Eyeworld

by John B. Pinto On choosing, managing the right practice administrator "The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it." –Theodore Roosevelt "Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them." –Paul Hawken G reat practices are built from the top down. After choosing where you want to practice and the right colleagues to practice with, the most important enterprise decision you have as a private practice owner or institutional department chair is which lay leader will manage your business. Lay practice leaders come in five basic flavors: • The "chief of staff," who is little more than an executive assistant to an MD owner-operator. Such individuals may receive a salary ranging up to $60,000, and may have the title "manager," but their authority is sharply limited. Everyone really reports to the doctor-boss. • The "office manager," who despite the low-octane title, may have full-charge responsibility for a small boutique practice. The office manager is typically charged with day-to-day operations, but has no material spending or hire-and-fire authority. Depending on the man- ager's experience and the market, office managers have a base salary today ranging from $60,000 to about $80,000. • The "administrator" is a kind of "CEO-lite," responsible for both operations and profitability, but in most cases with relatively limited off-budget spending authority. The vast majority of ophthalmic practices in America today, being in the $2 million to $5 million bandwidth, employ an adminis- trator. What does that cost them? In rural America, the administra- tor of a large practice may earn less than the office manager of an urban practice, but the wide-rang- ing base salary for experienced administrators today is $60,000 to $120,000. • The "executive director," who typ- ically leads practices with revenue in the range of $5 million to $20 million, is predictably hard-charg- ing and career-focused. In align- ment with the managing partner, they take command of the prac- tice boardroom—and they are often granted a much higher level of discretionary spending than their more junior administrative colleagues. EDs pull in $100,000 to $200,000 as a base wage—not because their title is more impres- sive than an administrator but be- cause their skill sets and personal commitments are higher. A $10- million practice needs four times the leader of a $5-million practice. • The "CEO" is generally found in only the largest practices. He or she is granted significant execu- tive and financial authority over the practice. CEOs cue up long- term strategies and budgets for final board approval, and if they are the right person in the right job, their board need only provide light-handed oversight, not fiat control. The highest-paid oph- thalmic executives today enjoy physician-level base salaries rang- ing to $275,000, and perquisites taking this figure much higher. As you can see, no matter if you have a small or large practice, you are going to have to spend about 1% to 5% of cash flow to hire and sup- port the brains of the outfit. With that kind of money at stake, you want to find the right kind of leader-manager, someone suited to the scale and aspirations of your practice. It's as big an error to undershoot and select a junior exec- utive assistant to run a large practice as it is to overshoot and hire a CEO for a small-time operation. Here are some considerations to help you get it right the first time around. 1. The hardest practice to manage is the mid-sized practice. You have to know how to do every job in the practice and have a balanced portfolio of leadership and man- agement skills. Small, solo practices have fewer moving parts and are relatively easy to manage. Enormous practices, captained by CEOs and executive directors, have a deep bench of middle managers with a lot of redundant in-house skills, and are comparatively easy to man- age (even if they are very difficult to lead). 2. Decide whether you need more of a leader, more of a manager, or a blend of the two. Leadership and management are overlap- ping but very different skills. This is frustratingly evident in the functioning of most elected officials. The leadership chops needed to stand up and charis- matically frame a mission and pull people along in that direc- tion has little correlation with actually getting the job done. In personnel management circles, a great leader who speaks well but who can't perform is called a "communicative incompetent." Don't hire one of these. 3. No administrator has a complete skill set. Some are excellent at personnel issues but weak at finance. Some are weak at mar- keting but a wiz at operating EW Ophthalmology Business May 2014 55 continued on page 56 digital.ophthalmologybusiness.org

• Cover