Editor's Note: Excuse my self-indulgence last week, but it seemed to strike a chord - thanks for all of the feedback! What do airplanes and strategic planning have in common? Read on and enjoy. As always, you can find all my blog posts from 2013 to the present on my website at http://stevemarshallassociates.com/steves-blog/
The Only Constant is Change
About the only thing constant a medical group or a business can count on these days is change. (NOTE: If you are running a medical group, you are running a business; no two ways about it.) The interdependent nature of today's marketplace means that the ripple effect of events in China or Wall Street, or, especially a Presidential Election (read: the Affordable Care Act), may well reach your medical group in Anytown, USA. Every medical group or business is vulnerable. Period. Charles Darwin said it best, over 150 years ago in 'The Origin of Species,' "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change."
That's why ongoing strategic planning is essential to the long-term viability of a practice, especially if that group is in a small rural community. Keeping on top of current and emerging trends, and evaluating them in the context of your business goals, allows you to anticipate and respond more quickly to shifts in the healthcare and business landscape.
Entrepreneur, author, and nationally syndicated columnist Rhonda Abrams says that short-and-long-term planning is a must for every entrepreneur, even those who are doing quite well, and I could not agree more.
"Many small business owners think the road to success is doing one thing, and then doing more of it," Abrams explains. "If the market falls off, your instinct is to make more sales. But you can't make sales if there's no market to sell to. That's why you need to be continually aware of things that can affect your business."
Why Plan When Everything's Going to Change Anyway?
Standing in front of a medical group board (all physicians) a few years ago, I was asked the question, "Why bother with planning for the future; it's all going to change anyway?"
The best analogy I have come up with to answer that oft-heard question is preparing for a cross-country flight. I was a pilot in my younger years and while learning how to fly, I got a job as a ferry pilot (fancy title for nothing more than a gofer moving airplanes around) for a used aircraft broker in Arkansas. It was a good deal for both of us; I needed to build my experience and my logged hours for advanced licensure, and he needed to buy and sell airplanes all over the southern part of the US.
My first job with him, (his name was Grover Scruggs.....really!), was to ferry an old 1964 Piper Twin Commanche airplane from the Boston, MA area to New Orleans for a potential customer. This plane had been sitting outside on the outskirts of Boston for two years; it was neither current on its licensure nor its required FAA inspections, and who knows what else might have been wrong with it? I cleaned out numerous birds nests from hollow surfaces, drained and replaced the fuel and oil and got it ready to fly.
The first step was to create a flight plan! All that I knew was where I was and where I wanted to go. It was 1,360 flight miles between the two cities, and this old plane I was flying would be lucky if it could maintain 200mph. So, I was looking at 7-8 hours of flight time, with two planned stops for fuel and food. Sounds easy, right? Not so much. In flying, like in life, there are many variables that are critical to planning for; some more urgent in flying than in everyday life, because you just cannot pull over if the airplane's engine stops or runs out of gas.
Let's take a minute and look at what I just described. It is really the complete strategic planning circle:
- How are things going now?
- Where do you want to go?
- What's (potentially) keeping you from getting there?
- How will you overcome any obstacles that may pop up?
As the pilot, I had to look at all of the possibilities that could thwart my efforts to get where I wanted to go; inadequate fuel planning, inclement weather, mechanical issues, getting lost, health problems, and to have an alternative plan for each of these potential eventualities. Is that really any different from strategic planning for a business or a medical group?
Next Steps - the How and the Who?
Having a business plan is the foundation for any strategic planning efforts. It should be reviewed at least annually, but many experts recommend more frequent assessments, especially since growth opportunities emerge, or your market undergoes sudden changes (e.g., regulatory changes, arrival/departure of a majoremployee, price spikes, etc), and to prepare for it all. Look at it this way; a business plan is like a bible of sorts to refer to when your business is up and running.
Do you conduct your analysis yourself? Yes. Do you include your trading partners? Yes. Do you include your entire staff? Yes. Do you include your community? Yes! Wait, huh? My community? This is particularly the case in a small community. Small towns always face a tougher transition to prosper when a major event happens and businesses face a shut down across the board. Look at the last recession in 2008. Small medical groups in large markets were closed down or merged with bigger fish, and that ripple effect still lingers in smaller communities 8 years later. If you think I am wrong, drive through the smallest communities that once were thriving and are now suffering. They cannot recruit new physicians or businesses to the communities because the town now has a visual problem. Main street is dead.
So what would a community review look like? For starters, create a monthly meeting, where small business owners and the medical groups get together and start listening to strategies to keep thriving and growing. Share ideas, examples. This is not a meeting for networking, this is an accountability meeting to keep everyone in check with their strategy deployment. It's uniting a community and connecting each other with big(ger) ideas that people are launching in larger markets that can be brought home to small town America.
Moving On, What Else Should Be Done During the Strategy Review?
Along with examining the marketplace and how it's being influenced, perform a SWOT analysis on your practice. Identify your strengths--the areas that are giving you an advantage, how they can be enhanced, and consider whether they'll remain positives in the future. Also examine your areas of weaknesses--areas where your small business may not match up so well, and what you can be done to address them.
Similarly, look for immediate and emerging opportunities that you can capitalize on, and threats that might compromise your operations and profitability now, and in the future.
You'll likely find no shortage of information resources to assist with your strategic planning--from industry websites, the local or state medical society and publications to your community newspaper. Blogs and other social media channels are also a great resource according to leading small business consultant Melinda Emerson.
"Every business owner should be using social networking sites as a listening device to understand how their marketplace is changing," Emerson says. "It allows people to get real-time information from current and prospective customers, and the competition."
As you translate your strategic planning findings into action, don't be afraid to experiment. According to Steve Strauss, author of The Small Business Bible, "Making mistakes is part of the business game. Keep trying new things. Some will stick, some won't. That's OK." Just keep trying.
P.S. I successfully made the trip from Boston to New Orleans........in 13 hours instead of 8. Bad weather and a malfunctioning fuel pump caused me to implement both Plan A and Plan B. Glad I had them.
Next Week: Other Things I Think About