I have a close group of women friends, we call ourselves the Akimbo Sisters.  We’ve known each other since grade school and get together as often as we can in spite of the fact we are scattered all over the country.  Thankfully for email we do keep in regular contact. 

I want to share the transcript of a recent email stream between the 6 of us:

MD:  Does anyone remember “John Doe” from high school?  He contacted me through Facebook and I don’t remember him.  CC, he says he was in French class with us.

DW:  He’s probably a serial killer.

CC: I took French?

JM:  I don’t remember him, but I don’t remember you either.

MD:  Who are you?

JP: He’s probably a serial axe murderer.

PB: It’s difficult for me to get into this discussion because I took German.  But my question is, has anyone seen him?  Is he a handsome serial axe murderer?

Yes, we are all sales people, every single one of us.  We sell ourselves, our products, our talent, our credibility every day.    I thought this was a great article, especially number 7.  Talk to your front office staff about number 7.  It could help how they view their jobs.

“Selling” can sound harsh and pushy especially if you do not see yourself as being in sales.  Sales is mostly about building relationships and trust.

The link is from RainToday.com

http://www.raintoday.com/pages/6598_7_bad_habits_of_highly_unsuccessful_sales_people.cfm

I was asked by an associate veterinarian recently if it was common practice to exclude the revenue from dental cleanings (prophy’s) from the formula for calculating compensation in a production based salary. My reply was “absolutely not!” The reason this associate was asking was because the practice owner where he worked had decided, based on an article published in Veterinary Economics, to do just that. The practice owner stated that because the tech performed the prophy, the doctor should not receive credit for it.

I was curious as I did not recall ever reading such an article. So I went back to the magazine archives and…well, there it was. An article written in 2008 stating that “doctors should receive production pay for services and products they directly provide, supervise or sell…. except prophylaxis, which the technician handles.”

I cannot disagree with this more.. let me list just a few of the reasons why:

First, it is not an easy task to convince a client that they should spend many hundreds of dollars to clean their pet’s teeth. In fact it can be such a daunting task that many veterinarians don’t even try for fear they get accused of “just being in it for the money”.  It is not the tech who advises the client about treatment recommendations, it is the doctor.

Secondly, and most importantly, a veterinary tech does not have the training to act as an independent provider of care, ever. They always function under the license of the supervising veterinarian.

A vet tech is not a physician’s assistant or a nurse practitioner or a dental hygenist or a registered nurse. I fear that may be the analogy the author of the article in Veterinary Economics was making and that is flat out wrong.

Thirdly, the supervising veterinarian must be immediately available to intervene during a prophy should there be a medical emergency. That means the supervising veterinarian is prohibited from generating other revenue while the prophy patient is on the table and under anesthesia.

Following the recommendation in that Veterinary Economics article means that the associate is not receiving compensation for a procedure they recommended and they are not able to pursue other avenues of compensation during the time the procedure is taking place.

Withholding associate compensation for prophy’s is simply wrong and a misplaced attempt to generate practice income.  If your fees are set properly, your expenses managed properly and you respect the associates who work for you, you will never need to even consider an idea like this.

This is sometimes a difficult concept to understand. I’ve found that many people can’t wrap their head around the ground level, or the “what does it mean to me”, connection between low inventory turnover and cash flow.  Hopefully, a short explanation will help shed some light on why poor control can cost so much.   

What is inventory turnover?  Simply stated, inventory turnover is the number of times you buy and sell a product in a year.  If you buy one 40 lb bag of that very special diet food, artichoke and woodchuck, and sell that one bag within a year, your turnover ratio = 1 for that item.

A caveat:  Some consultants state that a practice should have “$ x.xx of inventory on hand for each veterinarian fte”. Frankly, I think that’s balderdash and it encourages poor management.   Your practice should have on hand the exact amount of inventory that you will sell and/or consume in about 6 weeks of typical activity, whatever that amount may be.  Obviously, the amount of each individual item will depend on several variables such as: availability of the product, the delivery time of the item when re-ordered, the urgency of the need of the product, and deferred payment options, among other considerations.

Consider this example:

On January 1st you buy $10,000 worth of widgets that you mark up 100%. You sell this inventory over the course of one year for $20,000.  That results in a $10,000 gross profit,  a 100% return and the turnover ratio = 1 because you placed only one order during the year for a $10,000 investment.

But what if you had purchased $5,000 worth of widgets on January 1st and $5,000 more on July 1st? You have the same sales volume during the year, $20,000, the same gross profit of $10,000 but now you experience a 200% return!   And your turnover ratio = 2 because you placed two orders during the year for a $5,000 investment. You used the same $5,000 to purchase the widgets in July that you used in January (remember you sold the January products by July at a 100% markup?)

And if you purchased $2,500 worth of widgets every 3 months? Your return would be 400%, gross profit of $10,000, inventory turnover ratio = 4, total investment of $2,500.

Your cash flow gets incrementally better the more times you order, and sell, during the year.  In the example above, with a turnover ratio of 1, you took $10,000 out of your cash reserves in January and tied it up all year.  However, by simply purchasing less of the item more often (turnover ratio of 4) you were able to accomplish the exact same thing but tied up only $2,500 of your cash during the same period.

The bottom line is to think of inventory as if it were cash.  Because, well, it is.

Remember that classic line by Peter Finch in the movie “Network”?  I’m reminded of it after having talked to several practice owners in the last few weeks  about personnel problems related to what amounts to plain old disrespect.  I am generally consulted about the problem at the point at which the practice owner is fed up, angry, and just doesn’t want to take it anymore!

The problem is that the situations have all been allowed to go on far longer than they should.  Veterinarians, and I say this all the time,  are such nice people and many of you tend to be enablers of behavioral problems within your practice. 

Being a nice person does not mean you are required to accept disrespectful or discourteous treatment from those you work with or employ.  I can’t imagine that those of you who will stand for disrespectful behavior at work would tolerate that sort of treatment outside of work.  They are not mutually exclusive environments.

Every work environment should, must, have a core value of personal respect and courtesy from everyone.  That does not mean you can’t get angry or frustrated from time to time.  But it does mean that especially during those difficult times everyone must remember to focus thier frustration on the situation and not the person. 

The more you allow unacceptable behavior to continue, the less likely you will be at trying to curb it.  It simply becomes part of the culture… a habit.  And we all know how hard it is to break a habit.  Think about it… is that really the kind of culture you want to have at your hospital?  Is that how you want the community of prospective employees to think about your practice when a job opening arises?  Word gets around faster than a wildfire about things like this… believe me. 

Every business has a culture, a personality.  Make yours the kind of place you want to work at… not the kind of place you want to avoid.

To those of you who are now, or who may in the future, encounter a situation with a team member that is disresectful or discourteous, I say this:

STOP IT.  STOP IT NOW.  DO NOT ALLOW IT TO CONTINUE.

It will only get worse if you don’t.

Here is how I have handled these situations when they have presented:

When someone is in verbal “attack mode” and being loud or aggressive, rude or disrespectful, hold up your hand in the universal sign for STOP (under no circumstances touch the offending person) and say in the calmest tone possible:       “It is not ok for you to speak to me in that manner.”  Wait.  If they persist, say again “It is not ok for you to speak to me in that manner.”  If they persist, walk away.   (If the person has escalated to the point that they have not stopped by the 2nd time, you have a bigger problem than just an inappropriate employee.)

When the person stops, and if you have the time, you can ask them to discuss the point they are trying to make in a courteous tone.  Otherwise, ask them to make an appointment to speak with you later.

If one employee or colleague is disrespectful and you don’t establish appropriate personal boundaries with them, don’t be surprised if the behavior spreads to other staff or you have staff leave because the culture is not acceptable to them.