Well it’s that time of year, Colleagues! …The time of year we’re getting into the Holiday spirit (no Scrooges please!), likely putting on a pound or two and hopefully putting some real thought into the objectives we’ll establish to motivate our teams in the year ahead and create that “bias for success” we talk about!
And let’s remember that’s absolutely the primary purpose of object…of an objective… right Friends? A source of individual and team motivation that biases things in the world to go our way, despite the fact challenges and obstacles will be there and might otherwise knock us off course. It’s the motive of an objective, and the bias in our favor it creates, that powers us and our teams through.
Well that said, the Summit HELP DESK here at THRIVE is buzzing this month as usual, and partners seem particularly interested in and have sights for the new year on team influence on/involvement in production. So things like and getting the team focused on outcomes, and in a particularly big way these past couple weeks, determining what their objectives ought to be going forward into a new year. Partly influenced by our conversations (in and out of the meeting room) in Helena last month, and party because ‘tis the season for such considerations, partners are very interested in wanting to discuss where they should be setting the bar. In fact, a bit further into our conversation here, I’ll share some of that direct dialogue – some questions and answers – confident this dialogue will apply for all of us.
So let’s go there, Friends. As we’ve discussed in past posts, there are FIVE STEPS in a full-on team approach to managing practice production as a team:
Designate the specific practice Vital Signs (metrics) we’ll watch/manage together
Determine who on the team will lead us in our focus on each
Establish a clear yearly, monthly and daily objective for each
Gather data to know our actual outcomes in real-time
Conduct live Team Vitals Reports
It’s on Step Three we’re focusing in this post, so let’s cover a few fundamental considerations for establishing our practice production (Vital Signs) objectives.
1. What Does HISTORY Show?
Let’s put first and foremost stock in our own performance history and own practice benchmark, rather than the industry’s or any other practice’s. Industry benchmarks are interesting and helpful in setting our production objectives, but they take a WAY BACK seat to our own historical performance. I’m vastly more interested in what you’ve seen in YOUR practice and YOUR trend line than in a so called “average practice’s.” Is there really such thing as an “average practice,” and isn’t our own situation much more relevant and important?... 2
2. What do YOU think?
I’ve always believed what we WANT to accomplish is every bit as important in setting an objective as what we have been accomplishing. It’s not about what some other practice is accomplishing. The latter is not the right motivation in my experience (statistically the #2 reason for not accomplishing an objective is that we aren’t committed to it when we set it, and it therefore doesn’t truly motivate us). So let’s factor our heart’s desire, what we actually WANT to achieve, into our object. And maybe we get there in increments. Our end production goal might be $250,000 per month, but if we’re at $75,000 now, we likely need to get to where we want to be in several increments – a subset of incremental objectives – to get us there.
3. What Does the TEAM think?
We’ve said it many times and it merits saying again – people support what they helped create, not what we did without them! Let’s full-on discuss what the team thinks is the right objective going forward and thereby get team buy-in and even full-on team ownership of an objective, rather than just “announce” the objective at a meeting. Let’s own our production objectives TOGETHER and experience the team fighting for them accordingly!
4. What Does the INDUSTRY think?
Alas, here’s finally where we consider industry benchmarks. It’s not that these aren’t interesting and even influential, particularly for some metrics (as in A/R colleague dialogue below), it’s just that they’re not OUR benchmarks and therefore not OUR reality. There’s much to be gained by comparing things to an industry benchmark, but what someone else has done or is doing or aspires is not true motivation for what we’re setting out to do. Let’s give ourselves the best fighting chance of achieving our objectives by making sure they’re not someone else’s!
5. That’s the SCIENCE, What about the ART?
I’ve learned setting objectives is equal parts of both. The SCIENCE in the questions above in their listed chronology gives us a pretty good idea where we might land, but establishing our actual yearly, monthly and daily objectives at that juncture is the ART! It’s making the call, right? …What’s that “right spot” between too much and we constantly fall short and too little and we didn’t aim high enough? We want to push ourselves, even out of traditional comfort zones, but we don’t want to be disappointed every week and every month of the new year, right? So let’s be “artists” here and paint the right picture for the team!
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OK, this seems a good place to share some of that HELP DESK Q and A I mentioned above.
Question: Do you guys have benchmarks for the main practice metrics?
Answer: Yes, and we consider three main influencers here in this chronology – What have we been averaging in THIS PRACTICE? …What do we aspire? …What is the industry benchmark? Of these, we give the least credence to the industry benchmark. So let’s start by answering these questions in this order, then let’s make the call and set each objective.
Question: Do you guys have benchmarks for the following metrics I’d like to start with?
-2nd Pair Sales – Is there a known national average or a recommendation for healthy practice?
Answer: This one, like so many metrics (due to the emphasis some practices put on this relative to others) is all over the board, but we see an average between 20 and 40%. The key is to determine what we have been averaging here, what we WANT to accomplish, an set our objective accordingly.
-A/R – I know there is a percentage for Accounts Receivable in a healthy practice, I just don't know where to find that information on short notice. I know there are some percentages for total, thirty-day, sixty-day and I think 120-day and beyond …
Answer: A helpful way of looking at this is our total A/R being 17-25 days of revenue. When this gets to more like 30 or 35 days, it’s getting excessive and likely needs management attention and initiative accordingly. This is a general rule of thumb for overall A/R, but is massively impacted by how much third-party a given practice has and how the third-party payers are paying. And team tracking/reporting of this will clearly show what we need to address and how we need to impact.
Of this total, we look for 60 percent-plus to be within 30 days (much of our private pay falls here), 15 – 25 percent in the 31 – 60 days period, 5 – 10 percent in the 61 – 90 days period and 5 -10 percent in the 90 – 120 days period. Vastly more important than these benchmarks, however, is that we identify our historical trend and set an objective indicating our desire to impact/improve, while staying within reality (although some colleagues choose to shatter those paradigms by moving to cash only practice, so again, industry benchmarks are simply paradigms).
Question – Production Capacity –is there a detrimental low that should be part of this discussion?
Answer: Particularly good question, and YES, there is! If we see this below 80 percent, holes in the schedule are costing us profit (even in high revenue per patient practices). We like to see this around 90 – 98% (100% is very difficult to achieve when you factor in no- shows). Sometimes we see this at more like 105% in overbooked practices, which almost always offers potential for evolving what and how we schedule to something less frantic, more productive and more controlled and enjoyable for everyone (including the patients!).
Well Friends, as we move into “holly and jolly mode,” I hope this post has us thinking about the other mode we need to be in this time of year – OBJECT MODE! …And more importantly, that we move into the ACTION phase of that mode, and not just the thinking phase. And as we do so on the practice front, may you on the life front experience wonderous joy in this blessed Season. And may we all feel the excitement and anticipation of new successes ahead!
Like all THRIVE content, the purpose of BOWEN’S BLOG and SUMMIT TALK Podlecture conversations is to keep us driving together toward IMPACT. If something here has struck a chord, shoot us an email or give us a call and let’s talk it out! Tbowen@mythrivecoaches.com or 402-794-4064.