Veterinary practice management by the open book - Veterinary Economics
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Veterinary practice management by the open book
Dr. Ross Clark has built a legacy on open-book management. And all that transparency has meant financial success for him and his teams.


VETERINARY ECONOMICS


OPEN UP YOUR FINANCES

Practice growth plays an important role in Dr. Clark's thinking. But at the same time, he thinks going all-out for growth can be a mistake. "What I learned from the big national companies is to try to get your arms around the business first," he says. "Get your arms around what you have now and then go for growth."

On the other hand, he says, veterinarians often overlook growth when thinking about the financial health of their practices. "They talk a lot about their net: 'I have 22 percent net,' 'I have 26 percent net.' That's wonderful, but I'd rather have 18 percent of $3 million than 24 percent of $300,000. A lot of them are milking their practices. They're not putting enough back into the company."

Thinking about net and growth led Dr. Clark to design the "Clark Heat Index," a number he proudly says that no accounting firm has yet adopted. The Clark Heat Index is the percentage of net plus the percentage of growth. "I think 22 percent net is great, but 15 percent net and 30 percent growth—a 45 percent Clark Heat Index—is fantastic," he says.

Despite Dr. Clark's obvious success with open-book management, the philosophy does have its detractors. Dr. Clark says many practitioners are simply afraid to open the books. They think employees will be offended by what the owners take home and think it's better if they simply don't know. "What they don't realize is that their employees probably think DVMs are doing better than they are," he says.

However, knowing what the boss makes is only a small part of what Dr. Clark means by open-book management. In fact, he's translated the entire system for the veterinary profession in his new book, Open-Book Management for Veterinary Hospital Teams (tentatively due out from Veterinary Economics and Advanstar Veterinary later this year).

A major component of his system is a set of "scorecards" he created to use at weekly staff meetings. These cards track just about everything—rechecks, transactions, new clients, veterinary production, staff hours per "dog day" for boarding efficiency, and staff hours per transaction for veterinary hospital efficiency. Scorecards, he says, are "the No. 1 component of open-book management."

But as a good coach, Dr. Clark knows it takes more than keeping score to build a winning team. He sees the value of training and learning, a key concept in the story of Springfield Remanufacturing Corp.

"You don't lose employees if you're training them," Dr. Clark says. In a chapter in his upcoming book, Dr. Clark pulls all his management ideas into a single sentence: "We create partnerships by opening the company books, paying for performance, not titles, and sharing the bad times as well as the good."

When Dr. Clark was a boy he had a trash route and a paper route, and he was already thinking about owning his own business. One reason he chose veterinary medicine, he says, is that he figured it was one of the last professions where a person could own an independent business.

"I'm always looking for answers," he says. "I stop in at veterinary hospitals on vacation to get ideas. For me, it's a passion. I'd rather talk about this stuff than go to cocktail hour."

Veterinary Economics special assignments editor John Lofflin is a freelance writer in Kansas City, Mo., and a journalism teacher at Park University in Parkville, Mo. Send your comments to
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Source: VETERINARY ECONOMICS,
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