Good Management Involves Strategic Look Ahead

Thinking about the theme of this month’s issue – office management – I began contemplating what is unique about managing a medical practice compared to other small businesses. There are both similarities and differences. My career has been spent primarily running small businesses – mostly not-for-profit associations. Many common concerns prevail – human resource issues, financial concerns and budgeting, production and efficiency, and ultimately, the bottom line.

Most executives charged with running a small business have been schooled in the basic techniques. They take courses in everything from human resource development to business law. However, physicians, who have the same business responsibilities when it comes to running their practices, receive much less exposure to these same educational offerings. “Internship” opportunities are rare. Physicians most frequently receive on-the-job training when it comes to running their businesses.

One particular area that may be lacking in the conduct of many medical practices is strategic management, or strategic planning – what used to be called long-range planning. This isn’t uncommon – it’s a deficiency exhibited by most small businesses. The day-to-day conduct of making money, paying the bills, managing the employees and, finally, practicing medicine, occupies so much time that there’s very little left for any “blue-sky” thinking. However, as in any business, the need to look into the future is essential. If you’re not looking ahead, you’re probably not moving forward.

To ensure that your practice is preparing for future needs and challenges, there are a few key questions that any good business should regularly ask, and medical practices are no different. First, what do you anticipate are your three or four biggest challenges now, and more importantly what will they be in the future? Second, is there a service (or a new way of providing an existing service) you can offer to meet your patients’ needs, and is it something that can generate new revenue? Third, is there a problem your customers (patients) have that no one else is addressing?

The relevance of these questions to any business – the common denominator – is that they force you to think outside the day-to-day box. They’ll force you to do that important blue-sky thinking.

As the leader of your business, there are other questions that should be asked from time to time. What one or two innovations or occurrences (not possible today) could happen which would fundamentally change some aspect of your practice? (A few years ago the answer to this might have been electronic medical records.) Where is it that the profession wants or needs to go, but doesn’t know yet? Finally, what opportunities might there be that have not been seen, articulated or exploited by others?

All of these questions can help lead to a healthy state that most contemporary business gurus contend should be your ultimate goal – the state of nimbleness. This is a key business concept today – the ability to move quickly as things change around us. One of the secrets is constantly asking these kinds of questions, which force us to do the environmental scanning essential to strategic management. One part of being nimble is the ability to quickly react (in a proactive way), but another part is being careful you never commit to any course that you might later find impossible to abandon.

Establishing goals is essential to strategic management. One well-known strategist suggests that every business should have at least one big, bold, audacious goal. It should be so clear that it needs no explanation. It should fall outside of your comfort zone, yet be achievable. Finally, it should be so bold and exciting that it would continue to stimulate progress even if the originator of the idea were no longer around to promote it. Does your practice have an audacious goal?

Finally, one last important ingredient of successful strategic planning is to be sure your annual budget is tied to the plan. Too often plans fail because they are simply an idea without resources to make them take life. Allocating financial resources to two or three strategic goals turns the abstract plan into an action plan.

Business leaders are trained to ask questions that make them look beyond the end of the day, month or immediate fiscal year. And the end results include a more insightful look at your practice’s future, a logical plan with anticipation of potential threats and opportunities, and a vision of where you want to be several years from now. Most of us aren’t lucky enough to have visions just appear to us – we have to work for them. And strategic thinking doesn’t just happen. It’s the result of focused and proactive effort.