As you prepare for next year, it’s time to ask yourself several key questions to help you understand your metrics and analyze your business. We’ll be focusing on how metrics can be used to provide insight and confidence in your business performance. Then we’ll review the key concepts that you can use to incorporate metrics into sustainable growth for your practice.
Know Your Numbers
Knowing your practice metrics allows you to answer key questions that every business owner or manager needs to ask themselves.
- How are we doing? This is a fundamental question. Are you actually profitable, or are you just working hard?
- How do you know? It may be hard to admit that you’re not doing well, so it’s important to reinforce your “feelings” about how the practice is performing with facts. “Bank Balance Accounting” may be reassuring, but it doesn’t actually tell you how profitable the practice is.
- What’s the definition of ‘okay?’ Can you define the basis of your perception about how your business is doing?
- Do you know your top 5-6 metrics? We don’t have to be able to track every metric in the business, but you should be constantly aware of at least 5-6 key metrics that drive your practice profitability.
When a practice sets up a scoreboarding system and begins sharing those key metrics with their team, it generates results that can be used to build profitability.
- Staff Engagement. Sharing this information allows your staff to better participate in building the business
- Insight. Metrics are absolutely key to helping you and your team understand what contributions everyone is making to the practice, and formulating strategies to improve.
- Real-Time Response. The best time to handle a trend is when it’s happening. Scoreboarding facilitates fast responses and improves the likelihood that your business will meet its goals.
- Staff Awareness. When your team is aware of your current progress, they often make different decisions than they might otherwise.
- Clear Expectations. Your scoreboard is a tool that helps your team understand what you expect from them.
- Positive Growth. When your team is aware of what’s happening around them, they are better equipped to contribute positively to the growth of the business.
- Effective Solutions. Understanding the current metrics means that you are able to formulate solutions that address the reality of the situation, based on facts while there’s still time to do something different.
- Proactive Communication. It’s always better to communicate consistently and proactively rather than reacting to results after the fact.
- Transparency. Allowing your staff to be privy to the facts of the business helps them understand that it is a business where they can influence the outcome.
We can’t control every factor in a business, but there are certain variables that we can influence. Our success depends on how we address those items. They measure how well our staff is motivated and engaged, and they become the building blocks of practice profitability.
Using metrics and KPIs in training is critical. It provides a clear pathway to achieve goals, and sets your team up for success. We’ve been gathering data for a whole year, and that allows us to identify the areas that have shortcomings. Now we can clearly think about how to improve those metrics, and what kind of training and resources may be needed.
Making small steps helps create change that is sustainable over time. Gradual change is the key.
In order to successfully improve any metric in the practice, you need to understand all of the steps that flow into that metric. Every step along the way is part of the puzzle, and once you’ve completely dissected the entire process, then you are able to make a real change that will impact your business.
Every process in your office should be systematized. Creating a system rather than a broad job description allows you to staff more efficiently, handle exceptions, and reduce business interruptions from outside influences like turnover.
Core Company Knowledge
Silos are a natural result of practice growth, but every member of the staff needs to understand certain core information about what’s happening in your practice. Define the basics, and communicate them clearly to every member of your team. This will help your team work better together, and provide the best possible results for your business and your patients.
Formula for Success
- Know your numbers.
- Pair metrics with training and resource allocation.
- Systematize your processes.
These three steps are effective “levers” you can pull to create success in the upcoming year.