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Do you measure what truly matters in your dental practice? Nearly every conversation I have with a fellow dentist-entrepreneur circles around how to know your investment and time is working, ‘how do you know that you’re actually growing your dental practice?’
You Can’t Improve What you Do Not Measure
Common sense tells us that in order to keep improving you must keep examining the results of what you’re doing. What is the point of doing a tremendous amount of work unless you’re going to review it to see what has been effective and what has been a waste of time?
“In God we trust, all others bring data.”
-W. Edwards Deming
Reading a slew of reviews about a business who consistently makes incredible hamburgers but their fries are always soggy is literally reading the lagging indicators of a business that refuses to accept feedback and examine its protocols to address what is working and what is not. Reviews are one way to gain insight into what’s working in your business and what’s not working. They are also a look back into the near past: one person’s recent experience at that one hamburger joint. Make sense?
Here’s What to Measure in your Dental Practice
So, how do you measure and what do you measure? Two vitally important questions every business needs to ask and answer constantly and consistently.
In the case of dental patient treatment plan acceptance, patient nurturing and dental patient experience, not all actions are created equal. Some of our actions have a greater impact on our environment than others and it’s a good idea to know which ones have a greater impact and which ones have a weaker impact.
Lead Measure Vs. Lag Measure
First, let’s define some terms. Lead measures or lead indicators help you predict which actions might successful and which might not, in other words, what to keep doing to keep getting the same successful results.
A lag measure or lag indicator, measures your wildly successful goal with results that have already passed like profit, revenue, and patient satisfaction. They are a little harder to gauge because the results are correlated to actions taken in the past.
In my book Extraction: The Surprising New Formula to Systemize, Scale and Sell Your Business, I breakdown different forms of measurement and the importance measuring growth and goal achievement play in your leadership role. Let’s look at three measurable areas of your practice here.
Dental Practice Revenue Growth
- Leading Indicator: The leading indicator here is the Number of Qualified Patient Leads. By measuring the number of qualified leads generated, your business can predict future sales growth. In a dental practice, your qualified leads are patients who call for an appointment—for a service you can provide with a payer you accept. If the number of qualified leads is increasing, it’s likely that sales growth will follow. If your qualified leads are decreasing this is an area that you want to pay attention to with your team to decide why they are decreasing and what can be done to stop and reverse the trend, essentially get ahead of the ‘problem’ before it becomes one.
- Lagging Indicator: Dental Practice Production or Revenue. Production or revenue is a lagging indicator because it shows the results of past sales efforts. As we know, production in your dental practice doesn’t happen if the patient doesn’t show up, accept the treatment plan, and ultimately pay for the dental care you delivered. After sales have been made, revenue is generated, but this data is historical and cannot be used to predict future sales growth. It can help you look back and evaluate what you and/or your team did to increase revenue or the reverse: review what you did that possibly decreased revenue.
Safety in Your Dental Practice
- Leading Indicator: Number of Safety Training Hours. By measuring the number of safety training hours completed by employees, including HIPAA and OSHA trainings, a business can predict the likelihood of workplace accidents. There is a documented correlation of safety in the workplace to awareness of rules, laws, regulations and best practices. If the number of safety training hours is increasing, it’s likely that the number of accidents will decrease in the future.
- Lagging Indicator: Number of Workplace Accidents. Workplace accidents are a lagging indicator because they represent past events that have already occurred. By the time an accident is recorded, it’s too late to prevent it from happening. But it’s not too late to review protocols, training hours and best practices to ensure accidents decrease and awareness of safety protocols are top of mind for your employees.
Managing Employee Turnover in Your Dental Practice
- Leading Indicator: Employee Engagement. By measuring your employee engagement through surveys, anonymous feedback systems, communications and strong morale engagement, your business can predict your future turnover rates. If your employee engagement is low, it’s likely that turnover rates will increase in the future.
- Lagging Indicator: Employee Turnover Rate. Your employee turnover rate is a lagging indicator because it shows the results of your past employee retention efforts. After employees have left, turnover rates can be calculated, but this data is historical and cannot be used to predict future turnover rates. However, if your turnover rate is high, you can take a look at your employee engagement protocols to see what is lacking and where you can improve employee engagement.
The Measurement of Growth is A Measure of Leadership
These are just a few examples of how using and measuring your leading and lagging indicators can improve so many areas of your dental practice. The key takeaway is that leading indicators can be used to predict future outcomes, while lagging indicators show the results of past actions. By tracking both leading and lagging indicators, you can better understand how your actions, decisions and the actions of your teams affect performance so you can make more informed decisions about future strategy.
The role of a leader is not just to delegate, guide and grow, it is also to measure so you can continue to improve on what has come before. If you’re working with a strategic plan in order to scale your practice, how will you know when to buy your second practice? Is it simply when you’ve socked away enough money or is it when your key performance indicators show that, not only are you financially ready to buy but it’s also the right economic environment to buy?
Mastering Dental Practice Entrepreneurship
If you are ready to measure your growth and assess the current health of your practice, why don’t you take the next step and attend one of our masterminds. My partner, Josh Gwinn, the co-founder and CEO of Optimize Practice Services, hosts a mastermind just for dentists and dental practice owners, to help you succeed.
A mastermind is a group of peers who come together to solve their biggest challenges, share resources and inspire each other to grow, take risks and support each other through the process of growing your businesses. Masterminds have been an incredibly important tool for so many successful entrepreneurs. Are you ready to supercharge your business?
Are you ready to tackle your biggest fears, gain great insights and receive the answers you’ve been looking for? Join us for our next mastermind and discover that you are not alone.