Lessons from the Field - 10 Deadly Sins Stopping Midsized Healthcare Vendor Growth

 

Image by Tumisu from Pixabay

Part one of a two-part series.

I have had the privilege of working for some great healthcare providers and vendors over my career, from the midsized regional and national companies to the multi-billion-dollar national and international healthcare providers and vendors.

While there are many different growth strategies, there are several commonalities on why the vendor has trouble growing organically. It is not usually a defective product or service sold in the healthcare provider market. Vendor product updates or enhancements may be late in responding to innovation in the market, but in most cases can be overcome. The factors are more related to the organization and how it is managed. Being beat in the market by competitors is one thing. 

Beating yourself is far more deadly than competitors.

From these experiences, I have identified the ten deadly sins being made that inhibit organic growth. In part one, we’ll look at deadly sins inhibiting growth one through five. Next week in part two, we’ll finish with deadly sins inhibiting growth six – 10.

While it's easy to say not me or my company, a look in the mirror will result in the identification of some of the ten deadly management sins at work in your enterprise. Identifying and correcting internal obstacles to growth is the mark of a company taking the good to great step.

Image by Klaus Hausmann from Pixabay

On to the first five of ten deadly sins stalling growth. 

1.       The person or group who started the company or came in and grew it to a certain level is still there.Sometimes leaders have capabilities more aligned to startup creation, driving deals, or expanding to a specific size.  After that, the Peter Principle kicks in. They work 20-hour days, seven days a week at the start, and continue to work 20 hours, seven days a week years later, and they tread water in the pool of growth. The company reaches a specific size and stays there. As hard as it is, implement your exit strategy or step back and bring in the management heft to take the company to the next level and get out of the way. 

2.       The entire focus of the management team is making money. Now, I understand the no money, no mission. Management teams that are only bottom-line focused lose sight of what is essential to drive growth.  They are micromanagers with one and only one objective - today’s bottom-line.  Management is by what did you do for me financially today. According to Peter Drucker, the purpose of a business is to create and keep a customer. Making money is a prerequisite of business. If you do not make money, you’re out of business. Create and keep the customer to grow the bottom-line. 

3.       A comprehensive business vision and strategy are lacking. When asked what your vision for the company is, the small to the midsized company often does not have a clear communicable vision that unites everyone under a common Big Hairy Audacious Goal (BHAG).  They confuse process with strategy, resulting in a promising approach. If we do this, and this, and this and this, it will lead to this outcome.  That is not a strategy; it is a process. It is hoping that the desired outcome will occur because of a process. Clearly define what you want to be when you grow up, create measurable goals, communicate, and focus the company's total energy on those goals and the steps necessary to get there. 

4.       Internal communication is limited and focused on a transactional basis. It’s the need-to-know view of internal communications that more often than not impedes business success. That is not to say everyone needs to know every financial detail. Employees do need to understand how their efforts contribute to the success of the company. Employees need to know the competitive pressures, who the competitors are, the year's primary initiatives, and company growth goals. Vision and strategy updates need to be shared and communicated regularly. If a business unit achieved a quarterly benchmark and a bonus paid was good enough misses the point. That is a transactional view that the only thing that matters to the individual is money. People want to know that their contribution is valued and appreciated. 

5.       There is no organizational culture, or the culture is broken. Culture is one of those successful business attributes most often misunderstood and mismanaged. Company culture is an era where acquisition is more straightforward and a substitute for growth, which doesn’t happen by itself. Different companies have different cultures with good and bad points. Merely changing the logo and integrating the acquisition into your company doesn’t make the culture whole or even desirable. Actions speak louder than words. Positive, healthy company cultures must be created and nurtured. Many small to mid-sized vendor’s cultures are designed for better or worse, as transactional when there is a single dominant leader. The employees will take their cue to act based on leadership’s verbal and nonverbal actions. When you tell employees, the culture is that everyone’s contribution matters. Your important statement, followed by body language and vocal tone perceived as condescending, arrogant, and conceited, is what employees will believe, not what you say. Telling employees that they matter, then visibly shunning employees who voluntarily leave, sends a far more powerful message than words.

Your choice. Remove the barriers, change, and grow, or believe what you think and tread water.

Next week we will focus on deadly sins six-ten that inhibit growth in midsized healthcare vendors.

Michael is a healthcare business, marketing, communications strategist, and thought leader. As an internationally followed healthcare strategy blogger, his blog, Healthcare Marketing Matters, is read in 52 countries and is listed on the 100 Top Healthcare Marketing Blogs & Websites ranked at No. 3 on the list by Feedspot.com. Michael is a Life Fellow, American College of Healthcare Executives. An influencer in healthcare marketing strategy, communications, digital marketing, and social media, Michael is in the top 10 percent of social media experts nationwide. For inquiries regarding strategic consulting engagements, you can email me at michael@themichaeljgroup.com. 

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