Your Vision and Ethics: The North Star of Your Business Strategy
September 2015 Issue
Your core ethical values and your O&P practice's vision should form the underlying guiding principles of every aspect of your business: its mission, its culture, its reputation, its employees, its patients, its planning, and its strategies. "Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices endlessly adapt to a changing world," write business experts James C. Collins, MBA, and Jerry I. Porras, PhD, ("Building Your Company's Vision," Harvard Business Review, September-October 1996). Defining and articulating your vision, your mission, and your core values are fundamental steps in your business planning.
"Clear vision, mission, and value [ethics] statements for a company are the cornerstones for creating culture," says D. Scott Williamson, MBA, CAE, president, Quality Outcomes, Fredericksburg, Virginia. "As the orthotic and prosthetic profession goes through all the upheaval as healthcare reinvents itself in this country, there is nothing more important to an organization than a strong culture. Change is going to come at us from all sides, and we need everyone on the team working together in harmony with the vision and mission to survive as independent practices."
Do Good Guys Come Out Ahead?
Drawing on various research studies, a 2011 report by the Ethics Resource Center shows that companies with strong ethical cultures and excellent reputations generally come out ahead of unethical competitors in the long run. "Recent research tells us consumers prefer to deal with a company they trust and employees prefer to work at a company they are proud of," the report states. Also, investors increasingly believe that trustworthy, ethical companies are safer investments, according to the report.
A strong ethical culture attracts top talent, retains good employees, and builds loyal customers, Steve Koslow, senior vice president and chief ethics and compliance officer at CUNA Mutual Group, pointed out in a presentation at a 2014 conference. The company was recognized as one of the World's Most Ethical Companies by the Ethisphere Institute in 2013 and 2014. "Research over the past ten years shows a positive correlation between business performance and companies with high integrity," Koslow said.
Your Code of Ethics
Your practice's code of ethics, sometimes called its value statement or code of conduct, is arguably its most important cornerstone (some business specialists, though, differentiate between these three inter-related terms). It embodies the underlying guiding principles that define how you do business, how you treat patients and staff, and what you expect from employees and yourself.
Williamson encourages business owners to begin by creating their personal visions. His consulting firm has an exercise in which business owners, ideally along with their spouses or significant others, think about what they want their lives to be like with their families and what role their businesses will play in their lives. Each business owner then begins to develop a vision for his or her business. "And that's something you create with your business partners, if you have them." The vision for the business then becomes the foundation for your mission and value statement.
Your Mission and Value Statement
"Your mission statement is how you capture your passion for what you're doing," Williamson says. "It's not just words on a page-it's a verbalization of why you do what you do. Your value statement is a declaration of your core values. You are basically saying, 'These are the lines in the sand that I will not cross that will fundamentally guide my business decision making.'"
A mission statement is "a written declaration of an organization's core purpose and focus that normally remains unchanged over time," states BusinessDictionary.com. For example, Alexander Lyons, CPO, owner and president of Lyons Prosthetics & Orthotics, Conway, South Carolina, shares his company's mission statement:
The mission of Lyons Prosthetics & Orthotics is to promote the well-being of individuals with amputations, orthopedic injuries, and disabilities in the Horry County community. We provide accessible, quality O&P care, utilizing state-of-the-art designed artificial limbs and braces. We are committed to quality and emphasize trust, respect, confidentiality, and compassion in a collaborative effort with the overall greater healthcare community.
Walk the Talk
The code of ethics must accurately reflect the owner's values, Williamson points out, because if the owner claims a value statement that she or he does not actually subscribe to, then the disconnect will be apparent to the staff and the statement becomes meaningless. "So then you have people putting their own value system into their decision making, and that can bite you."
Hire the Right People
A fundamental way to create your company culture is to hire people who share your vision and values. "I have tried to hire 'in my image,' because I think that's the rational way to go if you're going to grow your business," says Jeffrey Brandt, CPO, CEO and founder, Ability Prosthetics & Orthotics, headquartered in Exton, Pennsylvania. "I don't mean 'yes people,' but rather people who are like you in such areas as your ethics, your reputation, your brand, if you will."
"Most practitioners got into O&P because of their passion for the profession-because of the difference they make in people's lives," Williamson says. "It is important to make sure that the people who work for you share the same passion that you have and that's conveyed in everything that you do."
Transparency Builds Trust, Employee Engagement
"As a company, we try to be more transparent," says Joyce Perrone, director of business development for De La Torre Orthotics & Prosthetics and consulting partner for Promise Consulting, both headquartered in Pittsburgh. "For companies, transparency is a better way of functioning.... People coming in want to be part of the team, want to be clued in on what's going on." De La Torre has two company meetings per year that include this type of information, but it's made clear the information is confidential and not to be shared outside the practice, she adds.
A study conducted by the TINYpulse survey company shows the practical as well as the ethical value of management transparency, according to business writer Victor Lipman in the article, "New Study Shows Transparency Isn't Just Good Ethics-It's Good Business" (Forbes, December 11, 2013). The study found that transparency is the top factor when determining employee happiness, coming in at a high correlation coefficient of 0.0937. (Lipman notes that in the context of the study, "employee happiness" is a concept similar to "employee engagement.") The study summary quoted by Lipman observes, "We see an increasing number of companies using transparency to attract and retain top talent."
A 2013 report by Harvard Business Review Analytic Services found that among senior executives surveyed, employee engagement was one of the top three priorities. "[C]ompanies have been increasingly monitoring their engagement levels, as a growing body of research has demonstrated that having a highly engaged workforce not only maximizes a company's investment in human capital and improves productivity, but it can also significantly reduce costs, such as turnover, that directly impact the bottom line."
Brandt has seen firsthand the value of transparency. A few years ago the company faced a temporary cash flow crisis. Brandt went to the staff, openly explained the problem, and said the company would have to institute a 10 percent salary reduction for six months, after which full salaries could hopefully be reinstated. "They said, 'No problem. We're aboard; we understand,' and we got through the tough period. When we were upfront, the staff was willing to help us out and help keep us solvent and moving forward. Every single person stayed."
Sharing in the rewards helps employees engage with the company; everyone feels appreciated as part of the team and its success. For instance, Lyons has a profit-sharing plan based on each month's profits. Not only the practitioners, who are generally considered an O&P company's revenue generators, but the technicians, assistants, and office staff also share in the profits; when the company makes money, everyone makes money.
Policies, Procedures, and Employee Manuals
Written policies, procedures, and employee manuals might not be necessary when a business first opens since there are probably only a few employees-usually people you know who share your values and goals. However, as your business grows and you hire more employees and perhaps open multiple locations, you will need formal written policies, procedures, and manuals for reference and employee training to be sure everyone is on the same page. Detailed information on writing these documents is outside the scope of this article; however, your values and ethics will play a part in their effectiveness.
If your company is planning acquisitions or mergers, new business partners or other stakeholders will bring their values and visions to the table. Business owners should thus consider how these align with their own ethics, visions, and goals, and discuss and address these issues with potential stakeholders.
"An ethical standard of the company is what it does above and beyond the law," Perrone says. "It's doing something because it's the right and ethical thing to do." She gives the Family and Medical Leave Act (FMLA) as an example. Legally, the FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. However, beyond what is required by law, a company may opt to continue paying the employee's salary during this time.
Your Employee Manual
An employee handbook, perhaps one
of your most important documents,
sets forth your expectations for your
employees and describes what they can
expect from your company, according
to the U.S. Small Business Administration
books). "It also should describe your legal obligations as an employer and your employees' rights." Other areas to cover include compensation, benefits, antidiscrimination policies, standards of conduct, work schedules, leave policies, and other employment-related information.
Your employee manual should also include your company's disciplinary policies, problem-resolution procedures, and how to report violations. While this document should certainly reflect your core ethical values, complex federal and state laws protect employees, so employers are urged to have an employment attorney review their handbooks for any unintentional illegalities. "We engaged an attorney to help us write policies correctly," Perrone says. "Companies may get [in trouble] when they just decide to do it themselves without consulting a labor law attorney."
The Fight to Do What's Right
Doing the right thing is not always easy. Gray areas can cloud the picture. Economic pressures may lead business owners and employees to rationalize ethically questionable decision making. Your competitors might get business through unethical or even illegal practices. Referral sources may exert pressure to participate in unethical behavior, such as changing device delivery dates to shift costs to Medicare or private insurance payers.
"It's good to confer as a team to navigate through these [gray] areas to establish a policy or make a decision," Perrone says. Also, when strategizing, the ethical component involved in the different challenges your company is facing should be considered as well as the strictly practical business pressures. Discussing potential scenarios and considering in advance what to do can help avoid making poor decisions.
Many O&P companies with integrity have survived while unethical business owners have found themselves out of business, facing heavy fines, or behind bars.
Perrone says, for example, "About 25 years ago I was working for a [durable medical equipment] company that wanted to do something illegal. I said, 'Starting today, I'm on vacation-and I'm not coming back!' I walked out the door. I didn't have a job to go to, but I knew it was my reputation, and I didn't want my name associated with that company. That company subsequently went out of business." Although many O&P business owners have at times lost business by being ethical, in the long run, taking the high road has generally paid off financially as well as with peace of mind and the satisfaction from having done the right thing.
"I think in the past I've lost business because I've been known to not [agree to participate in unethical practices], Lyons says. "However, I've gained business by being a consistent, ethical business-centered practitioner. I have very committed patients and referral sources. When referral sources see that I want to treat the patient in the right way, do the right thing, then they feel that I'm a part of their team, and that I'm going to do the right thing, including in coding and billing."
"At the end of the day you have to live with yourself, your character, and your reasoning on decisions you made," Brandt says.
Of course, for highly ethical O&P facilities, a standard of excellence in patient care, sound business strategies, operational efficiencies, and effective marketing are also necessary components for success.
The Good Guys Win
Your O&P company's code of ethics influences, and is intimately linked with, its reputation among your patients and potential patients, current and future employees, vendors, and the community you serve. Word-of-mouth and social networking, online consumer reviews, and websites such as glassdoor.com quickly make your reputation known. Research reveals that an excellent reputation attracts customers, attracts and retains top employee talent, and overall is more profitable than companies with lesser reputations.
"Regard your good name as the richest jewel you can possibly be possessed of-for credit is like fire; when once you have kindled it you may easily preserve it, but if you once extinguish it, you will find it an arduous task to rekindle it again. The way to a good reputation is to endeavor to be what you desire to appear." -Socrates
Miki Fairley is a freelance writer based in southwest Colorado. She can be contacted via e-mail at .