EPISODE 410: The Great Game of Business
Hey, chiropractors. We're ready for another Modern Chiropractic Marketing Show with Dr. Kevin Christie, where we discuss the latest in marketing strategies, contact marketing, direct response marketing, and business development with some of the leading experts in the industry.
[00:00:00] Welcome to another episode. Excited to have John Williams join us today, and he is Uh, certified coach from the great game of business and a little bit of background on that. There's a, you'll hear it during the episode, but give you some context. There's a book called the great game of business by Jack stack.
And it's been instrumental in some of the mentors I've had and people we've had come speak to our mastermind group and, uh, webinars we've done. And it's, uh, it's just a phenomenal way to have your business run and there's certain principles to it. And we dive into the framework, um, today, and I'm excited to have John.
He's going to be kind of our headliner in New Orleans at the end of the year. What we've done with our mastermind group is, uh, we have an East group and we have a West group. We meet three weekends a year for the East only, and then three weekends a year for the West only. And then we combine the two groups for a fourth meeting.
So there's seven meetings total, it used to be eight and four and four. So now we do a three and [00:01:00] three and then we meet together. Uh, at the end of October and this year in 2025 will be in New Orleans and 2026 will be in Dallas. Um, but we're we're all squared away this year for the mastermind, but it put it in your calendar for 2026 i'll be promoting that in the summer But john will be joining us in new orleans And diving into the details of great game of business and how that works to really get your team Enrolled in the idea of growing the business and making a game out of it and uh, he dies dives into that today It's a phenomenal framework.
It's, uh, he, he's very knowledgeable in different businesses. He's got quite a background with dentists, which is very applicable to the chiropractic profession. You're going to get a lot out of today and some of the wisdom that John has. So, uh, without further ado, here is my interview with John Williams.
Dr. Kevin Christie: All right, excited to have John Williams on the podcast today. We're going to dive into the great game of business and, [00:02:00] and that, uh, that body of work. But before we do, John, tell us a little bit about yourself professionally. Uh, sure. Thank you, Kevin. Uh, my name is John Williams. I am a certified great game of business coach, which we'll talk about here in a few minutes.
John Williams: Uh, but, uh, my background, I have around 35 years of manufacturing and distribution experience. Uh, I, um, I started off as a frontline employee working in maintenance, uh, years ago and slowly got into leadership and then in January of 2006, uh, I, uh, was reading the newspaper as most people did back then, which they don't do very much now, not anymore, but just reading through the classifieds, uh, You know, I was currently working for an aerospace company in Tulsa, Oklahoma, and I seen this little block ad that said, wanted leadership, fast growing [00:03:00] company, and normally you don't pay attention to those type of ads if they don't give it too much information, but for some reason I sent my, uh, emailed my, um, resume in.
And, uh, 2 or 3 months later, January 30th, 2006, I was sitting in Northwest Arkansas in a little town called Arkansas, which is just south of Bentonville as central states manufacturing. And, uh, that was my introduction to the great game of business central states, uh, manufactured metal building components, steel roofing.
Pre engineered metal buildings, uh, their employee owned company. Uh, but. I can remember it very vividly and I wrote a blog in 2020 about that first day at work in 2006 called how a book report. Changed my life. So I sit there my first day ready to [00:04:00] fill out all my paperwork and, and, uh, all of that, uh, or my benefits and, uh, the lady that hired me, she was the VP of ops at the time she came in.
And I said, okay, what do I do? Here's my driver's license. Here's my social security. She said, don't worry about any of that right now. Said, here's what I want you to do. I want you to read this book. Uh, I want you to write a book report on it, . And in two weeks I want you to give a presentation to management about what this book means to you.
And that book was The Great Game of Business by Jack Stag and, and that was my first introduction. And even in that blog. Uh, I put the book, the, uh, uh, copy of the book report in that blog. So, uh, so that was my first introduction to the great game of business. It was my first introduction to employee ownership, not just an [00:05:00] ESOP, but also, uh, An ownership mindset and an ownership culture central states was formed in 1988 and they built their entire business model off two books.
1 was good to great. And 1 was the other was, uh, the great game of business. They had been practicing their great game of business, uh, since, you know, probably around 1992 when the book came out, even before there was, This great game of business coaching and consulting firm and, and, and all of the things that that great game of businesses today.
But, uh, the owner at the time just felt that the concepts fit in. With an ownership culture, which is what he was trying to, uh, to, uh, implement in, uh, in the business, uh, you know, to go along with the other part, uh, of good or [00:06:00] great. So, yeah, you know, and that's how I came across. Good. Uh, great game of business was, was through the book and it was actually from Dr.
Dr. Kevin Christie: Ray Tuck, who was on my podcast maybe three years ago or so. And then, uh, the first thing this was when we were just chatting, um, to prep for his call and he, he, said, you got to get this book. So I got the book, uh, read the book and then we had a great episode. And then he was kind enough to come, uh, speak to our mastermind group in January of 2023 on he's a chiropractor had, uh, 11 clinics.
Um, unfortunately has, has passed away since, but, um, still the clinics are, are operating fully, you know, because he implemented this structure and framework. And, um, he talked a lot about how it helped him grow and scale his chiropractic practices during the mastermind group, uh, which, which you're, uh, going to be speaking at our new Orleans group here in 2025, which is [00:07:00] exciting.
We're going to have the east and the west groups converge together in new Orleans and will be. Diving into this in detail, but that was my first experience with it was through Dr. Tuck and then reading the book and just kind of diving into it. And I was like, you know what, this, this really makes a lot of sense.
And so I want to, I want to dive into kind of the framework. for it, and I'm just gonna set the tone a little bit and have you kind of dive into each a bit. But you come up with a critical number, and that is a confluence of what you call think, act and feel. Could you could you dive into? Would it make sense to start with a critical number or maybe dive into think first?
John Williams: It would probably be just it would probably be best just to look at the model of great game of business or What are you trying to accomplish? What does the end goal look like? Because when I talk to people about it, they've [00:08:00] read the book and they said, okay. Well, how do I implement this? How do I do this?
What's the critical number? What's the stake in the outcome all of this? And I said, well, let's first Let's understand what you're trying To accomplish because all of those little pieces that I just mentioned are tools. Uh, to help you get to this point where you want to be as a, uh, as a great game of business company and or as a company that's going to implement great game of business principles, but yeah, so really the great game of business, it's really a system or a process that teaches employees, uh, how to think, act and feel like owners and it does it in the concept and it's very important, uh, that, You share information first that you're transparent with information because if you're going to teach employees the [00:09:00] business Okay, they have to have the data.
They have to know the score. They have to know what the score means, where it comes from. So this whole thinking like an owner part is the teaching them about the business. Be transparent with the information. And when I say be transparent, you don't have to be transparent with everything. For example, salaries and wages.
My opinion, you should never, uh, share salaries and wages with others. There are certain entities or businesses where, uh, some of the work they're doing is confidential. They're doing work for the government, or if you're in the healthcare industry, there's certain things that you can't share, uh, and, and that's fine.
You don't have to share that. The only thing you need to share is so that the individual can connect with what they're doing every single day with the outcome of the company. Like, how do they [00:10:00] influence that? So, things like, uh, if you're looking at it from financials, from a P& L perspective, uh, you, you could just share the revenue, and you could share the cost of goods sold, and that may include, uh, direct labor, material, uh, and then, you know, the, uh, revenue minus the COGS equals your gross profit, and then you have overhead.
Gross profit minus overhead, uh, That's your profit, right? Before taxes, so it can be that simple. At least they can see and understand where those numbers come from. How do I affect them as an individual? And is the company winning or losing against a target? So that's the, that's part of the thinking part.
Dr. Kevin Christie: Yeah. And one, one question on [00:11:00] that. I agree with you about sharing individuals salary compensations. Could you give a, I could you give like maybe this is the total payroll of the company. So you're not actually like. Teasing it out, but they can see like, oh yeah, payrolls a lot more. When you talk about taxes and overall payroll costs, they get the ideas like, wow, that's more than I thought.
Cause one of the things we see in chiropractic practices, it's a very intimate setting typically, right? You're, you're, you're talking two, three, four, five, 10 employees, and you've got an owner chiropractor, who's not necessarily. Totally business savvy. And then you got an associate and there tends to be a associate chiropractor, there tends to be a disconnect.
And a lot of times the associate doctor thinks the owner doctor's making so much money. They have to bury it under their mattress. Right. And cause they just may see what's coming in the checks, the revenue, the batch reports, but then they have no idea with the overhead. And that's a big problem I see is many.
Many associates don't understand [00:12:00] how much it costs to really run a practice that can actually afford a second doctor. And then on, on the flip of that, the owners don't do a good job of teaching the doctor, like, look, this is where we're at on, on what it takes to operate this. You know, and, and I think that's a big.
A big issue, so you could share overall payroll. Sure. And you would even in small businesses, you know, and especially service type businesses, whether you're in the medical field, whether you're a chiropractor, whether you're a doctor, uh, you have a dental practice, whatever that is, you know, they're, they're pretty much.
John Williams: Structured the same from a business standpoint, so you may want to put a salaries and wages line and include everything in there. You know, maybe include health care and their benefits and their vacation and whatever as 1 total line. Now, if you're a small practice with 1 location or 2 [00:13:00] locations. Maybe the, the owner or the doctor that owns the company, maybe they're below the line or below the profit before tax because most of the employees aren't influencing that number.
You know, sometimes that's done because that's, uh, that amount is usually a big portion of that total if you just have a few people, but yeah, you could. You could put it all together because they do need to see that because in service type industries, salaries and wages are by far the biggest line item and the biggest influencer of profitability, right?
Dr. Kevin Christie: Yeah, no, absolutely. Okay. And so the, the think part of that is kind of, you know, know and teach the rules and really give them a lot of clarity on business. It sounds like, which is rare. Yeah. And financial literacy and it doesn't have to be me. Okay. Difficult. You're not trying to make them accountants.
John Williams: You're just trying to get them to a level of where they can understand how they're [00:14:00] impacting it. And it can be as simple as what I just explained. Uh, it's easier said than done because for years and years and years, business owners have kept this information from employees. And because I think a lot of it is for control, you know, uh, some of it is for fear, uh, and, and then they use excuses to support those fears, right?
Like, oh, if my employees, I don't want them to see how much money I make and then they'll. Then they'll want more money. Well, no, that's not true because most employees think owners of businesses are making a whole lot more money than what they actually are. So I tell owners, what are you scared of? Why don't you just tell them the truth?
Because it's much less than what they [00:15:00] already think. If you don't tell them the truth, they're going to make up something and it's going to be based on perception So that's one of the fears that you'll hear. So and uh, yeah, and another thing is is the idea of profit. Um, another person that I we've done some work with is greg crabtree who is an accountant and I think he's got a pretty good background with the Great game of business and he talks about you know, your profit margin and he's a big proponent of the the owner Uh, paying themselves what you should pay yourselves, right?
Dr. Kevin Christie: So if you're a, an owner, a chiropractor, you would want to pay yourselves what the going rate of a, uh, of a full time chiropractor would be to replace yourself. And so then you, you add that into your overhead, obviously. And then he talks about having at least 15 percent profit after. All that, uh, obviously the more the better, but you want to be at that 15 percent profit and, uh, just some, uh, for my audience, some car prices make the mistake [00:16:00] of saying, Oh, you know, it's like, no, your price should be 50 percent profit.
Well, they're, they're actually counting. They're not counting what they pay themselves, right? That's right. And it's, that's a big difference. I want to tease out for chiropractors. So let's say we get that 15%. And then the other thing that Greg Crabtree talks about is, then, you know, even when you get that 15 percent profit, even if it's a, if, even if it's a big number, let's just say it's 10, 000 in a month, which isn't a big number, but let's just say for sake of argument, the, your employees may think you're just taking that all that profit home.
And they don't realize that uncle Sam's going to. Take, you know, I think he says to put 40% towards that, give or take and mm-hmm . That might, you may not need all that, but that's, that's gone. And then taking another 30% and reinvesting in the business. 'cause that's the other part that I think employees don't realize is that all those things you need to buy into and, you know, maybe implement a new marketing strategy and all the different things to reinvest to grow the business that's coming from profit typically.
And, and then you get [00:17:00] to take, the owner takes its. The 30 percent per se, uh, so I think even, uh, breaking that down for team members can be very helpful to realize like, look, even when we're profitable, it doesn't mean all this is just cash that I get to take home. Right. It is. And that's an important part in teaching the employees the financial literacy of a business.
John Williams: 'cause they 'cause the p and l uh, and profitability has nothing to do with cashflow. You know? 'cause you can be profitable for a long time. If you run outta cash, you have no business. You know? So, uh, so it's teaching them that and, you know, the way the great game business came about 'em and why it was called Great Game is Jack Stack thought I can't.
When he started SRC in 1983, he was trying to teach the employees financial literacy about business and they couldn't grasp it. So we had to find [00:18:00] something that they already knew that was just like a business and everybody understands the concepts of a game that has rules. It has winners and losers. It has an objective.
You keep score. You know if you're winning or losing and all of that. Everybody understood that and he related that to business. And I think when you teach financials, it's the same way. If you come at it from a business approach, most people are just going to shut down because they already have a preconceived notion it's too hard.
But if you, if you teach them that a business P and L is no different than your personal P and L, like I get gross pay, I have these deductions, which are personal cost of goods sold, then I have my take home pay, which is my personal gross profit, and then I have rent, gas, you know, all this other stuff, which is my expenses, and that's my take home, [00:19:00] and then you ask them how hard is it for you to make money as an individual, what do you put in your pocket at the end of the day, Yeah, it's just like that in a business and the cash and thank you.
Dr. Kevin Christie: That's a great comparison. Yeah. And the cash is your checkbook. Yeah. What do you have in your checking account? That's your cash flow and you can have a lot of cash in there, especially if you have a wealthy uncle who's giving you money all the time and not have any money left over from your personal P and L from working.
John Williams: And you can still pay your bills, right? Yeah, it reminds me of the, it's a quote from Wes Cape and it's, uh, volume is vanity, profit is sanity, cash is reality, right? To your point on your QuickBooks may read X on the profit, but what is your what does your operating account read, right? Yeah, and in the medical [00:20:00] services businesses, you know, it's about collections.
That's, that's the cash coming here. That's the, that's what, uh, you pay employees with. That's what you pay the bills. That's what keeps the door open. Awesome. So the second part is, is called act and it's follow, follow the action and keep score. What's the, what are some of the details of that? Sure. The acting like an owner.
So you've, you've taught them all about the business, financial literacy. You, you've taught them who their competitors are, who their suppliers are. You've taught them about their industry and their market and all of that, but it doesn't stop there. So now they have the knowledge. Now you have to let them be part of the business.
Include them in decisions, uh, I coached about 5 or 6 dental practices over the past year and implemented great game of business. And here's the example I give on acting like an [00:21:00] owner. So imagine this scenario that if you're a dental practice and you want to buy a new x ray machine. And the owner goes out and buys the x, x ray machine, brings it to the office and plops it right in there and said, okay, x ray technicians, here you go, I bought you a new x ray machine.
Or imagine doing it this way. You meet with everybody that's going to use it and say, okay, all of you know our x ray machine is old and we've had issues with it. Okay? Uh, here are three different types of x ray machines. I would like for you to give me your opinion on what you think we need. Now realize, here's our budget, okay?
And also, after you give me that, they're having a industry trade show next week [00:22:00] here in town that they're going to be displaying these models, and I'd like for all of us to go look at it. Give me your feedback. They give their feedback. Maybe the owner goes with it, maybe he doesn't. But now when the x ray machine goes.
comes up, they're already bought in. They're part of the process. If something goes wrong or if it doesn't start in that first example, uh, well, nobody asked me what to get and they're and they're going to blame the owner on why it's not running right. But if they do it the other way, they're bought in.
They're more inclined to find out why it's not working and get it working. That's the acting. That makes sense. And then, um, keeping score, is that just like, you know, monitoring certain KPIs, some leading indicators, things like that? Sure. Everybody, every, well, it's embedded in every human that they [00:23:00] want, they want to win.
Okay. But they need to know what the target is. And that target is a critical number. That's the one number, the most important number in the organization that everybody is rolling to. Now, there's individual KPIs at the departmental level that those are drivers that affect that critical number. Okay, but, uh, yes, and so that's the target.
That's the objective, but they, you have to constantly be updated on where you're at. So imagine this. So, uh, and whether or not anybody's a Kansas City chief fan or not, I'm going to use Patrick Mahomes as an example. So imagine Patrick Mahomes and the other 10 players on offense show up on the field, ready to run a play, and Patrick Mahomes is the [00:24:00] only one that knows the play.
The other 10 players on offense don't know what the play is. What's going to happen? You know, a lot of it. Well, somebody may think they know the play, but they don't somebody's just gonna sit there Nobody told me to play Patrick Mahomes is gonna get killed, you know, I mean, he's gonna be out of the game hurt They're gonna so all of these things could happen So now let's say we fix that and all 11 players know the play, but there's no scoreboard They don't know what down it is.
There's no down marker. There's no play clock. There's no yard field markers. Nothing Well, what happened then? And most people would say nothing. I said, would anybody come to watch the game or watch it on TV? No. Every game that's played in the world keeps score. And it has winners and losers. From checkers, to [00:25:00] chess, to ping pong, to football.
It doesn't matter what you're playing. Because most people would say, Well, that would be crazy to not keep score and not know who's winning or losing at any point in time. Then, my reply to them is Well, why are so many businesses in the world ran that way, where there's only one person that knows the play and only one person that knows the score and everybody is either sitting there or making up something that they think they need to be doing.
Dr. Kevin Christie: So it's very, very important. I love that makes a lot of sense. And that leads us into feel, which is provide a stake in the outcome. Can you, can you dive into that for a minute? Sure. A stake in the outcome. Most people see this as just a bonus or something, and that's part of it. Uh, but it can be a lot of things and it's very much up to the [00:26:00] individual.
John Williams: On what they perceive as a reward or a stake in that the outcome for the job that they've done. Now, that can definitely be your regular pay. Whatever that is, uh, but it also can be more of, uh, it can be a benevolent cause where you're doing something good for the community are in the medical field.
You're making people healthier and, uh, you know, or it can be, you know. Your grandpa and your dad and your uncle were all chiropractors. So I Love the industry, you know, but it could be your health care. It could be you know, uh, the people I work with uh the person, uh, My leader my manager it can be all of these things But the number one thing that I think that [00:27:00] feeling part is is having purpose at work You know, and all of those things I've listed fall into that, but if somebody can go to work, and they feel like they have purpose, they feel like they're making a difference as an individual, then they're going to feel better about that, and they're not going just to be concerned about, hey, and benefits, and healthcare, and all that, all that stuff's important, it is, but what ties them to that, and what's going to motivate them, uh, to do the best job possible, Is to have that purpose, and that's the feeling like an owner part.
Now the bonus part, it needs to, the incentives need to match their, their frame of reference when it comes to time. So what I mean by that is, if you're managing the office, your frame of [00:28:00] reference on time may be, okay, what do I get to get done this week? What do I get to get done this month? Where the front line employee is, What have I got to do today?
What have I got to get done? What's in my little world right now that I have to do? So the closer you can tie those incentives to their time frame, uh, the more impact it'll have. Because that's the way they think. So bonus programs, uh, you know, a lot of great game of business companies that use these principles, they may set up an annual bonus that's paid quarterly.
Dr. Kevin Christie: Okay. So the annual incentive will be based on your critical number, whatever that is as a company, but you're paying a little bit of it quarterly to keep them engaged and keep them thinking about it because the shorter term thinkers. Okay. It's still an annual bonus. It's paid on a year to date basis. [00:29:00] Uh, but you're giving pieces of that bonus if they accomplish some quarterly targets along the way.
John Williams: Gotcha. So you said the quarterly target, get the quarterly bonus, but it ultimately adds up in summation to a yearly bonus. Sure. Sure. So you could miss all first three quarter bonuses, but hit the year end and you get all of it. Right. So it's not one of these, uh, lose it. So let's just say if you have. 10 offices and you're the CEO of all of these, all these chiropractor offices, then maybe they're staking the outcome should be something three to five years.
Maybe it could be based on the value of the company, or maybe it's, uh, based on a return on investment or return on assets or something like that. So you have a longer term incentive out there to make them think more about the sustainability of the business and not so much. [00:30:00] Focused on giving them a bonus every quarter.
Dr. Kevin Christie: And you mentioned something briefly ESOP. Could you tell us what that is exactly? Sure. And he ESOP, uh, stands for employee stock ownership plan. This is where, uh, uh, you know, a lot of owners, uh, of businesses in several different industries. They're facing a, a huge challenge now to where, you know, 50, 60 years ago, it was passed on to the family.
John Williams: Right. And then the family took over the business and they ran it for years. Well, what's been happening over the last 30 or 40 years is no one in the family is taking over that business, you know One of that I think is just there's more options out there. There's more things to think about more things to do I don't think families are having as many kids as they used to, so, so that lowers the options of them taking over the business.
So one of those [00:31:00] succession plans is to sell their company to the employees. You know, you can go, you can sell it private equity. Or you can sell it to the employees. The um, the uh, It is a defined, deferred plan, so it falls under ERISA, and the benefits. So what you actually do, you would sell Your business to the ESOP, which is really a trust if you look at it from a legal perspective and that and it has a trustee that oversees that trust.
So inside that trust is the owners of the business, which are the employees. Okay, so the ESOP purchases the company, uh, from the seller, uh, and over a period of time, every single year, a contribution is made [00:32:00] into each one of the employee's accounts. Uh, and that is, uh, put in their account and, and it relates to so many shares.
Of stock in the company. Okay, nice. So yeah, so you could have under that kind of having a stake in the outcome. It, it could be an esop, it's probably a little bit of a bigger company maybe. Yeah. Uh, obviously it could be benefits and I, and paid quarterly, like how you talked about that. Um, I mean, and then I've even seen some, and, and we're working through this as well, is, is maybe a profit share with some key employees, right?
Dr. Kevin Christie: Yep. Um, do, are you seeing that a lot in this model? Uh, yeah. You can, like, like I said, it, it, With some key employees, you may look at some medium term incentives, you know, and maybe they're not just profit sharing, but they're based on some key metrics that you want, you want, uh, that you want to [00:33:00] look at to drive your business.
John Williams: Okay. But so for example, SRC, which is the parent company, a great game of business, they'll all, they'll do the short term incentives, like the annual bonus paid quarterly. Now with some, uh, management director and executive levels. They may have a medium term business or bonus three years or so, and then there's the long term of equity in the company through an ESA.
Okay, so you have a short term, medium term. Oh, love it. And then those three things think, feel and act like we just broke down. That becomes a critical number. So I assume that's one number. And what are some examples of what that could be? Well, it is, it is one number. And I get this question all the time.
Well, we're trying to do three things. And I said, well, here's the problem with that. And, uh, [00:34:00] and I understand that all three are important, but the problem is when you pick three critical numbers, people are going to go with the path of least resistance, the one that's easiest to get. Okay, so two of them may be very hard.
So they're going to do the easy one first. Well, the easy one may not have as much impact as the other two. So that's why it's important to get to that one. that is the most important number to the company over the next 12 months. So that number in 2020 when COVID, uh, was here, a lot of that. Those critical numbers changed from a profitability number to a cash number.
Mm hmm because they wasn't worried about profit They were just looking to survive So maybe they their critical number was revolved around more of a balance sheet [00:35:00] item whether that was cash cash flow DSO, whatever that whatever that is collections, you know in and in the medical field so But most of the critical numbers you see are based around profitability.
You do see the ones that have been doing this for a while. Look at other things like return on assets. If you're heavy manufacturing, where you have a lot of, uh, equipment and you're going to have a lot of depreciation, you're going to have a lot of inventory, uh, you know, that makes sense there. Uh, and then, uh, some people over the last five years, they've been looking at employee retention.
Because it is so hard to, to hire people. Uh, so instead of just hiring all the time, focus on retaining the ones that you do have. And so I've seen that number a little bit, but most of the time it's a [00:36:00] profitability. It's around net operating income or profit before tax or, or those types of things. Now that a percentage are usually an absolute number they try to go for.
It's usually it depends. Uh, you know, I think for a lot of businesses that are just starting out doing this, they want to do something that the employees can understand and they can relate to and they can tie how what they do as an individual into the outcome of the company. And usually that's simple.
Profitability number, so it's going to be your net income or your profit before tax as you start to mature. Then, you know, margins become more of a, uh, of a measurement tool. So, whether that's the gross margin or whether that's net margin, uh, you know, they'll start to to look at that and that because, you know, that's going to take out the effective revenue.[00:37:00]
Dr. Kevin Christie: That'll be exciting to work through when we, um, we have you at our mastermind to kind of get really clear on that. Um, in the dental industry and the dentist office you've worked on, has it been anything other than profit for them? Has it been collections? Has it been new patients? Has it been anything in particular?
John Williams: Well, it, for the most part, I would say most all of them use collections, you know, and they're paying monthly incentives and stuff like that, collections. Collections is fine, but in a dental practice, you know, most of the dentists are, you know, they're, they're being paid at a variable rate. So they're being paid for the procedures, not a base pay.
So that's fine, that's going to go up and down with the collections or the revenue generated, but the staff is the largest overhead number in a lot of those places. So they, so when you just do it on collections. You don't take into account [00:38:00] the cost and you could be paying some incentives, paying a bonus, think you're doing great, and your net operating income is negative.
And you start to have cashflow issues and all of it. And that's what was interesting. Uh, that was one thing we learned from, uh, Dr. Tuck and our mastermind a couple of years ago was the problem of bonusing on collections. Uh, and, and historically a lot of chiropractors will bonus. And I ran into this in the past, um, but they'll bonus the associate doctor on.
Dr. Kevin Christie: On what they bring in, right? What they collect and the thing that that just doesn't measure is your costs of running a business going up, which obviously we've seen over the last few years, and that could be a staggering number versus obviously profit and net profit and things like that. That's that's actual.
Money that's there that's in the, uh, that takes into consideration the cost of, of, of stuff going up. So, and I've seen it happen in dental practices where if the doctor is [00:39:00] being paid a bonus on collections, the way they can do more is that they have more staff. So hire me. Two more assistants, one more assistance.
John Williams: And meanwhile, the profitability of the practice keeps going down, down, down, and their collections going up, up, up, and they're like, Hey, what's going on here? What's, what's happening? Yeah, no, it's, it's fascinating. And I've been diving into it quite a bit and obviously starting with the book and, and, and that's why I wanted to have you guys come speak to us to continue to, To, to really lock it in because it's, you know, it's a lot and that's what, um, uh, but once you figure it out, it really makes a lot, uh, uh, set like makes a lot of sense.
Dr. Kevin Christie: It provides more clarity for yourself as the owner and also your team members. And then you just get on the same page. And, um, I'm excited to keep on diving into this stuff. Yeah. And, and you have this, you have this, uh, you know, [00:40:00] variability of scaling. Yeah. A medical practice business, whether it's chiropractor, uh, especially in the dental practice where, oh, you grow your business.
John Williams: You've got maximum profitability with the market, you have the staff, you have the dentist, you have, and then you want to go hire another dentist. What happens when you hire that dentist goes down and that dentist has to produce a certain amount. To get it back up because the dentist that new dentist requires more staff and so on so you're up down like this So dentist have to say Okay, well, I guess if I just stay at this level right here and some choose to do, because every time I go hire somebody, my profitability goes down.
Dr. Kevin Christie: Yeah, and that goes back to what you talked about as far as educating everybody around and we see it all time where and Greg Crabtree did tell us like, okay, yeah, 15 percent profit margin is ideal, but you can go down to. [00:41:00] 10 percent or so if you do bring on a new doctor or something, that's a big investment.
And then tell me like being able to show that to that new doctor and say, Hey, look like we're, we're taking a considerable hit on profit by hiring. Cause there's always an onboarding and ramping up of that doctor and building their book of business. And, and obviously you hope that that happens sooner than later, but if that.
Ramping up takes too long. It, it can really be a, a practice killer. And I'm sure there's a lot of variables to figure out what a normal, uh, how, how many months does it take for that doctor to pay for themselves and get your profit back? And then, you know, obviously they need to be a profit center, right?
You don't, you don't hire just for, for, for fun. And so, but I think if you. If you lay that out and that will spur that doctor along to realize like they got to take ownership of this and they got to start doing things to build a practice. Otherwise it's gonna they're gonna because because I, you know, I think a lot of [00:42:00] times the new doctor coming on board and oftentimes they look at themselves as an asset to the practice, right?
And at some point that's what you hope they are. But in the early phases of that, they're, they're not an asset to the practices yet. They're really a liability. And the sooner they can turn from liability to asset and do the right things that happen, uh, the better everybody's going to be, be. And I think that's a big sticking point in our profession.
John Williams: Yeah. And I think what the great, what these principles of great game of businesses think, acting and bill, what it does do. Is it teaches, especially in the medical practice, and it did this with the dental practices to be more efficient with your staff to use systems and processes instead of adding people to, you know, to get some, to get something done.
Uh, and that way, when you do hire that doctor, it doesn't require extra staff because their systems and process [00:43:00] because it's. The way a doctor becomes fully utilized and the most efficient has everything to do with scheduling. And in the dental practice, I start off by telling them, I said, uh, all of you are important, but I'm going to tell you who the most important person is in the entire office.
It's the person that that patient first sees when they walk in the door. The person sitting at that desk who's doing scheduling, that's the first person they see. They have a smile on their face. Don't underestimate how important scheduling is. Yeah, so that changes their mindset and that allows them to do more with less staff or the same amount of staff that they had because the staff, yes, their support, you couldn't do it without them, but you're paying them whether you have zero patients or 20 patients that day.
So which is, yeah, there's a, I'm not sure if you're familiar with the company, the scheduling [00:44:00] Institute, they work with mostly dentists and some chiropractors, but their whole thing starts training the front desk and they, they have a particular bonus system. I won't dive into today, but it's based on a new patients for the, for the front desk.
Dr. Kevin Christie: That's like the critical number for the front desk person. Uh, because psychologically, um, they actually spoke at our mastermind as well. And he said during there, psychologically, if you don't have an incentive around. the new patient or the scheduling, um, they like new patients is extra work for that front desk person.
It's more paperwork. It's insurance verifications. It's all this stuff. And if there's no benefit to them or they don't see the benefit to them, uh, then they may not be that excited to. Get that patient on or smile that, you know, or when john's checking out and says, I need to get my son in here, isn't that eager to get the sun on the schedule?
Right? And so there's a lot of, um, you know, like you said, the front desk is a gatekeeper in a lot of ways and getting that schedule busy. Well, [00:45:00] another thing that we found in the dental practice was the, was tracking the hygienist, uh, time per. And some of them, I remember an example where they were taking like 60 or 65 minutes and the process of actually cleaning the teeth was only about 20.
John Williams: And so what are they doing? Well, they're checking a man. They're going through their paper. So why is a hygienist doing that? The hygienist is a producer. Get that done before they come to the office or somehow and that way you can be more efficient. So these examples and these principles, but you're teaching all of these employees how what they do impacts the business.
Dr. Kevin Christie: And then ultimately that critical number. Well, John, this has been great. And obviously it won't be the last time we speak. We'll see you in, uh, I believe it's October, New Orleans for our East, East meets West mastermind, and we'll be really diving into [00:46:00] this stuff. And I know as a group, we're excited, but if any of our audience wants to reach out, how can they find you?
John Williams: Uh, sure. Well, uh, you can certainly email me at John Williams. at elucidate resources. com. Uh, or you can, uh, check me out on LinkedIn. Uh, just look, search for John Williams, elucidate resources, and you can pull me up there and all my contact information is there. Feel free to reach out to me, email me.
Dr. Kevin Christie: Perfect. And we'll put that in the show notes. Everybody has that. Well, John, I appreciate your time today. Have a great rest of the day. All right. Thank you, Kevin.