Partnership Framework for Social Care
“Partnerships in Social Care; if done well will mean rapid transformation for the sector.”
— John Lanyon, CFA and Co-Founder of KareInn
It is a common maxim in business today, that the explosion of consumer choice and expectations have transformed the way leaders think about their business. In few areas is this more keenly felt than in Social Care, which is part-way through a fundamental transformation, that began over 15 years ago. As a residential care home group leader, the same constraints and pressures (costs and regulation) are still there, yet in every stakeholder interaction, the dynamic has changed and the need for a systematic approach, a Partnership Framework for Social Care is on the rise.
When choosing a home, your residents (and their families) can find your performance records (CQC reports, customer or family reviews, articles in the local press) alongside those of every other home in the area. They come to the first visit well prepared with checklists of demands and requirements. If your home is selected, they will expect access to up-to-the-minute (real-time) information about their family member, a view of their loved one’s activities and appointments and the ability to communicate regularly, that dwarves anything desired even 5 years ago.
This is driven by the best of intentions for their loved one’s care but also aligns with the service and delivery we all expect in our day to day lives. Your staff can now download Apps like Florence and find shifts and roles with other care providers within minutes. Suppliers are rarely now constrained by geography, often being able to service any one of your 12,000 care group competitors if it is in their interests.
In this new world, information is cheap, and you will be openly compared to all of your competition. Trying to treat everything on a purely transactional basis will ultimately be self-defeating.
Two aspects are key to navigating this; being clear about what you want to be great at, and leverage.
Your USP; what your organisation is great at
You do not have to be perfect at everything, but if you are being compared to everyone, then you must be great at something, otherwise, you will lose out in every comparison. As a care home organisation, this might be developing a reputation for ‘the best value for money care provider’, ‘great specialist dementia care’, ‘the best staff training and development provider’, ‘the best technology-led organisation’. Yes, you want to do all of these to a degree, and it is always a balance. But unless you are truly clear and communicate your priorities, you will always risk being overshadowed by your competition.
You need to work hard to maximise every interaction and every ‘unit of effort’ for maximum impact towards your priorities. This will run from your internal systems and processes, through to how you interact with the myriad of stakeholders required to run your business successfully.
Key to this concept of leverage is to consider every interaction as a Partnership. By approaching this from the viewpoint that both parties are willing participants, each with their own set of objectives, you will find it leads to the opportunity to develop much deeper, more loyal, profitable, and successful relationships. This is the opportunity for 1 + 1 to really equal 3.
Below is a simple framework to use to reconsider how you approach all your Partnership interactions. As above, this can be how you interact with the CQC and Care Inspectorate, residents, families, food service, CCGs, technology suppliers or with your own team members.
The Partnership Framework for Social Care Organisations
The start of the year, your financial year-end, or a new industry challenge (COVID) is a good time to reflect on the nature of these partnership relationships and whether there is room to optimise or reset. We would therefore encourage you to read through the Framework with a specific partner in mind, to get you thinking about how to create even more value for your business.
Having been asked by many CEOs in the social care sector, we included notes about how to consider taking on a financial partner. Given the COVID disruption, this is an aspect many residential care home leaders are evaluating; but arguably it is also one of the areas of Partnership that can have one of the biggest long-term impacts on your business – good and bad.
It is therefore critical to approach it systematically with the following framework.
1. What are we trying to achieve with this Partnership, in the context of reaching our Business goals?
- While it can be easy to come up with a dozen items on a wish-list for the Partnership, break this down to your Top 3 in order of priority; the components that are critical to you meeting your wider goals. Overlay this with an appropriate timeframe for each.
Using our financing example; it may be that your business goal is to acquire a further x3 homes in your core region, allowing you to take advantage of your existing regional-leader position with x10 homes. Operationally this will allow you to exploit your exceptional training program over a wider base, allowing the same high-quality provision at a lower cost point. This expansion will require £10m but will increase the profitability of your new and existing homes by 5% per year. You a) want a financing Partnership that can provide the full amount, but perhaps b) you don’t want to add too much risk to the existing business, and c) you feel the right partner should have a voice within the business to add expertise you don’t want to employ directly.
2. Why are you doing this Partnership?
- How important is this to your wider business goals? Does everyone on the team agree; do you need them too?
- Be careful that this is not seen as a ‘pet-project’ for the CEO if, in reality, it is of critical importance to success (or even survival). In almost all cases, it will not be you, but your team that is responsible for dealing with the Partnership day-in-day-out, and that will determine the success more than almost any other factor. While this might seem frustrating, creating the buy-in from your team will be critical to success. Leadership is gaining their buy-in even while accepting the fact this may not mean full agreement.
Using our financing example; the idea of additional site expansion may not appeal to all, a regional manager may be convinced they are already too busy, and would not have the capacity for more, yet would not want to yield to more support. While this may not make or break any financing, it will add sand to the gears, and will often be important to both explain the decision, and understand, where viable, how to mitigate their concerns.
3. What do you bring to the table for the Partnership?
- What are you great at, but also what are you weaker at – be honest. This will help to define further what components are needed to be successful in the Partnership.
In our financial example, we use a family run business. As an historically family run business, you have proven to be incredibly careful and effective stewards of your business over many years; with an intuitive understanding of every £ flowing through your business. However, you may not have invested in a full finance team and a heavyweight CFO with the latest accounting and reporting system. Therefore, while you would be a candidate for bank debt funding, this would likely rule out an appetite from other financial investors who would like to see a stronger finance team – unless of course, you are willing to hire in this area. None of which is to say there is a wrong-or-right approach you should take towards taking on a financial partner, only honesty about ‘fit’, given the objectives of each party.
4. How do you want to Partner – what will be the agreed rules?
- What resources; time, people and money will you have to dedicate in both investigating and then maintaining the Partnership?
- Do not underestimate the intangible/cultural aspects of this consideration. For example, as a small organisation, you may eschew long reporting lines in favour of a flat decision structure, with a wide range of the team being able to make decisions over Whats-App or Slack rather than through a committee. Partnering with a firm that is diametrically opposite (e.g. large corporate), is a culture question.
Any financial investor will be clear about the formal reporting requirements (e.g. quarterly reporting and monthly covenants) which is the easy bit. What is trickier, is the day-to-day relationship. The rule of thumb for any financial investor will be that they want to be ‘your first phone-call in the event of a road-bump’ however that trust and relationship is a two-way street. If they act poorly and provide a disincentive for you to call (or just don’t add any value), then there will be a misalignment there which can breed issues.
5. Ok. Process. How do we find the Partner that can best meet our needs?
- The Process defines how you go about finding and evaluating your Partnership options. Should you do an RFP, do you already know most of the options, should you hire an advisor to help?
- The optimal process will be a function of the answers to all of the above.
Using the financing example to see this play out in two different option sets;
The £10m financing would be very small in the context of your existing and demonstrable profitability; in essence, the money is underpinned by ‘doing more of the same’ as your track record. You have a strong CFO in place who can handle negotiations without significant distraction for the CEO, and all preparatory material ready. Given your desire for ongoing interaction, there are say, 20 potential providers. In this instance, running a formal process – sending out preliminary information to all 20, and limiting to 1 CFO conversation before asking them to present terms; whereby you select the cheapest and proceed with them.
As above, but for the £10m financing to be viable, you will need to demonstrate that you will achieve the 5% decrease in staff costs. Keeping everything else the same would likely lead to unsuccessful fundraising. Though you will have received offers from 20 providers, because of how the process was run, none invested much time or effort upfront. There is a high risk that when the ‘picked party’ got into the detail, they changed the terms or walked away completely. A better approach under this dynamic would have been to pick 2 or 3 providers and look to develop a relationship over a period of time. Even though they know they are in competition, it is not a blind ‘pricing race’ and therefore they are incentivised to understand your business first, before offering terms. This means you still get to select the best option, but it also drastically reduces the chance of failure later on.
6. Pick the best Partner that the Process produced and negotiate in good faith.
- Noticing the theme developing, be clear and open about your objectives and expectations and ask them to do likewise. Then map out the agreement that best balances both parties.
- The most common mistake is ‘doing all the wrong things, for all the right reasons.’ You both want to make it work, but if this is leading either side to overpromise (for example on timeline expectations) then the relationship will ultimately be doomed.
From the financing example, get the detail right now, ensure clear understanding on any point (even the hard conversations), then the agreement can be put in a draw and never looked at again!
7. Commit to each other and get to work.
- The chosen Partner may not perfectly satisfy every initial requirement you may have held. There may continue to be nagging doubts from you or your team that there was a better option. In business, there is rarely ever a ‘perfect’ solution, but at this point, it is critical to trust in the process that has been run and to commit to making this Partnership excel.
- A sub-optimal solution that is approached with full commitment, enthusiasm and considered execution from both parties will always trump a ‘perfect’ solution if it is missing this impetus.
- More importantly, the more effort you put into the relationship, the more you can hold the expectation to extract.
8. Constantly monitor the health of the relationship.
- Done well the agreement will be clear about the objectives of each party; these should be regularly (monthly / quarterly) evaluated to ensure both that the original objectives are still valid, and that the Partnership is still optimising how these are met.
- Don’t forget to pick up the phone. Outside of the formal requirements, remember that there are two Partners in business and the personal relationship aspect should never be overlooked.
Done well, great Partnerships, be they with your customers, suppliers or even your own team, whereby you move beyond the short-term transactional, and into a deeper commitment from both sides, lead to both parties gaining more for every ounce of effort.
What you create from this Partnership Framework for Social Care process could be repeated in all aspects of your business, delivering exponential benefits (1 + 1 to equal 3) across your entire care organisation.
The best operators in the sector – many of whom we work with at KareInn – understand this deeply, and it becomes clear in how they interact with us and others. But they also see that the use of technology is an area where they can fundamentally transform their business providing real leverage to help meet their clearly defined objectives.
If you’d like to speak with John Lanyon more about the Partnership Framework for Social Care and how to optimise your business with the right partnerships, you can connect with him on LinkedIn or email firstname.lastname@example.org.
More about John:
As the CEO of a global corporate financial advisory firm, John has spent many years working with businesses in a range of sectors including technology, healthcare and energy, in the UK and globally. For the last 13 years, John was also a lead volunteer member of the Alzheimer’s Society research community, helping to fund and work with academic researchers in dementia care, cure and prevention. John founded KareInn to deliver tangible outcomes for people living with dementia. He developed the Partnership Framework for Social Care as a means to help other social care businesses join the rapid transformation in social care.