Situation: A company is in the skilled trades. When there is an injury at work, Workers Compensation does not cover the employee if they were using drugs or alcohol at the time of the injury. Should you conduct random drug tests at work? How do you make employees aware of company policy on random drug tests?
Advice from the CEOs:
Laws governing Workers Compensation vary by state. Be sure to get the latest update on regulations from your State.
The best policy is preventative. Always test for drugs and alcohol prior to hiring. Let potential employees know that this testing is a requirement of employment, and that a positive test disqualifies the candidate. A candidate has the option to disqualify him or herself rather than be tested.
The use of medical marijuana with a doctor’s prescription does not preclude a candidate or employee from failing a drug test. State laws regarding medical marijuana are evolving, so monitor state regulations.
In your employee policy, specify that you can test for drug use at any time, at your discretion. Additionally, state that you have the option to perform a drug test in case of an injury. If there is an injury on the job, have the treating physician perform a drug test on the injured employee.
Assure that you are consistent in treatment of employees and in how you apply your policy.
There should always be a reason for a drug test – tie it to employee safety.
As you institute a new policy, let all employees know about the policy. Prominently post the policy at your place of work, and remind employees about the policy at appropriate company or employee meetings.
Situation: A company that has been in business for several generations has been approached by a government official with an unexpected regulatory requirement and a stringent timeline for compliance. This was completely unexpected and it will be disruptive to comply. How do you respond to a regulatory wild card?
Approach the agency and negotiate an extension of the deadline, or a series of steps that will bring you into compliance but under conditions so that compliance does not disrupt your business and workload.
Dig to determine the ultimate reason behind this development. Is it a neighborhood evolution issue where new neighbors want you or your business out of the way? If so, is there a win-win alternative that gives you a new or better location in exchange for moving.
Seek legal assistance – local lawyers may be knowledgeable of the officials involved or their superiors, and will know the language to use to ask for the leeway that you require.
Circle the problem from every angle – look for other city contacts that can assist.
Trade a tax concession for compliance – particularly if the issue is a long-standing situation that has just now been brought forward.
Look for a way to turn the problem into an opportunity by solving the problem uniquely in a way that favors you.
Consider asking them to help solve the problem.
Do NOT respond with an attack. Local officials can be in place for a long time and may hold a grudge.
Situation: A company has a network of regional offices, operating under loose oversight from the home office. Increasingly, large customers are asking for national service agreements, but the company struggles to coordinate uniform national service delivery. How do you shift from independent regional to coordinated national operations?
Advice from the CEOs:
If you want to act like a national company, then organize like a national company. Create a national account office which will take the lead in negotiating national contracts. That office will then coordinate with the regional offices to assure that service delivery occurs according to contract.
As the national office is built, it will be important for them to understand how service delivery may vary between states because of differences in state regulations. This will require a manager who is experienced and knowledgeable in your field. This may be a promising current regional manager or an outside individual from your industry.
You will also want to define customer categories which will enable you to classify current and prospective customers as regional or national accounts. You may want to consider three customer categories, for example Regional, Emerging National and National Accounts.
The key to success will lie in your incentive and professional development structures.
If region managers receive their incentives and promotions primarily for developing regional business, then this is where they will focus.
If you want the region managers to shift their activity and priorities to creating and servicing national contracts, then bias both your incentives and professional development programs accordingly.
For region managers, continuity of business will be a top priority, as this enables them to maintain region performance. To come on-board with the new program, they must perceive a value for both themselves and their customers.
Once you have determined your structure, look for high profile wins that drive the structure. Reward and promote those who produce these wins.
These producers will become your champions for change.
The message will spread quickly across the organization.
Situation: A company seeks the best way to introduce a novel health monitoring solution. The challenge is that people don’t want to change their routines. If you can creatively fit into existing routines with minimal behavior change this facilitates adoption. How have you introduced a new solution without asking for a change in behavior?
Advice from Kiran Kundargi:
As the population ages health care costs rise. A solution that can reduce healthcare costs while allowing more seniors to remain in their homes this can significantly reduce health care costs. The sticky part is making this solution a part of the elder’s and their family-caregiver’s daily routine.
Our solution is to seek the low hanging fruit – post-hospital discharge recovery at home. Seniors who have been discharged from the hospital following treatment or surgery often receive strict instructions to take their medication, adjust their diets and engage in regular exercise. This requires changes in the senior’s routine, and non-compliance is a leading cause of readmission.
Effective October 2012, Medicare will stop paying hospitals for readmissions that it deems avoidable. This forces hospitals to take a more active role in follow-up care following discharge. Our online health monitoring service, Nclaves, provides a low cost solution.
Nclaves facilitates communication between the elder and his or her children and grandchildren using Internet and hand-held technology. This enables family to help their senior comply with post-hospital instructions.
We approach this opportunity in four phases.
We start by using the Internet. We have made our solution easy for physicians and hospitals to find. Internet activity is supplemented with presentations to monthly meetings in hospitals. By acting as an information resource on the change in Medicare regulations, we can introduce our solution to those who will suggest it to patients. Early adopters will enable us to build case studies demonstrating both technical viability of our solution, benefit provided to patients, and impact on readmission rates and cost of care.
Next, we will approach large employers. Employers understand that increases in hospital costs will adversely affect the cost of insurance benefits for their employees. We want them to include Nclaves as part of their employee health and wellness programs.
The third step is insurance companies. These companies have the leverage to specify and suggest options to both patients and providers.
Our final step is broad market acceptance. Once both payers and providers are on-board, we will be ready to work through alliances, the Internet and broader public relations and advertising campaigns to build market acceptance.
Situation: The medical device industry faces uncertainty due to potential changes in reimbursement, increased regulation accompanying health care reform, longer FDA approval timelines and the economy. How does this impact strategy for an early stage medical device company?
First and foremost it puts a premium on focus. We compete in a market dominated by large incumbents. When introducing new products in the past we would have blanketed the market to maximize early market share. Now we are being much more selective in terms of where we compete and putting more effort into targeted geographies.
This focus is accompanied by more caution and control of spending. We will only hire a new sales rep, for example, if we are assured that there is a significant customer base in the market that rep will serve.
Similarly, we are being much more cautious in our capital equipment decisions, and if an employee leaves we do not automatically replace that individual.
In terms of price planning, where in the past we would have counted on annual price increases, we now plan for the potential of prices decreasing over time to reflect new pressure on reimbursement and cost containment. As another example, in 2012 there will be a new tax on medical device companies. We assume that this will reduce our margins where in the past we might have passed it on to the buyer. Reduced margins will also impact our new product investment strategy.
The big change in long-range planning is that we are focused on slow, sustainable growth – maintaining both gross and net margins and profitability. This is a major change from five years ago when our focus was on maximizing rapid market penetration for new products. We want to be self-sufficient financially and thus avoid having to rely upon future fund-raising rounds.