JOEL BERG: Thank you, Wendy. I want to thank Colleen and Wendy for putting this conference together. I feel like it's a superset of what we lived everyday at UDUB With Wendy in the department, I feel like this is the family--the extended family--of the integration efforts that have extended from the MCH grants and related activities and it feels like family in that sense. This is a wonderful conference for us in pediatric dentistry being a minority player it enable us to see how we, the three centers, who are all represented here fit into this 149--is that correct, Ann? 149 MCH leadership centers. My background is a little bit different as Wendy said. I thought I would start with that to give you the framework of my perspective. I had an unusual--I've had an unusual career. Maybe I'm a little unusual. That's why. It's fitting. I never intended to do anything but academics. I knew I would be doing something with kids since I was very young. I got interested in dentistry and then of course it became pediatric dentistry, and I knew I would be in academics, and there was no other possibility in my mind. And I engaged in 10 years of fulltime academics at the University of Texas in Houston where I was the residency director most recently there in pediatric dentistry and had the opportunity to consult with a few private companies and one thing led to another and they invited me to take a job fulltime.
This was a German dental manufacturer at the time--running a scientific operation they were just creating in the U. S. and I thought, "Well, that's interesting. If it works, maybe it's a big opportunity, perhaps a career. If it doesn't, it's a sabbatical." And plenty of academic opportunities. I could come back and do that regardless. Nine years later, and three different positions I had a lot of experience which I enjoyed very much. I worked for this German company for two years, three years in the U. S. and three years at their headquarters in Germany, and then I came to Seattle about four years ago to take this job at Phillips Oral Health Care/Sonic Care.
What I'd like to talk about today and I just have some notes, some of which I'll talk about in these comments now and some of which I'll save for the discussion, so we'll see how it all fits together. My observations now coming back to academics recently coming from the business world, and I want to talk about what one could say are differences but are really similarities, they're just different perspectives and definitions of how we do things. I think everybody knows when you think of business, you think all they business people care about is return on investment. You hear that term. That's a common term, right? You make an investment in something and you want some kind of return. Well business people aren't the only ones who want return on investment. We all want return on investment. We make a different kind of investment. We may not ever realize what the investment is, we may not understand what kind of investment we made. We may not measure the return on the investment in the same way, but we're still basically interested in return on investment, but it's much more complicated. When I came back to academics, here's where I came from. I came from the Sonic Care Company, right? Everybody here knows what a Sonic Care is probably and the Seattle people certainly do. This is a one-product company, (inaudible) from the University of Washington. The technology was developed here at the University of Washington. It's now part of this big international conglomerate Phillips. Oral health care has about 1,200 employees. They sell annually about 320 million dollars a year of Sonic Cares. One product. That's a one-product company. So it was pretty easy to focus, although interesting when I was there we had all these meetings that talked about how we're not focusing enough. Focus, focus, focus, focus--and I'm thinking, "We have one product. What else can we do?" But it was about the style of management and discussion and the way of measuring this, that, and the other.
And then I come to academics once again having had experience and, you know, and U. W.'s a little bit different environment than Houston was for me, but I had this nine years in industry and the first observation which was really striking although it wasn't unexpected is given all the talent around me, given all the experts in our department in the surrounding areas, with all these diverse interests, it becomes quite challenging. It's obviously challenging to--first of all--determine what you want to do in the best interest of the organization. What does the organization want to accomplish? On the business side, you make the strategic plan, you sit together, you make what we call a product line strategy, okay? So a product line strategy says you establish a vision for what you want to make, what you want to do. It's based on customer need. In our case, we have customers, too, the community that Dr. DePaolo spoke very eloquently about the community customer, us the provider interaction, but then one has to look at their core competence. Well, in academics we have a lot of core competencies. We have a lot--all of us are different and so what is the core competence of the organization. In the case of an MCH training leadership center, perhaps that's the unit of focus, because otherwise it becomes too complex to try to rally a gigantic organization around one core competence because that will never happen, so we have to determine what is the unit of measurement?
Okay, it's this leadership-training center and we want to look at what is our core competence? What can we do differently than the other ones? What can we do well? And let's focus on that. So the first challenge for me became, look at all this expertise that we have and see if it falls discreetly into two, three, or four categories that happen to mesh with our core competence and if they don't, let's reject some of them and talk to ourselves and say, "Maybe we shouldn't be doing that because we're not good at it," or going back to the first point, maybe the customer doesn't want it. We're not here to fulfill that need. The customer doesn't want it and of course, the ever-important point is resources. Resource management, a real big job of the leader. In fact, some would argue that's the biggest challenge of a manager. We haven't talked about managers yet and the session I have is on management and the breakout group. The manager in my interpretation is the one who executes the vision. Might be the same as the leader, but in some organizations, you have a CEO and the COO. The COO is the one who does the (inaudible) aspect of it.
So we've laid it out, we've decided exactly what we're going to do and this is the person who's making sure that the wheels are turning so that it happens perfectly. So, get into this resource management and what are resources? Well, it's a complex subject but we have people--the most important resource--allocating as was mentioned many times the expertise of the individuals to the needs of the organization. And the most important principal I learned on the business side there is that nothing should ever be created specifically for an individuals needs if it's not within the needs of the organization. Now, that's a little cold. It sounds like a business person talking, but if you're focusing on the objectives of the organization and measuring them based on a certain outcome that we want to create, then that has to be something--as Don said before--you have to tenaciously adhere to the vision and never deviate from that. So to create an opportunity or a product or a function specifically to make one individual happy that's not part of the organization's interest. It's only going to hurt the organization achieving its objectives. So, that gets to the idea of focus.
Some of the similarities that I see, once again, then are the return on investment is still there, it's just that we measure it differently. How do we measure our return on investment? I don't have the answer to that. We all have to decide what we're trying to create. That's the vision. Stick tenaciously to it and then the second point which I learned from my business experience and also from reading a lot of books. I also like to read a lot of books of CEO's who were successful and there's another airline in Texas--Continental Air Lines--great book written by Gordon (inaudible) the CEO soon to retire--called "From Worst To First." Texas must have something about Texas that has two of the biggest airline successes. And continental was in bankruptcy twice. It was probably going to be de-listed from the New York stock exchange, was pennies the stock, and then on the average of the last 10 years, it's a little bit more profitable in terms of actual numbers in the south west, both very successful, but this person turned it around as Dom said. If you read the book "From Worst To First" great book--talks about customer focus, internal customers. It's not coincidence that Gordon (inaudible) prior to taking the job as CEO of Continental was the vice president of customer service at Boeing. What do you do with that? You go to see somebody and say, "How do you like your 747. Are you happy with it?" I guess that's what you do in that job. When I was at Sonic Care, it was easy to see the measurement. In our company cafeteria there was this big thermometer--well, it was actually a Sonic Care, but it had that--they had that kind of thermometer thing in the middle and we were supposed to sell 320 million dollars this year. So if you walk in there on July 1st you hope you're above 160 million, right? Although people buy them for Christmas gifts so some of the sales come at the end, there's this argument, but the point is it's transparent and that's what Gordon (inaudible) says.
So, you set the vision first tenaciously adhere to it, as we've heard many times before, and create a transparency in the environment so that everybody can see what you're trying to accomplish. And that, I think, is one of the most important objectives of the leader is to--once you create the vision, that's good. That's very important. But then the difficult part is to tenaciously adhere to it and constantly show people where you are relative to accomplishment of that vision. Where are we? It's easy when you have one product and I can walk down to the cafeteria to get a cup of coffee, oh, 162 million, 162.5 million. You really focus around that. But what are we establish--what is our thermometer? You know, what should it be? I don't have the answer because I think it's a basis for discussion. How do we define a successful outcome? Are we looking at enabling objectives or outcome objectives?
Tomorrow, Judy Morton is going to talk about Malcolm Baldridge which I find fascination and we did a lot of that in the business side and it's invading the educational and health care world, and it talks about--and tomorrow I'm very interested in hearing her perspectives. It talks about how we use process to manage the organization and leadership is, of course, the key to that. So, once we have the transparency which is maintained every single day, how do we get it in front of all of our people that we're rallying or they're making this happen so they can all see the same thing that I'm seeing? Every single person. Even the person working in the factory line who had a vested interest walked in to get their cup of coffee, and the also saw that thermometer. There wasn't anybody who didn't see it and that was very important. Then we have to define what is this measure we're measuring, well that's the first step of course. You can't do that last. And then take corrective action if you're not achieving your objectives. Don't wait to find out at the end of the year. Do something in the middle of the year. On the business side, we have an obvious profit motive so the measurement tool is very obvious. It's money. Okay? And they get creative there because when you get tired of talking about profit, you can talk about cash flow or you can talk about accounts receivables.
You could have 16 different measures, but it really is about how much money do you put in the bank? And it's relatively simple for the business folks to do that. It's an obvious measure that their shareholders want them to see--they call it shareholder value. Shareholder value means there's a growth of the revenue stream over a period of time, but in our job as everyday, it's much more challenging to define specifically what are we trying to create, how do we measure it, create the transparency now working backwards the vision up here. The vision is first and then move all that forward. So, I find that to be an interesting challenge. I think it's a very possible one and I'm trying to talk to everybody about that without being perceived as some kind of techno process guru which I'm not. I say that only because I think it's very important because we are speaking the same language.
The business world and the academic world are all interested in return on investment. We (inaudible) personally too. We only have a limited amount of us, each of us, the most important resource. What we can give to our selves and to our organizations. How much are we going to devote to each portion of our daily tasks? How much are we as individual contributors in the organization going to contribute to this vision--to the pieces of the vision. What is our product line strategy? What do we want to create? It's easy to say that at Phillips Oral Health Care, we're going to make this Sonic Care and maybe next year we'll make a different Sonic Care. What is our product line strategy going forward? Do we have an operative plan in addition to a strategic plan so we can measure it year by year? Thos are interesting discussion points. But there's a lot of commonality. I was thinking just yesterday about how one product company--Sonic Care, right?
We used to talk about this thing called price points, okay? So if you go by a Sonic Care at the (inaudible) here in town, you might pay--I don't know--$120.00 for it. But if you buy it as Cosco, you get two of them for $106.00 or something like that. Well, it's not the same Sonic Care. The technology's basically the same. This one has a little more bells and whistles, some different features, but essentially the same products. So what the company does at the beginning of the year, they have different price points and they calculate that we're going to sell "X" many of these, "X" many of those, "X" many of these and at the end of the day this is the revenue stream, okay? And therefore, we can determine what expenses should go behind that to push it, to drive it. How to control those expenses and to measure our profit which is that measurement thing.
We do that, too, in medicine. Hospitals do it every day and they call it pay or miss, right? I mean we have a certain number of patients that pay this much, a certain number that pay that much, and at the end of the day we have to plan and planning is a big part of the process to make sure that hit happens correctly so that we can predict the best way we can the number of patients that fall into each category and then make our profit and our return on investment properly. So, I'm going to wind down here and my last point to summarize the vision, transparency, and the measurement of that vision. The key to success, I think, therefore, of leaders whether there in academics or in industry is prioritization and focus because those are common themes that prevail throughout the vision, the transparency, and the measurement. Because you have to prioritize what the vision's going to be and you have to focus on that. You have to prioritize how you're going to create transparency and you have to prioritize how you're going to measure it, and that's true everywhere on earth.
The big problem we have in academics is we eat what we kill financially. I learned that phrase from somebody and it's true. We don't get this big number at the beginning and then you spend it down and you have much left and we're all working towards creating some profit. And we're kind of bogged down with a high ratio of fixed (inaudible) costs, and the challenge we face, therefore, becomes allocating resources because our most important resource is even more directed to the people because we don't have as much flexibility in terms of variable costs. Therefore, the intellectual capacity and capability of our producer as the people becomes much more important than in the business world and therefore leaders in academics do have an interesting different challenge and that is how to maximize the output of individual contributors, the people, not having access to as much money to support their individual efforts. So, I'll stop with that and look forward to the discussion. Thank you.