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Accommodating progressive and conservative ownership styles in the same practice
These differences can weaken a practice or help partners reach a new level of alignment.
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“A widely held, but rarely articulated, belief in our society is that the ideal self is bold, alpha, gregarious. Introversion is viewed somewhere between disappointment and pathology.”
— Susan Cain
“Ignorance is bold and knowledge reserved.”
— Thucydides
This month’s column is a shout-out to one client’s frustrated administrator — and many others like her — who operates in a boardroom environment where half of the owners are progressive, bold and developmentally vanguard and the other half are conservative, reticent to advance the business and itchy when it comes to change and improvement.
These style and personality differences can cleave along various fracture planes in practices where the partners are less than perfectly aligned.
A classic fracture plane is the difference between old and young doctors. Older doctors commonly see things differently from younger ones, and not just because they have more experience. A 45-year-old surgeon sees a new building as an opportunity for expansion and personal wealth management in a career that is less than half over. A 60-year-old surgeon can see the same building as a financial albatross and a drag on partner profit distributions for the 5 or so years remaining in his career.
Partner styles can differ based on early life experiences and class differences. Doctors who grew up poor (or who are behind in their retirement savings today) can be expected to view money and business risk differently from partners who grew up in affluent homes (or who have a cushion of family wealth to fall back on).
Although we are talking here mostly about differing partner positions on business development, partner-to-partner conflicts are not limited to this domain. Clinical care pathway differences of opinion can exacerbate differing business philosophies.
Ten areas of differences
There are 10 prominent domains in which partners can differ. Alone or in combination, differences in these areas can weaken a practice to the point of dissolution or, with effort and empathy for each other’s position, be the catalyst for reaching a new level of partner alignment.
1. Planning horizons: Some practice owners are comfortable thinking in 10-year strategic planning terms. Others feel uncomfortable making plans that are more than a year or two out.
2. Service scope: All practices have important decisions to make in this area. Should we remain a subspecialty referral center, add limited primary eye care or shift to a full-service practice?
3. Growth pace: The demand for eye care is rising 4+% per year. Some partners want to exceed this growth pace and build market share, while others would prefer to halt growth and work on operations polishing or increasing personal time off.
4. Tactical prioritization: In any one practice, at any one moment, there are hundreds of actions that could be taken to improve patient care and profitability. A key partner responsibility is to prioritize the most import tactics to pursue near term.
5. Facilities development: Differences in opinion in this area are widespread. Should we have one large office or a sprinkling of satellites? Should we own or lease our facilities? Should we build lavish offices to make a statement and have quarters we enjoy working in, or be industrial and utilitarian?
6. Partner admission pace and standards: If every doctor is of partner caliber, then patient care can be excellent, but passive profits will be lower than in a closely held practice with just a small owner’s group and a cohort of durable associates.
7. Compensation modeling: There are an infinite variety of approaches to compensating partners in a group practice. At the “capitalist” end of the spectrum, doctors “eat what they kill.” At the “socialist” end of the spectrum, all income is more or less equally divided.
8. Ancillary services development: ASCs and optical departments now underpin profitability in the most financially successful centers. But some partners can be allergic to these investments because of cost commitments or even philosophical differences about whether owning such facilities represents a conflict of interest.
9. Institutional relations: Most ophthalmic practices today are relatively decoupled from acute care hospitals. Should we remain “Swiss” and unaligned or orbit closer to institutional providers?
10. Control lent to lay managers: Some owners like to make broad policy decisions in the boardroom and let the management team work out the details. Other owners like to micromanage the details. Each approach has its virtues, depending on the setting.
Better communication
It is helpful to remember that people do not dislike change so much as they are uncomfortable with ambiguity and uncertainty. The key in all of these areas is open disclosure and communication. Co-owners should communicate directly with each other and not pursue communication with support staff along the lines of, “I know that Dr. Smithers wants to keep a lid on the size of our practice, but I still want you to place that ad for a new associate.”
Adjuncts to better partner communication include regular meetings, written strategic business planning and the use of facilitators when needed to draw opinions out of shy and withholding owners. Policy cannot be argued in a vacuum; use robust financial facts to cut scary decisions down to size. Most business decisions — like most clinical decisions — are at their root objective.
If you and your partners are durably divergent in your thinking about practice development, there are numerous workarounds:
- Taper plans: Recognize that your conservative board member may be a blessing in disguise — not killing development, but slowing it down just enough to make it more intelligent and less risky.
- Take safe, baby steps: To help the most hesitant owners get on board with big plans, break things down into small, safe steps. Rather than hiring a full-time retina surgeon, bring in a guest subspecialist part time for a year to see how he fits in your system. Rather than opening a brand-new, full-time satellite office, rent clinic space a day or two a week in a compatible colleague’s office.
- Allow differential investment levels: When making larger side investments, such as a new building or a major piece of capital equipment, it is not obligatory to have everyone be equal owners. Allowing a couple of enthusiastic, deep-pocketed owners to own a larger share can get the needed development work done for the company, while limiting or eliminating risk for hesitant owners.
- Shunt shy docs to a comfortable “slow lane”: We see some providers get uncomfortable when their practices grow and necessarily become more corporate and bureaucratic. It can be a kindness to such doctors to allow them a slower pace. This can take several forms: fewer committee assignments, reassignment to a quieter satellite office, exclusion from certain investments or even reversion to associate status.
New partners
As in medicine, the easiest approaches are preventive. If you are in a solo or small group practice and working to build a larger organization, try your best to only admit partner candidates who align with your perspectives. You can accomplish this in a number of ways:
- Ask questions about the candidate’s background. Has he or she made life and career decisions — especially financial decisions — that are on balance bolder or meeker than yours?
- Disclose in detail your plans for the future of the practice, including dimensions such as economic and volumetric scale, number of locations and number of providers. Then ask, “Does that sound exciting or scary to you? Is that something you would be more comfortable rolling up your sleeves and doing with us, or sitting on the bench and watching happen around you? Are plans like this a fit with your natural ambition levels?”
- Ask your candidate’s references, “How ambitious is she?” “Does she take the initiative or have to be asked?”
- And finally, do not offer an incompatible associate a partnership position.
- For more information:
- John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams and a new book, Simple: The Inner Game of Ophthalmic Practice Success. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.