If you are even remotely involved in the DSO or Group Practice space, there is a very good chance you were in attendance at the ADSO Summit in Austin. The 2018 Summit set a record for attendance and the buzz around the event was nothing but exciting!
Education and advice from industry veterans was bountiful. What all did we learn?
Here are some valuable pearls…
The entire week, the lush lobby of the JW Marriott was filled with executives from large and small DSOs throughout the country. Attorneys, PEGs, bankers, and many other industry partners were in networking overdrive. There is no doubt that many relationships were formed, and many more deals were made.
Partnering for Growth: a New Membership Level for the Fastest Growing Segment of the Industry
One trend that is sure to continue is that the attendance by emerging doctor-owned DSOs and Groups was up significantly. Chris Vranas and his team at the ADSO recognize this as well and have launched the Partnering for Growth membership level which caters to groups that fit this mold. The Partnering for Growth membership level not only grants access to the grand ADSO Summit, but also provides access to regional summits for emerging groups as well as educational content and webinars aimed directly to emerging groups. TUSK was honored to lead an ADSO-sponsored webinar with PlanetDDS on March 21st on “Exit Strategy & Selling Your DSO” as part of the content offering for this new segment of their membership.
With all of the focus on emerging groups, it is obvious the ADSO is invested in helping them scale the right way in order to minimize risk for both themselves and the industry as a whole.
In addition to the phenomenal networking (and great music…it is Austin after all), there were many panel discussions filled with great content. Below are some of the best takeaways from a few of the discussions I attended:
Leading Change: Supporting and Developing Newly Acquired Practices
This discussion was heavily focused on knowing who you are, what your culture is, and building a repeatable process. If you don’t know to execute in these areas, then you are going to struggle as you go. Steve Bilt stated: “There is no wrong model, just know who you want to be”. At TUSK, we get the opportunity to see many unique models, and agree with this statement. Just because you do it differently, doesn’t mean it’s wrong. You need to understand how your model works for you, then optimize it as best you can.
Both Steve and Ken spent a great deal of time talking about how important culture is, especially during a transition. When acquiring or adding a new de novo location, it’s vital you understand how you are going to instill your culture into that new location. Both Smile Brands and North America Dental Group have spent a lot of time thinking through this process, and they work on installing their culture very early in the transition process.
Pricing of practices was also discussed. Specifically, both Steve and Ken agreed that pricing of practices based on revenues is an antiquated model that does not hold water. As savvy investors they look at the risk associated with generating repeatable cash flow and work to increase their ROI by making synergistic additions to the existing business. The synergistic changes are not layered in to the price they are willing to pay, but they are considered throughout the purchasing decision as they significantly impact the ROI. It is believed that references to practices price vs. revenues will become less and applicable as the industry continues to consolidate. TUSK has been vocal about this antiquated pricing methodology and can’t agree more with the message delivered at the ADSO.
Strategic Growth: $100 Million and Up
- Led By: Doug Brown (Affordable Care), Steve Spellman (Midwest Dental) & Steve Thorne (Pacific Dental
It was clear with this discussion that it is not easy to build a successful DSO. You have to know who you are, what your model is, what your culture is, and then execute day in and day out. Execution cannot be overlooked, and as you grow, you need to have the right team to execute and grow. The most valuable takeaway from this discussion was hearing about the amount of attention each of these iconic DSOs focus on in building and retaining their talent. While the office level and support staff are vital to day-to-day operations, this panel focused most of their attention in this discussion on business executives and doctors.
When it comes to your executive-level business team, the message was “don’t under club” when it comes to your management team. Get the right people for the future and invest in that talent as it will pay dividends as you grow. Finding the right skill set is not always easy – and it’s not all that matters – but you must also make sure they are the right cultural fit. If you find a C-suite executive who has the perfect skill set, but doesn’t fit the culture, chances are that individual isn’t going be successful.
Equally as important is finding and retaining top doctor talent. All of these organizations have developed recruiting arms that are dedicated to finding the doctors that fit their mold. When Pacific Dental and Affordable Care find their ideal doctor, they are not bashful about finding a way to make them an equity partner. Both organizations boasted that they have nearly 0 doctor turnover at the equity partner level. They attribute a lot of their success to these successful partnerships.
At TUSK, we also encourage you to consider allowing your key doctors and executives to earn equity in your business. To learn more, you can read our recent article dedicated to this topic HERE. Our clients who have committed to providing equity to their key doctors and executives have seen great results to date. Maybe this model is right for you or maybe it isn’t, but the key is finding what works, then executing on your plan.
If you would like to talk with TUSK about your strategic plan; how to roll out an earned equity ownership plan; or any other industry-related topics, please contact me karnold@TUSK-Partners.com. TUSK provides industry-leading resources for Group Dental Practices and DSOs. We help our clients START, GROW and SELL their Group Dental Practice or DSO. For more details, visit our website or feel free to download our Overview of Services.
TUSK will be the featured presenter at the “DSO Foundations” seminar hosted by Patterson Dental Supply in Charlotte, NC on June 1&2, 2018 where we will present “Tactics to START, GROW and SELL your Group Practice or DSO.” You can find more information and register HERE. We hope to see you there as well!
To see where else we’ll be in the near future, please check our calendar for a listing of all seminars, conferences and presentations.