I am often asked “What is the best organisational structure for a practice?”
My answer is always, “well that depends!” What this talk is about is just what it depends upon.
Built on my experiences of helping practices with organisational change this talk hopes to:
- Review the most common organisational forms we find in practices today
- Review the strengths and weaknesses of each form
- Highlight the common issues that I find
- Identify the corrective actions required
In managing our practice (just like any other business) there are three principal roles:
- Strategy formulation, usually performed by “Directors” whose role is to set out the goals, strategies and policies of the practice
- Management control, usually performed by managers whose role is to develop and manage the business processes that will deliver the strategies, policies and goals of the practice
- Task control, usually performed by suitably skilled technicians, whose role is to ensure individual tasks are performed efficiently and effectively
All of us will spend some of our time in all of these roles.
In applying these roles to our practice we can differentiate between:
- Those tasks that are concerned with the need to drive income and growth
- Those that are concerned with ensuring we consistently achieve the desired quality of output at the lowest total cost to the organisation
Income driving roles should reflect the income streams of the practice.
- Large animal, small animal, equine
- Main site, branch 1, branch 2
- 1st opinion work, referral work, out of hours
Whereas consistency and cost roles will apply to the deployment of resources or skills (e.g., vets, nurses, reception, HR, finance, health and safety, etc).
For most practices none of these roles are likely to be full time, and so individuals can hold many roles. Owners must decide which roles they wish to keep, and those that they wish to pay someone else to do for them. However, owners need to remember that all of the roles will always be required and cannot be ignored, so if they choose to keep one, they must make the time to perform it!
The result of their choice will determine the appropriate structure for their practice.
The most common form of structure for small practices is the owners centric or “hub and spoke” organization.
- The owner retains control of all functions.
- The owner can react quickly to changing circumstances.
- The owner can personally influence all elements of the organization.
- Very effective during new practice start up.
- The owner gets swamped in detail as the practice grows and cannot perform all of the roles required in an appropriate timescale.
- Staff can choose to pass all problems straight back to the owner.
- Rarely works effectively with multiple owners because the decision making process is either unclear or takes too long.
- Is quickly outgrown, but owners have a reluctance to change because of the loss of control.
- Once outgrown will cause good staff to leave, and it then becomes very difficult to transform.
The first step from owner centric.
Delegation of non-clinical issues to an “Administration Manager.”
- Removes admin burden from owners.
- Enables the practice to bring in or develop “managerial skills.”
- Owner(s) retain control of key clinical roles.
- Often misunderstood by owners who fail to delegate with sufficient authority to enable the form to work.
Hence; this is the perceived state by the owners of many owner-centric practices!
The next logical step.
- Delegation of all staff roles and functions other than veterinary surgeons to a “Practice Manager.”
- Commonest form amongst mid-size practices.
- Allows further development of the managerial role.
- Reduces admin burden on owners.
- Owners (usually vets) retain the management of the assistant vets.
- Owners fail to delegate with sufficient authority and responsibility.
- Clinical issues overlap between roles which can cause problems.
- Practice manager often finds they have many bosses with many views!
- Owners can undermine their manager by dealing with non-vets directly.
Delegated Business Operations
- Increasing in popularity with larger practices.
- Business manager could be a “Managing Partner” or an “external” manager.
- Has led to a “partnership share” for some “non-vet” managers.
- Removes the “many heads” effect where there are multiple owners.
- Allows owners who are “clinical specialists” to focus on their key interest and skills and away from “day to day” activities.
- Can be used in conjunction with many sub-structural forms, for example with a head nurse or head receptionist.
- Requires owners to understand their roles as shareholders, directors and technicians, and play them accordingly.
- Requires effective delegation of authority and responsibility.
- Used by practice groups with many business units.
- Includes as many profit centre managers as there are profit centres.
- Some roles may not be “full time” depending on size.
- Some roles may be performed by “owners.”
- Organisational structure reflects the organisational needs.
- Creates a strong and cohesive management team.
- Requires well-developed “managers” to be successful.
Choosing the Right Structure?
Review where you are today.
- Evaluate current performance, interview key staff, assess how effective they feel, what issues frustrate them today?
- Honest assessment of current strengths and then agree where you need to be in the future.
Creating the Right Organisation
1. Select the appropriate structure to reflect business situation and needs.
2. Owner(s) decide which roles they wish to retain and have time to perform to an appropriate standard.
3. Delegate to their staff the other roles.
4. Delegate with sufficient authority and responsibility.
5. Hire or train appropriate staff.
6. Continually review their roles with a view to delegating further.