How Numbers Can Get in the Way of the Right Decision

August 5, 2021
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How Numbers Can Get in the Way of the Right Decision

8.5.2021

Decision making varies widely among organizations. Some take a committee approach, while others reserve decision making for top leadership. But, regardless of who or how many people are involved in the process, the most important thing is that those making the decision have access to the necessary information. 

When it comes to gathering that information, smart leaders often look to the numbers to make good decisions, but it’s important to recognize that sometimes numbers aren’t enough. And, when hard metrics are the only consideration, or when they’re used out of context, it can actually cause organizations to make poor financial decisions.

Numbers don’t always tell the whole story.

Context is key for leveraging numbers in decision making. Often, we get caught up with what worked in the past, and expect those parameters to be applicable in the future. Although the past can often be a good indicator of what works, the world is constantly changing.

Additionally, different roles in the organization can often adopt some bad habits. For instance, financially-minded people can often focus solely on the profit dollars and ignore the other elements of running a dental organization. And, non-financial leaders tend to focus more on expense control rather than expanding revenues. The incorrect combination of context and utilizing the right numbers can lead to bad decisions.  

Let’s look at an example of a team member asking for a raise…

Imagine your dental office has capped dental assistant wages at $24 per hour. One afternoon, your most tenured dental assistant comes to you and explains that she got an offer to go down the road to a competitor for $25 per hour. Should you give the dental assistant a $1/hour raise?

One dollar an hour sounds like a big raise, but for a full-time team member this equates to an additional $160 per month. And, while it’s tempting to focus solely on how much money can be saved by each decision, it’s important to also consider how much production could be gained or lost.

Here are some important questions to think about when considering her raise:

  • What’s the provider’s production per dental assistant? 
  • How easily has the organization been able to recruit dental assistants at the current pay range? 
  • Is it challenging recruiting experienced dental assistants? 

It’s important to factor in the reality of replacing the dental assistant at the current rate. Replacing someone takes time and resources, and those costs will likely be more than the raise of $160 per month. There’s also a significant opportunity cost of not having a dental assistant even for a single month, and it’s important to quantify that before making your decision.

This is also true when evaluating providers. 

In many dental organizations, providers are viewed solely through the lens of their productivity. For dentists, this is often a reflection of their ability to diagnose, to get patients to commit to treatment, and to perform procedures. The numbers may get in the way when there are decisions to be made regarding how that provider fits into the long-term picture of the organization. 

Instead of focusing solely on the statistics, ask yourself:

  • Is the provider contributing to the practice’s positive company culture? (Consider practice turnover, employee surveys, and exit interviews when evaluating this)
  • Is the provider delivering patient care consistent with the organizational philosophy? (Look at patient refund rates, online reviews, and patient referrals)
  • What is a reasonable expectation of the provider? (Think about factors like new patient count, treatment diagnosed from hygiene, number of dental assistants, hours worked, restorative operatories, and clinical toolbox)

Underproductive providers may help foster the organizational culture and get positive patient feedback, but are not comprehensive in their approach to patient care. On the other hand, it might be that there are many highly productive doctors that create an unhealthy work environment. It’s often important to look beyond the metrics and aim to understand the “why” behind the numbers.  

Financial and quantitative measure should absolutely be a factor in any decision-making process, but not the only factor. Financial measures are historical and they can often be short term in nature, meaning long-term decisions made on these measures will not necessarily correlate to long-term financial success. There are more measures available now than ever and new measures continue to be formulated, but this information should always be leveraged in concert with qualitative factors to get a full picture of the organization and how to move forward. 

The key is to utilize all relevant measures and understand the behaviors that drive the numbers to make the best decisions for your company.

The Strategic Thinker
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