Is Managing Business Risk The Same As Managing Patient Risk?
As a doctor, you manage risk every day. You manage risk on behalf of your patients, for example, you may sensitively speak to a patient about their weight by asking if it’s okay to talk about weight management, even if you know weight is an issue the patient came to discuss. You also manage your own practice risk as per the requirements of your insurance company by running tests on your patients to confirm or disprove a suspicious set of symptoms. The risk you manage as a medical professional is sharp — it comes into focus every day because it’s often a matter of life and death for your patients. Running a business, on the other hand, creates a different type of risk and reward. While you have a lot of experience identifying patient and doctor risks, business risks may be more difficult to detect. These risks can be both internal and external and they can also directly or indirectly affect the practice’s ability to operate. Business perils can be hazard-based (for example, chemical spills), uncertainty-based (natural disasters) or associated with opportunities (the risks involved with taking up a new business opportunity versus different risks in ignoring it).
Have you asked yourself what are the risks that could have an impact on your business objectives?
The Potential Risks to Your Business:
The types of risks that any business faces will be specific to your practice and personal goals but, overall, managing business risk is like managing patient risk. To effectively manage practice risk, think about internal and external scenarios that may directly affect your business — and then prepare for them. Consider using this list below as a starting point to think more broadly about the risks that could impact your practice. Click here to download your own PDF version. Also, think about other important areas of risk you may need to consider that are not listed here.
2. Indirect Risks to Your Practice - don't ignore what might seem like a very unlikely scenario:
Overlooking changes and issues that don’t directly affect your practice is a common error and one which can leave you unprepared for change. For example, while your practice might not be directly affected by a natural disaster, you may still suffer if it affects your suppliers, customers or is in your general location. As an example of this, one of our medical doctor clients recently had an unexpected superstorm hit their town in rural WA. The storm left more than 16,000 homes without power, as well as the local hospital. While the hospital had a generator, our clients didn’t — and they had vaccines that required refrigeration. So they went to the town’s only open hardware store to purchase one. Panic broke out when people from other local businesses began scrambling to obtain the last few generators. Our client managed to procure one of the last and the vaccines were saved. If such a widespread power outage had been part of their risk-management plan, they may have already had a generation and may have avoided this stress. Unexpected storms can be a timely reminder that we cannot control everything that affects a practice and, therefore, spending the time identifying, assessing, and maybe even calculating the probability of a certain risk is worthwhile. You can then prioritise which risks your practice should be more prepared for.
3. Managing Risk In Your Business - it's all about using innovation:
Despite the immoral, destructive and violent culture of the illicit drug trade, my research found that drug kingpins are, first and foremost, entrepreneurs and risk managers. These "pioneers" of the underworld live in an unpredictable and inherently risky world and face a wealth of diverse "business challenges" never encountered by our mainstream business leaders. The most successful kingpins are visionary leaders who survive by implementing effective business strategies and policies. By suspending our judgement of the drug dealer and focusing on the kingpin, we open our minds to their skills, flaws, triumphs and downfalls, all of which are magnified by the volatile environment that shapes their enterprises. This provides us with innovative approaches to managing risk during times of rapid change. In attempting to manage risk, these leaders of the underworld had to turn to innovation, specialisation, and networking for the success of their "business". And, of course, most of the time, their strategies paid off: the reduction of risk contributed to significant profit. While the illicit nature of their enterprises can not be admired, they were undoubtedly successful — and the resulting insights from their successes can be applied by anyone to their own legal business.
Contact us if you would like to have more information. Our lawyers at You Legal will be happy to assist you in whatever way we can.
This is an edited extract from the book Growing A Medical Practice: From frustration to a high-performance business.