Michael Schuster, DDS
Is your management system a `Hail Mary` or an orchestrated, well-practiced formation?
As human beings, we are governed by systems. From the simplest of functions to the most complex, systems keep our universe operating in an orderly and efficient manner.
We have systems for driving our cars, systems for electing our leaders, systems for obtaining our education - even systems for designing systems. Without an organized plan of action, we would be lost. Chaos would ensue.
As dentists, we have a whole other set of systems to consider. Technical systems are for preparing and repairing teeth, thus preventing decay. It`s only when we move into the management arena that our propensity toward systems becomes a little less defined.
Considering that more than 100 systems exist to help us deal with basic business-management functions, it is amazing that approximately 90 percent of American dental offices operate without them.
Amazing, yes. Surprising, no. While dental school teaches us the finer points of biological sciences and applied technical dentistry, nothing prepares us for management, organization, hiring, training, communication, time management and budgeting. We graduate without understanding that only 15 percent of our success in dentistry comes from our technical capabilities. The remaining 85 percent of our success is based on sound practice management, organization, communication and the ability to persuade patients to move ahead with the treatment they need.
Therefore, it is up to us to design basic management systems to complement the technical systems already in place. Only then will our practices truly prosper.
A system vs. policy
Before we can design a system, we first must understand what it is and why it is important. Simply defined, a system is an organized, routine way of performing a certain task. Having a system in place helps us gain control of a situation. It gives us predictability, and, optimally, it produces consistent results.
A system should not be confused with a policy, however. Many books are published about policy or a precise way of doing things. A system is different in that it implies action. In fact, in its practical sense, "system" should really be considered a verb. Because if the system is not in effect - that is, if it isn`t being practiced daily - it really is just as bad as not having any system at all. Consis-tency and action are key.
Take, for example, a professional football team. I guarantee that each team member and coach understands the value of systems. They create a game plan, meaning they put their systems in place. Do they practice the plan during the week before the big game? Of course they do! They practice their systems over and over again, only they call them "plays."
On the morning of game day, the athletes come out to practice without their pads. They walk through each play. Slowly. Just to be sure they have each one correct. They fake a block, just to make sure they`re in the right position. They review and analyze the systems to make sure they`re working correctly. And they practice, practice, practice, so that when they get on the field, they can run the plays close to perfection. Theoretically, if they ran the plays perfectly every time, it would lead to a touchdown every play.
So it should be with our businesses. As we run our dental practices, we need to look at our systems and how they must operate to produce the results we want. When a simple phone call comes into the practice, we must evaluate what we want to happen from that phone call. If we`d like to invite the patient to come into the office for a pretreatment interview and a new-patient examination, then we must design what we will say and how we must execute the system to achieve our desired result.
Waiting to inhale
While hundreds of systems exist for managing a dental practice, all basically fall into three categories:
In laying the foundation for your systems structure, I recommend beginning with those that deal with money. This includes percentage budgeting, fee structure, cash flow, accounts receivable and accounts payable. The reason is: Cash is to a practice what oxygen is to life. You can`t live without oxygen, but oxygen isn`t the purpose of life. Likewise, a practice can`t live without good cash flow, but money isn`t the purpose of a practice.
We do, however, really want to understand how it ebbs and flows in and out of the practice. That`s number one.
If a dentist doesn`t understand that, he or she will think that production is the answer to all prosperity problems - and it isn`t. I`ve known of dental practices that have grossed $1 million and didn`t have the profitability that a practice grossing $375,000 had. The difference is that the dentist who grossed $1 million was looking at production, rather than prosperity and profitability.
The key is working smarter, with solid operating and management systems, rather than simply working harder.
Secondly, I recommend defining systems that control time and help patients. Those include appointment-book control, weekly planning, morning-huddle control and new-patient care and recare, among others. Something as simple as developing a system to color-code your appointment book can save an incredible amount of time and restore a measure of control to the practice.
As we know all too well, time is critical. In fact, in many ways, time is more important than money. If we can control our time through proper management, it stands to reason that we will have more of what we desire - both time and money. Time management also has another desirable benefit - less stress. These systems, therefore, help us increase results and decrease stress.
The vital systems in the physical/material arena include case presentation and the ability to communicate to patients the value of what you can offer. Putting systems of this nature in place involves taking a close look at your communication style, your personal and practice philosophies and the goals of dentistry you have set for your practice.
What type of dentist are you now? What type of dentist do you want to be? How do you get there from here? What mix of services do you intend to provide and what problems do you choose to solve for your patients?
After you have answered these questions, you are ready to establish a universal case-presentation system. A strong case-presentation system will enable you to sell more, persuade more and understand the needs of your patients more readily.
As you can see, each of these systems is designed to work together and build upon the others. If you have strong systems in place for managing the financial side of your business, you can spend less time struggling to improve the bottom line through sheer production.
As you implement scheduling systems, you will maximize your timewhich, in turn, will allow you to spend more quality time with patients. As a result, profit margins will be improved and stress will be reduced.
Finally, a sound sales system allows you to communicate the value of what you can offer to patients. The system results in greater case acceptance and your ability to generate that increased production.
What is prosperity?
When most people talk about prosperity, they automatically assume that a tremendous amount of productivity or output must be required. But the truth is, productivity is only one small component of the prosperity equation. Prosperity also has to do with time management, treatment-planning, cancellation systems, fee structure, accounts payable and receivable, credit follow-up and insurance programs. It has to do with how you budget the flow of money in and out of a practice.
Nearly 40 systems are devoted to monitoring and managing money flow. A business can be producing and collecting a significant amount of money, but it also can be spending a hefty sum at the same time. A prosperous practice is one where expenses add up to less than 50 percent of the gross revenue.
So as you can see, systems are crucial to creating wealth and prosperity in a practice. Like a knife that can be used to carve a turkey or snuff out a life, systems are merely a tool that can be utilized to achieve a particular goal. The system itself has no value - it`s how we apply the tool that is important.
When we understand that the system is not the answer, but merely a tool to help us get consistent results, then we release the power that is available to each one of us.
Dr. Michael Schuster is founder of the Center for Professional Development, a business school for dentists based in Scottsdale, Ariz. He is the author of 12 tape programs on professional excellence and practice management. He also is the publisher of a monthly newsletter, The Profit Letter, and his most recent program is titled, "The Private Care Practice: The Profitable and Ethical Option to Managed Care."
Tinkering in the garage? The best place for repairs is with staff
Suppose you are among the 10 percent of U.S. dentists who understand the importance of management systems and already have your own set in place. What can you do to ensure they are operating at maximum efficiency? What can you do to redesign them for prosperity?
The first two important steps are defining the result you expect the systems to deliver and analyzing why they are not performing. If you instituted a particular system four or five years ago, the market may have changed. Attitudes may have changed. Business is moving rapidly. If you are not getting the results you want, redesign the system. Build a better mousetrap.
A common reason for system breakdown is operator error. For any system to perform properly, the people behind it must also perform. In many cases, you or your staff already may have developed habits or a particular way of doing something. When you bring in a new system, there always is a tendency to revert back to the old ways.
Your job, then, is to communicate the importance of adhering to the system. The purpose of any good system is to help the practice run more efficiently, so that staff can focus on the patients, rather than on internal problems.
Weekly staff meetings are a helpful forum in which to review systems. Choose a particular system or group of systems to regularly review with staff. Remind each employee of the system`s worth, procedure and purpose. Remember the football team analogy: Keeping your systems in top working order takes practice, practice, practice.
Also, if you believe you are too close to the situation, you might consider seeking the assistance of a practice management expert. This expert will review your systems with an educated eye and recommend areas for improvement to get you on the road to prosperity.