If you went to an American college or university in the past 50 years, there's a good chance you took Psychology 101. If you took that course, you probably remember names like Freud, Jung, Piaget, and Maslow. Each was the architect of a highly influential movement within their field of study, including psychologist Abraham Maslow (1908-1970), who created a theory associated with how individuals reach their full potential as human beings.

The foundation of Maslow's theory rested upon the premise that certain biological needs must be satisfied before self-esteem and other similar needs can be met. He used the term "self-actualization," which is at the top of a pyramid (Figure 1)1, to describe the innate human desire to lead a fulfilling life. At the time Maslow created his theory, commonly known as Maslow's Hierarchy of Needs, the prevailing attitude among psychologists was to develop theories of human behavior around the disordered state of individuals. The real genius behind Maslow's Hierarchy of Needs is that he studied normal human behavior, rather than disordered behavior, to arrive at his theory of the self. Maslow's view of the normal human self has had a profound effect on a number of fields, including business.

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Managers and owners can apply Maslow's Hierarchy of Needs to their businesses as shown in Figure 2. In order for your business to reach its full potential as a center of excellence, you can apply a similar hierarchical approach. By studying what successful professionals have done to build their practices, you can apply Maslow's hierarchy to ensure the fundamentals of your business are sound.

The Practice Development Hierarchy of Needs is a pathway to greater success. Let's spend a little more time examining this concept as it relates to practice management. Notice that the most fundamental need of your practice, which is customers, is at the bottom of the pyramid in Figure 2. Without fulfilling these basic needs of your customers, the needs listed directly above it (staff) will not be met. In order to reach a higher level in the hierarchy, managers need to continue to improve their skills in order to reach the highest level, which is self-actualization. When self-actualization is finally reached, you are likely to have a highly profitable practice that is known throughout your community for providing a consistently high quality service experience for each patient. Additionally, reaching the highest level of the hierarchy provides a level of contentment, allowing you to take time away from your practice without losing sleep. Let's review each level of the hierarchy and examine some of the details pertaining to each.

Level 1: Customers

As business management pioneer Peter Drucker so eloquently stated, "The purpose of a business is to create a customer." In order for any business to have a shot at survival, it needs to create customers, which is primarily a function of sales and marketing. Most businesses view sales and marketing as a funnel, as shown in Figure 3, in which advertising is used to create awareness and desire that eventually leads to a few people agreeing to purchase your product or service. For most businesses the fundamentals of the funnel hold true, however for hearing aid dispensing there are some critical differences. Considering that approximately 60 percent of hearing aid purchases are made to previous buyers of the product, as well as the relatively low volume of the market relative to other products and services, word-of-mouth referrals take on greater importance in our industry.

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For these reasons, relationship marketing tactics must be centered on public relations and community outreach programs, in addition to mining your existing database of patients to cull sales opportunities (assuming you are not a start-up business). Table 1 provides a list of relationship marketing tactics you must incorporate into your sales and marketing plan.

With the rise of social media, it's essential to add Facebook or its equivalent to your sales and marketing plan. Because Facebook users are able to "like" and make comments on your page, it becomes a virtual billboard for your practice. Given the importance of word-of-mouth referrals, the viral effects of Facebook make it a word-of-mouth referral engine on steroids.

Many practices take the time to develop and execute a marketing plan; however, a considerable number of practices fail to create and execute a sales plan. Whereas a marketing plan is designed to "pull" people into your clinic, a sales plan is geared to "pushing" people into making a purchase once they are in your clinic. A good sales plan institutionalizes how you ferry a patient through your practice once the patient decides to place a phone call or visit your practice. Table 2 describes the essential elements of a sales plan.

Not Just Customers, but the Right Customers

A common mistake many practices make is "trying to be all things to all people." In other words, many practices blindly attempt to capture office traffic without paying enough attention to the type of patients they want to service. One way to avoid this mistake is to ask the question, "What do I want my practice to be known for?"

There are five possible answers to that question: 1. price; 2. technology; 3. convenience; 4. customer service; and 5. memorable experience. When asked, most practices report they want to be known for providing either legendary customer service or a memorable patient experience. Therefore, once you've decided on the vision of your practice, it's imperative to build plans and set goals to support your vision. For example, if you want to be known for supplying outstanding service and providing a memorable experience, you don't want to capture patients motivated to buy at the lowest price by using price advertising to generate business.

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Level 2: Staff

A well-designed sales and marketing plan is essential, but it simply will not replace great people who can execute your plans and run your office systems. Therefore, the second fundamental component in the Practice Development Hierarchy is the ability to hire, train, coach, and mentor staff. Once you have determined a hiring profile, it is your responsibility to develop your staff. Since several MarkeTrak surveys have suggested that the interaction between office staff and the patient is an integral part of a practice's value proposition, it's imperative to have a highly motivated and engaging staff. Your job is to create the environment for that to occur. Table 3 provides a general overview of staff development.

Level 3: Infrastructure and Work Flow

Once you've built solid programs and plans for customers and staff, the next level in the Practice Development Hierarchy is building a solid office infrastructure and clinic work flow. Office infrastructure is generally thought to be the computers used to run things like back office operations, billing and appointment scheduling. Beyond simply having office systems (e.g., computers) available to your staff to use, Level 3 infrastructure relates to how these tools are used every day in your clinic. The terms "efficiency" and "effectiveness" describe good office infrastructure and clinic workflow. Efficiency is doing things right; effectiveness is doing the right things. Both are essential components of good infrastructure and work flow. Table 4 lists several elements of office infrastructure.

Level 4: Manager Vigilance

The essence of effective management is summarized in Figure 4, highlighting seven actions that effective managers must engage in with their staff in order for a business to be profitable and grow. If you look around the Internet, there is no shortage of consultants who want to help you improve the culture, profitability and growth of your business. When you get right down to it, however, the action required to move a business up the hierarchy needs to come from the manager.

The key ingredients of vigilant management are focus and action. Without taking some type of action your business is doomed to fail. And, without the proper focus, your actions will be wasted. But there's really no special or unique talent needed to achieve level 4. As Peter Drucker said, "No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings." Effective management of your customers, staff and infrastructure is actually quite ordinary, dull and predictable. However, vigilant managers have the ability to unite their staff and complete all tasks on the management wheel.

Level 5: Self-Actualization of Your Business

Without the first four components of the hierarchy, the highest level-self-actualization of your business-will not be achieved. Self-actualization is a highly subjective term that ostensibly means you are content with the status and performance of your business. It might mean you could leave for an extended period of time and not worry about the day-to-day operation of your business; it could mean you are ready to sell it to someone; or it might even mean you are proud to be the local provider of choice for hearing care services. Self-actualization means you define success on your own terms and conditions.

Every small business owner and clinician needs guidance and support from time to time in the quest to get to the highest rung on the ladder-self-actualization-and, in today's turbulent economy, it's important to get the fundamentals right. Rather than relying on quick fixes and trends, use the Practice Development Hierarchy to focus on what is necessary to be successful in any economic environment.

Reference

1. Maslow's Hierarchy of Needs. Wikipedia, accessed online 10/12/2011.

Brian Taylor, AuD, is director of Practice Development & Clinical Affairs at Unitron.