by Alan Stuart Markoff, DDS, MBA
This is the fourth article in this series and relates to overhead expenses, and how to minimize or eliminate them. The first article of the series was an overview while the second article presented a new concept relative to laboratory expense. The third article dealt with rental expense, and how to either reduce it or turn it into a lifetime saving plan.
In this article, let us now turn our attention to salaries. I sense this arena may be the most difficult terrain of the four overhead expense issues. There are a multitude of mechanisms and philosophies that can be applied here. Each of us must select one with which we are most comfortable.
I was always of the opinion that people make the difference in any organization, so I tried to seek out what I considered to be the "best" people for my practice. Allow me to qualify that statement-the best people for me, and for the type of practice I aspired to possess.
My sense now is that I went about the entire process backwards. In spite of my shortcomings, I "lucked" in to some remarkable people.
We see what we know. I realize now how little I knew about building an outstanding business. I thought the significant key to success was to decide on a direction, devise a vision, and then a strategy to accomplish that vision. Then I needed to get my team committed to this direction.
Think of your organization (business) as a metaphorical bus. First, and most importantly, get the "right" people on your bus, and the "wrong" people off the bus. Then, get the "right" people in the "right" seats on the bus. All of you together must then figure out where to drive. The bottom line is: Begin with "who," rather than "what."
Who are the "right" people, and how do we find them? I suggest you retain professional assistance relative to this issue. I sense many of us hire the "wrong" people for the wrong reasons, simply because we do not know how to interview. Also, more often than not, we desperately need someone.
Previously, I thought that even good employees (team members) needed to be managed and motivated. My philosophy was to enjoy the strengths and manage the weaknesses. The definition of the "right" person is one who allows you to do away with the need to manage and/or motivate. They come with those talents. You just have to lead appropriately.
The concepts I have just alluded to are in a wonderful book by Jim Collins entitled, "Good to Great." If you are an auditory learner, you can get the book on tape and listen to it in your car. The book is both easy reading and easy listening.
We haven't discussed salaries yet, but-with the above as a prelude-you must learn the techniques of finding the "right" people, and then place them in the "right" seats on your bus. I sense if you aspire to soar, you will need two, and perhaps three "super stars."
What positions do the "super stars" occupy? Leaders must make that decision for themselves. I wanted a "super star" to manage my practice/business. For my adult-restorative practice, I wanted a "super star" with me at the chair. And finally, I wanted a "super star" in hygiene. The salaries (and the benefits) I paid each of these people were above the average paid in my community.
Secondary chairside assistants, receptionists, and laboratory assistants were paid fairly, but not in the realm of the "super stars." Were all of my team members the "right" people? Not often enough. The one premise I did adhere to was to eliminate the "wrong" people.
Keeping a "wrong" person on the team weakens and demoralizes the entire team. Additionally, it diminishes you as a leader. Equally important, the wrong person takes up space and keeps you from finding the "right" person to contribute to your chosen direction. Perhaps, most importantly, think about what it does to the self-esteem of the "wrong" person. The "wrong" person knows that he or she is not on the "right" bus. This person feels it. You are not helping the "wrong" person achieve his or her goals in life. Be kind. Give this person a gentle push in the "right" direction.
Relative to the economics of this issue of salaries, you as a leader must decide how many dollars you have available annually to contribute to the salary arena. If you buy into the concept of eliminating laboratory overhead, then there is just that much more to pay to the "super stars."
The percentage of overhead for salaries can range from 20 to 30 percent. Only you as leader can make the final determination of how much you choose to invest in this area of your business.
There is always the issue of annual raises. I have consulted in a number of practices where staff members are disgruntled because of low pay and no reviews. I always admired my friend, Bob Frazer, relative to this issue. He annually took his staff on retreat in December, and along with planning the next year, each team member was allowed to choose his or her compensation for the following year.
When the numbers were in, the group decided what they had to produce-and collect-to achieve these goals. Bob never considered that it was his obligation to take additional funds from his pockets to reward team members. The team set the goals, and therefore, the team was motivated to achieve them. This is a wonderful concept, and one worth serious consideration.
In "Good to Great," Collins mentions a company that "hires five, works them like ten, and pays them like eight." Those are numbers we should be able to relate to. Most dental practices today have teams of five to eight members. The key is to find the "right" people, place them in the correct seats, eliminate the "wrong" people, then as a group decide where you are going to drive the bus.
People decisions are not easy. It is an area dentists do not know enough about nor do they take the time to learn the skills required. Therefore, they frequently make people decisions on "gut" instincts, at best, and need, at worst.
I again urge you to find and retain outside help. Whatever the cost of professional assistance, it is minimal compared to loss of revenue, diminished morale, and patient satisfaction relative to personnel turnover.
My last office manager was with me for approximately 10 years. I located her by accident. She was right under my nose, helping another dentist who was leasing space from me. When she left, I called her, and requested she come back for an interview. After I talked to her, I had my previous office manager take her to lunch and talk with her.
The call I received that evening disappointed me. I was told she had no business background, and would probably not be a good choice. My sense was that she had great people skills, and could acquire the business skills.
My instinct was correct. Today she is an extraordinarily successful consultant in the dental industry, and earns some seven times what I paid her.
My last chairside assistant was with me for five years. She came to me as a temporary employee for two days. She was wonderful. She was kind, caring, gentle, knowledgeable, and soft-spoken. She possessed all of the qualities I desired for this position. Most importantly, she was easy to be around-for me, the patients, and other team members.
Ironically, she was filling in during a break from teaching school. I offered her a full-time position. She asked me to match her salary as a teacher. I offered slightly more. She requested that she be allowed to leave at 4 p.m. daily because she had a three-year-old daughter. That was easy. I was delighted to be finished with patient care at 4 p.m. rather than 5 p.m.
Over the course of 38 years of practice, these were two of my very best "hires." Today, this former chairside assistant is a successful salesperson for a dental supply company, and earning significantly more than I offered her to come back to dentistry.
I would readily profess that finding both these individuals was pure luck and my good fortune. I'm certain you are familiar with the phrase: "If you stand still, the butterfly will light on your shoulder." Both of these people were (and still are) "super stars" and made my practice voyage a delight.
In order to attract people like this and to be able to retain them for lengthy periods of time, you must find the money to pay them. I would urge you to consider all of the major overhead expense areas and realize that-if you have your patients pay for the laboratory aspect of your practice, you find a creative mechanism to reduce your rent, and you explore all avenues relative to saving on supplies-the money to pay and retain the "super stars" will be there for you. In turn, they will aid and abet your journey to practice-business health.
Team building is an art form. So is leadership. Chase down the book entitled, "Leadership and Self Deception" by The Arbinger Clinic. It is as good an approach to leadership as you will find.
Surround yourself with quality people. Create an environment that everyone wants to be in, including yourself, your team, your patients, and anyone who has contact with your business.
Yes, it is a fine line between the "practice" of dentistry, and the "business" of dentistry. And you get to draw that line.
