The Real Cost of a Bad Team Strategy

 

Announcer
Hello, everyone. Welcome to The Millionaire Dentist podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.

Casey Hiers
Hello, and welcome! This is Casey Hiers, back at The Millionaire Dentist podcast in studio with co-host Jarrod Bridgeman.

Jarrod Bridgeman
Casey, I appreciate the fact that you've sat several feet away from me. I've been feeling pretty ill this week, if you can't tell by my super sexual voice I've got right now. But I'm here, and I'm putting in the time to help people.

Casey Hiers
Well, you sound like shit, but you don't look that bad.

Jarrod Bridgeman
Thank you. I don't look worse than usual is what you're saying?

Casey Hiers
That bad, yeah! What a compliment. No, no—yeah, this time of year, man, there's allergies, there's change of season, little ear, nose, and throat issues, and you've been battling.

Jarrod Bridgeman
Well, my son was sick last week, and so I'm pretty sure that little dude gave me something, you know? It's not all lollipops and puppies when you have kids.

Casey, you travel all the time. You were just out in Kansas City last week, out there in Missouri, which looked like a pretty cool place...

Casey Hiers
Missouri.

Jarrod Bridgeman
Missouri, out there in Missouri. What is one of the biggest stressors you hear from practice owners out there?

Casey Hiers
What a broad question.

Jarrod Bridgeman
Yeah, I just kind of want to know. I mean, it could be super broad, but I feel like there might be some commonalities.

Casey Hiers
Yeah, a lot of conversations I have with practice owners and their spouses are, "What's bothering you? What are the challenges? What are the stressors?"

And, you know, team/staff. I've said this before. Somebody once said, "Staph is an infection; I have a team." I try not to be that self-righteous sometimes, but I was like, "God bless." So now I say "staff or team" to account for that. But the people you employ in your dental office to work for you—that's normally the biggest stressor that I hear. It's the first one, and it's the most common.

Jarrod Bridgeman
I think it's because it's always in your face. You know, you're seeing the same people five days a week, four days a week...

Casey Hiers
Every day, sometimes every hour. Yeah, that stress is in your face, and it has not gotten better. It's gotten more challenging post-COVID; we talk about that a lot. There's a lot of reasons why. Staff and team have always been a challenge for dentists and specialists—for really anybody who employs people or where adult babysitting is part of your responsibilities, that's going to be the stressor. And like you just said, it's in your face nonstop, so it's the squeaky wheel. That's where the mind instantly goes because there's so much of it.

Jarrod Bridgeman
But it just seems like that might be the scapegoat—the thing you put all of your ire onto. What are the real stressors kind of behind that? What are the things that make people kind of aggravated that they're like, "Oh, it must be the staff"?

Casey Hiers
Yeah, when we pull the curtain back, or peel the onion, or pull the thread in the sweater... typically, once somebody... we're having a direct, open, honest, vulnerable conversation, staff and team is a challenge, right? But it gets magnified because of what we just talked about: it's in your face all the time.

In reality, for most practice owners, their true stressors are cash flow, income not being reflective of their hard work, overhead, tax management, taxes, retirement, retirement planning, the business side—all those things behind the scenes that are incredibly important. Those are typically the true stressors. And we've said this before: a lot of practice owners, when their money's right, their staff or team does not bother them quite as much, right? You might have a sour grape in there every once in a while, but once you're happier and less stressed in your life, it's a little easier to handle people.

Jarrod Bridgeman
Yeah, no doubt about it.

Casey Hiers
And, you know, the topic that we want to talk about is: how do I measure success with my current team? Right? And that internal team, that's the big stressor.

Jarrod Bridgeman
And how would you measure that then? I mean, is it simply a matter of fact that, you know, so-and-so is always a diva? Like, is she less diva-like today?

Casey Hiers
Yeah, it's probably like your children. I think that the ones that require more maintenance and more time can be top of mind as being harder, versus maybe the quiet one that just does what they do.

But in reality, if you're measuring success with your current team, this might sound a little callous, but the answer to most questions is money, right? Profitability: Are they profitable? Like, there's two primary ways to measure your team. But is your hygiene department producing three times what you pay them? Well, that's a metric you should know. That profitability metric is really important.

Sometimes there might be a practice with a lot of insurance, and they've got one associate, two associates, or more than that. Are they having that associate...

Jarrod Bridgeman
You know, and everything that they do is actually costing you money. They're not bringing money in because of those adjustments.

Casey Hiers
Yeah, I mean, beyond hygiene, is your associate simply producing dentistry that you're ultimately writing off? Right? There's a profitability component to associates. For some reason, too many practice owners—we won't get into EBITDA—but they just think, "Oh, add an associate, boom, multiple profitability, done." And we see a lot of times where a heavily insurance-driven practice has a lot of associates, and if you look at the profitability, a lot of times the associates are actually making more than the owner, and the associates' dentistry is simply getting written off. Yeah, that's a broad statement.

Jarrod Bridgeman
Well, it's kind of the inverse of sometimes what we talk about, which is, "All my stress is the staff," and things like that. Where this is the opposite: maybe your associate's great, maybe you get along really well, maybe they're really good with patients, but at the end of the day, the success rate is low because they're not bringing in the money.

Casey Hiers
Yeah, I mean, if cash flow is great and there's money everywhere, well, there's probably less stress. And, you know, the profitability component might sound a little callous, but that's just the facts of life. That is the component.

The other one is probably the one more can relate to, which is their attitude, the cultural fit, right? I think that's another way to measure that team.

Jarrod Bridgeman
For sure. You don't need a negative Nelly running around.

Casey Hiers
Yeah, are they positive? Do they have that servant mentality when it comes to serving those patients? Are they happy and joyful? Are they good with their co-workers? Are they a bright light, or are they that cancer that's bringing everybody down, trying to get everybody demanding more money?

Jarrod Bridgeman
This is why you guys put me in an office and close the door on me—to try and sequester me off.

Casey Hiers
You're a bright light almost all the time! I mean, better than most, right? We all have bad days as you're hacking on your phlegm. That's so great.

Jarrod Bridgeman
Every time I cough, my entire body hurts. It's been fun.

Casey Hiers
Yeah, well, this is good. I'm glad to be this close to you in a studio. We should have just shared a microphone at this point.

Jarrod Bridgeman
Luckily, I had a couple donuts today, so that should definitely help.

Casey Hiers
A couple donuts, there you go. That sugar's just medicine.

Jarrod Bridgeman
That's right, that's right. But Casey, you know, we're talking about the internal team, and how do you measure that success? But the other side of that is something that owners out there might not think about or even know how to measure success: that external team of CPAs, advisors, and things like that.

Casey Hiers
Well, it's fascinating with this topic. "How do I measure success with my team?" I interpreted it as internal team because, being out there with practice owners, that's what I hear a lot; that's what's on most of their minds. Your interpretation of it was the external team. And that's as important and sometimes overlooked, right? It's like, "Oh, let me pivot to how do you measure success with your external team." Well, who the hell is that?

Jarrod Bridgeman
Right, and again, as you said, it's overlooked because it's not in your face as much. You might talk to your CPA guy once a year, twice a year, maybe.

Casey Hiers
That's right, yeah. So that external team, right—your CPA, practice manager, personal financial planner, investment advisor, or a combination of those. Sometimes there's another consultant thrown in there. That's the external team. While a lot of our clients, prior to working with us, had used a lot of those people and had written big checks, they did not feel like maybe they got out of it what they wanted to.

And so that question is again: How can you measure success with that external team? We'll spend the rest of our time on it, acknowledging that staff and team is hard. But bottom line: profitability and attitude. External team—how do you measure success with them, do you think?

Jarrod Bridgeman
That's a much harder thing to break down. Especially, let me just go CPA because I brought them up. If you've only ever worked with one accountant, one CPA, that may be all you know. And obviously, taxes are complicated and tougher for most people. But a measure of success: Do you have to keep hunting them down to ask them about something? Or every year at tax time, are you writing a giant check to the government?

Casey Hiers
I break it down like this: the answer to most questions is money, and I would add time. Time and money, especially to practice owners whom we help and interact with. Those are valuable resources for anybody, but especially in dentistry, it's time and money. That's how they should be measured.

Most of the time, when we speak about people's external teams with a practice owner, they like them, right? They're nice people. They like that attitude; they're positive, there's a rapport. That box...

Jarrod Bridgeman
They meet you for a drink and a game of golf, or...

Casey Hiers
Yeah, that box is checked, right? And we talk about this all the time: sometimes they're neighbors, patients, friends, and all of that. But the way they should be measured is time and money. Are they helping you be more profitable? Are they coming to you with overhead-reducing strategies? Are they looking at employee wages? Are they looking at your insurance in totality? Where are the leaks in the boat? Are they providing that to you?

And then that stress and that time: If that external team is helping you with stress reduction because you're more profitable, AND you have more time because you have people that literally you can give a story problem to, they take it, go to the lab, analyze it, cook it up, look at analytics and metrics, and provide solutions—that proactivity is going to lead to more profitability. That's how you measure them.

The problem is—and I'll try not to get on the soapbox too long—when I talk to these practice owners, they like them, and they simply assume they are providing them with the same level of service that the dentist is providing to their patients. And I think that's such a misconception because, unfortunately, over our 23 years as a firm, we have seen a very low standard of care when it comes to these external folks who are commanding large checks and payments. But when it comes to time and money, a lot of practice owners can't pinpoint that they have provided that value.

Jarrod Bridgeman
Yes, and we're not even touching upon the comprehensive plan type of thing that we do where our advisors and our CPAs all work together. Even just as these little silos, it's hard to judge the success of each one individually.

Casey Hiers
You're exactly right. And in a lot of rooms that I'm in, people attend the event and I never speak to them again—most I do—but one thing I encourage them to do and challenge them to do: challenge your current external team. "I need you all talking. I need you all bringing me solutions—not just my investing, not just my personal finances or practice cash flow, practice advisory, or tax in a vacuum or a silo. I need this comprehensively to tell me something, to pull in the same way so I have an overarching strategy." Have them present you with those things. They need to be talking.

Because we use that hub-of-the-wheel analogy: the practice owner can't be the hub of the wheel, talking to three, four, and five different groups to try to make sense of it to help make more, save more, have a plan, and reduce stress. It's a maddening business model that exists today, which is why we exist—to flip it on its head to make time and money.

Jarrod Bridgeman
How do you make time? Save time! I would like to know.

Casey Hiers
Save time, you're right. You can't make it, but you can save time.

Jarrod Bridgeman
And as you said, the biggest stressors and things that people base success on is time and money. And...

Casey Hiers
Well, they should, but a lot of times it's on feel. A lot of times they base it on how they feel. "I feel like this employee is nice. I feel like my external fill-in-the-blank person is doing a good job," but they don't actually have some of those profitability metrics.

And unfortunately, when I go ask basic questions like overhead, production versus collection, insurance adjustments, overhead-reducing strategies, things of that nature, most practice owners are not getting basic information—retirement planning, we've talked about that. Most are not even receiving basic information that they need, but they feel like they're a nice person. And they probably are, and we're not trashing these people, but when they're doing it in a silo and a vacuum, they're doing their little thing okay sometimes. And when you have a bunch of those piecemealed, then you're left with, "Okay, what do I do with this?" Then you look up, and your insurance adjustments are 35%, your overhead is probably 67% to 79%...

Jarrod Bridgeman
And you're left with no clue on how to even start to begin to fix something.

Casey Hiers: Well, the first clue is, "Well, I guess I have to use bad supplies and fire people," because they don't know what else to do, and that's not it! That's the most basic misnomer out there.

But it's tough, right? So again, how do you measure success? Unfortunately, it has to be through a business-minded lens: profitability, attitude, culture, saving time, proactivity, providing solutions. Those are the things that then you can actually measure some success—or lack of—and make an adjustment.

Because guess what? When you go to retire, and we have those conversations, your patients have been treated well for decades, your staff's been compensated well for decades, whomever you're stroking a check to is probably feeling pretty good, and you're the one looking up going, "I don't have enough money to retire; I don't know what to do." That can be tough.

Jarrod Bridgeman
And you're 80 years old, still working...

Casey Hiers
Yeah, let's say 70. But yeah, that's the key part. The longer people keep their head in the sand, the more jaded they get with dentistry, the more frustrating it is. They do not retire a multi-multi-millionaire on their terms; instead, they look up and try to convince themselves and everybody else that they love dentistry, so they're just going to keep practicing. That's sad.

Jarrod Bridgeman
"If I don't know about it, it's not going to bother me." The head-in-the-sand thing—everybody deals with that, everybody has that issue, whether it's business, personal, whatever it is. Blind spots, yeah. And at some point, you have to pull your head out.

Casey Hiers
Well, and a lot of times at our events when we go through our subject matter, a lot of people have that epiphany, and they look like they've just seen a ghost because a lot of these things that they've kind of pushed down, now they realize, "Oh, this is the difference between massive success—retiring when I want, how I want—or practicing dentistry for way, way too long."

Jarrod Bridgeman
Casey, for those of you out there that want to hear more about these types of things, you and your team are going to be traveling and educating dentists out there. We're going to be in Chattanooga and Knoxville, Tennessee, on October 15th. After that, we're going to be in Athens and Savannah, Georgia on November 5th, followed by Charlotte and Winston-Salem, North Carolina on November 12th.

Casey Hiers
Well, I'm departing fall break from Arizona early to get back to Tennessee to present to this crowd.

Jarrod Bridgeman
Oh, you're just a machine.

Casey Hiers
You know, I said it 10% to be a martyr and 90% because we're going to have a good crowd. It's information they need. Some people need to hear it to make adjustments with what they're currently doing. And you know what? I should be pretty relaxed coming off of AK.

Jarrod Bridgeman
I think you'll be fine. Thanks, Casey.

Announcer
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener, for tuning in. The Millionaire Dentist podcast is brought to you by Four Quadrants Advisory. To see if they might be a good fit for you and your practice, go on over to fourquadrantsadvisory.com and see why, year after year, they retain over 95% of their clients. Thank you again for joining us, and we'll see you next time.