Co-Blog post with Tusk Partners – Perrin DesPortes
Wisdom & Wandering from the Herd: Human Capital – Marketing
Posted by Perrin DesPortes on Aug 29, 2017 8:11:19 PM
“Leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.” ~Jim Collins, Good to Great
We’re going to take a slight break from our normal discussions of ROI, growth rates, scale and finances to delve deeper into the most important capital in your business – human capital. All of your Key Performance Indicators (KPIs) don’t add up to much if your team can’t execute the plan, so we’re going to talk about five critical roles in the typical DSO and how the responsibilities of each need to scale right along with the person who is accountable for it.
Like many of you, I tend to rely on industry experts who walk and talk this stuff every hour of every day, so I’m fortunate to have Jon Fidler of Zingaro, Fidler and Wolfe as my industry expert in this series.
The importance of having the right people with the right capabilities in the right roles
If you follow successful business leaders, they all have one thing in common. In one form or another their advice is to hire people smarter than you, then stay out of their way. This is no different in the DSO world.
Undoubtedly, there comes a point in running your own business that you can’t do everything. This moment becomes somewhat of a tipping point. Having the right people in the right place allows you to scale the business and, maybe even more importantly, leverage your time.
When we make the correct hires, there can be many positive, lasting impacts. From increasing the bottom line to creating a positive company culture to reducing turnover, the results can be felt both economically and strategically.
The state of the Dental Industry in its current form
The only thing predictable in our business is change. It’s inevitable. As most studies show a favorable growth trend for the industry overall (population growth, aging demographics, better dental education amongst the population, improved technology, etc), no segment is better equipped to handle that growth than DSOs.
As growth occurs, so do the challenges (and opportunities) for the leaders of these organizations. The key to separating your DSO from others: YOUR PEOPLE.
Examination of a specific role: Marketing
In simple terms, marketing is any touch point (advertising, referral, social media, patient experience, etc.) your organization has with a potential patient. Marketing can be different depending on the needs or wants of each individual group, but the common end goal is to increase profit for your business.
Below we will examine the different “typical” roles of the Marketing department and what they entail. As your DSO grows, so do the roles and responsibilities of each leadership position within your organization.
Marketing in a group practice of 3 to 5 locations:
Marketing Coordinator/3rd Party – For most groups in the 3-5 location range, marketing is “outsourced” to a 3rd party vendor or multiple vendors.
Roles & Responsibilities – These companies work directly with the owner/doc in website design, print materials and social media. They are typically “dental specific” and can assist with general, non-custom campaigns and ideas.
Key metrics & focus – New patient acquisition and short-term campaigns (free whitening, low cost initial exams, etc.)
Emerging Market DSO of 5 to 15 locations:
Director of Marketing – Work with the owner/doc in developing a brand strategy that can be used by each location to streamline messaging and brand and leveraging buying power.
Roles & Responsibilities – Focus on centralizing the brand strategy and efficiencies of marketing with internal ideas, initial data and results.
Salary scale – $44,000 – $82,000 depending upon variables.
Key metrics & focus – New patient acquisition, budget responsibility and developing comprehensive marketing plan.
Established Platform DSO of 15 to 50 locations:
Chief Marketing Officer (“CMO”) – Oversees and incorporates the overall strategy, implementation and vision of the marketing initiatives.
Roles & Responsibilities – Focus on strategy/direction with ability to envision the future needs/wants of the organization and how to implement into overall operations; find areas of optimization and efficiencies.
Salary scale – $128,000 – $284,000 depending upon variables.
Key metrics & focus – Hard ROI and analytics correlating all marketing efforts and their impact on bottom line profits & production.
The loyalty conundrum: when promoting from within creates recruiting issues
We are seeing many instances where promoting from within is causing issues from a growth and organizational structure standpoint down the road. It is very easy to promote those that have been with you from the beginning. It helps with morale and keeps employees motivated while also minimizing turnover and limiting salary increases. However, this can come at a cost. At some point the capabilities and experience needed to keep up with your growth will outweigh those skills of your people who you have promoted into VP or C-level positions. This will ultimately put you at risk when you decide that, in order to continue to grow, you need to bring in someone from the outside with a track record of performance, vision and growth.
Finding the right talent and the right fit for the right price
There are many factors that go into hiring your executive level team, and far too many are unforeseen. Are you sure you are getting the right person for the right job? How are you able to know the qualifications of the candidates you are looking at are in-line or better than what your competitor may be hiring? Are you getting a good value? Are you strategically thinking about the impact that this person will have on your organization not just today, but 3-5 years from now? Is the amount of time you are investing into the recruitment of this position worth the exchange of things that are getting neglected?
As you scale your business, it becomes critically important to have the right people on your bus and in the right seats. Most of the time, the “right” person isn’t already in your network, so lean on someone like Jon to help you craft the job description, salary range, and experience level for the role, then help you find the right person to take your business to the next level.
To continue discussion on these topics or any others related to trends in our industry, please feel free to contact either firstname.lastname@example.org or email@example.com. TUSK is a practice brokerage, strategy and M&A advisory firm specializing in the dental market. Zingaro, Fidler, Wolfe & Co. specializes in partnering and advising DSOs and Groups in their search for executive level talent.
TUSK will be a featured presenter at the DEO Associate Summitin Houston, TX on November 4th where we will share “Compensation & Equity Structures for Associate Retention.” We hope to see you there as well!