Setting a Business Strategy
Any business, orthodontic practices included, should have a strategy in place. Setting a strategy, and incorporating true strategic thinking are critical. A commanding general should have a strategy to go into battle and a coach should have a strategy before playing a game. Otherwise they could suffer heavy losses. Similarly, we must consider strategic thinking as a factor for success in the core competencies of an orthodontic practice.
As a business is developed, a strategic plan should be set in place. These plans begin by incorporating a vision or mission statement. These are the goals set for the business and set the tone for the core strategy. The second component is a list of initiatives that the business will carry out to pursue those goals. These initiatives devise the larger part of a business plan, with a long affirmation of the core competencies. Finally, the planning is rounded out by the financial projections that will set budgets for the business.
The challenge continues in that business strategy is not a static exercise. As a practice grows and years go by, planning needs to evolve into true strategy. A plan and a strategy become inherently different. Where planning looks at cost allocations, strategy focuses on revenue. That focus should incorporate the customers that will affect that revenue. Strategic positions can be based on the needs of our customers, their accessibility, and the variety of the products and services we provide.
Planning can’t and won’t make revenue magically appear, and the effort you spend creating revenue plans is a distraction from the strategist’s much harder job: finding ways to acquire and keep customers.” Roger Martin
Strategic thinking becomes more important since it focuses on long-term goals of growth and revenue creation, versus the short-term goals from planning. Our focus should be on the top line vs. the bottom line in orthodontics. Certainly, planning on bottom line gains are key components in business where revenue can be profitable for that business. But it is strategy that compels customers to give the company that revenue. The trap for strategy makers lies in the way planning and cost management commonly dominate strategy rather than serve it.
Strategic thinking should be considered regularly to maximize the potential of several components of an orthodontic practice. These should include clinical strategy, financial strategy, marketing strategy, strategy in the implementation of technology, and a strategy in maximizing human capital. Ultimately, who will you target and how will you target them? Those questions help to set your strategy for success.