Managing Your Practice During Economic Downturns

What is good management? There’s no single, comprehensive answer. But in our research, we focus on three facets: target-setting, incentives, and monitoring. Well-managed companies set reasonable, strategic goals; set their staff up to contribute to them; and measure their progress. Call it boring if you like — I call it good business. 

Success of a company is more than the vision and intellect of the CEO.

There are three dimensions to a CEO’s leadership ability. First their intellect and charisma. A Swedish study of CEOs showed that their intellect was in the top 17% of the population. 

They possess a variety of different skills and knowledge, as well as leadership styles. 

Included is their ability to become the model of hard work, excellence or whatever attribute they are trying to instill, but also their ability to influence the behavior of others.

This is important as we continue to move deeper into a hyper-inflationary environment brought on by supply chain issues, loose fiscal policy and high government spending to stimulate the economy after COVID. 

As the economy worsens, and in an effort to understand what is going on, leaders are tempted to increase the number of meetings with their teams, ask for more tracking and data collection. The risk here is that leaders move into micro-managing.

This has a stifling psychological effect on teams. The worst-case scenario is when leaders take over the roles of team members or micro-manage their work. 

Schuster Center Power Strategy: Stewardship

1.    Ensure you have a legitimate reason to “move closer.”

2.    Remember, your purpose is to energize and support, not control or sow doubt.

3.    Ensure you are on the same page with the team member about the outcome of the work.

4.    Move closer to gain mutual understanding and then have a clear exit strategy — meaning the role returns to the team member and their final step in stewardship becomes reporting results to the team.

Schuster Center Power Strategy: manage stress levels of the team. 

Okay, so patient flow is slower, revenue is trending lower, and the economy is worsening. Yes, time is of the essence, but you can’t act crazy.

This is a time where you can make massive changes to your offering by having a cool head, knowing that this too shall pass, and that growth is on the other side.

Look at this time as an opportunity to reimagine your offering, introduce a new business model or a new direction for your practice. Maybe you want to change your financial policy, begin doing more of the work you want to do, or change the way you bring patients into the practice. Maybe you want to exit the in-network insurance environment. Believe it or not — this may be the perfect time!

Schuster Center Power Strategies: 

1.    Mental health issues are real. Have a calm, supportive and positive demeanor, focusing on outcomes and the growth phase that will come. A typical recession lasts 12-18 months. Don’t believe the misinformation coming from the politicians, we have been in a recession for at least two quarters.

2.    Time is of the essence, but don’t create emergencies where there are none. Focus on excellence and strengthening relationships with team and patient alike.  If your schedule is light, schedule more time for each individual and stay in the room during the anesthetic phase of treatment to get to know people on a deeper level.

3.    Leaders tend to become more ego-centric and less tolerant of the opinions of others during economic downturns. Practice impulse control and create structures and processes where you allow others to voice concerns and share opinions. Don’t decide things on the fly, but, have reflective time before you make a decision. 

4.    Often, we ask our teams to do more during times like this. We may operate at normal capacity with fewer team members. This is the time to roll up your sleeves and for the leader to do more than they normally do! When you accomplish more with less, celebrate! Have the team over to your house for a meal, or a social night of bowling or a movie. If your team members are on the younger side and have children, include the families for a picnic at the park or a pizza party and backyard movie. Find inexpensive ways to say thank you and acknowledge the hard work teams are doing during this time. 

5.    Lastly — prepare for the growth wave that is just around the corner.

Being a good leader in a bad economy can be challenging, especially this time with the pandemic shutdowns being so recent. This means dentist leaders must turn from their normal MO of crisis management to one of care, moderation and forward thinking.

If you are concerned about the future or want to have a strategy call with Dr. Edwards or one of our coaches, email chris@cfpd.com to find out how to schedule.

"My gross profit is up 94% in one quarter using the Schuster Financial Strategies."

— Dr. M.N.