Communication is the key

Dec. 2, 2010
Without a doubt, the most important element in the transition process is communication.

John M. Cahill, MBA

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Without a doubt, the most important element in the transition process is communication.

  • Communication between the seller and buyer BEFORE the transition
  • Communication between the seller and staff DURING the transition
  • Communication between the buyer and staff DURING and AFTER the transition
  • Communication between the buyer and seller AFTER the transition

Most problems that surface during a practice transition can be traced to a lack of communication on the part of one or the other party, and often with both parties.

As the transition evolves, it is extremely important for the seller to emphasize how the practice operates. It is important that the practice philosophy of the buyer be in sync with the practice philosophy of the seller. If the seller has the laid-back style common among long-term practitioners, and the buyer is very aggressive in his/her treatment planning style, then this could spell disaster for the transition.

Likewise, if the seller is very aggressive in his/her treatment planning and the buyer is more cautious and conservative, then it may very well create financial problems for the buyer. The buyer will not be able to keep up the production numbers of the existing practice.

Additionally, the buyer needs to be comfortable with the treatment procedures that are being performed in the practice. He/she should also have the experience and ability to continue these procedures after the practice transition.

Once the seller has made the decision to transition the practice, it is imperative that this be communicated with the staff, especially long-time staff members. If the staff learns about the transition from an outside source, it can create problems of trust during the transition process, especially if the staff members feel slighted in some way.

By withholding plans, the seller risks offending long-term staff members, and they might conclude that the seller did not trust them to keep the news quiet.

It is important that staff members learn of the transition from the seller. The appropriate time to tell the staff depends on the circumstances of the particular practice. I have found that in most cases it is best to inform the staff once the practice is being actively shown to prospective buyers.

There needs to be a clear vision as to the role the staff will play in the transition, and it is important for the seller to make that role very clear. The seller needs to communicate to the staff how important their role is in assisting the new doctor, and patients must be reassured that the new doctor is capable and caring.

Likewise, the buyer needs to establish communication with the staff once the seller has told them about the sale. The staff will primarily be concerned with job security, salary, and benefits packages. They need to hear from the buyer that nothing will change except the new owner/doctor.

Once their concerns are put to rest, the buyer should tell the staff the roles he/she wants them to perform in the transition process. The staff's role in growing the practice as it moves to the next level is just as important as the transition.

In order to guide the staff, the buyer must have a clear vision of the goals of the practice during and after the transition. Oftentimes, an experienced management consultant can be a great resource in clarifying goals for a young buyer. After the closing, communication between all parties becomes even more critical.

The seller and buyer must be sensitive to the needs and issues surrounding each other on all transition matters, but especially regarding patient re-treatment issues. The contract should be very clear and specific on this.

If a problem regarding re-treatment does occur, I suggest that the buyer discuss it with the seller by telephone or personally and not through e-mails or attorneys. Having an open line of communication between parties will resolve most differences in the least amount of time, and at a far lower cost than through attorneys.

In my experience, most issues can be resolved when the two parties sit down and openly and fairly discuss things.The transition mantra should be: COMMUNICATION, COMMUNICATION, COMMUNICATION.

John M. Cahill, MBA, of Western Practice Sales/John M. Cahill Associates, has more than 40 years of experience in the dental industry, including all aspects of appraisal, sales, purchases, and buy-ins in connection with dental transitions. Cahill is an emeritus member of ADS Inc. He can be reached at (888) 416-5724, ext. 530, (800) 641-4179, or [email protected]. Visit his Web site at

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