WHAT ACTIONS SHOULD YOU TAKE DURING THIS RECESSION?

I mentioned in my last blog that I would give you an article we wrote several months ago for our clients and prospective clients that addresses both a viewpoint and specific actions one should be looking at during tough economic times like these. We feel that it is still relevant, even if written some months ago. If you have any feedback on this, let us know by visiting our discussion forum at: Facebook.

Larry Silver
President, Silkin


Not a day goes by without more information coming to light regarding the economic situation we are all experiencing in this country and around the world.

It is very clear that we are now seeing the very obvious signs of a national recession, despite whatever spin may be put on it by the politicians from both sides of the aisle. This crisis is not limited to the finance sectors or the housing market and is effecting many people and numerous businesses. It is likely to get worse before it gets any better, and as the economic problems go deep, it could possibly be as much as a decade before we’re able to fully recover.

That’s what’s happening today.

Silkin has worked with health care professionals for over 25 years and during that time, we’ve seen several periods of economic difficulty with different names attached to them. Some called them recessions, some called them "stagflation", as well as a variety of other names. Whatever cute label one wants to attach to tough economic times, there is no fooling people with the fact that the economy in general, and their specific economic situation is far from ideal. And today, some economists are stating that this is the worst economic situation since the Great Depression of the 1930’s.

During a recessionary period such as this we oftentimes see practitioners "tightening up", meaning they manage through fear, worry, and reduction. Promotional efforts are decreased and doctors often let go of staff. They may cut corners and consequently the quality of their service may begin to suffer. It’s a proven fact that doctors who act in this manner will begin to lose some portion of their patient base. This can make it a perfect time for doctors who don’t succumb to such thinking to capture more market share and increase their productivity.

Our clients generally thrive during recessions because they know what to do. They’ve learned how to manage their practices through objective means. They know how to effectively market without it costing an arm and a leg. We’ve been through three of these economic downturns/recessions and we’ve seen how our clients are able to take advantage of the situation rather than be the adverse effect of it. In fact, a recent survey of our clients showed that our clients who are trained and skilled in practice management have been increasing their productivity by 10% to 15% during those years the nation has been in recession. And this includes all socioeconomic areas of the country. This type of growth is generally not true for the average practice owner. In fact recent industry surveys have shown an average decrease of 10% to 15% for the average practice during the recessionary period we are now experiencing.

Our clients thrive because they are able to prepare for down economic periods. They make realistic plans based on objective data and systematically hire, train and monitor staff efforts in alignment with a business plan, marketing plan and financial plan. They know how to closely monitor all of the key areas of the practice and thus are in control of the practice. They know if they are understaffed or overstaffed, or if they have under utilized staff. They have efficient systems that keep "busy work" off their desks and don’t have a desk full of backlogged activities. This is called running good control over your practice. And that doesn’t mean, as some people think, that it results in not having fun at work or not having relaxed staff people or having people obsess constantly over profit instead of paying attention to people and service. It simply means that you know what is going on in your practice, that your staff know their jobs and work well as a team together and, because of that, you and your staff enjoy the work environment much more.

Objective systems are the components that allow staff people to remain calm and competent. When they know their jobs inside and out, it allows them to respond creatively to unique and unanticipated situations. It allows them to be calm and composed even when work backs up or the amount of office traffic increases greatly. Staff become accountable and self motivated because their work is measured by objective statistics. They are productive rather than just busy. Prior to the current economic situation, we have seen a large percentage of practices and businesses supported and inflated by the bullish economy. It normally does not take superior management skill to grow during such periods. Now that credit is less available and people have less disposal income, it becomes obvious which offices have the management skill and resulting infrastructure capable of handling the change. It isn’t enough to do the same old thing. Every income source must be maximized and must be maximized with the best interest of the patient in mind. Staff must be able to communicate the importance of delivering the highest quality of care without seeming to be solely motivated by profit.

Everyday we work with practice owners to put together proper business, marketing and financial plans and help them properly implement those plans in a time frame that allows the creation of a stable infrastructure. We do this so practice owners are able to grow and thrive in a sane manner, during either good times or bad. To survive any activity, you must be trained and knowledgeable in that activity. You wouldn’t be an effective doctor if you weren’t adequately trained in your profession. It is no different in terms of managing a practice.

The business environment is very tough right now. The better you are trained in practice management, the better you will be able to not only survive this economic crisis, but to actually be able to expand during these difficult times. You can accomplish this if you approach management training with the same dedication as your professional training. That's what Silkin does. Feel free to contact us if you wish to discuss this further. We can be reached through our website at: www.silkinmanagementgroup.com, or emailing us at info@silkinmanagementgroup.com, or calling 800-695-0257.

Goals Gone Wild

Catchy title, wouldn't you say? That's what I thought when I saw it at this blog describing a recent Harvard Business School study which you can find at blogs.ft.com "Goals gone wild -- and how to tame them". The title caught my attention and got me to read the blog. Unfortunately the blog was not as interesting and catchy as it's title. But the point is that it got me to read the article.

What this brought to mind was a marketing concept that we teach our clients. Before I go into that concept, let me say that good marketing is an extremely important activity during this economic downturn. In fact in my next blog I will give you a recent article we wrote for our clients and prospective clients that directly addresses why marketing is so important during bad economic times. In the meanwhile I'll simply point out that during a down economy most businesses cut back on marketing because they feel that they can't afford it. In actual fact, what you have to do during a recessionary period is at least as much, if not MORE marketing than you've done before. If you don't, you'll continue the downslide that many businesses find themselves in - it's truly a dwindling spiral. Again, more on that in our next blog.

Now, relative to the cute "goals gone wild" title I presented above - if you read the article you'll notice that the article is at best only somewhat interesting to a select group of business people. None-the-less the title was clever enough to catch most people's attention and get you to read on. So, what's that have to do with marketing? A lot.

We teach our clients to survey their client and patient base on a variety of subjects ranging from why they chose this particular office to how the service was. From doing correct surveys one can easily find out the primary answer to the subject of that particular survey. The primary answer can then get translated into a marketing "button" - meaning a phrase that instantly captures the attention of the great majority of people looking at it. It is a marketing rule that you have less than a second to capture your audience's attention from a marketing piece to get them to read on. So getting the right "button" is extremely important in order to get the person to then read what your message is and become interested in what you are trying to say. For example, if you were a chiropracter and you surveyed your patient base as to what successes they had with your service and found out that 55% of your patients said you cured their headaches. You would then design your "button" around headaches and come up with a catchy button that grabbed their attention. Just like "Goals Gone Wild".

If you have any feedback on this, let us know by visiting our discussion forum at Silkin Facebook Page.

More on the economy and marketing in our next blog.


Larry Silver
President, Silkin

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Solutions Magazine

THERE IS FISCAL SANITY IN MISSOURI: You can do the same.

In my never ending reading and research to keep up to date on what is going on with our economy and the myriad of solutions being presented, I ran across this fascinating blog in BizJournals - "Mo. lawmakers want to reject part of stimulus" The state of Missouri actually turned down $133 million dollars from the Federal Government that is part of the stimulus package. No, they didn't turn it down because their coffers were full - in fact their coffers are far from full. The state is in just as much budgetary difficulties as most any other state in the union. But what they so aptly observed was that taking the $133 million required, with all the strings attached, a commitment to further expenditures that they could not afford. They refused to take a short term "fix" that would end in in further long term difficulties. Hooray for the Missouri legislators for understanding that there truly is no "free lunch".

This parallels an article I read last week about an ambassador from an African country who stated boldly that she was adamantly against her country continuing to receive economic aid from the United States. She pointed out that her country had been receiving this aid for decades and it had done little to nothing to improve her country - rather she felt that it hurt her country greatly. Why? Because there was no incentive for her country to figure out ways for her country to stand on its own two feet and develop their economy. A great deal of the money ended up in the pockets of the rulers and little ended up helping the population.

These two stories reminded me of a basic management and financial philosophy that we teach our clients: rewarding production will get you more production while, similarly, rewarding lack of production will simply get you more of the same. We teach and provide bonus systems for staff that provide incentives for each staff member and the office as a whole to be more productive. Done correctly we regularly see significant increases in individual and office wide production and greater net for the practice owner. Using these bonus systems we've seen entire staff's take trips to Hawaii or Mexico with each staff member making more money and the doctor/owner greatly increasing his net and take home. Everybody wins.
They win because production is being incentivized and rewarded. It works!

So, if you want to control your own economy during this recession, if you want to provide your own economic stimulus package try implementing bonus systems that reward individual and office wide production and you'll see production increase.
We'd love to hear from anyone who has tried such bonus systems and hear what has worked best for you. Go to our discussion forum at: Silkin Facebook Page.

Larry Silver
President, Silkin
http://www.Silkinmanagementgroup.com