Practice Made Perfect
Letting Go Improves Off-Site Efficiencies
By Marilee Blackwell, M.B.A., C.P.A., A.I.B.A. and Donna Suter

Just as the scope of optometry has expanded, managing a practice has become more and more complex. According to recent research, an increasing number of optometrists either own more than one location or provide coverage at multiple locations. If this describes you, then you probably have more than a few horror stories.

Such was the case at Superior Eyecare, a satellite in a resort town. Dr. Lee McKenna contacted us because his satellite office was floundering .

The balanced scorecard

In the November 2004 issue (page 77), we introduced you to one of the best business models available to evaluate a practice: the Balanced Scorecard. This model views the practice from complimentary perspectives by not letting one outweigh another when evaluating the practice's strengths and weaknesses. The four perspectives are:

1) financial

2) patient

3) operations

4) organizational.

We can analyze, and appraise each separately, but in the day-to-day management of a practice, the impact each has on the other is inseparably intertwined.

The financial perspective determines whether the practice is generating the required financial returns in excess of expenses. The patient perspective defines whether the practice provides the patient with superior value in terms of differentiation, cost or convenience.

The operational perspective measures how effectively and efficiently the core processes are producing patient value. In other words, are we using our resources effectively and efficiently to satisfy the patient?

The organizational perspective defines how well the practice adapts to its environment. Most people think of organizations as organizational charts, chains of commands and job functions. But more importantly, the organization of a practice sets the tone for learning from past mistakes, working toward a shared set of goals and ultimately beating the competition.

The complexity of successfully maintaining this balancing act becomes quickly apparent in offices where the doctor/manager isn't always there.

If you want it done right . . .

During our observation, we noted that Dr. McKenna performed many of the tasks that staff would normally perform, such as conducting the initial case history and dilating patients' eyes. Essentially, Dr. McKenna was subsidizing staff productivity, thereby reducing his own doctor productivity.

When we asked him why he was doing his staff's jobs, he told us that he was nervous about mistakes because the staff didn't always follow procedures.

This cycle of worry and mistakes was never ending because Dr. McKenna "didn't have time" to train the staff on the policies and procedures and felt he was too busy seeing patients to make sure they were being followed. Because he wasn't leading proactively, his staff wasn't truly productive and neither was he. He blamed the staff for the problems and the staff blamed him.

Who's the boss?

We recommended Dr. McKenna use the concepts of empowerment and delegation to improve operations. These two concepts, commonly mentioned by business consultants, became the framework to reinforce the process improvement suggestions we suggested. A common strategy that often leads to the financial underperformance of a satellite office is to designate one person as the office manager. This often-unnecessary level of management can prohibit efficient operational functions because it doesn't empower or motivate employees to achieve excellence.

The problem is that in small practices or satellites, the "office manager" generally has no management training and no real decision-making authority. Therefore, this added layer makes reactions and resolutions to problems slower and consequently, more costly.

Dr. McKenna had made Mike the office manager because he wanted to make sure that the policies and procedures were being performed at the satellite. However, Mike had no real authority to make changes without asking Dr. McKenna, so the staff didn't follow his directives. The doctor's attempts to control employees had lead to their greater dependence on him. No one solved problems independently. No one made a decision without first asking the doctor.

Build it to last

According to management expert Peter Drucker, the structure of an organization has to be able to handle the typical stresses and strains of day-to-day operations. If you can't answer, "yes" to the following questions, then it's likely that you don't have the correct organizational structure:

► Is the practice meeting financial, operational and quality goals?

► Does the structure of the organization encourage activity toward the right performance?

► Does it contain the least number of managers possible?

In Dr. McKenna's case, the answers to these questions were "no." The staff and doctor were not efficient; hence they were not meeting financial objectives. The satellite had a manager who had no real authority. Dr. McKenna either needed to learn to add sound structure while backing off of control to the practice himself or he needed to give Mike autonomous authority.

Get back in the driver's seat

The first order of business was to make Dr. McKenna understand that his practice couldn't operate efficiently and effectively without his active support and management. Second was to meet with the office manager. Mike was uncomfortable offering correction to employees and was very willing to redefine his role as manager to that of managing accounts receivable and the schedule.

This meant that Dr. McKenna had to become a leader, a trainer and a mentor. Improving the performance of the satellite was a matter of finding that delicate balance of holding to standards, while, at the same time, acknowledging that employees will never perform tasks "just like I do." His first task in correcting organizational and operational deficiencies was to let his staff know in a non-imperative fashion that he was aware of some policy and procedure violations that were occurring habitually. In a conversational tone, he explained that he expected all policies and procedures to be followed in the future. Dr. McKenna had to begin correcting employees instead of pretending he was not aware of policy and procedure violations.

No time like the present

In our travels, we've found that giving negative feedback is the one employee-management tasks doctors fear the most. In our experience, most doctors put it off "until the right time" or just "let it go." Remember, there is no perfect time. The best time to give feedback is when the problem is occurring.

Give them quality time

Improving organizational communication both vertically and laterally goes a long way in implementing operational efficiencies. Because it was important for Dr. McKenna to offer staff the skills they needed to reach production goals, we went against what might appear to increase production and recommended he reduce clinic time by one hour and use that time to hold weekly staff meetings.

The reason is simple: As a survival technique, an employee who the doctor only speaks to when the doctor is offering correction shuts down any further input to deal with the negative information he's already received. The employee may hear a word here, a phrase there, but in the end, he may totally misconstrue the doctor's message. What he does remember of what the doctor said is likely incorrect.

Setting aside time for uninterrupted staff and doctor conversation allowed the team time to "gel" and for everyone to brainstorm possible solutions to potential practice pitfalls.

Translating it into real life

Whatever style communicator you are, you'll find that having a plan for an office meeting helps you stay on track and get to the point quickly. Dominant persons will be less likely to go for the jugular. Detail- and rule-oriented bosses such as Dr. McKenna learn not to get sidetracked on small issues but focus on the staff training and corrections needed. Warmer communicators such as Mike realize that a correction isn't a personal attack but simply a tool to improve performance.

Staff productivity increased dramatically because Dr. McKenna used staff meetings to:

► Educate the staff about the scope of today's medical-oriented optometrist and approach patient satisfaction issues without alienating everyone

► Learn to speak with information, not opinion

► Deal with the situation, and strive not to get defensive themselves.

In 2001, staff productivity per hour per employee based on the Jerry Hayes, O.D., model was $52 (low to fair). By the end of 2003, it had increased to $81, which is excellent.

It gets better

Because appropriate collection of data during the exam process was pushed to a lower level, the doctor's productivity also went up. Revenue increased from $145,000 to $270,000 during the two years we worked with Dr. McKenna. This increased revenue per square foot from $145 in 2001 to $270 in 2003. Also, revenue per doctor hour increased from $163 to $303.

Everybody wins

The staff no longer views themselves as pawns who feel more like outsiders than employees. By using staff meetings as a forum to empower staff, they have more authority and responsibility. Because they now feel properly trained, they rightfully view themselves as worthy of responsibility and as having worthwhile input.

Dr. McKenna also understands that delegating authority and responsibility doesn't mean that he's relieved of accountability and he now stays properly informed. He has seen for himself how changing his organizational structure and concentrating on operational improvements enhanced his bottom line.

	Ms. Blackwell (top left), president of Blackwell Consulting (800-588-9636) and Ms. Suter (bottom left), president of Suter Consulting Group (423-236-5465), team up to offer financial guidance and on-site consulting services designed to increase your gross revenue and improve your net income percentage.