The building blocks of management

July 1, 1999
With the right people, given good direction and the resources and freedom to excel, you can take your business to a higher level.

With the right people, given good direction and the resources and freedom to excel, you can take your business to a higher level.

Grant Staley, DDS, MBA

Why are some dental businesses very successful, while others just plod along? Luck, charisma, and skill all have a part to play. You cannot do much about the first two. You can, however, improve your skills ... and I heartily endorse this! Learning how to run your practice in a business-like manner is a good starting point.

When I look at a practice that is not reaching its potential and not meeting its owner`s desires, lack of business basics almost always is a major issue. In this article, we`ll take a look at the basics of business management.

Management is the utilization of resources and the efforts of others to achieve expressed goals. There are four highly inter-related aspects of managing:

1) Planning

No business plans to fail, but many do in the absence of a plan. This aspect of management is concerned with expressing a future state for the business and creating a road map to achieve it. The future state is a goal, a condition, or achievement that we will work toward accomplishing. A plan is the set of steps, elements, and actions needed to reach our goal. Goals can be broad business-wide objectives or specific to only a part of the business. It is paramount, however, that a business` goals be complementary and supportive, not divergent and in opposition to one another.

For instance, a goal to increase production by 20 percent for the next year is a top-level goal. To reduce the amount spent on dental supplies is a subordinate goal. It also is a conflicting goal. If production increases, the amount spent on supplies also will rise (assuming the supply-cost percentage was in line before the increase in business). To avoid this conflict, the second goal should be restated as: reduce the percentage spent on supplies from 5.9 percent to 4.8 percent.

2) Organizing

The organizing building block deals with the effective utilization of resources to reach the stated goals. Our businesses have financial, human, physical, and information resources. To meet our goals, we need to apply the appropriate resources for the situation. For example, our goal is to increase production by 20 percent in the next year (adjusted for any fee increase).

How is this accomplished? Perhaps another operatory is needed, or more equipment, or added staff. Perhaps a more comprehensive treatment-planning philosophy needs to be implemented or continuing education may be the answer to building new skills. The point is that to reach the goal, it is not enough just to scream it aloud. Using resources with a plan to reach the goal is required.

3) Leading

Leading means directing the efforts of your co-workers toward goal attainment. You have created well-crafted goals and brought all the necessary resources to the situation, but that only gets you halfway there. Leading is selling the vision of the future of your organization to the workforce. If your expressed vision is to do tomorrow what you did yesterday, that is what you will get. If you have expressed a vision to your staff that emphasizes improvement of internal systems, patient care, and staff responsibility, then that is what you will get.

Deeply involved with leading are two concepts - delegation of authority and employee motivators. Delegation passes the authority to perform work from a superior to a subordinate. I have seen too many offices where the owner has failed to delegate all but the most basic functions. This type of dentist needs to touch everything, look over everyone`s shoulder, and make all decisions.

Let me pose a simple question. If Ford Motor Company ran like this, what would it look like? If the company existed at all, it would look like it did in the early days. Then, Henry Ford did most of the decision-making. That worked out alright for an industry in its infancy, when the consumer had only one choice. Today, Ford is an international firm involved in many businesses. Does one person make all the decisions in the company? Of course not! There is a hierarchy of managers who make the decisions in line with the company`s overall strategic, operational, and tactical goals.

A business can grow only to the capability of one person if that one person makes all the decisions. A business can grow as large as it can envision (tempered by managerial abilities and market conditions) when the talents of its employees are used to their fullest extent.

The second aspect is employee motivation. Most people work for money, plain and simple. Most people value more money, and I am all in favor of motivating them through financial rewards. How-ever, your staff members also value other rewards, such as time off when needed for a child, spouse, or parent, and recognition for a job well done. Recognize your employees as people with their own individual needs.

I once bought an office and asked the seller for a list of the employees` birthdays and what was done for them on their birthdays and at Christmas. The reply was, "I don`t even know when their birthdays are!" Well, I found out, and we had a birthday lunch on me on every birthday. The morale went through the roof! Work through lunch or past closing time? We almost never ask our staff to do that, and then only in a true emergency situation. Your employees value their free time, and you should value it, too.

The bottom line is, with the right people, given good direction and the resources and freedom to excel, you can take your business to a higher level. Hire the best, train your employees well in your practice goals, expectations, policies, and procedures ... and then get out of their way! Be there to guide, coach, and correct them if they move outside of your vision, but let them do the jobs they were hired to do. A competent, self-managed individual can do astounding things if given the freedom to act independently (yet within the goals expressed). Lastly, respect your employees in all ways.

4) Controlling

This is the favorite area of most dentists. Yet, it is only one of the management building blocks and is no more important than any of the other tools. Controlling means monitoring your progress toward your goals and taking corrective actions if you are veering away from them. Controlling also involves setting policy and standard operating procedures (SOP). This is done to create a standard, yet flexible, way of dealing with the orderly processing of patients from new patient to recare appointment.

That is why we have standardized instrument setups for a given procedure. These SOPs handle repetitive tasks efficiently. Policies deal with broader issues. Patients might have 10 questions about finances that a single financial policy can address. In our practice, we do not extend in-office credit. Monitoring means measuring the progress toward goal attainment and judging whether or not we are progressing toward the goal in the proper manner. If we are, we make sure we can continue on that course. If we are coming up short of our goal, we need to understand why. Perhaps the goal was not properly crafted and is unattainable. Perhaps the right resources are not being applied to the objective. Whatever the case, an evaluation must be made and a correction undertaken.

Cross-linking of functions

When I taught undergraduate management, the students wanted these building blocks to be discreet steps in the management process. In other words, first we set our goals, then we organize, etc. But it just does not work like that! These four functions constantly cross-link; they do not exist separately. Controlling involves effective use of resources that are applied in the organizing function, as well as evaluating the attainment of goals. Goals cannot be set without regard to resources available or to controls to facilitate their attainment. And, without people who are motivated to reach new and higher goals, they will not happen.

A ship does not set out to sea without a clear destination (goal), adequate provisions, crew, tide and currents information, fuel (organizing of resources), competent sailors who are up to the passage (leading), and navigation to ensure the ship arrives as expected (control). Your dental business, too, should be ship-shape!

Important characteristics Of Goals are:

> The goal is expressed - this serves to coordinate and motivate efforts.

> The goal is specific - unless stated clearly, what are you aiming at?

> The goal is measurable - if not quantifiable, how do you know if it was reached?

> The goal has a deadline for completion - a future date for the attainment of that goal.

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