Features
Cinderella 2006
It is interesting that events we generally pay no attention to can suddenly capture our attention. I have never been very interested in college basketball, but March Madness certainly captured my attention this year. Why? The Cinderella Story. We all seem to like them.
The Cinderella in this case was George Mason University. “Who are they?” is what much of America asked. “How could they be in the Final Four?” Once the news media told us they were a small school battling giants like LSU, UCLA, Florida and Duke, we wanted to see them win. They became a Cinderella.
When the sportscasters interviewed Jim Larranaga, the George Mason coach, he revealed a really powerful principle he taught his team: It is 10 percent about the situation you are in and 90 percent about how you react to it. This principle is one that home care providers need to recall over and over again.
The situation our industry is in is unprecedented. The survival of many providers is threatened by the implementation of the Medicare Modernization Act. Yet it is 10 percent about the situation and 90 percent about our reaction to it.
So, what is the right reaction? Embrace the MMA as good public health and/or fiscal policy? Sell the business before it is too late? Wait to see how it all shakes out? These might be valid options for a few but, first, try the following five techniques.
- Relax
Not being relaxed makes us emotional. Being emotional keeps us from being logical. Imagine being in an airplane in turbulent air with a pilot who is freaking out. Could you be confident that he or she will make the best decision? We know that the pilot must have a calm, steady hand on the controls. Providers should, too.
- Evaluate
Knowing that the situation the industry is in will cause lower profitability is not enough. Every provider must evaluate the specific effects on his own company.
How much will revenues, profits and cash flows change? How will rivals react? How will their reaction affect us? How will manufacturers react?
The evaluation should quantify every material fact and assumption. It is only after a situation is measured that an appropriate response can be planned. Responding to this industry's current situation without evaluating and quantifying its effect on your individual company is about the same as buying a car without knowing anything about it.
