They’re key to growth, but why do 25% of business managers in dentistry fail?

by Business growth, Costs, Leadership, Performance reporting, Recruitment

If you’ve ever appointed a business manager, were they or are they effective? By effective I mean do they or did they actually deliver the objectives you set them? I can honestly say that it’s the single hardest appointment we advise our clients on. You can do all the preparation in the world but you only know a few months in whether it’s going to work.

Sometimes the answer, unfortunately, is no. And when it’s no, the cost is substantial. It’s not simply the opportunity cost of having the wrong person, it’s the damage they do to your team, your practice and your reputation with your colleagues. I have seen a failed BM set a practice back a year.

On the other hand I have seen and regularly see talented BMs driving practices forward and delivering truly outstanding results.

Why is it so hard to find a great BM? Part of the reason is that if a person looks good on paper and seems impressive in the interview, they might be wearing a mask. We all wear masks to some extent but what really matters, of course, is an individual’s follow-through, risk threshold, fact finding, empathy and communication skills up and down.

You can assess a candidate’s behavioural preferences like risk, fact finding and follow-through using one of the many psychometric tests like Kolbe but it’s no exact science. You can check their Instagram, Facebook and LinkedIn accounts which can be revealing. You can talk to previous employers, you can use full day assessment programs.

But in the end a disturbingly high level of BM appointments in dentistry fail, which is catastrophic for the practice and also for the individual BM.

My experience so far suggests a failure rate of circa 25%, so we have been developing strategies to reduce the failure rate. Without doubt part of the reason for failure is related to the leadership skills of the principal clinician. Typically the appointment at this level in the practice is a ‘first time appointment’. The business has grown from a revenue of say £650k to £1m and the next level of growth requires skills and processes that the principal or partners simply don’t have, let alone the time.

Taking on a skilled manager/enforcer is not straightforward, it’s not like appointing another associate. The good ones are persuasive, Machiavellian and results driven, which essentially is what you want. The problem is they need to be tightly managed for the initial six to 12 months, and this can be challenging. The principal has typically not been trained to manage a senior manager and often there can be an insidious and gradual breakdown in the relationship and trust which is borne out of the owner’s inability to run the manager effectively.

Typically emotion, ego and conflicting agendas get in the way of business pragmatism. I run leadership courses for principals and part of the preparation is to carry out a 360 appraisal on the principal. I write to the principals, partners, direct reports and BM and ask them to grade the principal across 10 performance areas, attributing a value out of 10 for each one. They send their responses to me anonymously. I get the principal to asses themselves on the same questions. What is interesting is the difference in the scores — he/she may think they are worth an eight yet their colleagues give them an average of 3.4! This brings me to lesson number one.

Don’t appoint a BM until you know how to run one

Obviously it’s no good having a business manager who you have to keep checking up on. But it’s even worse having one who you think is effective but isn’t, because they are out there making decisions based on a misunderstanding of your business fundamentals.

It’s important to have clear limits of authority and structured weekly reporting that is essentially numbers based. Think of your BM as your operations and sales director rolled into one and think of yourself as a CEO. I am happy to send you job descriptions for both. You have to give the BM space to operate; they will make mistakes, and that’s OK, just not too many!

What should you expect from your BM?

Loyalty, accountability, honesty but above all tangible results. My four rules on how best to achieve this:

  1. Your BM must work to quarterly SMART objectives (specific / measurable / achievable / realistic / time bound)
  2. You adopt an exception reporting system — in other words if I don’t hear anything to the contrary I am assuming that the task has been completed
  3. No surprises — good or bad
  4. Always work to the numbers first

How much does a good BM get paid?

To recruit someone of the right calibre for a £1m- £3m practice you should be thinking of £40k-£80k+. It’s a significant outlay and it comes with significant risks — get it right and it will be the best investment you ever make.

What’s the alternative to an experienced BM?

It’s what the bulk of owners are doing right now, a fuzzy mix that relies on the compromised initiative and limited business experience of your practice manager and receptionist, who together always seem to just about muddle along. Their hearts are always in the right place, they love you and the practice and the patients. You know and trust them.

When they report to you in your weekly or monthly meetings, they diligently convey the things they know and understand about your business, and they are correct about all these things. They leave out the stuff that makes them uncomfortable, and it’s probably the same stuff that makes you uncomfortable — technical business stuff. Not hearing about it is a relief. You let yourself believe that everything is as it should be, and you congratulate everyone on another successful trading month. This arrangement supports the status quo, everybody is happy but the business stops growing and becomes paralysed.

The paralysis happens for two reasons:

  1. The individual is not prepared for business management and therefore takes a conservative, risk-averse stance and neglects things they don’t understand in order to protect their fragile sense of competence
  2. You, the owner, accept their version of reality and together you both remain fearfully wedded to the status quo

As times passes it’s inevitable that your business will pay an opportunity cost that neither of you is aware of. From your comfort bubble you will miss golden opportunities to consolidate the business — and bear in mind the number of opportunities to grow any business is limited. The alternative is to appoint a great BM. There are risks but the upside is significant.

One last tip when appointing a BM: hire slowly and fire fast. If they’re not working out don’t hang about. If you need help on recruitment of a BM talk to us.

Best wishes


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“I have seen a failed BM set a practice back a year”

Jonathan Fine, MD
Author: Jonathan Fine