Everything Dental Blog December 2019

Is running a dental office more challenging today than it was for your predecessor?

My aunt owned an exclusive personnel agency in NYC during the seventies and eighties. Her successful staffing agency retired early in the nineties. The clientele was a ‘who’s who’ of the Manhattan elite. Virtually every major corporation wanted the distinction of a ‘212’ area code and successful executives wanted a superstar secretary and an attractive receptionist. Back in the seventies and early eighties change happened at a more gradual pace. There were no computers, high-speed internet, cell phones or LinkedIn. Workers were not as productive back then and life was simpler. 

As a child, I thought my aunt was the richest adult I knew. I believed she lived the life of the rich and famous. Her primary residence was in Gramercy Park, NY in an exclusive, doorman building. She owned a fancy, luxury car, had a second home in Florida and she owned her own business. In comparison, my family lived in a two bedroom apartment in rent controlled housing in Brooklyn, New York. My two brothers and I shared the smaller bedroom and my parents had the master bedroom. 

By the time I was a teenager, my aunts’ business and lifestyle had changed. She said the business wasn’t as lucrative as it once was. Even as a child, I was interested in business and asked my aunt what had happened? She loved to teach me about business and tried to motivate me to reach for the stars. She told me that the telephone answering machine had impacted her ability to cold call corporations and gain access to clientele she had previously done business with. She could no longer call up an old client to schmooze or brag about an amazing candidate that would be a great addition to their company. As a result, recruitment and placement for receptionists was declining fast and many firms were eliminating the position altogether. My aunt blamed those sophisticated phone systems and answering machines because they operated 24/7 and they were accessible from anywhere and at any time. The machine acted as a gatekeeper for executives who didn’t want to be interrupted by unwanted solicitation and phone calls. 

Years later, in the mid to late eighties, my aunt and I spent the day together in NYC. I had already graduated from college and it was several years since we had spent time together. I was excited to see her and spend the day together because she always knew the best restaurants and the hottest attractions in NYC. This time when we got together, we spoke about my career opportunities and aspirations for the future. After all, she was a recruiter! During our day together, I remember asking her if those telephone answering systems were still a problem for her business. She told me that she now had a new, even worse nemeses. She said that the personal computer and e-mail had taken a huge bite out of her secretarial placement division. According to her, even the most successful, business tycoons had laptops and e-mail and they relied less on support personnel. This decline in my aunt’s core business (Secretarial Placement) was catastrophic for her personnel agency. 

There were options and choices to make to correct the decline of her business but my aunt did not fully embrace them. She could have branched out into new markets, particularly in the Information and Technology sector. Coders, network engineers and computer analysts were in high demand as every business was computerizing or building an IT infrastructure in the late eighties and early nineties. A personnel firm with her agencies reputation and notoriety, would have thrived in the IT and temporary placement market. She had the contacts and the reputation of an industry influencer but lacked the will, capital and expertise to reinvent her business. Failure to move where the market was going eventually shrunk the business until it was gone.  

In business, the ability to pivot and reinvent yourself is how corporations and individuals create opportunity which leads to transformative change. In my aunt’s case, technology killed her business and it was technology that represented the greatest opportunity for her!

Today, service companies that evolve from a transactional business to a results-oriented business are thriving. Retailers who complement their e-commerce business with small, convenient retail/service locations are learning how to navigate and thrive in the new marketplace. 

Thirty years ago, dentistry was a cottage industry. Most dental offices performed the same basic procedures and insurance was not invasive. Dentists flirted with cosmetic work but it was largely a need based business. Almost 100% of the Endo, Ortho, Perio and OS specialty work was referred to the specialist. Most fillings were restored with amalgam and the patient’s expectations and dental IQ was very low. 

FAST FORWARD to today. It’s absolutely more difficult to be a dentist today but it is still an amazing and well-respected profession. Dentistry remains a very profitable business and that’s why private equity is enamored with it.

Dentistry, like society is multi-generational. Here’s how I think it looks to all the players: 

  • 1946 to 1964: Baby Boomers.
  • 1965 to 1979: Generation X.
  • 1980 to 2000: Millennials

 

For the boomers, the profession has served them well but retirement planning has been a moving object. No one told these children of the second industrial revolution (The age of science and automation) that they’d still be practicing through the end of the third industrial revolution (The age of digital technology) and would witness early signs of the fourth industrial revolution (AI, Robotics, Genome editing …).  While its’ been fascinating, the Boomer has been burdened with the high cost of keeping up with technology and all the regulatory and compliance costs. Those Boomer dentists that planned well and invested wisely will enjoy the fruits of their labor in retirement.

For the Xers, the business of dentistry did not deliver the same benefits (life style) of those that came before them. The reason for this was less about the career of being a doctor and more about the socio/economic challenges of the time. Like the Boomer, Xers had to invest in and on the practice to remain competitive but they did it during a turbulent economic period. The overhead of running a dental practice soared after the great recession of 2007/8 and costs continue to rise as dentistry moves towards a digital workflow. While the challenges are many, the Xers have been fortunate to practice during a period of time when elective and cosmetic dentistry is in demand. Implants, clear aligners, facial fillers, whitening, Sleep medicine and indirect restorations provide lucrative opportunities for the progressive dentist that executes. It’s not enough to hang a shingle, have great dexterity or unparalleled clinical skill. Patients don’t evaluate your clinical competency, they want you to get them out of pain or improve their appearance ‘SMILE’. You must connect with them on a personal level to establish trust and you must provide simple treatment plans, even when the work is arduous and complex. In addition, patients want easy financial solutions and payment arrangements so they can say yes to treatment they need and want! 

For the Millennials, dentistry is exciting and rewarding but the high debt from dental school and the changing landscape has clouded their enthusiasm for the profession. I’m a huge fan of the Millennial and I believe they will transform the profession during their tenure. They will perform their work with tools and equipment that haven’t been thought of or invented yet. They will work with artificial intelligence, robotics, materials and medicaments and diagnostic equipment that will revolutionize care. Millennials will incorporate a preventive business model and elective dentistry will continue to compliment a good profession making it a very lucrative one.

My hope is that this blog will encourage dentists to think about how they operate their business and view their profession. Dentistry has always advanced by embracing technological advancement and dentists must adapt to remain relevant and profitable. My hope is that my aunt’s experience is a wakeup call for all of us. The message I learned from her experience is simple – 

‘You must not only adapt, you must adapt to win your future’.