How to Build a Leadership Team and Regain your Sanity (Even If Your Practice is Small)

Tired of every decision and every problem running through you? You don't need a bigger team — you need a leadership team.

In this episode, the DPH coaches share why building a leadership team was the single best move they've made as an owner. They break down how to start one even if you only have 4-5 team members, how to delegate without blowing things up, and the one thing you need to do if you want your team to lighten your load.

Topics discussed:

• How leadership teams transform a practice
• The exercise that instantly creates clarity on your team
• Should you share your P&L?
• How to start a leadership team in a small practice
• How to choose the right people for your team
• Training, SOPs, and building trust

This episode was produced by Podcast Boutique https://www.podcastboutique.com

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We help dentists take more time off while making more money through systematization, team empowerment, and creating leadership teams.

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Transcript

The Tuesday Meltdown Moment

Paul Etchison 0:01

There is a moment that every owner hits at one point in their career. It's usually maybe like 10 30 a.m. on a random Tuesday. You're running behind. Somebody didn't show. The front desk is working on it. Hygiene has another opening. Some team members mad about something. Were they crying? I don't know. Someone needs a part ordered, and someone else wants time off. And then you hear, hey doc, do you have a second? And that is the moment that you realize that you built a job and not a business. And today we are going to be talking about the single best move I've ever made to get my sanity back at the practice and make my life amazing like it was supposed to be.

Why A Leadership Team Changes Everything

Paul Etchison 0:43

It's building a leadership team. In most practices, they don't do it. They think it's only for the big offices. Most practices, they don't think they're ready. And man, that is a trap. So today we are going to tell you how to do it, no matter what the size of your practice. And we're going to share what works, what doesn't, and what you should be focusing on. Now you are listening to the Dental Practice Heroes podcast, where we teach you how to create a team-driven practice that self-sustains without you being the bottleneck that allows you an insane amount of freedom so that you can take time off all while making great profit, taking great care of your team and great care of your patients. I'm your host, Dr. Paul Etchison. I'm the author of

Meet The Hosts And Their Practices

Paul Etchison 1:26

two books on dental practice management, a dental coach, and the owner of a large practice in the south suburbs of Chicago that has collected over $6 million a year. Now, if you want to learn more about practice management, how you should do it, and what are the best practices for living an amazing life as a practice owner, you've come to the right podcast. Today I am joined once again by my wonderful DPH coaches, Dr. Henry Ernst and Dr. Steven Markowitz. Now, Dr. Henry and I, we've got large practices, 35 employees. Henry's got 18 ops, I've got 11 ops. Our practices collections are very similar. And then we got Dr. Steve Markowitz. He's got six practices, a huge

Starting Too Late And Why It Hurts

Paul Etchison 2:07

team. So we have lived this leadership team stuff. And I can tell you, each of us knows how powerful it is and wishes that we started it earlier. So we're going to tell you how to make it safe, how to delegate it without blowing up, and how to stop being that person that everything depends on. Let's jump into it. One of the biggest things I've done at my practice was create a leadership team. But the fact of the matter is, is when a lot of people start to put this into their practice, it's slightly painful. It can be a weird transition. It can be a difficult transition passing on responsibilities. And often we see a lot of practices that feel like, you know, I'm just not at that size to have a leadership team. I only got two hygienists. I can't make a lead hygienist. And we're always asked, what do I do? How can I have this someone take on some management responsibilities and share some of this ownership with me when I don't have a big team? So I feel like that is an excellent topic to take apart because I think, yes, you should have a leadership team. I don't care how big your practice is, you should. It's going to be a little bit different, but I think it's worth having. So I'm going to go to you first, Henry. You talk about like what has having a leadership

Early Steps For Tiny Teams

Paul Etchison 3:15

team at your practice done for your practice?

Henry Ernst 3:18

The greatest thing that I've ever done in the practice, right? I've probably mentioned this before on different podcasts, but there was a point in the practice growth because we did startup practice, and within five years, we were at 18 shares and 35 employees, right? Along that way, there was a lot of growth. And sometimes the growth was too fast, right? So there were points in time where I was just like looking at myself, like one of those shows like a bar rescue or the Gordon Ramsey show. Just like, what in the world, right? The greatest thing I ever did was establish a leadership team. Once I established a leadership team, it allowed these team members to give them the baton and say, listen, we trust you. We want you to make your workplace your own. How many places that you work at can say that, right? And that was the biggest thing that took a lot of stuff off of my shoulders and allowed them to make the practice their own, right? Because too many doctors get involved in so many things, they micromanage and it just stresses the heck out of them. It's once I did that, the practice literally took off like a rocket because I was a better leader, I was a better visionary, it allowed me to go to less days. But the biggest hurdle that we have, in my case, is a great one. I did a leadership team too late. I should have done it sooner. The biggest issue that we have is consulting people is, and we've had this conversation for years now. Oh, what's the starting point for a leadership team? Well, when you have about 10 team members. Well, the freaking stress to get to that is going to be so terribly hard. So just recently we came up with some protocols to help people that are in that realm. And we've done this with coaching clients, and it's worked pretty good so far, where you even start with like two people, two people, and you're just picking them not on their clinical skills, you're just picking them just in their personalities with their core values, and you just start the cadence of meetings, and there's lots of different things you can start to do, and there's lots of exercises that we put together. I don't want to go too deep in it, but we've done that for people as low as five team members, and it's worked well because it gets them used to the cadence of meetings and it gets them used to starting to think and getting

Letting Go And Granting Real Autonomy

Henry Ernst 5:20

that trust.

Paul Etchison 5:20

I think one of the best things to do is, and I'll share your sentiment, Henry, is like I did a leadership team too late, and I operated with a leadership team for probably about three years before I even was doing it correctly. And listeners probably like, what do you mean you were doing wrong? I was still taking on way too much. But that's what when you get and think about you're driving forward, you're driving for growth, you're walking around making sure things are getting done, things are going to your standard. Man, how much faster could you grow if you had two, maybe it's we're talking small team, one or two people that were also doing that as well. So my thing was is that I had these leads, but I wasn't giving them the full autonomy. I wasn't giving them the full responsibilities. And man, when I did that, my life changed. Everything changed. And it's my my relationships changed, my my income changed, the practice changed. It was just amazing. Now let's pass it to you, Steve. You've got huge talk about your existing leadership team now. And then I'd love if you could go back and let's talk about the smaller ones.

Building Clarity With A “Who Do I Go To” List

Steve Markowitz 6:23

Yeah, no, I I'd love to start from the beginning because all of us have said the same things. We wish we put a leadership team in place earlier. And I think that's I probably did it when we were 20-something people, I think, maybe even more. And the the reason for that was I wasn't ready to let go. So even if you have a small practice, where it's easy to talk about it from our perspective now, we're we're through it, it's in place. But when I first started to have those meetings or first start sharing information, it's really uncomfortable. When I tell people and clients that I share the PL with my team, they look at me like I have 30 heads because it's so forward. It's the same feeling of when you're starting to truly delegate things that are could be really, really uncomfortable or really secretive, like payroll, like sharing what everyone makes, or having delegating bills payable, or delegating bookkeeping, like these things can be really uncomfortable. And I totally can understand that because for the longest time, I was like, that's gonna make them think this about me, or that's gonna make them think about this about the practice. So I didn't share. I hid a lot more, and it was intentionally out of my own fear. So for me, when I start and come into a practice, and we talked last episode about acquisitions, when I first come into a practice, what I'm really trying to establish with my leadership, with a leadership team is clarity. Clarity of who should I go to for what? So if I have a I need time off question, who do I go to? If I need to order a uniform, who do I go to? If I need to talk to someone about this procedure, who do I go to? So the first thing that we do and within small practices

Sharing The P&L To Build Trust

Steve Markowitz 8:12

is we start with a who do I go to list. And that's a team group exercise. And we we list every single thing that someone could need to go to, someone for someone in a practice, and everyone gets assigned. And it may be that there's 90% of it goes to one person, and then there's 10% of it that goes to three other people, and that's okay. And these are all tasks. We'll see those tasks start to create more influence because I'm gonna go to this person, I need them for PTO, and then they're gonna be able to accomplish that goal for me. And now I'll have influence over other aspects of their of their experience at work. And from there, I also get trust in their ability to do what they say they're gonna do. Now there's trust, and we can actually have that circle of information where we're actually open and talking about things that may be uncomfortable or maybe not for everyone's ears in the practice. And then we can talk about true issues because we're vulnerable enough and there's enough trust there in those meetings to have real conversation.

Paul Etchison 9:17

I think the listeners probably would love to hear what do you share on your profit and loss? Can you go into a little more detail about that?

Steve Markowitz 9:24

Sure. It's condensed, but it has revenue, then it has costs of goods. Hopefully, everyone's PL looks very similar. Not just in dental business, but in every business.

Paul Etchison 9:32

So Yeah, it doesn't.

Steve Markowitz 9:35

I know. I know, but that's why I'm gonna I know that exactly. So revenue should be on the top, then it should have costs of goods sold, which is for us, it's lab supplies and dental materials and um small equipment. And then from there, it should be broken down into expenses. So doctor expense, hygiene expense, assistant expense, business team expense, then facilities, then a marketing line, and then we can have an other line. And then from there, we will get a net profit. And that number should look large to someone who's making $25 an hour.

Paul Etchison 10:08

But are you sharing that profit number?

Profit, Context, And Healthy Margins

Paul Etchison 10:10

Is that that you're sharing that with your team?

Steve Markowitz 10:12

Yes.

Paul Etchison 10:12

Oh, that scares the hell out of me.

Steve Markowitz 10:14

Sure. But what else is in there? Because one thing I I can promise you, Paul, it's smaller than I than they thought it was.

Paul Etchison 10:19

I guarantee you. Yeah, you're right.

Steve Markowitz 10:21

They thought you were doing six million dollars, and they're like, wait a second, we do six million dollars of collections. Why is there only a couple hundred grand? Oh, yeah. By the way, what else comes out of that couple hundred grand? Taxes. What else comes out of that couple hundred grand? Debt payment. So it looks like we just went over one last week. We have one of our practices. At the end of it, there's four hundred seventy-seven thousand dollars. That I promise you, that's not coming to me. But there needs to be our ability to save, and there needs to be profit because I want to explain to everyone that profit actually is a good thing. Because when we're succeeding, then everyone can. What I learned most from my my practice failure was if there isn't profit, everyone loses their jobs. We cannot create the amazing experience if I can't invest in it. And that only comes from the profit. The reason why I share that is so that everyone has an understanding, so that when we're needing to order hand pieces or we think we need to add another team member. Cool. Let's both have an understanding of why we're making that decision. I don't want to just be the bad guy that says no. I want you to have just as much information as as I do if you want it. Not everyone has to look at the PL, but it's there if they want it. I want you to have just as much information as I do because if I'm telling you no, it's not because I want to be an S. This is the information I'm looking at. And these are the boundaries of each one of these categories, and this is how a business works.

Paul Etchison 11:43

I love your intention behind this, but like my thoughts is I'm a Yeah, sure. I think it's okay. I think you should share. I love sharing expenses. I love sharing percentages. I love sharing what they should be benchmark. You know, we should have our payroll under 25% of total collections. But the idea to me of showing somebody, yeah, I mean, you mentioned six million dollar practice. Let's say you got a 15% EBITDA. Yeah. I mean, what's that? 900K? Sure. Cool.

Teaching EBITDA And Thinking Like Owners

Paul Etchison 12:10

You know, so like somebody, hey, we're so busy at the front desk, like, we need to hire another person. And then you're gonna look and say, well, that's gonna cost about 60k a year, and I'm making 900k. I I don't I can't go down to 840. I can't afford.

Steve Markowitz 12:24

I am so passionate about this, Paul, and I'm gonna share this. So a couple years ago, I interviewed uh office manager from a a large DSL. And in the interview, she shared with me that it she got written up because her EBITDA of her practice was not at 25%. I share this story when I share the PL. And what I say is I don't even set our goals at 25%. I don't even want to be play that game. There are three stakeholders in every business: there's customers, there's owners, and there's employees. Everything is a give and take. There needs to be profit. Everyone can understand that a business needs to be profitable, but it doesn't need to be profitable where only the owners win. That's not fair. It doesn't need to be so little profit that only the customers or the employees win. That's not fair. So I think when you're looking at a PL, you have to give it context. 900 grand on a six million dollar practice is only 15%. I think that's okay. That's not great. The business is creating six million dollars worth of value, and that means that 85% is going to the employees and the customers. That's a really good ratio, I think. You can be open with that. I'm comfortable with it. But at the same time, that took me years and years to get to. For most of my career, I was would hide behind it and say, I don't want anyone knowing what I make. And I totally get that. But I also know that this is how businesses run. Most businesses will show everyone their PLs. Most businesses, you can actually big businesses, you can Google what the CEO makes and it's out there. My experience, it's always gonna be less.

Paul Etchison 14:05

I think if you own it, that's what it is. It's like if you can own it and you can

From Reactive To Proactive Operations

Paul Etchison 14:10

own this is what I take home, this is what I deserve, and there's nothing wrong with this. And look at the people we're helping. It's on that framing. Like, Henry, like, pipe up here, buddy. What are your thoughts on this? Settle this. Settle this for us.

Henry Ernst 14:22

All right, I'm gonna agree with Steve here. So we we share our EBITDA too with the team, and that's a metric that's in our KPIs that we report. I'm really proud that if somebody comes into our practice and asks one of our team members, what does EBITDA mean? They know exactly what EBITDA is. Right? How many team members in practices across the country could you walk into and say, what does EBITDA mean? Most people, what the hell is that? I don't know what that is, right? So I feel like it's allows our team members and our leadership team members to think like owners. We can look at the PL and they'll say, oh man, why is our dental supply cost this much? It shouldn't be this much. It's supposed to be this much, right? And it also gives you validation. Like, listen, our staff costs are 29%. But you know what, guys? I'm happy with that because it's a little higher than the standard, but I'm happy to pay my team the higher amount. I'm happy to provide that. So it also provides validation and just kind of getting on the same horse about why is this so important in your practice? It allows your practice to be, you know, instead of being reactive, most dentists across the country have their businesses in a reactive mode. They're in the practice and all of a sudden they get a knock on their door. Doctor, I got a problem. I got to talk to you. And there's a problem with a patient, and there was maybe an issue with the collections process. Or maybe there's an issue with clinical stuff, and they're always, always, always dealing with reaction, reaction, reaction. When you have a leadership team and you're meeting on a frequent basis, you're becoming proactive. You're finding problems and issues before they turn into a stressful situation, right? And the other thing that happens is the dental practice, the leadership team understands that they're in a safe space. And this is what happens in the beginning of this process. They understand that it's safe. It's understandable that you can shit on the practice. We're honest, you can tell us our problems. How many practices the team members know that there's this problem, this problem, this problem, this problem, but they don't ever say anything about it. They just suck it up, go about their day, clock in, clock out, nothing ever happens, right?

Safe Space And Small Wins

Henry Ernst 16:25

Till something hits the fan, and then now their reaction to it. The leadership team understands this is my practice. I work here, I can make it my own. And it's amazing once you pass the baton to them and get out of the way. Very important, you mentioned this, Steve. Get the heck out of the way. It's amazing the things that they accomplish and they take care of problems that you didn't even know were problems. Like when we first started doing a leadership team, apparently it was a problem with the team members that people would get upset. Why am I always the one who does the suction traps every day? Why am I the one who's responsible for the bathroom? Well, they found a solution and they came up with something called popsicle sticks. So I was walking by the practice about a month into the leadership team establishment, and I saw this thing on the wall that said, number one, bathroom, number two, blah, blah, blah. And apparently they came up with their own system where at the beginning of the day, they just grab these popsicle sticks and you just pick them. And I said to myself, shit, that's a great idea. I had nothing to do with it. The leadership team did it. So these are things that can help you. So I'm totally upfront and honest. They see what the practice does, they know what the word IBITA means, but they're also allowing the business to be very proactive, which is super important.

Paul Etchison 17:36

So I want to reel this one back in, but before, because we we got to talk about what to do when leadership teams are small. I don't think we've really got to the focus of our episode. But quickly, quickly, Steve, yes, and Henry, just quickly, you're telling me your team knows what you make each year. Probably not, because I don't think they they know the profit of the practice. They know the profit of the practice.

Henry Ernst 17:59

Yes.

Paul Etchison 18:00

That's insane.

Steve Markowitz 18:01

They also should know That's crazy.

Henry Ernst 18:03

That's so crazy. Paul, do you know what they're doing? They're actually trying to figure it out themselves with what you do provide them. And it's actually doing you a disservice because if your practice does six million dollars, they may think that you're taking home a lot more.

Paul Etchison 18:16

Yeah, they probably think I'm making three.

Henry Ernst 18:18

They may think you're taking home a lot more.

Paul Etchison 18:19

So

Framework For A Three-Person Core

Paul Etchison 18:20

you're doing yourself a disservice, actually. Yeah, you're right.

Steve Markowitz 18:22

Paul, before we started doing this, some of the team would go out for dinner and I would get a call and they're like, we're talking about how much you make. Is it five million dollars? That's how much we think it is. And I'm like, no, it's not. It's not 10. But if you set the standard of what healthy is and tell, like, educate, educate your team. What is a healthy practice? They don't know. So if you tell them that a healthy practice is doing, you know, 20% margin, and our goal is 18, they're gonna be happy for you when we hit an 18. But if you don't know, they're gonna set the expectation for themselves. It's and now they think it's 40, but you were at eight, then there's a discrepancy there. So just be honest with what the goal is, and I think that will create clarity for them too, and not think that you're a greedy jerk.

Henry Ernst 19:13

I still don't think I could share it. We're not gonna get clarity on this. Let me reel it back in here.

Paul Etchison 19:17

No, I don't think so. So, what do we do with a small team? We got a small team, we want helpers. Go ahead, Henry.

Henry Ernst 19:23

Like, how do we start? Let's say you have four to five team members, right? Small practice. And gosh, I hear this stuff, I think it's gonna be valuable to me, but I'm just too small to have a every lead, right? Establish, find two people. Let's call them two. So it's a nice group of three, you and two other team members. Just go by their core values. Are they good people? Are they consistent? Do they seem like they've got the greater, you know, the greater good of the practice involved there? And just invite them. You're gonna invite them. I want to start meeting on a regular basis so we can really make this practice, you know, our own and make it as good as possible. And call them advisors. You're gonna set up a meeting, maybe with the three of you guys, set some time aside, and during this meeting, you're gonna talk about what you want to accomplish. You want them to make the practice their own. You want them to

SOPs, Social Director, And Cadence

Henry Ernst 20:10

be honest. Let's talk about all the problems that we have in the practice. You're gonna come up with these, and I don't want to get too deep into it, but you're gonna come up with these little exercises that we have that can create core values if you don't have them. Like if we had the perfect employee, what would they look like? If we had the worst employee, what would they look like? And we even have action words that you can circle. So there's lots of exercises to come up with core values, to come up with a mission statement. So at least you have these, and it the nice thing you can always say, even 10 years later, is the team came up with these. And then you're gonna just make a normal cadence of meeting once every week, once every two weeks. And you're gonna get at least get them used to providing you some numbers. I want you to give me these numbers every week. How many new patients did we see? What's our production and stuff like that? At least it gets them to start thinking like that. And during that meeting, they're gonna write down, you're gonna write down all the problems, all the issues that are there, and then try to come up with the solutions and let them be the one who come up with potential solutions and run with them. The typical things that we'll usually find every single person in this situation, one of the standard things that they'll all do is they'll start the process of trying to create some standard operating procedures, documented, whether that's videos, which we like the most, or written. So this way, at least slowly but surely, we can get those together, even if they do one per week. And the other thing is we like to create a social director. A social director is somebody who starts the process of putting fun videos online and, or more importantly, coming up with like a quarterly get together as small as it can be. And slowly but surely that can develop, we call your skeleton EOS model, a skeleton model. And slowly but surely that can morph into adding more team members, creating actual team leads, and creating what Steve said an accountability chart that tells you where. Where do I go no matter what happens? But we found that this works and it works on a small scale. And

Coaching, Month-To-Month, And Next Steps

Henry Ernst 22:05

we can really get more detail into this, but that's the framework of what you should do if you're a smaller practice owner wanting to start this and not waiting too long like Paul and I did. Yeah, I think one of the things is this is a test.

Paul Etchison 22:16

This is for you to build trust. You're asking your team members to take on more responsibility and you're asking them to act without asking you. And so they're going to do things, and you got to be very careful with how you treat those things if they go a little bit awry. Like if you've got to make it safe. They just start doing things and you praise that. And you say that's what I want. I mean, Henry, you're mentioning the whole what do we like in a good employee? What's a bad employee? I mean, just defining that. Good employee for you. I mean, you blondes, brunettes. What are you into, Henry? I'm a brunette guy, but we all right.

Henry Ernst 23:03

That doesn't go in the core values, though. That's all about Oh, that's not in the core. Oh, okay. Productive, enthusiastic, trustworthy are our core values. But it's really important for them to understand that it's a safe space. And in the beginning, I like to preface a couple things I'll tell them. Maybe in the beginning, they're not coming out quickly with solutions to problems. And you know they have the ideas in their head, but they're just not wanting to say them. What you always have to say is listen, let's try something. What happens when we try something is what's the worst thing? We try something and it didn't work. It wasn't a failure. We learned something. And it's okay if we try stuff that you guys think we should try and it doesn't work. It's 100% okay. We're better off than we were before without doing anything. So I think that's really important to frame that that it's okay to try something. I love that attitude.

Paul Etchison 23:50

Steve, final thoughts. Small leadership team, what size of practice? Let's just put it on that and then and take us into the into the sunset here.

Steve Markowitz 23:58

Yeah, I don't think there's necessarily a size of practice. What I do know at any size practice, dentistry can be lonely. So when you have someone that you can confide in and you can trust and you can share ideas and help you execute them, you're gonna feel better about going to work. So I love what you and Henry were both saying about finding ways to identify who those people are, bring them into the fold, give them information. With information, they'll feel empowered to be able to be an even better extension of you.

Paul Etchison 24:30

All right. If you listened and you said, that sounds great, but I'm too small. Remember the points of the episode. Did you even listen? A leadership team, it's not a title, it's a mechanism to get that weight off your shoulders and get the practice running without you being that bottleneck, without you being the thing that everything relies on. So start with two people. Pick them for their character, not their clinical skill, and create the meeting cadence. It's so much of it is about communication, making it a safe space for people to talk

Key Takeaways And Closing

Paul Etchison 25:00

about things and give those people some real responsibility. Let them try things, let them learn, let them build the trust with you. And that is how the leadership team eventually becomes life-changing. So if you're listening to this episode and you're like, man, I want help building something like this in my practice, reach out to us about coaching. It's all month to month. There is so little risk. We're not forcing you to sign a year contract. It is month to month coaching. So if you don't feel like you're getting value out of it, you can stop anytime. But I'll tell you, most of our clients will stick with us for about 15 months on average. And that's month to month. So I think that says something about the coaching that we provide. So if you're thinking about that and you want some help with your practice, please reach out to us at dental practiceheros.comslash strategy. And one last thing, if you got some value from the podcast, give it that five star review. Please do it. Please, I keep asking you. I want you to do it. I want to see those five star reviews. I want this podcast to find more dental practice owners, and that is the easiest way to do it, as well as the easiest way for you to support what you listen to here. So thank you so much for listening and spending some time with me today. I really appreciate it. We will talk to you next time.