These six steps will start you on your way.
He, and increasingly she, is a familiar figure in corporate America – the workaholic middle manager. He is a dedicated soldier in the corporate army, obsessed with his work. He can be found at his desk late most evenings, slogging through endless mounds of reports and e-mails. No problem or issue is too small to command his attention.
Our tireless corporate servant immerses himself in the minutest details within his sphere of responsibility and is convinced that no one else in the organization is capable of managing his turf. He will jump in and prepare the report that someone else failed to deliver on time or will spend hours tracking down and resolving a customer complaint, even if outside his area of responsibility.
The heroic recoveries from snafus and the loyal service he provides are invaluable but seldom noticed by his supervisors. Overworked, underappreciated and usually anonymous, he gets stalled in the scramble to the top of the corporate ladder and financial freedom. Bosses label him as unpromotable – lost in detail and task, focused on today and not tomorrow, unable to delegate, unable to inspire colleagues. He does not think or act like a chief executive officer.
Does the shoe fit?
What does the profile of a familiar corporate type have to do with you? All too often practice owner/optometrists find themselves trapped in the role of overworked chief employees. While they dream about escaping the daily grind and increasing their personal income, they can see no way out of their predicament. They believe that stepping off the treadmill means reducing their income. From our consultations with practices throughout the United States, we know that is simply not the case.
To maximize financial success and gain control of your personal schedule, you must begin to think like a CEO. This does not mean abandoning our primary role as a care provider. It does mean performing both the duties of patient care and small business executive management well.
Learn the balancing act
We find that there is a universal trait among practice owners who achieve both high-gross revenue and a high-net income: They have discovered the optimal balance between their duties as practice CEO and as patient care provider. Achieving a high net income is never an accident. It requires planning, goal setting, delegation, leadership and constant oversight, all of which are the key skills of any CEO.
The Management and Business Academy’s (MBA) surveys of large optometric practices in the United States (MBA median gross practice revenue = $1.4 million, median number of employees = 10.5) revealed that large practice owner/optometrists spent 85% of their working hours on patient care and less than 10% of their time on planning and leadership activities. We think this allocation of time dooms many owners to the fate of our passed-over, workaholic corporate hero. While this group has been highly successful, the owner must step off the treadmill and begin to act like a practice CEO to achieve the full potential of the practice asset. We advocate that owners of large practices spend no less than 20-25% of their time on management duties.
The six-step plan
It’s easy to agree in principle to become a practice CEO, but quite another matter to take the first step to change the practice routine and make it a reality, it will not occur overnight, but here are six steps that will help you become a practice CEO.
Step One. Get out the appointment book and mark off the hours that you will devote to planning and leadership duties. You cannot have it both ways – a full schedule of exams and sufficient time to manage. Don’t be too busy to make more money.
After you reduce the time you spend in patient care, you will discover that the time spent managing the practice yields a far higher return per hour than seeing patients. Your CEO hours will become your most productive at increasing net income. Many doctors discover that these are also the most enjoyable hours they spend in the office, because they stimulate the imagination and involve creativity.
Step Two. Create a practice budget. MBA surveys revealed that less than 20% of large optometric practices have a formal practice budget. No business, large or small, can be run effectively without on-going measurement of income and expenses. What is good enough in managing family finances is to adequate for a well-managed practice. Without basic financial information, planning and control is impossible.
You do not need to be trained in accounting to budget and it is not time-consuming. Establishing a budget is quite simple with the basic spreadsheet tools that most practice software systems incorporate. The budgeting process starts with an accounting of the proper year’s income and expenses and monitoring progress toward defined performance goals throughout the year.
The financial performance of practices that establish a budget always begins to improve immediately. The mere process of measurement sensitizes the practice to control income and expenses, and to adjust spending to achieve financial goals.
Step Three. Establish a vision of the practice and concrete financial goals. Nearly every optometrist wants to make more money without spending a lot more time to do so. Yet many feel trapped in their daily routine and would love to have more free time to enjoy life. Those facing imminent retirement hope to improve their practice net to make their asset more valuable. Many also need to reduce the practice’s dependency on their own personal relationships with patients. All of these goals are achievable when you put on your CEO hat and set measurable financial goals.
Establish goals for gross revenue and net income as well as for the major expense categories. Beyond the near-term financial goals, articulate your longer term aspirations for the practice in measurable terms. How large an enterprise do you wish to create? How much time do you want to spend in the practice each year? What are your personal goals? How much would you like the practice to be worth at retirement? What is your exit strategy?
Step Four. Conduct weekly staff meetings. Staff looks to you for executive leadership, not just for your medical expertise. Only you can set practice goals, define staff roles and responsibilities and establish operational guidelines for the practice. Your role as team coach and cheerleader is often vital. But most optometrists are so preoccupied with seeing patients that they interact little with the staff. Most practices spend far too little time in staff management. In our research, we found that only 35% of the larger optometric practices hold weekly staff meetings. Yet MBA program participants cite staff management as the most vexing problem they face.
Your first few weeks of staff meetings should be devoted to reviewing the practice budget and goals, and brainstorming with the staff about how to accomplish those goals. Your staff will have many ideas about how to control those expenses that involve their work as well as how to increase patient revenue and probability per patient.
Topics for subsequent staff meetings can include:
- Staff roles and responsibilities
- Resolving patient complaints
- Improving patient loyalty and satisfaction
- Product training and case presentation skill
- Team appearance
- Patient – handling standards
You will never run out of topics. What’s more, staff meetings will become the basis for continuing improvement of the office process.
Step Five. Manage by walking around. Don’t get so trapped on the exam treadmill that you overlook inefficiencies and patient-displeasing aspects of your practice. Is the upholstery up-to-date in the reception area? Are the bathrooms well maintained? Are patients treated personably at the front desk or is there an over-emphasis on fees and immediate payment? The only way you will become sensitive to these issues is to get out of the exam room and observe your office through the eyes of the patient. During the weekly staff meeting you can get the staff to help fix the problems you observe.
Step Six. Delegate. The only way most doctors can free up time to perform their executive role, without reducing the patient load, is to delegate more duties to the staff. Start by ridding yourself of all routine administrative tasks, such as meeting all sales reps, ordering products like contact lenses and frames, actually doing all the steps in paying the bills instead of just overseeing the process.
Next, examine how much time you spend with each patient during the exam. In many well managed practices the doctor spend no more than 15 minutes with each patient while completely satisfying the patient’s need for personalized care and attention. If you are spending more time per patient, consider taking steps to delegate testing tasks to the staff and streamline the entire process.
Change from the inside out
To become a practice CEO requires a change in mindset. While your role as eye doctor is primary, your role as business owner, asset manager, and merchant and team leader deserve a substantial portion of your time. Start with the steps outlined here and you will find yourself well along the journey to practice success. OM
About the authors: The authors are the faculty of the Management & Business Academy (MBA), a professional education service co-sponsored by Essilor of America and CIBA Vision. To help optometrists realize the full business potential of their practices, the MBA conducts management seminars and publishes materials that provide real-world advice on practice improvement.
From Optometric Management, Nov 2005.
Authors: Neil Gailmard O.D., Gary Gerber O.D., Jerry Hayes O.D., and Peter Shaw-Mcminn, O.D.