Years of consulting with therapists in private practice has meant helping hundreds of therapists make informed decisions about key aspects of their practice. Therapists who are optimists, pessimists, ruminators, and procrastinators. Some are analytical, others instinctive. Many have (far too many) projects and ideas being tossed around and often float from one idea or to the next making it challenging to decide what to work on. Inherent in helping therapists make decisions is showing them how evaluate the opportunity cost of proceeding with one option, while eliminating another.
Here’s a resolution – how about instituting a new decision-making process in 2017? In every decision there’s a cost, but there’s also a hidden cost – the opportunity cost. That’s the lost opportunities of all the other options you could have taken instead. The concept of opportunity cost is a powerful one and can help you instill reason and pragmatism behind multifaceted decisions. Weigh not only the benefits, but the costs of every decision you make.
For example –
If you are considering offering a new service and do all the preparations to get it up and running, realize that the “cost” or trade off may be that you don’t have the funds, skills, the time or the “real estate” in your office to offer another service. This comes up frequently when therapists consider running a group versus offering individual services.
If you fail to keep abreast of a current trend or a new modality in delivering your service, the “cost” may be your inability to serve your target market as these new technologies make inroads in improving the delivery of that service – and you may lose clients to the competition who may be embracing the trend.
If you decide to keep employing a staff member with “issues” from chronic absenteeism to poor people skills the “cost” may be the time spent doing damage control, which may drain resources, and could cause others to quit in frustration.
If you spend your time doing the books and handling collections yourself, the “cost” may be the opportunity (and time) to get before prospective clients by networking, or building deeper relationships with your referral sources.
And examine the cost of doing nothing – Don’t fool yourself if you think doing nothing is neither good nor bad but neutral. There is indeed an opportunity cost of doing nothing, that is, the failure to reap the benefits of an effective intervention or the cost of inaction. Despite the fact that doing nothing can feel safe and comfortable, especially if you operate from a position of risk adversity or suffer from what some call organizational fatigue, for each new potential project in 2017, make a rule that the cost of doing nothing be quantified and considered. Once the cost of doing nothing is established as a factor, therapists often become more comfortable at approximating and considering it.
Every decision has a “cost” and each of these costs impacts either positively or negatively the processes and profitability of your practice.
When making decisions, you can control the quality of the decision, though not the ultimate outcome that occurs. But by understanding and examining the opportunity costs associated with important decisions, we can improve our odds of making good decisions.
Speaking of decisions, 2017 is looking like a year when we will all be challenged to learn to make decisions together as a crucial element of getting along and getting things done with others. All the best to you, your families and your patients in the new year. I am filled with gratitude for the opportunity to work and connect with so many of you.