You know it’s bad when the New York Times has a front-page article on planning for the apocalypse. Rampant uncertainty can undermine even the most solid business plan. This week, I’m delighted to have on the show, CEO and President of Annandale Village, Adam Pomeranz, and the former chairman of their board, Chuck Lotz. Since 1969, their non-profit organization has provided a residential community for adults with developmental disabilities, specifically intellectual disabilities, and/or brain injury.
We discuss the importance of solid corporate values, how setting standards from the top down retains staff in an uncertain economy, and why doing the right thing helps maintain a solid foundation, even in questionable times. Their nonprofit is a very interesting case of how to provide great customer service, how to market, and how to stay true to one’s mission.
Develop “If/Then” Contingencies
There have been more than 50 attempted repeals of the Affordable Care Act since the initial legislation was passed in 2009. Apparently, the 51st time is the charm? Regardless of what the future holds, there will be significant consequences for businesses who rely on Medicare and Medicaid to pay their patients’ bills. Any alteration to the ACA will have a ripple effect across the industry.
Granted, all businesses face struggles and pitfalls outside of their control. These factors can redefine everything from the bottom line, to the ability to find competent and committed employees. Mitigating these obstacles is especially important in the healthcare industry, where changes in technology, along with unexpected shifts in the social agenda and focus, can radically alter the corporate landscape.
Being prepared for any and all possibilities, no matter how major or minor, is crucial for mitigating unseen obstacles. At Annandale Village, it all begins with the strategic planning process. According to Pomeranz, the company will “set up “if/then” equations, if you will… we can cut back if need be, and we also hope that we’ll have some lead time.”
According to the Harvard Business Review, these types of contingencies are effective because they accommodate human nature. In the May 2014 issue, Heidi Grant wrote “If-then plans work because contingencies are built into our neurological wiring. If-then planners are about 300% more likely than others to reach their goals…while several recent studies indicate that if-then planning improves team performance by sharpening groups’ focus and prompting members to carry out key activities in a timely manner.”
Adjust with the Economy
But, it’s not just internal concerns that have to be addressed. There are external factors as well, one of the most consistently inconsistent being the economy. As you’ve heard in our discussion with Greice Murphy from Advanced Care Pediatrics and Andy Isakson, the healthcare industry can be counter cyclical. As Pomeranz points out, “I usually can tell you how good the economy is, based on my staffing. As the economy gets better, my staffing gets more challenging. As the economy gets worse, my staffing actually becomes a little easier.”
This may sound confusing, but follow the logic here. A healthy job market means more opportunities. More opportunities mean more options for the potential employee. If Annandale, for example, can only offer a base pay of $10 an hour, the candidate may look for work elsewhere. However, when the economy is lagging, or near recession, a job – any job – looks good and Annandale has an easier time finding staff.
Use Company Values as Your Anchor
The company’s values, which Annandale stresses all the way from the board room down to the employee lounge, are paramount to the company’s success, which in turn, helps mitigate the unforeseen and the unexpected. “Sometimes the effect on the bottom line doesn’t tell you what the right thing to do is,” as Pomeranz puts it. He continues: “The bosses set the tone with the standards, the standards that dictated the decisions that we would make. Or actually, provided the guidance for the decisions we would make would be a better word. We do the right thing for the right reason. So, the staff at Annandale can feel very comfortable that the decisions we make are with the villager and their family, at the forefront of our minds.”
Still, possible legislation and changes to healthcare funding are what worries companies like Annandale the most. Even though they are technically “not” a nursing home, they are still potentially affected by changes in Medicare and Medicaid. As Pomeranz points out, “Annandale has a unique business model. In the sense that we’re a private pay organization…a model where about 75-80% of the cost is reflected in the fees that the family pays, while we go to the philanthropic community for the other 20-25%. So, most of the things talked about in regard to the changes coming in health care, or the changes that have come in health care, don’t necessarily impact us in that regard.”
Offer Over and Above What Customers Expect
Annandale is aware that families have a choice when seeking such an institution. Even without a direct impact from legislation, they still have to deal with consumer need and perception. Annandale addresses this concern by going over and above what a consumer expects. “We have some value-added services,” Pomeranz points out, “We feel really good about the services we provide in our facility. Our nursing home, from 2010 until this last year, is a five star nursing home. It’s just a great level of care that we offer; our nursing ratios are great, our CNA ratios are great.”
But, staying within the boundaries of the current business can only provide so much. Annandale plans on expanding its reach across the nation. As Pomeranz explains, “We actually represent about, I think it’s 34 different states; we have villagers from 34 different states, so we believe there are opportunities to expand our fundraising reach.”
A perfect example of this concept is the company’s annual Jazzy Thing. Annandale has been doing it for 30 years, and it has added amazing name recognition and corporate value to the community. As Pomeranz points out, “When I first came to Annandale and I went around and spoke to civic organizations, there were a few people who said to me–they looked at me with this odd look and said, ‘oh, I know who Annandale is, that’s Jazzy. I go to Jazzy every year.’ They knew the event before they knew Annandale.”
Indeed, doing the right thing and striving to do better is what has helped Annandale Village mitigate against the constant fluctuations in the healthcare industry. Thanks to their leadership and preparedness, they are ready for any contingency, maybe even floods, earthquakes, and hurricanes.