Heather: Hey everybody! Welcome to this week’s Spark Strategic Thinker. My name is Heather Driscoll and I am the cofounder of Spark Dental Network, and I’m joined today by my colleague dental, financial, and accountant-extraordinaire Drew Schaefer! How are you doing Drew?

Drew: Good, how are you doing Heather?

Heather: Good! Thanks for joining me today.

Drew: Thanks for having me.

Heather: Of course. So, each week at Spark we actually take a little bit of time and talk through the foundation of what Spark is. So, Spark helps growing dental organizations really focus on the things that are ultimately going to improve their overall dental enterprise value. So, the Strategic Thinker really is conversations to help spark your mind and the way you’re approaching your business and we do that by focusing on 4 fundamental areas. We’ve found those things to be drivers of value in dental practices. So Drew, we’ve broken the Enterprise Value Matrix down into these 4 quadrants. I think you probably have a couple of personal favorites, right?

Drew: (laughs) Of course.

Heather: Do you want to talk a little bit about the quadrants and why we found them to be so important?

Drew: Yeah, first and foremost your culture is who you are and what you stand for and ideally that’s delivering great patient care and being a resource for your community, your patients, and your employees. That’s probably one of the most fundamental and important because that’s the foundation that everything else is built on. As I referenced, a lot of your culture has to do with your people and having the right people on the bus and in the rights seats is what really delivers that great patient care, what makes it a rewarding environment, and really what leads to the most success for all parties. I’m a little partial to the financial piece, and so I think ultimately great patient care is reflected through financial results. And ideally, great financial results lead to good opportunities for the owners, the doctors, and all team members. And lastly, the process. The processes are really what helps lead to financial results as far as being consistent in how you approach various matters, how you process things, and how you can stay most lean as an organization and really driving value that’s attractive to potential buyers or other investors.

Heather: Absolutely. Thanks Drew. So, to Drew’s point, often in dentistry, we’ll start to throw people at problems or challenges, and if you have really good balance in these 4 areas, often you can get a little further down the road without having to come up with some real significant investments, whether that be in people or technology or anything else. So, usually each of our topics falls into one of these categories and today we’re going to focus on the Process Quadrant, specifically one of our favorite processes, strategic planning. And, while there are numerous processes that Spark tends to focus on, what we find is usually that when people start working with us, we really have to go back to the foundation, the very beginning, and that’s their Strategic Plan. And The Strategic Plan ultimately should increase the likelihood of their vision becoming a reality. So, we help them to distill down the vision into actionable items that ultimately can become executable. And, follow-through becomes more of the norm instead of every once in a while. Often we find that when people are getting started, they kind of feel like performance is something that happens to them and not really something that they have control over. So, a good Strategic Plan really helps to get things on the right path. But, there’s a little bit of a process for the process, right Drew? So, certainly strategic planning starts with understanding why you’re doing it. So, do you want to talk us through a little bit of the purpose behind strategic planning?

Drew: Yeah, I think the most important element is really looking out past a single year. Where do you want your organization to go? You might have goals financially that you want to achieve. Or professionally, as far as how many practices or communities you can serve. But, if you take it a year at a time as a lot of leaders tend to do, it’s very hard to reach that ultimate goal because you’re skipping the in-between of the different steps you had to take to get there. So, really clarifying your vision helps you kind of break down what steps are needed. And at the same, it makes sure that everybody that you have, your personnel, they’re aligned with that same vision. If they’re not, then it’s going to be very hard to get there with those people. It gets clarity for the rest of your team members as well. And, it can really ease conflict due to people having different perceptions of what that vision is. So, once the vision’s defined, then depending on how long term that is, then you can kind of fill in the gaps in between and develop the plan and the different measurements and stopping points to get to that ultimate goal. So, I think a lot of leaders get caught up in the day-to-day and putting out fires, and it’s hard to take that step back and say, “well, where do we want to be and how do we get there to where we’re not putting out fires and we’re being strategic, and we’re growing (with whatever that growth looks like in your definition).” And, that helps you mentally set the priorities for the key triggers to get you there the quickest and helps you communicate those priorities to everybody else as well. There’s finite resources, whether it’s with people’s time or financially. So, it helps you really prioritize those investments and resources as well. And ultimately, it helps align everyone to once again be on the same page, be working together, and it will really help you understand who’s not going to be a team player, who’s not aligned with your vision and help you adjust to make sure that there are no conflicts that will prevent you from reaching that goal. And ultimately, it helps you as a business leader become more strategic and that planning as it relates to what that means financially through budgeting and long-term planning processes.

Heather: Absolutely. So, often we’ll hear team members in growing dental organizations say that sometimes the day-to-day activities don’t really feel like they’re completely in line with the vision and what they say they’re going to do and who they say they are doesn’t always trickle down and translate into what’s actually happening each day in the practice. And so, I agree, the Strategic Plan does a really nice job of aligning the vision, the strategy, and the execution. And ultimately, it helps to lend to more consistent favorable outcomes. So, you talked a little bit about people getting stuck in the day-to-day. And, certainly having been a leader of operations (for longer than I should probably admit anymore), I know that I can find myself every once in a while kind of getting caught up in the minutia and losing my strategic, big-picture focus. One of the things that was really helpful to me over the years is making sure that when I was doing strategic planning that I had some guard rails to make sure that the strategic stayed strategic. So, anytime we found ourselves deviating into an individual practice or individual performer, that was a good indication that we were veering more toward tactical, day-to-day things and not so much big-picture, visionary things. Also, being able to define near term versus long term. A lot of times, your Strategic Plan is 3 years, 1 year, and then ultimately starts to be broken down into 90-day chunks so that you can really hit home the execution on things. But, it doesn’t replace the fact that there ultimately will then need to be planning in place for the individual practice locations, but that’s not usually a part of the overall Strategic Plan. So Drew, there are some best practices that have really been beneficial to help people be ultimately even more successful with their planning. Do you want to talk us through what some of those are?

Drew: One of the great things that’s come out of the technology resources that we have now, if you integrate with some of the dental intels of the world, is that there’s a lot more information out there than there used to be to really leverage your performance and know what you should be aiming for. And, it also helps bring more clarity for providers and practice managers to understand the metrics involved in running a successful and profitable practice. Leveraging the different platforms that are out there, there’s so much more data that’s more real-time and less historical than has been in the past. So, just leveraging that is very important to make sure your processes and planning are aligned with where the industry is going so you don’t become obsolete. Ultimately, making sure all of the goals are SMART - Specific, Measurable, Achievable, Relevant, and Time-Based. And, that’s obviously the best way to make sure that we ultimately achieve our goals in line with that vision and keeping things on track. In line with the industry trends are the KPIs and Benchmarks and that all goes together and it will continue to expand as there’s more and more money put into technology and the platforms and consolidation are really going to continue to give us more and more information. And, defining what those are for the leaders down to all the team members that are accountable for the results is really important. The Strategic Plan should be revisited at least annually to make sure you’re on track. Of course, always look back at what you had planned for to see whether you stayed on plan or not, and what need to do to adjust it to get back on plan if needed. Consistently communicating your vision is important. There’s a lot of groups that have some very long-tenured employees, but realistically most always have some turnover. So, making sure to reinforce that rather than a one-time event and making sure that’s at the forefront of their minds. And also, the plan might change, so making sure to communicate that as it happens as well. Reviewing annually the plan is one thing, but you can’t have that long of a gap in checking in with the individuals and the different key milestones that are important to get to that full plan. So, having a good, consistent diligence about good quarterly check-ins on those 90-day rocks is vital because once again you can get bogged down in the day-to-day and a lot of the tasks to where if you wait too long, you’re really behind the 8 ball on those longer-term strategic goals. Celebrating, obviously it’s easy to forget to celebrate when you’re in run mode, but especially to make sure everybody stays aligned with your vision, it’s important to celebrate and to get everybody excited so that it’s not just your vision, it’s the team’s vision. And lastly, since everything for me comes back to finances, really you should be budgeting in a way that aligns and supports your Strategic Plan. So, there are different elements as far as investments and capital expenditures that might be required. So, being diligent about that. Planning for any debt service that would be required to grow and ultimately budgeting at the practice-level and overall to align the results with the long-term vision and having everybody bought into and invested in that.

Heather: Absolutely. And Drew, I definitely have learned from you over the years that while the true test is improving profitability, I would be much more confident working with an organization who knew exactly why and how they were a certain level of profitable, as opposed to an organization who had a fluke influx of improved performance and not really know what to attribute it to. So, the name of the game is consistency, and it’s okay if you aren’t performing in a way that is really where you want to be as long as that’s what you planned for. Whether that be a brand new startup practice or the loss of a key provider, or whatever the case might be, performance when planned for is a lot different than surprises. So, I have definitely come to appreciate what a good budget and a good plan can do for success. Alright, any final thoughts Drew?

Drew: No, I think the vision is really what you have to define before most of these other elements can even fall in place. Is what you want long term, once again whether it’s financial or community-wise or patient-oriented or employee-oriented, and going from there and it’s a long process and it takes a lot of work but these steps are what’s important to making sure that’s realized ultimately.

Heather: Absolutely. Well, I know our organization is better because of your brilliant mind and your commitment to these key processes and honestly my job as a leader has gotten easier because of our commitment to some key processes and so I really appreciate that. And for all of the rest of you, thanks for joining us on this week’s Strategic Thinker. We’ll be back again next week and you’ll see Drew again in the future talking about budgets and all kinds of other really exciting things. So, thanks for joining me Drew.

Drew: Thanks for having me Heather.

Heather: Absolutely.

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