Improving Your Business the Smart Way
There is an old axiom in the business world: “grow or die”. This, in my belief, is incorrect. It should read “improve or die”. Business growth is a critical metric for established, medium-to-large businesses. For smaller businesses growth can kill your business without a proper foundation.
Let’s look at a hypothetical example: Dr. Smith is a family medicine practitioner with 300 patients. His practice is running smoothly with decent profitability, and his overhead is low. Dr. Smith wants to take on more patients, both to help his community and to increase profits. Therefore, Dr. Smith takes on an additional 100 patients.
At first, everything runs about the same. There was an initial busy period with new patient appointments, but things go back to normal once they get them completed. Six months later, flu season hits, and Dr. Smith is inundated with appointments. His staff is doing its best to get as many people in as possible, but he quickly finds himself having to book patients two-to-three months out. His patients become frustrated. Not only do they decide to switch providers, but they also voice their discontent on social media. Dr. Smith’s reputation has been negatively impacted.
Instead of growth, Dr. Smith should have been looking at another framework: continuous improvement (CI). Continuous improvement is an ideology derived from the Toyota Production System. In Japanese, it’s called Kaizen which roughly translates to “change for the better”. The core principle of continuous improvement is as the name suggests – to aim to improve every hour, of every day, of every year.
Although continuous improvement (CI) sounds simple, it’s a large commitment. While there is no one right way to implement CI, there are some well-established tools that many businesses have used to great success. There are too many tools to discuss in a short blog post, but I want to cover the more important ones.
Standardized Business Processes
Business processes are at the core of CI. To implement standardized business processes, you first have to break down the tasks of every role. As an example, consider checking in a patient. Does your office staff have a well-established, written process that they follow every time? Having a standardized process allows for new and seasoned employees the tools they need to perform their work from day one.
Change management is at the core of CI. As the name suggests, continuous improvement will mean continuous change. While that may seem scary, there are methods that take the variability out of the equation. One tool is called the Deming Cycle, or PDCA. PDCA stands for Plan, Do, Check, Adjust. When something needs to be changed, plan the change by gathering data and determining the root cause of the problem. Planning also includes creating a communication plan for the change. Do the change according to the plan. Next, check to make sure the change is working as you expected. Finally, adjust the change based on the information you’ve gathered, and start the cycle over.
How can you improve something if you don’t know where you’re at? Metrics are critical, measurable components of your business. They serve as a quick look at the status of your business. For medical practices, the following may serve as metrics: patient and employee satisfaction, margin, on-time starts, cost per patient, patient wait time, cost of patient acquisition, and many more. Every practice is different, so selecting the right metrics is crucial for CI.
Properly implementing continuous improvement requires commitment from every level of the business. It has to be injected into the culture. Every employee must be brought onboard and feel empowered to bring new ideas to the table. Leaders must be willing to listen and consider change from all parties. While the effort is high, the rewards are substantial.
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