A business optimization process for 2018 that all HMEs should implement.
Every provider is on a path, one determined by a strategy developed and implemented over the years of the business. The organization’s current state is the “Here” and the organization’s future is the “There.” To reach There, a provider must create and follow the right “Path.”
HME providers are up against historic challenges, but simply doing your best and working harder won’t be enough. You must achieve business optimization and develop the Path to get from Here to There.
Business optimization is a process that requires a significant investment of time and talent. The business optimization process has four navigation points on the journey from Here to There:
Here — Where the provider currently stands.
There — The long-term goal the business needs to achieve.
Path — The metrics and reporting process to measure progress.
Execution — The follow-through on that path by the team and leaders.
Here
Before we embark on the business optimization journey we need to ensure that our organization is healthy.
Healthy businesses have minimal politics and confusion; have teams that engage with high morale all while being highly productive; and typically experience very low turnover.
A healthy organization is also a smart organization and learn from each other and attack critical business issues. These businesses have a cadence of handling problems and recover quickly from mistakes.
As you examine your business you must be able to diagnose the overall Health. Every business has individuals that may contribute to the overall illness of an unhealthy organization. As leaders we must find ways to change this behavior or surgically remove it from the business.
There
So where do you want your business to go? If you were to create a clear yet compelling statement that could unify your entire team and provide a defined “finish line” that can be crossed as a team, what would that be? In their ground-breaking 1994 book, “Built to Last: Successful Habits of Visionary Companies,” James Collins and Jerry Porras; named this statement as the “big, hairy, audacious goal” or BHAG. The BHAG has sat the forefront of some of the most industrious organizations on the planet.
The BHAG should be both strategic and emotionally compelling and provide a visionary goal for the organization as a transformational statement that moves beyond a rally cry. Both Collins and Porras wrote that the BHAG is “a 10 to 30-year goal to progress towards an envisioned future.” For our purposes let’s focus on the next three years.
Defining your provider business’s BHAG requires careful and compelling consideration and should not be done in a vacuum, but embraced by all of the leadership, including front line managers and other team members. In recent years many organizations have also included some clear metrics that reveal an even greater vision of the finish line. This enriched BHAG has included more tactical objectives that would include sales, finance, innovation, and products and services.
To be truly “audacious,” a business must be both daring and unconventional. The addition of these tactical components to the BHAG will provide the drive for your team to quantify how to get across the finish line. Remember how to eat an Elephant? “One Bite at a Time”
The Path
Developing the Path is a critical part of the business optimization process, but it can fall prey to initial over enthusiasm. Too often when organizations develop a strategic plan for getting from Here to There, they start with great passion, have monthly meetings to discuss their progress, and by month six they lose their drive and all that time and effort falls by the wayside.
Therefore, the business optimization process requires commitment from leadership to get the organization to push through this process throughout the entire year. That sustained follow-through requires both leadership and team to focus on three elements: simplify, quantify, and ratify.
First, start with the metrics that best define the business and simplify. What will you measure to track your progress and how will that get reported? You must make this as easy as possible. You should not have multiple Excel Spreadsheets that calculate and manipulate the numbers. The metric reporting process should be straightforward and easy to view for any given period (month, quarter, year).
Next, quantify those metrics in a dashboard so that the team can easily review our results more fluidly. We must have the capability to drill down on the numbers. Once the metrics and dashboard are in place, we need to now set a “cadence” so we continue following through.
This is where we ratify or formalize our monthly performance review of our business optimization plan.
Taking the time to set the metrics and cadence for the business optimization meetings. Doing so will produce well-attended meetings, where relevant and time-sensitive information is shared. These meetings provide on-going clarity of the business position, and does not detract from running the business, but actually contribute to the overall operation of the day-to-day.
Execution
When you combine the Here of your business and then navigate through the Path of knowing and developing the There, the only thing left is Execution. Execution is how your team works together to achieve the business optimization plan that are measured by the established metrics and reported upon (cadence) during the business optimization meeting.
Earlier I wrote that the business optimization process is not to be created in a vacuum and that we need input and alignment with all team members. So, it would make sense that we not only share our metrics but also our cadence with our team.
How will the team know if they are achieving the goal and crossing the finish line unless they know the Path we are on and the There we must achieve? The metrics and cadence become part of the everyday process of your business. Every person on your team has an investment point in the overall return on the company achieving the business optimization process.
As 2017 comes to a close, we as business leaders must fully quantify our There for 2018 and beyond, and this business optimization process provides a systematic approach to achieve your business’s There. Time to get started!
This article originally appeared in the November 2017 issue of HME Business.