More often than not, when I walked into Dental Businesses, one of the first questions I was asked was, “What KPIs should we measure?”. Although I could blurt out a list of some standard KPIs, my question back to them was, “What would you like to measure?” to which I often received a bewildered look as if I had asked them to tell me the exact distance to the moon in millimetres. Sounds familiar?
There are hundreds of Key Performance Indicators that measure various aspects of a dental business. So should we start measuring them all? “Obviously not”, I hear you say with a roll of the eyes. Yes, you are correct; if you start measuring every single KPI under the sun, you will not have enough hours left in the day to run your business.
No two businesses are the same. Dental practices are no exception. Before answering (or asking) the question of what KPIs to measure, one should determine where their business is at in the business lifecycle. A newly opened dental practice may put a great emphasis on new patients, while an established practice may focus more on patient retention. In contrast, an in-between practice may look at treatment plan conversions or hourly production. In my years as a Business Intelligence Consultant, I recommended the following three-step approach to my clients who wanted to start paying close attention to their dental business KPIs.
- Identify which stage of the Business Lifecycle your business is currently at. Are you starting up or expanding? Are you challenging a competitor or fending one off?
- Understand your business goals. Are they SMART (Specific, Measurable, Achievable, Relevant and Time-bound)?
- Break the goals down and decide where your focus should be. It is not enough to say that you will increase the productivity of the business by 10% in the next 12 months. It would help if you decided whether it will be by increasing the number of patients seen at the practice or increasing the average value of treatment plans or any other means.
Once you have answered these three questions, you do not need me or anyone else to advise you on what KPIs to measure. Although it may not be in fancy technical jargon, you will have a fairly good idea of what you should measure. Armed with this information about your own business, you should be able to walk into a meeting with a Business Intelligence Analyst and throw the piece of paper (or the tablet) on the table and say, “This is what I would like to achieve, and this is how I am going to do it. How and through what KPIs should I measure my success?”. I guarantee that you will walk away with a list that will not cause you “Analysis Paralysis” but enough to act as the guiding star on your way to success.
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