5 Ideas for Better Laboratory Management

Owners and GMs must lead from the front, not push from behind

By Bob Yenkner

Historically, laboratory owners have operated successful businesses using the traditional “top-down” management style, which requires that the owner, or general manager, be the single point of control—the person who makes the decisions. Who does the final QC call? Who answers the “Does this margin look OK” question? Who makes decisions about discipline, pay increases, hiring, and firing? Who makes the decisions on capital equipment expenditures or laboratory workbench layout? However, the top-down management style is in jeopardy. As Bob Dylan noted, “the times they are a-changin’.”

Recent industry studies reveal increased competition in the market, a dwindling number of small laboratory operations, and an increase in the number of dental-service organizations (DSOs). The complexity of today’s business environment and its changing demographics are forces that can’t be dealt with by a single person. Building a strong organization today requires the delegation and support of such activities as employee development, delegation of authority, delivery of training, standards of accountability, coaching, succession planning, and reward/recognition. By leveraging the knowledge of employees and the leadership of key personnel, laboratory owners can achieve three major benefits from changing their management style: 1. Increase productivity by moving daily decision-making to the bench versus the front office; 2. Reduce stress on the owner as the only decision-maker; and 3. Make your laboratory more appealing to either buyers or customers because production efficiency and quality can operate independently and as effectively without you.

Here are five suggestions to help your business reconfigure its management style and operate more effectively and profitably:

Step 1

Utilize a team of department heads for day-to-day decision-making. The “top-down” organizational model misses out on the opportunity to leverage the experience and knowledge of employees. In most laboratories, employees are constantly seeking feedback about priority, clarification, and often about the acceptability of the work in-hand. The wealth of technical experience and industry knowledge that resides at the bench could be leveraged and the employees encouraged to deal with those daily issues, thus freeing up the leadership to pursue business-level needs. Many owners have expressed a desire to focus more on running and growing the business, so it is suggested that the department heads work as a committee, guided by the owner (or GM) to have a stronger leadership role on the laboratory floor. The role of the department head includes communicating with employees and dealing with employee discipline, cross-training, mentoring, scheduling, job assignments, and ensuring that the required quality levels are met.

Step 2

Employee skills and evaluation. Developing employee skill levels is critical to the ongoing success of the laboratory. Formal training methods versus on-the-job training are required to ensure the perpetuation of standardized work methods, to make re-training easier to conduct and to support a standard level of quality. This also ensures that “tribal knowledge” is shared in a documented method. Employees can then be evaluated against a standardized skill set.

A “skills matrix” chart that documents each technician’s skill level in multiple areas can be created. It is a simple chart that displays three key pieces of information: employee name, list of skills within the company, and a 1-5 rating as to the employee’s skill level for that task. Based on this simple information, goals/objectives and improvement plans can be created and tracked. This tool also provides obvious gaps in job coverage so that weak skill areas can be improved.

The data can also be the basis for employee performance reviews, which serve multiple purposes. They provide reinforcement for good performance, provide a roadmap for increased performance, and build a foundation of reasons for termination if a forced separation is required. Of critical importance is the assessment of the contribution being made so that all parties have a clear performance picture.

Step 3

Define business measures and link them to employee performance to maximize productivity. Define a proper set of measurements to evaluate business performance at all levels. Whatever is used, the measurements must be visible and understood by all. Properly chosen, those few measures will guide the performance of the employees and deliver top-level results. Make sure measurements are meaningful to the staff, and they reflect the performance of the process, not necessarily the individual. This will help the employee on the floor link his/her behavior, actions, or thinking to those measures.

Step 4

Manage the process, not the parts. Most laboratories today focus on getting units out the door, not the process that produces those units. This line of thinking often limits production or generates a high level of remakes, with little recognition that the process itself is the weakness.

The solution often focuses on one small part or step of the process without considering the impact it will have on the entire system. One laboratory the author consulted with fixated on making its new milling machine meet ROI expectations. Although the machine was running around the clock and the ROI looked good, the finishing department became quickly overwhelmed and quality suffered as they tried to keep up. No one looked at the system to understand the impact.

Step 5

Everybody should know how to identify and eliminate WASTE. Virtually every laboratory has experienced employees who are more than capable of providing insight and ideas to make improvements. Let team members discover solutions that will promote self-sufficiency much more quickly and can drive future improvement in all areas of the organization. Unfortunately, employees are rarely asked to get involved because they are too busy producing.

Most improvements are the result of a series of deliberate and patient continual refinements. The time required to support these mini-improvement activities can be revealed in “Lunch and Learn” sessions, meetings after work or before the start of the day, or even on the weekends. What are your slower days of the week? You can always conduct improvement sessions on those days and make up production on the other days. Eventually as the improvements take hold, you can produce the same or more work in fewer hours, which means you have even more available for more improvements. You may have to pay for sandwiches or pizza, but the return on investment is very quick.

A well-managed dental laboratory won’t happen without good leadership. But you have to be leading from in front, not pushing from behind. By applying these five laboratory management suggestions, you can reduce stress and drive productivity at the same time.

Bob Yenkner is the owner of Practical Process Improvements (PPI) in East Hampton, Connecticut.

Most improvements are the result of a series of deliberate and patient continual refinements.