Gary Kadi uses a dental practice where salaries eat 51% of revenue to show why unclear roles and missing metrics tank profits. He argues the post-Covid target is 30-35% of revenue, not the outdated 20-25%, and that busy staff aren't productive staff without a scorecard.
Questions this video answers
51%.
20–25%.
30–35%.
Chapters
I'd like to introduce you to Dr. B. She had a full team, her salaries were high, morale was okay but production wasn't matching the payroll and really no one knew why. When we dug deeper we found that 51% of her total revenue was going towards her team salaries. That's a lot. Pre Covid we wanted to see that number be somewhere between 20 and 25%. Post Covid we're looking at 30 to 35%. So our strategy here isn't just to start laying off team right that would have the opposite effect on on our culture. Instead we really want to assess our strategy and figure out how we can increase our top line so that those salaries fall into more appropriate range. And really when we looked at it we saw this. There were no clear roles, no defined expectations, no way to measure success. So everyone felt busy but no one knew if they were actually winning. And you heard me say this before, right? Busy does not equal productive.