345 - The Team Metrics That Predict Practice Growth

I bet you people are on purpose and they're on mission and they see that their work drives capacity to serve. They, they know that their job and the things that they do impact your throughput in your practice, right? So it's like, how many people can you see? How many people can you serve? They get that. What they do not understand is how their work, their responsibilities, their tasks, the work that they do actually drives revenue and profit. And they can really influence and affect the revenue and profit. And here's the missing component. Why should they care? Hello and welcome to the Remarkable CEO podcast, a show dedicated to chiropractors who want to transform their job into a business so that they can have a remarkable practice as part of a remarkable life, not instead of one. With your hosts, Dr. Pete Camiolo and Dr. Steven Fransen. What's up, remarkables? Welcome to another episode of the remarkable CEO podcast, Chiropractic's number one business podcast. I'm Dr. Steven Fransen.

And I'm Dr. Pete Camiolo.

Hey, Dr. Pete. We're back at it, buddy. Man, I'm stoked for the this conversation. As always, we get to have a business conversation. Hey, we're in the business of saving lives and when business is good, everybody wins. I want to make sure that everybody hears that everybody wins. You know, we've been talking about this discretionary energy component of your team, and this is something that we've gotten a lot of feedback from people. People like, man, I've been whiffing on that. I've been totally missing that. So I want to make sure that as we get into this team building conversation today, we're talk about your people, we talk about your metrics. I want you to be thinking about that, this discretionary energy in your team members, right? So I want to make sure that you're thinking about. It's like, oh, man, he's right. I know that when we get aligned, we get along. We've got to energize our team. I know that everybody on my team has got another gear, right? If you're not thinking that way, I'm telling you right now, they have at least one more gear, right? So when we get aligned, not just on our mission, right? So I bet you people are on purpose and they're on mission you and they see that their work drives capacity to serve. They, they know that their job and the things that they do impact your throughput in your practice, right? So it's like, how many people can you see? How many people can you serve? They get that. What they do not understand is how their work, their responsibilities, their tasks, the work that they do actually drives revenue and profit. And they can really influence and affect the revenue and profit. And here's the missing component. Why should they care? Right? So it's like, why should they care? They have to see how when the tide comes in, all boats rise, guys. Right, so we've got to get our PPFG right, Personal, professional, financial goals, right? We've got to get our teams financially aligned. Dr. Pete, I want us to keep that in mind so that we can find that discretionary energy, right? So when you get people financially aligned with the business, watch what happens to the growth of the business. I'll suggest that there'll be a 10% increase in focus, there'll be a 10% increase in energy, 10% increase in effort and a 10% increase in profit.

With that in mind, we know that there are four things you got to get right when it comes to building a world class team. We know that of all the domains, this one is the one. So team building. We are. Like you said, Dr. Stephen in part four of five in the series, we're also coming up on our immersion. So just again, friendly reminder, if you are wanting to come to the Immersion, we'd love for you to be there. Come and join us for the business immersions March 5 through 7 in Phoenix and March 19 through 21 in Brisbane. The links are below. We'd love to have you join us at the Immersion. I know many of you are already registered. We're right here on the cusp of the event, but there's still time for you to register and get there. Then do that because you're not going to want to miss this, the first release of the remarkable business Immersion. And it's going to be remarkable, Doctor.

And bring your team.

Yeah, and bring your team. Precisely. So with that, four things you got to get right. You got to write the right people, you've got to put them in the right seats. These are the seats you want them to be in the seats at the immersion. They got to do the right work and they got to do it the right way. And today what I want to focus on, Dr. Steven, are some of the operational metrics. One of them is one that probably you don't track. It'll be a game changer for you to track. And this is employee stick mo, which basically says, how many months does the average employee stick around? Okay, let's say it this way. So there's three levels of players. There's A players, B players and C players. What ends up happening is that when you build a team of A players only, what we have found is that A players don't tolerate B and C players. However, what we have found is that B players and C players tolerate B and C players. And when A players come around, it doesn't usually go very well. And so some of the doctors who I meet with have a great long standing team, but when they start working with us, all of a sudden there's a team turnover. So this metric, there's layers of depth here and I'm not going to get into that, but essentially it's employee stick mo. And if I could put a caveat in there and it would be an A players only. So what if you attracted, converted and retained A players? That, that is the key to this one. But how long and the average number of months does the, does your employees stay? That's the first KPI. These are KPI's by the way, that I would, I would love for your office manager to own and be accountable for. These are great KPIs for a manager because one of the jobs of the manager is lma, Leading, managing and holding accountable. And part of doing a great job of that would be retaining the talent, doing a great job of cultivating, developing, equipping and retaining the talent. It's a big part of being a great manager. And so that's the first One is.

And Dr. B, this I'm going to, I'm going to jump in here because these first two that you're going to cover, it's really a great way for us to keep an eye on our manager.

Yeah.

So there's a great book that every business owner should read called. It's about the manager. You want to keep an eye on your managers and the performance of the people that they manage. Their direct reports. Right. So if you've been around long enough to have multiple managers, you might say, hey, you know what? Our, our employees used to stick around forever, man. They used to come for three, four, seven, 12 years. Right. It seems like in the last two, three years we just have a lot of turnover with our people. Right. So either you've changed managers or your manager has changed very often. Right? So this is a way for you to keep an eye on a manager. Right. So Dr. Pete, this first one as well as number four here, the next one that you're going to cover is a great way to keep an eye on your manager.

That's good. So the next one we want to cover is employee Net Promoter score. I actually learned about this years ago and had never heard it before, but was the Net Promoter score and the employee Net Promoter score, which basically says this, how likely are the employees, the people at your business, likely to refer other people to come work at that business? Right. How likely are they to do that? If. If someone working in your organization is not going to refer someone else to come work in that organization, they're not likely to do that, then your Net Promoter score would be low. Does that make sense? If they would happily, enthusiastically, and they're trying to get other people to come work with us, then that would be a high score. You guys get that. So it's a stat you probably never tracked before. Again, these first two, probably you haven't. The ones that Dr. Stephen is going to cover, probably you haven't either. Maybe you have done some of them, but those two are huge for a manager, as Dr. Steven said, because it talks about the quality of the experience. We say we love for people to do their career with us. Well, what's the likelihood someone's going to do their career with you? They're not going to do their career with you if they wouldn't be enthusiastic about inviting someone else to come and do their career with you as well? If they're not feeling that, then the likelihood are they're probably on some job board searching for their next opportunity. So we want to make sure that we create an environment. That's why, Dr. Steven, you talked about the PPFG and I always believe in, you know, with the PDPS that we do, knowing what are the needs and what are the motivators of your people, and knowing that you have an awareness of the motivators, the things that are important to these people in each stage and season of their journey, and the things that they need and being aware of the human being and the human needs. And that's huge for us to be paying attention to this. That's a big part of retention.

I think people probably recognize NPS score. This has become less popular since Google reviews. People stopped doing Net Promoter Score. But. But this is a way that you used to survey your customers to say, how likely would you be to refer a friend or a family member to this business to be a customer? Right. On a scale of 0 to 10, you would survey your people and that was called your Net Promoter score.

Right.

And there's a way to score it from 0 to 10 and nines and tens count and you just discards the sevens and eights because this is kind of a non answer. And anything six or below is a detractor, right? So it's like you want to know what your net promoter score is from your people, from your patients, from your customers. This is a different version of that. This is for your employees. So asking your employees the same question, on a scale of 0 to 10, how likely would you be to refer a friend or a family member to come and work for this business? Man, it's really revealing, Pete. And very often tells the story about the leadership and the management.

Let me just add one little thing here to this one. This is because I'm a chiropractor and so are you. How likely are your or how frequently are your staff members having referrals come in as patients? I always found that one to be a real, a real, you know, sign of someone's kind of on their way out would.

Great way to check the weather, right?

When's the last time, you know, this person had a referral come in? It's been a year versus man, I feel like every 30 to 60 to 90 days somebody comes in, said they're referred by one of our CAs or somebody. It's like, yeah, that person is. That person's on the mission. So that's the second one is employee net promoter score.

Hey Doc, Steven Fransen here. If you're like me, you know that we're in the business of saving lives. And when business is good, everybody wins. That's the good news. But here's the bad news. Most chiropractors don't own a business at all. They own a job. It's a job they love, but it's a job. And far too often it feels like that job owns them. Is this true for you? Do you own a business or a job? Have you built and do you run your practice on brute force? Does it rely fully on your time, your effort, a pound of your flesh? Are you responsible for all growth, for all new patient generation? How about new patient conversions? Is it all up to you? How about patient care and delivery? Are you a sole practitioner, an owner operator who owns the practice but is also the only one that is head down and bum up taking care of all the patients? Is revenue generation or collections all up to you? Let me ask you the most telling question, Doc. What would happen if you took 90 days off? What breaks? In my experience, most on purpose chiropractors do not lay awake at night worrying about their practice. They worry about their business. Let's slay that dragon. The remarkable CEO program has helped Hundreds of chiropractors just like you turn the job that they love into the business that they've always wanted. Are you ready to run and build your practice on leverage instead of brute force? Do you want to create the scalability and durability that will allow you to make a bigger impact and a bigger income? What would it mean to grow your practice, increase your productivity and your profitability? Do you want to get your time freedom back? Are you ready to turn your pirate ship into a battleship? If this sounds like you, then the remarkable CEO program is for you. Just last year, 53 of our remarkable clients received the Seven Figure Club Award, meaning they hit the million dollar mark for the first time or their next million dollar level, be it 2 million, 3 million, 10 million, up to 36 million and growing. Now, Doc, is it crazy to imagine that your practice could be next? Click the link below and learn how to apply. Apply for the next cohort of the Remarkable CEO program. We look forward to working closely with you and creating the business that supports your remarkable life, not competes with it.

Third is the direct report goals completed. This one is a highlight for me.

Doc, that's one.

If I only had one, if I had one 100% manager, this would be the one. Yeah, like, you know, everybody's like, keep it simple. I'm like, yeah, well, this would be the one. And it ain't simple. It's super deep. Deep layers deep. But this one says this. All right, so let's just say in the TRP model, you know that we use scorecards. We know that on the scorecard we have the three objectives and the top five priorities organized into the top five KPIs. If I'm the manager, I am saying with this KPI that I'm accountable to my direct reports. Those that are managing the team, check in, check out, back office.

You're the boss.

Yeah. How many of their KPIs goals are they hitting per month?

Per quarter?

That's what this is measuring. So the performance of the team, their success is your success. That's how it works. So if they're not successful, we're not looking at them first. We're going to you first as the manager. Managers. This one's a big one. It is the direct report goals completed. Doc, that's one of our favorite.

Oh, man, that's money. That's like, captures the entire business in one KPI.

Yes.

Right. So just so awesome, man. I'm glad that we got that one in there. That is. That is the most powerful point of Leverage when you're working with a manager is what percentage of your direct reports are hitting their goals. And our remarkable standout on that is 80%. I want to see 80%. So out of all the people you manage, you're man managing Tom, Dick and Harry. I want Tom to have 80%, I want Dick to have 80% and Harry have 80% of their goals met as well, right? So it's like everyone that you are the superior to that, that you're managing, that you're leading, managing and holding accountable. We want to see an 80% or better of their goals completed. That's when you get the best, you know, juice for the squeeze with, you know, what you invest in having a world class manager or COO in the business. All right, so speaking of COOs, right? So if we make the elevation from office manager to COO in the TRP system, that means that you're running the cos, the chiropractic operating system. In other words, the, the COO is running the business, right? So and part of running the business beyond LMA leadership manager accountability is they own the P and L, right? So they own the profit and loss statement, right? So they own profit, right? So here's what we like to say guys, is as the CEO, clinic director, business owner, if you consider yourself the CEO, you own tomorrow's revenue, you own growth of the business, right? So the coo, your CEO, your office manager, right here, they own today's profit, right? You own tomorrow's growth, tomorrow's revenue, they own today's profit and profitability, right? So their scorecard might look and sound and feel a lot like this, right? So as we go through our five favorite metrics for the business side, the, on the, as far as the people domain is concerned, so number one, we're going to talk about labor cost, right? So we're going to take a look at that P and L and be able to say what percent of our overhead is labor, right? So you've got, you've got direct labor and you've got indirect labor, right? So you want to keep a close eye on out of all of our expenses, what percentage of our, of our business expenses is our labor cost? Direct labor would people that are actually involved in delivering the services directly, indirect labor costs would be those people that were indirectly involved, not directly involved. So there's something, and I don't want to blow your minds at this, but there's. You guys know what cogs is, right? So cost of goods sold. That's if you sell a, you Know, you buy a product for 50 bucks and you sell it for 150 bucks. You've got a $100 markup, right? So the cost of goods sold on that would be 50 bucks, right? So the gross profit on that would be the hundred bucks, right? So you marked it up. You had a 200% profit margin there, right? So you paid 50 bucks, you ended up making 100 bucks gross profit on there, right? So labor costs, direct labor costs. When you're calculating, you calculate what's called costs of services delivered. Instead of COGS, you've got CosD, costs of services delivered because you're a service business. In other words, what does it cost us to adjust a patient? In the service business, that's the cogs or the cost of services delivered, right? That's your direct labor costs. And in chiropractic, it sounds something like this. You got to pay the chiropractor, you got to pay a tech ca if they're involved in clinical care, you've got to pay for the consumables face paper, for example, right? And then you have to pay for the merchant account every time you strike the credit card, right? Those are the four things that add together to create the cost of services delivered, right? So labor costs, number one, keep an eye on that. Number two, RPE revenue per employee. Now, this is critical that you understand what this is. So we teach business breakpoints, right? So I love the way that Brandon Dawson teaches us. Every business has breakpoints, right? And you'll come up to these certain breakpoints. This is when your business breaks, right? So there's different ways as you're growing where your business will break down and break, right? So it might. Your marketing machine might break, right? So your conversion machine might break, your delivery machine might break and break down, right? So this is about your team, your team breaking down, right? So when your team breaks down, what ends up happening is they get overwhelmed, they start pumping the brakes, and what you end up seeing is sandbagging. They stop promoting. The business will flatline, maybe even contract, right? So this is when the business starts to break because of your people, right? So RPE is the number that you want to watch as a metric to keep an eye to make sure you're not. You're not approximating a break point. You're unprepared for it, right? So the breakpoints in chiropractic are every $250,000 annually, right? So Breakpoint 1 is 250. Breakpoint 2 is 500. Breakpoint 3 is 750. Breakpoint 4 is 1 million and it just keeps going beyond that. So as you're approximating the next break point every, in essence every $250,000, you should be getting ready to hire the next person to increase the capacity of the business, right? So your break point in a single brick and mortar chiropractic practice for team is about 250k a year. If you're in an enterprise where you've got centralized functions and a headquarters, you should be able to see $350,000 per employee. And this is per full time employee equivalent. Now I know we're throwing a lot of numbers at you guys, but the fast and easy way to do this is if you're using a payroll service. Find out from the payroll service, how many hours are we paying out? And divide that by 40, right? So how many hours a week are we, are we paying out? Divide that by 40. That's going to give you the full time employee equivalent. Okay? And that's what you want to understand, that's the next number. Full time employee equivalent is how many full time employee equivalents do we have on my team? So if you have one full time person, meaning somebody that works over 32 hours, that's one full time employee equivalent. If you have two part time people and they both work 25 hours, that's 25 plus 25, that gets to 50. You have one full time employee equivalent. If YOU have three people each working 15 hours, then it's 15 plus 15 plus 1545 hours. You have one full time employee equivalent. You guys get it right? So for, for this calculation, you want to figure out revenue per full time employee. Not just many people are on your payroll, but how many full time employees you have. Dr. Pete, revenue per employee is a really important number to watch so that you know when your business is ready to hire your next person so you can increase your capacity so you don't get overwhelmed and the business doesn't break. The shorthand on this is basically every $20,000 a month in collections, you're going to be ready to hire that next person, right? So as, as you increase, when you go from like 20k a month, which would be 20 times 12 would be 240. You're approaching break point one. Once you get to $40,000 a month in collections, you're approximately 12 times 40 is 480. You're approximating the $500,000 breakpoint as you go to $60,000 a month in career in collections. Now 60 times 12, that's 720 a year. So you're approximating 750,000 break point three, right? So as you collect 20,000, 40,000, 60,000, 80,000 for every 20,000 Dr. P, you're pretty much ready to hire your next person and avoid that break point. So your break point, once you hire that right person, that a player who pulls the business forward, you turn that break point into a breakthrough.

Dr. Stephen I think what we're doing here is making it so clear and so straightforward for all of our listeners. So I just wanted you to know if you're getting value to these episodes this series. This is part four of five. Hey, we love to get a comment, Leave us a review, give us a Google review, whatever the platform that you might be listening on. And please share this with a friend. Dr. Steven I know we're wrapping, but there are a lot of chiropractors right now in our world, all around the world, I know that just don't have these concepts. They don't have their mind wrapped around this. And this is so helpful. It's transformative. We watch it transform the minds and then the practices of so many chiropractors and many of you hopefully, who are listening. So we're so grateful for the opportunity to serve you. But I just want to use this as an opportunity to say if you listening to this and you're like, wow, this is really good stuff. Like, I need to know this, I need to understand this and we all need to please share it with a friend. It's free. You know, you can just bless, bless a colleague. Please do that. It's the greatest compliment you can give us is simply to share the message. We know that marketing is messaging and we're all messengers. That's the same thing. If a patient shares about the amazing services that you're providing in your clinic, we feel like this is a way that we can serve chiropractic. So please share this, Share this, Leave us a review comment. We'd love to hear from you guys. And hey, remember to tune into the next episode, which is going to be part five, which is one of our favorites. We're going to be talking about money and profit. No money, right? No business. You've got to have the, you got to have the mission. You don't have the money, you got no mission. So we'll pick it up with the money and the mission on our next one. Until then, God bless everybody.

God bless everybody. Hey Doc, if this message is hitting you right between the eyes, it's exactly where we're aiming this message is for you today. If you said, hey man, that's me, that's the thing I'm trying to solve, or that's the thing I'm trying to accomplish, and now is the time. If you're ready, let's jump onto a strategy session. You'll see the link down below schedule, we'll jump on a call with you, and let's discuss exactly how we can help you create your own remarkable practice. Thanks for listening to this episode of the Remarkable CEO Podcast. Remember, what the world needs now is chiropractic. And what chiropractic needs now is more successful chiropractors. If you like this podcast, please subscribe, share with a friend, and leave us a review. And if you'd like to connect with us personally, direct message us on Facebook, LinkedIn, or Instagram. Now go and be remarkable. Sam.