“It is not necessary to change. Survival is not mandatory.” This is a quote from W. Edwards Deming, one of the greatest business minds ever, whose writing and views are still applicable today. What law or regulation stipulates that any business in this or any other industry is required to survive?

After almost two decades of consulting in this industry, I can reflect on a number of changes that have occurred in the DME business environment. However, there are none as broad and perilous as competitive bidding, which the Medicare Modernization Act set in motion on Dec. 8, 2003.

A change of this magnitude screams for a change in strategies and processes and, in fact, demands that owners and managers revisit the very core of their business to ensure it is appropriate for the current environment.

Start at the Beginning

Any makeover of a home medical equipment business today must begin by reevaluating both the company's vision and its mission. In many cases, however, the vision statement is a missing component. And while most companies have some kind of mission statement, it's often not well defined or not relevant.

The company vision should be a statement of what you want the company to be. In other words, the vision statement could be defined as “what we're going to be when we've grown up.”

The essence of many vision statements I've seen is very broad and reflects an altruistic desire, such as “our company wants to help people.” But the level of efficiency required for the industry's current environment is almost universally opposed to a broad vision statement. There are some customer segments, for instance, that a provider can do a better job of helping than others. The challenge today is to identify those segments and narrow the company's vision to help them.

I often write and speak of the root cause of all business revenue and expense as being the solution we offer and the customer we offer it to. In HME, the solution to be offered and the target customer should be clear in the company's vision statement. In this industry, the combination of “product and payer” can be substituted for “solution,” because the products you sell are the solution you offer. If you want to offer better respiratory function, for example, then the product you offer is oxygen equipment.

If you modify your company vision to fit the current environment, this necessitates a revision of your company mission. But I also find that mission statements from many HME companies, whether they are small or large, are fairly vague and don't really address what the current elements of the business are or the current conditions that the business is in. The mission statement may even have been developed simply to fulfill an accreditation requirement or for some other purpose, such as creating a business plan when requesting funding.

The mission should be a statement of how the business will achieve its vision. For example, a provider whose vision is “to be the most often referred provider for complex rehab equipment to military veterans” would then restate the company's mission to address how it actually becomes the most often referred provider.

Once the vision and mission statements have been carefully considered, don't relegate them to the back burner. Reevaluating both vision and mission is something that HME management should be doing regularly, at least once a year, so the company can revisit questions like “Is this really where we want to go now?” and “Considering what we know, is this still what we want to be and is this still how we want to get there?”

The reason that a lot of existing vision and mission statements are not developed well enough is because they are generally regarded as theoretical. Developed properly, however, these statements can be your key guidance system for the company. They are not the detailed nuts and bolts; they are the 30,000-foot view. But all of the nuts and bolts have to be in the right place so you can achieve that perspective.

Align Your Strategies

The next change is to align the company's strategies with its vision and mission. A strategy is a descriptor for a set of actions (tactics) that will be used to achieve some part of the mission.

When a company must adjust to a different business environment, the conventional (and good) method of identifying the right strategies is to consider the company's strengths and weaknesses in the context of the environment. Whatever the business environment is, it includes both opportunities and threats.

Saying that the business environment has changed is also saying there are different opportunities and threats that must be addressed. Ask this question: “Given our strengths and weaknesses, what are the implications of the current and future opportunities and threats?” The answers to this question will determine the appropriate strategies and tactics your company needs to adopt or modify.

Because change is difficult to make in any organization that involves people, it is important to map out (in the strategies) how you will affect change within the company. Consideration must be given to the training, staffing, marketing, purchasing, policies and procedures and management information systems that will support the change.

Many providers who are insightful, courageous and energetic enough to adapt to the industry's new environment will be making some change to the solution they offer and who they offer it to. When that occurs, at least two of their process groups — customer acquisition and order fulfillment — must also undergo some change.

The company's customer acquisition processes should create a new promise or message to its customers and referral sources that is in alignment with the vision and mission statement. The need for a different message is to focus on getting the best customer, not the next customer.