by Linda Miles, CSP, CMC
The old phrase, “what you giveth you cannot taketh away or you will loseth your team” is taken very seriously by some dentists. While this phrase in my seminars is meant to be funny, the consequences to the dentist and practice when it is upheld by Dr. Generous can be seriously detrimental to the doctor’s net worth.
If you have attended my lectures over the past 30 years, you know that I have always said, “Take good care of your team and the team will take good care of your patients and your family”. While this is true, some dentists carry it to extremes for fear of losing long-term employees. I am all for long-term staff, as long as they continue to accept new ideas and systems, share the employer’s vision, and have the patient’s care and their doctor’s success as a priority.
Some employees develop a sense of entitlement that no matter how frail the net income of the business, they think the dentist still “owes me.” Good dentist leaders know that charity is a good thing. This goes for free or discounted dentistry, supporting numerous community programs, and being generous with the team. They believe as I believe that what you give comes back tenfold … but not if it spells financial disaster.
Let’s look at three different scenarios with dentists I will label Doctor A, Doctor B, and Doctor C. All three dentists were good to their teams, but not to themselves. Perhaps in reading this article, you may see yourself in one of these dentists or a combination of two or all of them. My purpose in writing this is to outline the frustration dental consultants have in making these wonderful dentists realize that when you own a business, charity is wonderful, but it begins at home before so much can be given away. It’s nice to be generous, but not to a fault!
Dr. A is in his golden years of practicing. His generosity included living high. He was in total denial, pretending he was wealthy when he was not. He was also overly generous to his team, wondering why his staff compensation was 35% versus the normal 22% to 24% and total overhead was 75% to 80%. He still lives in the same home, has the same dated facility, and has seen (and paid for) his four children graduate from college. At age 71, he can’t retire because he’s broke!
During his years in practice, he led the good life. He bought his home in the best neighborhood, joined the best country club, had the finest vehicles and boats, vacationed at five-star resorts, and sent his children to private lower grade schools. When they were ready for college, there was no money set aside. His wife went to work, and he drained the equity from his paid-for home and office building to pay their tuition. Now his home is in need of renovation, his antiquated facility is dated (which means patients have dwindled) his numbers are down, and he’s deep in debt, but the team still expects raises and better benefits. Dr A’s dental supply companies and lab require COD payments, and from time to time, paychecks for the team must be held for days until there is money in the bank to cover them. Dr. A’s biggest fear is that the pseudo success he has tried to fake will become known by everyone in his small town. Success avoided him all those years because of poor leadership and management and his desire to be Dr. Generous as well as Dr. Good Life.
Dr. B is a young female dentist whose primary goal was to not only be a good clinical dentist, but to be best friends with her team members. The old phrase, “familiarity breeds contempt,” has certainly started this young dentist off on the wrong foot. Being best friends with staff members is not good leadership. Eventually, reprimands and changes must be made, and they fall on deaf ears if team members do not view the dentist as the “leader and boss” first. With the intent of “having it all” at an early stage of her career, this dentist invested over her head. In her first few years of practice, she had a brand new facility, the latest technology, and an overbuilt and oversized facility built on the thesis she would one day start a family and bring in an associate.
Dr. B took home almost no personal income, and eventually began to resent the fact that the team took more out of the practice than she did! She invested everything in the team and the facility. Her physician-husband supported the two of them. When her husband was on call, she spent most of those evenings and weekends shopping and eating out with her team of “best friends.” Within months, her staff knew every aspect of Dr. B’s personal and business life. They saw her not as their employer, but their best friend who afforded them fancy meals, shopping trips, or spa outings … not to mention CE trips to exotic and fun places. After all, she wanted to be a good boss, even with a near zero net profit.
After Dr. B’s first child was born, things changed dramatically and the changes were not well accepted by the “spoiled” employees. Her commitment level to her own practice changed, and overnight she expected theirs to change as well. These changes resulted in a 50% staff turnover. Dr. “B” is now on the road to recovery, realizing she must be a stronger leader now and in the future. She must communicate with her team on a professional level with some fun built in, but not 90% fun. She must outline her expectations to each team member (hire, train, trust ,and praise them). The team members who stayed with the practice actually like the positive changes in the past year and they like having a “real leader” they admire and respect.
Dr C is his late 40s and is the dental employer every team member would love to have. He is an excellent clinician, attending all the top clinical excellence courses, and providing CE opportunities to all members of his team. Dr. C’s benefit package includes 19 to 26 paid days per year off, excessive bonus plans for some team members, high wages for his area, health insurance, and free dentistry for all employees and family members and many in his community.
Dr. C loves his patients, often losing track of time as he performs procedures. He is always in a good mood. He is well thought of in his community and has a great family life. When invited into this practice to consult in 2003, each team member expressed concern for how hard the dentist worked, yet how little net profit his practice had. Some of them even questioned his generosity with the practice administrator and “felt bad when he gave them large bonus checks they knew he could not afford.”
Usually, when we see over-compensation issues, we sit down with the client and let him or her know that long term, the benefit package must be totally reconstructed in order for the practice to get healthy and remain that way. We usually involve the dentist’s accountant and spouse (at the doctor’s discretion), and tell the doctor this is an SOS (save our ship) change that must be made ASAP. Typically, the reason the client has hired us is he or she is ready to start on a different path and needs an outside, objective person to construct the blueprint for future success and stop the bleeding. Based on how long the bleeding has gone on and the dentist’s acceptance of the changes that need to be made determine the success of the consultation.
We also have cooperation from team members if:
1) They sincerely want their doctor to succeed.
2) They wish to help save the practice from financial failure.
If the practice fails, they lose their jobs and where are they going to go in their area that will provide them with half to two-thirds of what Dr. Generous is giving them? In 30 years of consulting, I’ve encountered this problem in 10% of the 1,200 practices I have consulted with, so the numbers aren’t high, but they are astounding when it is discovered. Please note, in most of these cases, the staff members are not taking advantage of the dentist … they don’t have to as Dr. Generous continues to take advantage of himself or herself!
In other practices, we often see an older dentist who enjoys time off for travel … up to 12 weeks per year! In one such situation, instead of giving his long-term staff of seven raises, the dentist gave them additional free time off with pay. This was great until two younger dentists bought the practice and suddenly found themselves with 14 employees, some with six weeks of paid vacation! With the proper introduction of necessary changes, we lost only one employee after the changes were made, which we considered a low number based on the fact this is not an easy assignment. Years later, this practice continues to flourish with dedicated, hard-working team members who realize that their doctors and consultant have their long-term best interests at heart. This problem exists with many younger dentists who inherit good, long-term employees. Sometimes, a step backwards is three steps forward for not just the practice, but for those who work there.
Dr. C, however, fearful that the recommended and fair-to-all changes might create a loss of staff members, has only slightly revised his benefits. The practice showed immediate improvements in morale, productivity, and net profit, not to mention time management, scheduling, and A/R management. Within a few months, however, Dr. C started to back down and listen to some of the team and not his advisors, which will surely result in our worst fear of financial ruin. He prefers to be generous and kind versus following good business principles. If you are Dr. Generous, please know you can’t be taken advantage of without your help. While Dr. C may at first glance seem like the ideal boss, what good are great benefits and pay if the practice fails?
The other serious downside is that the spouse of the dentist feels totally cheated if he or she realizes Dr. Generous is draining the family income to remain overly generous and loyal to the team. This problem has caused many family problems and even divorce when the spouse is as powerless as the advisors in trying to make changes that are not adhered to. However, in too many cases, the spouse is often unaware of the financial status of the practice. The spouses may be totally removed from all aspects of the dental practice, tending to the family or their own careers. In other cases, they are told it is none of their business. At any rate, neither is fair to the family or spouse.
Strong leadership is a trait that dentists must continue to improve over the life of their practices. It is not easy, but it is never too late to regain control of out-of-control overhead due to Dr. Generous.
The first step is identifying the fact there is a serious problem.
The second step is to want to make a change.
The third step is bringing an outside consultant, coach, or other advisor into the practice to create the blueprint of change.
Frequently, business owners are too emotionally involved in the practice to fix it. In other cases, it is a form of self-sabotage because they do not feel worthy of success so they continue to “give away the farm” to those closest to them (patients/team members/community) without thinking of themselves first. Either way, the problem will continue to perpetuate while these dentists become even more powerless to reverse the situation. If some of the team members resign, the dentist-owner has still won, as now he or she is in control. If a practice loses only $15,000 per month in net income due to an overly generous dentist or poor management, that is $180,000 per year. Over 20 years, this adds up to a staggering $3.6 million dollars. Sobering, to say the least!
