The Private Practice Success Podcast

25. 5 Mistakes to Avoid when Hiring a Principal Clinician

• Gerda Muller • Episode 25

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In Episode 25 of the Private Practice Success Podcast, Gerda dives into a pivotal topic for advanced practice owners - hiring your first Principal Clinician. 

Drawing from her many years of experience and lessons learned through trial and error, Gerda shares the 5 most common mistakes practice owners make when hiring for this critical leadership role.

In this Episode, you will learn (among others):

  • The critical mindset shift needed before hiring your Principal Clinician.
  • The top 5 reasons why this hire often goes wrong to the detriment of both the incumbent and the business owner. 
  • Why paying the right salary package matters, so you can avoid the pay day dilemma.
  • Strategies to ensure a strong, long-term working relationship with your Principal Clinician.

Who This Episode Is For:

  • Level 4 and 5 private practice owners ready to step out of the COO role and into the CEO or Founder role.
  • Practice owners preparing to create a Self-Running Practice.
  • Anyone curious about building a sustainable, thriving practice.

Gerda provides actionable insights and practical advice to help you set your Principal Clinician up for success, while creating the freedom you’ve worked so hard to achieve. Tune in now and learn how to avoid costly mistakes and pave the way for your very own thriving Self-Running Practice.

Connect with Private Practice Success & Gerda here:

Well hello there, spectacular private practice owner. My name is Gerda Muller and you are listening to the Private Practice Success Podcast, and this is episode number 25.

Today we are going to be talking about a really exciting topic, and that is hiring your principal clinician. But I'm going to specifically focus on five mistakes that I really want to encourage you to avoid when you hire your principal clinician. If you are a psychologist like me, that will be a principal psychologist. 

I am going to be honest with you, there's probably a lot more mistakes that you need to avoid. But having now employed a number of my own principal psychologists, and having worked with quite a lot of practice owners - these are the five big ones. The five big mistakes that I see people making, and I see this over and over again. So I know these are probably the top five most common mistakes that I see practice owners make, when they hire a principal clinician.

As per usual, I have had to learn these lessons myself as well, and I always say what I've learned, (the majority of what I've learned) has been through blood, sweat, and tears. When it comes to hiring my very own principal psychologist, I hired my very first one back in 2012. So at the time of recording this episode, it is 2025, so that was about 13 years ago now. And since then I've had five principals working across my two practices. For a bit of background information -  my two locations have always operated as two very independent and separate legal entities, so I've had principals working across those two locations - five in total. 

Two of those five didn't last. So that was me making a lot of these mistakes that I'm going to share with you today. I've experienced the mistakes as well as the remedies to these mistakes firsthand. Three of those were absolutely amazing. And I've had my most recent principal psychologist now for quite a number of years. So I think I've got this down pat. Well, don't get too confident, Gerda! But so far so good. Of course I want to share with you what these mistakes are so that you, my spectacular practice owner, can avoid these mistakes yourself. Because I'm telling you at this level, when you get to hiring a principal, these mistakes are very, very costly. Not only in financial terms, but also in terms of your time - and even greater - your emotional energy when it comes to this specific role. 

I'm very mindful that I'm probably talking to my level four, level five practice owners. Because honestly unless there are extenuating circumstances, I have found -  as a general rule - you wouldn't be hiring a principal clinician unless you are at those stages.  Again, there might be individual circumstances that might mean that very early on you want to hire a principal psych. I am all for doing what's right for you and your business at the time that this is right for you and your business, but as a general rule, you probably have a level five practice. 

This is what I like to call the Ultimate Private Practice, if you've read my book. You probably have eight, ten, or way more clinicians at this point in time. You are at least generating seven figures, that is more than a million dollars every year as part of your annual revenue. So that's the level that you've reached. By the time you get to level five, you're probably having those thoughts of, ‘Hmm, maybe the time is right to hire that very first principal, psychologist’, or principal clinician -  if you have a different type of allied health discipline.

So if that is you, I do recommend you keep listening. If you are not at level five, I would actually still recommend you keep listening because knowing what I'm going to share with you now, is going to stand you in good stead as you lead up to getting to level five. 

So let's dive in. What are these five mistakes?

Mistake #1: Hiring for the Wrong Reasons

The first one, I think, is the biggest one and the most important one. If you take nothing else from today's episode, but this - this is the one.  And that is hiring a principal clinician for the wrong reasons.  What do you mean Gerda? For the wrong reasons. My reasons are good? I need this person? Let's dig into this. 

Nine out of ten people that I have spoken to, heard from, consulted with, hired - especially their very first principal psychologist - because they themselves no longer wanted to deal with the challenges that comes with running a business. Does that sound familiar? 

If you felt like that - you are probably just human, okay - let me just say that as well. But a lot of times practice owners are hiring a principal because it's like -  ‘I do not want to do this myself anymore. I need someone else to come in and deal with these bloody fires. I need someone else to come in and have these hard conversations. I need someone else to come in and keep the diaries full. I need someone else to come in and just solve all these problems for me because I have had enough, I can't do this anymore.’ 

So really, what this practice owner is wanting is somebody to rescue them from their own business - and that is the worst reason to be hiring a principal clinician. I mean, I get it - but it's a recipe for disaster. I’m just going to say that, because it is. Hiring for the wrong reasons, (your motive behind making this hire) when it is for these reasons I've just shared - you will not be setting this person up for success. We are going to dive into that in the second big mistake that I see people making.

So I really want you to reflect on it. If I've been thinking about hiring a principal clinician, is it because I'm just over it? Is it because I'm just over all these challenges, all these decisions that I need to make as the business owner, and all I want is to take myself out of this, this role and pop somebody else in there and say, “Okay, now you can deal with it” - so I can maybe see more clients (if you love clinical work). Or maybe I can just focus on an online course that I've wanted to put together for so long. Or maybe then I can focus on a new location or whatever the reason is - the justification that you're giving yourself for stepping out - that is not a good reason. 

Instead of hiring somebody to rescue you from your own business, you want to make sure that you get to a place where you can actually hire a principal clinician because the time is right. Because the time is right for you as the business owner to step out of that role of being the person that's running the show. To step out of being Chief Operating Officer and step even more into being Chief Executive Officer - because you actually are now ready to start creating a Self-Running Practice. Let's think of this when you are a level five ultimate private practice. Nine out of ten times, you are still the chief operating officer, so the person in charge of all the business operations. When you then get that principal clinician, you generally step into that chief executive officer role - so you are still overseeing what is happening, all of that type of stuff. 

But then there's that next level where you step out even beyond that, where generally your principal clinician can then even step into that CEO role within your business. And yes, I'm using these big terms, but as a small business, we also have those roles and responsibilities. It's going to look different to what a COO or CEO role looks like at Westpac or CommBank, or a big corporate organisation. But I'm talking about those terms within the context of a small to medium business industry - a lot of you guys are actually way bigger than you think, but there's still certain roles that you need to fulfill - no matter how big or small your business is.

And then when you want to create that Self-Running Practice, a practice that can run in your absence like mine does - I live seven hours drive away from my practice locations. I'll tell you a dirty little secret, I do not even have keys to my two locations. If I had to drive down to Brisbane today, I would not be able to let myself in through the front door. Now that might horrify you like - Gerda, that's really irresponsible. As a business owner, you know, I couldn't care less. Why do I want to get in there? There's nothing that I need in the business. That's how I have set it up, right? But that is a true self-running business, a Self-Running Practice. So if you want to get to that and you want to step out of even the CEO role into more the founder role - that you are the person that started it - but that business is no longer reliant on you, you need to do things for the right reasons. 

That is not somebody that runs away from dealing with business challenges. And please, again, that sounded really bad when I said that. I'm not saying you are running away. I can tell you I've had times of wanting to run away, and you are allowed to feel like that. You are allowed to think that I want to run away. I want somebody to come in and rescue me. That's okay. The one thing you shouldn't do is act on that. You shouldn't act on the running away. And I'm not saying keep doing the same old shit. That's not working. We all know that that's the definition of insanity. Don't do that either. If that is you, get help, contact me, reach out. By now, you should know how to get hold of me. 

But don't act on the running away because that just shoots yourself in the foot, and I have seen the devastation that happens when practice owners have put their heart and soul into their business - they build it up to a level four and five, and then at that level, the house of cards starts to crumble. That's the worst situation to be in, so let's not allow that to happen. 

So to recap, mistake number one that you want to avoid is to hire a principal clinician for the wrong reason. And the wrong reason is generally when you want them to come and rescue your business so that you do not have to deal with those challenges. And instead, you want to hire your principal psychologist or clinician, when you are ready to step out and to step away and allow that person to come in, in a very supportive manner, to take over that role of Chief Operating Officer or maybe even later, Chief Executive Officer within your business.

Mistake #2: Throwing Your New Hire into the Deep End

The second mistake that I see people make when they are hiring a principal clinician is that they hire the person - the person comes in, they have their first day, first week, first month - and they become completely overwhelmed. I'm going to put the blame solely on my shoulders here. I've done that. And I'm also going to put that blame solely on your shoulders, because I've seen practice owners do this. We overwhelm our principal clinician. We are not doing that consciously. It's not like you're planning to do this. It just happens.

Why? Probably because of mistake number one. See if you did hire them for the wrong reasons because you were so sick and tired of having to deal with all these business challenges and you just want this person to come in and rescue you from your own business -  it's like, ‘Ahhh, they're here. I can just hand over these things to that person.’

This overwhelm doesn't happen in a day or a week. This can happen and normally happens within the first two to three months. You might think three months is a long time. Actually, it's not. Three months is not a long time in business. When you are onboarding somebody in such a key position, you cannot rush this. If you are going to overwhelm that person, they will leave. It's happened to me. 

It's happened to lots of other people because you know what happens, and I'm going to specifically talk psychology here, because that's my business and the majority of practice owners I work with are psychology business owners. They hire amazing clinicians into these roles, but also clinicians that maybe have felt like they were close to burnout when it comes to doing clinical work - it's like, okay, they're ready for diversity, they believe that they can do this role. Then when we put them in a role that they don't have training for, that they've never done before - because a lot of principal clinicians have never managed a team before - what do you think is going to happen? They are going to be overwhelmed. They are going to go - I don't know what the hell I'm doing. I need to get bloody well out because I'm feeling even more like an imposter than what I did when I was a brand-new little baby psychologist. They're not going to want to stay. So you will be shooting yourself in the foot, okay. 

I get it. It is such a relief when you get somebody on board and you know that this person is going to change your life because they are going to be able to - eventually, take so much responsibility and tasks off your shoulders - don't get me wrong, that happens, that's why you are hiring this person. But you need to slow things down. You need to slow it down. You really need to be clear as to - what is the timeline that we are working towards?  Which means that you need to be clear of what your onboarding is going to look like.

I'm not saying I have like a whole 12 months’ worth of stuff planned out. But you need to go -  what does this person need to know by the end of this week, or by the end of next week. And it's not everything. They cannot learn everything in a week or even in a month. It’s slowly but surely handing over the reins.

If you think about this big pie of tasks and responsibilities that's on that job description, I don't give them everything at once. I go, “Okay, let's take this one little slice. I'm going to teach you how to look after this one little slice of your job description. Once we know both of us agree that you've got this little slice, then we're going to do the second little slice, and then we're going to add the other little slice, and the next piece, and the next piece, and the next piece.”

In time, that person will learn the job, the responsibilities, and the tasks. If you do this right, they will enjoy it - because they will have that sense of achievement, learning, and growing - but also of,  ‘I can do this!’ which will make them stick around.

Mistake #3: The Hidden Cost of Unclear Role Expectations

The third mistake I see people make is linked to mistake number two, and it's interesting that each mistake is linked to the previous one. And that is having unclear expectations for this role. That is when you don't know what your expectations are of this role, and when the incoming principal clinician doesn't know what your expectations are.

When people don't know what their expectations are, they will underperform generally. Some people that are really high functioning might still overperform because they don’t know what I need to do, so I'll just do everything I can. But guess what? That's a recipe for burnout. So you don't want that. This all comes down to achieving that balance, that harmony. So you need to be clear. 

What are my expectations of this person when they're coming in? This is where you need to know what your motives are.  How do they fit in this organisational structure? What is their ultimate purpose of being and sitting here on this org structure, what is that? Based on that - what are the outcomes that you want from this role? You need to be able to have this big picture conversation first and foremost before you dive into the details. 

I find that practice owners often get stuck in the details. I mean, the details are pretty important, but I think it's how our brain works, we are very detail oriented because we are helpers first and foremost, that is how you are trained. We are trained to see the details, but this is where you need to go - okay, details, we're going to get to that in the next part - but first, what is the big picture stuff?  Because this is a big picture role. You need to be able to sit down with that person and have a conversation - and this is not giving them their job description and their KPIs - this is about having a conversation with them, for them to know where they fit. 

What is their purpose? What is their role? How does that link with you as the business owner? What's going to be your role ongoingly? How do all these cogs fit together in order to serve the business - which really means to serve the entire team, whether that's clinicians or admin, but also the entire client population. Because those two roles - that's you and the principal clinician - are incredibly important, because this principal clinician's now going to become the main leader within your business. 

So setting clear expectations for that role at that big picture level is incredibly important.

Mistake #4: Setting Unrealistic KPIs 

Link this then is mistake number four. This is when we now go, okay, now that we know what this big picture expectations are, what are the details? So mistake number four is when we set unrealistic key performance indicators for this role. 

A lot of people come to me and say, “What should the KPIs be for a principal clinician?” And some people have got no freaking idea. It's like, “I'm a blank slate. I don't even know where to start Gerda.” And other people, again, on the whole other end of the continuum, have got like 10 pages of things that this person needs to do. And it's like neither of those two options are going to work. You need to have very realistic KPIs for this person.

And of course, the KPIs need to be clear -  just like your big picture. Your detailed KPIs need to be clear, but also realistic. What I also see practice owners often do is they go - Alright I've hired this person - and remember, you're not doing this unconsciously - I've hired this person because I'm thinking I can't do this. I've sucked at doing this because I'm stressed out. I'm burned out. Things aren't going the way that I want. So I'm going to get this other person in to do the job for me, and now I'm going to expect them to do even better than I did. I am going to expect them to double the billables. I am going to expect them to have these amazing team retention rates.  

It has been really opening to me to see some of the expectations that practice owners have of their principles. And I mean, I'm all for having good expectations and like very high level KPIs. I love a culture of excellence. I love smashing records and having a month and then the next month and the next month where we improve our client numbers, our revenue, our profit, all of the numbers. I love that.  But the mistakes people make are unrealistic. Especially in those initial six months of expecting somebody to step into a role like this and to hit unrealistic expectations - because you will feel like that person is failing at their job - and they will feel like they are failing at their job. 

So it's about going - What were the KPIs that I had for myself as a business owner? Because unless you've been able to meet those KPIs, how can you expect somebody else that’s never worked potentially in your business - if you're hiring externally - to come in and smash those as well. And let's say if it is somebody that's been in your business - they've not run the business before - so there's going to be some time for them to find their feet at that level. So I'm not saying lower the KPIs or the expectations for that matter, i'm saying have it where it was always.  Make sure this person settles in and then go, “Okay, this is the benchmark of where we are.” Now that I am stepping out and maybe, depending on what's happening in your business - you might still have an involvement.  If you are still involved in the business, you are going to contribute to some of those improved KPIs.  But you now have this additional person that can step in and has renewed energy and more time. 

So basically, the workload is now shared potentially between you and that person, depending on what it is that you're going to be doing. It's then about going - based on this new setup and what this org structure now looks like within my business, what should be the next goal for us in terms of KPIs and then setting those together and being realistic. I find that especially psychologists, you guys are such overachievers and you are such high performers and you know this, you are constantly moving the goalposts - which is fine, I do that myself. I do that with my own practices. I do that with Private Practice Success Australia and the work I do here because I want to help as many practice owners as possible.

But it's also about going, let’s move the goalposts - but let's not move it a hundred meters every time. Maybe let's move it by 50 meters and then get there, and then move it by another 50 meters. Because slow and steady progress wins the race each and every time.  Building a business is not a sprint - it is a marathon. So yes, keep on moving the goalposts, but be mindful of the distance. Be mindful of what is that goal that you're setting for yourself so that it can be realistic. 

So coming back, we don't want unrealistic KPIs. We want realistic KPIs. KPIs that motivate - that inspires. That's what you want.

Mistake #5: Pay Package Dilemma

Last but not least, is the fifth mistake I see people make. I was really struggling with what are the words that I used to describe this one? I'll just blame it on the fact that English is my second language. So, please bear with me how I'm going to describe this, and that is when you pay your principal clinician too much, so the pay package is too high. 

Let me clarify, 100% your principal clinician should be the highest paid person on your team other than yourself. Okay, let's get that clear. But you know what tends to happen here, and this is linked to number 4, 3, 2, and 1 that I've just discussed with you. All those previous four mistakes lead to people feeling like they're paying their principal clinician too much money.  I'm not saying you are paying them too much. 

What happens is that maybe you give them a really amazing package, but then you've not set realistic KPIs. You've not set clear expectations. You have overwhelmed them during the onboarding. You have hired for the wrong reasons - which means that they are not going to be performing in the way that you expect. And then what happens? Resentment starts to creep in okay, because you are just human. You want to return on your investment, right? I'm a business owner. We can be honest about this stuff. If you are going to pay somebody like top dollar, you want to have a return on investment. 

And when you've made the previous four mistakes, you are not going to have your return on investment. And when we don't have a return on investment, we start to get resentful. And return on investment is generally measured in money when your investment is financial, right. And return on investment is measured either by having a return, a financial return, so you make more money as a result of this investment or you save money - and people often forget about this part - you often save money as a result of this investment. And people forget about that second one when they assess return on investment.

But this is what happens, because if you - every two weeks when you're doing your wages, or whenever you do yours - are paying somebody thousands of dollars potentially every fortnight, (because that's what they deserve to get paid to do this job, to take on these responsibilities) but they're not performing like you want them to - because you've made the previous four mistakes - you are not going to be happy with them. Then you're going to be back at needing to have an uncomfortable conversation. One of those reasons why you hired them in the first place, because ultimately it's still your job as the business owner to manage the principal clinician. 

We all have a boss. Maybe as the business owner you don't, but you should. That's why I like having a business coach. It's like I just imagine that they're the boss and they're telling me what I need to do and I'm accountable to them because otherwise, I can just do whatever the heck I want - and accountability is amazing. It's so good. So I really want you to think about this. 

You Don’t Need It All Figured Out

I'm feeling very aware that this has been a bit of a harsh conversation today with like - these are all the things you're doing wrong practice owner. Please don't take it in that vein because that is not how it was intended. This is me really trying to warn you. To warn you of mistakes that I've made, and warn you of mistakes that other people have made. To really encourage you to go into the hiring of your principal clinician with your eyes wide open with big expectations, but also with patience. 

I would actually encourage you to just take some pressure off your shoulders. When you are hiring for a role like this, there can be a lot of pressure to get this person set up, to get things handed over, to get everything working perfectly fine - and I think sometimes that comes back to bite us as well. And I'm a very organised person, but I'm also very flexible. The one thing that you'll always hear me talking about is finding that balance of two concepts that could seem very different, right? Consistency and flexibility, for example. 

So yes, you want to be organised. You want to have all your ducks in a row. But you can also take things one day at a time.  You do not need the next two years planned out. It's just about taking things one step at a time, one day at a time. So take off the pressure of needing to onboard your first principal clinician perfectly. Because guess what? It isn’t going to be perfect.

I do hope that this conversation has not put you off from hiring your very first principal psychologist. Take it from me - I highly recommend having one. I've had one since 2012 and it has been amazing.  It is incredibly satisfying having somebody that you know is there on the ground looking after your business. Yes, I've got a Self-Running Practice. My business is located seven hours from where I live. But you know what? I still mentor and support my principal. I meet with them once a week for 45 minutes.

Final Words

So for clarity, I highly recommend hiring a principal psychologist - but doing it for the right reasons. Making sure that you don't overwhelm them once they get started, because you want to play the long game with this role - setting clear expectations and having realistic KPIs. When you do that, both you and that person will feel valued, and will feel like this is a mutually beneficial working relationship. The things that you will be able to achieve together as a result of setting this up right - right from the start - is just amazing.

Take it from me, hiring a principal psychologist is the pathway to freedom as the business owner. Been there, done that. I have that every day. Right now, I have that. But that pathway doesn't get completed in three or six months. You need to be willing to play the long game. You need to be willing to hold their hand appropriately. You need to be willing to teach them, to mentor them, to coach them. 

We find a lot of practice owners that come and join the Private Practice Success Academy. They bring their principal clinician and practice manager with them, because the Academy is a business enrolment. It's not just for one person, the practice owner, it's for the practice.  They train them in performance conversations, how to do supervision, how to lead,  leading with emotional intelligence - all of the things are covered in there. So it's your job to make sure that your people are trained appropriately to do the job that they are being employed to do. And that takes time, but it is so very worth it.  

Alright, we are going to leave it at that for today.  Thank you so very much for joining me. And as always, remember that I am here to help you build a practice you can't stop smiling about. And for a lot of you, that is going to be a Self-Running Practice as a result of hiring that fabulous principal clinician 😊

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Gerda Muller

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