Top 10 Insights to Open Book Management: Part 2by Dr. Ron Arndt
Last time, I gave you five methods of introducing Open-Book Management into your practice. What is Open-Book Management?
It’s a system of educating your employees on the basics of business income and expenses, like how to read a financial statement, and then applying that knowledge to your practice. That means as the leader of the practice, you must understand these numbers so you can educate your team. It means teaching your employees to think like business owners and giving them a personal financial stake in the profitability of your practice. The results? A more motivated staff, better profitability, happier patients, and less stress.
Take the time to read the rest of these tips and implement these ideas, and you WILL see results.
1. LEARN MORE ABOUT OPEN BOOK MANAGEMENT
2. INSTRUCT AND COACH YOUR EMPLOYEES
Give them the WHY as well as the HOW, then follow up with feedback. Be sure they understand all of the why’s: why the practice is in its current position; why they need to know how the business runs; why you are sharing this information. Then show them how this new Open-Book Management will work for and benefit them. Make sure you provide regular, ongoing coaching and feedback – real-time learning.
3. SHARE YOUR NUMBERS
Every industry (including dentistry) has benchmarks against which companies measure their performance; production, collections, remakes, and patient complaints are among the key statistics we track in dentistry. What gets measured, gets done. When employees begin tracking these critical benchmarks, they begin to see opportunities for improvement. They start to provide solutions and feel ownership over the results.
Your stress is lowered, because you are no longer required to have all the answers.
Share financial information with employees. Teach them how to read the numbers…they send a powerful message.
4. TEACH BUSINESS BASICS
Inc. Magazine suggests that Americans know very little about business. Many believe the word “business” equals success and money. They have little or no idea about routine business expenses, what percentage of profit is healthy, or the distinction between profit and income. Develop a program in-house that teaches business basics, like how to read a financial statement, or even how to balance a checkbook.
Start with employees’ personal finances and apply their new understanding to your business.
Compare personal income statements and balance sheets with those of the business to get them to start speaking the language of business and deepen their understanding of business basics.
5. SHOW EMPLOYEES HOW TO THINK LIKE OWNERS
Profit and loss are strong motivators. Make sure every employee shares directly in the business success and in the risk of failure. When employees trust and understand management, profit and loss will motivate employees to get clear on what they are working for each year. When they have the opportunity to be rewarded like an owner, the will think like owners.