1.24.14 Issue #620 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Can You Lead a Profitable Practice?
By Sally McKenzie, CEO

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Certainly, there have been plenty of excellent dentists who have managed to eke out a fairly comfortable living in spite of their less than stellar leadership skills. Truth is, years ago, few dentists (few employers for that matter) gave much thought to leadership. But as one of the most studied areas of management over the last four decades, we’ve learned a few things about the critical impact of leadership on business profitability, and most assuredly on small business.

Leaders of the past were the ones who had all the answers. They simply told employees what to do. As leadership models evolved, leaders were taught it was better to ask their employees rather than tell. And today, leaders are encouraged to engage, cultivate, and reward their teams. Below are three keys to leading a profitable practice.

#1 - Weed and Feed your Team
In other words, do not tolerate poor performers, bullies, and slackers. Just one toxic employee will drag down your entire practice. Instead, cultivate the high potential workers in your ranks. Recognize the strengths and weaknesses among your team members. All employees bring both to their positions. The fact is that some people are much better suited for certain jobs and not others. Don’t be afraid to restructure responsibilities to make the most of team strengths.

#2 - Pay Attention to the Numbers
It is critical that you understand completely the business side of your practice. One of the most critical numbers to know is your overhead percentage. It should breakdown according to the following benchmarks to ensure that it is within the industry standard of 55% of collections. 

Dental supplies - 5%
Office supplies - 2%
Rent - 5%     
Laboratory - 10%
Payroll - 20%
Payroll taxes and benefits - 3%
Miscellaneous - 10%                                    

Beyond knowing your overhead percentage, recognize that there are 20 practice systems affecting how much of your practice profits are consumed by overhead. You should be well versed in each of them, as the effectiveness of these systems will directly and profoundly impact your quality of life and work throughout your entire career. But here’s the rub - you alone cannot manage each of these systems.

In every dental practice, the management systems are ultimately shaped and molded by the quality and training of the staff. It is this trifecta of doctor/staff/systems that creates the framework for the seamless delivery of superior care to your patients. 

Moreover, the systems affect whether you have enough money to pay your bills. They impact your schedule, your production, your collections, and your reputation. The numbers and reports they yield will loudly and clearly tell you what you don’t want to hear when you don’t want to hear it. But no matter what, your success as a dentist is dependent upon your ability to understand and respond to these key performance indicators.

#3 - Clearly Define your Mission and your Vision
Your dream will remain a dream until you are able to share it with your team and empower them to take ownership. Start with the fundamentals: Take the time to define and clearly communicate your practice’s vision and mission to your staff. Next, prepare them to help you achieve your vision and mission; in other words train employees to carry out their responsibilities fully. If you expect employees to just figure it out, in many cases they will fail, thus so will you.

Create a working environment that empowers your employees to be accountable, offer ideas, and give input. If you cannot genuinely accept even the simplest of employee suggestions without finding some fault or issue with their recommendations, eventually you will silence them. Take a close look at your practice culture. Is it focused on “problem solving” in which concerns or challenges are viewed as indicators of system weaknesses that can be adjusted and improved as needed? Or is yours a blame-based business model, i.e. there’s a problem; find someone to blame.

Ultimately, you alone must be accountable for the type of leader you are. If you believe that your team cannot fulfill your vision, ask yourself why. Are you leading with a “victim mindset” - if only you had better equipment, better patients, better employees. Or is yours a leadership attitude in which you minimize the weaknesses, acknowledge the challenges, and build on the strengths. You decide.

For more information on this topic, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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