hazardous practice size

Most hazardous practice size? Ten people

Posted in Expansion Issues
Tagged ,

From my observations, the most hazardous practice size has about ten people. Let’s examine why this is true and how to work through these perils.

Characteristics of a ten-person practice

For a practice to grow to ten people, several achievements have already occurred. First, the founder of mental health practice has survived the startup phase. This stage always includes building a practice infrastructure and overcoming the technical, legal, and financial challenges that come with any startup. (See The ultimate guide to starting your own practice.) 

Additionally, the organization has mastered the daily challenges of scheduling, billing, collecting, marketing, and while providing enough therapy to grow. (See: The boss’s boss–Unrelenting business demands in practice.)

Furthermore, the organization has begun to grow a staff with all that comes with those challenges. (See: The ultimate guide to building your staff and culture.) 

And all of these accomplishments have led to some little-noticed consequences. For example, the organization has accumulated some notable fixed costs for space and infrastructure that continue no matter what. And the owner, at this stage, is in the habit of covering these costs each month.

And what makes this a dangerous time is that the ten-person organization is on the cusp of significant changes in identity and structure. 

Necessary changes to grow larger

To get to the next phase requires more than just hiring more people. The next stage will change the relationship the owner has to staff and to all of the office. What I mean is this. 

Before hiring that tenth employee, most owners can quite comfortably hire, manage, supervise, plan, and do a significant amount of psychotherapy. But something is going to have to give. To grow larger while continuing with the owner-at-the-hub-of-everything model means some areas will not get the appropriate attention. 

Typically, it is at this stage that the owner re-conceives how to do everything. Usually, the owner is looking for others who might share some of the load. Often that means promoting some employees or at least delegating tasks to others. This reformulation is natural and, I would argue, necessary to progress and grow as an organization. 

See The dilemma of success: Do it myself or delegate for more on these decisions.

Promoting and delegating

And yet, one of the consequences of these changes is that the leadership structure has more layers. This redesign changes the organization in several ways. 

First, promoting and delegating is the beginning of forming a leadership team. Sharing the load can be an incredible relief for the owner, especially if the new leaders are easy to manage.

But that also means that the nascent leadership team excludes some. And it is not unusual for some employees to have somewhat inflated views of their leadership abilities. Resentment can easily creep into some people’s minds—especially the ones who feel entitled and then slighted. 

The owner becomes a more distant figure

Another consequence of adding organizational layers is the increased distance between the owner and some employees. Frequently, the owner has, with growth, become less available than when the group was smaller. While adding members to the leadership team may help the owner manage things more efficiently, some may miss the old patterns. You will hear, “It just isn’t like it used to be.” Of course, it isn’t.

Inevitably some existing staff will find that the organization they joined no longer exists. The increasing size has changed things. And not surprisingly, a few employees may loosen their attachment to the owner and practice. 

Sadly as all these factors play out, some will feel rejected, and some disconnected. At this stage, it is not unusual for several employees to exit in a short timeframe, one of the most significant risks of the ten-person organization.  

Read more about the challenge of several exiting at once in this post: Growing pains: Overcoming crises–When several clinicians leave

Why is the ten-person organization a hazardous practice size?

To summarize thus far, the owner is investing significant amounts of time and finances every month to keep things afloat. There is not much margin in either time or money. 

Second, several necessary but disruptive changes that must occur to move to the next level. 

And third, there are many opportunities for existing staff to become alienated or even feel betrayed. 

Lastly, because the new leadership structure is so fresh, there are higher risks of missing or minimizing employee discontentment.  

For these reasons in my view, the ten-person organization is at its most hazardous practice size.

An analogy: Ten people in a canoe

Imagine a ten-person organization paddling hard in a canoe. Together they are fighting the strong currents of overhead costs and expenses while struggling to make their mark in the community they reside in, and provide the best therapy they can.

But then, let’s say, three of them “jump ship” and join another canoe. The remaining seven are even more stressed. And sadly, the strong currents have not diminished.

Now let’s change the image. Suppose the canoe now has fifteen employees paddling away. And those same three employees jump ship. Now we have twelve continuing to paddle.

You can see even in this simple visualization that the larger canoe is far more resilient. The twelve had more “paddling power” and more “ballast” than the seven.

I have talked about the benefits of size, in general, in this post: “How increased size adds resiliency.”

Can’t I just back off?

Continuing with our analysis, we may wish to back off from the expansion. Generally, that is a mistake, and frankly, it may not be possible. Usually, we are contractually committed to several fixed costs, especially the ones with signed leases. 

Typically, the best course is to grow through challenging times. If we lose several employees, hire more, and move forward. That will usually be the best course.

Fortunately, if we can survive this perilous time, we can set up a structure that will smoothly carry the organization through many stages ahead. 

The next stage: The fifteen person organization

I believe that if an organization can get to a fifteen-person organization, things stabilize. Think of the fifteen person canoe with lots of ballast to maintain things. But why is this so?

Partly that is because of the changes that are required to get to fifteen people. A staff of more than ten needs a new way to manage that many people. No one person can, or should, supervise that many people. A leadership team must be created or expanded, i.e., a new normal constructed. 

Of course, finding and training that new leadership person will take effort. Yet as people join this new chapter, everyone calms down. (Also see: Redesigning your leadership structure.)

And while the new normal may carry the memory of painful times, it can also be the next step in fulfilling the organization’s mission. Ordinarily, one goal, whether stated or implied, is for the organization to increase its size and influence. 

Continuing to grow then, is the organization’s destiny. It is what must happen to fulfill the organization’s mission. (For more on how our mission should drive our organization, see: Why create another mental health practice?)

To infinity and beyond

I found that once we have passed through that hazardous ten-person practice size, we have developed we need. Handling fifteen, then twenty, thirty, and forty were just expansions of the same structure, i.e., one with several leaders. Yes, we will always need refinements and improvements. Yet the structure stays pretty much the same. 

Give it a try. I think you may enjoy it. 

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.