Why Soft Leadership Kills Team Production & Profit?

Why Soft Leadership Kills Team Production & Profit?

High Performance Practice: Scaling Practice Profits And Systems 

A quick heads up for all the audience, if you've been tuning in to the show for a while, you know that it took me at least ten years of grinding in my own clinics before I finally figured out how to scale and sell my 4 practices for 7 figures, and about 3 times the national average. The biggest shift wasn't some secret marketing hack. It was how I thought about profit, systems and my role as the owner. That's exactly what we're going to be working on together with you at the High-Performance Practice Conference in San Antonio, Texas from October 15th-17th.

Adam Robin and I are hosting a three-day hands-on event for PT, OT, speech, mental health, peds, pelvic floor, and medical practice owners who want to build clinics that are profitable, scalable, and best of all, don't depend on them 24/7. We’ll dig into simple profit and KPI frameworks, real leadership and culture work and practical systems you can take home and plug in with your team.

If you're doing roughly 6 to 7 low figures a year and you want your client to feel more like a real business and less like a job/cage, I'd love to see you there. Frankly, I'd love to see you bring your leadership teams as well because we will have breakout sessions for them, too. You can get all the details and grab your seat at the link. Let's get into our episode.

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This is right in line with the High-Performance Practice series that we're doing on the show. We're also doing associated Facebook lives all leading up to the conference on October 15th-17th, the High-Performance practice conference led out by the Private Practice Owners Club in San Antonio, Texas. Go to PPOClubEvents.com to check it out. We're excited about it.

We even made a fancy video for you. There's a video there of us talking about it and stuff. Check it out. San Antonio is a pretty cool place. They got the riverwalk. There is a lot of history there. I've been there once. There is a Brazilian Steakhouse there. I don't know if you've done the Brazilian Steakhouse thing before. If you like to eat steak and all kinds of good meats and stuff, come to San Antonio. We'll treat you. In this episode, we're talking about some things that every owner is working on or thinking about if they have any other providers on their team. That is provider, productivity and team communication. How you get your providers to be productive.

Let's lock in on this topic.

I almost feel like passing the baton to you because this is all you've been working on for the past six years.

It's like the last twelve months. It's been hard. I know there's going to be people X people on my team that see this and they're going to be like, “That was terrible.” The good news is, I know what not to do and I know what needs to be in place in order to do it, I think. Hopefully, you folks can learn a little bit from the lessons that I've learned along the way. We'll go from there.

I'm trying to think of where to start because we can talk about team productivity. Me being a numbers data, I'm thinking, “Set the expectations. Figure out your break events. What do they got to generate in order to justify their salary and compensation?” There's a lot of metrics involved in making sure you share that during the interview process and what's expected out of them. Not the number of visits, but how we bill. Do we start there or do we focus on communication? Part of this is team communication and what that looks like. Which direction do you think we should start first?

Essential Financial Metrics To Determine Provider Breakeven 

I tend to think that starting with the metrics is usually the best place. You got to know your metrics. There's two things that you need to get this to go. You have to have your systems in place. You have to have your systems component and your metrics dialed in. You have to have the culture and the communication to support it. It's hard even with a great culture. If you start pushing metrics into a team, even though they're happy, they're also used to doing things a certain way. Change is hard, no matter what. I feel like getting that expectation buttoned up and clear on the front end is probably the prerequisite, in my opinion.

We've had plenty of conversations and episodes about what it means to set the expectation. That goes back to you getting to know your break even points in terms of visits and revenue. You got to know what those providers need to generate in order to justify or have an even exchange with the compensation that they're receiving. You've got to tie that to the number of visits that they're seeing per week. You've also got to be clear about, “This is how we charge. This is how we maximize reimbursement for the amazing services that we provide.”

We're not just going to bill willy-nilly a bunch of three therax, one manual, because nowadays that's the worst reimbursement that you can get. We're going to have objective conversations and a data driven organization. That has to become part of the culture to make that communication the easiest, because as you said, most owners don't start in this space. They don't start working off of statistics, metrics and numbers. They usually start because they know they're great therapists. They want to do their own thing. That's a goal they've always had. The culture when you first start out is a one man show. You are the culture of the organization.

As you grow, the need to have metrics, standards and expectations in place. It becomes more and more vital. The tendency, if you're not careful, is that emotions and feelings start to guide your decision making instead of the metrics. It's important that you understand all those metrics so you can have an objective understanding of what's happening in your business.

You have a clear idea of the health and status of your organization so that you can make bold, good decisions in a quick manner to correct what's going on. Also, to make it more efficient, profitable. If you want to achieve all your goals as an owner, you have to know these metrics. You can't just go willy-nilly. We're not in that space anymore.

Unfortunately.

It makes us better business owners. It helps us learn and grow because we are both a testament since we knew our numbers in our organization and became better business people. Opportunities in other businesses start to show themselves. We can take what we've learned and not only incorporate it into these physical therapy practices and be successful at it. We can take what we've learned into other offshoots. Other business ventures, if you are small business minded, and apply those same principles and be successful there as well. Knowing that metrics are the drivers is super important.

To add on to this a little bit. Not that we want to get into each aspect, but got to know our breakevens. We got to know the expectations in visiting revenue. We've got to know things like compensation ratios against total revenue. We've got to know what our billers are billing on average. We need to know their utilization rates. These are all part and parcel to production. What more would you add to that?

I would say the first thing that comes to mind is you don't have to make it more complicated than it needs to be. It's surprisingly simple. It's not that complicated. You only need like three metrics. You need to know what your average reimbursement per visit is. You need to know, as you said, your break even, what are your costs per visits, and basically how many visits do I need per provider in order to create a stable financial foundation for the practice.

That generates a significant profit. If you have those three metrics, you can pretty much find all these other things that we're talking about.

It's pretty much it. If you have a good front desk person who understands what the breakeven is and what that schedule needs to look like in order to give your providers an opportunity to even hit the number. If you have some providers who are aware of their expectation and they're doing it consistently, then you should be fine most of the time. You should be pretty close to fine most months. That's all it needs to be. That's like the systems component, the hard data side of the business, which is more analytical. It's more tedious. It's more boring, you crunching numbers and spreadsheets after work or on the weekends to try to figure out what that model needs to look like. The other side of it is the harder side.

The communication part.

Once you get that in place and you're like, “I know the science behind this now. I know the data. Now, I have to get people to do it.”

That's true.

That's the hard part. That is something that I can flip a number on a spreadsheet and make it say exactly what I want today. To create that change with people, that takes time. That's got to be massaged. That's got to be rolled out in a way. There's a lot more emotions that come into play, like having some strong leadership skills and honestly, a good team that supports your vision. It’s so critical to being able to do that.

I will backtrack a little bit. I agree with you, crunching the numbers isn't the hard part. I would recommend if you are not a numbers person, get a bookkeeper, leverage your CPA and say, “Help me find these metrics. What do I need to know?” They can tell you. They can help you out in that regard. Finding the numbers, as you said, can be difficult. Once you find them, then they're there on the piece of paper.

If you found them once you can find them again, and you can adjust because my costs have changed or yada, yada, yada. Starting with the basis of knowing your metrics now, it transfers into how do we translate these expectations and these numbers into real life so that we are producing what we're expecting to produce or needing to produce.

Turning Expectations Into Systems And Clear Job Descriptions 

Another part that goes. I can't think of a different word besides unnoticed, but it doesn't get enough recognition as the need to define those expectations in a job description. We know our numbers. Now, what are the systems that we need to create that will produce the numbers that we're expecting? That goes into how we can create systems that will replicate over and over again. If we follow those systems, we know we're going to get this product. Still, knowing the metrics I don't think is enough. You have to communicate, but creating the system might be that next step.

Correct me if I'm wrong, but as I'm just thinking through this. You might need to put together some job descriptions, some training or resources on how we get what we're expecting because if you're looking at a therapist, they're expected to do three things. They need to provide great care, document for that care well, and charge optimally, ethically for the care that they provide.

You need to generate a job description around those three things. The only thing that we're going to add on top of that when it comes to production is you need to do all of those three things at a certain level in order for this relationship to work, employee relationship. Me pay you this salary, you need to do those things at this level in order for this to work. Generating some job descriptions, some systems, creating the resources and preparing the training for them is essential.

You could say the same thing for the front desk. Their three main responsibilities are to fill the schedule, collect every dollar at the time of the appointment. Make sure everybody on the schedule arrives on time, and ready to pay. That's the main job and the job description where it revolves around that. Again, they need to do that at a high level.

Going back to the metrics that we talked about, what are they expected to do? What do they need? What are the metrics that we're going to hold them to and then provide them training and resources behind that? Creating these systems is a little bit of a go-between, we know what is expected. Let's roll it out. We need to have some systems to fall back on and to train with in order for those things to be replicated over and over again for years at a time.

I agree. Also, a couple things that are worth mentioning is that this isn't easy. Only because you have a system doesn't mean it's going to be easy to execute.

Creating the system in and of itself can be a little bit of a grind if you're starting from scratch. That's one of the benefits that some of our coaching clients have had is because they've had access to a library or resources of sample job descriptions and some of these things. You don't have to start from scratch. You can find them and AI can even help.

It's not going to be convenient. When you're trying to deliver care, there's never going to be enough time. When you create budgets and constraints on delivery, you're going to force prioritization in some capacity. It's hard. It's a hard thing to do. That's why it's important. It’s to make sure that systems aside, if you want people to follow them, it's critical that you're clear on your company mission, purpose, values, and what they mean to you, and the types of people who typically thrive in your organization.

Having like a filtering mechanism to make sure you're onboarding the right people into your organization. Right people don't mean good or bad. It means they're aligned with you and they're more willing to naturally be inclined to follow the process that you have because they see the vision and the values that you operate within. Your systems are built around that. That is so important.

Cultural Alignment: Hiring And Onboarding The Right Clinic Team 

I learned the lesson the hard way several times trying to fit the wrong people into the right system. You start building a team that doesn't quite want to go where you need to go. Nobody wins. The company loses because they're not happy. The patients aren't getting consistent quality care like they need. I would say make sure you have that buttoned up, too.

That could be an entire episode unto itself and we've probably done it in the past. We had 400 of them. The correlation between an aligned team and production is in parallel. They go hand in hand. The better aligned team with your purpose and values, the better your numbers are. It's how it is. It's crazy when you offload some of those people who don't align with the purpose and values, you have a smaller team yet production goes boom. The atmosphere improves and morale just goes through the roof. Addition by subtraction.

Going back to the principle of, it's not as complex as we might think it is. We've worked with a lot of practice owners. We've all had challenges with production. It’s like, “How do I get my team to just do it?” A lot of times, the answer is you got the wrong team. It's a combination of you not being clear on what you stand for, what your values are, or having the leadership skills to communicate that in a way that's persuasive and inviting. It influences people to make change. You don't have to be a wizard. You just have to be sold on your vision and be passionate about it.

Maybe even to a greater degree, sometimes we have the wrong people on the team. Maybe they would be better off in a hospital system or doing home health or something like that. I’m not trying to simplify this too much but it's like, you can't ask a fish to get out of water to start running on their legs. It’s not built for that. They don't want to do that. They just want to go swim in the ocean. Good for them.

I will say that if you have that system in place, some basic systems, you get to know your metrics and you're clear on who the right person is for your company. You're willing to say no to the wrong people. It will be like, “I value you but I don't think that you're going to thrive here.” Only bring the right people. A lot of things just start moving in the right direction naturally and organically because you've got a good aligned team. I'd say, it doesn't have to be forced.

I'm so glad you brought it up because there's plenty of owners who are reading who are, “I've got this team. It's hard to get them to produce.” It can go back to know your metrics and get the systems together. You're going to roll some of this out and some people aren't going to like it. Let's just say that. They're not going to like it because it's not how they did things. They might even be some of your more “loyal people,” like, “This isn't how we did things in the past. You're coming to corporate. You're worried about the numbers more than you are about the people.”

You're going to get that kickback or they're going to be silent underminers. They're just not going to say anything and you won't see their numbers move up or maybe you'll get an initial spike and they'll come back down. Maybe they're not encouraging. You might start seeing them act out a little bit. Whether that's rumor mongering or spreading rumors or saying snide remarks about you or other people behind your backs, and they act out in that way.

I say all that because for an owner that's trying to make these changes, that can hurt personally and that can be a hard space because you probably, up until this time, have not had accountability conversations with them. Now you need to learn how to hold them accountable to the metrics. These are people that you love and you appreciate. You would like for them to stay, and you want for them to stay because you know getting a replacement can be very hard. Them staying is worse for your organization than keeping them on and suffering them. You've seen some of that.

I remember I had to do that with front desk people as I was making changes. I had my lead therapist as I'm making changes. She was on board, but she started acting out a little bit more. We can't do this and it sucked. I remember I was almost in tears going through that conversation with her like, “I've got to let you go because of X, Y, and Z.”

Overcoming Soft Leadership And Embracing Healthy Accountability 

It was hard for me but over time, as I made the commitment to my purpose and values and held people accountable to the metrics, the culture started changing. The light at the end of the tunnel is you start hiring and keeping people. Now, when you hold them accountable, take it on in the right manner and are inspired to do better and they want to do better and step up to the challenge. I know you've seen that.

They choose the company. They choose the organization. When you say they decide to choose the company, what that means is they're willing to sacrifice their own personal convenience. Oftentimes, they're willing to embrace the challenge of going along the journey with your company. Business is a hard thing. It's not convenient or natural to be profitable or to grow a business or to climb a mountain. You're going to have to go through a bunch of stuff. You're going to have to climb rocks.

You're going to have to look at things and be like, “This is physically impossible. We have to find a way to get resourceful and creative.” Your ability to do that is going to require sacrifice in a lot of ways. You have to have a team that is willing to embrace that journey with you because they're aligned with you. If you have people who aren't willing to do that with you, and once things get tight and squeezed and things get hard.

Every year, there's Medicaid changes, reimbursement cuts and all of the things that we deal with. Your team feels that constraint. Your team feels that pressure. They are not going to be willing to align. They're going to choose their own path, which is going to be counterproductive. Eventually, it will no longer be an ROI for them to be on the team anymore, unfortunately. It's funny that we're staying on this topic because this is the hard part because we're so people oriented. We want to create a place where everyone's invited.

We've got a big tent. Everybody, come on in. That's where compassion kills us. We're so compassionate that we're willing to sacrifice our own and our company's health for the benefit of individuals who don't align with us.

What is the product of that? If you, the owner, you design that. You design the systems, the onboarding process, the training, the expectations, and the metrics. You design that job description. You build the culture. You define it. You hold it as a standard and you make sure that only the right people come to the team. You are the creator of that. When you are staying true to that, what a high-performing team looks like is more like, “Team, we're here, which is not going to be good. We need to be here. Are we good?” Everybody says, “Yes,” and everything changes. Everything moves. There's no friction.

There's not a lot of pushback. There's not a lot of massaging. There might be some questions, but there's clarifying questions that are like, “I'm willing to do it. Here's a sticking point. I don't know if we can do that because of X, Y, and Z and I don't like how it changes because I don't like it.” It's not those questions. It's clarifying how we meet the end goal. Those people are. For those people who are reading that are like, “That's nice.” That would be a dream scenario. Adam and I are both telling you that we have lived that scenario. We have those people and we've made these changes because we put in effort over time to put our company in this position to do so.

Why Provider Productivity Drives True Team Morale 

It's remarkable how things will start moving in the right direction because you got the right people around you. As opposed to the opposite, when things feel heavy. It's like, productions are down. You feel stressed. What that typically feels like as an owner, that experience is, having the same conversation over and over and drama in the organization. You're recognizing that your key people, who you trust who've been with you are being worn down by the business. They're being drained. Their energy is suffering along with you and they're frustrated. You see the morale of your key people starting to be depleted. That's when you probably got the wrong people on your team. That's a bad sign.

Let's say for what it is, 1) You've got some bad people on your team. 2) You're not stepping up into the leadership role that you need to be. That's on you. If you're seeing good people leave your company, then you need to look in the mirror. A lot of people might bring up the word culture like, “I want a better culture in my organization.” This might be partially what they're talking about. They want to improve the culture because they're feeling stuck.

They're noticing the drama. Things are hard to change when I'm trying to implement change. We're trying to increase our arrival rate. It's not moving the needle and constantly training people on conversations to get patients to stay engaged and commit to their appointments. Things aren't moving the way I want them to move. I hear these guys on the show and they're telling us, “We need to hit these metrics. I'm stuck. I don't have that team.” They're talking about culture. I would like to think that one of our mottos changed to that when we were in that situation. That was our motto, “Production is the basis of morale.”

When people are productive, the culture improves straight up. The interesting thing is, the more you push them to be productive, they will be more engaged in the company. The people who aren't engaged in the company and with your values will stick out like a sore thumb the more you push them.

Correct. They will eventually be gone.

They'll almost self-select. They will just be like, “This doesn't work for me.”

I'm wondering if you could speak to this as well. The hard part about that, not just with business owners or rehab professionals, but everybody in the world. We generally want to be liked. There's always a piece of us that wants approval and confirmation from other people. When you get in that situation where you're trying to create a real company and you're trying to create a real organization and you're recognizing that there's a significance. When I say significant, it could be one or two providers. Whatever that word significant means to you.

One or two people that are objectively important to the company, but you're recognizing they're probably not going to be better off the team. There's not very many chances that you're not going to seem like a bad guy. You're going to have to make a hard call. You can try to do it with as much grace as possible. No matter what you do, there's always going to be that lingering, that person or that group of people who think that you're a jerk.

Part of being a good owner is learning how to be okay with that sometimes. It is learning how to be like that's part of the process but taking ownership of it as well and saying like, “That's on me. That's on me for inviting that person in. Now I know, and we're going to screen a little bit better and make sure that we pick up on those things a little bit quicker.”

It will help a lot if you care less about what people think of you.

I say that because a lot of people, including myself, try to build this culture or this company that is awesome and we believe in. We try to do it in a way that avoids that. How can we build it and avoid looking like a bad person? It's not going to happen. As you bring people into your company, you're going to get haters. It's going to happen. Not everyone's going to like you. Getting into that mindset of like, “I'm okay with that. I have to learn how to be okay with pieces of that.” That is an important piece to developing a strong culture as well and training your team on being okay with that.

Overcoming Confrontation Fear In Practice Leadership 

Not to belabor the point, but if you're not having those accountability sessions because you're worried about the confrontation. It's coming from a very selfish place of, “I don't want to look like a bad guy. I want to be the friend.” You're trying to salvage what you think other people think of you by keeping the friendship and not having the accountability conversation where in the best interest of the organization, of the other team members and of that person, you should be having more accountability conversations with them. Invite them to grow and inspire them to step up because you're not the only company they're going to work for in their lives.

If you can help them see that and show them how to step up in a path to be a better team member, even supervisor, then that will transfer into other parts of their lives. You withholding those accountability conversations around production is just selfish. You're inviting them to step up and to be better people, to be better in their roles across the board. If you're withholding that, you're just doing it because you're worried about sacrificing your image in their eyes for your own comfort and to salvage your ego.

Here's the thing. Going back to, if you have a company and you have some goals. It’s like, I would love to be a little better than average. Can we be a little better than average? What that means is everybody in your company is going to have to give more, be more, do more, and challenge themselves. It's going to be harder.

They've got to be better than average.

You have to call people up to that. Most people, including you and I, want convenience. We want comfort. We want the easy thing. We want to see less patients, get paid more. We want the big check every month. You have to have the right people who like that challenge and who want to be motivated by something internal to take that on. We are belaboring the point but learning how to navigate that cultural piece as an owner, in my opinion, is more important than the metric sometimes.

Definitely. What was the most helpful? Maybe it was some resources or a mindset shift. Maybe it was certain exercises or a book that you read. What were some things that helped you get an idea of how those conversations go? Maybe there's a template or the frame of the conversation and how to focus your questions. Were there any resources that you used to help you become better in those accountability conversations?

There's a few good books. I know you've read The Coaching Habit. It's a small book. That was probably like the first book that I read. The Coaching Habit is a great book that teaches you how to ask questions that call people up into a place instead of telling them what to do all the time, which is a skill. Through working with a bunch of coaches, I've built what we call a clarity conversation framework just to give people some language that could be used in those conversations. That's important, but ultimately, the two things that have made the biggest difference for me is repetition. Doing them. You're going to feel stupid. You're going to sweat bullets. You're going to look stupid, honestly.

Afterwards you're going to say, “I should have said this, that, or the other.” It's going to happen.

Literally, the best piece of advice I ever got in business was like, “Do stuff that you suck at for long enough and eventually you won't suck.” Be willing to do that. That's number one. The second thing is, honestly, learning more about myself. Being more reflective about those experiences and learning how to understand what influences my own emotions in a positive way and in a negative way. The things that help me feel safe, seen and heard. Learning that about myself helped me try to create more of that for the people that I'm leading to create a little bit more collaboration. I would say a big leadership journey, a personal leadership journey of some capacity is important.

Essential Books And Frameworks For Crucial Leadership Conversations 

A book that I would add to that is Crucial Conversations. The whole idea behind that or one of the main ideas behind it, is the issue being something that is outside of the two people in the conversation so that you can both, for example, put the issue on the table in front of you, so to say. You're both looking at the issue trying to figure out how to resolve it so that issue is not part of that person's being.

Inviting them into those conversations, in that situation, staying as objective as possible. This is not about you as a person. This is about the need to accomplish X, Y, and Z according to expectation. Keeping things objective. You’re making it about the issue. I've said it all the time, it's always helped me to tie a company value to what we're talking about.

This is an issue because it goes against this value in our organization. For me personally, if I can go in with that mindset that keeps an objective, that ties it to purpose and values. Not just because I said so or that it's going to improve the profits of my personal organization, but because it goes against the value. We can't have that if we're going to be a values-driven organization.

Those are some of the thoughts, mindsets, and resources that I've used to help me. I will say the thing that I've seen in you over the years is, even when you didn't know, before you had read some of those books and had some of those resources to lean on. You were one that was quick to have the conversation. You weren't going to let it sit, and still. You were going to have the conversation, even though you didn't know what you were doing at the time. It was going to happen. It had to happen. If you want to see change, it has to happen.

The people who align with you will appreciate you having the courage to do that even if it's messy. I do want to just re-invite people back out to San Antonio. We are such a people-driven industry. This is about people. It's about influence. It's about learning how to try to tie people's passion and purposes into their work. It's not all about strategy and tactics. Sometimes it's just about that. There are people who are good at that stuff. A lot better than me and Nathan.

They will be on the stage. Imagine if you and 2 or 3 people on your team could elevate their leadership by 5% or 10% in 2026. What type of real change could you make in the lives of your people, and not to mention your finances. It's a little bit more alignment with your people. You should come to San Antonio if you're on the fence. Check out and just consider it.

It’s on October 15th-17th and go to PPOClubEvents.com.

Good conversation. I appreciate you having me.

Take care.

Important Links

• Private Practice Owners CLub
• Private Practice Owners CLub Events
• The Coaching Habit
• Crucial Conversations
• High-Performance Practice Conference