When to Hire and How to Pay an Office Manager
If we truly look at this title as a starting point, I would first ask, “Do you really need an office manager”? Again, even though office managers are “common place” in the dental industry, I find this to not be “common sense”. Many of the things we accept as foundational originated during the industrial age and have somehow persisted to this day even though they have far outlived their usefulness. Titles are one of those things. Retirement age at 62 was one of those things. These limiting beliefs have us building our businesses on sinking sand without really understanding why. Back in the industrial age, retirement was set up because the workers were not productive after they hit 60. They needed young, strong, energetic employees that could lift the heavy materials. Not true today. In the industrial age some smart consultant talked corporate America into giving people titles instead of increasing their pay to promote longevity of employment and quell the masses. This played to the American psyche. Someone gets to be boss over the common worker. Today in dentistry we make the assumption that because it is common place, we should all have office managers. Not so fast Scooter. If your practice is not doing well south of a $120,000 a month, you really don’t need one. When you hit $3,000,0000 a year, you probably need someone that takes on some of the leadership and management rolls that a traditional office manager might provide. When you hit $5,000,000 a year, you should start looking for a wise MBA with experience if you want to continue to grow. Bottom line, no one really needs an office manager, they need to develop a team leader.
Too often, I see doctors and their practices struggling to find a solution to high overhead, low productivity, high staff turnover, and insufficient patient marketing and retention. In most cases, I see a high turnover of staff, few new patients and an out-of-control overhead spiral. The doctor’s response is generally to take more continuing education to improve his or her clinical skills. As it turns out, this strategy misses the true cause of their problems. Overhead, productivity, staff unrest, and poor team performance are usually just symptoms of a lack of leadership and sound business protocols in your practice.
We have all been pushed by so called practice management gurus to “delegate” the day-to-day “management” of our practices to an “office manager”. I can hear those same “experts” say: “Just do the clinical and let the office manager take over everything else”. If your consultant is saying this, fire them. It demonstrates a complete lack of understanding of group dynamics and purpose driven management skills.
Far too many office managers exist by “positional authority”. In other words, their title or position gives them the authority to dictate policy. At best they follow orders, at worst they alienate the staff through intimidation and poor people skills and run off patients. In addition to this, the doctor does not understand what an office manager’s job should be, does not train them or give them an adequate job description, and fails to measure their performance or create consequences. Also, most office managers are never given any real authority to hire and fire, change processes, and see the data that would really help them actually keep a hand on the management side of the practice. The problem is you, as the doctor, don’t want to “manage” or “lead” the practice but are reluctant to let go. By abdicating your leadership and management role you set yourself up for failure and poor productivity with high staff turnover. When there are problems in a practice, they are always caused by the Doctor. By your decisions, or lack of them, you should own the results. Your systems are precisely designed to give you the results you are getting. The buck stops with you. You want different results, then change the systems. Do something different.
Doctor, you need more than an office manager. You need to “partner” with a TEAM LEADER.
A Team Leader is someone who provides guidance, instruction, direction, and leadership to a team for the purpose of achieving results. A group of staff members do not necessarily constitute a team. Teams are developed and grown. It is no longer good enough to have “good” staff members. You need excellent employees. You want a committed team and not just compliant employees. Your practice will never go any further than the one person with the lowest level of commitment to the vision for the practice. It is the responsibility of the team leader to add feet to your vision. It is reasonable to expect your team leader to manage your office and your team during working hours, but you are responsible to define “reality” in your practice and monitor their progress. The team leader will create the systems and help the staff develop and embrace the vision on a day-to-day basis.
The team leader fulfills a team role similar to that of “captain” in a team sport. They hold equal responsibility and accountability for the group’s performance with each of the other team members. Ideas, options, and collective decisions on how best to accomplish the purpose and goals of the team are encouraged and supported by the team leader. When a person accepts a position as a team leader, he or she accepts the challenge of becoming both an exceptional leader and an exceptional person. In effect, the team leader becomes accountable to the team for his or her leadership performance as well as the final results of the practice. They become more than an office manager, they become a partner in the leadership and execution of your vision for the practice. Remember that “team leaders” are rarely hired, they are developed. You could even say that they become a team leader without a title. They don’t need the title because they are already seen by others as a leader and the person that they would naturally seek out for advice.
There is a litany of mistakes that most offices make in hiring an “office manager”:
- They hire from outside the office and hire them as “the office manager”. This creates that positional authority with a title, but is not supported by actually earning the title or authority. For the best strategy, you should always try to hire people that could grow into elevated positions so that when there is a vacancy in any area of management, you can consider someone already in your employ.
- Offices fail to adequately train for the position with well-designed office policy manuals, job descriptions, measured performance, and consequences for not fulfilling each of these. How could you? You yourself have not actually held the position nor even have the skill set to perform it. It’s difficult to hire for a job you don’t understand. You need to know and understand what you need and what that person needs to do to hold the position.
- You pay them more than anyone else in the office. An office manager’s pay should be no more than a front desk staff members salary as a base. Any other pay would be based on the performance that they actually oversee and you can measure. Pay for an office manager must be tied to performance. They should have a solid base salary but with an additional pay based on hitting various targets for the office: Collection percentages of over 100%, calls converted to appointments, accounts receivables being about two weeks collections, overhead between 50%-63%, etc. Whatever you want to measure or reward will get done. Be careful to choose these bogies carefully and make sure that you give your team leader the authority to carry them out.
- They should have an actual job and not just an office where they hide out. Your team leader could be a hygienist or assistant but is most likely tied to the front desk positions. They need to work hand-in-hand and side-by-side with the staff. Authentic team leaders rise to the top to occupy that position of authority and leadership. It should never be appointed by you, but, instead, it should be awarded by the team. They earn the position and don’t actually need a title. Consider every hiring and training in the light of building a “team” rather than a group of people that work together.
- Whatever the job description, make sure that you figure out a way to measure their performance and reward excellence. Dedicate yourself as an owner to make sure they receive ongoing training and consistent feedback on how they are doing.
- Never hire from desperation. Hire slowly and fire quickly. Never hire someone you cannot let go. This would include, but is not limited to your spouse, kids, relatives, best friend of an employee, sister or brother of an existing staff member, your best friend in dental school, etc. You get the idea.
- The ultimate goal of leadership is to create an office with committed team members, not just compliant employees. Do this and you will see that there is no need to manage them. You merely need to cast a vision to let them know what you want done. This type of commitment means that the team will police themselves by not allowing a mediocre member to stay on your team.
If you are a doctor or office manager and you are reading this, go back and ask your team these three simple questions:
Few leaders are successful unless a lot of people want them to be. Every success comes through the assistance of many other people. Conversely, many people whose success stops at some point are in that position because they have cut themselves off from everyone who has helped them. They view themselves as the sole source of their achievements. As they become more self-centered and isolated, they lose their creativity and ability to succeed. Continually acknowledge others contributions, and focus on appreciating and thanking others, and the conditions will always grow to support your increasing success. You will never get ahead until people are behind you. A leader can give up everything but final responsibility. Becoming accountable is how you Summit. Paying your team leader well based on results and finding the person that has the skill set to partner with you, is like having a co-driver on your 180 Degree Dental Journey.
Michael Abernathy, DDS