Berning & Affiliates

Addressing CEO Transition Opportunity In The Current Economy

Given a difficult economy some doctor CEO’s are turning away from plans made over many years to add the next doctor. Others are embracing a good prospect even with the economic turbulence and proceeding to offer a transition opportunity. Specifically, in several instances recently doctors who had planned to add an associate leading to a partner stopped their plans and withdrew their offers. Their instinct told them that with the practices down in production 12-30% it was not the time to continue to add the next doctor. Others in a similar situation are not stopping. Why the difference? In my view it is the doctor CEO’s understanding or not of the context of the practice and the underlying demographics that acts to have one stop and another proceed with a practice transition in this economy. For those practices that have the facility, the staff, and the planning indicating that the practice will benefit, perhaps not immediately but over the intermediate to longer term, they are proceeding to add a good candidate now. For those that have expenditures to make to expand the facility, add the cost of additional staff and in addition marginal demographics indicating the local economy may not recover for a significant period of time, they are the ones not moving forward. Prudent leadership in this economy means basing decisions on facts, including the context of the practice and the underlying demographics.

"Do I Need Professional Help?"

In a consultation this week with a doctor evaluating numerous options for a practice transition strategy he wondered about the following: his investments and their performance, his insurance coverage and whether it was adequate, the documents being prepared (for nearly 2 years) for his estate plan and whether the firm preparing them should take into account his potential practice transfer plans, the marketing and management of the office and how it would be best developed when he brought in an associate or partner. There was more than that which gives you an idea of the number of questions and unmet needs being discussed. All of this discussion was prompted by his wife asking "when are you going to have a plan in place to transition the practice?" And his response to her was, "Do I need professional help to develop the plan?" The answer became obvious the more they talked! If you end up in a similar discussion don't wait -- in this case the doctor and his wife had their discussion 3.5 years earlier and he was just getting around to calling yours truly!

Confidential Treatment of Doctor CEO Information

An orthodontist client recently inquired about advisors in general and my position regarding whether the doctor could anticipate that the discussion with a consultant is confidential. Here is a portion of my reply with some modifications for the use on this blog. "I appreciate receiving your inquiry. This is an important question particularly given doctor's practices becoming ever more prominent in their market areas and so potentially more vulnerable. In my case, all my conversations are confidential unless, for example, two doctors indicate that they want to have me serve as the facilitator to help them develop their relationship and work through written terms. In that case, when I talk with one about a term(s) I will email or call the other to keep the process moving until the next three way conference call takes place. So, unless you request me to share our discussions, you can be assured that our conversation is private. But note, in providing a consulting service there are no specific rules of confidentiality. I must say however, if I shared confidences in the very small community that is, in this case orthodontics, I would not be practicing in this my 26th year!" In short, be careful with your confidential information and know who you are discussing your affairs with. Don't just assume that your confidences will be kept, instead just as this wise doctor did, ask and discuss your expectations regarding confidentiality.

Is An Attorney An Attorney For All Matters?

Three times in one week the same question came up with different doctors. I just have to vent my viewpoint, shared with all three and now for all my blog readers. Here's the question, in a modified form, asked by all three: "I know this is a transition of my practice and I also have some estate issues that need attention and I want to sell the practice facility and real estate, can't I just use the same attorney?" The simple answer is "yes", but also "no". Each of the areas mentioned above, transactional, estate / tax and real estate is a separate area of law, with of course overlaps. But the degree of sophistication required today to effectively and efficiently provide legal services in all those areas by the same person takes, in my view, an exceptional attorney. My experience has been that doctor CEOs are overseeing ever more complex practices with significant legal issues and they need expert assistance. I personally like to encourage that experienced and comment counsel with a working background in the needed area of the law be used. So even though you may need two or three attorneys for your affairs it is in your own best interest to have an expert in the given legal area on your team

The Advanced Practice

Some of the most challenging practices for me to work with are those that have moved beyond getting administrative systems nailed down, staff entry/performance and exit under control, regular repeating marketing and vision/transition set. These practices aspire to more. But the 'more' requires careful decisions. In a complex practice tinkering with success can have big consequences - some of them not desired. So we find that adequate time must be spent to evaluate a course of action before implementation. Some doctors that have grown a practice based on intuition and their own hard work find taking time to think through a planned objective and implementation constraining. Until, that is, they realize that the current practice has many staff, many many patients and lots of dollars on the line. Then the sobering reality hits that more care and attention is required not less to make sure a good result is achieved. I particularly like the great results that occur when larger practices plan well for their continued evolution!

Visiting Doctor's Offices Brings Insights

Just finished another tour of 5 offices on this most recent California trip. Practice situations ran the gamut, from the immediate purchase and sale, the new equity partnership formation, development of a life and practice plan for a last-"5-years-in- practice" doctor, to a major 5 partner practice day long retreat. Fascinating to help set in motion so many aspects of doctor CEO's practice and personal lives! It is the insights however that teach so much about the direction of the profession, current practice and achieving the constant improvement of both doctors and practices. One of the insights is that moving across the profession is a desire to have certainty in the direction of the practice and the smooth integration of new technology. Gone are the days of making a decision without careful plotting of the consequences and consulting with appropriate resource professionals. The result is that doctors overall practice environments are more in line with their state of growth than ever before.

Our Mission Is...

As part of our ongoing coaching of doctor CEO’s to help fine-tune and grow their practices we discuss stating the practice mission. This discussion is not the tired old format that many doctors think of, namely, ‘our mission is to be good dentists and do good dentistry for our patients’. Rather we encourage doctor CEO’s to clearly state their vision for the defined period of time under discussion and then produce their "marching orders" i.e., the statement of mission that helps achieve the vision. Here’s one excerpt of a recent mission statement that helped to transform an organization. "Our Mission is to be a practice that provides dental care carefully matched to the patients needs, providing a thorough explanation of the benefits that will inure to the future health of each patient...." In this portion of the statement you can feel the whole dental team joining together to focus on the dental health of their patients. It stresses matching care, not just scheduling another procedure, to improve the patient’s health. My view is that powerful mission statements are one of the best initiatives a CEO can take to lead and unify any team.

Know What You Don’t Know

Recently an interview with Robert Toll, CEO of Toll Brothers, Inc. contained several of his tips on running a business. Although a number of them could be applicable to various kinds of CEO’s and their business, one struck me as universally applicable. "A wise man knows what he doesn’t know. (Never assume knowledge)." This phrasing was the way the tip was expressed in a sidebar by the interviewer. My observation of doctor CEO’s over the years finds that far too often doctors assume key information in the process of making important decisions. Many times what is assumed has to do with business, marketing, finance or personnel related areas. Seldom is an assumption of any kind made without a real understanding when it is related to clinical care. Take a tip from this very successful CEO, know what you know and if you say to yourself, ‘I don’t really know this aspect of what I am trying to decide’, seek out those knowledgeable to assist and guide you. Its cheaper in the long run!

Coaching CEO Doctors

There is no question that practices have developed and grown in sophistication over the past 26 years. In that time, my own capability to guide growth, development and succession planning has increased. Today, what it takes to guide growth (growth that is many times greater than what was realized with practices I worked with at the end of the 70’s and early 80’s) and plan for less stressful practice days is dramatic. But one aspect seems constant. Established, confident and intelligent doctors often fail to realize that the success that is behind them is no predictor of future success. As the practice entity changes to a larger and more sophisticated environment, the old systems, the old decision making process and the old planning by the seat of the pants becomes ever less effective. Here is what is important for doctor CEO’s and their practices on a going forward basis: interject a repeating process to critique CEO leadership, plan for the evolution of practice administration and nail succession planning, all a part of annual practice performance reviews. Check this service out http://BerningAffiliates.com/doctorceo.htm

The Value of Celebration for a Doctor’s Practice

Dr. David Musich and Dr. Matt Busch, Schaumburg, Illinois orthodontists, recently celebrated the 30th year of the practice. They sent out invitations to referral practices, colleagues, patients and long time advisors. I was included because I had handled the transition when Matt joined the practice five years ago. It was a wonderful evening event with a great choice of food and drinks. There is definitely a lot of planning that goes into it and Beth Barrett (the practice administrator) is exemplary in making an event of this consequence happen. All the practice staff was there and acted as hostesses for the visiting doctors and friends. The warmth and good feelings were palpable. David gave me a card the night of the event, it stated in part, "Time to celebrate! Our past, our future..." He’s right, and it got me thinking about the importance of sharing the milestones of a professional’s practice. We need to share them with each other and with all those that come in contact with the practice. We need staff to experience the high regard a practice has achieved and the good feelings. Although Matt became a partner only 5 years ago, he is fully integrated as a part of the practice. He gained much, in my view, from the celebration with many offering good wishes and telling stories of the years spent with David. The remarkable aspect to me was the number of individuals from diverse relationships with the practice that said in one way or another, "Here’s to another 30 years!". It doesn’t get any better than that! My view is that we should celebrate more. Sure we have an open house when a new office is completed, or a remodel is accomplished or a new partner joins the practice. But the 5, 10, 15 and 20 year milestones and beyond are all positive events to enjoy and to solidify relationships.