Today on Consolidate That! with Dr. Ivan Zak and Ryan Leech, we discuss continuous improvement in the veterinary world. Ivan talks about the difference between continuous education and continuous learning cultures, and how many veterinarians experience burnout once they’ve completed their studies and find themselves in a repetitive practice environment.
Welcome back to Consolidate That. Ivan, I am very excited. I always love having guests, but I enjoy our fire side chats one-on-one together and I’m looking forward to talking to you today.
Good to see you Ryan, too. Especially after our trip to Mexico for Strategic Planning, that was exciting. So, good to remind myself that you are tall because they keep thinking you are short.
Yup, and you are very muscly. People do not know that about you, they should see that. And you know what, the other thing is there is a lot of very tall people in our team. If everyone has been working remotely, you should all do like a stand up and stand back from the camera thing. Like when you rob a convenience store or something with those little measuring sticks.
Speaking of measuring sticks, we’re going to talk about continuous learning today and the things you need to measure and use to make that successful. The reason I wanted to talk to you about it today, was because we have some great policies or ideas around continuous learning and some other different organizations that you and I have been in together. From VIS to Galaxy Vets to the things that you have done at SmartFlow and I’d love to get your insight and thoughts on how organizations that scale can go about fostering a continuous learning environment.
That’s a great topic, because we have talk to quite a few consolidators that provide continuous education. On consolidate our operating framework that we created, there is some sort of artifact on lower right corner of continuous learning so you can read about it. We are going to expand it a little bit with this conversation. I think there is a big difference between the continuous education, what everybody calls, and continuous learning cultures. Let us parse those two things.
Continuous education is, sort of known by everybody, a thing that some professionals have to do. Most jurisdictions, and I think all veterinary boards and States and Provinces in Canada, they require continuous education. A certain amount of hours, so you keep up with the profession, some are more strict about it, some are less strict. But the desire to continue learning, I will just give my own example. So, during the first maybe five years of my career, I was very excited to go to conferences and learn new things, and then after five years I think it kind of, you know. Every conference you go to, there is not really much new stuff. So, you kind of look for more opportunities to learn new things and I think it may tie more to our conversation of goal setting. So, let’s talk about that a little bit and then how that rolls into, actually, how you can continue to build a continuous learning culture.
I think that’s a good idea, it’s a good point that you make. It’s a lot different than how to get people CE credits, because I know that. With my wife being a realtor, she has, I have a mailer here being up to date or needing to be up to date on her CE credits, so she needs to it through a title policy rule for four hours just to keep her license. But going to a course at Stanford and learning negotiations or developing a second language skill, those sorts of things I think are what we want to talk about with continuous learning.
Following a passion, but not just making it completely random or unbridled.
So, one thing that we see a lot from consolidators, is that they all provide continuous education because Veterinarians love to learn. That is true, but I don’t think that Veterinarians are very good at structuring that. So, most of the job offers that you see on the market, it’s like we offer X amount of dollars, or Y amount of dollars for continuous education. But it’s not really structured. I think that this is something that, there is a huge opportunity, and it does tie back to the goal setting that we have discussed, in various environments that lead to burnout.
So, Veterinarians are very determined people and the reason why they like to learn, I think there is a couple of reasons why they like to learn: One is a special type of people that are selected through the process of entering into the Vet School. Second, I think that this is, sort of, one of the ways to hide from reality. Unfortunately, I’ll say that. Because that kind of blocks you 10 plus years of becoming a perfectionist, which is not necessarily a great thing. Perfection is a fear of trying new things. I think what happens as part of the burnout, is that they are on this trajectory for 10,15 years becoming Veterinarians, and they are continuously learning things. And then they gain this crazy momentum of goal achievement, which is becoming a veterinarian and then immediately after they graduate, there’s no more goals. You are basically, you are it, you became a veterinarian and then you’re in 9 to 5 poking vaccines. If you did not choose to go to internship or additional residency, your goals are over. And if you are not setting them properly, I think that is one reasons for burnout in early-stage career as veterinarians.
That would make a lot of sense. And I think that works for Veterinarians, Veterinary Technicians, anyone that’s feeling kind of burned out in their day-to-day job. But because you have that desire to keep learning, you want to be able to tap on that and keep moving forward.
What is a way that you think that consolidators should look at implementing opportunity for people to learn, whether it is an additional license, whether it is an additional skill that allows them to practice at the top of their license? How would you go about encouraging people to do that and monitoring them?
Well, I love that you took the approach to that question through structure. Because not everybody wants to go internship, I didn’t. I was comfortable practicing in the ER after graduation. And not everybody goes to residency. But, at the same time, if your learning was structured, in a way, then you could of choose a little mini path, if you will. And there is a lot of, right now, research and startups in the educational sector that is promoting micro-learning. Micro-learning and micro-accreditation. We had a conversation with Patrick Walsh, who is an ophthalmologist and pivoted to invest his time and career into continuous learning and development within organizations. It sort of was, he started in ethos and now it’s business on its own. But I think it is a brilliant idea.
So, if you are not, at the moment, aiming to gain an additional accreditation or go for board specialization. But as an ER Vet myself, it would be amazing if someone didn’t just mentor me through every case I saw and said, “Okay you have, you have a spleen today then you need to remove then tomorrow you have a chest that you need to tap and then you have the tympani where you need to tap the heart.” Those are all cool and if you have someone next to you who will teach you through it. But if it was structured and gamified, I think that would give a better understanding of how you can advance your career without going for that Board Certification. So, for example, if an Organization Consolidator has a good organization to design it in, would have, let’s say, ER Vet Level One, Two and Three. And then, there are certain badges that you need to gain to become First Level, Second Level or Third Level and then those are the procedures. There is an amazing new, well it’s not even new, but a start up from the UK, it’s called VET CT. They allow to connect with A specialist remotely, and they can also guide you through A procedure. So, if we can have a connection of ER Vet with the certain badges that you need to get through procedures guided by the specialist, you can use in that service. Once it’s completed you, A: you can be accredited through a RACE accreditation for that time, B: you can get this badge and sort of understand that you are moving on to Level One, Two or Three ER Vet and most important, you will get that satisfaction of achieving goals. The Dopamine does continue flowing when you check those boxes. That sets the goals without setting a huge goal. Not everybody wants to dive after 10 years of school into another five years of school. I didn’t.
So, I think this micro-accreditation with micro-learning building up micro-goals would really be a good way of structuring education in the consolidation.
You had mentioned the idea of talking about micro-accreditation and micro-learning earlier. I was struggling to grasp it, but then I realized it’s similar to what you would see if you’re on Duolingo, learning a second language. I’m trying to do that now and I learned, I earned my Level One Vocab Badge and then I learned Level One Grammar badge and then I learned my ‘he, she, him, her’ badge, so that I know the correct gender terms and all of those things and it keeps coming back because at the end of each one, it’s like “Alright, come on, can you finalize you did all of these tasks, can you finalize the badge and did you get it?” And that would be cool because, as people continue to learn and then if they can monitor those things, you do have a really neat way to do it. And within a consolidator, I see it being a unique opportunity to be able to use those corporate-wide across the entire organization. So, the neat thing would be, as your doctors as your technicians, as everybody, even your front desk staff can learn a billing badge, so that they can understand what credit card fees look like. They can learn better ideas on that and if they want to utilize the entire group to move from Dallas to Phoenix and then you have a different company there. You know, “Hey I need someone with this sort of badge to replace an employee that we moved to a different place” and you can pick up a lot of things by having those. That’s kind of a neat idea. And I also think the other thing is it is probably a good employee retention tool as well.
If someone is in the middle of learning a new skill and they’re enjoying that, they’re probably less likely to feel burned out, they’re probably less likely to be looking for another position, they’re probably enjoying what they’re doing more, and so you are able to keep your staff which is a big thing right now.
And the other thing that is beneficial to these organizations: that can provide the salary bands. So, if you are acquiring a hospital and then you have 20 technicians in it. They are all technicians and how do you know which one is paid more, which one is paid less? So, if you develop your micro-credential structure, the way that is associated with salary bands then A: You don’t have to keep people on commission, which is everybody who’s trying to do to the pro-sale or whatever they call it. A veterinarian who is trying to charge more clients, I am sure that this is great to earn more money, but that leads to burnout because you are continuously trying to charge more for potentially unnecessary services then you feel bad, then you have economic euthanasia’s and then all of that leads to nowhere.
So, if you have the goal within the organization to A: become more educated B: continuously you are gaining those credits that you need for the association, and then C: your salary band depends on your knowledge, not on how much you gouge the client. So, I think that all creates a great structure and then in the properly formed organization, then you can create the whole career later.
And that is the benefit of consolidation, because in one clinic, potentially I can slice, you know, in a smaller clinic it will be technician is a technician is a technician. In a bigger specialty hospital, you can have one, two, three anesthesia specialized or something else. If you are a consolidator, you can grow beyond that a then add accounting courses or some business aspects of it. If you want to move to another State, just like you said, or another location I could be that accredited person within the organization to carry the message and training to others. So, that is one of the benefits of consolidation that is hugely overlooked. Larger organizations, I know Mars is going that, I don’t know if NVA is doing any of those programs, but if you’ll think about what we talked to one of the consolidators and they said, “We have like 80, North of 80 hospitals and the huge driving feature of our organization for sale of your practice to us, is that we provide tons of CE.” When one is not organized and seem to me is like a vacation that I can tell my wife that I have to leave the house for a week because I have to go to the conference where I have to get the CE credits. In fact, I am going to hang out with my buds at the conference, not even go to lectures just to get the signature and then hang out at the bar in the evening. I mean, I have tons of friends that are doing that, it’s sort of like an excuse to leave home and then to hang out, which is nothing bad with that, if that’s your thing. But it doesn’t serve the purpose of CE. So you are, as a consolidator wasting money of providing this capital for them to go, they are not getting more educated, they are not getting more engaged with the organization, there is no gamification that keeps them within completing with each other, it serves no purpose. And then I think that this is something that, if you provide it as a continuous learning culture, it has to be structured and systematized.
So, I want to come back to that and I want to hit on one other thought. So, with you background with SmartFlow and with VIS even, the software components that were being built there, you obviously have higher developers. When I think about development and the technology side of things, I think there is a lot of this sort of learning that happens within Tech Development and Tech Developers. It’s one of those jobs that’s kind of interesting, where you can generally give them a test to take before they apply for the job, and you go, “Okay you say that you can code in Python and you can do this and you can do — okay, here is a task, knock it out. Oh, you couldn’t make the dog walk backwards on the screen? Okay that’s obviously —you should’ve been able to do that.”
Do you think that you could have people testing in or testing out of levels to be able to, as you are acquiring a clinic, and then sort of the get them set up be able to — We’re always trying to get people to work near the top of their license, but having them test in and out of abilities there and then move on from different badges?
Absolutely, that is great that you mentioned that because, when you are buying a hospital, and if you have a Tech that worked there for 25 years, you have an assumption that that’s a professional that has acquired skills to the top of their license. But when you dig in, it might not be the case. So, to provide the top dollar for this position, and you know I am always advocating paying the highest price on the market so you can retain the talent, but how would you identify on which market this person is. So, this is definitely this is directly then linked for post-acquisition assessment of skills and the levels. Because you can A: Justify the pay or raise it if you need to B: you can clearly outline the trajectory. Because when people are moving into the new organization specially if they don’t provide equity to employees then you are A: Scared, you are going to lose your job, B: you have certain agreements with your previous owner and, going back to our triggers of burnout, then there is a sense of unfairness as one of the huge triggers.
So, if you worked really hard to gain certain knowledge and certain skills, and then, all of a sudden, the owner sold the practice, and then now it’s not appreciated, that testing definitely needs to happen. It shouldn’t happen at the time of acquisition, you’re going to lose all the people, but this special period of stabilization that we are advocating for in our consolidator operating framework is crucial for that because A: you understand the skills of people, B: you understand how willing they are to learn or to develop further. That’s another huge thing.
If you are buying a clinic and you are just advertising, we are going to provide CE to everybody and everybody is burned out, I don’t want to learn a thing if I am burned out. I want less work; a better environment and I do not want to learn. So, when you are going with those theses and just blanket through them, you know, “We are going to give you money to go to a conference”; I do not want to go to a conference. I want more people; I want better workflows and I don’t want software that’s glitchy.
So, these are the things that you really need to assess and that is why I am advocating for this stabilization period where you insert the some professional with a psychology degree, and they actually can assess these people for rate of burn out or readiness to change, their level of education on micro-credentials within the certain position. Then after that you have the full picture where you can start implementing change. Then you know then they are ready to change, people with the mindset to change and if there are people that do not have that mindset, maybe they should leave. I know it’s scarcity of the talent right now, but if you have the right formula for people to work post-acquisition, then the right people will stay and there will be more people that will join your organization.
That is great. So, all of that sounds great, but it also sounds expensive and difficult to manage. I think I’m going to jump the gun a little bit and say a book that we want to recommend people is The Rules of No Rules, which is the Netflix Book. They talk in there about the ‘no expense policy’ policy and they hit on that, as far as continuous learning and continuous improvement and the things like that. How do you think you could utilize that for a group if you were trying to roll this out at a consolidator?
Well, I think it is like anything with consolidator. The first part is that everything is expensive in the first year, because you are trying to accumulate your cash flow to invest into the infrastructure, and that is the biggest dilemma. I mean, I think I’m talking about it in our core video in the top VIS website, that the dilemma is that you are saving money and trying to shrink your corporate EBITDA during the development phase while you are buying the hospitals, but then don’t implement change. Park them in the stabilization mode, accumulate the cash flow and then, using that, develop these systems. Because, if you can’t afford building it, then you shouldn’t.
The outcome that we now know — what is the upside of building consolidation in the private equity world. This is like the least invested area in the continuous learning and learning development. The least invested area, but everything stems from there.
So, I love the policy of Rules of No Rules. We have that policy in VIS, we talked about it and then basically, if someone wants to become better on what they do or learn something they want to do different, or different position within the organization they will benefit, I mean, that is an investment in the future. So, we have a policy of, I think that there should be a skin in the game, you should not just blanket and cover all educations.
So, the way we do it at VIS, we cover 75 percent of any initiative the person wants to take. If they want to do a $1000 course, they have to pay 250. If they want to do $10,000 course, well, two and a half grand is on them. But that motivates them and keeping the skin in the game, that is probably a second book that I would like to recommend here, is by Nicholas Taleb: Skin in the Game.
We only allow one book per — Guests are allowed to recommend two.
Just because we do not have any guest, no one can hold out feet to the fire and our producer is not even on the episode with us today. So, we can do whatever we want.
So, I think that’s a great rule. I mean, obviously there should a budget for this and then calculated. But I think this is not something that should be overlooked. This is one of the main points of people burning out because they are doing the same stuff over and over without moving from their position and then they hate their job.
So, if you can circulate them, if you can have the accumulated knowledge within your organization and then build on it, new skills, that is probably the goal of every organization. I think, where was it? My wife, she was working for Roche, and they were doing a fourth face testing of the oncology drugs. And their rule was that they assessed everybody for how much more you learned in this year, and if you did not learn anything else and just sat on the same position with the same skillset, you were fired. You need to continuously develop your skills and prove to management: this is what I learned this year, and this is how I apply it to my job.
That’s great. I think the other thing, too, if you are trying to — if you’re listening and you’re an Executive and consolidating or you’re trying to justify what the expenses are to investors. It’s probably similar in a way that, you cannot look at the EBITDA of each individual practice that you are requiring. You need to look at the corporate EBITDA, you need to look at what the overhead costs are, you need to look at the cost of burnout and the cost of employee turnover, and see these things as not just an expense, but they are a major component in retaining, attracting — and you should also be able to do higher skill, higher value procedures and work within the clinics. So, it is an expense, but it should be one that is looked at as an overall positive for the growth of the business too.
Absolutely. I think we’re running out of time. We should be honest to our listeners. So, we are through 20 minutes. I love the topic, so thank you for bringing this up. So, continuous learning, rather than continuous education, you know spotty continuous education, is a great model in the unit that needs to be designed within every consolidator from the get-go.
Well Ivan, always a pleasure. Talk to you soon.