Mr. Pareto, Mr. Juran, Mr. Koch, Garden Peas, and Your Care Management Practice

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Chances are you’ve never heard of the three gentlemen named in today’s post title: Vilfredo Pareto, Joseph Juran, or Richard Koch.

Nor can you imagine how they – and garden peas – relate to advocacy.

Yet, the principle they have in common affects your work and ability to succeed, especially in the early days of your practice building. Unfortunately, most newly minted advocates not only don’t realize that, but they ignore it – at their peril.

So what principle am I talking about?

This post is intended to light a fire under you if who can’t figure out why you aren’t succeeding in practice despite the fact that you know you are a great advocate. Your excellent advocacy abilities may be getting in the way of your success if you think you can rest on them alone.

How the 80/20 Rule Affects Your Health Care and Cost Management Practice

Yes – that’s what Pareto, Juran, Koch, and garden peas have in common…  they are all related to the 80/20 rule, also called the “law of the vital few” or the “principle of factor sparsity” as follows:

  • Vilfredo Pareto, an Italian economist, was the first to describe it when he observed that 20% of the pea plants in his garden produced 80% of his garden pea crop.
  • Joseph Juran, an American management consultant, was the first to publish the observation, which he named after Pareto.
  • Author Richard Koch wrote the book, The 80/20 Principle which applied the Pareto Principle to business.

Their observations are vitally important to our success. In fact, if you ignore the 80/20 Rule in your work-related decision making, your business may fail.

For example, It’s very likely that:

  • Only 20% of the phone calls you receive will be eligible candidates for the advocacy services you provide. 80% will not. (How to regard this: recognize that, on average, only 1 out of every 5 potential client contacts has the possibility of yielding a contract, so don’t get discouraged if they aren’t all possibilities!)
  • 80% of the reading and study you do won’t affect business decisions you make. But 20% will.
  • 20% of your clients will yield 80% of your income.
  • 80% of your marketing efforts will be ignored, while 20% will yield inquiries. (How to regard this: you’ll need to market your practice and abilities non-stop because you never know who is paying attention, or when.)
  • We could probably come up with a dozen more examples.

Now let’s look at one that surprises most new advocates, but induces nodding heads from those whose practices have already survived into year two or three:

  • Practices that succeed do so because in the first year or two of business, 80% of their effort is business-building, and only 20% is actual advocacy work itself.

If you don’t understand and embrace this concept, then you put your success at risk.

Let’s look closer:

Starting an independent private advocacy or care management practice is no different from starting any other business.Whether you open a pizza shop, or hold a client’s hand in a doctor’s office, or negotiate medical bills, the same attention to business details is required, even if those details vary.

The basics of starting all new businesses are the same: making sure the business is well-capitalized, making sure contracts are legal and air-tight, making sure a potential client can afford to pay…. and then there is marketing which (if you ask me, the marketer) is probably THE most important indicator of success.

Business start-up success statistics are grim, according to the SBA, Small Business Administration. One reason is because most new business owners don’t understand this absolutely necessary attention-to-business-detail aspect.

  • The guy who makes great pizza will fail in the pizza shop business because he doesn’t keep up with his bookkeeping, and doesn’t do enough marketing. He loves making pizza! He makes delicious pizza!  But he spends his time and efforts making and giving away free samples of pizza instead of attending to his business details. Then he fails. If he had spent 80% of his time attending to business details and hadn’t given away so much free pizza, he would still be in business. (New advocates give away too much of their time doing pro bono work – same result.)
  • The woman who runs a consignment shop will fail because she doesn’t keep up with her product tracking, and doesn’t do enough marketing. She loves collecting new designer clothes from people who want to sell them! She has a great eye for gently-used fashion! But because she never developed a good contract to use with customers who want to sell their clothes, and because she would rather chat with buying customers than develop good marketing strategy, she fails. If she had spent 80% of her time attending to the business of owning a consignment shop, she would still be in business.
  • The advocate who loves helping patient-clients get what they need from the healthcare system will fail because she hasn’t taken the time to learn about what belongs on her website, is afraid of public speaking, and doesn’t realize that if she volunteers her time as an advocate, that is actually interfering with her ability to build a successful practice. She’s a great advocate!  She knows advocacy!  But her practice will fail because she’s not spending 80% of her efforts on the business aspects required for her success.

Here’s the good news:  Once you establish that strong business foundation, and into the third, fourth and subsequent years of business, you’ll begin to see your business efforts shift. Eventually you’ll see that the 80/20 rule goes the other way: 80% of your efforts will be focused on your advocacy work, and the other 20% will take care of business.

As you get started in practice, remember Mr. Pareto and his garden peas …  Focus 80% of your efforts on the BUSINESS of being an advocate, and your opportunities to help clients will come.

 
 

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Comments

  1. Annette  October 9, 2017

    LOVE THIS! Thank you for validating (again) that start-up efforts are not in vain. I love advocacy work and put in the 80% business/marketing/networking that I didn’t always necessarily enjoy. I am beginning to see my work balance trending towards just doing what I love and letting the rest take care of itself.

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  2. Mary Anne  October 10, 2017

    This is so true. I had one client out of the gate my first year, and then I spent the first 10 months of the second year with NO clients. I networked like crazy (it was uncomfortable to say I had no clients, but it was true!) and I spent time doing business development. By November I had a new client and now, I have business. After 4 years, I am getting steady referrals from my network. It took longer than I thought, but persistence pays off!

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