Owning a business is tough.
Owning a business that is heavily regulated by the government is tougher.
Owning a business that is reliant on government reimbursement schemes is the toughest. Especially if the largest percentage of your revenue, cash flow and profits is beholden to that source.
Therein lies the plight of most in the HME/DME world.
So what can be done? Don't just own your business, lead it!
That's right, ownership and leadership are very different. The primary difference is that ownership is a financial circumstance. Leadership is a strategic decision. Ownership is simply a result of fiscal responsibility and structure. Leadership requires emotional, psychological and financial commitments.
Leadership is about taking control. It is about deciding to steer your own ship, not simply going where the winds and currents choose. It requires power, perseverance and an unrelenting passion to muster all that is within your reach to overcome the travesties of governmental meddling.
Regardless of your size, product mix, or whether you're in one of the first MSAs for competitive blundering (uh … bidding), here are five ways to start leading:
- Decide to Be In or Out
This is fundamental. It begins between your ears.
Are you committed to your business or do you want to bail? Hint: the time for bailing (at a good price) has come and gone. You're about three years too late. So you might as well do whatever you can to improve your business and build its value so that in another three years or so, you'll be in a stronger position to court suitors.
If you think it's too late for that, then it probably is. So try to find a buyer who'll give you whatever they will for your years of investment. For those who are willing to fight for the survival and success of your business, read on.
- Fix and Build
The true paradox of transitioning from owner to leader is the ability to take care of the day-to-day problems that need fixing while looking ahead at building the company. In time, a general manager is a wise solution. This person takes on the daily operations issues and frees up the owner's time to explore alternatives for the business' strategic future.
The owner must not only rely on the internal talent of managers and workers but also engage the services of outside professionals. These people can bring experience and expertise of their own disciplines as well as those of their clientele.
While any final decisions regarding the direction of the company is solely in the hands of the owner, taking advantage of new insights and perspectives from outside the business (and even the industry) may prove a wise investment in creating a distinct plan.
- Leave the Castle
Sadly, the boss' office is always the most comfortable place to hide (I mean sit and control the empire). Yes, it can be safe for the boss, but hazardous to the company's growth. You must leave the office, cross the bridge over the moat and travel the lands.
Meeting with vendors, suppliers, lenders, neighbors, shakers and movers and other community leaders offers a reality check for you and your business.
Getting out allows you to exchange ideas, brainstorm and, most of all, take the pulse of the marketplace and be visible in it. It's an opportunity to get involved in clubs, organizations and community initiatives that will position you as involved and committed to the success of more than just your business.
In the process, you can become a value resource for information to those in need. After all, everyone in the community is or will be a prospective customer or influence decisions made by a loved one.
- Hire Better
In a world of competitive bidding that reduces all products and services into a “cheapest commodity provider,” the one thing that separates your business from every other is your people.
You deserve to have the brightest, most enthusiastic, hard-working, honest, dependable, courteous workers possible. That is a daunting task. You must ask better interview questions; discipline and reward consistently and constantly; communicate and manage effectively. Between generational differences, turnover and competition, finding and keeping talent is tough.
What issues should be at the forefront of every leader's thinking? Finding and building more leaders. Every successful company is made up of people who exhibit leadership skills at every level of the operation. They take on a pride that permeates all they do, and they develop into the next generation that will enable the business to continue growing.
- Improve the Dollars
By now you've probably eliminated as many expenses from your business as possible, so now what? It's time to look at:
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Alternative revenue streams
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Alternative business ventures
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Product mix
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Payer mix
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Territory expansion or reduction
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Market niche expansion or reduction
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Alternative business models
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Retail sales
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Improving cash flow
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Exploring alternative packaging and delivery
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Examining return on training dollars
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Fostering expanded sales/distribution networks and relationships
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Acquisition and/or merger alternatives
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Exploring disease association linkages
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Leveraging buying group contracts and individual vendor terms
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Managing existing lender relationships and/or seeking out others
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Succession planning for turning over the business
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Clearly, recent CMS reimbursement schemes are yet another reason either to diversify out of the government business or maximize the possibilities for a profitable relationship with CMS. There's not enough space to explore all of the tactics here, but suffice it to say “business as usual” is going to shut your doors.
Average owners will continue to whine. HME/DME leaders will find some way or, perhaps several ways, to turn their business' future into their hands, not the government's.
This industry is not unlike others in turmoil. Automobiles, airlines, restaurants, hotels, home builders and others are facing changing regulations, buying habits, profitability pressures, talent drain, increased competition, etc., etc.
This sector just seems to be such an easy target because a growing percentage of our citizenry thinks health care is an entitlement and should be a government-run right. Without getting into political debates, consider what the government has done to health care so far, and then imagine the entire system from delivery to operations being run by Washington.
Leverage your dollars and volunteer efforts to support those organizations that make sense: AAHomecare, your state association, VGM, The Med Group, NAIMES and any other collective body that is able to muster the kind of political and fiscal clout to take on the legislators.
In the meantime, mind the store and look to the future. You can't do it all or know it all, so find ways to use your dollars, time and energies wisely. Find people who have the expertise to accelerate the thinking, strategies and action necessary to get your business headed into a more desirable future.
And by now if you aren't accredited, shame on you! It's a tremendous process that helps formalize the dimensions of your business that will not only allow you to participate in national competitive business but help you tighten up on many of the day-to-day functions and document the workings of your company.
One of the obstacles to going from owner to leader is the inability to have others carry on in your absence because policies, procedures and processes are in your head and not written and available to the staff.
So what's your next step? Determine whether your business needs transition or transformation. Transition means looking at doing things differently. Transformation means doing different things. They both come with risk, rewards and uncertainty; however, they're better for your future than the government's current plan.
As with all legislative changes, the pendulum will swing. There will be a backlash, revisions and ongoing remedies, as evidenced by the trials and tribulations thus far in simply getting MSAs identified, start dates announced and the accreditation and rules of national competitive bidding confirmed. So you must take the lead in deciding what you want your business to look like and how you're going to be a “value-added choice” for families in need.
You are not only a supplier of home medical equipment; you are a critical link in the continuum of U.S. health care. You are a resource to families that enables and empowers them and their loved ones to live to the fullest, as independently as possible, with as much dignity as possible, in the place they call home.
Revisit the true meaning of your business and the impact it has on the lives of the neighbors in your community. Re-energize your efforts to lead, not just own your business.
Leadership means knowing what to focus on and what not to. Take control of what you can. Take your business, your employees and your customers to a new level of trust, quality and service.
And in spite of the statehouse, CMS and the Washington gang, you can profit.
Vince Crew is the creator the HME Power Management Success System (VGM 2005). He provides confidential advisory services to owners and executives on strategic growth issues and is the author of several books on leadership, staffing and strategy. Visit www.REACHdevelopment.com for additional information.
