168: Turning Acceptance and Ownership into a Competitive Advantage - an Interview with Peter Sheahan

What differentiates good companies from not so good companies during periods of change is the psychology. It's not access to capital, it's not availability of insights, it's not the intellect of their leadership team. It is the psychology of that team.

Hi, I'm Emmett Scott and just like you, I've had my ups and downs in the dental industry, but times are changing. The DEO has built a map of how to succeed in one of the most challenging industries to navigate. On this show, we talk to dental industry leaders, solve problems and get you the answers need to face these challenging times and thrive. Welcome to DEO's Growth Secrets podcast for dental organizations. Now let's get started. Hello, everyone, and welcome to another episode of DEO Growth Secrets. I'm so excited to have Peter Sheehan here with us who's going to be at the DEO Growth Summit. This is a man who's written seven books on entrepreneurship and been a disruptor and a leader in the entrepreneurial space. He's worked with big companies like Apple and Chick Fil A and even helps small companies like ours. We were even talking before the show about his dentist and how disruptive his dentist is being in this space, which is awesome. Sounds like a very boutique firm that's really integrating health within dental. So, Peter, great to have you on here and what an incredible background. You know, I'm curious just right out of the gate if, if a dentist or their team was going to pick up one of your seven books, which

straight off the first time off the rank and I'm self promoting my books and all the content. I mean, give me a second to build some rapport and get some love from your.

No, no, no. We're just straight to the point. Like we just, we just need the content, man. We need the answers.

Look, if I was going to buy any of those books, I would buy matter M A T T E R.

Okay, that's your latest one, 2016, right?

Yeah. And in essence, it's about how do you move towards disruption and find the opportunity that is there. You know, I fundamentally believe that, you know, the opportunities in dentistry go far beyond just scale and looking for operational efficiencies. We were talking, as you said offline about, my dentist takes a really holistic approach and a functional medicine approach to health and the role dental hygiene plays to that. And I can show you I'm paying an absolute premium for that experience. They've also, you know, embedded in really smart things like, you know, maintenance packages and sort of concierge like services as well, and so, you know, matter is essentially about how do you do that, how do you move towards those opportunities, how do you begin to learn at the edge of disruption rather than expecting everything to be perfect right out of the gate? And so that's probably a pretty good place to start.

Yeah, I, you know, oftentimes I, I think of my mom's quote, like, if you don't want people walking all over you, get off the ground. Sometimes what we have to do is lift our vision of the potential. Right. And I think we're, we're sometimes just like head on a swivel, looking side to side, fighting the demons. This insurance company or this, you know, cost or this. And right now we have a lot of demons. I mean, inflation is really hitting dentistry hard. And so being able to increase our value offering, being able to look up and above this. And obviously with the companies you've worked with, Apple, Chick Fil a, you know, AT&T, these are companies that are in very competitive markets. It wasn't like nobody had a chicken sandwich before Chick Fil A, you know, or no one ever had, you know, EarPods before Apple. But it's like looking above those, into, into that next layer. Right. And that next level.

Yeah. I mean, look at those two examples. Right. You know, there are other chicken sandwiches, but Chick Fil A make them about as well as anyone else does. Right. You know, and here's a business that can make four or five times more per square foot than any other QSR restaurant in the world, and they close on a Sunday. I mean, it's an unbelievable story of elevating culture and quality so to the absolute highest level. Right. You know, you mentioned a company like Apple. I mean, Apple just makes stuff so beautiful, you want to lick it. Right. And it's the integration and the flow of their products into the lives and the ecosystem of other products that their clients have. Both of those are opportunities for entrepreneurs in the dental space. Right. You know, number one is what is the quality opportunity? What is the higher order need that, you know, patients or customers and have, you know, how do you make the practice experience more seamless? And, you know, I know there's been an emerging trend for well over a decade now in the, in the industry around how do you improve the customer and patient experience, Be on time, meet your own commitments. Right. There's so many opportunities that, that, that are available to us. I will say, though, I think the big one that dentists and practice managers generally struggle with is even if they see the opportunity to create more Value, I think we struggle to tell the story and have, you know, transfer that, that perception of value to the, to the customer. Right. And as a result of that, you know, and by the way, in, in defensive of dentists, right, that's because one, you're incredibly technically gifted and good at what you do. At least I hope so. Right. You know, the, the, you are the product in so many cases, particularly if you're a single shingle rather than a, than a scaled set of operations. But the. You're dealing with a marketplace where people expect rebates and insurance to cover things, and they're not necessarily always used to having to part with their own time and money, or at least their money to pay for these things. Right. And so increasingly, I think we're going to have to get good at selling the invisible, you know, and selling the perception of the value of what we do. End of the client experience, the customer experience, the patient experience as part of that.

So, yeah, it's huge because oftentimes, you know, as dentists, as scientists, we can get to a place where we're like, well, if you really look at the meat structure within Chick Fil A's Chicken, it's really not that different from. And it's the story, you know, as you were saying, like the ability to sell that story. In my journaling this morning, this quote came to me. It was a business quote that I just kind of made up, but it was for me personally, which is your visionary influence exponentially increases as you increase your ability to structure and communicate your story with the systems, resources and milestones needed to execute on it. And so we're, we're playing from the same energy here.

But I think, by the way, that's not an art, Emmett. There is a science to doing that and understanding how to create value, build talk tracks, et cetera. By the way, this is not going to be the focus of my presentation necessarily at, at Growth Summit, but it is an area that I am really passionate about and are doing a lot of research right now. But I interrupted. You may keep going.

No, no, no, I appreciate. So when you say this isn't an art and it's a skill, like how do you think about that? I mean, I'd love to hear just a little bit more about that.

Yeah. Well, let me give you a simple example. My first client in the US Was Harley Davidson, and the outgoing CEO at the time was a guy called Richard Teeling. This is, you know, almost 17 years ago now, right. And Richard Teeling had a quote that was Quite famous, which was, we don't sell motorcycles. We sell the ability for a 43 year old accountant to dress in black leather, drive through a small country town and have people be afraid of him. Right. And, and, and this idea that they're not really selling the functional benefit of that experience, they're selling the experience and the reputation that comes with it. And so for them, that then comes down to, well, what's the design? You know, is it aggressive? Does it feel like, you know, you're making a statement? I mean, they've patented the noise that comes out of the exhaust on a Harley Davidson ride. And so I call it story and stitching. Right? So underneath you've got what's the narrative I'm trying to create? And then you've got, you know, these things like the quality of the stitching on a suit, the sound of an exhaust on a motorbike, the paint job of the, on the car, or, you know, the quality of the waiting room. In the practice, it's what are the tangible evidence points that people link to to reinforce their underlying narrative? Reinforce the underlying story. Right? Now in a branded example like Harley Davidson, you got to be pretty subtle with it. In professional services, you can't be subtle because no one wakes up in the morning developing a narrative of the high value contribution their holistic or their entrepreneurial dentist brings to their life. You've got to give them the narrative. You got to help, you know, configure the story and then use the examples, the stitching as I call them, to sort of reinforce that. I mean, that's like level one of 10 levels of how to, how to do that. But just starting with that, like what is the narrative I want my patients to have and my customers to say? And then what are the evidence points? You know, the moments of truth, the proof points that matter, like opening the box and when you get a product from Apple, like smelling the chicken, when you walk into a Chick Fil A, these are the things that we have to pay attention to.

You know, I love it because it's not just like marketing. You're not just going to like hire someone to do your pay per click and like, hey, make us like Harley Davidson. Right? Like what you're talking about is really that getting integrated into the fabric of, of who you want to be.

Yeah. It's an expression of who you are and who you want to be.

Yeah. When we talk about the culture, so forth, you know, this drives everything from that touch and feel down to how people are behaving, how they're treating everyone. I often encourage people to do an audit of their practice, but not the typical one you would think of like regulatory osha, but do a feel audit.

What does it feel like?

Yeah, so I'm a patient and I drive up and I look at your practice, how do I feel? I open the door, how do I feel? Someone greets me, how do I feel? I get in the chair, how do I feel? I take X rays, how do I feel? Because I think that's what you're hitting on. Maybe that's the stitching piece of it.

Yeah, and it's, you know, let me give an example from, from services. We were doing a project for a large global law firm and the challenge they had is they're trying to like law firms, survive on having the best technicians, like the best, like attorneys. Right. And so they're all competing with each other to attract the best and brightest out of the Ivy League schools and

who can also just spin off and do their own thing at any time as well. Much like dentistry.

Right, exactly. You know, and, and we will, we should talk a little bit about it in the dentistry context in a second. But that we were working for a firm trying to build their employee value proposition because that is one of the other challenges we have in dental right now is attracting great staff who will deliver that experience. Well, they decided that their point of difference compared to the other eight large firms was that they had their attorneys backs like that, a culture of support and kindness. And yeah, you're going to work hard but we're going to take care of you.

Right.

But when you came in for your job interview, it was like at a big rectangular table, there were five people on the other side and you sat there by yourself after waiting in the lobby with these intimidating art and these like big marble staircase and like, you know, you're 22 year old kid out of university, you feel completely overwhelmed and you don't feel like you belong. You don't feel like anyone's got your back. So we designed the experience differently. We, we gave you a buddy before you came into the interview. They would meet you on a different floor. So you didn't have the big intimidating client, impressive lobby. You would have a drop in and have a cup of coffee, share a snack that intern would tell you about, the partner was going to interview you. We put them on round tables now instead of rectangular tables. Emmett, you wouldn't believe, by the way, we doubled acceptance rates just by softening the experience. Now I'm not saying we should all soften the experience. My point is they knew their value proposition. They knew their point of difference. They knew what they wanted the candidate to feel, and then they design the experience around that.

Yeah. I mean, how often? Just out of operational necessity or maybe traditional. Our vision's right. Our execution's just off, Right?

Yeah. And we're doing all right. Like, yeah, there's headwinds.

Yeah.

Like, input costs are up.

Yeah.

Labor challenges exist. But if you're half good at what you do, you're making decent money, probably more than you thought you would. You know, you. You know, if you. If you've gotten over that first hump as an entrepreneur and you've got momentum so you're not like, get the work, get the work, do the work, do the work. And you sort of got through that. Sometimes it's nice to play golf every second Friday or just have a bit of a lifestyle vibe, and, you know, we fall victim to the it's good enough trap, you know, and so the vision's there. We're getting kind of close to it, but we're getting a little complacent, you know, and now, I'm not saying that's, you know, I'm sure that the attendees of Growth Summit are the opposite of that, but I'm just saying generally that happens for entrepreneurs because you work so hard to get it going that you do allow, like, just slowly to chip away at what may have been the thing that made the biggest difference when you got started.

You also bring up a really interesting point, which is those who've been there for a while, the culture might have evolved to this we got your back type piece, but you bring someone new in, and it doesn't speak to that. Like, they'd have to be there for three years before they really appreciated that and all the nuances. And I think to your point, it has to be. Everything has to be so much more explicit. Right. It's like, not that they could understand, but Stephen Covey says, so they can't misunderstand. Right. You're pushing that next level where it's like, they could not misunderstand the fact that we have your backs, like, literally being concierged through the entire process.

And it's. It's as simple as, say, your receptionist going, oh, hey, Pete, it's, you know, 9:15. This is exactly the time of your appointment. I'm going to bring you in now. Like, just pointing out to me that it's exactly the time of my appointment. It's now. And now I'm like, wow, these guys really care about my time. They respect me, you know, or if the, you know, the, the dentist around and like, coming out and going, we deeply respect your time. There are a couple of things we can get started while we're waiting for know Doctor who, whomever. And it is about giving just enough detail that people know the value they're getting, but not so much detail that it starts to feel inauthentic. Yep.

Yeah, it's, it's interesting because I've often said within dentistry, it would be super helpful if along the way someone said something like, okay, now I'm removing this part of the cavity or whatever it might be, right? Just something that's more explicit other than just drills going and things like that. So all the way from the front through the entire process. If you're really proud of something like it sounds like, let it show, right? Let's not hide it.

Well, how about this, Emmett? If you're listening to this podcast and you're thinking about this and you're not proud of it, let's start there. You know what I'm saying? Like, let's start there. Because at the end of the day, right, the, the vast majority of services you provide are fairly commoditized. Right. You know, there are certain very complex procedures and there are certain, you know, applications of innovative technology and materials, but for the most part, 90% of what we're doing, you know, is fairly similar. Right. Which means your point of difference is likely in something beyond just the quality of the, of the technical experience, you

know, and oftentimes you'd say the customer doesn't really understand the nuance of the technical. So if you said, oh, but, but my margin is so much better on this, the client doesn't appreciate that. So you're going to have to find some other level. You're either going to have to be super explicit about that or you're going to have to find some other differentiating value prop. Right?

Yeah. You know what? I hope so. I've done some work in the dental space, as you know. And you know, one of the big challenges we have here in the US Is the amount of debt that new dental, new dentists inheritance or accumulate through their training and education. And then you've got the corporatization of dentistry on one side, you've got increased insurance and risk, you've got inflation and input costs, and you're carrying like 225,000 bucks worth of debt when you leave. It's not surprising that some people are a little Fearful about making that entrepreneurial leap, you know, setting up their own practice, taking an equity position, perhaps in somebody else's, you know, and I think it'd be, here's what I hope people like are hearing, right? Designing that experience is actually fun, right? Being an entrepreneur in this space is fun. You get to, you get to creatively express yourself beyond the technical nature of what you do. And so I like, I love getting into conversations like this and I love thinking about how to design these things. And, and I'm sure that, you know, the Growth Summit attendees are probably pretty, pretty apt to enjoy similar sorts of creative challenges.

Absolutely. And you're going to have some other great speakers called the Bentest, who is, is actually an Instagram and Facebook influencer, has millions of followers on TikTok as well. So to your point, no matter where you are, the ability to upgrade that, that value prop. You know, speaking of the summit, your title for that is how to turn challenge and change into competitive advantage and growth opportunities for your dental company. Talk to me a little bit about what is the opportunity that's sitting under all this pain that we're feeling?

Yeah, well, number one, the opportunity is underneath it because everyone's feeling the pain. And those who are most willing to accept that reality and take ownership of doing something about it are going to immediately experience some form of a competitive advantage. You know what I mean? Like take the labor challenges that we're all kind of bitching about right now. We've been bitching about that stuff for 20 years.

Right?

Like at some point you're going to make it a world class employee experience or you're not. But it's time we stop complaining. Because the power has shifted from organizations to individuals. The war for talent is over. Talent 1. Like, the sooner we accept that the truth will set us free, right? And so just by definition, the more challenges we collectively face, the more opportunity to differentiate from a competitor is in that environment. Right. And so what we're going to focus on at the summit is really kind of three critical ideas. Number one is the, the, the number one obstacle to agility. The number one obstacle to responding effectively to change. In our experience, we've been doing this for 20 years is the unwillingness of the owner or the practice manager or the CEO to accept their change reality. You know, maybe it's pressure from insurance companies, maybe it's the fact that employers are trying to shift costs from their balance sheet or onto their individual staff's balance sheet. Maybe it's people are starting to do the roi on some of the insurance packages, and they don't really can't see it there. Maybe it's. It's the fact that tools are 40% more expensive than they were previously or that, you know, a hygienist is, you know, 30% more expensive. Like, we're seeing all these things happen, and we can just. We have two choices. We can confuse our awareness with acceptance, or we can set ourselves free of the emotional burden and just go, that's my new reality. I need to do something about it. In my experience, it's easier to do something about it than it is to accept it. Does that make sense? Like, there's this sort of subtle resistance to the change that's happening to us rather than for us. And that subtle resistance holds us back. It means we talk about the same thing year in, year out, but we don't go back and do anything about it. Right. So that's the first thing we're going to drop in on. I'll stop, looks like.

Yeah, yeah. So, no, I really appreciate what you're saying. You said the action's actually easier getting over the first hump, which is acceptance. Is the delay there some kind of false hope that will return to the past that never fully existed?

It's a false hope. It's a values conflict. I was working with a bunch of entrepreneurs yesterday, and we were talking about the challenges they have with their technicians. They're losing technicians to fast food restaurants paying 23 bucks an hour. And these guys are highly skilled labor, you know, and they just, they're like, they want more flexibility. They want air conditioning in the service bays. They want. And they said, like, the owners are so upset that they want good working conditions. And they're like, oh, when I got my first job, I had to walk to and from the service center uphill, barefoot, in the snow, both ways, you know, like. And it's like they don't. They're not willing to accept the fact that that's changed. And no one cares what it was like for you 30 years ago. No one cares. Right. Like, build a bridge, get over it, you know, and so, like, there, there is this sort of values conflict that's emerging or, you know, how hard I had to work or do you know how much debt I took on when I got started? And, like, it's not. It's not.

You know what's so fun about this, Peter? And I say that, like, those who come to Summit, those who are involved with the DEO because of what you're saying, because the fact of the change isn't going to stop. Right. Like once we get to this one, it's just the way the universe works. The next change happens, those who come get the competitive advantage you're talking about doesn't require more capital, by the way, doesn't require some smart mba, anything like that. Like this is just, oh wow, I'm different. And all of a sudden the other 240,000 dentists who weren't there, you now have a competitive advantage, apple level competitive advantage over to say now what do you want to do with this?

And, and the point about it doesn't take more capital is a critical point. Right. So we have a saying in our practice that transformation is a psychological journey. First, strategic second.

Right.

And what differentiates good companies from not so good companies during periods of change is the psychology. It's not access to capital, it's not availability of insights, it's not the intellectual of their leadership team. It is the psychology of that team. Right? And an aligned leadership team, with full acceptance of the current reality, with a burning ambition to progress their patients and customers lives to the future, they will outperform the limitations of capital like structure, market forces six days a week and twice on a Sunday. Yeah.

This is where you're saying, like the focus on consolidation. Consolidation can just get you into a bigger group that still hasn't mentally made the shifts they need to. And this is where the, you know, quintessential guy in a garage who just has the right mindset can just start crushing all of that. People ask me all the time, do you think big dsos corporations are going to rule the world and like, only if they bring better value to the patient because the patient doesn't know the difference. Right? Like, yeah, what you're the size of your dental group, you go to one, you don't care. Two, you probably don't even know what, what you care about is. Wow, this is bringing a lot of value to me and I really appreciate it. I don't care if it's just one doc with, you know, a couple chairs. Right?

So look what, what is happening in dentistry. It's going from a very large cottage industry with lots of single shingle and individual operators to a much more consolidated delivery path. And I mean we've already seen that at supply levels, albeit I would say dental products are still more fragmented than other medical sectors as well. So we're still, we're seeing that maturity and that consolidation. There are three business models, Emmett, that emerge in every industry when this happens. So I'm Going to, I'm going to save you 30 years of pain.

All right, awesome. Just take us to the end result.

There are three models, right. Number one is scale and volume, right? Where you basically amortize the cost of both, use your scale to drive down costs and then amortize your cost over a high volume of patient spend. Right. It's unlikely they're paying a premium. They're probably in heavily rebated environments. But you're moving them in and you're moving them out, right? So this scale volume model, this was like Dell computers in with the technology boom, right? Then you have what's called a services model, right? Where the most important asset you've got is the relationship you have with the patient, relationship you have with the customer, right? And you find ways to sell more things to that patient, that customer. It's value added service, it's the prepaid experiences, it's the, you know, whatever concierge level treatment it is. How do I increase my average dollar sale for this relationship? That would have been like IBM who sold hardware, but then worked out it was all the consulting and services that sat around it that really drove their value. The third model is niche. Now, niche doesn't mean small, it just means narrowly targeted, narrowly defined. Apple is a niche player, right? They decided to turn their back on enterprise level architectures. They started, they weren't going to commoditize the space. They were going to make the most beautiful technology that you could imagine. And turned out people were prepared to pay for it. Now, not everyone. That's why Dell had a healthy business and IBM had a services business. There is space for everybody. Here's the biggest mistake dental entrepreneurs and the leadership teams that they hire will make it is that they fail to choose the business model that, that they want and they'll end up in the middle where they're neither large enough to have a low cost structure, they're neither differentiated enough to attract higher fees, or they don't have enough expanded services to really extract value from that relationship. And they get stuck in the messy middle where they're neither that profitable, neither got that good a lifestyle, and they ain't changing anyone's lives, right? And so the first step when you're facing that consolidation and looking at the maturing of an industry is decide what kind of business you want to build. And then here's the deal. You come to Growth Summit and you hear a thousand good ideas, right?

Yep.

Don't define them whether they're good or bad ideas, define and, and qualify them Based on are they aligned or misaligned to the vision I want to create?

Right.

So if someone is presenting to you a dental chair that is like uber high quality, cutting edge, but you want to be a low cost provider, that's probably not your game. But it definitely is if you're on the niche side and it's all about a world class patient experience and technical excellence or whatever that differentiator is, right? When you're hearing a strategy around hiring, does it apply in a services model and do you need a broader set of understanding? Does that make sense? And so totally the clarity of the entrepreneur and the CEO is the first step. And there are really just three models. And the biggest mistake you can make is not choose any. And the second biggest mistake you can make is choose one, but keep trying to be the other things at the same time.

It's so powerful because I think because of the scale and volume, let's call Walmart or whatnot. We get so caught up on that that we think, well, industry's over, that's what everything's going to be. And time and time again it's proven that that's not true. You can take one of the most consolidated markets like banks, right? You got your Wells Fargo and Bank of America. And yet all the time you know, I'm in Crumb, Texas and three banks open up that I have no right. There's always opportunity for that next level of service model, that next level.

You just can't be average.

Yeah, well you can.

Multiple standard deviations from normal, right? Like if, if Walmart can deliver 90% of the experience, then we have to push. We either have to change the way the market perceives a quality experience, which will move them to the edge of the Belco, or we need to move further to the edge of the Belco. You know, I mean the, the, the both can exist, right? Like, yeah. Do Toyota sell a lot of Corollas? Absolutely. But they also sell a lot of Lexus too, you know, and like there is both a, there is a bifurcation that happens and it's, it's okay. There's, there's room for all of us, mate. Room for all of us.

I'm excited. So this is June 8th through the 10th. It's in San Diego, California. This is the type of stuff you get from DEO. This is why it's the dentist entrepreneur organization. And when you're thinking, what's my competitive advantage in the marketplace? I mean, I'll just. I love what you said, Peter. Like, it's mindset. It's mindset. And that clarity of mindset, that ability to articulate it. Then you get an entire team behind you doing this. The office manager's thinking the same way. Your practice, your. Your regionals, whatever it might be. And like, you become unstoppable, right? Because you've picked something to be unstoppable. And. And there's not confusion.

Well, you just unpacked the. The. I said there were three ideas. The first was around the mindset. The second is having a burning ambition, like a strategy that is designed to move your customers to their future. And then the third is around alignment, because if you can get an alignment around a thing, you will become unstoppable, providing you've picked a strategy that the market values and needs and you've accepted your change reality. So I. I didn't mean to cut you off, but that was. You're right. On my thesis.

All right, so go over to deodental group.com you can find the event there. You can get registered. Listen, this is something you want to bring your team to because frankly, and this was the competitive advantage I created by bringing the team. Then they get it like, I'm not going back. And they're like, oh, Emmett with his other new ideas. You know, it's like, emmett, we want to do that idea. Like, let's get this aligned, man. When they're pulling you, that's awesome as a team versus when you're trying to push. So, Tom, bring the team along. Let them listen to Peter. Let them listen to these other events that are going on. Upgrade the mindset. You walk back and you start crushing it. Peter, thank you so much for being on. I really appreciate it. Look forward to seeing you in San Diego.

San Diego in summer. What a perfect time to be there. If nothing else, come along for the weather, right?

Exactly. Exactly.

I'm looking forward to this.

Wonderful. And those who want to have more of this conversation, come over to our DEO Growth Secrets over on the Facebook page. And until next time, keep smiling. Thank you for listening to deo's Growth Secrets podcast for dental organizations. Continue the conversation on our Facebook group and meet other dental leaders, get questions answered and the strategies you need to succeed. Plus, we have some free resources for you right there on the Facebook page. Remember, you're not alone. Let's do this together. Join DEO's Growth Secrets Group on Facebook. And until next time, keep smiling.