Profitability is NOT a Four-Letter Word!
January 15, 2018
Strategic Planning benefits veterinary hospitals, too!
Week 3 = We finish this 3-part series with what to cover during a strategic planning meeting and recognizing that it ultimately impacts profitability.
The last two weeks have covered why to create a plan, who should be involved and the first steps. We finish with a discussion on the actual meeting. Ultimately, it’s to help increase profits. Small businesses that have a defined mission statement and a strategic plan are 10-12% more successful than those that don’t bother.
— Strategic Planning, Bain & Company, 2015
- Remember Alice in Wonderland: “I just wanted to ask you which way I ought to go?”
- The Cheshire cat: “Well, that depends on where you want to get to.”
- Alice: “Oh, it really doesn’t matter, as long as I…”
- Cat: “Then, it really doesn’t matter which way you go.”
Create a Strategic Planning Session
While participating in and facilitating a number of strategic planning sessions, I have learned engagement is enhanced when the attendees are given a road map to follow in the planning process. In addition, people contribute more when they understand that there is accountability, follow-through and celebration.
The process can be fun, educational and create synergy among team members. Yes, strategic planning can be ALL that while ultimately increasing team satisfaction, client service, patient care and profitability (WOW!).
Step 1: Get Organized
After the need for a strategic plan and the participants have been identified, set a time (roughly three to four uninterrupted hours) and location for the collaboration. Provide materials to support the process (defining mission, values and vision statements, current budget, current statistics and any survey results). Identify a facilitator (either from within the clinic or an outside person).
One tool for objective evaluation is through a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). Have the group consider what is working well, what needs improvement, what opportunities or untapped resources are available and what possible challenges might there be. Establish ground-rules supporting innovation and creativity.
Step 3: Think BIG! Be BOLD!
Ensure the time in planning is creative, inventive and an option to explore what can be. Yes, the facilitator will help the team consider the current circumstances (where we are), but the focus is on the FUTURE and what can BE. Test assumptions, be creative and “throw it all out on the table” for exploration.
Step 4: Generate a Plan
Define the format in which to work. SMART Goals or Fill in the Gaps are ways to create a plan. I prefer to help the team determine where they are (tangible, with current stats) and where they want to be (without boundaries in creativity), then fill in the gaps (how to make it happen with outline of resources). Use SMART Goals to establish champions (lead people), time frames and measurements guidelines.
Step 5: Execute
Teams may be over zealous in their commitments to “get ‘er done.” Set them up for success by focusing only on a few objectives at a time. Small successes lead to BIGGER ones!
Management should continue to work with the champions, establish “check-in” points and continually offer resources and support in obtaining the goal. While carrying out the goals, obstacles or opportunities may arise that alter the course. Regroup as needed to ensure the project continues to move forward.
Step 6: CELEBRATE!
A valuable aspect of strategic planning is recognizing when a goal or project has been accomplished and acknowledge it. Determine ahead of time how to celebrate and DO IT!
Earlier, the statement indicated small businesses with a mission and strategic plan had an increased revenue of 10-12%. Why does that occur? Simply because the team has a focused path and a common purpose.
Well designed and executed strategic planning session with a diversity of individuals create engagement, understanding and enthusiasm for the goals (in my experiences). Buy-in occurs when team members feel like part of the process and are valued for their ideas.
To track profitability, the management team must have a solid understanding of the current financial position and hospital statistics such as client retention and loss, and average daily transitions.
Then Key Performance Indicators (KPIs) should be identified which they can then track over the next 12 months. Four examples of KPIs worth tracking are client satisfaction, revenue, inventory and client retention.
Identify goals that are tangible and measurable. As an example, “We want more clients” is a good goal, but not measurable. “We want to retain 90% of our current clients and grow the client base by 10% over the next 6 months.” Now that’s a great, measurable goal!
You GOT this!
Taking the time and energy to define a strategic plan leads to an abundance of benefits. The people involved and the way the process is initiated is flexible. Finally, there are many tools available to assist in the development of an effective strategic plan. By following through with the goals and tracking KPIs, you too can grow your practice.
It all adds up to a functional, defined path that will take the team in the best direction. After all, to quote from George Harrison’s song “Any Road,” “If you don’t know where you’re going, any road will take you there.”
Yours in Planning for Profit!
Rebecca Rose, CVT
How CATALYST VetPC can help with your strategic planning. https://catalystvet.wpengine.com/expert-consulting/strategic-planning/
7 Benefits of Strategic Planning, Strategic Management Resources, Helen Mitchell, 2006. https://strategicmgmtresources.com/7Benefits.html
Strategic Planning, Bain & Company, June 10th, 2015. https://www.bain.com/publications/articles/management-tools-strategic-planning.aspx
Select your Strategic Planning Team, Eric Olson. https://www.dummies.com/business/business-strategy/select-your-strategic-planning-team/
How to do a SWOT Analysis for Your Small Business (with examples): https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis