As a nation obsessed with sport, Australia loves a sports metaphor. Kicking goals, runs on the board, keep your eye on the ball, get a Guernsey, a dropped catch.
In the late 90s and early 2000s, baseball teams in America were searching for a new way to measure success. Bear with me on this, but I honestly believe that what they came up with has the potential to be hugely useful for providers in the NDIS.
Sabermetrics is a measurement system that was developed by the Oakland A’s baseball team. Faced with a substantially reduced budget compared to some of the bigger teams in the league (a situation many providers will find familiar), the As decided to look for a completely new set of statistics to rate current and potential team members.
At that time, almost all baseball scouts, coaches and team managers were looking at traditional, 19th Century statistics such as batting average, runs per innings and pitcher winning percentage. Proponents of sabermetrics argued that these were statistics from a different age, when the game was played in a different way. Instead, they started looking for the often missed or previously hidden statistics such as runs created, defensive efficiency, or win shares. This approach was highlighted in a 2003 book Moneyball and a 2011 Brad Pitt film of the same name.
Even if you don’t know the first thing about baseball, this book is fascinating. While reading, I was constantly thinking about how this topic could apply to providers in the NDIS. What are the sabermetrics for our sector?
Old World Metrics
Here are some of the out-dated metrics that the sector can do without:
Turnover or revenue – It’s little use having $10 million in revenue each year if you’re spending $20 million to get it.
Market share – You have 10% of the market. Well done! Now what? If you aren’t able to deliver a high-quality service, you can have 100% of the market and it won’t mean much for long-term success.
Asset base – We know that there are many providers out there who are asset-rich and cash-poor. In these turbulent times, it makes more sense to have money in the bank than tied up in three houses.
Cash in reserve – That being said, while cash in reserve might be useful for a rainy day, you need to ensure it isn’t masking bigger problems. Having money in the bank means nothing if you are compromising your long-term success by cutting corners in your delivery of supports.
Marketing spend – It’s very easy to spend money on marketing, but do you know how effective it actually is?
Number of clients, or hours delivered – This is the Holy Grail for all the providers who believe “volume will get us out of this problem!” But if you make a loss of x on your existing 50 clients, increasing the number of clients to 100 could just double your losses.
Number of staff – Surely it’s better to have a team of 10 staff members united, aligned and committed to doing a great job rather than a team of 20 doing the same amount of work?
Combined value of the company cars in the Senior Management carpark – To put it simply: status symbols don’t win matches (another sports analogy for you.)
Some of these metrics are a product of Old World funding mechanisms and ways of working. Others are the result of early rollout confusion. But what unites them all is that they in no way guarantee success in the NDIS marketplace.
New World Metrics
These are the metrics that tell a more accurate story about the culture, finances and operations of a business:
Days absent per staff member per week or month – If staff absence rates are increasing on a week-to-week or month-to-month basis, it is a sure sign that something is going wrong in the organisation.
Month-to-month staff retention – It used to be quite common for providers to measure retention on a year-to-year basis. But a year is far too long in this market.
Median staff age –Participants are telling us loud and clear that they want more choice and control in the delivery of their services. This does not just mean choice in provider, it also means having a say in the staff members they work with. The median age of support workers is 47, 7 years older than the rest of the working population. In contrast, 65% of people in the Scheme are under the age of 35. Many people would prefer to be supported by someone closer to their aged group. So having a team of support workers from diverse age ranges is important to your long term success.
Billable hours per day or deployment rate – The deployment rate is the number of hours in a work day that an employee spends doing billable tasks. Many other industries live and die by this rate. There are some interesting things NDIS providers can learn from it, but don’t let it become the be all and end all.
Ratio of cancellations to services delivered – If there is one thing that rattles a person’s confidence in providers it’s late cancellations and no shows. Of course emergencies happen, but a key mark of a person-centred provider is making these a very rare exception, not a common occurrence.
Debtor collection period – Don’t worry, this is not about bailiffs or debt collection agencies. The debtor collection period is the amount of time from service delivery to invoice sent out and payment received. This measurement gives you a valuable insight into how efficient your financial processes are and helps you identify points where cashflow might be a problem. Trust me, next time the Portal goes down, you will wish you had collected the cash quicker.
Marketing $ spend per new Participant – We’ve seen providers who have spent millions on TV and internet advertising, only to bring in a handful of additional Participants. But through carefully crafted, targeted marketing campaigns, providers might be able to bring in more Participants while spending less money.
Distance from frontline to CEO – Providers who are making the greatest success out of the NDIS typically have a shorter distance in the organisational chart between the CEO and frontline workers. This results in more connected staff, leaner employment models, and Participant feeling more valued and heard.
Time between touchpoints – Providers need to look at the amount of time between various points of contact, including the initial enquiry, the matching process, goal setting, service booking, start of service, review and invoice. Longer waiting times between touch points can give them impressions of disconnected services and people.
It is also crucial for providers to find the unique metrics that apply to their specific town, service and people. Context is everything in this Scheme, so find metrics that work for yours.
We all know the NDIS has changed everything, but we have been slower to recognise that it has also changed the definition of success. Providers do not need to worry about metrics that will impress government anymore; it is the Participants who are now in charge. And in order to succeed, providers need to find the metrics that measure the quality of the services they deliver to those Participants, as well as how effectively their business it operating. That’s how we find our Moneyball, and most importantly of all, support real change in people’s lives.
Rob has worked in and around NDIS service providers for more than six years, and the disability sector for more than a decade. His roles in the disability sector across this time have been varied including Project & Policy Officer, Service Manager, National Projects Manager, Business Development Manager, General Manager and most recently Founder & Director of a service provider in ACT. He has experience across the public, private and not-for-profit sectors in Australia and the UK in both large and small organisations, including Board roles. Rob combines hands-on experience of disability support work, an MBA and journalism qualifications, and in-depth understanding of Design Thinking, Agile Development and Lean Management.