Reduce Repeated Financial Losses in Your Business By Using The Experimental Method

I enjoy my work with people. Learning together with my clients is at the top of my list. My role as a coach is different from my client’s role running her business. My view is from the outside and her view is from the inside; and both are working to make the business better. A way to make the business better is testing ideas through measureable actions, in other words we experiment. This allows us to analyze the results of our actions, to stay the course, modify our direction and stay away from behavioral traps. I describe a behavioral trap as taking action without a clear purpose, without gathering measurable data and working harder pursuing the same unclear direction. An example of this scenario is a manager “trapped” hiring only people with experience. Who’s to say if the experience is beneficial, detrimental or somewhere between these two outlying points. Often people’s previous experience can be a hindrance to a new position, because they often have to “unlearn” unproductive previous habits. If we look at working people from a statistical perspective half of them are above the mean and half below.  How do you know if you are hiring people from the positive side or the negative side of the bell curve? So, most of time I see an ad for employment opportunities that highlights “experience needed” I question the operational skills of the employer.

Framing our actions in an experimental structure reduces wasted time, energy and expenses. Designing projects as experiments does not mean telling people how they “should” be running her organization or what’s right or what’s wrong. It does mean introducing processes and scientific principles assisting people in making better decisions.

Your goal is not to conduct an academic experiment. Your goal is to use a proven, organized method to test your business ideas, adjust them to make them better and grow your business with increased revenues. Let’s look at the component parts of this method and couch them in a business setting. My mother just passed away in her 96th year. She purchased long-term care insurance by paying significant annual premiums over a 25-year period. About 4 years prior to her death she required in-home care to live safely. The process to complete the necessary forms to receive the insurance payments provided through the long-term care policy required meticulous organization, bookkeeping, monitoring and follow-up. It was impossible for my mother to accomplish this insurance work in her condition. I learned long-term care insurance is a good idea, but collecting on it when you need it is another matter.

Caring for my mother over the years provided me with insights into the business of long-term care. In-homecare is a booming business, however the majority of the agencies are smaller businesses struggling with hiring, training, sales and profitability. Long-term care facilities understand the insurance game, work with the families to see if they have insurance and work with the insurance companies to collect payments for the care they provide. Many of the in-home care companies miss this opportunity for increasing their revenues and providing better service to their clients.

This market is a growth market, getting stronger everyday. How can these small businesses increase their value to their clients, grow their revenue and strengthen profits? The complexity of healthcare, the expense of in-home care and the work it takes to successfully manage these family life stages provides these businesses with opportunities for growth and profitability. Business and life in general, is chocked full of daily challenges. These challenges can easily lull us into focusing on firefighting at the expense of establishing strengthening processes resulting in additional profitability and health of the organization.

Managing is an active endeavor. There is nothing wrong with being in the middle of the action “doing.” In fact, it is important to be an active manager. The question is, “What are you doing?” An effective manager creates an environment for other people’s success. Unfortunately, we usually default to what we know, and most managers’ default is focused on what they learned as an individual contributor. An individual’s success is predicated on personal achievement, political acumen and luck - energy is primarily focused on oneself.

How do I create an environment for other people’s success? My success is now predicated on this one specific task! What do my teammates need and what do they want in order to increase the profitability of our business? When dealing with in-home health care we have an exploding market and we are often being squeezed, because of limited revenue sources. Our clients face the confusion of a sudden change in their lives caring for a loved one. The elderly person is no longer able to manage his household and finances. It is going to be expensive for the last years of your loved one’s life and what strategies can home healthcare businesses implement to solve customer problems, ease their pain and enrich their lives?

How can many of these smaller businesses providing in-home healthcare add more value to their communities and build more financial strength in order to prosper. I propose the leaders in each company get together to run an experiment.

  1. Discussion with you, local managers and staff regarding the Hypothesis: what do we want to test? In this case they decided, “Many clients struggle with completing the paperwork needed to collect long-term care insurance payments.”
     
  2. Plan the action steps, with the team, that we are going to use to run the experiment
    a.) The management team creates questions to ask current clients “What their experience has been dealing with long-term care insurance providers.”
         i. Completing daily forms
         ii. Submitting forms to insurance company
         iii. Tracking the progress of the forms
         iv. Resolving issues with forms
         v. Reconciliation of payments
    b.) The managers schedule meetings with clients. Asks clients which steps of the process create problems and how much money is it costing you?
    c.) Manager and staff people meet to review the data collected, determine if they require more information in order to test hypothesis. Next steps?
     
  3. Data collection: each one of the experimental actions generates measureable results. For example:
    a.) Who provided input to build the questionnaire?
         i. What was the process, who participated and what were the questions?
    b.) How many people/families did you interview? What were their answers? What questions did they ask that you didn’t anticipate?
    c.) Create a method to analyze the data you collected.
     
  4. Now use your data to support or refute your hypothesis.

The advantages of using this method are you always learn and get better. You structure a process so you can constantly measure your actions, identify areas of success/problems; and adjust your future actions based on data and stay away from unprofitable, self-centered judgments. As the management master Peter Drucker said,

“If you can’t measure it, you can’t manage it.”