The Hidden Ceiling: How Doctors Cap Their Own Practice Growth

Most dentists are brilliant clinicians, but somewhere between $1M and $3M in collections, growth stalls. Not because of skill, not because of ambition, but because every decision still runs through the doctor. In this Executive Session, Wes sits down with practice management consultant Megan Shelton (Shelton Solutions) and marketing strategist Michael Anderson (Wondrous) to break down what it actually takes to build a leadership team that lets you scale, whether you’re going from one practice to three, or from $1.5M to $3M under one roof.

What You’ll Learn

• Why dentists keep hitting the same ceiling and what’s actually causing it
• What a fractional COO, CFO, and CMO look like in a dental practice context
• The four most dangerous clarity gaps inside a dental office
• How to identify and build your “Janine,” the internal operator who frees the doctor
• The financial fingerprint of undefined leadership (and exactly where it bleeds on your P&L)
• Why DIY isn’t always bad and when it becomes the bottleneck
• The difference between training people to execute and training them to think
• How job descriptions, SOPs, and KPIs connect and why most practices get all three wrong

Key Takeaways

You can only scale what is clear.

Role clarity, expectation clarity, decision clarity, and culture clarity; without these four, everything keeps surfacing to the doctor.

The fractional model works.

A fractional COO, CFO, or CMO gives a $1–5M practice access to executive-level thinking without the $250–500K salary. The doctor still has to engage but they’re no longer doing the day-to-day administration.

The financial fingerprint of poor leadership:

• Payroll creeping past 28% of collections (GP target: 26–28%)
• Supplies & labs drifting toward 8–9% (target: 5–6%)
• Doctor distributions quietly shrinking even as W2 stays the same

Build your “Janine” your internal operator.

It doesn’t require an MBA. It requires someone bought into your vision, is hungry to grow, and is willing to hold the line. Promote from within, give them authority in front of the team, and back them publicly.

SOPs before AI.

You can’t build agentic workflows on top of chaos. Your SOPs are the blueprint. Claude can put them into a pretty format, but garbage in is garbage out.

Less is more financially.

Retain earnings in the business. That retained capital is what funds the hire that buys back your highest-value hours. A doctor doing $400–600/hr chairside should not be doing $25/hr administrative work.

Stop being the hero.

If you want everyone to bring decisions to you, keep being the person who has all the answers. If you want scale, train your team to think and celebrate when they do.

Transcript:

Wes Read:  Welcome back everybody to another episode of the Dental Boardroom podcast. We continue what is, I think, my favorite part of the podcast these days. It's the executive session, which is a subseries of the Dental Boardroom podcast, where I invite Michael Anderson with Wonderous and Megan Shelton with Shelton Solutions.

Welcome back to the Table team.

Thanks for having us. Good to be back.

Morning

excited for this episode because it's one that I think dentists would really benefit by, and I also think it's one that's a little bit more challenging to develop, and it is on the concept of building a leadership team in a dental practice to scale.

As most dentists I talk to want to scale, some want to scale in their, you know, their one practice and take it from, let's say, a million dollars a year to $2 million a year, plus others want to scale and own 20 dental practices. We're just gonna focus on scaling in general, because whether it's one practice going from one to 3 million or one practice going to 10 practices, leadership, your roster, how you develop processes and an ability to delegate systematically is the bridge for you to access that scale.

That's the subject today, Megan. You're gonna be a little bit more of the, uh, the emphasis today as the practice management cons, uh, consultant, which is all about, or a lot about leadership, team, your roster, communication, culture, processes, et cetera. But Michael, you run a good sized company. You've got, I don't know, 80 people plus.

So you're definitely thinking about what it means to be a leader and to scale and create a flow across all of those minds and people. So your contributions will be valuable and I'll attempt to contribute where I can as well as leadership is something I think long and hard about on a daily basis.

Let's go ahead and, uh, frame the conversation. And Megan, I'm gonna, I'm gonna direct this one to you. Most dental owners I talk to, they do wanna grow, uh, more locations, production and get this sort of concept of freedom at the same time that if I scale and it can start to operate where it's less dependent on me, it kind of can create some freedom both operationally and financially.

But there's a, there tends to be a ceiling that most of them hit before they ever get there. This is virtually what I see almost every time. It's, it's the, it's the rule, not the exception. So Megan, we can. Uh, your work inside of these practices as a fractional COO define what a fractional COO is, kind of as a general concept in businesses and how that applies in a dental practice and what does that ceiling look like?

Well, Wes, in most, uh, practices, we have the doctor who has a vision and then there's an operational reality. And finding, uh, a way to merge those two and bridge that gap is one of the hardest components because of the financial constraints or even the mindset around it. So a fractional COOI have the opportunity to sit between the dentist owner and the team, then translate that vision into reality.

So I get to work inside the practices to build the systems, the leadership structure, and create the accountability so that an owner can actually. Step away and allow the practice to continue functioning. You know, it comes up in lots of conversations right now being after spring break. It's like I stepped away and I came back and this is what I had expected to happen and that didn't happen.

And then we talk it through and we find out expectations were not clearly set at all. And the team had no idea what success while the doctor was away really looked like. So most. Practices don't have an operations leader and they have a dentist who accidentally is responsible for being COO, HR director, customer service marketing manager, and they're burning out.

So as a fractional COO, I get to help fill that void. And I think something that you would be able to share insight on is like fitting that into the overhead because we can't afford to pay as a, as a small business, we can't afford to pay 2 5300 for a COO.

Yeah. This is kind of a, a, if we kind of zoom out, macroscopically, the dental practice is a small business.

It typically has somewhere around. Seven to to 20 employees in a standard practice. Uh, but if we look at businesses in general, uh, all businesses have common themes across them. And the bigger they are, the the thicker the leadership tier tends to be. And so you, you know, you think of large companies like ExxonMobil or Microsoft, they're gonna have an almost an infinite layer of these, these sort of leadership areas overseeing a broad department.

And in dentistry, dentistry is not doing billions of dollars a year like these big businesses. But they have in, in many ways similar issues. They're just at a smaller scale, but similar issues. So big businesses have a CEO, the chief executive Officer, they have a COO, that's what you just talked about, Megan, the Chief Operating Officer, they have a C, uh, A CFO, the Chief financial officer, and they'll have a chief marketing officer.

Yet a dentist can't go drop 500,000, $800,000 a year to hire people full-time as leaders, uh, because that's not the, the size and nature of their, of their business. So the question then becomes how do they simulate that form or that layer of leadership when essentially the economics is only allowing them to have people that are doing things rather than leading things.

And, uh, and so there is some truth to that. A dentist has to wear a few of those hats at some level. The question is, how do you keep that to a minimum and it still be effective? That's the way that I look at it. So let me talk about my side of the equation. The financial systems to scale, you have to have good financial systems.

And sometimes dentists will say, I don't want to pay, you know, $1,500 a month to have a, a fractional CFO, or which is a part-time CFO externally, who will oversee my QuickBooks. Who will oversee my, my tax planning, who will oversee my, my cashflow planning, make sure I have enough money in the bank, help me set up my payroll structure correctly, and help me sort of weave all that together.

So in, in that case, a a, a good dentist should find an external option. This is where you can take what big companies have, give it as an access to a smaller company like a dental office. Give them that access without breaking the bank. And so, like for practice CFO, you know, they may pay two x what they might pay, uh, an accountant down the street.

Uh, is it gonna break the bank? No. Are they gonna get more, uh, engagement and effective systems? Absolutely. They will. As long as they engage it. That's the thing. A lot of times we service providers come in and say, Hey doc, if you hire me, you just get to focus on the operatory room and I'll do everything else in this area.

The reality is that's a sweet talking. Just try to try and get 'em as a client. The reality is the dentist has to engage their financial person, they have to engage their operational person, and they have to engage their marketing person. Now, they should fractionalize all of those, unless they got to some really large scale, you know, they're doing five to 10 million in collections, then they might hire those full-time in-house.

But under that number, the smart thing is to get somebody really good to meet with on a periodic basis, whether that's monthly or quarterly, or you know, periodically who is setting up the structure, the framework, and then the doctor is making sure that the team is following that framework as a leader every day in that practice.

So it's leveraging a fractional team externally to amplify the benefits of those services across the company and to, to the team. That's my take on it. Any, uh, any follow-up commentary on that?

No. Absolutely right. I mean, that's where the, the offset of the word fractional, right? Like you, your, your responsibility is still to participate and be the other fractional portion of the COO or CFO.

That's right. Michael, anything on that one?

No, I think you guys covered it.

Okay. So then I think the takeaway there is doctors hit the ceiling when too many things have to go through them and they simply can't do it. Or if they attempt to be the c uh, OO, the CMO and the CFO too much, then that's time away from the chair.

And if it's time away from the chair, they're bottlenecking the scalability of that practice. So let's move on now to really what I think can help them pivot out of that. And that's to have a really clear vision. And I believe strongly that you can only scale what is clear. You can't scale chaos and confusion.

You can't scale simplicity and clarity. So Megan, you said the phrase you, this phrase to me before that you can only scale what is clear, what does it actually mean inside of a dental practice, and where do you see the most dangerous lack of clarity.

Uh, well, often when I walk into a practice, something might feel off, like production is inconsistent, which is a common reason.

Docs will reach out to one of us. Turnover might be high. The owner is exhausted, teetering on burnout, and I always start by getting clear on what they want. And almost every time, the problem isn't effort. The problem is that nobody can tell me what the standard actually is. So the most dangerous lack of clarity, I see that.

I see that show up in a few different ways. And one of them is role clarity. Teams have no idea what their job is and what other team members' job is, so where their job ends, where someone else's begins, and then you hear doctors living in that fear of, well then we have no overlap. Well, we're still gonna have primary responsibilities.

There will be secondary responsibilities to pick up those things, but we need role clarity. The next thing would be expectations. Owners assume that people know what good looks like. So we aren't giving them a baseline of this is the outcome that we expect. This is the number or the marker, this is what good is.

So we give them a responsibility to answer new patient calls. That's it, that's their role. But there's no clarity on what a good new patient call sounds like or what the outcome we're trying to generate is. Um, one of the strong ones that shows up frequently is also decision clarity. I call this like the team has to check, there's no, uh, clear path of who has authority to decide what.

And without that, everything ends up back in the doctor's lap. And that's when the doctor is like, ah, they keep asking me so many questions all day. Um, and I'm like, well, that's. We've trained them to do that. Um, so they don't have understanding that they're allowed to make decisions. And if we don't find out what decisions they aren't able to answer and create a system around that, and like, this is okay, this is the way to answer that question, you're gonna stay stuck there and you're gonna be exhausted at the end of the day.

Um, and then culture, culture's another one where there's often a lack of clarity. I see. Where we walk into a practice and it's very unclear what is non-negotiable. Like what are we willing to tolerate in behavior, attitude and personality versus like hard skill sets. Because if you ask a team, you know, who was your favorite leader you worked with?

Who was a favorite team member you worked with, none of them mention hard skills. They will always mention soft skills. Yet we don't take time to define those soft skills and say like, this as a team is how we agree to show up for each other.

That's insightful. Um, yeah, as I think of clarity, I think of kind of two big areas I think of the vision.

What is, what is our, what is our, what is our reason to exist as a dental office? And yes, at the end of the day, people are coming to have good oral health and good smiles and all of that. But it's important that the dentists distinguish themselves with their own nuanced vision that the team feels is a little bit unique, uh, special, that they come to a special place.

It's a different place. And, and you, dentists have to define that. Think of your geography, think of your patients, think of your team. Think of you know who they are, think of you. What is your vision? Where do you want to go? And, uh, and make it unique to you. You're not just another dental office down the street.

You are your dental office and here's why people will wanna come and work or get their treatment done at your office. So that's vision. Um, and then I, then the second area is gonna be vision around the different operational lanes. You really emphasized that one nicely, Megan, that there needs to be clarity on, on what needs to be done and who needs to be doing it or these, uh, standard operating procedures.

It's a painful thing to develop clarity at the operational level. Personally, I think it's easier to define clarity as a vision, and it's harder to define clarity operationally. And yet if you have clarity as a vision of we wanna become a $3 million dental practice, but you don't have clarity of the lanes and the roles, it's gonna feel like utter chaos and you're gonna hit so much friction that you're not gonna get there.

Um, so Michael, let me, let me actually ask you on this too. What does this look like externally when there's not clarity in the practice and it's sort of confusion under the hood? How does it show up in their brand and their messaging and their, their growth from a marketing standpoint?

Yeah, I, you know, I think for a lot of dentists, right, when they go to school, it focuses on the clinical side.

And so maybe there's one semester that does a survey of marketing, business leadership and everything. And, and it is overwhelming for any business leader to come in and own all of those areas. And so I think oftentimes what you see, whether it's the CMO hat or the CFO hat or the COO hat, is that, you know, dentists often go into that and they want to have an easy button.

So we'll often hear something, and I think it often is a, is a crutch. We will hear something like, well, that's your area, you tell me, right? And, and. In a way, I think people can make the mistake of saying, this is really empowering. Like, you, you do, you, I'm, I'm just here to work with the professionals and I, I, I hate to break it to you, but for every business, no one is gonna come and save you.

At the end of the day, it's your business. And, and if you're hoping that you're gonna find the best CFO or the best CMO and they're really smart and they're gonna figure it out for you, you're going to be disappointed every time. And I think what really is required is this vision and clarity. And so for me, what I look to is one the hardest thing.

How are you different, right? That's something that most practices really struggle with. And, and they always start out with something that skim milk. And so you need to push yourself and say, listen, I, I need to find a niche in this market. Think about Mexican restaurants, right? There's five Mexican restaurants on the street.

What's the difference between all of them? One of thems gotta have a mariachi band, one of them's gotta have the biggest margarita. There's gotta be something that you go to for that Mexican restaurant and, and I think. This vision for how am I different is, is a big one. The other one I really wanna focus on is how to measure success.

I find this is a big gap in leadership. You need to know in your business, how am I holding people accountable? And so whether that's gonna be reappointment percentage, uh, care chair utilization, or in our case ROI, you know, number of new patients coming in. All of these things are going to be critically important when, um, understanding, uh, whether marketing is actually working.

YI wanna pause for one second. Talk about, um, I find the, the thing that was so difficult for me as I started practice CFO and went from having me and one person to me, and five people to me, and, you know, 20 people, um, was that the buck always stopped with me. And everything surfaced to me. Everything surfaced to me.

It's been years of training the culture. It's been years of training the culture to get to a point where the buck doesn't always go to me. That there's procedures and layers that buffer me from the ground, from the ground level. So I eventually hired a, what's called a, uh, I, I did, I hired a COO, uh, we call her an integrator, which is part of a management platform I've talked a lot about on my podcast from, uh, EOS, uh, which is a great management platform.

I, I honestly, I don't think I could have continued to scale without it. But I, I got a chief operating officer and, um, her name is Janine, and I don't know how I would do it without this person. And what she does is she's not only conditioned the team, but she's conditioned me. She gets upset, not upset, but she calls me out when I'm the one answering.

Conflicts that people circumvent her or their manager to come directly to me. And the way I am is like, I always wanna jump in and help and be the, be the hero. I've had to let go of that and fill these sort of abrupt conversations by saying, did you go to so-and-so? Did you talk to Janine? Why are you coming to me for this?

And where before I would've never done that. Now I say that very frequently to the point that my team knows, okay, Wes, Wes isn't out of reach, but he's out of reach for most things operational. And then I try to make myself in reach accessible for kind of some bigger, maybe soft conversations needed. But I become very selective around how I, uh, who I, and how I allow people to access me.

So let me put this back on you and make one more comment about that. Janine is essentially DJing the company day to day. My, my COO, my integrator, she's DJing this company day to day. It allows me to do things like this podcast to think strategically about AI in my business, to go to conferences, to develop leadership skills, to manage the culture, to do a monthly visionary message that I send out to my team in a, in a video.

It allows me to do things like that and also to sort of platform the business for more scale. How does a dentist create a Janine, how do they create A-A-C-O-O? Um, now, whoever they hire and they're paying, you know, 35, 40 bucks an hour or two isn't gonna be the Megan Shelton that's gonna help take the business to $5 million.

That, that's the fractional guidance from you, the coaching guidance. But in office, somebody day to day to buffer the doctor, how do they create that person? And is that an office manager? What, what do we call that person? And what is the role of that person to prevent too much filtering up into the doctor's, uh, schedule, preventing them from doing productive dentistry?

In my experience, Wes, um, an office manager, that term is so broadly used in dental and it's very unclear. We keep going back to clarity, but it's very unclear what that is. And it's different in every practice. So when we're hiring for someone of this capacity with a role that's expected to, um, help free up or buy you back time and to help ensure that the practice is headed down the path of your vision as opposed to deviating, making sure they're honoring the filters and accountability chains, I think.

It's someone that believes in you and your vision. Like that person doesn't have to have operational experience before, always in a practice. But it could be that person who does hold the line for you in your practice. The person who is already like completely bought into your philosophy. They may not have leadership experience yet, but that could grow.

And one of the most common failures or misfires I see with docs is that they don't give this person authority in front of their team. So there has to be a clear baton passing or a clear stance that this person is an extension of me and what they say, I will have their back. And they know and we've, we've been working together, so I.

X, Y and Z goes through them first, just like you said, Wes, right? Like my team never interrupted me during the day. At some point we got to that, right? We didn't start there. Um, but they knew the chain of, of approach and they knew that what resources to tap into for certain questions. And then my team leader was able to hold that line and that's what allowed me to step away and have the practice continue to operate always.

That is so well said. Um, Megan, I, you know, and I'll, I'll mention two things as an extension from that. I look at like, Janine, my, my integrator. So we now have about 70 people here. Janine was like number four. And when I hired Janine about 11 years ago, she was hired as the, as the receptionist. We had this little tiny suite and I bought for like 200 bucks this totally used reception desk.

It looks so Jan. Patients would come in. This was before COVID, you know, a lot of patient clients would come in. And that was Janine and I, when I interviewed her, I remember thinking, wow, she's, she's got a fairly confident approach to her style. Um, but she had a nice humility to her as well, and she just was incredible.

And she was always seeking to self-improve, always seeking to help me more. And she took on increasing scope over time until eventually she became a, our chief operating officer and a partner. She's now a partner of my firm. So she's, she's literally my partner on my, on my, uh, my partnership, uh, uh, cap table and gets distributions.

Now, I'm a different company than a dentist, so I don't want to necessarily say your front office should get ownership in your dental practice, but, but the nature of my business is, is, is that it, it, it's structured to be okay for that. And now it took years. I remember actually, here's a little story. I remember having a partnership meeting, this was about five or six years ago, and we were getting EOS into place and designating who is our chief operating officer.

And I wanted Janine, I knew Janine extremely well, and I, at the time, I had five other partners and, uh, and Paul, you know, Paul was one of them. Uh, you know, you know Paul, Megan, and, um, and we took a vote. How many of you are, are good for me to have Janine as, as our, as our integrator? And, uh, we had three say, no one essentially said, I'm neutral, and one supported me.

And it was the, the only time I can think of where I overrode the team. I overrode my partners and I, so I vetoed them and I brought her in. The, the crazy thing is, a month before then my partners were saying, uh, we need to remove her because she doesn't have a, a, a clear role anywhere. She's in between office manager and something strategic that we dunno how to define and we should let her go.

So I remember talking to her, which was crazy 'cause I'm like, this is one of the best employees I've ever had. And following my partners and, and trying to let her go. And she was so stunned by that, so stunned by it. 'cause she gives so much of herself to do a great job. It was the biggest error of judgment I think I've had at the company.

And then I, I, I thought deeply about it and I flipped that and overrode them and brought her on. And here we are about five or six years later and I don't know how I, how I would've done what we've done and where we're gonna go without her. So much so that I, that I sold her some of my own interest and, uh, and she and I carried the loan to make it really easy for her to her to be a partner.

So my, my takeaway there, sorry for the long story there, but my takeaway is that. Um, it, a person doesn't have to come in with an MBA credential or a background in deep operational leadership. If you find somebody who is super committed to you, they're really eager to learn and you provide them tools, some training, some conferences, some books, you know, some, some, some guidance from somebody like you, Megan, if you provide that and they're hungry and they have the hardware, they can, they can do that.

And if you can find that person, consider yourself lucky. It's, it's hard to do, but if you put in, in the time and attention to do it, there's a good chance you're gonna find that in time. But be patient with that. The last thing I wanna say is less is more. And I say this a lot to doctors, less is more. And I wanna refer financially.

If you can spend less in your personal life, allowing your business checking account to remain healthy. To where you're not distributing too much to yourself because you gotta buy this and that and keep up with everybody, yada yada. And you have more money in your business checking account that you're, you're retaining, called retained earnings.

If you're retaining that, that will allow you resources to find somebody that may be a little bit more money and then that person will free you up from half of what you're doing outside of the operatory, if not a lot more than that, which thereby allows you to do those things that are your highest productive use as a dentist.

Okay. I'm gonna shut up Michael. Megan, anything else you wanna drip onto that as we, before we move on?

I'll, I'll just jump in with a thought. You know, I like to make things actionable and, and for me there's three things here that, that come together. There's. Job descriptions, SOPs, and KPIs. This sounds so buzzwordy, doesn't it?

But I just wanna take a minute on it, right? Think about this. Do you have job descriptions? Have you looked at them recently? And do they actually really tell someone on paper what they should do? Here's the funny thing about this. SOPs and KPIs should connect back to job descriptions. You don't need the whole SOP in there.

You don't need all the KPIs, but, you know, have, have the most important things in there. SOPs, is there a, um, is there a binder, you know, digital or physical that literally has the processes that are core to your business from asking for reviews to, you know, to whatever technical processes you need to focus on chairside.

And then finally, do you know what KPIs you're measuring for your business financially, clinically, marketing culture? Do those have a place and a time that you review them? I've worked with many dentists and many small business owners, and I think what most of us start out doing is we get a little sensitive on this question.

Most of us start out saying, yeah, yeah, yeah, yeah. I've done this many times in my career. People ask me, say, yeah, I've got that stuff. And then here's the awkward part. Say, show me, say it to yourself. Say, okay, let me go look. And I think when you do that, you're gonna say, well, those SOPs are out of date. I'm going to update them.

Well, those KPIs are there, but we haven't been tracking them. And that's where a lot of this stuff falls apart. And so I would encourage people to really look at those three areas, job descriptions, SOPs, and KPIs. And if you can get serious about that, uh, it's going to solve a lot of problems on the leadership side.

Absolutely. The, um, yeah, I think, I think of the SOPs as, uh, you're, you're creating those clear lanes that people operate in, out of SOPs come clear lanes of communication. As well, not just individual job duties and tasks and uh, and clear guidelines. And then the way I look at the KPIs is the KPIs are tracking how well people are following those SOPs in some ways.

And it also, I think, KPIs measure how effectively you are delegating and, uh, and it's like a scoreboard. How well did you delegate billing? How well did you delegate? Uh, uh, I, I, I don't know. Um, marketing or, or some aspects of the marketing or, or delegate, you know, your payroll functions. How well did you delegate these things?

And EOS uh, says everybody at the company should have a number, a number. What is the single most important number that measures the output of that particular position? So here at Practice CFO, over the past six months, we hired a company and it has been. I'll admit it's a distraction. But this company is making us delineate all of our processes.

And we have accounting department, tax department, payroll department, investment, 401k department, and our financial planning department. And every one of those has all these processes. And so when they send me an email and they sit down with me and they say, Wes, I need you to review this process. I'm like, Ugh, I don't have time to sit down and review this process.

And then I step back and I think about it. I'm like, I don't have time not

to do this. Yeah. Do you have time to keep doing it the same way?

Yes. Like, do I have time to keep fielding a million things that keep surfacing to me? 'cause I don't have a clear SOP in that area.

Yeah.

Yeah. It's, it's one step back.

Sometimes it feels like two or three steps back for a lot of steps forward. And it costs me money to pay this company to do that. And the other thing about developing those SOPs, as we start to think about ai, uh uh. Sort of introduction into our practices. You can't build out agentic processes if you don't have SOPs underneath it.

It's like you can't go start building, putting up two by fours on a house until you have the blueprint in place. Your SOPs are the blueprint. So such a great comment there, Michael.

Well, and that comes up a lot. Wess. I would add, you know, that's a common conversation in forums, Facebook groups, email groups, is we'll just have Claude build it.

And I'm like, okay, but garbage in is garbage out. So if you don't have clarity on what your system is and you're just giving it what you, what you've been doing, and we don't even know if that's been effective because we aren't taking metrics or measure of what we're doing, what is Claude going to produce?

That's different. Until we have clarity on what the SOP should be and what the outcome should be, then Claude can put it into its pretty format.

For

sure. Here's the other hard truth. You know, I, I actually think in many ways Claude's default is gonna be better than most people's default. That's what I continue to find.

But, and here's the difficult thing about it. Implementation is the hardest part. So Claude can give you every single SOP that you want. It can be perfect if you don't know how to run a huddle. If you don't know how to command, uh, leadership and respect, you don't know how to create accountability. That's the big one, right?

Anyone can go in front of a room and say, guys, here's new SOPs. Put a binder down. Did you follow through with it? Did you hold 'em accountable? Like, these are the things that make it so hard. And I think that it's, it's the muscles we're most uncomfortable with. It's leg day. It, this is all leg day stuff, and nobody wants to do leg day, right?

I don't wanna, I, I want Claude to gimme the binder. I wanna feel good that I got the SOPs done. I wanna check the box and move on. Did you bring it up in your next meeting? Did you bring it? But

leadership is isn't a task you get to check off, right? We all that like, you're never done.

Yes.

I will say Michael, I work out my calfs at least twice a week, buddy.

I've seen your calfs and I will vouch for that. My,

my, my thin little chicken legs, uh, they don't grow, but it makes me feel better. That's great. Alright, this is a good segue into the next section on, uh, DDIY dentists. So since the day I got serving dentists in my as a career, I realized that the tendency for doctors is to DIY, it.

And doctor, if you don't know what I mean by DIY, it stands for do it yourself, do it yourself. And I think part of it is out of nature biology, the way their brain works. And I think part of it is out of necessity because there's not a lot of capital or money to go around to hire people to do other things.

And it creates this a little bit of a catch 22, uh, along the way. So let's let, let me have you kick this off, Megan, how dentists tend to do everything, uh, and what they will say is. Well, Wes, I have really high standards and I want to be a high performer and a great clinician, and I don't wanna concede at all on my standards.

That's not me. I want to give everybody and my patients in the world the best that I possibly know how what happens is every decision has to flow through them. So you've been a dentist, you've been inside many practices. As a practice management consultant, what's actually happening and why does this DIY approach really kill scale?

Well, I've worked with dozens of practice owners, and it comes from a real place, a good place, high standards, like you said, deep ownership. The belief that if you want something done right, you have to do it yourself. And that belief gets us pretty far, right? It builds the practice, it generates some cash flow, but at a certain point, it does become the ceiling.

It becomes the bottleneck. And so what's actually happening is now the owner's having to make every decision. The team has to wait for direction instead of having the ability to make developmental judgements their self. And the owner interprets it when the team is asking the owner questions. Now the owner's going, well, I can't trust them.

They have to ask me every question. And I'm like, okay, well look in the mirror. They have to ask you every question 'cause you haven't trained them what good looks like? And you're keeping everything so tight. And that mentality of I have to do it myself, is pouring into your practice. And so it's showing up and that loop accelerates and burnout follows.

Um, so. Doing it yourself is not leading. That's execution. You are the person executing. You are the doer, and you can't scale execution because you need to be in the operatory. So it's, you know, there's a book Traction that's a great book about integrator, visionary models. And the dentist is brilliant, can have high standards be driven.

But as a visionary, if you don't understand how to implement, like you said, Michael, the practice needs someone who is an integrator. Um, so I, you know, I've lived this, and I would say, again, this goes back to like, you have to have someone else on your team that can be that person. You need your Janine, you need your Liz, you need your team leader, and maybe even department leaders because the transformation is possible.

It's going to take, you know, it's like one step back to have two steps forward. You may need to pay and they may not be quite ready to lead yet, but you know, it's there. And so you, you really just have to be willing to get out of your comfort zone.

Agreed. So I wanna talk a little bit about the financial, uh, consequence of DIYing.

Mm-hmm. The, the, the practice leadership and, and I think I'll weave in the prior question about not having clarity. And when there's not clarity, uh, there's a lot of, uh, friction, unnecessary friction that gets absorbed into everybody's daily work. And it shows up in five places on the p and l when this, when this happens, payroll creeps without really production growth.

This is probably the, the universal trend almost, especially over the past 15 years or so, is payroll keeps going up. Because the earth goes around the sun, but the production is not going up accordingly. And payroll should be total payroll costs, excluding the doctor and excluding doctors, sort of kids or spouse who's on there for tax purposes.

Should be around 26 to 28% of a GP practice, including payroll taxes as well. 26 to 28%. If every year that's going up by a percent to 2% within five years, you're, you're now up around 32 to 33%. Sometimes I see it up to 35% without associates. Sometimes associates will level that up a little bit, um, depending on how, how they're paid, especially specialists.

But, but no, that's really, if you're paying 6% more, uh, on your labor costs, think about that. Let's say you're doing it a million and a half, that's $90,000. Um, paid, uh, too much to the team. Let's say your, your profit was 300,000. Well, $90,000 is almost a third of your profit. Almost a third of your profit is going as excess, not total excess labor costs, because we have not been able to, uh, delegate to your team, allowing you as the doctor to grow the top line collections, which then can lead to proper compensation, but increases, but within that percentage of 26 to 28%.

So if your collections go from a million to 2 million, that 26% also doubles, allowing you to pay your team more. And the next thing I see is I do see suppliers and labs go up because there's not good processes around controlling, uh, what's being ordered. Sometimes suppliers will come in and just restock at will.

There's not checks around that. And so that should be around five to 6%. I see that get up to eight to 9% when there's not good controls around that. Um, collections. And actually let me focus on, uh, the last one is kind of the doctor's take home compensation. Their W2 might be the same from year to year.

Let's say they pay themselves 200,000 as a W2 to themselves, but their distributions, which is the second way they get money out of their business. End up shrinking and sometimes they may even have to throw a little bit of money back into the practice to keep it afloat when payroll time comes around.

So here's my one liner on that. The financial fingerprint of undefined leadership is, is this revenue looks fine, overhead is quietly bleeding, and the owner is the hardest working, lowest paid per hour person in the in the business. The p and l doesn't lie. It just takes someone who reads it to connect the dots.

Doctors don't be doing $15 an hour work, don't be doing $25 an hour work. Don't be doing $35 an hour work and don't be doing $55 an hour work. You should be doing work that is four to $600. If you're a specialist. It should be more than that. Exact, yeah, that's your greatest work. Now you may have to spend some time doing work where you literally receive zero.

That's where you're working on building the systems, building your sop. Training your team. That's, that's zero. But if you do that well and you have enough cash to hire people like, like, like Megan and Michael and, you know, and a financial person to oversee those systems strategically, then when you step back on top of that now platform to business, you can spend 95% of your time doing 6, 7, 8, $900 an hour work.

Now you're cranking it. Alright, any comments on that DIY conversation? Michael, I bet you have some thoughts on that one.

I'm a big fan of DIYers. I love them. I, I encourage people to be DIYers and, and here, here's my hot take. Um, I think to manage anyone well, you have to have a baseline understanding. And so I, I'd say, Hey, do your taxes.

Do your taxes your first year in business. You know, build your leadership protocols by yourself. Your first year in business. Try to do marketing. Go and do it. And I think most people that have that experience, either you be, you're just a rock star and like, yeah, good for you. You don't, you don't need whatever area you're really loving, but what ends up happening is you end up having a much better appreciation for what you need to do and why you need someone else.

I'll give you a great example. I, I remember when I was in my twenties, I got into brewing my own beer. It was fun. I love doing it. I had a whole refrigerator that I kind of jerry-rigged up to be able to like logger beers and stuff. Guess what? I don't brew my own beer anymore, but I sure appreciate going to a brewery a lot more.

I I can really tell what they do and I, I know why I want them doing it, and I don't wanna do it myself. And so I think DIY can be a really important part of the process. It can be a really important part of being a great partner with someone. Because you have enough appreciation for what needs to be done.

You've thought through it a little bit, but you ultimately are able to hand that off to someone else and say, Hey, please take this and run, whether it's a outside partner or whether it's someone in your office. And so, um, I think our best clients are clients that have that DIY gene, but they're also clients that don't hold on for too long.

That's where it can go really south is you think you have to do everything. And then that b word burnout comes in really quick.

Yeah. I'm gonna, I'm gonna make up a term and call it leveraged DIY 'cause you're right, this is such a good comment there, Michael. I, I, more and more when I talk to, to new prospective clients, they tell them, uh, look, we're not, we're not taking you completely outta the financial systems.

In fact, the financial systems are only gonna work if you are still involved. And I, I don't want you to become me, but I need you to understand a certain layer of what me is. I need you to understand how to read a p and l. I need you to understand what depreciation is. You should understand what a 1 79 deduction is.

There are some big sort of terms and variables and concepts that I do think dentists need to understand in each of our areas, even though they're not the ones day-to-day administering that particular area. That way when they show up to a meeting with you or me, they are understanding what we're saying and they're seeing how it filters into their broader ecosystem in their business.

And so that, um, that D iy initial sort of, uh, iteration one is actually a great idea. Like, roll up your sleeves and get deep into that area, understand it terms, then hire professionals or maybe it's along the way. I don't know if it's a this before that, but along the way, they're deeply a part of the evolution of that area of their business.

Okay, let's stick to landing with, um, the, our last little subject here. Uh, training people to think. Not just to execute. And, um, there's a big difference between telling your team what to do and training them to think one creates dependencies and one creates scale. Megan, walk us through how you build a team that makes good decisions without the doctor in the room.

Michael, you've got a lot of people. You've had to, you've had people. As we all have, who, you know, are thinking through a problem independently and recruiting others when needed, but thinking through it and owning that and then there's people who can't think through it and they feel like they need somebody else to tell them how to solve a problem constantly.

Um, how have you tried to nurture independent thinkers so that not everything keeps bubbling up to you?

Yeah, I think there's a couple things I would share. Uh, the first one is, you know, you wanna be careful of creating culture where everybody's an independent thinker, right? I think for me it's identify the people that you want to be independent thinkers.

'cause if everybody is, it can create a lot of conflict. Good

point.

Um, and, and that's something that it changes as you grow like ear early companies, like you might have everybody being an independent thinker 'cause there's very few people. But then as you grow, like your, your management team or, or even an operations team, if you get to that point, can be the people that lead that.

Um, I think what. Megan said is so critical, right? That that safety, um, to, to be able to make mistakes is such a big one. And I, I, I love this idea in dentistry that everybody's so precise. It's like, okay, cool. So you, you go, uh, learn how to place an implant at a, at a, at a, you know, school. Uh, it the first case you're gonna do.

Let's be honest. Like, it's not gonna be your best work probably, unless you're just like a freak. And, uh, and so all of us know that skill building requires, you know, good, better, best. We're gonna grow into it. And so I think letting your team do that. Um, we have values at Wondrous. We talk about them quarterly at every camp.

Tomorrow's gonna be our team day. Our, our, our quarterly camp that we do. And our last value is use your best judgment. We trust you. We talk about that all the time. So for me, it sounds corny, but is that something that you actually wear on your sleeve? Is it on your wall? We have our values on our wall. If you come into our office, you'll see them there.

So people see 'em every day. And, um, I, I think that. The last one, I'm, I'm gonna quote a really corny line from a really corny book that everybody needs to read. The One Minute Manager, right? The One Minute Manager is a great management book. It's a fast read and, and you're gonna read it and say, this is a little bit corny, but there's this great concept in there that's talking about catching someone doing something good because so much of what we think we need to do as a manager is catch someone doing something bad, right?

That's, I'm gonna get out here today and on the factory floor and find someone doing something wrong. It's so funny when you incentivize the behavior you want, when you pull someone aside and say, gosh, I saw what you did there, that was awesome. Thank you. What are they gonna wanna do this? I'm gonna do more of that.

Or show the whole team say, Hey, that was great, we need more of this. Um, so I think it, it, it, it, Megan is spot on culture over everything. If you can create a culture that celebrates this, um, it's, it's gonna really change your business and. We, I love what you said. There's that tendency in all of us to wanna be the hero when we own a business, right?

I want to be the smart guy. I want to be the one with the answers. And, and yet we wanna complain about how hard it is. It gets tiring. So at a certain point, stop being the hero and let other people lead and, and you will have a happier business.

In some ways, I measure my success by how much I'm able to, um, almost like, like that, that Simpson moment when he backs into the bushes and disappears.

You know, like, like doing that a little bit to where the company is less dependent day to day for me, and I'm more the one like pointing in the direction strategically. That's where we need to go. Everybody and everyone starts to sort of rewire the way we work collectively to go in that direction.

That's, that's been a, a way that I look at it a little bit. Let me share a couple of my final thoughts on this. I, I too, every quarter we do something called the state of the company. Event. It is a standard part of the EOS management operating system. We use a software, it's called rei, and it, uh, it's online or integrates with our Microsoft teams.

I don't know how, honestly, I would implement a management system without a software that keeps, uh, like, like, like painted lines on the street in some ways. And it's, um, it almost like AU automates the way that the company thinks in some ways or channels, the way that the company thinks. And that, uh, infrastructure of thought management, uh, allows people to see to what extent can they operate in their own domain with flexibility to make their own decisions, to be people who think and not just execute, but within the, their domain in, in that, within that lane.

Where it crosses another lane, then it surfaces up onto what's called an IDS board where it's identified, discuss and solve, uh, as a, you know, as, as a team. But that structural implementation I have found just so valuable and it costs money to have it, like I'm taking five of my most expensive people to the EOS conference this coming Monday for a week where we will all be out of pocket in an expensive conference with hotel costs and travel costs and all that stuff.

And I've done it for five years. But that is an investment. It's not a cost because there's a return on that investment. And this is where I say, doc, don't do $25 an hour work. It's okay for you to do currently $0 an hour work if that is gonna have an ROI of taking your revenue from 1.5 to 2.5 million because you're building systems.

It may produce zero now, but it's like investing in a stock that's going to triple in size over the next. 10 years. That is, that is a good use of, of time. Um, and so these, in these state of the company events we do every quarter we have, uh, three awards. We have a visionary award and a couple other awards where we acknowledge people who have lived our values or acknowledge people who have, uh, used their own thinking to solve problems.

And the more that we promote that and nurture it and allow errors to be made, as long as those errors are sort of not replicated over and over, but we give them space to feel okay to make those errors, it's incredible what can happen. And lastly, here's what happens when there's not a good team that can think for themselves and everything therefore has to sort of flow through the doctor is, um, or I, I should say better.

A, a practice where everyone is. Thinking independently in their lanes and, and you create a well efficient run organization is everyone is paid for the value that they contribute. That's number one. Everyone is paid for the value that they contribute. You don't have people in ops in different lanes where they're being over or underpaid.

Uh, you have everyone being paid for the value that they contribute. The doctor isn't involved in all the drama. Like Janine, my CEO, she filters out 95% of the drama at the company. I only deal with the 5% of the drama that really needs my attention. And the front office is making more decisions on behalf of the doctor.

The, the, the, the treatment coordinator is, uh, or financial coordinator is, is managing more of the financial conversations and, um, problems are solved at the point of origin and those problems are not metastasizing into other lanes and up to the doctor. So the last thing I'll say on that is the most important thing, I may better said.

One of the most important things as the business leader you can do is make sure you have a really well vetted roster of people on your team. If somebody isn't playing their role, you can't let that drag on for a year or two years. If they're not correctable, you need to let them go. I don't care how hard that conversation is.

Let you have to let that person go and then hire interview 20, 30 people if you need to take the time to get that person, because that person who can think for themselves and cares and will buy into your vision, will release you from stress and ta a bunch of small tasks and just make your life so much better in so many areas.

So get that team right. Okay, let's wrap up everyone. Um, any final punctuating points you wanna deliver here before we end?

I think for me, leadership is one of the hardest parts of business ownership because it involves a lot of self-work and self-reflection, and it involves a lot of change. The business leader you need to be in your business today is different than the business leader you need to be in a year or two. And so, um, I think you, you have to approach it with a lot of humility and probably the number one thing to do is to find someone else to hold you accountable, find someone else to share leadership.

And if you have to have all the answers, I think your leadership journey is gonna be a very difficult one.

Megan, drive it home.

Uh, I would say. What you could do Monday morning, pull your two or three most, maybe not senior in tenure, but senior team members who are most aligned with you. Pull them in and talk to them and ask them in your own words, what does excellence and success look like in our practice?

And just listen. Because if they can help define that, you can expand on that. But if they cannot help define that, that's, that's a very clear answer for you that you need to define for yourself and then spread to your team. So I would say that'd be a great starting point. And then don't be afraid of putting someone who is really good at their position and like holding them hostage to that and not accelerating them into an operations position.

It might be easier for you to fill an assistant position than it is for you to fill the operations. If you already know, this assistant is incredibly bought into you, your philosophy and your your business. Why not promote within and then find an assistant? You know, like you don't have to always look for the certain role outside of your practice.

Doctors, make a game plan, blueprint this out, go to your team, start to roll it out. If you roll it out and then it dies in a month or six months, your team is gonna look at you and they're not gonna trust. When you come to them with a new plan, a new vision, they won't, this is something you have to stick by it, like just glue.

You've gotta be honest, hold the line honest, and not hold it and you hold it. And seven times they'll hear your vision before they start to say, oh, I think Doc is actually serious about this. Maybe we should get on board. You got, I, I found that it, honestly, it took about two or three years to really get into traction, as they say in EEO s, to really get everybody on board with the vision and flowing and, and changing the way they do things to align with the broader picture and vision of the firm.

And lastly, I'll say one thing you can do. Reach out to Megan, reach out to Megan. This is what she does, this is what she specializes in, and massive endorsement for her. She was a practice, a client of practice, CFO, one of the most remarkable dental practices we've ever seen. And now she's out trying to help people replicate that success.

Even just an initial, I'm sure it's a free conversation, just to explore what that might look like. Megan, how do they reach out to you?

Uh, visit my website, Shelton solutions.co. And or my Instagram at Shelton Solutions. And we can set up a, a coffee chat and figure out what you're working on and where you wanna go.

Yep. And that's co because I've gone there before. There's another Shelton Solutions that wasn't you and it confused me at first, so.co co to find her. Yep. And, uh, of course, Michael Anderson with wondrous on all those, uh, marketing systems. Nobody better. Thanks team for joining the show. It's been productive.

Until next time.

Thanks, Wes.

Thank you.