October 2012, Volume 8, Issue 10
Published by AEGIS Communications
Think Like a CEO
Follow these tips to manage a dental practice like a chief executive.
Do you think of yourself as the CEO of your practice? You should. Dentists face many of the same challenges as other types of CEOs. There are some critical differences, however. For example, CEOs in other business fields usually received extensive business and leadership skills training. In addition, they have typically climbed a corporate ladder with the assistance of managers, mentors, and coaches along the way. They also have time to focus strategically on growing the business.
Conversely, dentists spend the vast majority of their time involved in direct patient care. They have generally have little business training or the time to design strategies for practice growth. B.coming an effective leader is challenging for dentists who fit this description. Levin Group r.commends that dentists seeking to build their practices adopt the following behaviors of highly successful CEOs.
Start with a Powerful Vision
Very few people—including CEOs of small businesses—have a clear vision for their business. A vision is the answer to this question: “Where should the business be in 3 years?” Excellent CEOs always have a vision. This vision is usually committed to paper and evaluated on a regular basis. Does the doctor want to: Double practice production? Add new services? Create an effective team that allows the doctor to spend 98% of his or her time directly involved in patient care? Open a second or third office? Add an associate or partner?
Set Achievable Targets
While the vision is based on a 3-year time frame, CEOs use targets like incremental stepping-stones for achieving the vision. As a scientific process, targets can help CEOs achieve more than they did in the past. However, there are several rules to setting targets; each must be written down, have a deadline, be measurable, and be assigned to a responsible party.
A target lacking these characteristics is little more than a wish and is difficult to achieve. Therefore, each year, dentists should set specific performance targets that can be evaluated based on statistical data. The staff should understand that these are objectives the CEO is firmly.committed to achieving.
Examples of growth-driven targets include: Having 98% of all patients scheduled at all times; collecting 99% of all production; having no money owed over 60 days; reactivating 85% of all inactive patients within 90 days; decreasing the no-show/last minute cancellation rate to below 1%; and keeping overhead at 59% or below.
Continually Build Value in the Businesses
Complacency is the enemy of growth. All highly successful CEOs focus on building value. Likewise, dentists need to periodically think about how to increase the actual value of their practice, even if they have no immediate plans to sell or retire. Building value at every stage of a practice’s development cycle ensures that the right decisions are being made by the CEO to achieve positive practice growth. There are many components that contribute to value in a dental practice that must be considered, including:
• Quality of systems
• Staff longevity
• Staff training
• Physical space
• Number of patients
• Number of new patients
• Number of overdue patients
• Percentage of insurance participation
• Overdue payments
• New patient close rates
• Case acceptance percentage
What constitutes value in the practice is often not fully understood. Attending a course on practice transitions long before any transition is likely to occur can help dentists understand where and how value is built. Once dental CEOs know how to build greater value, each of these categories can be evaluated annually to ensure that the practice continually moves in the right direction.
Learn to Excel at Educating and Motivating Staff
Excellent leadership is a critical.component of being a top CEO. At their monthly business review meetings, highly effective dental CEOs gain.commitment from the team by sharing their vision and goals, reviewing them in detail, and asking for input. By doing the same, dentists can create ongoing.commitment, spark more team discussion, and generate new ideas with every team member’s participation.
CEOs are the champions of achieving the vision and targets focused on practice success and ongoing growth. Their excitement should motivate teams to take ownership in the practice and assume greater responsibilities. Highly effective dental leaders recognize that they cannot do everything on their own and delegate as much as possible so they can spend the maximum amount of time focusing on providing excellent patient care and generating practice production.
Actively Engage in Regular Strategic Planning
CEOs in other fields are always thinking about ways to improve their business. However, this presents a particular challenge to dentists because they are both the CEO and the main producers in their practices. Despite their considerable time constraints, it is critical for dentists to set aside time for strategizing ways to improve and grow their practices.
Whether it is a monthly meeting with the staff or an annual 1- or 2-day retreat, it is important for dentists to set aside time for strategic planning, and they should not attempt to do it alone. Like CEOs in other fields, dentists need to access outside ideas to better understand what may be possible in their practices. Relying on the additional knowledge of expert advisors can make strategic planning far more effective.
Mastering Both Professional and Business Skills
Being a CEO is more problematic for dentists than for other business professionals because they are the principle producers in theircompanies. Dentists run a.complicated small business and spend the vast majority of their time focused on patient care. Clearly defined goals and actionable plans to grow the practice are critical tools that help dentists in their roles as CEOs.
CEO training can transform practices. This was evident during the recent recession when, amid widespread practice declines, 25% of dental practices—those led by dentists with excellent CEO skills—continued to grow consistently. Likewise, dentists who make the effort to master CEO skills and apply them to their offices can achieve continual practice growth.
About the Author
Roger P. Levin, DDS | Dr. Levin is the CEO of Levin Group. To learn how to run a more profitable, efficient and satisfying practice, visit the Levin Group Resource Center at www.levingroup.com a free online resource with tips, videos and other valuable information.