— PRACTICE GROWTH & PROFIT INSIGHTS
Strategy, the Great Misnomer
(Not a Monty Python Character)
When I was a young-ish consultant, I couldn't wait to "develop strategies" for clients. Took thought and skill. I was UP for it.
I wrote these tomes. Really, they were huge, with small type.
I had metrics by the dozen, analyses for days, interview notes, suggestions for everything that breathed, and root causes for every "problem."
I wrote the most detailed, step-by-step tactics to fix every practice issue known to man. They were magnificent. I put them in pretty, expensive binders, with tabs, laminated pages, color graphics, arrows, highlights, and...
O.M.G.
Many clients saved those binders for years. They had value, to be sure. Some still follow them today (thank you).
But was all that a strategy?
Nope. No. Non.
It was a tactical plan, sans strategy. It was all the things you could do and tools you could use to get an outcome, usually more revenue and profit.
Lasers. Biologics. Better selling. Better coding. Better collections. Better marketing. Better, better, more, more and more…tactics. No strategy to be found.
How embarrassing.
So What's the Difference Between Strategy and Tactics?
A strategy gives you context for making decisions about how you will play the game of business to achieve your goal.
It establishes your direction, your priorities, and the principles you'll use to decide what to do and what NOT to do.
Tactics are the specific actions you take to carry out that strategy. Add a location. Hire an associate. Change a process. Improve coding. Invest in equipment. Introduce a new service.
Tactics are the how. Strategy determines which “hows” make sense.
Tactics should emanate from strategy. They aren't strategy.
And the strategy that makes sense for one stage of a practice's life may be entirely wrong for another. Aggressive growth, improving profitability, reducing operational complexity, building a legacy, and preparing for an eventual sale, aren't necessarily the same game.
The goal matters. The circumstances matter. The strategy needs to fit both.
The Lucky, the Geniuses, and You
Can you grow a practice using tactics without a clearly defined strategy?
Sure. Sometimes it works remarkably well.
After 40 years of consulting with more than 1,000 practices, I've seen a few reasons why.
First, some practices are small enough to benefit from almost any sensible improvement. They have relatively few people, fewer systems to coordinate, and enough room to implement basic improvements without overwhelming the organization. The important caveat is that the budget for improvements can be a limiting factor.
Second, sometimes the owner gets lucky. A major employer moves into the area. A valuable referral relationship develops. The local market changes favorably. The owner adapts to the opportunity and does well.
Third, there's a smaller group of unusually capable business-minded owners. They have the drive, judgment, and leadership skills to implement one good idea after another, often supported by a few very capable people.
Their practices can grow impressively without a formal strategy guiding every move. At some point, however, even these owners will almost always need (and will get) some outside expertise, though they usually exceed practice revenue benchmarks well before that happens.
These practices tend to get a lot of attention. They can make a tactic-first approach look like a reliable recipe for success.
But the results may depend heavily on the owner's personal abilities, favorable circumstances, or a relatively simple operating environment. That's not the same thing as having a repeatable method that works for different practices.
And it creates a problem for other ambitious owners.
They see what's working for someone else and reasonably wonder, "Should I be doing that, too?"
Maybe.
But maybe not.
Your Colleague's Winning Strategy May Be Wrong for You
There are two assumptions that can get practice owners into trouble.
The first is that a successful tactic, or even a collection of successful tactics, automatically adds up to a successful strategy.
The second is that a strategy that worked for another practice should work for yours.
We wouldn't make those assumptions in patient care.
We wouldn't treat every patient the same way simply because a particular treatment worked for the last patient we saw.
We understand that the right treatment depends on the diagnosis, the circumstances, and the desired outcome.
Developing a growth and profit strategy isn't fundamentally different.
One practice may need more patient volume. Another may already have enough patients but struggle with capacity. A third may generate substantial revenue but have disappointing margins. A fourth may have good financial results but depend so heavily on the owner that growth makes the owner's life harder rather than better.
The same tactic can produce very different results in those four very different practice situations.
Adding another provider might be exactly right for one and an expensive mistake for another. New equipment might open an important opportunity in one practice while tying up too much capital in another. More marketing might solve one owner's problem and send another owner's already-overloaded operation into a tailspin.
The tactic isn't inherently good or bad.
The question is whether it fits the practice's particular situation and helps achieve the result the owner actually wants.
That requires more than collecting ideas from conferences, colleagues, or consultants.
It requires a strategy.
When Good Ideas Become Expensive Distractions
Imagine a practice adding new marketing, opening another location, purchasing equipment, changing its EHR, bringing on an associate, hiring two MAs, and replacing a front desk employee.
All at once.
Then the physician-owner attends a conference and comes home with a couple more great ideas to implement immediately.
Everything collapses. Staff flee. The server catches on fire and the roof caves in.
OK, maybe I exaggerate. A little.
But I've seen practices almost descend into chaos when too much happens at once, more so when changes are unpredictable. Staff drop the ball when they didn't used to. Projects stall, are half-done or abandoned (a symptom of overwhelm, including too steep a learning curve). Finances become stressed. Mistakes increase. Revenue decreases.
The trouble isn't necessarily that any of these ideas are bad. Some may be very good.
The trouble is that good ideas compete for the same limited resources: money, time, attention, and the practice's ability to absorb change.
Without a strategy to establish priorities, it's easy to believe that implementing several tactical changes at once is progress.
It isn't.
A practice doesn't need to pursue every promising opportunity at once – or even every opportunity presented. It needs to identify which opportunities matter most, make sure the organization can execute them, ensure the timing is right, and then direct its resources accordingly.
That's what strategy is supposed to help you do.
Strategy Doesn't Have to Be Complicated
There are dozens of strategy frameworks, many with impressive names and elaborate diagrams.
A few are useful. Many others are far more complicated and time consuming than most practice owners need.
Consultants, on the other hand, like building frameworks. Strategy is fun to play with, and the frameworks can sound cool and mysterious.
But independent practice owners need something more useful, not something that creates another layer of complexity and work.
It needs to be simpler, without losing effectiveness.
For example, in an ER, where complex situations abound, their first treatment framework, called A-B-C, is truly simple: First Airway, then Breathing, then Circulation. It helps clinicians establish priorities and guide immediate action.
The point isn't that running a practice is the same as working an ER. It's that complexity doesn't automatically call for a more complicated decision-making process.
In fact, the more complex the situation, the more valuable a simple, focused framework can become.
This is especially true as a practice grows. More providers, staff, locations, services, and systems create more (often hidden) inter-dependencies. A decision in one part of the organization can affect several others.
You don't need a giant strategy binder to manage that complexity.
You need a clear way to make decisions.
A Streamlined Strategy Framework
Here's a framework I use with my largest and most profitable growth-oriented clients:
Get clarity. Define what you want to accomplish and understand the gap between where the practice is now and where you want it to be.
Set the goal. Make sure the goal aligns with your vision for the practice and what you want the business to do for you.
Identify the biggest barrier. Determine what is most directly preventing you from achieving that goal.
Find the root cause of the biggest barrier. There is usually only one.
Choose a focused strategy. Direct your effort toward solving for that single root cause, rather than trying to improve everything at once.
Select the tactics. Identify the simplest, most appropriate actions needed to carry out the strategy.
Execute. Assign responsibility, provide the necessary resources, and complete the work.
Measure and adjust. Determine whether the actions produced the intended result. Adapt as necessary, then move on to the next barrier.
That's it.
Clarity. Goal. Diagnosis. Strategy. Tactics. Execution. Measurement. Review and adjust.
Then rinse and repeat.
Notice what's missing: a shopping list of every good idea anyone has ever had about growing a medical practice.
Those ideas may be useful. But they need to earn their place in the plan.
You Can Be the Lucky and the Geniuses
You might have an excellent practice. You might be a terrific clinician and a talented business owner. You may already know dozens of tactics that could improve revenue, capacity, or profitability.
That's all good.
But the question isn't how many good ideas you know, or how many of them you've implemented.
It's whether you're working on the things that will make the greatest difference to your practice.
Effective strategy and tactics aren't about how many new ideas you can apply. They're about choosing the right direction, making sound decisions, and using the right actions to get the result you want.
Sometimes the answer will be a new service, new equipment, better marketing, or another provider.
Sometimes it will be something much less obvious.
The trick is knowing which is which.
And that starts with understanding what is actually standing between you and the result you're trying to achieve.
If you'd like to find out what growth & profit opportunities you might be leaving on the table, get a free Growth & Profit Analysis. Click below.
By Pam Thompson Reading time: 9 strategically invested minutes
— PRACTICE GROWTH & PROFIT INSIGHTS
Strategy, the Great Misnomer
(Not a Monty Python Character)
When I was a young-ish consultant, I couldn't wait to "develop strategies" for clients. Took thought and skill. I was UP for it.
I wrote these tomes. Really, they were huge, with small type.
I had metrics by the dozen, analyses for days, interview notes, suggestions for everything that breathed, and root causes for every "problem."
I wrote the most detailed, step-by-step tactics to fix every practice issue known to man. They were magnificent. I put them in pretty, expensive binders, with tabs, laminated pages, color graphics, arrows, highlights, and...
O.M.G.
Many clients saved those binders for years. They had value, to be sure. Some still follow them today (thank you).
But was all that a strategy?
Nope. No. Non.
It was a tactical plan, sans strategy. It was all the things you could do and tools you could use to get an outcome, usually more revenue and profit.
Lasers. Biologics. Better selling. Better coding. Better collections. Better marketing. Better, better, more, more and more…tactics. No strategy to be found.
How embarrassing.
So What's the Difference Between Strategy and Tactics?
A strategy gives you context for making decisions about how you will play the game of business to achieve your goal.
It establishes your direction, your priorities, and the principles you'll use to decide what to do and what NOT to do.
Tactics are the specific actions you take to carry out that strategy. Add a location. Hire an associate. Change a process. Improve coding. Invest in equipment. Introduce a new service.
Tactics are the how. Strategy determines which “hows” make sense.
Tactics should emanate from strategy. They aren't strategy.
And the strategy that makes sense for one stage of a practice's life may be entirely wrong for another. Aggressive growth, improving profitability, reducing operational complexity, building a legacy, and preparing for an eventual sale, aren't necessarily the same game.
The goal matters. The circumstances matter. The strategy needs to fit both.
The Lucky, the Geniuses, and You
Can you grow a practice using tactics without a clearly defined strategy?
Sure. Sometimes it works remarkably well.
After 40 years of consulting with more than 1,000 practices, I've seen a few reasons why.
First, some practices are small enough to benefit from almost any sensible improvement. They have relatively few people, fewer systems to coordinate, and enough room to implement basic improvements without overwhelming the organization. The important caveat is that the budget for improvements can be a limiting factor.
Second, sometimes the owner gets lucky. A major employer moves into the area. A valuable referral relationship develops. The local market changes favorably. The owner adapts to the opportunity and does well.
Third, there's a smaller group of unusually capable business-minded owners. They have the drive, judgment, and leadership skills to implement one good idea after another, often supported by a few very capable people.
Their practices can grow impressively without a formal strategy guiding every move. At some point, however, even these owners will almost always need (and will get) some outside expertise, though they usually exceed practice revenue benchmarks well before that happens.
These practices tend to get a lot of attention. They can make a tactic-first approach look like a reliable recipe for success.
But the results may depend heavily on the owner's personal abilities, favorable circumstances, or a relatively simple operating environment. That's not the same thing as having a repeatable method that works for different practices.
And it creates a problem for other ambitious owners.
They see what's working for someone else and reasonably wonder, "Should I be doing that, too?"
Maybe.
But maybe not.
Your Colleague's Winning Strategy May Be Wrong for You
There are two assumptions that can get practice owners into trouble.
The first is that a successful tactic, or even a collection of successful tactics, automatically adds up to a successful strategy.
The second is that a strategy that worked for another practice should work for yours.
We wouldn't make those assumptions in patient care.
We wouldn't treat every patient the same way simply because a particular treatment worked for the last patient we saw.
We understand that the right treatment depends on the diagnosis, the circumstances, and the desired outcome.
Developing a growth and profit strategy isn't fundamentally different.
One practice may need more patient volume. Another may already have enough patients but struggle with capacity. A third may generate substantial revenue but have disappointing margins. A fourth may have good financial results but depend so heavily on the owner that growth makes the owner's life harder rather than better.
The same tactic can produce very different results in those four very different practice situations.
Adding another provider might be exactly right for one and an expensive mistake for another. New equipment might open an important opportunity in one practice while tying up too much capital in another. More marketing might solve one owner's problem and send another owner's already-overloaded operation into a tailspin.
The tactic isn't inherently good or bad.
The question is whether it fits the practice's particular situation and helps achieve the result the owner actually wants.
That requires more than collecting ideas from conferences, colleagues, or consultants.
It requires a strategy.
When Good Ideas Become Expensive Distractions
Imagine a practice adding new marketing, opening another location, purchasing equipment, changing its EHR, bringing on an associate, hiring two MAs, and replacing a front desk employee.
All at once.
Then the physician-owner attends a conference and comes home with a couple more great ideas to implement immediately.
Everything collapses. Staff flee. The server catches on fire and the roof caves in.
OK, maybe I exaggerate. A little.
But I've seen practices almost descend into chaos when too much happens at once, more so when changes are unpredictable. Staff drop the ball when they didn't used to. Projects stall, are half-done or abandoned (a symptom of overwhelm, including too steep a learning curve). Finances become stressed. Mistakes increase. Revenue decreases.
The trouble isn't necessarily that any of these ideas are bad. Some may be very good.
The trouble is that good ideas compete for the same limited resources: money, time, attention, and the practice's ability to absorb change.
Without a strategy to establish priorities, it's easy to believe that implementing several tactical changes at once is progress.
It isn't.
A practice doesn't need to pursue every promising opportunity at once – or even every opportunity presented. It needs to identify which opportunities matter most, make sure the organization can execute them, ensure the timing is right, and then direct its resources accordingly.
That's what strategy is supposed to help you do.
Strategy Doesn't Have to Be Complicated
There are dozens of strategy frameworks, many with impressive names and elaborate diagrams.
A few are useful. Many others are far more complicated and time consuming than most practice owners need.
Consultants, on the other hand, like building frameworks. Strategy is fun to play with, and the frameworks can sound cool and mysterious.
But independent practice owners need something more useful, not something that creates another layer of complexity and work.
It needs to be simpler, without losing effectiveness.
For example, in an ER, where complex situations abound, their first treatment framework, called A-B-C, is truly simple: First Airway, then Breathing, then Circulation. It helps clinicians establish priorities and guide immediate action.
The point isn't that running a practice is the same as working an ER. It's that complexity doesn't automatically call for a more complicated decision-making process.
In fact, the more complex the situation, the more valuable a simple, focused framework can become.
This is especially true as a practice grows. More providers, staff, locations, services, and systems create more (often hidden) inter-dependencies. A decision in one part of the organization can affect several others.
You don't need a giant strategy binder to manage that complexity.
You need a clear way to make decisions.
A Streamlined Strategy Framework
Here's a framework I use with my largest and most profitable growth-oriented clients:
Get clarity. Define what you want to accomplish and understand the gap between where the practice is now and where you want it to be.
Set the goal. Make sure the goal aligns with your vision for the practice and what you want the business to do for you.
Identify the biggest barrier. Determine what is most directly preventing you from achieving that goal.
Find the root cause of the biggest barrier. There is usually only one.
Choose a focused strategy. Direct your effort toward solving for that single root cause, rather than trying to improve everything at once.
Select the tactics. Identify the simplest, most appropriate actions needed to carry out the strategy.
Execute. Assign responsibility, provide the necessary resources, and complete the work.
Measure and adjust. Determine whether the actions produced the intended result. Adapt as necessary, then move on to the next barrier.
That's it.
Clarity. Goal. Diagnosis. Strategy. Tactics. Execution. Measurement. Review and adjust.
Then rinse and repeat.
Notice what's missing: a shopping list of every good idea anyone has ever had about growing a medical practice.
Those ideas may be useful. But they need to earn their place in the plan.
You Can Be the Lucky and the Geniuses
You might have an excellent practice. You might be a terrific clinician and a talented business owner. You may already know dozens of tactics that could improve revenue, capacity, or profitability.
That's all good.
But the question isn't how many good ideas you know, or how many of them you've implemented.
It's whether you're working on the things that will make the greatest difference to your practice.
Effective strategy and tactics aren't about how many new ideas you can apply. They're about choosing the right direction, making sound decisions, and using the right actions to get the result you want.
Sometimes the answer will be a new service, new equipment, better marketing, or another provider.
Sometimes it will be something much less obvious.
The trick is knowing which is which.
And that starts with understanding what is actually standing between you and the result you're trying to achieve.
If you'd like to find out what growth & profit opportunities you might be leaving on the table, get a free Growth & Profit Analysis. Click below.
By Pam Thompson Reading time: 9 strategically invested minutes
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