepare to do more for less while growing. That means more productivity, quality, and value with less resources consumed. That means old business models need to be replaced with new business models that hold new promise, possibility, and potency.
Performance Builders has earned a reputation for accurately anticipating change and creating opportunity in that anticipation. I'll be sharing a series of posts with you over the next couple of weeks that identify key drivers that will shape our markets and the opportunities they will present.
In the mean time, we are quietly working with our clients to leverage those opportunities and create sustainable competitive advantage.
If you are are not implementing new strategies as you move into 2010, you run a serious risk of being left behind. One thing is certain, Practices that are not run like businesses are likely to fail.
Bob
(c) Copyright 2009
Performance Builders
There's a lot of buzz in both the physical therapy and personal training community these days around national health programs, changes in reimbursement and payor networks, erosion of profitability, cash based business opportunities, increasing competition, variable compensation, and emerging business opportunities. Those conversations have been intense during my recent visits in Hartford, Boston, Manhattan, and Chicago. They have been repeated in my conversations with clients throughout the US. I expect more of the same in San Diego. If those topics are not part of your conversations and priorities they definitely need to be!
Performance Builders' clients tend to be of the progressive type - those that sense opportunity in difficult times. Most agree that significant change and challenge is imminent in the industry. While no one has a crystal ball, its pretty obvious that whatever the outcome, providers need to prepare to do more for less while growing. That means more productivity, quality, and value with less resources consumed. That means old business models need to be replaced with new business models that hold new promise, possibility, and potency.
Performance Builders has earned a reputation for accurately anticipating change and creating opportunity in that anticipation. I'll be sharing a series of posts with you over the next couple of weeks that identify key drivers that will shape our markets and the opportunities they will present.
In the mean time, we are quietly working with our clients to leverage those opportunities and create sustainable competitive advantage.
If you are are not implementing new strategies as you move into 2010, you run a serious risk of being left behind. One thing is certain, Practices that are not run like businesses are likely to fail.
Bob
(c) Copyright 2009
Performance Builders
Tuesday, October 20, 2009
Traveling
Just an update... I'll be traveling to Adrian Michigan this week for The third and final GIFT Gathering of 2009 (Gray Institute). There will be about a half dozen of us there as faculty with about 70 GIFT Fellows who will be graduating with their Functional Manual Reaction Certification (FMR) and will officially become Fellows in Applied Functional Science (FAFS). We will also be having our first opportunity to see each Fellow's Capstone Presentation.
It's been a great year at GIFT (Gray Institute for Functional Transformation) and as in previous years the class has become very close personally and professionally. The talent is incredible and they together with previous year Fellows ARE changing the world of rehabilitation and fitness.
It has been a privilege to serve on GIFT's faculty for the past 3 years and to be able to contribute to the Fellow's learning in Applied Functional Science and Business management. Excellence in both areas is creating significant opportunities and reward for participants!
If you've not checked out GIFT, you owe yourself the favor!
Bob
(c) Copyright 2009
Performance Builders
It's been a great year at GIFT (Gray Institute for Functional Transformation) and as in previous years the class has become very close personally and professionally. The talent is incredible and they together with previous year Fellows ARE changing the world of rehabilitation and fitness.
It has been a privilege to serve on GIFT's faculty for the past 3 years and to be able to contribute to the Fellow's learning in Applied Functional Science and Business management. Excellence in both areas is creating significant opportunities and reward for participants!
If you've not checked out GIFT, you owe yourself the favor!
Bob
(c) Copyright 2009
Performance Builders
Wednesday, September 30, 2009
Questions
It seems almost everyone is looking for answers these days - preferably short and soon! We live with information overload and the pace continues to accelerate.
"Just give me the bottom line." To make a long story short..." "Just make it quick!" "I don't have time." Just the facts ma'am." "I want an answer now!" "Is that your final answer?" "I'm waiting!" Just keep it short and sweet." "
Answers that are short and soon run a high risk for being wrong. If in doubt, try calling the IRS three times in a row with a single question and see how many different answers you get.
Talk is cheap. Think productivity. Where's the accountability?
Perhaps we are getting it backwards. Our need for solutions may be better served with better questions than with quicker answers.
Measure the quality of ones contributions not by the answers they give but by the quality of questions they ask! Measure the progress one is making by the questions they ask.
On reflection...
"One may lead perhaps with not more than a question in hand. " –Richard Foster
“The function of genius is not to give new answers, but to pose new questions - which time and mediocrity can solve.” - Hugh Trevor-Roper
Sometimes the questions are complicated and the answers are simple.” - Dr. Seuss quote
“Mistakes come from not asking the right questions” -Anonymous
"We do good science when we ask new questions” -Anonymous
"In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. - Galileo
“If we are asking the right questions, we are probably living the right answers” - Rilke
Are you asking the right questions? Are you taking the time neccesary to formulate the right questions? Do you need better answers or better questions? Is opportunity more often found in answers or hidden in questions? What is your next big question? What new questions are awaiting you on the back side of beyond?
Bob
(c) copyright 2009
Performance Builders
"Just give me the bottom line." To make a long story short..." "Just make it quick!" "I don't have time." Just the facts ma'am." "I want an answer now!" "Is that your final answer?" "I'm waiting!" Just keep it short and sweet." "
Answers that are short and soon run a high risk for being wrong. If in doubt, try calling the IRS three times in a row with a single question and see how many different answers you get.
Talk is cheap. Think productivity. Where's the accountability?
Perhaps we are getting it backwards. Our need for solutions may be better served with better questions than with quicker answers.
Measure the quality of ones contributions not by the answers they give but by the quality of questions they ask! Measure the progress one is making by the questions they ask.
On reflection...
"One may lead perhaps with not more than a question in hand. " –Richard Foster
“The function of genius is not to give new answers, but to pose new questions - which time and mediocrity can solve.” - Hugh Trevor-Roper
Sometimes the questions are complicated and the answers are simple.” - Dr. Seuss quote
“Mistakes come from not asking the right questions” -Anonymous
"We do good science when we ask new questions” -Anonymous
"In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. - Galileo
“If we are asking the right questions, we are probably living the right answers” - Rilke
Are you asking the right questions? Are you taking the time neccesary to formulate the right questions? Do you need better answers or better questions? Is opportunity more often found in answers or hidden in questions? What is your next big question? What new questions are awaiting you on the back side of beyond?
Bob
(c) copyright 2009
Performance Builders
Friday, September 25, 2009
GIFT
I have had the incredible privilege to serve on the faculty of Gray Institute for Functional Transformation (GIFT) for the past 3 years. There is nothing like it in the industry!!!
GIFT is a ten-month, distance-learning, mentorship program that focuses on physical transformation and human performance through chain reaction biomechanics. Its holistic approach incorporates mind, body, and spirit.
This years cohort of students will be graduating in mid October as Fellows in Applied Functional Science (FAFS). GIFT Fellows come from around the world - they are physical therapists, medical doctors, chiropractors, and personal trainers. Each leaves with a distinctive knowledge and skill set that allows them to transform the lives of others through movement.
If you are a professional that is committed to the health, well-being, and physical performance of others check out GIFT. Participation will create in you the ultimate competitive edge. It will transform how you think, problem solve, treat, and train.
GIFT puts the "PRO" professional. Fellows are uniquely confident, qualified, and competent in all aspects of the neuro-muscular-skeletal system. They are uniquely capable of enhancing function and performance.
Join me in 2010 - Now is the time to register for classes starting in January 2010. Change your life and change the lives of others.
By the way, GIFT Fellows have special access to Performance Builders tools, consultation, and resources...
Bob
(c) copyright 2009
Performance Builders
GIFT is a ten-month, distance-learning, mentorship program that focuses on physical transformation and human performance through chain reaction biomechanics. Its holistic approach incorporates mind, body, and spirit.
This years cohort of students will be graduating in mid October as Fellows in Applied Functional Science (FAFS). GIFT Fellows come from around the world - they are physical therapists, medical doctors, chiropractors, and personal trainers. Each leaves with a distinctive knowledge and skill set that allows them to transform the lives of others through movement.
If you are a professional that is committed to the health, well-being, and physical performance of others check out GIFT. Participation will create in you the ultimate competitive edge. It will transform how you think, problem solve, treat, and train.
GIFT puts the "PRO" professional. Fellows are uniquely confident, qualified, and competent in all aspects of the neuro-muscular-skeletal system. They are uniquely capable of enhancing function and performance.
Join me in 2010 - Now is the time to register for classes starting in January 2010. Change your life and change the lives of others.
By the way, GIFT Fellows have special access to Performance Builders tools, consultation, and resources...
Bob
(c) copyright 2009
Performance Builders
Saturday, September 19, 2009
There's a Bend Up Ahead
Regardless of the outcome of the national health debate over the coming weeks, the fact is that financial realities demand that something change... e.g. Medicare running out of money by 2017 as just one example.
Is change coming? You bet it is! What it looks like is still up in the air but one thing is for sure - reimbursement will continue to erode and costs will continue to go up. Businesses will be pinched - healthcare providers and community employers.
There will be winners and losers. Those who are not productive and efficient will be the first to suffer. One need only look back to the Balanced Budget Act of 1998 and long term care sector to appreciate the scramble that was caused and the losses incurred by so many.
Was there recovery. Sure there was... for some but not for others. Business changed hands. Business that inefficient providers could no longer afford to do shifted to those providers who could do more for less and still make a profit. While some were going out of business others were taking the opportunity to grow theirs.
Times of change are times of opportunity for those who are prepared. Now is the time to be preparing. Those who are business savvy and prudent are doing just that - PREPARIING.
"A bend in the road is not the end of the road unless you fail to make the turn."
Do you have your hands on the wheel?
Bob
(c) copyright 2009
Performance Builders
Is change coming? You bet it is! What it looks like is still up in the air but one thing is for sure - reimbursement will continue to erode and costs will continue to go up. Businesses will be pinched - healthcare providers and community employers.
There will be winners and losers. Those who are not productive and efficient will be the first to suffer. One need only look back to the Balanced Budget Act of 1998 and long term care sector to appreciate the scramble that was caused and the losses incurred by so many.
Was there recovery. Sure there was... for some but not for others. Business changed hands. Business that inefficient providers could no longer afford to do shifted to those providers who could do more for less and still make a profit. While some were going out of business others were taking the opportunity to grow theirs.
Times of change are times of opportunity for those who are prepared. Now is the time to be preparing. Those who are business savvy and prudent are doing just that - PREPARIING.
"A bend in the road is not the end of the road unless you fail to make the turn."
Do you have your hands on the wheel?
Bob
(c) copyright 2009
Performance Builders
Wednesday, September 16, 2009
Opportunity
About a dozen years ago I had the privilege to introduce the American Physical Therapy Association (APTA) to performance benchmarking at one of its Leadership Conferences (LAMP). The presentation was about using objective comparative performance data as a tool in discovering best practices and providing evidence based practice. It was a presentation about enhancing the performance of the profession.
Over the past 15 years I had the privilege to benchmark hundreds of physical therapy operations - both hospital and private practice based. Benchmarking provides a disciplined statistical methodology t0 identify and assess variance in business performance - financial, operational, productivity, utilization, etc. The bottom line for a practice owner or manager is that benchmarking provides an efficient and economical system for optimizing clinical outcomes, competitive advantage, and profitability.
In working with the data on individual practices I found another story that was being told by the aggregate data. It was a financial story of physical therapy performance across the nation. It was a multi-billion dollar story told on the back of a napkin! Here's that story...
First lets make a few conservative assumptions that are readily supported by benchmarked industry data.
Assumptions:
Over the past 15 years I had the privilege to benchmark hundreds of physical therapy operations - both hospital and private practice based. Benchmarking provides a disciplined statistical methodology t0 identify and assess variance in business performance - financial, operational, productivity, utilization, etc. The bottom line for a practice owner or manager is that benchmarking provides an efficient and economical system for optimizing clinical outcomes, competitive advantage, and profitability.
In working with the data on individual practices I found another story that was being told by the aggregate data. It was a financial story of physical therapy performance across the nation. It was a multi-billion dollar story told on the back of a napkin! Here's that story...
First lets make a few conservative assumptions that are readily supported by benchmarked industry data.
Assumptions:
- Each therapist provides 12 patient visits per day
- Each visit consists of 3.5 service units (CPTs)
- Each therapist works 230 days per year
- There are about 125,000 PTs in the US
- Expense per unit of service is improved by 10%
- Each therapist provides 9660 service units per year for a total of 1.2 billion units per year.
The Impact:
- A 10% improvement in average practice expense across the US would generate an additional $2.9 billion in profit/margin. That equates to $23,200 per therapist ANNUALLY!
A 10% improvement across the industry would not be difficult considering the lack of attention that business performance gets in most practices and the high variance in financial performance that is shown by benchmarking.
What could such a an improvement in profitability (discretionary income) have on professional development, enhanced services, competitive advantage, compensation, political influence, and social responsibility?
Most physical therapy practices in the US are under performing. The performance of the top quartile of practices (25%) prove what can be achieved. They also demonstrate how it can be achieved (best practices).
Its right there in the numbers! That is what benchmarking and best practice is all about. Time consuming and costly scientific studies are not necessary. The answers are already in.
The opportunity does not offer just a one-time payoff, but one that is repeated annually! Think of what a decade of improvement would produce. Think how practice values would increase when sale prices are based on MULTIPLES of profitability. Think how performance, reward, and influence could be transformed.
The potential for the industry is nothing short of transformational!
In a period of skyrocketing health care costs and national policy debate on health care reform, isn't transformation what the PT industry needs?
Will ignoring the issues/threats with business as usual or complaining about health policy change your reality? The solution and the reward will go to those within the industry who take matters in their own hands and within their own practices to change their performance reality.
The risk is low and the return on investment great.
So, how are you doing? What are you waiting for?
Bob
(c) copyright 2009
Thursday, September 10, 2009
Economics In Practice
The current practice economics are not stable, secure, scalable, or sustainable in institutions or private practice.
Reimbursement has and will continue to erode. Compensation expectations are and will continue to build. The only way out of that scenario is enhanced productivity amongst fewer people.
Innovative compensation strategies and incentives are part of the equation but not all of the equation. Professionals want autonomy of practice, mastery of skills, and purpose in their work.
What is needed is reconceptualization of the challenge and the solutions.
Pay-for-performance has proven challenging in healthcare on multiple levels. That said, professional autonomy demands both clinical and economic accountability.
It's time that the concept of "pay-for-performance" be migrated to "variable compensation" within the framework of autonomy.
Are practices and professionals ready for it? NO, but they need to take it seriously if they intend to remain economically viable. Those that adopt "variable compensation" effectively will enjoy a substancial competitive advantage in the coming months and years. Those who can deliver good service and productivity will have unique opportunities that will pass the rest by.
Bob
(c) Copyright 2009
Performance Builders
Reimbursement has and will continue to erode. Compensation expectations are and will continue to build. The only way out of that scenario is enhanced productivity amongst fewer people.
Innovative compensation strategies and incentives are part of the equation but not all of the equation. Professionals want autonomy of practice, mastery of skills, and purpose in their work.
What is needed is reconceptualization of the challenge and the solutions.
Pay-for-performance has proven challenging in healthcare on multiple levels. That said, professional autonomy demands both clinical and economic accountability.
It's time that the concept of "pay-for-performance" be migrated to "variable compensation" within the framework of autonomy.
Are practices and professionals ready for it? NO, but they need to take it seriously if they intend to remain economically viable. Those that adopt "variable compensation" effectively will enjoy a substancial competitive advantage in the coming months and years. Those who can deliver good service and productivity will have unique opportunities that will pass the rest by.
Bob
(c) Copyright 2009
Performance Builders
Thursday, September 3, 2009
Structured For Success
In a conversation with a practice owner this week we talked about business performance in physical therapy and personal training practices. I made the comment that most practices are not structured for success. That comment raised the question to me, "What do you mean by structured for success?" Good question!
First let's define success... It involves five elements: reputation, profitability, scalability, sustainability, and giving back to the community served. If one achieves those five elements satisfaction will likely also be found.
It seems that too many practice owners are satisfied with making a wage. Too many overlook the need and benefit of earning a profit and a return on investment for their financial and time investments and for the risk they take in launching and operating a business. Profit is that return on invest. It is important and prudent. We focus on the success factor of profit because it is the fuel that makes the the other four elements possible.
"So, how does one structure for success?"
Structuring is multi-faceted. There are matters of the legal structure of the business including, contracts, partners/members, rights, responsibilities, obligations, understandings, tax status, capitalization, governance, etc. There are operational structures related to marketing, utilization, productivity, staffing, billing and collections, communications, etc. There are also matters of financal structures such as budgets, loans, line of credit, leases, fees, discounts, provider contracts, compensation, distributions, and profit.
Profit is too often an after thought, i.e. what's left over at the end of the year. It gets far too little consideration. How little? I find very very few practice owners that know what their profit margin is. And, it is equally rare that an owner can tell me what their intended profit margin is for the year. Here's a simple test for you? What is your current profit margin for the year and what was it intended to be? If your answer is, "I don't know", then you are not structured for success and you are not alone.
Profit is not something one can manage directly because it represents the sum total of all of the decisions one makes. Profit represents your score in the game of business. it tells you how well you're playing, how competitive you are, and what league you are playing in. As a point of reference, 25% of practices earn 10% profit or less. The remaining 75% earn more - the top 25% of practices earn much more!
Why? Because they are structured for success. All of the moving parts of the business are aligned, and integrated toward one end - superior service and profit. Practice owners need to stop making excuses and being embarrassed to talk about profit. Sure service comes first, but service without profit is foolish. Even not-for-profit organizations recognize the need and appropriateness of operating with a surplus (profit). Nonprofits can get by for a while on a smaller margin (profit) only because they have a tax advantage and the ability to accept charitable contributions.
Without profit one can not grow and provide better and better services to their community. Profit rocks!
Here's the underlying insight one must understand. Unless there is an intended profit target and unless one knows whether they are on target or off, they can have no idea what decisions need to be made or what solution to a problem is optimal! And, unless such decisions are routinely being made proactively in a timely fashion one can assume that there is no one managing the business.
The budgeting and managing of expenses are particularly critical since they are the only financial variable that management can actually control. Volume and revenue are dependent on the decisions of others to engage one's services. Bottom line profit is simply the calculation of the difference between one's top line revenue and their middle line expense. Thus, how expenses are structured and managed in relationship to conservative revenue expectations are critical to profit achievement.
It all begins with planning. Planning begins with an honest appraisal of how well the business side of the practice is currently performing in comparison to other practices. How competitive is it? Only then can one learn what is possible. Only then can the practice be structured for success. Only then can one find structured success.
Restructuring can take anywhere from a few weeks to a year or so, but it is the most important thing one can do for their practice, for their staff, for their community, and "yes for themself"!
Back in the 1800's Webster's dictionary defined Success as: prosperous, fortunate, happy, kind. It's important tonot forget the elements of fortunate (blessed) and kind (grateful) in our understanding of success. It is also important to keep in mind that prosperity favors those who are pro-active and prudent in their preparation. And, happy like profit is an outcome that can not be controled directly.
Are you structured for success or just getting by?
All The Best!
Bob
(c) copyright 2009
Performance Builders
First let's define success... It involves five elements: reputation, profitability, scalability, sustainability, and giving back to the community served. If one achieves those five elements satisfaction will likely also be found.
It seems that too many practice owners are satisfied with making a wage. Too many overlook the need and benefit of earning a profit and a return on investment for their financial and time investments and for the risk they take in launching and operating a business. Profit is that return on invest. It is important and prudent. We focus on the success factor of profit because it is the fuel that makes the the other four elements possible.
"So, how does one structure for success?"
Structuring is multi-faceted. There are matters of the legal structure of the business including, contracts, partners/members, rights, responsibilities, obligations, understandings, tax status, capitalization, governance, etc. There are operational structures related to marketing, utilization, productivity, staffing, billing and collections, communications, etc. There are also matters of financal structures such as budgets, loans, line of credit, leases, fees, discounts, provider contracts, compensation, distributions, and profit.
Profit is too often an after thought, i.e. what's left over at the end of the year. It gets far too little consideration. How little? I find very very few practice owners that know what their profit margin is. And, it is equally rare that an owner can tell me what their intended profit margin is for the year. Here's a simple test for you? What is your current profit margin for the year and what was it intended to be? If your answer is, "I don't know", then you are not structured for success and you are not alone.
Profit is not something one can manage directly because it represents the sum total of all of the decisions one makes. Profit represents your score in the game of business. it tells you how well you're playing, how competitive you are, and what league you are playing in. As a point of reference, 25% of practices earn 10% profit or less. The remaining 75% earn more - the top 25% of practices earn much more!
Why? Because they are structured for success. All of the moving parts of the business are aligned, and integrated toward one end - superior service and profit. Practice owners need to stop making excuses and being embarrassed to talk about profit. Sure service comes first, but service without profit is foolish. Even not-for-profit organizations recognize the need and appropriateness of operating with a surplus (profit). Nonprofits can get by for a while on a smaller margin (profit) only because they have a tax advantage and the ability to accept charitable contributions.
Without profit one can not grow and provide better and better services to their community. Profit rocks!
Here's the underlying insight one must understand. Unless there is an intended profit target and unless one knows whether they are on target or off, they can have no idea what decisions need to be made or what solution to a problem is optimal! And, unless such decisions are routinely being made proactively in a timely fashion one can assume that there is no one managing the business.
The budgeting and managing of expenses are particularly critical since they are the only financial variable that management can actually control. Volume and revenue are dependent on the decisions of others to engage one's services. Bottom line profit is simply the calculation of the difference between one's top line revenue and their middle line expense. Thus, how expenses are structured and managed in relationship to conservative revenue expectations are critical to profit achievement.
It all begins with planning. Planning begins with an honest appraisal of how well the business side of the practice is currently performing in comparison to other practices. How competitive is it? Only then can one learn what is possible. Only then can the practice be structured for success. Only then can one find structured success.
Restructuring can take anywhere from a few weeks to a year or so, but it is the most important thing one can do for their practice, for their staff, for their community, and "yes for themself"!
Back in the 1800's Webster's dictionary defined Success as: prosperous, fortunate, happy, kind. It's important tonot forget the elements of fortunate (blessed) and kind (grateful) in our understanding of success. It is also important to keep in mind that prosperity favors those who are pro-active and prudent in their preparation. And, happy like profit is an outcome that can not be controled directly.
Are you structured for success or just getting by?
All The Best!
Bob
(c) copyright 2009
Performance Builders
Friday, August 28, 2009
Capturing Hearts and Minds
In conversation this week with a client the discussion shifted to employee motivation and the role that compensation has in it. The context was "pay for performance" which is premised on the assumption that professionals are motivated by money. Well, that's not entirely true.
The science is in... professionals are not primarily motivated by financial reward. Of course if compensation is inadequate money matters but beyond that the three key motivators are autonomy, mastery, and purpose. These are the matters of performance that lay the foundation for service, scalability, and sustainability in practice.
Professionals desire independence in the services they provide, they want the opportunity to acquire and to be recognized for superior skills, and to be working for a purpose that is larger than themselves and the organization they work with.
That should come as no surprise but it is an understanding too often overlooked. ... not just by employers but also employees.
With autonomy comes accountability. One must live with the consequences of their choices and actions. Those consequences have clinical, social, and financial implications. Productivity and contribution have consequences pertaining to compensation and job security - those things are inherently linked to autonomy.
With mastery comes commitment, practice, objectivity and the willingness to teach others. One must be willing to sacrifice and invest time and money to earn skill mastery. It's not good enough to claim mastery, it needs to be recognized by others who have the knowledge and experience to recognize mastery.
With purpose comes expectation and obligation. One must find the passion and persistence to make a difference, to take risks, advocate, lead, and contribute by example. One is expected to achieve that which they set out to do. Purpose is not left at the side of the road. Purpose does not go on vacation. Purpose gets one up early on a Monday morning and keeps one up late at night. Purpose means advocating for a cause... standing up to be counted... speaking the truth... delivering value.
Is autonomy, mastery, and purpose critical parts of your business / professional culture? If not, why not? If yes, what can you do to inspire and mentor others to realize their professional promise and potential? Are you capturing hearts and minds?
Coming back to where we started... "Pay for Performance" has high likelihood for failure in many practice environments. The discussion needs to begin around autonomy, mastery, and purpose. Only then can the conversation move toward compensation. The conversation needs to be anchored in the big rocks of trust, value, purpose, principles, and a service with performance culture.
When the time for compensation discussions finally arrives do yourself a favor and focus not on "pay for performance" but rather "variable compensation" based ones contribution to the business and those it serves through autonomy, mastery, and purpose.
Only then can heads and hearts be connected! Performance Matters!
All The Best!
Bob
(c) Copyright 2009
Performance Builders
The science is in... professionals are not primarily motivated by financial reward. Of course if compensation is inadequate money matters but beyond that the three key motivators are autonomy, mastery, and purpose. These are the matters of performance that lay the foundation for service, scalability, and sustainability in practice.
Professionals desire independence in the services they provide, they want the opportunity to acquire and to be recognized for superior skills, and to be working for a purpose that is larger than themselves and the organization they work with.
That should come as no surprise but it is an understanding too often overlooked. ... not just by employers but also employees.
With autonomy comes accountability. One must live with the consequences of their choices and actions. Those consequences have clinical, social, and financial implications. Productivity and contribution have consequences pertaining to compensation and job security - those things are inherently linked to autonomy.
With mastery comes commitment, practice, objectivity and the willingness to teach others. One must be willing to sacrifice and invest time and money to earn skill mastery. It's not good enough to claim mastery, it needs to be recognized by others who have the knowledge and experience to recognize mastery.
With purpose comes expectation and obligation. One must find the passion and persistence to make a difference, to take risks, advocate, lead, and contribute by example. One is expected to achieve that which they set out to do. Purpose is not left at the side of the road. Purpose does not go on vacation. Purpose gets one up early on a Monday morning and keeps one up late at night. Purpose means advocating for a cause... standing up to be counted... speaking the truth... delivering value.
Is autonomy, mastery, and purpose critical parts of your business / professional culture? If not, why not? If yes, what can you do to inspire and mentor others to realize their professional promise and potential? Are you capturing hearts and minds?
Coming back to where we started... "Pay for Performance" has high likelihood for failure in many practice environments. The discussion needs to begin around autonomy, mastery, and purpose. Only then can the conversation move toward compensation. The conversation needs to be anchored in the big rocks of trust, value, purpose, principles, and a service with performance culture.
When the time for compensation discussions finally arrives do yourself a favor and focus not on "pay for performance" but rather "variable compensation" based ones contribution to the business and those it serves through autonomy, mastery, and purpose.
Only then can heads and hearts be connected! Performance Matters!
All The Best!
Bob
(c) Copyright 2009
Performance Builders
Friday, August 14, 2009
The Loyalty Trap
I've been having an interesting series of conversations over the past couple of weeks with three different health practice owners who share a very common problem in their operations...
The problem boils down to a few not uncommon characteristics that play off eachother within the practice.
1. The practice is small and is structured around friendships and informal business "arrangements"
2. The practice lacks sufficient performance benchmarks and operational controls and thus is not structued for success and doesn't realize it.
3. Finances get tight and it becomes evermore difficult to make ends meet.
4. Loyalties suffer and team members enter into competitive moonlighting business arrangements.
The result is predictable:
> Both parties become frustrated, trapped, and feeling "owed something"
> Trust and loyalty is undermined
> Business and personal relationships erode
> Good intentions and opportunities are lost
> All parties suffer
It is important to realize that this type of situation often spirals out of control It carrys with it the seeds of failure and can easily erode into an abusive business relationship.
It's critical to differentiate the borders between friendship and business. So to it is critical to establish shared business expectations, responsibilities, and obligations, and accountabilites.
Businesses need to be run like a business.
Ideally businesses are set to be run like a business from the start. Too often they are not. When they are not it is important to get them back on track as quickly as possible.
When that is done there is usually some fallout - its regretable but often inevitable. Its likely to get unpleasant before it gets better. Confrontation, threats and harsh words are likely to occur. Procrastination will only make matters worse. The stakes are high.
If you find yourself in such a situation it's important to find a mentor - someone who understands the business and can help you step back and see the big picture, long term and separate business from emotion.
My advice: Face reality. Avoid blame. Get competent advice. Take action. Follow through.
A business that is not structured for success will rarely find it.
Bob
(C) copyright 2009
Performance Builders
The problem boils down to a few not uncommon characteristics that play off eachother within the practice.
1. The practice is small and is structured around friendships and informal business "arrangements"
2. The practice lacks sufficient performance benchmarks and operational controls and thus is not structued for success and doesn't realize it.
3. Finances get tight and it becomes evermore difficult to make ends meet.
4. Loyalties suffer and team members enter into competitive moonlighting business arrangements.
The result is predictable:
> Both parties become frustrated, trapped, and feeling "owed something"
> Trust and loyalty is undermined
> Business and personal relationships erode
> Good intentions and opportunities are lost
> All parties suffer
It is important to realize that this type of situation often spirals out of control It carrys with it the seeds of failure and can easily erode into an abusive business relationship.
It's critical to differentiate the borders between friendship and business. So to it is critical to establish shared business expectations, responsibilities, and obligations, and accountabilites.
Businesses need to be run like a business.
Ideally businesses are set to be run like a business from the start. Too often they are not. When they are not it is important to get them back on track as quickly as possible.
When that is done there is usually some fallout - its regretable but often inevitable. Its likely to get unpleasant before it gets better. Confrontation, threats and harsh words are likely to occur. Procrastination will only make matters worse. The stakes are high.
If you find yourself in such a situation it's important to find a mentor - someone who understands the business and can help you step back and see the big picture, long term and separate business from emotion.
My advice: Face reality. Avoid blame. Get competent advice. Take action. Follow through.
A business that is not structured for success will rarely find it.
Bob
(C) copyright 2009
Performance Builders
Friday, August 7, 2009
Between "Yes" and "No"
Getting to "YES" is a classic business book on the art and science of negotiations. It explores various negotiation situations and discusses ways to find common ground, expand common ground, and increase the odds of a successful outcome - i.e. getting to yes.
Of course the title assumes that the parties are not already at "YES" or at least have not realized it. If they are not at "YES", then one must assume they must be at "NO".
"NO" is the word that stops opportunity and possibility in its tracks. "NO" is a word that tests relationships. "NO" is a word that sets up barriers, ends things, shuts things down, begins confrontations, fuels arguments, disappoints, and creates uneasiness. As a result, "NO" often doesn't get said out loud. In some cultures, ethnic and business, "NO" is considered bad manners and is actively avoided not out of dishonesty but out of respect.
Of course not saying "NO" does not mean "YES". In such situations the potential for present tense disappointment and confrontation is traded for the certainty of future tense disappointment and confrontation. It introduces grayness into relationships, a high likelihood for passive aggressive behaviors, and dishonesty.
That reality is where buyer's remorse is rooted. It is where relationships become doomed. It is where growth and forward momentum is ground to a halt and where trust is eroded and lost.
"How can I believe your “YES” until I hear your “NO”?
The implied "YES" always has risks in negotiations and even in casual conversations that may not be immediately recognized as a negotiation - a reality readily evident in family relationships - "well you didn't say "no"."
If your transaction or relationship is important. If the outcome of your interaction has long term implications. If the risk of engagement is significant. ...Then, getting to "YES" and "NO" is equally important. Doing so establishes boundaries, sets up guardrails, and digs the ditches on either side of the road of engagement. It establishes the basis for trust. It shows respect for both parties - the other and yourself.
Sustainable business relationships are founded on trust. Trust is rooted in being able to take people at their word. "YES" and "NO" are liberating. They are the cornerstones of trust. Be sure you say them and listen for them in the interactions that are important to you! There is strength in the space between "YES" and "NO". Find it... exploit it.
Bob
(c) copyright 2009
Performance Builders
Of course the title assumes that the parties are not already at "YES" or at least have not realized it. If they are not at "YES", then one must assume they must be at "NO".
"NO" is the word that stops opportunity and possibility in its tracks. "NO" is a word that tests relationships. "NO" is a word that sets up barriers, ends things, shuts things down, begins confrontations, fuels arguments, disappoints, and creates uneasiness. As a result, "NO" often doesn't get said out loud. In some cultures, ethnic and business, "NO" is considered bad manners and is actively avoided not out of dishonesty but out of respect.
Of course not saying "NO" does not mean "YES". In such situations the potential for present tense disappointment and confrontation is traded for the certainty of future tense disappointment and confrontation. It introduces grayness into relationships, a high likelihood for passive aggressive behaviors, and dishonesty.
That reality is where buyer's remorse is rooted. It is where relationships become doomed. It is where growth and forward momentum is ground to a halt and where trust is eroded and lost.
"How can I believe your “YES” until I hear your “NO”?
The implied "YES" always has risks in negotiations and even in casual conversations that may not be immediately recognized as a negotiation - a reality readily evident in family relationships - "well you didn't say "no"."
If your transaction or relationship is important. If the outcome of your interaction has long term implications. If the risk of engagement is significant. ...Then, getting to "YES" and "NO" is equally important. Doing so establishes boundaries, sets up guardrails, and digs the ditches on either side of the road of engagement. It establishes the basis for trust. It shows respect for both parties - the other and yourself.
Sustainable business relationships are founded on trust. Trust is rooted in being able to take people at their word. "YES" and "NO" are liberating. They are the cornerstones of trust. Be sure you say them and listen for them in the interactions that are important to you! There is strength in the space between "YES" and "NO". Find it... exploit it.
Bob
(c) copyright 2009
Performance Builders
Monday, August 3, 2009
Mediocre or More
"Sometimes I worry about being a success in a mediocre world." - Lily Tomlin
There's an interesting contrast in the fitness and rehabilitation industry. Ask professionals from these market sectors how they would rank themselves against their peers and you will find that about 90% of them rank themselves in the top 10% of providers. Of course this means that respondents are kidding themselves and thus failing to see opportunities for self improvement. Usually along with the ranking are some sort of comments about how what they do is "special" and that they have a "special" relationship with their clients/patients. ...There is also a common reference as to how patients/clients often bring baked goods or special treats. Curious.
In contrast, its also interesting to observe how frequently business performance is benchmarked against the average for the industry as if that were good enough for a high performing professional committed to excellence and continuous improvement. Who cares about average? Why wouldn't every professional aspire to performing in the top 10% from a business perspective. Doing so provides greater reward, recognition, competitive advantage, service capacity, and influence for the good of the community served. Let's face it, most providers don't know what top 10% even is. Honestly, most providers don't know what their profitability is. I know because I ask them.
While the contrast is interesting to note, both deny reality. All professionals are exellent in some areas and not in others. There are dozens of potential points of comparison. In business performance benchmarks alone, I look at over 3 dozen points of comparison. Opportunity and reward may be found in those areas that one is less than excellent. Opportunity may also be exploited in those areas in which one is excellent. What is important is understanding how one actually is performering in multiple dimensions.
Of course there is no shame in not knowing. On the other hand there is no professional rationale or justification for not wanting to know and not taking efforts to find out. In doing so one steps onto the path to top performance.
Are you ready to claim the promise and potential that is within you? Are you ready to claim the leadership role and reward you deserve?
Bob
(c) copyright 2009
Performance Builders
There's an interesting contrast in the fitness and rehabilitation industry. Ask professionals from these market sectors how they would rank themselves against their peers and you will find that about 90% of them rank themselves in the top 10% of providers. Of course this means that respondents are kidding themselves and thus failing to see opportunities for self improvement. Usually along with the ranking are some sort of comments about how what they do is "special" and that they have a "special" relationship with their clients/patients. ...There is also a common reference as to how patients/clients often bring baked goods or special treats. Curious.
In contrast, its also interesting to observe how frequently business performance is benchmarked against the average for the industry as if that were good enough for a high performing professional committed to excellence and continuous improvement. Who cares about average? Why wouldn't every professional aspire to performing in the top 10% from a business perspective. Doing so provides greater reward, recognition, competitive advantage, service capacity, and influence for the good of the community served. Let's face it, most providers don't know what top 10% even is. Honestly, most providers don't know what their profitability is. I know because I ask them.
While the contrast is interesting to note, both deny reality. All professionals are exellent in some areas and not in others. There are dozens of potential points of comparison. In business performance benchmarks alone, I look at over 3 dozen points of comparison. Opportunity and reward may be found in those areas that one is less than excellent. Opportunity may also be exploited in those areas in which one is excellent. What is important is understanding how one actually is performering in multiple dimensions.
Of course there is no shame in not knowing. On the other hand there is no professional rationale or justification for not wanting to know and not taking efforts to find out. In doing so one steps onto the path to top performance.
Are you ready to claim the promise and potential that is within you? Are you ready to claim the leadership role and reward you deserve?
Bob
(c) copyright 2009
Performance Builders
Thursday, July 30, 2009
Why They Come...
Regardless of what your professional health related profession might be, it is likely that there are just four reasons why your patients/clients come to you.
1. It hurts when I...
2. I can't do...
3. I'm afraid that...
4. I want to be able to...
Sure, there are of course signs and symptoms, a diagnosis, contraindications, precautions, complications, and compensations. But, when it comes to a decision to seek professional help concerning matters of health, the client's greatest interest is in quality of life and doing the things they enjoy or aspire to do - some for the first time, some for the last time, and some for the meantime.
They find pain and limited capacity getting in the way of living life. They find there are things they use to be able to do that no longer come easily or perhaps not at all.
They express fear in losing ability, independence, freedom. They express fear of impairment, disability, and death.
They express hope of achieving new opportunities.
Life is in the doing. Life is in all of the "ings" ...walking, running, jumping, eating, playing, hugging; the list goes on... Ultimately, that is why they come.
Life is all about function. Its about hope, and purpose and movement and achievement. It's about holding on to what one has, increasing the opportunity for more, and sharing those things with others they care about.
That's why they come. They come to be recognized. They come to be understood. They come for a measure of wholeness. They come for living life.
That's why they come.
Bob
(c) copyright 2009
Performance Builders
1. It hurts when I...
2. I can't do...
3. I'm afraid that...
4. I want to be able to...
Sure, there are of course signs and symptoms, a diagnosis, contraindications, precautions, complications, and compensations. But, when it comes to a decision to seek professional help concerning matters of health, the client's greatest interest is in quality of life and doing the things they enjoy or aspire to do - some for the first time, some for the last time, and some for the meantime.
They find pain and limited capacity getting in the way of living life. They find there are things they use to be able to do that no longer come easily or perhaps not at all.
They express fear in losing ability, independence, freedom. They express fear of impairment, disability, and death.
They express hope of achieving new opportunities.
Life is in the doing. Life is in all of the "ings" ...walking, running, jumping, eating, playing, hugging; the list goes on... Ultimately, that is why they come.
Life is all about function. Its about hope, and purpose and movement and achievement. It's about holding on to what one has, increasing the opportunity for more, and sharing those things with others they care about.
That's why they come. They come to be recognized. They come to be understood. They come for a measure of wholeness. They come for living life.
That's why they come.
Bob
(c) copyright 2009
Performance Builders
Thursday, July 23, 2009
Right Size
I've had a few interesting conversations with Clients this week around business and the economy. Fundamentally, all three discussions came down to the same point... Each of them said in their own way, "I've been in practice for some time now and am struggling to make ends meet. What should I do? Where do I start?
Each had cash flow problems and practice wasn't much fun any more.
Interestingly I received the same reply from all three owners when I asked what their profit margin was?" Each reply was simple and to the point, "I don't know." There was more than a small twitch of uncomfortableness in each of their responses. Interestingly all three had been in business for some time and each had an accountant... Even more revealing was their response when I asked what their intended profitability was. Again, each said they didn't know.
So how does one address issues of cash flow when they don't know their profitability? They don't! Thus the problem...
Whether one is an owner or an employee, profitability matters - its either a matter of return on investment for you and your family, or its a matter of job security for you and your family. Either way it matters!
Every business with revenue has an opportunity to make a profit regardless of the amount of revenue that is coming in. But, only if one knows their profit or loss, and where the money is going before they get their share. Its a simple matter of right sizing expenses for the revenue that is coming in. Doing so means tough decisions but it also means profitability.
So here's today's question whether you are an owner, manager, employee, or independent contractor, "What is your profitability?" You can't afford to not know! And, "What could it be?" "What portion of your family's reward are you leaving on the table every year, every month, every day?" "How much will you lose over the course of your career?" How do you change the situation quickly?
Every business is challenged by cash flow and profitability at one time or another. There is no shame in that. Business owners with a financial background face such issues head-on. Clinical practice owners tend to avoid such discussions and such honesty and candor. Remember, the first responsibility of a leader is to define reality. "What is your reality?" "Are you working harder?" "Are you worrying more?" "Do you have a plan to change your reality? Do you need help?
Its all about right sizing your business based on reality and opportunity... based on revenue and expense. Your reality is not fixed. It can begin to change overnight with the simple power of a decision! What is your decision... status-quo or greater prosperity? That is your first decision...
Let me know if I can be of help...
Bob
(c) Copyright 2009
Performance Builders
Each had cash flow problems and practice wasn't much fun any more.
Interestingly I received the same reply from all three owners when I asked what their profit margin was?" Each reply was simple and to the point, "I don't know." There was more than a small twitch of uncomfortableness in each of their responses. Interestingly all three had been in business for some time and each had an accountant... Even more revealing was their response when I asked what their intended profitability was. Again, each said they didn't know.
So how does one address issues of cash flow when they don't know their profitability? They don't! Thus the problem...
Whether one is an owner or an employee, profitability matters - its either a matter of return on investment for you and your family, or its a matter of job security for you and your family. Either way it matters!
Every business with revenue has an opportunity to make a profit regardless of the amount of revenue that is coming in. But, only if one knows their profit or loss, and where the money is going before they get their share. Its a simple matter of right sizing expenses for the revenue that is coming in. Doing so means tough decisions but it also means profitability.
So here's today's question whether you are an owner, manager, employee, or independent contractor, "What is your profitability?" You can't afford to not know! And, "What could it be?" "What portion of your family's reward are you leaving on the table every year, every month, every day?" "How much will you lose over the course of your career?" How do you change the situation quickly?
Every business is challenged by cash flow and profitability at one time or another. There is no shame in that. Business owners with a financial background face such issues head-on. Clinical practice owners tend to avoid such discussions and such honesty and candor. Remember, the first responsibility of a leader is to define reality. "What is your reality?" "Are you working harder?" "Are you worrying more?" "Do you have a plan to change your reality? Do you need help?
Its all about right sizing your business based on reality and opportunity... based on revenue and expense. Your reality is not fixed. It can begin to change overnight with the simple power of a decision! What is your decision... status-quo or greater prosperity? That is your first decision...
Let me know if I can be of help...
Bob
(c) Copyright 2009
Performance Builders
Tuesday, July 14, 2009
Certain Uncertainty
The national debate continues on the topic of universal health insurance or some variation of it. It remains uncertain what the outcome will be precisely, but a few things appear nearly certain - demand for and utilization of services can be expected to to increase as the baby boomers move toward retirement and age related functional impairments set it, and reimbursement will continue to erode.
I also suspect the PT labor shortage is likely to continue. It will be driven by the reality of the financial gap associated with 7 years of expense for a DPT and constrained clinical earning potential. The need for business savvy as well and clinical expertise will become ever more appearent.
These factors set up a scenario where reimbursement erosion coupled with labor expense escalation will put increasing pressure on practice profitability and thus viability. In such a scenario some practices will do reasonably well, others will not. The 50% of practices that currently operate at or below average profitability will suffer - not all will survive. Most of those practices don't realize what they are missing or what they are risking. Most do recognize however that they are working harder, worrying more, getting less reward, and finding frustration in the process.
Practice change is eminent. It's coming fast and its undeniable. The only uncertainty is how individual practices will respond. The future will not be fixed by national associations. The future will be determined one owner and one practice at at time. Its time to be proactive - time to get one's practice in order - strategically, operationally, and financially. The clock is ticking. Playing catchup is a loosing strategy as is compacency and denial. There are no special considerations for those who are not paying attention to what is going on around them. Ignoring reality is a fatal decision for practice owners and those they employ and serve.
Do you have your priorities in place? Do you have a plan? Are you working that plan? Is it working?
Have you guaranteed your practices profitability and viability in times of uncertainty? Do you know where to start? If you do get started. If you don't get help. These are urgent times.
Bob
(c) copyright 2009
Performance Builders
I also suspect the PT labor shortage is likely to continue. It will be driven by the reality of the financial gap associated with 7 years of expense for a DPT and constrained clinical earning potential. The need for business savvy as well and clinical expertise will become ever more appearent.
These factors set up a scenario where reimbursement erosion coupled with labor expense escalation will put increasing pressure on practice profitability and thus viability. In such a scenario some practices will do reasonably well, others will not. The 50% of practices that currently operate at or below average profitability will suffer - not all will survive. Most of those practices don't realize what they are missing or what they are risking. Most do recognize however that they are working harder, worrying more, getting less reward, and finding frustration in the process.
Practice change is eminent. It's coming fast and its undeniable. The only uncertainty is how individual practices will respond. The future will not be fixed by national associations. The future will be determined one owner and one practice at at time. Its time to be proactive - time to get one's practice in order - strategically, operationally, and financially. The clock is ticking. Playing catchup is a loosing strategy as is compacency and denial. There are no special considerations for those who are not paying attention to what is going on around them. Ignoring reality is a fatal decision for practice owners and those they employ and serve.
Do you have your priorities in place? Do you have a plan? Are you working that plan? Is it working?
Have you guaranteed your practices profitability and viability in times of uncertainty? Do you know where to start? If you do get started. If you don't get help. These are urgent times.
Bob
(c) copyright 2009
Performance Builders
