Poor procedures send profits down the drain: learning from Starbucks

Reprinted with permission from Sally McKenzie and McKenzie Management.

For those of us who routinely grab a latte or double-shot espresso from our favorite corner Starbucks, we probably don't think much about the time a few years ago when this icon of small business success was teetering on the edge of serious financial troubles. It was 2008, the year that is synonymous with financial disaster in virtually every business sector. Stock prices for the ubiquitous coffee giant had plummeted. For the first time, we saw Starbucks coffeehouses actually closing rather than opening one after another and another.

The company's focus turned to the fundamentals of efficiency and careful attention to the bottom line. As is common with businesses that grow too quickly, be they world famous coffeehouses or your dental practice, success can mask a host of system shortfalls and wasted resources. For Starbucks, looking at the fundamentals meant closely examining the basics. For starters, the company was literally pouring tens of millions of dollars down the drain in the form of steamed milk. The baristas would prepare a popular beverage, such as a latte, any milk that didn't make it into the drink went to the drain. With thousands of stores nationwide, there was cause to cry over this case of spilled milk.

Yet as is so often the case, simplicity is the root of all genius. An attachment was added inside the steaming pitchers to indicate how much milk should be used for popular drinks. It would save the company a bundle.

It's the seemingly insignificant details that can turn profit into loss. And it illustrates how major improvements can be made by stepping back and considering the minor matters and everyday procedures that are often overlooked because they have become second nature.

In the dental practice, time and valuable resources are wasted when the dentist struggles to delegate. For example, the doctor may be in the habit of explaining the postop care to patients, even though that's the assistant's job. Or maybe s/he always sits down with the parents to discuss the importance of sealants for their child, even though this is the hygienist's responsibility. Meanwhile, doctor and staff are stressed because patients are kept waiting too long. It seems as though they are always running behind. And the practice just can't seem to get ahead because capable team members are given only a sliver of the responsibility they can handle. Yet the doctor, who feels as though s/he is spread far too thin, is actually thinking the time might be right to hire an associate.

Rarely do dentists and their teams step back and examine the details of what’s causing stress or concern with particular practice systems, be they delegation of duties, collections, new patients, treatment acceptance, scheduling, etc. Most practices never consider anything but the obvious.“Patients aren’t pursuing recommended treatment because of the economy.” “It seems we are always running behind, so we must need more people on staff.” Certainly, demands on dental practices have increased over the years — and while clinical quality can never be compromised, efficiency in both the clinical and business areas can almost always be enhanced.

How much time is added to a procedure when an assistant doesn’t anticipate what instrument the doctor needs next? How much time does it add to a procedure when the doctor has to repeatedly adjust the light source? How much time does it add to a procedure when the assistant can’t see clearly what is happening in the patient’s mouth? How much does it cost the practice when the assistant or hygienist is not given the responsibilities s/he is legally allowed to carry out? How much does it cost the practice when the doctor is negotiating payment or explaining insurance basics to patients that other staff members could and should be handling? How much time and money is wasted dealing with staff turnover because team members quickly become bored and frustrated that the doctor does not trust them to do more? How much of your “milk money” are you pouring down the drain?

Author bio
Sally McKenzie is CEO of McKenzie Management, a full-service consulting/coaching dental management company, providing proven management solutions since 1980. She can be reached at (877) 777-6151 or [email protected].