114: Partnering with a Larger Group

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Hello, everyone, and welcome to another episode of DSO Secrets. I'm your fearless host, Emmett Scott. And today I'm thrilled to be with Tarek Ali Partners at Orthodont and Modern Smiles. And we're going to talk through something that I'm seeing more and more of, which is discussion around partnering with a larger organization with a larger group and everything that goes into that. So those who are considering partnering with a larger group, those who are thinking about bringing in individual practices or smaller groups on, you know, Tarek has a lot of experience both consulting and doing this himself. So anyway, Tarek, thanks for being on the show today and really appreciate you taking on this. This topic.

So, Emmett, glad to be here. Thank you very much.

Yeah. So let's start right off. Like, you have a specific way you kind of divide this out, which is nice from a framework perspective, because most of the time it just feels like overwhelm. So how do you think about when. When you're bringing someone on or partnering with a larger group, how do you kind of break out the different buckets?

So whenever we are thinking about a life change like that, remember, your DSO or your business is your baby. You've seen it grow from inception all the way to where it is right now. So there's a lot of emotions and a lot of going back and forth in your mind, but technically, you go through. You put them all in three different buckets or maybe four buckets max. The first one is you analyze it through a strategic aspect. Why am I doing this? Are they compatible with me? What's the mission? Vision? Core values. So you first define your core values. Like, oh, I care about integrity. I care about quality of care. I care about my community. I care about my team members. So you evaluate this option with this lens, with this bucket, and you do that inadvertently. You do that subconsciously in your brain. And then the second bucket is, okay, what happens Monday morning? Yeah. Great, warm fuzzies we're going to partner. I'm going to be bigger and stronger. But what happens Monday morning? What's my role going to be? What's my regional manager's role? How is marketing going to be done? How is HR going to be done? How's it going to be done? How is procurement going to be done, how's compliance going to be done? And a whole list of things. And then the third bucket is okay financially, how's that going to work out? Well, you know, I'm a business owner. I need to support families either whether it's my own family or the families that are, that are employed with us. So we need to make money and we were in it to have a high return on investment as well, not just caring for the community and patients. So you're also in the business to make money. So these buckets typically are. They go through your mind, you just don't know it. And the fourth one is basically the emotions around that. How am I going to feel? Am I going to feel okay? Is this going to take away my authorship and I created this, or am I really happy partnering with people and sharing that?

Yeah, I love this because so often we're kind of feeling through it and going out to dinners, looking over financial, but having these clear buckets. So I want to start with the emotions one, because this one's probably the most fascinating to me. And it's a lot easier for, for us as entrepreneurs and business people to say that we're making a very strategic decision and deny the fact that we're making a very emotional decision. So some of the things I've seen, I'm curious your thoughts is as an entrepreneur, one of the things that gave us a lot of energy is there was tons of complexity. It was kind of all on us. And though that's a huge stress and anxiety inducing feeling, it's also an adrenaline rush. Right. And there's also this independence, lone wolf, I'm in the ring, I'm taking the shot, and I'm going to be the one that conquers all. And I think a lot of business books out there give the impression too of kind of this individual, rugged, individualist type perspective. And so one of the things that I've noticed is this idea of partnering people really struggle with because it almost feels like failure to them. And you see it in their business because they struggle to delegate and provide that level of leadership too. They're kind of in all of the details as well. So they've got embedded in them this overall Feeling that if I'm not stressed, I'm not succeeding. If I'm not feeling anxious, I'm not ambitious. And so they have some of these unhealthy, in my opinion, unhealthy connections that, you know, initially for me and for others as entrepreneurs kind of drove us. But then we hit this brick wall, and we still try to use some of those tools. I don't know. Have you seen something similar? And is there another way that you would break that down?

Yes, you absolutely nailed it. And sadly, Emmett, some consultants out there promote that. They say, hey, why partner? You're doing great, you're growing. Or, why partner, share your equity where you can have it all yourself? Things like that. And they give examples of like, so and so partnered, and now. So it is actually in our culture, and it's mainly in a capitalistic world in general, is the individualism is, I want to do this myself, which is great. Individualism is great. But you also have to have collectivism and collaboration in order to reach your goals. And alone, you cannot do everything. And I always think of the partnership in two separate types of partnership. There's the competitive partnership. Let's say I'm a general dentist, you're a general dentist. We partner in an office. Well, the more patients I see, the less you see. If we're just looking at this from this angle, right? Or let's say you and I are eating a pizza. The more pizza I eat, the less you eat, and the more you eat, the less I eat. So that's. It's competitive some sort.

Now, you're definitely losing in that situation. Yeah.

No. Well, the other type is the collaborative partnership. So let's say you play the guitar and I sing. The better you do, the better I look. And the better I do, the better you look. And together we grow. So to put our minds in that mindset of, hey, I really am going to grow significantly if I hold hands with partners. But it has to be in a way where you are doing something that they are not either, whether they're not. They're not willing to do, or they. They're not capable of doing. And they are doing something that you're not either capable or willing. And that's how collaborative work. So I agree with you. It's a cultural thing like, hey, I need to do this macho man. I need. I can do it. I've done it all myself. And then also people around you, they praise you like, oh, look at your greatness, and how amazing.

You can't believe how far You've made this. Well, look at how much you're managing. Look at how much you're doing. Yeah. I mean, the world, you know, especially the American culture, really does have a workaholic culture that it praises and so forth. If we were addicted to something else, you know, some kind of drug, they wouldn't be as excited. But, yeah, that addiction to that work and adrenaline rush, you just get praises. Oh, man, you work harder than anyone else. Oh. You send emails late at night. You know, all of these things is. Is somewhat praised. Right. And that hustle culture, that hustle mentality. And I like what you said, though, Tarek. We're not promoting here that you just partner with anyone. Right. So a bad partnership is probably way worse than being on your own.

Absolutely.

And so I think that leads real naturally into your next framework, which is that strategic part. Like, I think one of the places that we can feel like we're competing with the potential partner is around our ideas, around our strategy, and we want that to be complementary. Right. And some of this is, like, going deep. Well, is my logo going to change? Right. And how much attachment do I have to the logo changing? A lot of things that we're concerned about controlling, at least what I found in conversations are not going to change, you know? Well, am I going to be able to continue to be ambitious and open up locations, or am I going to be able to bring a great culture to my team? Am I going to be able to do X, Y and Z? A lot of times a good partner is going to understand that that's your wisdom, your competitive advantage, your X factor. They're not going to want to change those things. Right. I mean, to me, a good complimentary partnership would be what are the things that you want to retire from that are not your highest and best use? Like, yeah, maybe you're the best person at reviewing doctor pay currently, but wouldn't it be great if somebody else was doing those calculations and having those conversations,

doing a better job? Of course.

Yeah. Yeah. So is that kind of in your strategy bucket? Is that part of the strategic piece?

Yes.

Where do they want to go? Where are you going to go? And also, how is some of the work going to divide?

Yes. So the strategic part goes back to that complementary or collaborative partnership. You really have to first realize, and I remember I said this on stage a few months ago, you have to realize and look in the mirror and say you suck. Because we all suck at something and we all suck at a lot of things. But we. Our brain tends to mask it like, okay, no, I'm okay there. I'm okay there. So first you have to go to the mirror and say, you suck. It's okay, you suck and you need to do something about it. So when you realize you suck. Okay, what do I suck at? Well, I suck at doing financials. It's not my forte. Yes. Maybe I have an MBA and I have an idea on how to do financials, but am I going to do this for the rest of my life? No. Do I have enough experience to run a $20 million company? No. Financially? No. Well, someone else with better experience needs to take that over. Same thing. Marketing. Am I, do I have a marketing degree? No. Am I going to be the best at it? No. So look in the mirror and say, you suck. So that's when they tell you about all these leadership theories and, and, and they have, you have to delegate. And we, for some reason that just doesn't apply to us. You're like, oh, no, I'm immune to all that. So when it comes to.

And we use like that example, here's things that I found I do is, well, I've hired someone before Tarek, to do it, and they didn't do it as well as I did. So I need to continue to do it. Right. We have like kind of poor excuses on why we're not able to partner or delegate, et cetera. And on that I love, like, where do I suck concept. I think a lot of it has to do with where am I not passionate? And I love the like 20 years from now, is this something that I want to be doing? That's a great. If you're not able to be like, well, I really suck at this, maybe it's okay. What are the things that in 20 years you don't want to be doing? Let's be honest, then if you don't have the passion for it, then that's probably not your highest and best use.

Absolutely. And whatever your strategic KPIs are, they could be targeting some markets, they could be patient care milestones, they could be specialties served, they could be number of team members hired, like, hey, I want to be the biggest employer in my community. They could be target revenue, they could be target net worth. So whatever your KPIs are, how are you going to get there and be the best? And if, if the answer is I can do it by myself, or you know what, have at it, that's good for you, great. But if the answer is like, there's no way I can be 20 locations alone or 50 locations alone, or there's no way I can have the best customer service ever without having these pieces. At some point, you're going to have to partner. Just like, at some point, you have to delegate to your managers and regional managers.

What I love about this conversation is I love the quote, I can give a man anything he wants. The hard part is for him to figure out what he wants. And I love that as a personal, like, bar and challenge, which is, you know, all of us are constantly figuring out what we want to do when we grow up. And so part of, like, going through this process, even if you aren't going to partner with someone soon, to start to follow what you're talking about. Tarek getting clear on, like, what would keep me emotionally from partnering. Do I have some. Some blocks strategically? Where am I trying to go? Because sometimes I've seen people walk into a partnership and they're like, hey, I'm so excited. I'd love to partner. I'm like, awesome. Where do you want to go? And they're like, I have no idea. I was hoping you would. Right. And that's a conversation that definitely, like, partners can build out a strategy, but you know, how much better to be at the place that you're talking about. Like, hey, here's some key markets that I'm excited about. Here's some patient types that I really want to serve. Here's doctor types that I really want to support. What is it that you really want? Because I think too many of us maybe get caught up in that third or fourth bucket that you're talking about, which is the financial. How is this financially? And we're like, hey, there's a really great financial opportunity. We got to kind of back into these other things because that financial opportunity is only going to be there to the extent we bring value to the marketplace. Right? To the extent we know how we want to support doctors, to the extent we know how we want to treat patients and staff. So, anyway, this strategy work, even if you weren't partnering with someone tomorrow, would just be great work to start doing today.

I 100% agree. And, you know, good coaches, and you are a good coach, will. Good coaches will gear the conversation towards a probing phase where you can help them realize what they want. But it's definitely a lot better and easier if someone knows exactly what they want or at least have a general idea. It helps them whether they partner or not. It helps them even in their mission, vision, core values and objectives, when they're lining it out. When you Have a vision board out there, puts in your memory, in your subconscious brain. This is what I want to do. This is what I'm focusing on. So everything goes through that filter in the lens to say, oh, yeah, this. This really aligns with my. Because it's easy to say yes to everything. It's very hard to say no.

Well, I'm very gentle, at least with myself, and I think it translates into others in that, hey, whatever I decide today, it could change in the next six months, right? But decide something today of, hey, here's who I want to serve, here's who I want to help. So, okay, let's move to the next one, because I love it is operations. What a great way to figure out what you suck at and what you're great at. But by going into the operational component of saying, okay, if this partnership happened, what do I want to do tomorrow? Oftentimes, doctors who are really concerned about control, I'll play a little bit of a game with them, and I'll say, hey, Doc, I want you to be able to control anything you want. So let's start at the top of the list. Do you want to control payroll? Like, do you want to do payroll every day?

Right?

It's like, no, I don't want to do that. All right, do you want to prepare the financials? No, I don't want to do that.

All right.

Do you want to come up with the marketing strategy? Well, I kind of like to give some input here. Okay, great. Blah, blah, blah, blah. You know, and going through, do you want to do hr? Do you want to do the hiring? Do you want to determine compliance? Do you want, you know, and then you get into, hey, do you want to do the clinical vision? Do you want to decide how patients are treated, et cetera, whatever that list might be. To me, it's even helpful for myself to decide what are those things I want to do and what are those things I want to delegate. Because I think what you're going to do Monday morning, it's great to go into the partner and say, hey, here's where I'd love for you to have strengths, because I don't want to do these things Monday morning anymore. Now, they might not be able to take it all on the next day, but let's build a plan so that I don't have to do that anymore.

So what if they say, this is

where I'm passionate about. Yeah, go ahead.

What if they say I want to keep everything? Do you tell them, like, you know, why are we talking get out of here.

Well, yeah. I mean, isn't that true, though, is like, hey, I want a partner, but I want to control everything. I have found, Tarek, that there are individuals that control is more important to them than impact or even money. Right. Like, they will do decisions that put them in a place of control but lower their financial outcome. And I think it's important to identify if you have that in yourself or if the person you're trying to partner with has that, because that'll be catastrophic if you've got partners where control is really the currency, I don't think.

And there's an underlying reason for that. You mentioned that, which is they've hired people in the past, they weren't as competent, so they felt that they need to take over that. And it became a. A culture in their environment. Like, I need to do this myself. So, yes, it's. And it's the basic of leadership in general.

Well, and I think all of us, you know, feel very much like we've taken a lot of risk as entrepreneurs. But let's be honest, the biggest risk we take is that next step of trust. Right. In an individual. And, you know, risk has failure associated with it. If we dwell on it and never take the risk again, then we limit our, our current growth. All right, so operations, anything else you want to say about operations?

Yeah. So operations, what goes through your mind generally is the big buckets of operation, hr, it, marketing, procurement, compliance. So you really have to sit down, put these items and go like you did the exercise you did, and go through them and say, okay, on a scale from 1 to 10, how awesome I am or how sucky I am, and if you are like, let's say three or below, then you just have to look in the mirror again and say, you suck. It's okay. Completely fine. And then find out what is the best solution for that and who's the best partner to take care of that. The strategic component and the operations as well.

Awesome. And then we move to the fourth bucket here. So we had Motion do that. Analysis. Strategic. Okay, where do I really want to go? Right. Operations. What's my day to day that I want to take on? And what's that integration plan or what's that transition plan going to look like? And then this financial component, can you kind of talk about that?

Yeah, the financial components, you're still a business and you're doing this for profit. Yes. It's great when you do pro bono work, mission work, helping your communities, and your main goal is really to help Your communities. But at the same time, you really have to make a plan profit and you have to have the highest return on investment. Otherwise just go invest in the stock market or something or crypto or whatever it is. But you decided willingly to get into this business in order to have a return on investment. So your mind goes through, hey, this is my baby. I created it from scratch and I've seen it grow and I've seen my net worth grow. My precious, right? So these things go into your mind and then you're like, what's going to happen to my precious? You think about your net worth in five years, you think about dividends, you think about salary, you think about all these like financial commitments you have in your life, whether they're personal or business. You think about your team members. Are they now, are they going to give them all raises and do this and then profit's going to go down or they're going to be stingy with raises and then for the sake of profits, are these people like profit hungry? So you, all these things go into your mind. So you have to categorize and say, okay, net worth, dividends, salary, return on investment, return on equity, ROI, ROE and then the five and 10 year plan. Am I going to exit in 10 years? Is this something I want to do for the rest of my life with limited roles? So all these things go to your mind. That's the financial bucket.

I love this framework because I think a lot of us just go into the relationship and frankly we're making it up as we go. So I really appreciate you being on TARC and giving us this framework. Any final thoughts as you think through the emotional piece, the strategic piece, the operations and the financial piece that you'd say to our listeners?

I say one main important thing you have to consider whenever you partner, it's integrity. Partner with someone with integrity. Everything else will fall out the window if the person or the entity or the group doesn't have integrity. So this is the core, the core of the core. And everything else will work. If you have good intentions and I partner with you and we have a hiccup, we both know that we have the best of intentions, so we're going to work it out.

But if I be honest to say, we are going to have a hiccup, right? It's like marriage. It's going to have issues. Are we, do we trust each other enough? Right. To know that when this fails and this doesn't happen, because we're going to put together this beautiful plan on how our marriage is going to be amazing, right? But when that partnership starts to have issues, when the strategic plan doesn't work out like we thought, when the patient flow changes and staff at turnover doesn't go, are we able to get in the same room again and know looking each other in the eye like, okay, we've got a problem, or are we looking at each other like you're the problem? I love getting that up front, right?

100% agree. If I have certainty that you're seeking the best interest of the group, I know for a fact we're going to come to a resolution. And if I had the slightest doubt that your interest is not aligned with mine, then more other conflicts will come up. So that's my final thoughts. Integrity is number one.

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