The successful orthodontic practice must establish objectives by which to measure progress toward its goals. There is nothing magical or new about Management by Objectives (MBO). MBO has been around for more than 40 years and is little more than a practical approach to achieving results.

Implementing MBO

The first six preparatory MBO steps outlined below are designed to make objectives meaningful and thus prepare you and your team for the action steps.

Preparatory Step 1

The specialist must initially provide each staff member with a list of goals. This step is crucial to establishing the information base upon which staff members will develop their objectives. The orthodontists goals may include the following:

• Increase referrals from general dentists.
• Expand our referral base.
• Control or reduce overhead.
• Increase productivity.
• Improve treatment acceptance percentage.
• Control inventory.
• Improve accounts receivable.
• Reduce debt/equity ratio.
• Add new technology.

Preparatory Step 2

Each staff member must develop objectives relating to his or her area of responsibility, keeping in mind the goals set forth by the doctor. Discussion of individual objectives at this stage ensures that they are compatible with the objectives and goals of the other team members. This is another step in building the information base used in setting objectives.

Preparatory Step 3

Clarify responsibilities by discussing the duties of each staff member. The treatment coordinator may assume responsibility for overseeing marketing to general dentists; the financial coordinator may assume responsibility for reducing accounts receivable, etc.

Preparatory Step 4

Identify key results areas (KRAs). KRAs help the staff focus limited resources (time, money, equipment) on those areas that will generate the greatest return on investment.

KRAs should identify subject matter C not goals or objectives. For example: Referral Levels From Each GP identifies subject matter. Increasing Referrals From Each GP identifies a goal.

Preparatory Step 5

Prepare a situational analysis with your staff. The prime purpose of this SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis is to lead you into the appropriate subject matter for your written practice objectives.

Preparatory Step 6

Formulate major assumptions. An assumption is an external factor over which staff members have little or no control, but which may significantly affect their performance or ability to achieve the desired goal. You must assess the impact of these assumptions on the probability of realizing your objectives. For example, Our practice will not participate with managed care plans is an assumption.

Only after the previous six steps are completed can you begin to write meaningful practice objectives.

Action Step 7

Write effective objectives. An objective states what is to be achieved and when. The criteria for effective objectives are:

• Objectives must be specific, realistic, and time-based. For example: Increase treatment acceptance for new patients to 95 percent.

• Objectives must be consistent with each staff member's authority. In other words, the ortho assistant should not be assigned the objective of reducing accounts receivable.

• Objectives must provide for flexibility. To the greatest degree possible, objectives should allow for periodic checking and evaluation during the target period. For example: Complete marketing plan by March 1. By July 1, increase referral rate by 10 percent . By end of year, increase referral rate by an additional 10 percent.

• Objectives must be stated clearly in unmistakable terms. Vague, general goals can be misinterpreted.

• Objectives must be put in writing.

• Objectives should contain "stretch." They should be set at a level of difficulty that requires the staff to exert higher than normal effort.

• Objectives should match the team members' experience and capabilities.

Once you and your staff have decided what you plan to achieve, you are ready to determine how to achieve it.

Action Step 8

• State the objective clearly.

• Identify ways to achieve the objective.

• Weigh all alternatives and select the most suitable one.

• Plan for the best alternative.

Action Step 9

Establish a budget. Once they are properly constructed, budgets are extraordinarily valuable for monitoring and controlling expenses. However, the primary purpose of a budget is to motivate staff members to optimize their results.

Action Step 10

Consider the implications that your goals may have on other team members. Each staff member must engage in this activity. For example: Increased treatment acceptance means that inventory levels and scheduling may need to be adjusted. Coordination among staff can be accomplished through individual discussion, at staff meetings, or by exchanging written copies of each team member's objectives and plans.

Action Step 11

Grant team members the authority to accomplish their assigned objectives. Despite the thoroughness of the MBO process, results cannot be achieved unless team members are empowered.

Action Step 12

Solicit meaningful feedback regarding progress toward specified objectives. For example: If the objective is to reduce the accounts receivable '90+ Day Category' by 30 percent by March 1, 60 percent by July 1, and 95 percent by the end of the year, feedback should be required (at a minimum) on each of those occasions.

Although considerable energy and effort are involved the first time your practice executes the preceding steps, it becomes much easier in subsequent years. Unless there have been major practice changes that have occurred during the year, all that is required is an updating of your objectives.

[SUBHEAD] Beware of the Pitfalls

Now that you know how to implement MBO, let me offer a word of caution. Before adopting the process, you must be aware of the two most common pitfalls that hinder even the best MBO approach. The first pitfall is deciding to adopt MBO without understanding what it is and how it works. The second pitfall is trying to implement it too quickly. Many of the following problems are caused by these two traps:

Telling your staff their objectives instead of asking them for input. This is a sure MBO killer.

• Delegating executive direction. You, as your practice's top-level manager, must bear the responsibility of controlling the process.

• Emphasizing the techniques. Do not spend hours in meetings and training sessions conceptualizing the system. The staff will never get around to applying it.

• Creating a paper mill and ignoring feedback.

• Failing to reward good performance. Over the short term, it is possible to enhance performance by emphasizing it. However, many MBO efforts fail because achieving higher levels of performance is emphasized, yet the staff is not rewarded accordingly once those results are achieved. Traditional compensation arrangements are usually incompatible with MBO aims because the performance of outstanding staff members is not recognized over average ones. Rewards and recognition are not limited to monetary compensation, although a motivating bonus system should be implemented.

• Instituting objectives but no plans.

• Stressing objectives rather than the system.

• Dramatizing short-term objectives. If you operate on the premise that by taking care of the present the future will take care of itself, MBO is doomed.

• Omitting reviews and refresher training for the staff.

• Failing to coordinate objectives.

• Refusing to delegate authority for staff to accomplish goals.

In conclusion, goals are not worth much without a method for measuring your progress towards them. MBO is a highly effective mechanism for developing and following through with objectives and goals for your orthodontic team. However, as I have learned through consulting to more than 2,200 practices around the world, you must follow all of the MBO steps and get your staff to do so as well. MBO will only work with the entire team=s involvement and dedication.

Action Guide

1. Determine your goals for the practice. Consider what you want to achieve within a specified period of time.

 

2. Require and encourage all staff members to contribute to achieving practice objectives through high performance.

 

3. Blend and balance the objectives of each staff member to realize greater results for the practice as a whole.

 

4. Establish a control mechanism to monitor the progress of each objective.

 

5. Institute a participative management style. Successful MBO requires it. This gives each staff member latitude in managing his or her own responsibilities within the parameters of the practice's objectives.

Roger P. Levin, D.D.S., M.B.A. Dr. Levin is on the faculty of several dental schools and serves as a consultant to the American Dental Association Council on Dental Practice. He is an accredited member of the American Academy of Cosmetic Dentistry and a diplomate of the International Congress of Implantology and has completed the L.D. Pankey Institute's continuum series.