The Value in Building Core Values

Evolving the strategy and messaging are key to building strong core values through growth.

By Daniel Beaird

Patrick Nelson, CFO, Platinum Dental Services

As an emerging DSO grows its business, its strategy and messaging must evolve. Patrick Nelson, Chief Financial Officer of Salt Lake City-based Platinum Dental Services, knows that firsthand. Platinum Dental Services was founded in 2012 and he joined in 2015. 

“In the early days, our training focused on metrics and pre-appointment hygiene rates as well as new patients, retention and average daily production,” Nelson said. “All of those metrics are very important, and they help drive success if you get them right. But if the focus is solely on metrics, it isn’t very inspiring to other people. So, last year, we got really serious about defining our core values.”  

Platinum Dental Services started documenting its core values around service, teamwork, humility, education, family and relationships. 

“We gathered a lot of feedback from our partners,” Nelson said. “And we went on a tour across all our locations.” That’s 23 locations in total with 17 in Utah and three in Colorado. 

Working toward a common goal 

Platinum Dental Services drives better performance working toward a common goal. “For example, if we want to talk about patient retention and case acceptance, let’s not talk about the metrics. Let’s talk about what impacts the metrics and that’s patient experience. Let’s treat the patient great and make sure they feel comfortable,” he said. 

A lot of metrics fall into place when core values like these are focused on. Nelson found that they get more emotional buy-in from their team members and doctors these days, and that creates a unifying voice. 

“People knew what we stood for and that built up our goodwill,” he said. “We should have focused on our core values sooner than we did, but I think that’s a common mistake among many DSOs. Our core values have aligned our shared vision and goals, resulting in changed team behavior.” 

Nelson said you must believe your core values, and you have to talk about them, otherwise they can become just another poster on the wall. “We had team members, at times, call us out about that,” he said. 

That’s a good thing, according to Nelson. He added it shows that Platinum Dental Services’ core values resonate with its team members. “It requires effort and time, and you have to talk about your core values to make sure you remind yourself and your team members what we believe,” he said. 

Setting the right expectations 

One of the biggest mistakes emerging DSOs make is failing to set the right expectations for its team from the beginning. “In the early days for us, for example, our expectations, agreements and contracts with some of our doctor partners were pretty loose,” Nelson said. “They weren’t very explicit as to who does what and how the economics were split and how we made decisions about investing in new equipment and new software. In most cases, we’ve resolved that. In other cases, it’s ended poorly. But as the business evolved, our strategy and partnerships evolved.” 

Nelson said setting the right expectations goes beyond the day-to-day business of the practices and into hiring the right people. “When hiring, we used to like highlighting the positives – we’re going to grow this practice, you’re going to love it, you’re going to get along with the team members, and you’re going to add so much value – but sometimes we set the wrong expectations by not highlighting the hard work. That’s something we’re trying to resolve and correct right now.” 

Doctor partnership agreements at Platinum Dental Services have evolved with a more professional tone and there’s more investment in training its team members. 

“We’re trying to set the expectations of what this job actually looks like during the training process,” Nelson said. “That makes us better and stronger.” 

Challenges change over time 

Nelson said any business owner or DSO must think through their business model and as it evolves, really think through communicating transparently with all its stakeholders to make sure that they are all aligned toward the same goals. 

“Challenges are different over time,” he said. “When we had 10 locations, we were very different than we are now.” 

“The current challenges are shared expenses as we get larger and the allocation of those expenses,” he continued. “We have better, stronger purchasing power now. We have shared expenses, and our regional managers work across multiple locations with specialty supplies, specialty suppliers, shared marketing budgets and shared marketing campaigns. Those are accounts of scale.” 

That requires better reporting, communication and controls on the accounting side to make sure the shared costs are allocated correctly across locations. 

“In the early days, we were trying to get our chart of accounts consistent across all locations,” Nelson said. “If you’re a smaller, emerging DSO, I strongly suggest you do that. You want all of your profit and loss statements across all locations to look the same. If you’re going to report non-doctor compensation, you want to report that consistently.” 

Today, Platinum Dental Services targets struggling dental practices to take over and avoids the kind of bankrupt dental practices it took over in the past. The practices must have a patient base with more than eight operatories and a history in the community, but are underperforming. That could be a practice with $500,000 in annual revenue to $1.2 million, depending on its number of providers. 

“We feel like we do a good job at taking those mediocre practices and turning them into successful multispecialty practices,” Nelson said. “Given the right practice, we can dramatically improve operations and financial performance.”