Theodore C. Schumann, CPA
Having well-trained staff members who will stay with a practice after it has been sold generally makes the practice more valuable. The new doctor often is very nervous, due to his inexperience running a practice and the amount of debt he has assumed with the purchase. Conversely, he is full of exuberance in seeing his dream of making this "new baby" a success, making it "his." This combination of inexperience and a sense of adventure can be a difficult, if not dangerous, combination. Striking a proper balance between injecting a new enthusiasm into the practice, while maintaining the current staff and patients, is the key to a smooth transition.
The most successful transitions occur when the buyer makes very few changes in the practice during the early stages. The new dentist must be willing to invest the time to build rapport with the staff and the patients. Both are extremely sensitive to the changes in the practice and must be handled gracefully.
To win over the patients, the doctor must win over the staff. This is not always the easiest thing to do, as the transition puts extreme stress on staff members for several reasons:
- No one likes change! It is often said that the only person who likes change is a baby with a wet diaper. Staff members tend to resist change, even when the change could result in a positive outcome for them.
- Staff has fears. Like most of us, staff members fear the unknown. They need economic security and are concerned about how this transition will impact their security.
- Loyalty to the selling doctor. In even the shortest transitions, staff members experience a high degree of stress due to divided loyalties. This is a greater problem when the selling doctor stays with the practice for an extended period of time.
- Loss of control over their turf. Even though changes must be kept to a minimum, staff will no doubt be concerned with how this change will effect their "power."
- The grieving process. Even when no death has occurred, staff tend to mourn the loss of the old doctor and the "good old days."
We often see the patients transitioning themselves to the staff first, and then to the new doctor. The staff can be extremely effective in "selling" the new doctor. The existing patients will look to the staff for either approval or disapproval of the new doctor. Patients often say things like, "as long as the staff remains, I will stay with the practice." The importance of the staff`s full-blown endorsement of the new doctor cannot be understated.
By the way, you have a new boss
There usually is great debate as to when to tell the staff about the transition. Our experience has shown that serious problems can occur if the selling doctor either informs staff too early or too late.
We have found the ideal timetable to be about two weeks before the closing. If the staff is told sooner, it becomes very difficult to maintain confidentiality. A shorter timetable may not provide enough time to "win the staff over" and, therefore, does not allow sufficient time for the staff and the new doctor to bond. The most important point to remember is that in no case shall the staff be told until there is a binding contact and all financing is assured.
When the buyer and the seller are sensitive to the needs of the staff during this difficult time, the result is a highly successful transition where everybody wins.
Theodore C. Schumann is a licensed real estate broker and operates DBS Professional Practice Brokers, a firm that specialized in the sale and acquisition of dental practices. He is a member of the Practice Valuation Study Group, the only voluntary national group dedicated to the study of dental practice valuation and brokerage. He frequently speaks to fraternal and professional organizations and dental study groups.
From ill-at-ease To at-ease
The successful transition must have a game plan dealing with staff. We suggest the following techniques:
- Obtain a brief background on each employee from the selling doctor. Determine each employee`s strengths and weaknesses. Find out which employee is the most influential. Determine if any employee will be resistant to the transition.
- Plan the timetable carefully, including when to tell the staff.
- After the seller informs staff, that day or the next, a joint meeting is held with both the seller and new doctor. They also may meet with the person identified as the most influential to discuss her role.
- Within several days of the initial meeting, the new doctor should meet with staff without the selling doctor. The doctor should be prepared to address all staff fears. People fear the unknown. The new doctor should outline exactly how the transition will unfold. Be very specific about how important the staff is to the continued success of the practice. The staff members must feel their input is necessary and encouraged.
- Next, the new doctor should meet with each staff person separately to discuss specific items, including salary and benefit issues.
- Meetings should continue every few days until the closing. Staff should be trained on the verbal skills necessary to answer the patients` concerns.