Do You Have an Emergency Exit Strategy?

Issue #182-8.13.13

In This Issue: Do You Have an Emergency Exit Strategy? by Dr. Tom Snyder Thoughts on Separating Employees, by Michael Moore Esq. How Much are YOU Costing Your Practice? by Sally McKenzie, CEO Thomas L. Snyder Director, Practice Transitions The Snyder Group Printer Friendly Version Do You Have an Emergency Exit Strategy? By Thomas L. Snyder, DMD, MBA Director, Practice Transitions The Snyder Group Several weeks ago, Sally McKenzie informed me about the sudden death of a mid-thirty year old specialist in her community. Ironically, three days later one of our representatives told me about a thirty-nine year old general dentist with a very successful practice passing away suddenly. These tragedies, coupled with the personal loss of a spouse, can have a very serious economic impact on the surviving family. Therefore, it is critical that no matter your age you must develop an “Emergency Exit Strategy”. Did you know that when a dentist dies, the practice’s value decreases approximately 5% per week? Fifty percent of all practices go unsold upon the untimely death of the practice owner, primarily as a result of delays in getting the practice listed to market. Statistics also show that 95% of all dental practices remain unsold after 90 days of the owner’s death. As transition consultants, we place a premium on planning not only for long-term transitions, but for addressing situations such as these two tragedies. It is important for a business owner to know what his/her practice is worth. Every time I lecture, if spouses are in the audience I ask them if they know the value of their husband or wife’s practice. Ninety percent of the time the answer is no. So, here are some recommendations to assist you in developing your “Emergency Exit Strategy”. Step 1- Have your Practice Appraised Most dentists only deliberate having their practice appraised when considering a practice transition. Quite the contrary! Since your practice is probably your number one financial asset, don’t you think you should know what it is worth? How about sharing that information with your family members as well as your trusted advisors? We recommend that you get your practice appraised now and share that information with those close to you. Your practice appraisal does not have to be updated annually, every few years is fine especially if you’ve been experiencing steady growth or have made some major purchases of equipment and technology. Step 2- Letters of Instruction “Letters of Instruction” is a document that will provide your heirs a quick and orderly way to set the wheels in motion to sell your practice immediately. “Letters of Instruction” should contain a list of key individuals who will need to be contacted in order to take appropriate action. Advisors can include your accountant, your attorney, your dental supply rep, and if you’ve been working with a transition consultant include them as well. Additionally, within this document you can include information about life insurance, disability insurance, and the name of insurance agents, etc.             “Letters of Instruction” can also be used in the event of a severe disability where you are incapable of making sound business decisions about the disposition of your practice. Although no one likes to think about these tragedies happening, they do in fact occur. With the sudden death of these two young professionals who had the rest of their careers to look forward to, it motivated me to write this article. If you would like to receive a complimentary copy of our “Letter of Instruction”, which is prepared in an interactive PDF format, please send me an email at drsnyder@thedentistsnetwork.net and we’ll be happy to share it with you. If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net   Interested in having Dr. Snyder speak to your dental society or study club? Click here. Hear Dr. Snyder’s FREE podcasts at The Dentist’s Network - HERE Forward this article to a friend Michael Moore, Esq. Director McKenzie HR Solutions Printer Friendly Version Thoughts on Separating Employees By Michael Moore, Director McKenzie HR Solutions A dental office can be like a family. Any small business can have that quality, but dental practices even more so. I don’t know if this is because the doctor works so closely with the assistants, or the practices tend to be male doctor/female staff, or something else altogether. The thing about a nuclear family is that seldom do the parents have to sever the relationship completely and finally. When kids are minors, the parents have a legal obligation of support, so throwing a drug-addled son out of the house is no option in any event. But later, and more frequently now, adult children are under the same roof as the parents. And when it becomes time to cut the ties that bind, the trauma is so great on everyone that the parents go into – or should go into – therapy. From my experience advising doctors about terminations, I see somewhat of a similarity. There is less potential for upset of the doctor if the employee is short term. But when the staffer has been with the practice for many years and has assumed or been given significant responsibilities, the natural reaction to deteriorating performance or outright behavioral nuttiness is to pull an ostrich. Doctors have told me that they’ve tolerated really bad behavior for years simply because they cannot bring themselves to make the break. In many more than one instance, the staffer has caused the practice thousands of dollars if only by driving away good employees, not to mention patients. One doctor said that he brought the employee into his office intending on terminating her, but before he got his mouth open, she blurted out that if he tried to fire her, she would sue him for years of overtime pay. The really long-time employees have a sixth sense from years of reading the doctor. They can almost predict when a termination is contemplated, and they take measures to instill real fear in the boss. In the case of this doctor, he backed down and she remained in place, causing havoc for several more years. Had he consulted me, or any good employment lawyer, the doctor would have learned that the threat was hollow – the statute of limitations on a claim for back pay is, in most states, one year. Had he fired her, his only exposure would have been for that single year, if at all. Most threats of this kind are pure intimidation. Yet, so many doctors’ knee-jerk reaction is to back off. For those of you who have experienced or are experiencing a similar office environment, you know the chronic low-level anxiety it produces. I suspect that many more heart attacks can be correlated with employee problems than ever are caused by patients.             A good tutorial on how to handle terminations if found in the movie “Up In The Air.” George Clooney’s character is employed by a consulting company and his only job is to fire people. Management of the companies that retain Clooney’s outfit are obviously unwilling to face the dozens or hundreds of employees who are getting the ax. It pays to hire the consulting company to pull the plug on all of them. But even so, watch the movie and take in how Clooney actually performs in a termination. Because it is a performance. It is a “pitch” just as much as the doctor is pitching his services to a potential patient.             Any doctor can hire me to fire a staffer. I will gladly fly to wherever the practice is and do the deed, just like Clooney’s character. But if you really study his pitch, you can do the same without angst. First, you divorce yourself emotionally from the interaction. Second, you retain the initiative. Third – and you see this in the movie – in some instances you have a severance agreement as your ace in the hole. A severance agreement is simply a contract providing that in exchange for a complete release of liability, the employee will receive some consideration in return.             Most consideration consists of the payment of money equated to past income – either in a lump sum, or paid over time. There is no schedule of payments that apply to all employees. Nor need the consideration be only money. The company can agree, for example, to pay for job counseling services. There are no limits on what the consideration can be. I cannot stress enough, however, that before you reach that termination event, it is critical that you have documented performance/behavioral issues. It is critical that you have given the employee the opportunity to recommit him/herself to the practice. We describe this as a “decision day.” The “decision day” is one paid day off, which is memorialized by a paper that the doctor gives the employee laying out the practice’s concerns and inviting the employee to consider the concerns and decide what she/he will do about them. Mike Moore is ranked among the best in employment law and has been named one of the top 10 lawyers in Ohio. As Director of McKenzie's HR Solutions, Mike is the creator of the Employment Policy and Handbook, geared to providing dentists who are unsophisticated in the legal arena with a step-by-step policy manual. Click here to hear Mike present “7 Elements of an Effective Employment Policy.” Email Mike at mike@thedentistsnetwork.net. Interested in having Mike speak to your dental society or study club? Click here. Forward this article to a friend Sally McKenzie, CEO McKenzie Management Printer Friendly Version How Much are YOU Costing Your Practice? By Sally McKenzie, CEO Plenty has been written about problem staff and what to do about them. But what happens when the problem employee is the leader of that team - the dentist. Take a moment and consider your role as boss. Is your leadership approach costing you a fortune? As a whole, bad bosses are expensive. A widely publicized statistic released earlier this year noted that lousy supervisors cost the economy in excess of $360 billion annually in lost productivity. That’s no small chunk of change. While employers often lament that good employees are hard to find, a multitude of staff members are saying the same about their bosses, dentists included. In fact, 65% of employees would take a new boss over a pay raise. So what do these lousy bosses do? The bigger problem is what they don’t do. They don’t inspire. They don’t question mediocrity. They don’t provide vision or direction. They don’t participate as a collaborator or team member. And they don’t walk the talk. Worse yet, bad bosses unwittingly cultivate workplace cultures where employees purposefully work slower, intentionally make mistakes, and fake illness just to avoid them. Admittedly, most leaders bring a host of both positive and negative qualities. However, when it comes to “bad bosses,” the negatives far outweigh the positives. And there are many types of bosses. What type of boss are you? The “hands-on” boss, more aptly described as controlling, cannot restrain herself from becoming involved in even the most insignificant details of the practice. Rather than guiding her team and helping them to problem solve independently, she simply takes over. However, as much as she must have control, decision-making is not her strength. In fact, peace on earth could be achieved in less time than it takes her to choose between option A and option B. She’s so afraid of making the wrong decision that she becomes trapped in a state of paralysis of analysis. Then there’s the perfectionist boss. No one can meet Dr. Perfectionist’s standards. Highly obsessive, Dr. Perfectionist is convinced that he is the only competent person in the practice. In fact, he is so completely obsessed with having things “just so” that he doesn’t hesitate to take a red pen and correct staff members’ post-it notes. There’s also the “I want them to like me” boss, better known as Dr. Spineless. When a problem arises, she waits for it to go away for fear that addressing it could result in hurt feelings. No spine in the doctor means no accountability in the practice. There’s also the blamer, the screamer, the backstabber, and the politician, to name a few more. And then there is the boss that all leaders should strive to become: the team builder. But how do you know if you’re a good or bad boss? If yours is a perpetually changing team, chances are that you’re not exactly an easy person to work for. And considering the high cost of staff turnover, that’s reason enough to improve your skills as a boss. Create an environment and a culture for success. Set clear, challenging goals and specific expectations for your team. Explain the “why” behind the “what.” Monitor the team’s progress in achieving goals through regular staff meetings, system checks, and performance reviews. Celebrate and reward success. Set up your employees to succeed. Work with individuals and the team as a whole to define realistic goals that encourage the team to work at peak performance. Invest in training for employees to maximize their potential. Establish guidelines. There should be a code of conduct in the office, specific office policies and business standards that everyone must follow. Communicate clearly and specifically. Avoid making general comments about an issue and assuming that someone will just pick up the ball and run with it. If you don’t communicate your desires clearly, no one can be held responsible except you when those desires aren’t met. Be decisive and make the decisions that have to be made, even when they are difficult. Listen carefully and make it part of your management strategy. Seek input from the team. Welcome and encourage open communication, both bad news as well as good news. Becoming a good boss requires that you are conscious of your behaviors, your strengths and weaknesses, and how you relate to each member of your team. At the end of each day, take a few minutes to evaluate yourself as a boss and pledge to do better tomorrow. Sally McKenzie is CEO of McKenzie Management, a nationwide dental management, practice development and educational consulting firm. Working on-site with dentists since 1980, McKenzie Management provides knowledge, guidance and personalized solutions that have propelled thousands of general and specialty practices to realize their potential. Interested in speaking to Sally about your practice concerns? Email her at sally@thedentistsnetwork.net or call 1.877.777.6151. Interested in having Sally speak to your dental society or study club? Click here. Hear Sally’s FREE podcasts at The Dentist’s Network - HERE Forward this article to a friend

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