The value of value

3M Dental, winner of the 1997 Malcolm Baldrige National Quality Award, is proud to sponsor the Dental Economics year-long "Quality Management" series.

First, determine what your patients consider to be valuable. Then offer services - including a staff focused on quality and teamwork - that meet their expectations.

Dr. Bruce Waterman

The buzzwords, "value-added services," are often heard in the media or business world. Basically, these are "services" paid for by a customer. Of course, the more value added to these services the more likely the customer will be satisfied and become a "repeat" buyer. In the business world, it is important to know what is valuable to the customer. This can be accomplished in two ways: developing a customer focus and understanding value.

Many businesses that successfully apply TQM (Total Quality Management) have revised how they focus their business efforts. For example, Blockbuster Video had been declining for years in the face of fierce competition. A new CEO came to the company with a fresh perspective. As a previously frustrated customer, he reported that he always was on a waiting list for any new releases because there were never enough tapes. From the company`s economic perspective, the tapes were too expensive to inventory in a large supply.

The new CEO made a new deal with the tape supplier. Instead of buying the tapes outright, they would pay a greatly reduced rate but give the supplier a percentage of the rental fees. This win/win deal allowed Blockbuster to stock tapes to a point that their marketing campaign guarantees they will have the tape you want. The financial fortunes of Blockbuster are rising again because they focused on what was valuable to the customers.

Can we learn from their successful awareness of consumer desires?

Methods of customer focus

Several methods are used by organizations with a TQM mindset to determine what is important to their customers:

- Insight and analysis. In the example of Blockbuster Video, the new CEO used common sense to determine that lack of tapes meant lack of value to customers. Consequently, customers were going elsewhere for tapes. It seems obvious in retrospect, but many businesses fail to analyze the basics of the services they provide.

Using insight to determine "what" you think your customers really want and analysis to determine "how" you are delivering it is a good start.

- Customer survey. These have become the norm in the business world. The common goal is to determine "what" the customers want and "how" it`s being delivered. Surveys can be varied in format - generalized or specific, formal or informal, in-house or generated by an outside agency, or even involve using focus groups. A written survey used in my office led to a redesign of hours, staffing, and several operational procedures.

We were able to address my customers` expressed needs instead of guessing. Copying the successful survey applications of the business world makes practical sense and definitely leads to better business decisions.

- Published surveys. Many general and formal surveys that are published can add insights to customer value. The related article titled, "Wisdom gleaned from a patient survey," shows the results of one dental survey and the values expressed by patients. Review its findings with your staff to give your organization an improved customer focus. You may be surprised at how your staff`s perceptions differ from your perceptions.

What is value?

Value is the perceived part of quality in which the benefits experienced by the customer must be greater than costs. Value is a subset of overall quality. Reference the quality circles in Figure 2. The large circles represent all quality and the internal circles reflect value. The - represents unseen quality which would include staff meetings, forms, procedures, sterilization techniques, etc. Circle A represents an increase in overall quality by an increase in this type of unseen quality. Of course, it is important to make strides in this direction. Circle B reflects an increase in value (seen quality) and Circle C shows increases in both seen (value) and unseen quality. The ultimate goal is to achieve Circle C.

Cost is the final determinant of value relative to customers. They may see or perceive a quality product, but if it costs more than their perceived benefit, then it has low or no value. If you buy a new telephone with fancy features that cost $200, it will have low or no value if you find out your neighbor bought the same phone for $20. Cost determines if your delivered quality is worthwhile to the customer. If the benefits are greater than costs, then you have value.

Employee value

Recall that value is the seen, or perceived, part of quality in which the benefits experienced by the customer must be greater than cost. As employers, our relationship with our employees is similar to a customer/buyer relationship. Since we pay our employees, we must be certain that the quality we receive from their job performance is worth the wages we pay them. In other words, are we getting our money`s worth? Ultimately, do the patients get their money`s worth from the value an employee adds to your organization?

Let`s look at two types of employee value.

- Talent value. What employees bring to the job represents their talent value. It can include such positives as skills, background, maturity, and optimism. But it may also include such negatives as pessimism, immaturity, poor grammar, family problems, etc.

As employers, we have to determine whether the employee talent level is worth the salary paid. Do their positives outweigh the negatives? Are there any negatives that are unacceptable or detrimental to your practice? The more positive talent employees have, the more value they add to your organization and ultimately to the patient`s experience. Conversely, negative talent can damage your practice.

Can we increase the talent value in our organizations? By careful hiring, you can, hopefully, get the most talented and least troubled employees. For existing employees, evaluating them relative to the value they add to your organization may help determine where enhancement is needed, how they should be paid, or if they should be replaced. Through training and education, good employees can be improved and add more value to your practice.

For salary considerations, a positive and negative value assessment may help make this evaluation process more objective. For example, isn`t an employee that is always willing to work extra or fill in for others more valuable than one who will not? Talent value can be measured, and the salary determined accordingly.

To further increase talent value in your organization, strong consideration should be given to replacing low-value employees. For example, if you have employees who are good workers but have a negative attitude, punctuality problems, and continuous home turmoil, are they adding much value to your practice? If you could replace her with a competent employee without all the negative baggage, your practice will improve. Ultimately, your customers want an employee with a high talent-value to take care of them.

- Team value. You could have many talented individuals in the practice. But if they do not work together, the amount of value you can deliver to the patient is limited.

If team players routinely help each other, the value they collectively add to your organization increases. Simple things such as writing up charts for each other, helping sterilize, developing X-rays, and answering phones foster team value.

Instituting "it`s all our job" to replace the attitude of "it`s not my job" will create team value. The patients want it that way.

With an understanding of what value represents to our customers and to us as employers, let`s summarize how we can increase value:

- Customer focus. If the emphasis of your organization is on the patient, then it follows that you will create more of the seen or perceived part of quality called value. By providing care that meets or exceeds the patient`s needs and expectations, they are likely to perceive the costs to be worthwhile.

- Talent value. Hire or improve existing employees to create the best. By improving your employees, they add more value to your organization, which translates to value to the patient.

- Team value. Harness the talents of your staff to optimize their cooperative efforts. Working as individuals or small units can yield at best the sum of its parts. Working as a true, cooperative team can yield the multiplication of its parts. All employees make everyone`s jobs easier and performance better. The team produces more value for the patient.

The value of value

Businesses that prosper find a way to provide value to their customers. Perhaps this TQM quote best summarizes the attitude needed to continuously provide value for the customer:

- Dare to be better,

- Strive to surpass the best,

- Unleash the exceptional,

- Leave behind the rest.

Wisdom gleaned from a patient survey

What patients said they like about the dental practice:

1. "Warm fuzzies" from the staff.

2. Humane, caring doctors.

3. Painless dentistry.

4. Doctor calls to check on patients.

5. Clean and esthetic facility.

6. Great feeling in the office.