Why Organizational Change Fails: The Expectation Gap Leaders Ignore

J. Ryan Smolarz, M.D., M.B.A. (00:02.869)
Hey Mark, I hope you're having a great day and welcome to the Medicine and Money Show.

Mark Henderson Leary (00:13.62)
I am having a great day. I'm glad to be here. I'm excited to do it like we did last time. It's such a fun time when we get to geek out on this stuff.

J. Ryan Smolarz, M.D., M.B.A. (00:21.803)
That's You're in Austin today, is that right? Houston, that's right. I don't know why I was thinking Austin, yeah, both of those are my old stomping grounds. just as a recap from the last time, if you want to just give everybody a kind of a update on what it is that you do and how you help doctors do what they do.

Mark Henderson Leary (00:24.728)
Houston. Houston.

Mark Henderson Leary (00:46.946)
Yeah, I help people get what they want from their practice. All businesses, but particularly in healthcare, I've developed this fascination with what it is to create what I call a free practice. And a free practice is one that has the ability to deliver amazing healthcare and great outcomes to those patients. It's, I'm gonna get stuck on my three things, I'm so used to doing it.

It's the it runs like a business is super profitable and it's a back it up. If you can edit this out.

J. Ryan Smolarz, M.D., M.B.A. (01:22.131)
Yeah, yeah, we can just stop two seconds. We'll just go. No, no. Yep. And then go for it again. All good.

Mark Henderson Leary (01:25.102)
This is my pitch and I totally dropped it so I'll give it two seconds of pause.

Mark Henderson Leary (01:33.56)
So I help people get more of what they want from their business and particularly in the healthcare space, the practice. And I help them create what I call a free practice, which is based on three pillars. And the three pillars of a free practice are a healthcare organization that delivers amazing healthcare outcomes. That's the first pillar. The second is it has an amazing culture full of people who love being a part of an organization that is healing people for a living. And so they take it for granted, or they don't take it, they don't take it for granted.

and they're grateful to be there. And then finally, it gives that founder, owner, leader the life that they deserve, the one that actually they were promised going into this rather than sucking the life out of them. So what we do is we implement a system of tools to create those things really around the vision, really around traction and health of this leadership team, which what that means is getting that leadership team on the same page with where you're going and how you're gonna get there.

Creating accountability and discipline for that traction of that leadership team to make it real. And having a leadership team that really is healthy, that loves working together and is right person, right seat, doing so much together as a team. Because all too often we don't have that team cohesion. Once we get that, we've earned the right to lead and get that from the entire organization. Because as goes that team, so goes the rest of the organization. We get to the point where everyone is crystal clear on the vision. Everyone is accountable and disciplined.

and everybody's part of a healthy functional team they love to be a part of. They show up, they love it. They're actually happy to work there. And all too often that's not what we see particularly in healthcare. Which is why I have that passion because they have potential to heal and do great things. It's so huge and so often we've just got really difficult cultures and really underperforming organizations.

J. Ryan Smolarz, M.D., M.B.A. (03:19.285)
So the three pillars that you just said, sounds like an absolute dream to me. Having lived it on a day-to-day basis and those, it it seems so daunting and so unachievable. What would you say to the doctors out there that had that reaction? I I believe you, I know you can do it, but it just seems so out of reach.

Mark Henderson Leary (03:26.06)
Yeah.

Mark Henderson Leary (03:49.038)
We'll stop taking the advice of the people who are running terrible practices as a first thing and stop hanging out with those people. And to some extent you have to do a little bit there. I obviously life safety and compliance and regulation, we have to participate in those communities because it's just the law. But if that's the only leadership input you're getting, you're gonna get more of what you've always got. So seeking out entrepreneurial communities of healthcare leaders, spending more time around entrepreneurs, changing the mindset.

because that's really all there is. I've been doing this for almost a decade and when I first got exposed to healthcare, there was so much disbelief that this was possible. It's different in healthcare. And a decade in, it's total bullshit. That's not true at all. It's all just a mindset and if you start getting courageous about making decisions about who you're gonna hire, what you're gonna do with them, what the mission's gonna be, raise your standard of excellence, put right people in the right seats, it's 100 % doable. And when you get it going, it's actually way more profitable and way more valuable. So there's no more excuses.

And so just get your mind out of following the people who are living the wrong vision.

J. Ryan Smolarz, M.D., M.B.A. (04:49.354)
Yeah, I agree with you so much on that because I know for myself when I became an entrepreneur, which I consider back in 2017, running other businesses that it is a mindset and it is something and it's just a little tweak, right? Like you see the world differently and I think that having

someone to walk you through that process like yourself would be invaluable. So what are, if there were just a couple things that you could give the audience, you know, two nuggets to start heading in the direction of having the right mindset, what would you say?

Mark Henderson Leary (05:38.744)
Well...

The two biggest nuggets Depends on who's listening. So let's assume for a second. We've got the Healer slash visionary leader, which is not always the case So sometimes we got some somebody who is in health care because their family Tradition is to be in health care and they hate it have hated every bit of it the entire time in terms of doing the actual care and they really just want to run a great business if that's the case that that's great, I would give you different nuggets

If you are, if you really love what you do and you just want to do it in a bigger scale, make a bigger impact and you see the impact at a bigger level, the first thing to realize is that you're doing three jobs and you will not sustain and grow this organization with any sense of joy. If you don't realize that each of these jobs is taking almost all of your life or more. And until you start delegating one or more of those jobs, you're not going to get there.

and those jobs that you're doing are...

I can't compare it, but from the bottom up, it's that individual healer. It's how you got here. It's the doctoring. It's what you thought you were supposed to be doing. Then there's this next level thing, which is we gotta run the business, run the practice, often referred to as the business administrator, which oftentimes we under horsepower, and you're doing a lot of business type of stuff that's equally full-time. There's also this additional role, which is the visionary leader of the organization, which is what's the impact of this?

Mark Henderson Leary (07:06.466)
the standard of excellence around culture and outcomes, which is a very different leader than that administrator mindset. And in every healthcare organization, there's a place for all three of those roles. And every one of them is a full-time job. And you have to start figuring out which one you're gonna let go of first because you will not survive if you don't get there. And so the first nugget really has to do with understanding how to start breaking out these roles and make your job, your life more possible with the time and energy you've got.

The second nugget is as that visionary leader, you have a clear vision in your mind and it seems difficult to communicate more than likely. And people, you don't seem like people get it and it's them. The problem is you don't realize how complex your vision is and how much of it is not quite baked and how much of it is moving around. And you might even be denied or like sort of resisting this as you hear this, but I promise you, I've done this hundreds of times.

until you document and simplify the vision to something that you could show somebody and they could read it and you would agree that this simple one page document of the vision clarifies it. Until then, you are going to be creating chaos by pursuing this vision. Those two big nuggets are really, there's so much horsepower and a lot of work to get both of those done.

J. Ryan Smolarz, M.D., M.B.A. (08:28.136)
Yeah, so I am the visionary leader and what you just said probably explains me more clearly than anyone has ever done in a couple of sentences and I would imagine that my team would agree with that. So.

With the practices that you're dealing with now, my biggest hurdle is trying to find another ENT to come help in the practice. There are 14,000 roughly ENTs in the country since COVID. 750 have been retiring and we're putting out about 300-ish, call it 350, out of the programs. There's just no ENTs. How do you, what do you do?

how would you approach that?

Mark Henderson Leary (09:22.114)
Well, there's a couple aspects of is I can't manufacture more ENTs and I can't adjust the legality of what you have to, your credentials and how it has to be in place to own a practice. There's obviously lots of tactical ways to handle scaling practice through MSO structures and various ownership models. And I'm not going to speak to those. The biggest issue though is I think clarifying what exactly that role is. And I think we do precious little clarification.

are we, and if this was gonna be a third nugget, and if I was gonna speak to that practice administrator type of person, I would say really, right people, right seat in the form of what we call the accountability chart. The system of tools I work with is called EOS, the entrepreneurial operating system, and the most powerful and simple seeming tool, it's not simple, well actually it is kinda simple, it's not easy to really nail this tool called the accountability chart. And all it's really doing is forcing you to get clear on what

the roles in the organization, what the seats are, and what jobs need to be done to get this business to run right. And you start to realize very quickly you're over-complicating it, you weren't clear, you can't afford to have what you thought, and so you're gonna have to make some hard decisions about what's simple and what's really critical and what's not so critical. And you start to clarify and simplify your thinking through this tool. And it's the first step to go, okay, well, I need a next error. I need somebody to take this over. I'm like, really? Well, what is this?

Because the job you had getting here might be a different job moving into the future. are we talking about a complete, are we exiting the practice? Or are we just elevating to more ownership role? And all of this clarification of what exactly we need from our leaders is very, clarifying of, I need somebody who can just do the business side. OK, well, that's a different thing. I need somebody to be able to carry the vision into the future. OK, what vision are we talking about?

my vision, I just need somebody who can execute on my vision for the next few years, five to 10 years while I'm an owner. Okay, that's very different than I want somebody who's I'm kind of out of inspiration. And I would and I think I've taken it as far as we can go. I think the practice is going to need to reinvent itself over the next five to years. And I just don't have the energy. I want that type of person. And then so those are critically important questions to answer. And until you do, it's going to be 100 % impossible to find somebody who can do it.

J. Ryan Smolarz, M.D., M.B.A. (11:47.316)
So are these, so you mentioned three positions. Are these that three different people need to do? Right now, the people in the practice already have full-time jobs. So you're saying that we bring in two people, not doctors, to take on those roles? Is that what we're saying?

Mark Henderson Leary (12:08.431)
Well, maybe. if, to make sure we're crystal clear on the two models. So when I talk about the three roles of that practice owner, I'm talking about the individual who's doing three jobs that they need to shed. Flipping it around in the accountability chart, there may be 200 jobs in the practice. And the accountability chart will figure out which 200 there are. Or more likely, you will think it's 200 and you'll realize you can only afford 100. And so you have to look at it very differently. And so,

the founder, you, probably did more things than is reasonable. And because of your grit and your commitment and paying a very heavy price, did two or three jobs. When you go to repeat that or replicate that, it's almost 100 % failure rate because it's just a unicorn. I need to hire another unicorn. Well, was it with wings? Well, yeah, of course it's with wings and I need to be pink and I need it to be like six feet tall and like.

No, there was only one of those and it was you. And so we can't, never going to find that one. So, so sometimes it's more than one role. Oftentimes it's more than one role. Um, and, and what you find, you know, I, I would want to slow down because there's so many mutations of, I'm just looking for more help. I just want to spend less time at being the business administrator. I'm perfectly fine a couple of clinic days and, and in the visionary role, you know, a little part time is

you know, running the town halls and beating the drum of how great this firm is, as opposed to like, totally want to exit. And I need somebody to do what I was doing. And that's probably, well, say probably, I have no idea. I don't know who you've got in the organization. Because what you've, so here's the answer, I think. Once you determine what those critical roles are, you might realize you already have those people, except for one, and you only need to find one new one. Or you might find, as you were implying,

I've got two or three jobs I was trying to stuff into one and nobody here can do them. And so I'm gonna need to find one at a time, three people. And some of them might be high dollar ones, which is part of the fear that I imagine starts coming up. how am gonna afford three people? But you might find that one of them is not high dollar, one of them is just, I just need somebody as an executive assistant, or I need somebody to manage something very manageable in the organization that's very reasonably priced, that when they're in place makes that very expensive or ownership level decision.

Mark Henderson Leary (14:30.143)
much more manageable.

J. Ryan Smolarz, M.D., M.B.A. (14:32.616)
So as a part of your process, I would imagine what is happening is you are breaking basically the organization down to its bones, to the scraps, and rebuilding all of the jobs and the roles of the practice. Am I following you correctly?

Mark Henderson Leary (15:00.847)
So great call out we are doing that in whiteboard form So we are not actually tearing the organization down to bare metal We are going to as a thought experiment tear it down to bare metal and put it back together as to what we think we want to have in The frame in the time frame for the next six to twelve months. And so this is a very important thing We're not building an ideal utopia for

J. Ryan Smolarz, M.D., M.B.A. (15:14.346)
you

Mark Henderson Leary (15:29.775)
the impossible future. I'm saying we've had some hopefully modest to impressive expectations for the next six to 12 months. What's going to have to be true for us to get there? And when we do that, most of the time we realize, well, we're not that far off. Most of these things are kind of in the ballpark. We don't need to change much, except for here are some critical issues, got some really uncomfortable conversations. Most of the time, that's what happens. Occasionally, we are way off, like way off.

And that's when we got to get pragmatic and say, what are we doing here? Are we going to transform the organization in a huge way over the next quarter? If so, what's the risk of doing that? Are we going to be definitely successful with that? Or is that too much? Let's slow the transformation down and think about what if we could do that next year, would that be reasonable? And what would the interim steps need to be? That's not that common though. You need to have that possibility in your mind, but most of the time you're looking at

Most of these people are pretty good. Well, that's not true. Most of these roles are in the ballpark of what we need to have roles wise. We have some critical leadership team structure issues that have been working against us. We may have had some very bureaucratic type of roles that we thought we had to have, and we may have been missing some very practical outcome roles that we never thought to put on there. For example, if we have a director of nursing, for example, gotta have a director of nursing in a situation where we have to have that.

But what is the outcome of a director of nursing? It doesn't speak to having a smooth patient experience intuitively. So we might need a role on the leadership team that is the patient experience, the clinical experience person. And this person's clear outcome is to make sure that every time a patient shows up and leaves, that's smooth, efficient, they love it, and it's on time and it's cost effective.

And that can be a very big mental shift for an organization. It would be one title shift that doesn't seem that big a deal in terms of amount of ink, but a massive shift in terms of like, my gosh, the person in the seat has no idea how to make a patient happy. But they do know how to get us compliant. And so what do we do? that's when the leadership shows up and we got to do our.

J. Ryan Smolarz, M.D., M.B.A. (17:53.198)
Yeah, so how this is a kind of a personal question that I'm fighting over right now. And you're probably the perfect person to ask when, you see a successful practice, obviously with your mentorship and your programs and tools and resources.

In the end, what kind of structure do you see that is most successful? I.e. is there a fractional CFO? Is there, how does the back end look? Like what resources do you, or if any, that you find key to helping with that success?

Mark Henderson Leary (18:41.433)
The critical non-negotiable is the number two leader. If you're not that leader. And so most of the time, you're not. There are some exceptions. It's like going to Las Vegas. There's always somebody winning. But if you do the math, the house is winning. And so in terms of successful practices, that physician founder not statistically showing up.

sitting down, run spreadsheets, running great meetings, loving every minute of it. It's not likely the case. So when the visionary leader who wants to create great outcomes is in the OR or in the exam room several days a week and showing up in front of the organization and driving the vision and the culture around what they think really is worth dying on the hill over, that person is probably not great operator. And that's fine. It's normal. And that's not a healthcare thing. That's all business.

And so we got to get that person in place who is capable of showing up, understanding the numbers, blocked into your vision, absolutely locked in on the same page with you and fired up about your inspiration. it's like, I could never be as inspiring as you and you are changing the industry in a positive way. And we love it here and the people are loyal. I'm loyal, but I know how to run a business. I know how to have hard conversations with people. I know how to respond quickly when, when fires pop up and create accountability and grow and mentor people.

And the number one mistake is under-horsepowering that and elevating somebody up who's not ready or overly bureaucratic and not entrepreneurial. And so finding people who have really have a track record and understanding how to show up as a real leader and manager, maybe outside of industry, that's the thing that separates the successes from the struggles.

J. Ryan Smolarz, M.D., M.B.A. (20:32.37)
Yeah, we have that number two person in place. so that is great news to hear you say that. So that sounds like a pretty big hurdle that we have overcome. Is. And obviously there are.

there's the back end issues that come up and that person is not what you just described is not the person that's running the books so I guess what's the third in line what's the third person

Mark Henderson Leary (21:07.065)
I'm happy to dig into something specific. If you're thinking of something specific, I can go right into it.

J. Ryan Smolarz, M.D., M.B.A. (21:09.962)
Well, it, it, was taught, had a fractional CFO on the podcast and we were kind of walking through kind of what they did and that sort of thing. And I'm just trying to wrap my head around whether that having a type of person like that would make the practice more successful.

Mark Henderson Leary (21:36.569)
So I'll answer it slightly differently. at the risk of challenging what you said about having the number two, the number two understands therefore what their leadership team looks like. Now we've co-created a great leadership team because we have, and by leadership team I mean starting with structure first. We have agreed with that accountability chart looks like. We have as a visionary and integrator, integrators we call that number two, got a great number one, number two.

We understand what the vision looks like and we know that we have decided we need a marketing function. And we decided it's different obviously than selling because selling is a part of our operations and we've got an intake or a patient care coordination role, which is our equivalent of selling. We've got a clinical ops seat. We've got a, you know, maybe retail operations if we've got that part of our business practice. We've got a finance seat probably, maybe a people seat. Maybe, I don't know, we could go on. we've committed to three to seven.

hopefully closer to three, critical functions. It's not an EOS thing, it's not a me thing, that's a human thing. For accountability and understandability and to be an effective team, three, seven functions and having no more than seven people in the room and that's a lot. I'm pushing all my teams to be like four, five, six person teams or high performing teams. So then number two understands what those functions are. Understands how to elevate people into those seats and remove them if they don't succeed.

And so in your practice, they understand, you we need the finance function that does this and it includes RSCM or no, RSCM lives over here and we all agree to that and it works. And they're able to really lead and manage those direct reports and those people are exceeding the highest level. And we understand that we need the pillars of the business. We need great financial accountability. And we have gone to that accountability chart and we said, we know what we, the five critical roles of that finance seat are this, bam, bam.

great reporting, it's great forecasting, it's budget compliance, it's RCM, it's whatever it is. And we need to, and that number two is gonna make sure we got right people, right seat. Now, tactically, you can say we're not that big and we have a great financial planning group or individual, our ARAP is fine, we've got RCM handled by one person or it's outsourced and it's working great, but we're not doing that great in terms of our forecasting and whatever. Okay, outsourced fractional CFO might be a perfectly great,

Mark Henderson Leary (23:59.991)
solution to that. However, I don't have any organizations I work with who don't have to have somebody in a finance seat that is the leader of that. And they show up in your weekly meetings and they show up in your quarterly meetings and they are taking account for whatever we've said that role needs to have in terms of we have to have accurate forecasts, we have to have accurate budgets, we have to make sure AR is handled, RCM is running great or if it's not under the seat, that's different thing.

outsourced and fractional leadership, if they can show up weekly and they can show up quarterly for a full day session, then they're fractional, that happens. That's a real thing. And if that's the right person in that seat, that's great. If that's leg of the stool that needs that. Very often though, those fractional resources don't show up like that. And they're like, I'm only here one day a week and I couldn't be, it's actually a half day, quarterly doesn't make sense for me to sit in on that. Then you need somebody in your team who's gonna sit in that seat and use those outsourced resources.

And that applies to anywhere in the organization. If you've got a marketing seat, you've outsourced that. Same exact thing. Somebody on your leadership team shows up every week in your weekly meetings, shows up every quarterly if you're quarterly off sites, and takes account for the success and failure of anything under marketing, even if a lot of those responsibilities and activities are outsourced to somebody else. Now, I kind of went wide on that. I don't know if I'm getting further or closer from your solution, but ask me a question and see if we can get close to the solve for you.

J. Ryan Smolarz, M.D., M.B.A. (25:27.25)
Yeah, so, I mean, we have a bookkeeper and we have a CPA, right? That does the taxes and all that stuff. And, but there's not really anyone looking at the numbers often enough, I think. And so,

It sounds like the answer to my question is it depends. Right. As any entrepreneur will find out the hard way. the I guess the question really kind of boils down to and it sounds like it may be a reasonable place for this person to fit in because a lot of the things you said is things that they do.

Mark Henderson Leary (25:53.891)
Yeah, all good consultants.

J. Ryan Smolarz, M.D., M.B.A. (26:17.674)
is if but what I also hear you say is that if they're not in the organization then there has to be someone making that person accountable is that is that what you're saying okay

Mark Henderson Leary (26:29.465)
Yeah, yeah, yeah, for sure. Someone has to speak on behalf of the firm. Some people can do that on a part-time basis. A whole lot cannot. So you've got to understand whether this person is truly on the team, they're taking account, they understand hiring and firing as critical, and you feel like when they show up there that they're really representing your team or they're not. That's critical. Now, one thing I will point to, that healthy leadership team, everybody understands the numbers. Everybody understands the numbers.

Now that number two leader understands it's on them, if they're working or not. They are the accountable party to the P &L. And this is an inalienable rule. So to have that number two in charge, or if there's only a number one, if it's a combined role, which is like I that's that whoever's that top leader, they're accountable to the success and failure of the business plan as measured in terms of the P &L.

If our profits not where it needs to be, our AR is getting out of whack, our costs are out of whack, that's for them to take account. Chunks of it are distributed, obviously across clinical care and things like that. There's a retail function, obviously the budgets get just bit broken up in their proper chunks, but the ultimate accountable party is that person. That finance function, really nine times out of 10, they have expertise in things like budgeting, but they're not the ones who say we're spending too much on con balls. They're not the ones who're saying, well, they might give you, I say that.

Let me clarify. They're gonna report back to you the accuracy of what we're spending. And if you've told them, or if they've done research about what margins should be, they might share with you, hey, I think we're running hot here, or running cold, or we're starving our patients. But it's not their job to fix it. It's their job to give you sort of the, here's the accurate reporting of what we need to know. And that varies widely, right? So the amount of sophistication and prediction, wildly variable from small and mature.

to immature to large and mature. But this is functionally the same. That finance seat needs to know where every dollar is and be able to tell you what the numbers are. So therefore the rest of the leadership team can know the numbers, respond and take accountability for the numbers that are important to them with that number two being the one who ultimately takes accountability of the whole thing working.

J. Ryan Smolarz, M.D., M.B.A. (28:47.004)
starting to understand a lot better. Thank you for that. So I am, you know, call it 50 years old. I will be soon. I'm, yeah, there we go. I'll take your years. So, you know, there as a succession plan, I can't work forever, unfortunately. And, you know, one day I'll I'll meet my maker.

Mark Henderson Leary (28:58.287)
Okay. Call me 50 years old too, even though I'm 53. So we'll share.

J. Ryan Smolarz, M.D., M.B.A. (29:17.468)
So in preparation for that and whatever that exit looks like say I could magically use my crystal ball to make another ENT that we've vetted them they're coming into the practice. What are the steps that you find important to make that successful and how do you start that process and what process is it? Is there a process?

Mark Henderson Leary (29:45.487)
Well, again, it depends on what the transition looks like. So if this is a, I just wanna hitch the wagon to somebody else. So it's a slightly different process in terms of the rigor. But as I say this, I'm gonna kind of recant a little bit. There's nothing more important than cultural fit. Nothing more important than cultural fit. Even if you're gonna say, I'm washing my hands of this thing and the next 10 or 20 years is entirely on you. And if you wanna turn the staff over and change the mission, that's up to you.

Not understanding a strong fit in transition is likely to create a terrible outcome if you're not very careful. And so I beat the drum really, really loud and consistently in the healthcare world. We just do such a terrible job as an industry and clarifying job descriptions and role expectations and even worse around cultural fit. And so we just have to build a whole new language around clarity. This accountability chart concept.

I mean, even your language, I'm hire an ENT, I'm gonna hire an ENT. okay, I know what you're saying, I'm gonna hire a doctor. And everybody thinks that's a description. It's not at all. It's so, do I need an ENT? Well, okay, why? Because we need patient flow to go through this person? If so, how much? And if it's not all patient flow, what else is it? And how do I know that person? So getting crystal clear on those five roles.

you're gonna run the PNL or you're gonna run the vision. You're gonna be the absolute accountability in clinical care and outcomes. And so we've gotta get crystal clear on the job. But that's also, but that's the second step. The first step is what do we stand for? And so what do we stand for? And I can go really deep on this one. You might have to kind of talk me off the ledge. Because I'm giving talks around this concept I call it the greater good. And the greater good is this, it's the moral obligation of an organization that is

built into the fabric of the organization that comes from that founding leader. What you have always believed and may or may not have learned to communicate crystal clear. And if you haven't gotten it crystal clear, it might feel a little squishy and soft, but it is no less critical. And it is everything, it's the inertia that this organization is living on. It is why those patients still come there. It's why those loyal,

Mark Henderson Leary (32:06.509)
staff members are still there. And to have this handed over, to have somebody who gets it and is not going to break it, you have to be just absolutely zero tolerance around, you don't get me, you don't get this organization, there's no point in talking. And there's a million ways to sort of interview for that. most people, and it's not terrible that people just approach it from a...

hit it heavy approach. I'm going to have dinner with them 15 times. I'm to go on vacation with them and their family. And we're going to, you know, I'm to find out what books they read and we're going to do 18 different assessments. And that's, you know, fine, but it's a little random. It really comes from the core values concept, core values and core focus. And so if you're, if you're running on EOS, you know exactly what I'm talking about. Uh, but it's, taking the time to figure out what a handful of statements would be to put into words what the heck we're so passionate about in terms of who great people for this organization are.

and how are they wired? And the core focus is really about the purpose of the organization in terms of what's created the passion to create it. What was the origin story and who are we helping and why? And focusing our niche as to where we play well and where we don't play so we can focus all of that energy and passion. And these things, the passion might change in sort of a regime change and you gotta figure out is that a compatible shift and what are the costs gonna be for that?

But culturally, if somebody steps in and they're kind of a quick and dirty type of mindset and they're kind of profit-oriented individual and they're very intellectual about their care and bureaucracy's never really bothered them and you bring it into a very entrepreneurial organization where there's a lot of care for each other, there's a family environment, details absolutely matter. The life cycle of a great patient really matters to all of them. You're gonna have an immediate clash of values.

despite having a lot of conversations in potentially in sort of clinical language, metaphorically clinical language about, this is a good practice. It's very healthy. The patients seem happy. And this is a great deal and the number seems great. And I can fit right in and I'm the right age. And none of that stuff's gonna matter when everybody's like, who is this idiot?

J. Ryan Smolarz, M.D., M.B.A. (34:19.274)
Yeah, so I understand what you're saying and I do you do you have here's a question Do you have other subspecialty practices that you work with that are struggling as much as we are with both human capital from?

Mark Henderson Leary (34:40.239)
Yeah, all of them, all of them. Yeah, absolutely all of them. And so, yeah. Because I feel like when I speak in front of audiences and I talk about people and retention and all that kind of thing, it's like, all right, guys, I don't have the magic bullet. Yeah, it's hard to hire. The only thing you can do is get better at and more consistent with it. And just doubling down on the, it's gonna take longer. You gotta be that much more committed to getting and keeping great people.

because the turnover and the exhaustion and the cost of the organization of like, need bodies, get anybody in here. It just costs too much. And you have to start protecting the culture and totally go long game on this. And that's the only way. And I don't have another answer. There is no short game on culture and retention. It's only long game. Why does this matter for the long term? And make sure this is the right people who love being there well beyond.

And obviously if your business model sucks and you can't pay market, that's a problem. But if your business model is at least average and you can keep people at market and you can keep them with love, then, and I use love loosely, that's, go deep on that too, but love is like the happiness, the privilege, the joy of being around people you like. And I got to tell you that in healthcare, well, across all my organizations I work with, a real,

dysfunction. Well, take taking a step back. Visionary leaders probably like yourself can relate to the fact that you always thought you'd work around amazing people, I would assume. And he worked around a bunch of mediocre people for a long time. And you got used to that. And even maybe he built some tolerance to work around some crap people and try to figure out some process and some ways to work around giving better than average service with people who are trying to give absolute crap service. And that becomes the norm. And so

Most businesses it's bad and healthcare can be really bad to go from where we are and go to where I say you deserve to be and you deserve to be in an organization where every single person in that organization is somebody you love and You they get it and they're happy to be there and they're growing and they're in an amazing place in their life You know way

Mark Henderson Leary (37:03.631)
up and down the socioeconomic and education status because there's lots of different roles in your organization. Everybody knows their place and loves it and is growing and is happy with how everything's going in right direction. And there's a lot of learned helplessness around, yeah, we just gotta have crap people. You don't, you absolutely don't. And you have to raise that standard of excellence and be committed for the long game that we are just gonna.

not tolerate people who don't fit the culture and the core values and don't deliver that and learn that what happens is we start doing more with less. We got a seven to 10 person team that's doing terrible work and the culture is horrible and we we've fired two or three people who are just toxic and we're like man we're so understaffed right now and there's four people who are like yeah we're working hard but man it's so nice I love these people and I don't mind working two or three extra hours because I get to work with these people.

and you have to take the faith, the leap of faith to continue to do that. And unfortunately, it's not a six month endeavor. It's a two year endeavor if you're committed. So that's, again, soapbox, happy to dig more into that.

J. Ryan Smolarz, M.D., M.B.A. (38:11.806)
Yeah, let's do it. I'm following you and it's I see this sort of dreamland out in front of my face that that is doable. my head spinning, trying to figure out like how do you bridge the gap between A and B? I mean, I get I understand.

Mark Henderson Leary (38:40.367)
Number one answer is don't be held hostage by not getting enough ad bats. Never ever ever be held hostage by not being able to replace somebody. And it doesn't matter the size or growth status of the firm. If your firm is in massive staff reductions because it's totally bloated and we're having to cut people out and we're reducing and we're in a quote unquote hiring freeze, you need to be recruiting more aggressively than anybody. Because as you shrink, you're gonna realize you've still got

B and C and D and F players and you cannot be held hostage with that. So if there's one thing that stops any organization from turning their culture over, it's that we don't feel like we can replace them. And so there has to be at least one person, probably one person who knows it's their job to be driving as many at bats at all times. So we always, now even if our hit rate is low, even if our batting average sucks, we gotta have the pitches coming over the plate so we can consistently drive it. And so the lever there is

whatever we have to do to get as many at bats as possible so we can never be held hostage. And if it's like three people in a row sucked, then I need to be ready for the fourth and the fifth and the sixth. If we give up on that, we stay stuck.

J. Ryan Smolarz, M.D., M.B.A. (39:52.106)
So when you say at bats, you mean people that are applying for the positions? that okay?

Mark Henderson Leary (39:57.369)
Yeah, some type of candidate for whatever positions you are potentially gonna need. I need another front office coordinator. You probably do. So that's just those kind of things. This making sure that we've always got, someone's looking shaky. this person is, I don't think they're as good as we thought they were. And someone in the room says, they've never been good. you're like, And so you've gotta be able to say, again, I gotta replace somebody? Yes, again.

J. Ryan Smolarz, M.D., M.B.A. (40:24.166)
So with all these new technologies and automation coming out, have you seen it hit practices yet and or do you see it coming?

Mark Henderson Leary (40:34.767)
absolutely. And I think it's amazingly great news. Because I think when we're seeing automation and AI is trying to fill some of those hard to fill positions and we need it, right? know, the doom and gloom of your job is going to be outsourced. And it's like, I wish we were employing those people in the first place. We were understaffed and the people who were in those roles were doing terrible work. And so we need to free those people up to do something they could do better.

and we're getting AI scribes and AI transcriptions and things that are doing great work, know, responding, appointment setting, HR manuals and, you know, call response, call back, appointment setting, agentic patient follow ups, you know, this whole ecosystem of stuff that like, it's not displacing anybody. It's allowing us to get rid of the people who were doing the worst job in the world at best or not doing that job at all. So yes, that is evolving very rapidly.

J. Ryan Smolarz, M.D., M.B.A. (41:32.318)
Where do standard operating procedures fit into all this?

Mark Henderson Leary (41:38.297)
Yeah, it's a good question. And so I will put it into two buckets. There's a lot of compliance related stuff that I don't speak to. That's widely varies based on specialty and the risk profile of the organization. You got to do what you got to do. There's a cost to doing overhead with that. I would argue though that putting the people in charge of those things, regulatory and compliance really understand the importance of that role, especially in people operations, compliance operations of any kind where there's a real, real propensity for this.

absorbing bureaucracy and being okay with it. Your organization might not be able to afford the bureaucracy of somebody, it was a much larger organization and you're going to have to be very pragmatic about how you approach those things. There's a lot of advice and judgment in there that's hard to unpack. But the bucket I will talk about is what I call core processes. In the EOS system, we say there's a handful of truly core processes that lift 80 % of the load in this organization.

that need to be there to support your vision, to take care of your ideal patient or your ideal referral, referring physician or whoever is in this process you're taking care of. And those handful of process could be six, could be 10, could be 12, whatever your hands can hold. And there's probably a handful of critical things. people, like we just talked about, there's gotta be recruiting process. There's gotta be an onboarding process. There's gotta be an offboarding process. There's gotta be way to post these positions. You will not survive if you don't have a core process that does that.

Now, name it whatever you want to name and figure out what's included, but you need to have that. You're going to need an intake process. You're going to have patient coordination, your equivalent of the sales process. You're going to have to make sure that that potential patient gets everything they need and deserve. And then that's going to flow it to some handful of patient care processes and follow-ups and things like that. RCM is probably a process if you're taking insurance. you're not, there's an AR process or billing and all things go with that.

There might be some ongoing patient relationship process, in the end, a handful of core processes. And those need to be simplified and owned by the leadership of the organization. just to bring this down to the ground, I mentioned simplifying, 20 % of the processes you could have will drive 80 % of that lift. And so you're going to have to stop and say, let's stop putting out fires. Let's lock ourselves in the room for an hour. That critical leadership team is a.

Mark Henderson Leary (44:02.241)
What are the handful of processes that deliver what we need? And what are they called? And what are those pillars and foundations? And you'll decide, and you give them names, and then you'll really start the work. What if we just wrote a simple checklist? Something that gives us the steps in the process and the steps of the process. Technically, this is we call process and procedure. Process is decisions, and procedures are the steps we follow.

and create some simple documents like one, two, three pages. This is how we do it. This is how we get the interview process all handled, how we get the proper interviews from sourcing candidates to hired. Why don't we just decide that today? What if we decide that these are the critical pieces we do when somebody starts talking to us about coming to our firm or clinic or whatever? And then it starts to be very easy to...

follow because it's no longer bureaucratic. It's two or three pages. You can train somebody on that. You can walk them through it. You can hand it to them and on day two or three and they forget step three, they can ask you about it. You can tell them and you don't have to worry about some really in-depth training program that's gonna get them going for six or eight weeks because truth is you don't have time for that, least not yet.

J. Ryan Smolarz, M.D., M.B.A. (45:14.054)
tell me about it. What I hear you say is you have to make time to work on the business and not in the business. Am I following you correctly?

Mark Henderson Leary (45:24.687)
Yeah, absolutely. Now, but the you is the part of back to this where we started the conversation. Who's the you? If you're the if you're the visionary leader and you're the individual healer, you're probably not going to be thinking this is Tuesday morning. I'm going to document the core processes, but there's probably there needs to be somebody in the organization, possibly the number two leader who can steward that process. If they're not documenting those processes, they're certainly delegating to people in the organization and co-creating

those core processes. Now I would argue that the first step of the process is that leadership team, you, including your top three to seven leaders of a total of no more than six, seven people in the room, you should agree the core processes. From there, who documents them? Who's gonna do that work? Probably not you. Probably not you, the visionary leader. You're gonna wanna read it and you're gonna wanna have some opinions on it and it needs to be written in a form you could read. If it's 55 pages, no. I don't have that kind of time.

You know, two, three, four, five pages if you're a super detailed organization and you actually have the patience to read it. These are your secret recipes. You gotta know what they say. And if it's beyond that, then we're not speaking the same way.

J. Ryan Smolarz, M.D., M.B.A. (46:37.938)
Yeah, have dyslexia, so it's a...

Mark Henderson Leary (46:40.367)
A lot of us do. I don't, but I'm in the bucket of people who self-identify with exactly those challenges.

J. Ryan Smolarz, M.D., M.B.A. (46:46.634)
Yeah, the 55 pages is not going to work. So.

Mark Henderson Leary (46:50.255)
Yeah.

J. Ryan Smolarz, M.D., M.B.A. (46:52.906)
As the last time we spoke, my head is spinning about 50,000 rotations per second in this noggin. And you have a vast amount of knowledge on how to get so many of us off this hamster wheel. And I want the audience to be able to find you. So please give us where the onboarding place would be to find you for

these questions, the services that you offer.

Mark Henderson Leary (47:26.009)
Yeah, so the easiest way to find me and start a conversation is practicefreedom.com. I've got a host of podcast episodes out there if you want to see my back catalog of things that are out there. But obviously it's a great way to contact me and you're never wasting my time. So in a very short conversation, I can get people kind of onto a next step. And if I can help, that's fine. But very often I'm not, working with me is not the right next step. I can get you to what that step actually is though.

J. Ryan Smolarz, M.D., M.B.A. (47:54.162)
Yeah, so I mean the way that you present the material, it's like I'm looking in a mirror, right?

Mark Henderson Leary (48:06.655)
I hope, I hope. I'm an entrepreneur, right? So I'm not a healthcare entrepreneur, but I lived the frustrated visionary life for a decade. And it was brutal. I started off feeling super smart and very accomplished and very quickly I was stuck. And I spent the better part of seven years feeling like a failure because I couldn't make things happen. And I thought I was an idiot.

And now it was years later that I had somebody show me a couple of tools that say like, know, if you did this, this would work. And it was a total game changer. And that's what started this process of learning that there were tools to do this. And there's enough to it that having some help can be really helpful, but it's very reliable. These tools are not so complex. They create hard questions for you to answer and they're uncomfortable a lot of times, but this is very doable stuff.

If you just kind of get introduced to it and ideally are guided through some of the pitfalls, everybody can do it.

J. Ryan Smolarz, M.D., M.B.A. (49:04.894)
Yeah, I mean, that's a profound statement. Everybody can do it and we're not. Bottom line. And every time we have these conversations, I'm thinking about it for the next three days and then life happens and.

Mark Henderson Leary (49:11.181)
Yeah. Yeah. Yeah. Yeah.

J. Ryan Smolarz, M.D., M.B.A. (49:23.954)
You know, that's, I think that that's probably the biggest pitfall that exists is that we start doing what I said earlier, start working in the business, not on the business. And we just keep running that hamster wheel over and over and over and over.

Mark Henderson Leary (49:39.427)
Yeah, yeah, that's right.

J. Ryan Smolarz, M.D., M.B.A. (49:41.04)
So hopefully you have ingrained in me the thing that I will take away most is that I have to have to have to at least start trying to figure out.

start at the bottom and coming back up and finding the right folks to help us do that. And because I know so many docs that I talked to are are just spinning out of control and you know on the path that either some sort of heart attack or you know health problem in general. So thank you for being here. I greatly appreciate it. Our audience if they don't get something out of this then

I don't know where they're going to get it. so, and to the docs out there, listen, I'm walking the walk. I'm in your position. And it's hard. It's real hard. And to listen to Mark.

say these things, we hear them, or at least I do, and we say, yeah, that's a great idea, and we should really do that. I think it's time for all of us to sort of take a good hard look in the mirror and say, it's time. It's time for a change. And like Mark said, anybody can do it. So.

Why are we waiting? Why am I waiting? I'm asking myself the question. So to take it further, Mark has laid out very clearly how to find him. Reach out to him. As he said, if he's not the right next step, he will point you in the right direction. And my next question to him is, what is my next step? And hopefully we'll be able to do that off camera. But.

J. Ryan Smolarz, M.D., M.B.A. (51:43.098)
I implore you to...

Seek that practice freedom that all of us want so much and You know, there's there's resources that exist and They're one of them is here today. So everybody out there until next week. We're gonna keep banging the drum You know and we can't have a investment journey that helps us Provide freedom without getting our primary practice

under control I hope I'm not speaking for Mark, I would assume you agree with that. Is that correct? So to everybody out there, let's keep this journey going. Let's keep making progress one step in front of the other. And as always, think like an investor.