Latest / Build Your PT Clinic with Bryan Wright, DPT / Business Is Hard Until You Build Systems Like This

Transcript

Business Is Hard Until You Build Systems Like This · Build Your PT Clinic with Bryan Wright, DPT

• 0:00
  SPEAKER_00: As doctors of physical therapy or clinicians of any sort that you might be, we're used to measuring things.
• 0:06
  SPEAKER_00: In PT, we measure range of motion, strength, pain, function, whether somebody's actually following their home exercise program, because we want to know whether what we're doing is actually working and whether the patient is moving in the right direction.
• 0:19
  SPEAKER_00: But when it comes to operating a company, many people don't measure the business with anywhere near that same kind of discipline, or they actually are measuring the wrong numbers.
• 0:28
  SPEAKER_00: And if you think about it, we know how every patient is progressing.
• 0:31
  SPEAKER_00: But if I ask you what your profit margin is today, or whether visits per clinician are moving up or down, where the referrals are trending, you may have a general sense of it, but not actually know those numbers.
• 0:43
  SPEAKER_00: And I see this all the time.
• 0:44
  SPEAKER_00: When you're a smaller company, you might be able to get away with that because you're in the building and you can see everything in the building.
• 0:51
  SPEAKER_00: But as your company grows, that gets harder.
• 0:54
  SPEAKER_00: And eventually you can't run the business based on what you personally happen to be noticing or seeing.
• 0:59
  SPEAKER_00: And really, you don't want to do that because then everything turns to you instead of where it should turn to.
• 1:05
  SPEAKER_00: I'm Brian Wright.
• 1:06
  SPEAKER_00: I'm a doctor of physical therapy by training.
• 1:08
  SPEAKER_00: And I took one physical therapy clinic and grew it to more than$50 million company with 21 locations and growing.
• 1:15
  SPEAKER_00: And one of the things I had to learn as we grew was how to take what I used to live, what used to live in my head and make it visible to other people so they could see what was happening.
• 1:26
  SPEAKER_00: They could make decisions that were based on their role and actually take ownership without waiting for me.
• 1:32
  SPEAKER_00: That's what I want to show you in this video.
• 1:34
  SPEAKER_00: What I put on our enterprise scoreboard, how we use it, and why it becomes so important as you're trying to build a practice that doesn't depend on you seeing everything yourself.
• 1:42
  SPEAKER_00: And this is where we really build margins.
• 1:45
  SPEAKER_00: We build margins in time and energy and money by doing this.
• 1:48
  SPEAKER_00: When you're in one clinic every day, you're actually taking in an enormous amount of information without even realizing you're doing it.
• 1:55
  SPEAKER_00: You might notice when the schedule looks a little lighter than it did a few weeks ago.
• 1:59
  SPEAKER_00: And you might run up to the front desk to stare at the computer with your front desk people.
• 2:03
  SPEAKER_00: You know which therapist is getting busy and which one has openings.
• 2:06
  SPEAKER_00: You hear what patients are saying at the front desk and you know which referral sources have been sending people.
• 2:11
  SPEAKER_00: And if somebody on the team isn't doing well, there's a pretty good chance you're going to feel that before it ever shows up in a report.
• 2:18
  SPEAKER_00: There's value in that, especially when you're a smaller company.
• 2:22
  SPEAKER_00: But there's also a problem with it because all that information is sitting in one place, which is your head.
• 2:28
  SPEAKER_00: And I like to tell people, if you're in your head, you're dead.
• 2:30
  SPEAKER_00: If you're the only person who can look at the business and understand how it's doing, then you haven't really created a business or a system for managing performance.
• 2:39
  SPEAKER_00: You've created a system that depends on you and your ability to be present and notice things.
• 2:45
  SPEAKER_00: In the end, that's basically like being enslaved.
• 2:48
  SPEAKER_00: And of course, that kind of works until it actually doesn't anymore.
• 2:52
  SPEAKER_00: You'll add another clinician, then another location, and eventually you can't be everywhere often enough to maintain the same level of awareness.
• 3:00
  SPEAKER_00: This is why owners need to start building instrumentation into the business before the need actually arises.
• 3:06
  SPEAKER_00: Now hear me say this again.
• 3:08
  SPEAKER_00: You want to build that instrumentation before the need gets too heavy.
• 3:11
  SPEAKER_00: And I am adamant about this.
• 3:13
  SPEAKER_00: One analogy we can use here is flying a plane.
• 3:16
  SPEAKER_00: If you're flying in a clear weather situation over an area you've actually known extremely well, you can look out the window and you can get a pretty good sense of where you are.
• 3:25
  SPEAKER_00: But the instruments are what allow you to understand what's happening when you don't personally see everything.
• 3:30
  SPEAKER_00: It might be foggy or cloudy or even dark outside.
• 3:33
  SPEAKER_00: One of my clients, just this last hour and I talked about this.
• 3:37
  SPEAKER_00: He was flying home this weekend and he needed instrumentation to bark at him when he was within 50 to 500 feet of the mountains.
• 3:44
  SPEAKER_00: He actually couldn't physically see the mountains, and so he needed to have instrumentation to tell him, hey, you're getting too close.
• 3:50
  SPEAKER_00: And he told me it was a little bit scary, but thank goodness for the instrumentation.
• 3:53
  SPEAKER_00: Your business means the same thing.
• 3:55
  SPEAKER_00: And when I say that, people sometimes tell me they already have a financial statement or they're looking at their PLs every month, which is great, that's important, but that's not really what I'm talking about.
• 4:05
  SPEAKER_00: Your PL, your profit and loss, is largely telling you what has already happened financially.
• 4:10
  SPEAKER_00: It's in the past.
• 4:11
  SPEAKER_00: And depending on when you're reviewing it, you may be looking at something that started changing several weeks before it even showed up there.
• 4:18
  SPEAKER_00: I want you, and I want to know also what's happening further upstream.
• 4:23
  SPEAKER_00: And I want you to think about what that would do for your business and your own personal sense of well-being.
• 4:29
  SPEAKER_00: If something changes with patient behavior or clinician capacity, referrals, or another operating number, eventually that's going to work its way through the company and show up financially.
• 4:39
  SPEAKER_00: But if you don't know why it showed up financially or where, you can't fix it.
• 4:42
  SPEAKER_00: All you can do is stress about it.
• 4:44
  SPEAKER_00: I'd rather see the change while we still have time to understand what's causing it and actually do something about it.
• 4:49
  SPEAKER_00: That is what a good enterprise scoreboard is for.
• 4:52
  SPEAKER_00: Now, think about this.
• 4:54
  SPEAKER_00: The exact numbers you track are going to depend somewhat on the business.
• 4:57
  SPEAKER_00: And it's going to depend on the market and the payer mix.
• 5:00
  SPEAKER_00: So I don't want somebody who's watching this to think that there are five magical numbers and every PT practice in America has to use exactly the same ones.
• 5:10
  SPEAKER_00: There are, however, a few categories I think that are very useful.
• 5:14
  SPEAKER_00: The first one that I think you should measure is capacity.
• 5:17
  SPEAKER_00: I want to understand how many people were capable of serving well and how much of that capacity we're actually using.
• 5:23
  SPEAKER_00: So I'm looking at things like total visit volume and visits per full-time clinician.
• 5:30
  SPEAKER_00: We call it visits per clinical FTE.
• 5:32
  SPEAKER_00: Those actually tell me different things, but they're related to one another and they tell me a lot at a distance or up close.
• 5:40
  SPEAKER_00: You can have a clinic doing a lot of visits because you've got a lot of clinicians, but that doesn't necessarily tell you whether the clinicians themselves have healthy schedules.
• 5:48
  SPEAKER_00: So I want enough information that I can actually see what's happening underneath the total number.
• 5:54
  SPEAKER_00: I like to call it what my music teacher told me when seeing no louder than lovely.
• 5:58
  SPEAKER_00: It just means only measure what's needed to actually make things beautiful.
• 6:01
  SPEAKER_00: The next thing I care about is what's happening with the patients once they're on the schedule.
• 6:06
  SPEAKER_00: And one of the numbers I like looking at is their percent arrival or their arrival rate.
• 6:11
  SPEAKER_00: What percentage of the people who are scheduled to be there actually are showing up?
• 6:16
  SPEAKER_00: I think it's a very important and interesting number because there's a lot wrapped up in it.
• 6:20
  SPEAKER_00: I think there's quality wrapped up in it, I think there's engagement wrapped up in it.
• 6:24
  SPEAKER_00: If patients are consistently showing up and following the plan of care, that's telling you something about how engaged they are in the process.
• 6:30
  SPEAKER_00: And it's telling the physician that referred them a lot too.
• 6:33
  SPEAKER_00: If that number starts moving in the wrong direction, I actually want to understand why.
• 6:37
  SPEAKER_00: I don't want to guess, I don't want to feel like it's the weather.
• 6:39
  SPEAKER_00: I want to take responsibility for that.
• 6:41
  SPEAKER_00: Then I want to understand whether the work we're doing is sustainable and whether the practice is continuing to generate demand.
• 6:48
  SPEAKER_00: So I'm going to look at things like new patients per clinical FTE and also referrals.
• 6:54
  SPEAKER_00: Again, the point isn't that you're only looking at numbers that you're going to track.
• 6:58
  SPEAKER_00: These aren't the only ones that you're looking at.
• 6:59
  SPEAKER_00: You're going to look at other ones.
• 7:01
  SPEAKER_00: The point is that I want a small enough group of operating numbers that somebody can look at in the enterprise scoreboard and get a pretty good sense of what is happening in the clinic before it becomes a financial surprise or a team surprise.
• 7:13
  SPEAKER_00: I need optics on the business, just like if you were flying an airplane.
• 7:17
  SPEAKER_00: And that's where people sometimes make this more complicated than it needs to be.
• 7:22
  SPEAKER_00: You don't need 50 numbers.
• 7:24
  SPEAKER_00: You don't need 40 numbers.
• 7:26
  SPEAKER_00: No louder than lovely.
• 7:27
  SPEAKER_00: If you've got 50 numbers on the scoreboard, there's a good chance people won't know which ones they're actually responsible for improving.
• 7:34
  SPEAKER_00: You see, I would much rather have a small number of meaningful metrics that we understand, review consistently, and can actually do something about than have a whole slew of numbers that we can't do anything about and just stress out about.
• 7:47
  SPEAKER_00: If you were a PT owner, clinician, or otherwise another practice owner trying to build a company that can grow without requiring you to personally monitor everything, hit subscribe.
• 7:58
  SPEAKER_00: That's a big part of what I want to help you think through on this channel.
• 8:01
  SPEAKER_00: Once you've understood the numbers, you need to measure the next part.
• 8:05
  SPEAKER_00: And that's what actually turns the scoreboard into a management system that you and the team members that you empower can use.
• 8:12
  SPEAKER_00: I like to say you inspect what you expect and you can't expect what you don't inspect.
• 8:18
  SPEAKER_00: Same thing said different ways.
• 8:20
  SPEAKER_00: If you've told the team something matters, but you never look at whether it's happening, then over time it's very difficult for that thing to remain important to the team.
• 8:28
  SPEAKER_00: So I like to have a consistent rhythm around that scoreboard.
• 8:32
  SPEAKER_00: For the operating numbers, I want to look at them roughly weekly.
• 8:35
  SPEAKER_00: And I say roughly weekly because that's my current cadence for that.
• 8:39
  SPEAKER_00: It can be different for you.
• 8:40
  SPEAKER_00: It doesn't need to become an hour and a half meeting where everybody gives me a report or gives the leads the report.
• 8:47
  SPEAKER_00: It can be 20 minutes, same day, same time each week, because it's a cadence of accountability with those numbers already prepared before the meeting starts, because that's what we're trying to do is to get everybody looking at the same information they need to and asking whether they're on track within their department and the role that they have, whether we're not on track, and what are the available solutions if we're not on track.
• 9:09
  SPEAKER_00: Then about quarterly, I want to step back and look at the big picture, the large pattern.
• 9:14
  SPEAKER_00: At that point, I'm less interested in whether one week was unusually good or bad.
• 9:18
  SPEAKER_00: And I'm more interested in what the last several weeks are telling us about the business and whether there's something we need to change.
• 9:24
  SPEAKER_00: But here's where I think this becomes much more important than simply having better data and looking at it.
• 9:30
  SPEAKER_00: Once those numbers are visible to the relevant team members, accountability actually works differently.
• 9:35
  SPEAKER_00: And this is something I want to slow down and help you really think through.
• 9:39
  SPEAKER_00: If the numbers only live in my head or your head and they're buried in a spreadsheet that only I look at or you look at, then when I sit down with a clinic director and tell them something isn't going well, that conversation can very quickly feel like Brian's opinion about their performance.
• 9:55
  SPEAKER_00: It becomes a little more subjective and a little less objective.
• 9:58
  SPEAKER_00: I know.
• 9:59
  SPEAKER_00: I know what I've been seeing.
• 10:01
  SPEAKER_00: They know, and they know what they've been seeing.
• 10:04
  SPEAKER_00: And now we're spending half the conversation trying to agree on what's actually happening.
• 10:08
  SPEAKER_00: Them versus Brian.
• 10:09
  SPEAKER_00: When we're both looking at the same scoreboard every week, we have a shared picture of reality.
• 10:15
  SPEAKER_00: And that's worth its weight in gold.
• 10:17
  SPEAKER_00: Now, the clinic director doesn't need to wait for me to tell them that their arrival rate is moving in the wrong direction and not hitting benchmarks.
• 10:24
  SPEAKER_00: They can see it.
• 10:25
  SPEAKER_00: I can see it, everybody on the team can see it.
• 10:27
  SPEAKER_00: They can start asking why it's happening, and there can be lateral accountability rather than vertically based babysitting.
• 10:33
  SPEAKER_00: They can talk to the team and make educated adjustments and observe what happens to those KPIs, what we call key performance indicators.
• 10:41
  SPEAKER_00: And they can take responsibility for improving it without me having to insert myself into the middle of the process.
• 10:47
  SPEAKER_00: That's really where the value of the enterprise scoreboard that Pilot North built starts to show up for owners.
• 10:53
  SPEAKER_00: And you don't have to have our enterprise scoreboard.
• 10:56
  SPEAKER_00: It's just been a great tool for me.
• 10:58
  SPEAKER_00: If you want to give somebody responsibility, they have to be able to tell whether the thing they're responsible for is getting better or is it getting worse.
• 11:06
  SPEAKER_00: Otherwise, you haven't really transferred ownership of it.
• 11:09
  SPEAKER_00: You've just held on to the responsibilities, but you've given them the rights.
• 11:14
  SPEAKER_00: You're still monitoring it yourself, checking in, asking questions, and deciding whether they're doing a good job, which means you are still carrying the responsibility, even though somebody else's name and rights are attached to it.
• 11:26
  SPEAKER_00: When you give somebody a clear outcome, a number that helps them understand that outcome and a consistent place where everybody can look at it together.
• 11:34
  SPEAKER_00: Now they have the ability to manage something without waiting for you or me or whoever to come tell them what you've noticed.
• 11:42
  SPEAKER_00: And that's how you start getting yourself out of the middle of the company, being torn between so many different priorities.
• 11:49
  SPEAKER_00: And I think that's the larger point here.
• 11:50
  SPEAKER_00: An enterprise scoreboard isn't valuable because I particularly enjoy looking at a bunch of numbers.
• 11:56
  SPEAKER_00: And I don't think the goal is to turn a practice or a company into a place where everybody spends their life staring at dashboards.
• 12:04
  SPEAKER_00: In fact, the reason we look at them is so that we can do the meaningful work.
• 12:07
  SPEAKER_00: The goal is to take important information that used to exist primarily in the owner's head and make it visible enough that other people can use it to make good to great decisions.
• 12:18
  SPEAKER_00: Because the more of the company that only exists in your head, the more of the company is going to need you.
• 12:24
  SPEAKER_00: And if you're trying to build something that can eventually operate beyond your own individual capacity, that information has to start moving out of your head and into systems that other people can actually use.
• 12:36
  SPEAKER_00: That's the magic.
• 12:37
  SPEAKER_00: That's the magic of building a business where you can build margins and time, energy, and money for yourself and have it serve you and not the other way around.
• 12:44
  SPEAKER_00: So if you don't have an enterprise scoreboard today, don't go build some giant dashboard with 37 different KPIs on it.
• 12:51
  SPEAKER_00: As an important side note, we have created a very valuable enterprise scoreboard in Pilot North that helps all of our partners.
• 12:57
  SPEAKER_00: You can also start by picking a couple of operating numbers that actually tell you something useful about the health of your company or your clinic.
• 13:06
  SPEAKER_00: Put them somewhere the people responsible for them can see them and start reviewing them consistently each week.
• 13:12
  SPEAKER_00: Then the next step is to pay attention to what happens to those conversations.
• 13:16
  SPEAKER_00: Instead of you walking into a room and telling somebody or everybody you think something's going wrong or right, you can both look at the same information and start figuring out what needs to happen next.
• 13:28
  SPEAKER_00: And over time, that's actually how you begin transferring real responsibility to other people.
• 13:32
  SPEAKER_00: Instead of just simply delegating tasks and continuing to supervise everything yourself.
• 13:38
  SPEAKER_00: That's an exhausting process that you don't have to do.
• 13:41
  SPEAKER_00: And if you're thinking about the financial side of all this, I encourage you to watch this next video on a different way that practices can actually pay their owners because most owners are only thinking about one of them.
• 13:54
  SPEAKER_00: And the strength of the underlying business is what determines which of the other types of payment are available to you.
• 14:01
  SPEAKER_00: I'll see you there.