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Learning from Fortune 500 Companies
How dental practices can model the most successful businesses in the country.
Fortune 500 companies are the most successful private and public companies in the United States. Every year, Fortune magazine ranks the top companies based on total earnings. Members of the Fortune 500 include Wal-Mart, Microsoft, and Exxon Mobil, to name a few. The best companies are led by CEOs who, working with an executive team, drive growth by setting specific targets and implementing systems to achieve challenging objectives. In public companies, CEOs answer not only to a board of directors but also to stockholders. If goals are not accomplished, the CEO will likely be removed from the company.
Obviously, dental practices are not Fortune 500 companies. But there is much that dentists can learn from the most successful companies in the world.
Each year top companies engage in strategic planning—the primary objective being to plan how the company will improve performance over the next 12 months. I suggest that dentists take a page from the playbook of Fortune 500 companies—spend a day every fall and engage in strategic planning for the upcoming year.
In addition to strategic planning, dentists should engage in these core management activities used by top companies to improve performance: Set Targets; Build Systems to Achieve Targets; and Implement Value Creation Scripting to Improve Systems.
Each year dentists need to set 12 to 15 specific targets to be achieved for the next year. This helps motivate the team to reach goals and drive practice growth.
All Fortune 500 companies begin their strategic planning process by identifying the targets that they want to achieve in the next calendar year. The difference is that they have to answer to Wall Street and their stockholders where dentists do not. The benefit of owning a dental practice is that dentists can control their own destiny. The downside is that they do not have an executive team to rely on for guidance and advice. Targets become the motivator and should be reviewed on a weekly basis. For example, if only 89% of all patients are currently scheduled, then the practice needs to reactivate overdue patients to reach the 98% goal (if that is the target that has been set). Without maximizing targets, problems and opportunities will not be noticed.
Sample targets to achieve include:
- Increase practice production by 15% in the next 12 months.
- 98% of all patients scheduled at all times.
- Collect 99% of all money owed to the practice.
- Maintain a less than 1% no-show/last-minute cancellation rate.
- Case acceptance at 90% or higher.
Build Systems to Achieve Targets
Systems are step-by-step, documented protocols created to achieve the set targets. Fortune 500 companies spend considerable time creating efficient systems. Large companies do not rely simply on the talent and capability of each individual, but rather design and implement clear systems for every individual to follow.
Systems have to be built and designed very carefully. The dentist or team member starts with the target and then builds the appropriate system to reach the objective. As an example, Levin Group uses Power Cell Scheduling™ where the entire year is created in advance to schedule 98% of all patients. Each power cell is put in place for every working hour of the year. Because achieving a minimum of 15% growth is another target, the first step is to evaluate the production for the next 12 months and divide by the number of days the practice will be in operation. By creating a schedule to reach the annual goal, the practice has taken the first step to reaching this growth target.
Levin Group recommends the following scheduling targets:
- 98% of all patients scheduled at all times.
- 100% of new patients scheduled within 7 to 10 days.
- Start all large cases within 7 to 10 days.
- 60% to 65% of all production should be performed in the morning.
These targets are all considerations when building a scheduling system. The most effective systems allow practices to reach challenging targets.
Value Creation Scripting
The difference between scripting and value creation scripting is that scripting focuses solely on communication while value creation scripting focuses on influence. Value creation scripting influences patients to accept dental appointments, cooperate with financial policies and accept treatment. These go to the heart of achieving the targets of completing 60% to 65% of all production in the morning (scheduling), collecting 99% of all money owed to the practice (finance), and closing 90% of all cases presented (case acceptance). This approach demonstrates how targets can be reached by building the step-by-step systems with the appropriate value creation scripting.
For example, a patient may not want a morning appointment for a crown due to his or her work schedule. However, according to the protocols of Power Cell Scheduling™, all larger cases are scheduled in the morning. Imagine the following value creation scripting:
Patient: Because of my work schedule, I would prefer to come in the afternoon.
Front Desk Coordinator: Mrs. Jones, I can certainly understand why you would prefer to come in the afternoon. However, Dr. Smith prefers to do these cases in the morning for two reasons. First, we schedule all longer appointments in the mornings. There are fewer appointments at this time, so you will have Dr. Smith’s uninterrupted attention. Secondly, as you know, we will be taking impressions of your case that morning and our dental laboratory picks up at 1 pm. To ensure the highest quality result for your crown, we would like to have the impressions go to the laboratory the same day. However, Mrs. Jones, I will be more than happy to schedule your second appointment in the afternoon so that it will be more convenient for you. How does 9:30 on Tuesday or 10:00 on Wednesday sound, Mrs. Jones?
This is one of many scripts necessary for implementing a system like Power Cell Scheduling™. Notice it is no longer simply telling patients that the goal is for them to come in the morning, but rather to influence the patient. Value creation scripting always includes using the patient’s name a minimum of three times in the conversation, emphasizing benefits and offering the patient (when possible) the second appointment in the afternoon. Value creation scripting has an incredible capability of influencing patients, which will make a significant difference in the overall production of the practice.
Dental practices today can use the same methodology as Fortune 500 companies with far less expense and in a much faster time frame. Practices that engage in strategic planning are better able to handle fluctuations in the economy. This three-step system—setting targets, building systems to achieve the targets, and using value creation scripting to make the systems work even better—is a powerful methodology to achieve greater practice success.
About the Author
Dr. Levin is the chairman and CEO of Levin Group Inc, in Owings Mills, Maryland. Visit Levin Group’s Resource Center at www.levingroupgp.com for a wide range of educational materials, including a “Tip of the Day,” newsletters, and whitepapers. You can also connect with Levin Group on Facebook and Twitter (Levin_Group) for tips, news, and sharing ideas.