How Burnout Prevention in Veterinary Organizations Translates Into Profits: Webinar Recording and Transcript

Great. Thank you, Ivan. Thank you for the opportunity. So my background, I fear is not particularly exciting. Like a lot of colleagues, I wanted to be a veterinarian from an early, early age, read all the James Herriot books. That was my guiding light. And as a result, I had a small town mixed animal practice for a number of years. In fact, it was called “Sweet Home Veterinary Clinic”, and it was a sweet little home on the foothills of the Willamette National Forest. It would likely still be there today, had not a couple of classmates come to me with a crazy idea to start companion animal practices inside a pet store. And at first I pushed back, but eventually believed in the vision and came on board. And that was the turn into Banfield. That was back before there was a Banfield. So I did that for a number of years, left there to go into academia, spent five of the most professionally rewarding years of my life launching the new veterinary school at Lincoln Memorial University – really dramatically different kind of school with a distributed clinical year where the students get thousands of hands-on, many primary care cases in the preclinical year. There’s a real focus on clinical skills as well as professional skills, communication, training, leadership, training, practice management training. It’s a remarkable institution.

I left there about three years ago to help launch WellHaven Pet Health. So, as you mentioned, we’re a relatively new group. We both buy practices as well as build practices. We have a number of De Novos, and three years in, so far so good.

As you indicated in the opening, our job is to take care of the people on our teams. If we take care of them, they’ll take care of pets. And then the profits are a consequence.

Sure. Hi Ivan. Hi Bob and hi everyone. I’m a vet by training, always wanted it to be a vet. Can’t remember ever wanting to be anything else. I got some commercial exposure in my teens when I swapped my paper out for web development. So it went to that school with this sort of commercial interests, graduated from Cambridge in 2012. So not so long ago. And through a bit of Googling, found a platform of four candidates in Beijing and decided to start my career out there and join them and help grow that business across mainland China into Shanghai,

Guangzhou, Suzhou, Nanjing, Shenzhen into Hong Kong and Singapore. I was Chief Operating Officer of that business. I was out there for about four and a half years, and then came back to the UK where I was Chief Operating Officer of a group of 30 connects called Village Vet, which is now part of the Linnaeus Group, which is part of Mars Pet Care. I founded Pets App two and a half years ago, sat on a couple of different boards, both within veterinary and outside of that so I have pretty broad business interests.

Yeah. Happy to, thank you, Ivan. So I wrote a column for Today’s Veterinary Business a couple of months ago, titled Mercenaries and Missionaries. And the thesis is as most of us know consolidation isn’t unique to veterinary medicine. Consolidation takes place throughout the economy in any fragmented, successful industry that will benefit from investment. And as we think about the two different categories as I put them, the mercenaries, they rely on the financial thesis, which is really clear. When you look at our industry, pet numbers are up, pet lifespans are up, pet spending is up, euthanasia’s are down, shelters are emptying. There’s a whole generation of veterinarians that look a lot like me, that are looking for exit and retirement. So from a financial point of view, what a nice profitable, fragmented recession resistant industry, where the investment community can park money with little risks and typically short term.So they’re looking to buy a practice at one X, get a whole group of practices in a relatively short timeframe and sell them for two X. So intellectually and financially it makes great sense. However, it’s a short timeframe. And during that timeframe, that makes little financial sense to reinvest into the practices that are joining their group.

I contrast that with what I termed the Missionaries. Missionaries, on the other hand, typically have veterinary professionals that understand the investment thesis, but they also understand the heart of the profession that it’s a relationship business. It’s about people and the good we do for society and pet parents, and take a longer term view, understanding that we’ve got to reinvest in people. We’ve got to look at the long-term horizon, that it’s not all about the investment thesis. It’s more about purpose. It’s more about passion. And if you focus on those things, then the profits will follow.

Yeah, without a doubt there is. If we don’t take care of the people, somebody else will. We’re so fortunate in our industry that the rate limiting step is not a lack of consumers. Pet parents are beating down the doors to come see us. The rate limiting step is attracting, selecting, developing, retaining great veterinary professionals, doctors, veterinary, nurses, and others. So we have to pay attention to them. It’s the heart of our business. And perhaps naively, as I look at consolidation.

Consolidation is pretty predictable. Thom has probably already seen it in the UK. In the US we’ve got 50+ consolidators. 10 years from now, that’ll be five or six. Naively I want to believe that those of us that are Mercenaries, we can prove to the investment community that by focusing on our people first, then the rest will follow – as opposed to the entirely financial thesis, where it’s easy to forget that this is a relationship business, this is a people business. P&L is not a bad word, we need to have that to be sustainable, to reinvest, to take care of our people, but people come first.

Yeah. So I think there’s a common issue with any acquisition is this idea of the “bait and switch”, and that can be a deal team that comes in right, and then there’s an operational team that comes in after the deal has been done and takes over. So people are dealing with different people. And so what we try to do at both companies I’ve been involved in this stuff was have the operational team involved early in terms of a non-financial due diligence process to get a sense of whether there is cultural alignment there. You know, I think it’s a worthwhile thing to do. I would say it’s hard to do. One key ingredient in being able to do it is knowing your own culture. And not everyone does, you know. I think it’s something that’s very hard to do. So starting by interrogating your own culture and doing that sort of non-financial due diligence process on your own business is what’s going to unlock those rewards later because sometimes you’ll find these gaps in what you say and what you do in reality, and confronting those early is the key to success.

Both. Because if you don’t do it pre-, if you don’t at least attempt to do it pre-, then you’re stuck. I would broaden that definition of culture. I’d agree with you, but what it really is – it’s predictive of how people are going to behave when you’re not there. That’s super important. So one way to arrive at your culture is to look at your stakeholders and do a stakeholder mapping exercise, and your stakeholders are the investors, your customers, the pet owners, but also your patients and your team, right? That would be one set of stakeholders. And if I’ve missed one, Bob, you can, you can shout.

Then arrive at your strategy, which will feed into culture. You want to rank that stakeholder prioritization and the easiest thing in the world is to sit here and say: Hey, they’re all important. Yeah, they are all important and strategy is making hard decisions and it’s like, how do you allocate your limited resource? So who’s going to have priority here. Right? And so what you want to do is get a sense of that for yourself. And then pre-acquisition, you can do things to see, right? How does this team order stakeholder prioritization? And if it’s way out. That might be one to say no to. And that’s a really good way to answer this question about “What is our culture”. It’s to invert it and say, “Well, what, isn’t our culture?” Who do I not want to acquire, what does that business look like? And then walk through that.

Identifying that business ahead of acquisition is tough because you’re at an informational disadvantage, right? The vendor, the person that’s selling the business has more information about the business. Then they acquire, but a perfectly reasonable thing that you can do to assess your culture. And this is why you should think deeply internally about this as well, because the things that you are benchmarking culturally, well, you want to approximate those in your pre-acquisition due to non financial due diligence. So if you care about your staff turnover, right, you’re saying it’s roughly 20% in the veterinary field. That means the average member of the team stays for five years. So if team is important to you, high staff turnover is probably a negative signal, probably in most cases. So that’s one thing on your due diligence balance scorecard. They have higher churn than our benchmark than an existing business. Or if you don’t, if you’re just starting out on this acquisition journey, then where we would like to sit where we’d like to peg it in the industry. Those sorts of things are super valuable. Ask them.

Appraisals are a real key way of communicating culture to the team because it’s telling them what behaviors do we encourage and reward? What behaviors do we discourage and not reward. And so if you ask them, you know, what’s your appraisal process and they shrug their shoulders and they say, “What appraisal process?” Well that communicates something culturally, right? It might just be, it’s never occurred to them. None of these things are like an immediate red flag “just back off”, but they’re all feed into this balanced scorecard. I feel like I can take up the whole hour talking through these things, but you get the idea it’s important to do it pre-acquisition, but then when you have the business, it doesn’t stop there. Now you’ve got to as quickly as possible fill the information gap. That information with disadvantage that you were at before you owned the business, it should stop existing as quickly as possible.

And, you know, in acquisitions in general, it’s largely that you discover the downside, especially early on, the surprises are usually negative. If there’s something really positive, the vendors. Probably been shouting about it beforehand. So you want to confront these negatives really early and that’s hard, especially when you’ve been pushed to justify your investment thesis, your reason for acquisition. You’ve got to just say no. Okay, there’s a new reality, now things state it. And what is the reality on the ground? And it could, you could find that, there’s you, you do the one-to-one with each member of the acquired team and you find that there’s some toxic elements here. Well, confront those as early as possible. You now have a duty of care about this team. So confronting those as early as possible is key.

Yeah. And Thom describes it really well. And it is difficult. Pre-integration you can’t know everything no matter how hard you listen and dig. And you have to know your culture and say no. In our experience, probably the biggest predictor of culture is really getting to know the seller, that practice owner and that team has assembled, those clients who know that community. So spending as much time as you can, listening to the seller.

In our case, we talked to the seller a lot about what your dream sheet is, what does success look like for you? Should you join our group practice six months from now a year from now? Do you want to take a month off and bicycle through Europe? Do you want to go from six days a week to four days a week? Do you want a new ultrasound machine? Do you want better benefits for your team? What does that look like? And as you really listen to this seller, you get a good indication of what kind of culture they have and does that align with yours? And you have to be willing to say no, if it doesn’t align further.

This release has surprised me the last three years – as a relatively young, smaller group of practices, there’s a lot of big players out there in the space that are after practice as well, many of which have bigger checkbooks than we do and we often get outbid. It’s not unusual that we will come in 10, 50, a hundred thousand or more or less than the bigger players, but the practice owner still elects to join our practice. That’s a tremendous indication that they believe in us. We believe in them. There’s a real fit there.

And back to the point you made early, Ivan, about the triggers, one being “Promises”. You think about this profession and part of the beauty of it is we’re so small here in the U S. There are more attorneys in the district of Columbia than there are veterinarians in the entire United States. If we go out and break promises – that says a lot of things, most of which aren’t good. But if we were to go out and break promises and not live up to what we say, not be transparent, not listen to sellers, that would bite us. It just gets around. It’s too small a neighborhood we live in. You’ve got to uphold your promises.

There’s too many consolidators out there where the investors or someone behind the scenes, likely at the board level said, you will buy 50 practices this year, and that becomes their mantra. And they’re going to hit that number. They’re not looking at culture, they’re not looking at fit. They’re not spending time listening. They have a number to hit. And while I get the investment thesis and you can stack the EBITDA and you can make the rationale on a spreadsheet, it’s absolutely the wrong thing to do.

There definitely are. Just to come back on that last point you made, Ivan and Bob. Too often when you see a lack of cultural alignment – what people do is they just discount the price that they offer. And that’s not good enough. You need to say no and walk away because early on in the acquisition pathway, it is largely arbitrage driven. And so the distinct competence is acquisition, right? So if you buy something, no matter how cheap, that requires you to have this operational competence that you don’t yet have to then do a sort of turnaround play. Your investors have pressured you into doing something that’s really, really going to damage the whole investment thesis, because you need to trust that connection is going to be on autopilot to some extent until you’re ready to allow on the operational bandwidth.

But let’s say you have made this mistake or whatever it is, and you want to take a temperature check and all that sort of thing. And you should be doing this regardless. One really useful tool, as a leading indicator of employee churn of staff, is Employee Net Promoter Score. It’s also called internal net promoter score. You might’ve heard of net promoter score as a customer satisfaction metric, it can be used as an employee satisfaction metric. And you’re just asking them “How likely would you be to recommend this clinic as a place of work?” And they score you on a scale of 0 to 10. If they score you a nine or 10, they’re very likely to stay. And if they score you seven or eight – who knows. If they score you a six – they’re likely to leave. And then you take your net promoter score, you calculate it in the same way as you calculate the normal net promoter score, which is your percentage of promoters, the nines and tens, minus the percentage of detractors.

Get ready for that net promoter score to be significantly worse than your customer promoted score, you know, sort of benchmark a net promoter score is hard to talk about, because it depends on customer collection methodology, but customer net promoter score is normally in the range of 60%. Even in the veterinary sector it’s not unusual to find employee net promoter scores, internal net promoter scores, being negative. Unfortunately. We’ve got a lot of work to do on this stuff.

Another thing, if you’re not prepared to do something like that, it doesn’t take much. So if you’re not prepared to do it, why not? Some people find that too impersonal, which I think I can relate to, but you’d be just the number of people, whether it’s corporate practice or independent practice, that walk into work one day and are faced by resignations that are a surprise to them. Well, maybe it wouldn’t be such a surprise if you just took this temperature check every now and then. As personally, as our relationships with our team members can be, it’s hard to know where the problems are, the things that are brewing and you want this leading indicator. You don’t want to leave it until it’s too late. But if you don’t want to do that, or in addition, in your post-acquisition one-to-one with each team member whoever’s leading the integration. A really good question to ask it’s super trite, super cliched, but it’s useful – if you were the boss for the day, what would you do? You know, if you were running this practice for a day, what would you change? What would you keep the same? What do you love? What do you hate? That sort of question? Just tease out the little niggles, that really can tell you what’s going on.

It’s really good to do it immediately on day zero and as close to day zero, as you can bear and then do it. If you’ve got this hundred day integration plan, which I think is pretty common with your 30 day checkpoints along the way and your 10 days “lessons learned” exercise at the end. Running another internal net promoter score, Employee Net Promoter Score. It makes a lot of sense. That’s too frequently to do it on an ongoing basis, but those two sort of sense checks do make sense. It’s important to add those, another question, which is “What is the main reason for your score?” and giving people that opportunity to give you feedback.

Well, I can start and then Thom can fill in the blanks. I make the analogy rightly or wrongly to marriage. In marriage, when you get married, you’re still you, but things change. And change is always a struggle. Nobody, very few people embrace change, but when you come on to integrate a practice, if you’ve done your due diligence around culture, often they’re looking for change. There’s things that they recognize that they could be better at. They’re looking for your expertise for your consultation. And every single one is a little bit unique. Well, there may be a timeline too, to bring the changes that you want to bring along. You need to take the time again, to listen to that team, to learn from them, to find out that “Hey, in our practice, we aspire to get everyone AAHA accredited.” They may not be ready this month. They may not be ready next month. They know it’s out there on the horizon, but I have to be sensitive enough to know what’s going on within their practice to recognize when that’s achievable and when that’s not. So being able to treat each one as a unique integration is really important.

That’s fantastic. And we have a question from Melissa: “How early in the deal should you tell your employees that you’re selling the clinic?” I would split it a little. Basically the entire team is told on the day when the papers are signed, there’s no communication anymore. It’s like, “Hello everybody. I just sold you all.” You know, maybe there’s a better form of that.

There are two tiers to that. One – when there’s still the negotiation, that should be the first tier of communication, maybe to your closer team, to your associates. When the seller decides they’re selling the practice, do they need to consult with their associate and management team or practice manager? Such as “this is who we’re selecting”, “this is what we’re looking for”. So that’s one tier and then expanding to another circle, the entire team, when is one of the recommended times. So any of you guys, if you want to jump in, to answer that.

Yeah, in my experience, this is exactly right. Typically the vendor will tell the team when the deal is done. I believe in candor and transparency, but in terms of telling people the specifics, specifics of what deal has been done, usually when it’s been signed is the only time you really can know for sure that it’s been done. Right. There’s all kinds of things that can happen along the way. The real test for me is, is it a surprise to the team or not? The best teams are prepared for it and expect it and can completely understand it, like “Oh yeah, I know that there’ve been health issues in their family and they want to spend more time with their family. And I’m so glad that they’re going to be able to realize that through this.” That could be one story or, you know, “Obviously he or she was on path to retirement and this makes sense to me and I was prepared for it.”

The negative stuff happens when it’s a complete shock. And often that shock is combined with a sudden upset in expectations. So, “Oh, I thought I was going to have a chance to buy into the practice.” You’ve got to remember the incentives in veterinary medicine and how these incentives change with consolidation. Typically a veterinary professional, that early compensation in their career, historically has been below what they would typically expect for an equally qualified person in another sector. Right. But the benefits have been sort of back loaded instead of front-loaded where at some point I’m going to be able to become a partner in this practice if I want to. And that will provide me with a nice sort of income and a retirement opportunity, et cetera, for a lot of associates coming through now. Suddenly that, that story, that narrative has been upset through acquisition. And it could be that the vendor was telling the associates that, yeah, you’re working your way to partner. And suddenly this narrative has changed. And that’s, again, to me, is a poor cultural indication. And so trying to tease out what are the expectations in the team and, and trying to honor those expectations. Any deal that is done is part of the art of acquisition. And again, it depends how much flexibility there is in the investment model of the acquiring entity.

Having that flexibility, you can get some really good deals done in a way that keeps the team on board. Vendor retention, as well as team retention, post-deal is a massive indicator of a deal success. I know in the early days of NVA, there were numbers floating around, but they were just doing a great deal, there was great vendor retention. You know, this was some time ago, I don’t know where that stands today, but they’ve been acquiring a lot of practices very quickly. And how did they do that? Well, retaining the leader within the business, to me sounds like a good idea. If you are not going to replace that with your own operational bandwidth.

That’s where the advice: if the acquirer is giving the vendor advice, someone to tell the team. Again, that’s slightly disingenuous because the incentives are misaligned, you know, it would be in the acquirer’s interest to find that out earlier, whereas the vendor – not really. I think take any advice with a pinch of salt. Again, you’ve got to know where the incentives are aligned and where they’re not aligned. And typically when I was doing acquisitions, you just got to be candid about that. For example, “I’m not the best person to advise you on that because frankly, our incentives depart at that process. So take your own advice and follow your own opinion.” And that’s why I agree with Bob that needs to be led by the vendor on that.

As I talk with sellers, there’s typically three big things that they’re looking at. If I chunk it down into a small list, and they come in different orders – that tells you a lot about the culture of the practice as well.

One is often legacy. I spent 20 years building a main street hospital. Are you going to take care of the main street hospital? Are you going to scrape my name off the door? What is this going to look like?

Two is my work family. I love these people. I’m with them more than I am with my, my biological family. Do you want them, are you going to keep them, are you going to treat them right? What will life look like for them post-acquisition?

The third (and sometimes it’s the first) – it’s financial. For many folks, this is their retirement. What’s the deal look like? And some sellers are willing to look the other way on legacy or team. If they get the biggest multiple, others will sacrifice the multiple because they know their team will get treated best. So it’s all part of that cultural due diligence to really dig in and find out what is the dream sheet of the seller? What do they really want? Does that line up with the buyer?

One more thing occurs to me. At least here in the US, as multiples have continued to go up and up, we’re seeing more and more joint ventures that there is some retained equity that the seller or vendor chooses to stay and leave some skin in the game that I think is a really strong model. Three years ago I saw most of the sellers just wanted to cash out. Now more and more we’re seeing people want to retain a part of the practice, which is a win-win then they’re still there. They’re guarding their team, their legacy. They’ve still got skin in the game. They’re going to benefit from upside downstream. It’s a real win. And I really liked that.

Big one. Ivan. The workload is a big one because this is where an accidental bait and switch happens. The acquirers that don’t plan to create any change, is that pitch of “you get back to doing what you love, being a vet or looking after the patients and we’ll take care of the admin, the accounting, all that sort of thing.” Well, actually the information expectations of all of the acquirers with the investors that they have to report to are much, much higher than your average independent practice owner. An independent practice owner might just check the bank balance once a month and see, you know, am I cash positive? Okay, that’s fine. Whereas the acquirer suddenly they might have this massive central accounting team. But they’re very hungry for information. And so suddenly the practice is like, let’s see your twice daily cashing up procedure, financial reconciliation. I want to see your purchase orders and your invoices and the teams just like “We never had to do any of this before and you said you were going to take care of all of it!” And I think that it’s not on purpose, but it can be this accidental, miss setting of expectations. And do I think maybe it’s one for the consolidators just to, to think about it. I think, does that, does that ring a bell? Because again, your reputation catches up with you very quickly and that will damage your investment thesis. If these teams are being burned out by you mismanaging that expectations and increasing workload, when you said you would reduce it.

Yeah. I think you’re right, there’s this upside to consolidation that often gets ignored or unexplored. I don’t much care what your ownership structure is as a veterinary practice. But if you do have this professionalization of practice management, that’s one of the purported outsides of consolidation. Well, then you should be able to provide opportunities for career progression that team members never before thought possible. And if you’re not doing that – well, what’s the point. It just feels like a bad trade-off. I could be wrong on this and I don’t want to disparage anyone or say anything out of whack with reality, but I think the AVMA not so long ago had to change their charter to say that a non vet could be, could lead the organization could be CEO. And the reason that they gave was a lack of depth of veterinary talent to manage an organization of that scale. I can completely sympathize and relate to that, but that’s sad. Maybe we can fix that if we do recognize the breadth of talent across the veterinary professions and reward that and provide a diverse career opportunities and then we’ll retain more people, more talent within the profession. So there is this upside that doesn’t get talked about a lot.

Excellent. There’s a curve ball here that I wanted to ask you guys. How do you deal with a doctor who joined a practice to not be in a corporate practice and then it’s sold? I don’t know if any of you want to pick that bit.

Yeah, and to add to that, it comes down again to listening and that one-on-one conversation. Hopefully they’ll give you the opportunity to sit down and talk with them. What is it they really want? There may be an opportunity for them to have equity within a bigger corporation. There may be an opportunity to put them in a leadership role to really hone their skills so that when they are ready to go buy a practice, they can do it on their own. Maybe you’ll even help back them. Maybe they’ll go build their own practice. And as the consolidator buys it back in 5 or 10 years, when they’re ready to exit. There’s so many opportunities there that the two passions could align. If they’ll give you the opportunity to sit down and talk with them, and if it doesn’t fit, it doesn’t fit. It’s a small profession. Let’s shake hands. Let’s keep up. Let’s see how we can help one another.

As an acquirer, you have a duty of care for the vendor. I strongly believe in that. It’s not me being soft and mushy. That’s me being pragmatic about how small this sector is and how important reputation is in the sector, as well as it being the right thing to do. And if you do see someone and they are facing burnout, one thing we know is that burnout can harm decision-making and someone’s capabilities to make decisions and how they make those decisions. Iit could be a really vulnerable time for them, making a decision that is going to be one of the most important decisions in their career. So I would say, approach with caution and care and sensitivity and be respectful of your duty of care to them. But ultimately this decision could be the right thing for them.

But then you’ve got key person risks to factor in again, pragmatically. So do see how that plays through. You’ve got to protect your own interests and the interests of your existing teams and the team that you’re going to assume a duty of care for. So do think that do sort of play it out and think it through, but I think you do have a duty of care to that person when they’re making that decision.They’re facing such a big decision it’s that it is like someone buying a house for the first time. And I know how vulnerable I felt going through that process. It’s like, I know that when I buy this, something’s gonna go wrong. It’s the same as the person selling the house. Right. It’s the same for the, for the, for the vendor.And it is that their legacy and it’s, it’s a big deal and you get to be part of this massive decision that they’re making. And so look off them, look off to each other.

A real powerful thing to do is to say to a vendor: “You know, I think you’ve got a year of really good growth ahead of you. And if you came back to me in a year, you’d be a lot better off.” And guess what? They’ll come back to you in a year and take that offer from you. Whereas like in all likelihood they might’ve sold to someone else. Just give people pragmatic reasons to behave well. It does pay off.

I can just share our experience at WellHaven. We’re relatively small. So our model is: we’ve got half a dozen really strong, team members out there across hospitals that are typically practice managers. They’re running very successful hospitals. They get our culture, they get day-to-day workflows, they get our systems, they understand us, they live our culture. So we just parked them inside. We introduced them to the team, to the seller. Often beforehand, we talk about their role. Their role is listening more than telling they want to learn from the practice that’s being integrated. There may there’s often great things we can share with our whole group, part of our philosophy or our communities.

So we have about a dozen hospitals in Denver and Minneapolis and Seattle and Portland, where we’ve got groups of hospitals that all lean on one another and share resources. So we’ll put someone in there that actually lives in that hospital and helps them. And is there 24/7 to answer questions as well as introduce them to the people behind the scenes, the support people. Our support team again is relatively small, there’s only about 20 of us. We’re housed at least pre-COVID right above one of our hospitals. And one of the things we require of all of them, you may be a payload payroll clerk or a CFO, but once a month you put on scrubs and you work in a hospital. So you understand what they need, what their day-to-day is, how important what they do is that you may not touch a pet every day, but you better be helping someone that touches the pet every day. Our challenge, of course, as we grow, can we continue to scale that? I think we can. Thom, you may have other observations.

That’s where the breakdown happens, when the upstream is not connected with the downstream. If you’re buying every practice that has a pulse and then you’re just passing it on without understanding what impact it has on the downstream, on the integration team and then post change management business as usual, if you will, on the operations, that’s where the problems will happen.

I love what you said about visiting the clinics. I’ve researched lean in human health care for the last year and a half. And lean has this distinct thing that they have to do. It’s one of the practices they do, what’s called gemba. So the management team goes once a week, it’s in their schedule, the CEO of the San Francisco general hospital goes downstairs and presents during the morning rounds with the entire team. They see what is happening, where the work is happening. So that’s excellent. I love that. And then the other thing, Thom, you mentioned about, you know, who is good at change management. I think that nobody is, especially external people. They come in, they know the theory. But what I keep talking about and hopefully it will start happening in the near future is really promoting the culture of continuous change. And the, um, what I mean by that is change management.

If you infuse the culture in the entire organization where the people that do the work have the voice, there’s feedback loops and they can provide information, their opinion on how to run operations of the practice – then that’s a continuous learning and continuous improvement culture. When you throw a change into that culture and ask them, how would you solve this problem instead of coming in and saying, “this is what you do next, because we told you so.” Then the change management is happening because people want to do the change because they came up with this idea. I’m pretty sure that without that consolidators can’t really push, just arbitrage and let’s just push all of these changes very soon.

I think too often people are looking for that light bulb innovation. When in fact it’s incremental, it’s little changes. And with that comes failure. Not so much an integration, but just as a practice, we try to always be listening. What are the pain points? How can we help? As a result, as we built our de novos, we built an alpha hospital. What if we’re hearing a pain point and there’s someone out there that can solve it, let’s try it in our alpha hospitals. See if it works there, then we have two other de novo betas. Let’s go try it there as well. If it works great, let’s roll this solution out everywhere, but let’s take learnings from the whole practice and share them as we can prove them out. Because with that incremental change are going to come some stumbles – that’s okay. Learn from it and move on.

And that goes back to, you know, what is the silver bullet for burnout prevention? Community breakdown is the sixth trigger for burnout, when you don’t have feedback loops. And if in the organization you can advise something, it’s taken seriously at the top management level and say, why don’t we put this experiment and then put it across because none of the consolidators, most of consolidators don’t come in with a toolbox of available improvements on their inventory management or marketing. They come in with those thesis to private equity, but that stuff stays on the investment deck. And then when they start consolidation, they’re really fixing a flying plane, developing these processes. So why not take it into a safe environment, develop the process, develop the rollout, develop the training for everybody, and then put it at scale, instead of trying it halfway in most of these hospitals.

We’re running up on time, and I have a final question on the topic of our webinar: how to convert burnout prevention into profits. So do you guys really think that investing into burnout prevention is worthwhile? Do you think culture assessment is an investment or is it an unnecessary process?

The CFO says: “What if we invest in our people and they leave?”, to which the CEO retorts:
“What if we don’t invest in them and they stay?”

That’s the problem you’re up against. And you got to think what your strategy is. Your strategy is not something that you wrote down on a piece of paper and gave yourself a pat on the back about. It’s the decisions that you make and it is your stakeholder prioritization. Usually, veterinary clinics are saying: “We put the pet owner first” or “We put the patient first”, right? Well, guess what, if you want anyone to genuinely put anyone else first, you need to invest in meeting their needs because unless their needs are satisfied, how are they going to prioritize anyone other than themselves?

It is an ongoing investment and it is something that you just need to live all the time. And you need to just build in these ways to sense, check, hold yourself accountable. That’s something really valuable. If you can, if you can build a culture of reciprocal accountability, you know, this is what I expect of you, and therefore this is what you can expect of me. And you build in checkpoints to see if you’re meeting those expectations and you allow people to hold you accountable. That’s the investment you need to make to be good at this stuff.

Yeah, I love that. And you know, especially for organization, we’ll start implementing that as a strategic filter for initiative that they’re taking. It’s one thing to talk “Yes, people first, then the customers, then the pets and everybody else”, but then they say, okay, what do we do to push that margin again? And you know, 55 initiatives on their quarterly planning have zero those that take care of people. Then again, you’re not walking the walk and you’re just talking about these things.

When consolidators say that “We’re all about people, we’re supporting veterinarians.” How do you measure that? Show me on your weekly scorecard that you’re looking at with your executive team. Where’s that number? What is it? And that’s really a good question to ask yourself when you’re an executive team. If you’re saying that, how do you measure success in supporting your people? I think that’s very important.

Yeah. And that’s the wonderful thing about this sector is you can do well by doing good.

When you say you put the people first, which people? You know, there is a subset of people that you’re putting first, then you want to select for that subset of people whose needs your organization can meet because it’s a different people. It’s not, you know, vets and vet nurses and customer service representatives are not a homogenous mass of people with the same motivations and same needs they’re distinct. Right? And so you’re only ever gonna be able to create this positive environment for a subset of the population.