The importance of being strategic rather than reactive cannot be overstated.

In an industry where the well-being and quality of life of vulnerable individuals are at stake, careful planning and proactive decision-making are not merely advantageous – they are essential.

Are you strategic and proactive or reactive?

Of course, we want to think of ourselves as being strategic and proactive and not reactive but in most cases that’s simply not the case. It’s actually really hard to be strategic.

You have to know where you want to get to and how to get there and put a plan in place that turns that goal into a reality. It won’t happen by accident.

To be strategic you need to be disciplined. Disciplined with your time and how best to prioritise it, with distractions from emails, your phone and others and with your mindset to keep you focused on the big picture and what you want to achieve.

It’s easy being reactive to others and distractions like emails. They fill your time without you having to decide what you should actually be doing as the leader of your organisation. It’s the path of least resistance. And we’ve all had days like this and you often get to the end and wonder what you’ve actually achieved.

You may have made a difference to others and reduced the amount of emails in your inbox but did you give the big strategic stuff the attention it needs to meet targets and move the company to the next strategic destination?

Of course, that isn’t possible 100% of the time because we aren’t robots (or AI) and you do need to be available to others and need to react and adapt to changing situations. (None more so than in a sector like social care.)

But if you are mostly reactive then in time your care business will suffer from a lack of top-level attention. Then, ironically you become even more reactive as you fight to address the big issues and get your ship back on an even keel.

Find that healthy balance though and you can steer your business to where you want it to be.

 

The Dangers of Reactivity

When social care businesses operate reactively, they are more likely to encounter a series of challenges that can jeopardise their sustainability and the quality of care they provide.

Here are a few common issues that arise from a reactive approach:

Financial Instability

This is the big one. Financial instability is the business killer.

The care sector has an almost unique challenge in that your customers – LAs and ICBs – have too much say as to what your prices (your fees) should be.

Meeting their shrinking budgets is far more important to them than paying you what you need, so you can provide the care a person needs and keep your care business financially viable.

But not only is there less money available but the funding required to deliver the services needed is increasing.

Please read this article by the Health Foundation that was published a few weeks ago, Adult social care funding pressures. This chart from the article shows the increasing funding gap projection.

 

 

 

Unfortunately, LAs and ICBs mostly succeed in paying less than a care provider actually needs because care providers let them.

 

 

Or more to the point, care providers don’t know their numbers well enough to be able to demonstrate why they need the fee they have set.

It doesn’t matter how good your service is, if you don’t have a robust financial plan in place and know what fees you need to remain financially sustainable then eventually the quality of your service will suffer and your financial struggles could lead to bankruptcy.

Dire consequences for both the business and the individuals it serves.

If you don’t know your numbers and set accurately calculated fees but instead accept fees councils and ICBs insist are fair then you have two choices.

You can carry on as you are and hope things will change – I guarantee they won’t and, as the chart indicates, will almost certainly get worse. That’s the reactive option.

Or take control and set accurate fees that are based on your true costs, without any guesswork so you can fully justify it and know the consequences of accepting lower fees. That’s the strategic option. I’ll talk more about this strategic option below.

Inconsistent Quality of Care

Reactive care providers may struggle to maintain consistent standards of care because they are often forced to make decisions on the spur of the moment or on a case-by-case basis.

The quality of your care provision is of course dependent on your staff on the floor. You need enough, highly trained staff who have the right attitude to their work.

Keeping on top of all the training your staff needs and managing that so you don’t lose numbers off the floor can be a bit of a planning challenge.

If a robust system isn’t in place to manage staff training then vital training can easily be overlooked and the quality of the service drop which will eventually lead to, accidents, incidents and more serious safeguarding incidents.

You and your managers’ valuable time is then spent investigating and reporting these incidents and doing what they can to keep it from escalating and threatening their CQC rating.

Since the pandemic the sector has suffered a shortage of staff and a high turnover. This challenge has been exacerbated by the huge rise in the cost of living and people’s need to earn more.

A person may want to work in your care home but can’t because the supermarket pays the higher hourly rate that they need.

Being reactive to the problem could result in staff shortages, which could lead to an even higher turnover, potential burnout, and higher agency costs. Or worse, the situation isn’t managed and those under their care suffer.

Struggling With Compliance

The care sector is quite rightly heavily regulated and being compliant is crucial and not something that a reactive care provider will manage to stay on top of.

It’s too late to realise that staff hadn’t received the necessary training after a safeguarding investigation. It’s too late to respond to data protection regulations after you’ve been hacked or suffered a data breach. It’s too late to check you are compliant after a CQC inspection.

Using training as an example, have all of your carers received the Moving and Handling Practical training they should have (whether new or a refresher)? To be compliant, those that haven’t shouldn’t be delivering care unless you can show that they are scheduled to receive that training.

We carried out a training analysis with a nursing home and found that 70% of their care staff were overdue their M&H Practical training and weren’t booked in to receive any. These staff members shouldn’t have been on the rota.

Suffice to say, the registered manager jumped on that and we helped them schedule enough training sessions with us whilst keeping enough staff on duty.

This did of course, put an unexpected added financial burden on the care provider – another consequence to being reactive rather than strategic and in control.

Whether care specific compliance such as ensuring your staff have received their mandatory annual training to more general business compliance regarding data protection (have you completed your DSPT?) and Business Continuity Planning (BCP), being compliant requires a strategic approach.

 

The Importance of Strategy

When business leaders are strategic, the unexpected can be reduced to a bare minimum. It can never be totally eliminated – that’s called life – but can become an infrequent manageable event that can usually be handled efficiently and effectively.

Of course, there are always exceptions and challenges are large and not isolated to your own company, such as the global pandemic and subsequent huge rises in costs because of that and the war in Ukraine.

But a strategic leader will always manage these kinds of crises better than a reactive one simply because they are able to step back and think strategically.

Now, let’s look at the above examples again but with a strategic hat on:

Financial Stability

Understanding your costs and setting appropriate fees is central to building a strong, strategic care business.

I cannot emphasise just how important this is. It really does make all the difference.

 

It is the difference between having a stable healthy business and one that struggles and eventually goes under.

 

When you know the costs of running your organisation and the cost of delivering the care an individual needs then you can set the exact fee you need that allows you to cover these costs while also generating a reasonable profit.

And when you know your costs to the point of being able to demonstrate and justify them then you take away a commissioner’s ability to tell you that you’re wrong and what your costs and fees should be.

(As I’m sure you know, they use the Fair Cost of Care tool and results from last year’s initiative to do this all the time.)

Knowing your costs and setting correct fees ensures financial stability and the ability to invest in staff training, staff numbers, equipment, and facility improvements.

I said earlier that getting this right is central to the success of your business and it is. Get this right and you can afford to get everything else right. Get this wrong (and accept fees your commissioners want to pay which will always be too low) and nothing else they do will work as well as it could and the business will struggle and eventually go under. This is no exaggeration as 80% of businesses don’t make it and by far the biggest reason is running out of money.

 

Being financially healthy boils down two things: knowing your costs and setting the right fees.

There is also the vitally important matter of receiving the fees you have set, but when you know your costs the battle to receive the right fee is half won because you can negotiate with clarity and make the informed decision of refusing the client (or serving notice on current clients) if the commissioner refuses to budge.

You have other strings to your bow – for example, per client your costs won’t be much different to a similar provider, so having set an accurate fee and justified it, if a commissioner says they know of another provider who will accept the much lower fee they want to pay you know that it won’t be possible if that provider wishes to make the profit a business needs to be viable.

And you can point this out and highlight that the other provider will either make so little profit or will have to actually subsidise the care that the fee will be pushing them to further financial struggle or the provider will have to take away some of the care the client has been assessed needs.

Remind the commissioner that they will be breaking the Care Act if they go ahead and place that person with a provider, knowing that inadequate care provision is a possibility.

Of course, the other provider may be one of those large national companies who have deeper pockets and will knowingly take clients for next to no profit in order to fill beds. I know those who’s strategy is to make a profit on the last 10% of their beds. Provided the company does that then overall it’s big enough to create the profit needed to be just about sustainable. Don’t try to compete with them – present your fee and reasons for it and highlight the Care Act argument I gave above.

I talk in great depth on how to set the right fees and how to then negotiate for those fees in my report, 5 Steps to Make Your Care Business Financially Secure In this report I also show how the Fair Cost of Care works and hence what numbers you need to know in order to counter any arguments a commissioner presents from that FCoC tool.

Knowing your numbers and setting accurate fees to enough detail to be able to demonstrate why you have set that level of fee, isn’t a trivial exercise.

Ideally, you should use tools that were designed for the job.

For example, to know your costs you need to record them, ideally on a weekly basis, and for that need some kind of financial tool.

If you don’t have such a financial tool then take a look at the Running Cost Calculator.

We developed this tool specifically for the care sector and is based on a spreadsheet I developed for our sister company’s nursing homes.

Now, our nursing homes use this online version to record and manage their costs.

Each week an administrator enters all the costs of each home (not as onerous a task as it sounds). The costs are entered according to departments or type of spend and budgets are set for each area.

Managers and the CEO can see all fixed and staff costs against budgets in clear tables or charts. This helps them to easily see where budgets are being exceeded and address them before these spends impact the home further.

It is also easy to see running cost trends and hence cost rises that will of course reduce the profit each fee returns. Should overall running cost rises be consistent and significant enough, the nursing homes will carry out reviews of all fees.

Because it’s our tool and I’m of course biased, I give you 90 days to try it for free. If you decide it doesn’t work for you then let us know, we’ll cancel your subscription and you pay nothing.

So don’t take my word for it but try it out for yourself.

To set accurate fees you need to take your staff costs, work out your staff costs (that includes on-cost and cover cost) based on ideal staffing levels and spread that cost equally amongst your clients or residents.

You also need to calculate accurate average hourly rates so you can calculate the cost of extra care an individual requires to give you a minimum cost for that client. Once you have that you then add your target profit margin and any uplift.

If you want to see these steps detailed then please download the 5 Steps to Make Your Care Business Financially Secure report.

These are very specific steps and for decades there has been no tool out there that calculates accurate bed fees.

That is why we developed the Care Fee Calculator

Like the Running Cost Calculator, I developed a spreadsheet version first, for our sister company’s nursing homes, and once proven to work well, I developed an online version so all care providers can set accurate new fees and review current fees.

This tool will calculate the cost of the care a person needs based on the costs of running the care home plus the actual care provision you have assessed a person needs. Add your target profit margin and the tool will give you the fee you need.

It can also show you the financial impact of a current fee that is too low or of a new fee a commissioner wants to pay instead. This is very powerful and gives you instant visibility of the financial impact should you accept the fee they want to pay.

Imagine being able to tell a commissioner that the £1000 they want to pay would actually make you a loss of say 20% and so unacceptable and then be able to show that. They don’t expect providers to know their numbers that well and will put them on the back foot.

Even though this tool was originally created for care homes, it will work for any residential-based care provision including Assisted Living, Learning Disability and Day opportunities.

As with the Running Cost Calculator, please don’t take my word as to whether the Care Fee Calculator is right for you, but try it for free for 30 days.

The information these tools provide, will give you and your managers the clarity and confidence to negotiate for the fees you present to commissioners who will of course object and question the fee was calculated.

By proactively understanding their expenses and setting accurate fees (which they regularly review), our sister nursing homes have managed to maintain a strong, stable financial position.

As with the other tool, please don’t take my word for Care Fee Calculator but try it for free for 30 days.

This tool was developed for residential and nursing care homes. Another version of the Care Fee Calculator is in the pipeline for home care and other services that don’t provide beds. If you aren’t a care home provider and would like to know when the other version is available please simply drop me an email. (Simply click the link and send the email as I’ve already added the subject title.)

The information these tools provide, will give you and your managers the clarity and confidence to negotiate for the fees you present to commissioners who will of course object and question how your bed fee was calculated.

By proactively understanding their expenses and setting accurate fees (which they regularly review) our sister nursing homes have managed to maintain a stable financial position.

Because your financial stability is central to your success and the Running Cost Calculator and Care Fee Calculator will together give you all the information you need to be financially stable, we have decided to halve their price if you buy them together.

By all means use the links above to see more about how the tools work and then, if you want to try them both for free for 30 days before spending a penny, then click the link below and take advantage of this bundled half price offer.

HALF PRICE BUNDLE

By understanding costs and setting the right fees, social care businesses can ensure they continue to provide essential services to those who need them while maintaining a sustainable and thriving operation.

That was a large section but, as I said, getting this right is the most important thing you can do because only when you do can afford to get everything else right.

Quality Care Provision

A strategic approach enables businesses to define clear standards and procedures, ensuring that every individual under their care receives consistent, high-quality services.

Training needs for example can be properly systemised so that you know who needs what training when and can plan that training in advance whilst ensuring your service remains safe with regards to the required number of staff on the floor.

Being strategic also means you could for example, set up more experienced and qualified staff members to observe others carrying out moving & handling as part of their duty and sign them off as carrying out M&H Practical correctly and hence not needing the classroom training.

The consistency you get from managing this challenge strategically is not only reassuring for your clients and their families but also ensures a safe practice and far fewer incidents and accidents.

A strategic approach encourages businesses to anticipate potential challenges and develop proactive solutions.

For example, do you need a workforce retention strategy? Our sister company’s nursing homes invest in those good, loyal carers who want to become nurses.

This is a long-term strategy that is now paying off. Not only are the nursing homes building a core team of ‘home-grown’, loyal and motivated nurses, they are becoming less reliant on expensive agency.

And the positive knock-on effect is that other carers are going that extra mile in order to be considered for this programme.

Of course, this may be an investment too far or you don’t need nurses in your organisation. Another strategic approach to tackle the challenge of staffing levels is to take on apprentices.

Many young people are choosing to leave school in favour of apprenticeships. The return you get for nurturing a young apprentice is well worth the investment and contrary to popular belief, apprentices don’t have to be supernumerary if managed correctly and can actually save you money.

Read More: Apprenticeships – Why You Should Take on Apprentices for Your Care Home

Consistently Compliant

The key to consistency in business is to systemise.

A business that is systemised will run far more efficiently and effectively.

Read more: 7 Reasons Why You Must Systemise Your Care Home

Having the right systems and processes in place will help you ensure that your care business runs as it should with fewer mistakes and issues grabbing your attention AND it ensures that regular audits and checks are carried out to ensure that all is well.

From how to deliver the right care, to carrying out regular quality audits, to ensuring your company complies with data protection regulations, to making sure care plans are up to date, to ensuring disciplinaries are carried out correctly, a strategic approach to putting the right systems and processes in place will reap many benefits (see post link above) and maintain compliance.

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Strategic businesses run more efficiently and effectively and cost effectively. They are more resilient to the unexpected external threats like the pandemic and cost of living crisis.

Being strategic puts a business on a solid foundation that will make it strong and stable and will always out last a reactive business whose foundation is weak and moving like its built on sand.

In the world of social care, where the well-being of vulnerable individuals is paramount, a strategic approach is not a luxury but a necessity.

Being strategic, as opposed to reactive, can lead to consistent care provision, financial stability, and long-term success.

If you want to know more about the benefits of apprenticeships and how we can help as well as any other training needs, contact Julie Brown at julie@qualityofcare.co.uk.

If you need help systemising your care business then drop me an email at chris@qualityofcare.co.uk

 

 

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