Creating Incentives That Drive Sales Results

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As Steven Levitt validated in his Freakonomics series of books, people do respond to incentives. The question is how to best create incentives for your sales team? The first thought should actually not be about the reward, but rather the behavior that you want to promote. For example, do you want your sales team focusing in on existing customers or new prospects? Do you want them focusing in one product group or another? Do you want them to sell a product now or generate a long-standing relationship with a loyal client? The answers to these and other related questions need to be carefully considered before determining what incentives to entice your team with. If you do not think through the outcomes that you want to create, then be prepared for people who are excited about creating individual success; however, that may not be consistent with what you want the overall group or organization to be driving towards.

Once you have addressed the behavior issue above, then you need to have open discussions with members of your team about what specific types of rewards they would find meaningful. Sales leaders incorrectly assume they know what reward(s) will motivate their team. People often are driven to excel for many different reasons. Some may be interested in money, while others are focused on travel. Perhaps others want time off whereas certain employees want the latest and greatest piece of technology. The only way to be sure what will motivate your team is to simply ask. If you lead a large group, then send out a survey with a list of choices and make sure to include a fill in the blank section for additional ideas. You likely will be surprised by the variety of suggestions you receive.

After determining what each individual is most interested in, list them out for your use and then determine which responses received the most interest. Consider choosing the top three on the list and create incentive programs (again based on the behavior you want to establish) that reflect the most popular answers. However, make sure to specifically list what each person wants because there will likely be someone on your team who is not interested in the top three selections. This is your opportunity to reward this person with a prize of their own should they earn one of the top three slots. If you choose to do this, then make sure you share this option with your team early on so you do not get people to “check out” early in the contest because they are not interested in your incentives. And, if there are individuals who seemingly want unique rewards but yet they are not on pace to win the current contest, then make a note of what they are interested in because you never know when they may do something in the future which would necessitate a nice gift for their efforts.

In sales, you can often encourage associates to give that extra effort if you provide them with a carrot at the end of the stick that is personalized and/or perceived to be valuable in their eyes. The frequency of these rewards is up to you, but I would offer them, at a minimum, on a quarterly basis and perhaps more often depending on the nature of your business. Regardless of the timing, make sure you incorporate the proper incentives into your sales campaigns. If you create them correctly, your team members and you will both be very happy with the results!

People: Your Most Important Business Asset

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Over the years I have learned one powerful lesson, the quality of the people around you is the single biggest factor impacting your success. While I believe this is true for all areas of business, I know it is critical to one’s success in my field of expertise – sales. I remember it like it was yesterday, I was on a plane flying back from a business meeting and I was frustrated with the lack of overall results our sales team was having. As the leader of this group, I felt personally responsible for our lack luster results. As I mentally reviewed the individuals on my team I acknowledged that I had a mix of A, B and C players. The A player was driving the majority of the revenue and the B and C players were delivering very average sales numbers. It was the old 80/20 rule – 80% of the sales come from 20% of your people. So I thought to myself, what would the results of my team look like if I had all A players?

The answer to this question could change the way I look at my team and my business I thought. But how could I consistently hire A players? After doing lots of research, I eventually landed on the Topgrading process by Brad Smart & Associates. Brad’s firm pioneered their methodology several decades ago with Jack Welch at GE. Of course, if Topgrading is good enough for Jack Welch then certainly it has to be good enough for me! I became fixated on the Topgrading process. I scoured their website (www.topgrading.com) for insight and articles, I purchased several of their books and I even got a DVD to watch some of their experts conduct interviews. Their methodology is powerful. Here is a brief overview of how it works:

Since most resumes are simply a one-page document that outline a candidate’s strengths but hide their inadequacies, I started using a 4-page Career History Form via Brad Smart & Associates. Then, I conducted one or two phone interviews using a specific set of questions as outlined by Topgrading. In many cases, I ended up disqualifying candidates before even making it to a sit-down interview. One of the keys to all of this is explaining to prospective employees right from the start that you will be asking them to set up reference calls for you with current and/or previous bosses. This definitely can change the answers to some questions you ask candidates, since there is a risk that you might expose some of their information later in the interviewing process. However, this comment around reference checks is not just a threat , you do actually follow-up on these conversations before you hire a candidate. Additionally, another powerful step in the process is the face-to-face interview. There are two critical components to this interview which are likely new to outsiders of the program. First, all interviews are conducted by two people from your company. One person is tasked with asking the questions and the other is tasked with listening and writing down the answers. This minimizes the risk of missing something important that the candidate says (or does not say for that matter). The other key to this sit-down interview is the chronological nature of the questions. All of these questions are outlined when you read the Topgrading book and these help you stay on track. It is great to be able to stick with a specific process which leads to consistently interviewing people with the same process. This really seems to take a lot of the emotion and bias out of hiring decisions. (Am I the only one who had previously hired people just on a gut instinct?)

The Topgrading process works, plain and simple. Once I started implementing this process into my sales organization, we went from about 25% success in hiring top performers to about 75%. That is a remarkable improvement. And, this better success in finding top talent has clearly led to greater sales results. Two points of caution though. First, Topgrading takes time and requires you to be patient and to stick with the program. Any deviation from the process or rushing steps can lead to poor hiring. Secondly, outside recruiters can become very frustrated with working with you. They often send many candidates my way with very few of them to be hired. The Topgrading process definitely challenges many recruiting firms, especially if they are paid on a contingency basis. I always explain this process to them in advance of partnering up but I still find this to be an issue for some of them. Even though this process is time and labor intensive, it does pay off. If you are looking to improve the results of your sales team and reduce rep turnover, then I highly suggest you spend some time learning about Topgrading. It could change the way you run your business!

Delivering Effective Communication to All Ages

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Some time ago my wife and I were beginning the dreaded potty-training ritual with my youngest son Jack. Like most parents, we started off with the best intentions. Simply stated, for every time Jack would use the bathroom appropriately we would reward him with a little gift. We were certain this would generate the right behavior. Unfortunately, he never seemed to connect the dots. Jack did not learn how to master this important craft even though minor forms of bribery. After two months of failed attempts we gave up on this approach. Since tangible rewards did not net the results we were looking for, we decided to go the other direction. Maybe showing disappointment and frustration outwardly would lead him to see the light? After several weeks of this, we quickly realized that negative responses to his actions caused an even worse outcome. Clearly, he did not care for this approach and we felt like we were getting farther and not closer to the objective. Following close to ten weeks of banging our head against the wall stemming from a combination of offering gifts to outwardly showing our frustrated emotions, we tried a new approach.

My wife and I decided to praise him for his actions regardless of the outcome. Every time he did or did not make it to the restroom, we put a smile on our face and confirmed to him that we were supportive of him in good times and in bad. And an interesting thing started to happen….he slowly started to figure it out. It did take a few more weeks, but Jack really seemed to feed off of how happy we got every time he successfully accomplished the mission. In fact, every time he did it the right way we treated it like a mini-party in our house. We would yell and scream for joy. To see Jack’s face light up every time we did this was magical.

After trying three different approaches, it was interesting that we realized the best results with our son were through positive verbal reinforcement. Now that Jack is fully functional in this capacity now, it occurred to me that my experiences with him during this process have a direct correlation to how I should approach my communication with co-workers.

As I reflected on my management and leadership style at work and considered how my fellow employees responded to my actions, it dawned on me that I was not using verbal praise and recognition consistently enough. After studying more on this topic, I learned that whether you are a young child or seasoned veteran in the workplace, we all thrive best in an environment where we are regularly praised verbally for our good deeds. This is particularly effective when positive statements come from a boss or someone whom you respect. So I took all of this to heart and for the last year or so I have been focusing in on constantly praising my team members for events that deserve recognition. I provide this feedback face-to-face, via email and by delivering handwritten notes. While I find that the in-person acknowledgement of success is the most effective, it does help to add variety to how you deliver recognition to your co-workers (especially for those who receive it frequently). If you have not taken a minute to provide positive reinforcement to a team member recently, try giving it a shot right away. Take it from me, verbal recognition can provide long-lasting thoughts in the minds of the recipients. I hope these comments not only motivate you to start something new with your team, but also encourage you to make this part of your overall management and leadership approach in business and in life!

Eight Ways to Increase Staff Motivation & Morale

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Eight Ways to Increase Staff Motivation & Morale

During the first break-out session at this year’s NAHAM conference in Orlando, I delivered a speech entitled “Keys to Effective Leadership in a Diverse Workplace.”  Within this presentation, I discussed a variety of topics including incentives, rewards, goal setting, time management and increasing staff morale and motivation.  By the end of my presentation I had realized that the attendees were most interested in my section on increasing morale and motivation. 

The following is an overview of the top eight ways you can accomplish this within your team or organization:

1)     Public Displays of Appreciation

While money can sometimes be a motivating factor, there is extensive data suggesting that employees have a strong interest in being recognized by their managers in front of their peers.  The next time one of your team members provides a remarkable customer experience, try acknowledging them at the next department meeting. 

A key aspect of this recognition is to request that they stand up in the front of the room and that you sincerely thank them for a specific instance where their work went beyond expectations.  This act will put a smile on their faces (as well as in their minds) for quite some time which will in turn enhance their work satisfaction and attitude.

2)     Work a Station Occasionally

Many managers complain about all of the calls, meetings and paperwork that keep them in their office for days at a time.  While this may be unavoidable it has been my experience that employees would like to see their managers walk in their shoes from time to time. 

For example a manager in the registration area should occasionally sit with patients and help with the admission process.  Not only will the staff appreciate the fact that their manager understands what it is like to do their jobs, but by being on the front lines managers will hear many things about their employees that they would not have heard with their office door closed. 

3)     Training Should Not Be a One Time Event

Many organizations have strong new-hire training programs in place, however not enough on-going training for their employees.  Managers should constantly invest in a cycle of success for their employees. 

This means providing regular development opportunities for them.  Managers should want this for their staff, and research suggests that employees generally have a desire to keep improving and learning.  If you run out of training ideas, ask a vendor or consultant to come in and discuss market trends or case studies of other successful organizations. 

Bottom line, in order to keep spirits high management needs to provide employees with frequent opportunities for professional development.

4)     Provide Regular Performance Reviews

Managers need to keep a close eye on how their employees are doing.  Regular feedback is a necessity.  This cannot be accomplished through an annual review.  I recommend providing reviews on a quarterly basis – twice in writing and twice verbally. 

I have found that most good employees want to know how their manager rates their work.  So, increasing performance discussions will increase morale and continuing that communication throughout the year will keep the motivation high. 

Additionally, providing consistent feedback gives management more data to make changes in staff should an employee not be performing well.

5)     Set Clear Expectations

You can start to frame your expectations as early as the new employee interview process.  Then follow that by using a simple “expectations document” to remind employees of their objectives as the year progresses.  This resource can be used for both new hires and existing team members.

The “expectation document” lists what you need and want from an employee during a review period.  It is a working document that will change as an employee grows and objectives are updated during the review process.

This type of communication is vital to the success of an employee.  It has been proven that people want to know what is expected of them and how they will be measured against those objectives.  If this information is delivered in a clear and concise fashion, you will greatly increase morale and motivation.

6)     Empower Your Employees to Say Yes!

Most organizations spend a lot of time and money trying to hire and retain high quality people.  This allows management to trust that staff members know right from wrong.  If that is the case, then there is no need for policies and procedures that make it hard for employees to do the right thing.  The harder you make this process, the more frustrating it will become and ultimately your customers (both internal and external) will be affected.

7)     Control Team Negativity

Unfortunately, we will all come across an employee who is a bad apple.  If this is your reality, then move quickly to improve the situation. 

If one person has a bad attitude, then separate that person from the team and work with them on improving behavior.  You do not want one person’s negativity to have an impact on your top performers. 

Additionally, good employees want to see their management address problems head on.  Get in front of your problems right from the start and you will be amazed how much your team dynamic improves.

8)     Enable a Sense of Progress

Employees do not expect to move from the front line to upper management overnight, but they do want to feel like their job has purpose, and that they are moving in the right direction.  Low levels of morale and motivation can set in, if employees do not think that they are making progress. 

Give your employees opportunities that will allow them to validate that they are making progress.  Develop a career ladder or appoint team members to lead special projects or tasks.  These are small ways to show employees that they are moving forward. 

Hopefully these eight ideas serve you well as you continue to shape and mold your team.  Always keep in mind that employee morale and motivation can play a significant role in the short and long term success of your organization.

Seven Ways to Minimize Your RAC Financial Risk

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The Recovery Audit Contractor (RAC) demonstration project found over $1,000,000,000 of improper payments from just a handful of states.  The permanent program will likely generate several times that amount.  Even though your organization may not be receiving many complex review letters yet, you should be preparing to minimize your financial exposure as much as possible.  Here are seven ways to accomplish just that:

1)     Mail Yourself a Mock RAC Letter

Many providers are concerned about how the RAC letters will be handled in their facilities.  Some popular questions are: Who will the RAC letter be routed to within our hospital?  How long will it take for that letter to get to the right person after we receive it from the RAC?  Will there be any consistency to how our internal team treats this process?

One quick and inexpensive way to address these questions is to mail yourself a letter as if it was from your RAC.  Go ahead and make it look official, address it to the person who is responsible for RAC letters and document exactly what day you put it in the mail.  Then, wait to see what happens.  Even if you are already receiving letters from the RAC and they appear to be handled correctly, I would suggest that you mail a sample letter every month to ensure that your process is still running smoothly.  (If it is not, wouldn’t you want to learn that from a practice letter before you miss a deadline with your RAC because the right person did not receive their mail in time?) 

2)     Review All Four RAC Websites

All issues need to be formally approved and posted on the RAC websites before they can pursue those with providers.  Given that, review your regional RAC website on a weekly basis to see if there are any updates.  However, do not stop there.  Take a few minutes every couple weeks and review the other three RAC sites as well.  If a different region has had success with a series of DRG’s, it only is a matter of time before your RAC will add that to their approved list as well.  Be pro-active and see what is going on from a national basis and get your team prepared.  You can learn more about the four national RAC’s at: www.aha.org/rac.

3)     Increase Your Billing & Coding Resources

While medical necessity was the category that produced the most improper payments during the demonstration project, the permanent program has only approved DRG related issues as of the first quarter of 2010.  Many hospitals have built up their RAC team largely focused on clinical resources, but they do not seem to have added certified billers and coders to meet the increased demand that is soon to be coming.  If your facility gets inundated with RAC letters, your existing team members will likely not be able to handle all of that additional work.  I would encourage you to add another FTE if possible or partner with a company who could provide this as a service to you.  Doing nothing will probably result in adding to your financial exposure from the RAC’s.

4)     Plan for an Audit Revolution

Given the overwhelming financial success of the RAC demonstration project, all other payers must be salivating over the opportunity to perform similar audits on you in the future.  While this is painful to think about, your audit concerns need to focus on more than just the RAC’s.  Plan for Medicaid, Blue Cross, United, Aetna, etc. to quickly piggy-back off of the wild success that the RAC’s have had. 

Accordingly, your internal committee should probably not be called your “RAC Team” but rather your “Audit Response Team.”  Think more globally about how auditing will change in the near future.  It would be helpful to have a plan in place to handle audits that come from any payer, not just RAC. 

5)     Focus on Getting it Right from the Start

While responding to the RAC’s is a necessary endeavor, your real goal should be much broader than that.  In an ideal world, you would like the auditors to never find any reason to come calling.  In order for that to happen, you must be focused on revenue integrity and data correctness right from the start.  How do you do that? 

Get more committed to your denials management process! Regardless of how good you think it is now, there is always room for improvement.  You probably need to have parallel task forces to accomplish this.  One would be for your newly named “Revenue Integrity Team” and the other would be your “Audit Response Team.”  The combination of both of those efforts will produce short and long term results which will pay dividends to your organization.

6)     Be Prepared for the Long Haul or Partner with Someone Who Is

Even though a defined appeals process has been established for the RAC’s, that timeframe has turned out to be much longer than anyone expected.  For example, there are many providers from the demonstration project that are still waiting to have resolution on their appeals.  Given that the permanent program will grow to 50 states, what will the appeal timeline look like for you?  Common sense would suggest that many appeals in the future will take years to finalize.  Given that, do you have the time, resources and patience to work through this process over the course of several years?  If you are not sure, I would encourage you to partner with a company who can help you do just that.  And, make sure they charge you a flat fee for the appeals; otherwise you may end up winning the RAC appeal but giving all of your proceeds to your vendor.

7)     Build Your External Team and Plan for Implementation

Many providers THINK they have everything in place to manage all of the audits coming their way.  However, so did most of the hospitals during the demonstration project.  The unfortunate reality is that many of you need help.  If you cannot pull together funds to add FTE’s, then partner up with external resources who can help.  You should have a RAC attorney who you can call when you need their services.  Additionally, do you have a company that can provide both DRG and medical necessity claims review and support in the event your existing team cannot manage the increased volume?  Hopefully you will not need to utilize all of these services, but since you cannot really tell what your workload is going to be it is wise to set some partnerships up now.

If you agree that you may need some external help, please remember that most partners need some time to implement.  You need to sign an agreement and then given the nature of the RAC reviews, you may also need to set up electronic access to your system.  This can take two or three months.  Don’t wait for the RAC’s to create a problem for you, proactively plan for success in this area.

Hopefully these ideas will help minimize your current and future financial risk related to the pending audits.  While it can sometimes be difficult to plan for the unknown, there is simply too much at risk not to be prepared.  Do yourself a favor and implement the steps above.  It would be great to have all of them in place and not need them than the other way around!