Have you ever had one of those weeks where your conversations all seem to be about the same type of issue, converging on one theme or course of action? Well, I just experienced one of those weeks. Then again, it could be the way my mind works, as I continually look for links and connections. Whatever the case, I experienced a very interesting convergence of situations which I believe is was worth sharing. The week began by talking with one of our consultants, Stan. He is working with a client that helps companies optimize the benefits of SharePoint. We are helping this client on several fronts, so the conversation lasted a little longer than usual. Before he signed off, Stan told me how impressed he is with SharePoint‘s ability to improve communication, collaboration, and productivity for the enterprise.
A few days later I was talking with another consultant, Paul, regarding his progress marketing an integrated program/project management software product. This SAAS product provides a comprehensive solution for franchisers to better manage its business development program. The program enables management to easily determine the company’s progress toward meeting their goals and gaps at every stage in the process.
Convergence occurred when I remembered a conversation the prior week with another consultant, Faith. She had told me about an adverse situation created when a patient received a new heart, but the system hadn’t been updated to reflect the candidate’s eligibility for a transplant. That breakdown in the process created a question as to who’s responsible for the $1.4 million approximate costs of the procedure. Faith explained that this glitch was an administrative error as the candidate still needed the heart and was qualified to receive the transplant, however, an updated authorization wasn’t secured. I can only imagine how bad the situation could have been if the patient had died, prevented from receiving the transplant due to an administrative mistake. It occurred to me that the system has a fundamental flaw that can be mitigated with a technical solution. Faith continued by providing an overview of additional risk and complexity created by Federal Agencies and Laws regulating the Health Care Industry.
Federal Agencies and Laws regulating the Health Care Industry
- Equal Employment Opportunity Commission (EEOC) and Health Care
- Department of Labor and Health Care
- Americans with Disabilities Act and Health Care
- Homeland Security and Health Care
- Occupational Safety and Health Act (OSHA) and Health Care
The mandate of the EEOC is to facilitate good management by ensuring that employment decisions are unaffected by discrimination. Toward this end, hiring decisions, performance reviews, pay and benefits packages, and other employer offerings should exclude consideration for race, sex, age or religious affiliation (Gómez-Mejía, Balkin, & Cardy, 2016).
The Department of Labor (DOL) mandates that employers are responsible for scheduling, recording and reporting hours worked; including pre- and post-shift duties, scheduled travel time from job site to job site, or travel time related to training or on-site client meetings. Wages and deductions for all hours worked must be monitored and reported. Overtime must be paid for hours worked exceeding 40 hours in a 7-day workweek.
The American with Disabilities Act (ADA) prohibits discrimination against individuals with disabilities. The original bill was passed in 1990 and amended in 2008 with clarifying definitions. If the applicant or employee is qualified for ADA purposes, reasonable accommodations must be made for the employee. ADA provides guidance as to when and how applicants or employees may be asked about their medical condition or requirements for a medical examination.
Homeland Security relies on the health care community’s readiness to respond to disasters, natural or man-made. Preparedness depends on staffing and training.
The Occupational Safety and Health Act, (OHSA) was passed in 1970 in response to the deaths of 78 coal miners working under questionable safety conditions. Medical practitioners are exposed to a wide range of workplace hazards. Today, the health care and social assistance sectors experience more worker injuries and illnesses than any other industry.
These regulatory requirements, whatever the justification or good intentions, have injected additional complexity and risk into the Health Care Industry. Failure to comply with these regulations may result in fines, litigation costs, lost contracts, and damage to brand equity. Proactive expenses include continuing education to help employees stay current with relevant changes in laws and regulations. Ignorance is no excuse for non-compliance and it can be costly.
In years past, we were left to devise elementary processes to ensure compliance with legislation and its mandates. Today, however, we have powerful technological alternatives. More to the point, technical solutions are readily available to help minimize risk and ensure compliance. Share Point is one of several tools worth consideration. The question is how to know which application to select? This is where professionals can be of tremendous value. Credentialed, seasoned experts are available to advise us on evaluation, selection, and the implementation of alternative platforms. A professional fee for services is much less costly than a civil crime for a legislative error.
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Jim Weber, Managing Partner
ITB PARTNERS
Last week, one of my clients filed for Chapter 11 Reorganization. Now, two of my clients are in Chapter 11, working to find a path back to solvency. In April, I was engaged by a new client to help them find a way out of Chapter 11. In the case of the two former clients, I can honestly say that I wasn’t responsible for the circumstances leading to their demise. In other words, I didn’t place any executives who caused these problems, and I haven’t been involved in consulting projects that resulted in adverse consequences. To the contrary, I placed an executive to help one client navigate through Chapter 11. Regarding the other client, I placed an executive to help them avoid business failure. Regrettably, Senior Executives sometimes fail to heed sound advice. In each of these situations, failure was predictable. Management failed to adequately penetrate their home markets before moving into new territory.
I’ve witnessed the results of many crazy decisions during my career. Some noteworthy situations include an ice cream brand selling franchises beyond their distribution capabilities. Or a California-based brand that tried to move into the Southeast with a single location. I’ve seen Southeastern brands sell franchises on the West Coast, thousands of miles beyond their management reach and distribution network. A Northern barbecue chain leap-frogged into Georgia with a few restaurants placed across the state. That decision was funny, in a sad way, as barbecue has a distinct regional appeal. Another brand added drive-throughs to dogs with the hope of turning them into profitable restaurants. Sadly, they created dogs with a drive-through. From my perspective, the most egregious yet consistent mistake is the urge for start-ups to enter new markets before adequately penetrating their home base. To be sure, many of those mistakes were made by rookies, entrepreneurs lacking experience or solid advice. However, these mistakes continue to be made by experienced leaders who should know better.
I can speak with authority on this subject as I spent most of my career working on retail expansion. I began my career as a financial analyst assigned to the new store development group. In this role, I performed analytical work on capital expenditures for new stores and other investments. I learned how to evaluate the prospects for a new store, and the penetration required to optimize the return from a larger market, i.e. city, SMSA, or region. I became a strategic analyst and planner shaping retail store development strategy for several national brands. Finally, I held general management positions where I was accountable for return on investment. In fact, one of my first assignments as a senior executive was to identify and prioritize markets for focused development. As a result, I am confident in my ability to build a retail brand, especially, food-service brands. I appreciate the value of achieving significant market share before developing new markets. Believe me, engaging in the development of a new market, before adequately developing a home market can be fatal to a business, especially so for a start-up.
So, if significant penetration of a home market is fundamental for success, why does management continue to violate this well-established rule? Over the years, I have asked this question of countless CEOs, CFOs, and Chief Development Officers. The only consistent response is “sometimes, management becomes so enamored of expansion that sound business practices are ignored.” Imagine, human emotions getting the better of Senior Executives. Who knew? The only solution is to hire accomplished retail development executives, among others, who won’t hesitate to tell the “Emperor that he has no clothes.”
We have advisors and coaches in all facets of life. But in this most important area for our future, for our family and for our retirement, most business owners are pretty much just “winging it”. Oh, they may have an accountant but not much more of a team to focus on exit planning in all its complexities. An advisory team is critical for successful succession planning.
As the primary business reason for our meeting was to discuss his presentation, we got right into that topic. Paul wanted to know how to position his talk as the audience wouldn’t be his typical prospects. I told him that there were two main points to consider. First, the members want to learn about him. They want to know his background and how he came to be involved in his current situation. Secondly, they want to know about his employer and the product he’s selling. I said, “keep the discussion at 40,000 feet.” They don’t need to get into the details, they just need enough information to make good referrals. Also, I told him that I had adopted the 
Having heard of Paul’s recent successes, I reminded him that we are prepared to leverage his efforts through our social media and public relations platform. He said he had forgotten about those benefits. So, I spent the next few minutes reminding him about our capabilities. He was sold. My thoughts moved to other possible referrals. By the end of our conversation, I had a long list of connections to make on his behalf.
Jim Weber has completed the first phase of a Turnaround Management Engagement for a client in Chapter 11 Reorganization.
