With the SA Best Practice of the Year now behind us, it is time to reflect on some of the issues that have emerged from the competition. The results of the HealthCheck self assessment undertaken by participants as part of the competition remains confidential, but an audit of the 'finalist' practices yielded some interesting information.
The HealthCheck essentially requires participants to answer 130 questions across a range of categories. While the eight finalists demonstrated beyond doubt that they are healthy, prosperous practices, they did not necessarily score top marks in every question, some of which are discussed below.
Business planning
Most practices achieved high scores in this category. The practises that excelled, however, were those that genuinely use the plan as a working document and share its contents with all employees. We were impressed when a number of employees knew exactly what the practice's objectives were and, more so, when employee performance contracts were aligned to these objectives.
Business ownership and continuity
The majority of the finalists have arrangements in place to facilitate transition in the event of death, disability or retirement. In some instances, senior administrative or client service personnel have been given a stake in the practice, demonstrating recognition of the roles played by these employees. Succession planning remains an area of concern, however, and of all the participants who entered the competition (a total of 80 practices), 71% do not have adequate plans in place to cater for succession.
Client base segmentation
While each practice visited has segmented their client bases, a number of these have been done on a subjective basis. Often, A-status is bestowed on the grounds of the personal relationship between the business owners and clients, rather than on the net worth of the client to the business. Few, if any, practices have done a profitability analysis on their client segments. Not doing so exposes the practice to the risks of over servicing or cross subsidisation – i.e. having one's A-category clients pay for services provided to C and D clients. It also makes differentiation of services more difficult.
Client service
Without exception, the audited practices pride themselves on their client servicing standards but only a few of them genuinely differentiate their offerings in line with their segmentation policies. A few of the practices have conducted client satisfaction surveys and some regularly ask their clients if they are happy with service delivery. None of the practices have conducted an independent, anonymous survey which would elicit responses a client may not want to offer in a face-to-face situation. A few of the practices have Service Level Agreements that are signed by their clients.
Technology and processes
All the practices audited were able to demonstrate effective use of technology, data protection and recovery and robust processes, supported by detailed procedure manuals. Few amongst the finalists, however, have implemented any form of electronic workflow. This is something that practices should be considering in order to enhance administrative efficiency and to better manage compliance. The majority of practices audited use Spotlight as their FNA and client relationship management tool.
Staff training and performance management
All practices visited take employees and their training and development seriously. The more successful practices appear to have extended the development programme of their employees beyond product and industry training and make use of business and client management training facilities outside of the industry. One practice makes full use of legislative subsidies (training levies) to fund the employee development programme. Some companies pay particular attention to performance measurement and employee incentives are appropriately aligned to business objectives. However, in certain cases, performance measurement was somewhat subjective. At all practices employee job descriptions were well defined, with most employees knowing exactly what was expected of them in order to qualify for their incentives or performance bonuses.
Client communication
It was evident that the practices all communicate regularly with their clients. However, there were aspects to this element of practice management that warrant further consideration. Firstly, the frequency of client communication could be increased in a number of instances. Best practice research suggests that one should make contact with an A-category client at least 10 times each year, preferably in a pro-active and personalised manner. The definition of a 'contact' ranges from a courtesy call to a full review, but very few of the practices audited meet this standard.
Secondly, the content of or reason for communications tended towards stereotype portfolio reports where ad hoc informative communiqués could enhance services offered.
Financial planning and reviews
As one would expect, financial planning standards were high and all the practices audited provide holistic financial planning and advice. In most instances, strategic alliances have been established to ensure that services not directly offered by the practice are available through a reputable supplier. In some instances, these arrangements should be more formally contracted with appropriate service level agreements signed between the parties. Regular client reviews were a feature of the practices and reviews extend beyond portfolio performance and address changes to goals and financial requirements.
Tony Stephens from Business Health, Australia, and a member of the 'audit' team, commented several times on the quality of the practices we visited. Bearing in mind that his frame of reference includes some of the best practices in Australia, New Zealand and the US, his comments are indeed flattering. More importantly, the SA Best Practice of the Year award has exposed this level of excellence for us all to see.
The finalists and winner of the inaugural best practice award are indeed worthy of their achievement.
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