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[00:00:00] Hello everyone. Welcome to The Testing Psychologist podcast, the podcast where we talk all about the business and practice of psychological and neuropsychological assessment. I’m your host, Dr. Jeremy Sharp, licensed psychologist, group practice owner, and private practice coach.

This episode is brought to you by PAR.

PAR offers the RIAS-2 and RIST-2 Remote to remotely assess or screen clients for intelligence, and they also offer in-person e-stimulus books for these two tests for in-person administration. Learn more at parinc.com.

Many of y’all know that I have been using TherapyNotes as our practice EHR for over 10 years now. I’ve looked at others and I just keep coming back to TherapyNotes because they do it all. If you’re interested in an EHR for your practice, you can get two free months of TherapyNotes by going to thetestingpsychologist.com/therapynotes and enter the code “testing“.

[00:01:00] Hey folks, I am back today to talk more about the latest installment in our journey through the Entrepreneurial Operating System or EOS. This is a long-running series. At this point, I had no idea that we would be cruising into year 3 of EOS when I started.

There are plenty of episodes in the back catalog that you can go search to chronicle this journey. All you have to do is search EOS on The Testing Psychologist website and you’ll pull up all the previous episodes.

So the idea here is that I’ve been chronicling our journey through the EOS system as we have scaled our practice. We started about two years ago and have been implementing this business framework to help our practice run more smoothly.

Today, I am talking about our recent two-day [00:02:00] annual retreat for our leadership team. Like I said, we are heading into year three, so this is our second two-day annual and it catapulted us into the third year with EOS as our practice continues to evolve. So I invite you to buckle up and hang on as we talk through the two-day annual and future directions for the practice.

All right, let’s jump right into it, two-day annual.

So a little bit of background, the last time we left off, it was September of 2023. We were approaching our all-staff retreat that happens every year in late September or early [00:03:00] October. We were restructuring our admin team. We were about to transition to salaries for all of our practitioners and admin staff. And so here we are coming back after all of those changes. We’re now back together for our second annual retreat and the first step into year three of EOS.

So just a quick word on the cadence of EOS. You start strong in the very beginning. So you meet for a full eight-hour day, every 30 days for two months. So this is essentially three eight-hour days, full-day meetings in the first two months to really get going. Then you move to the cycle of doing one eight-hour meeting every three months, in a two-day annual meeting, where you meet for two days in a row for eight hours each.

So we are wrapping up the second full cycle with this annual meeting here. So this is a two-day retreat for my leadership team. We go off [00:04:00] site to get away from the office and we meet for eight hours a day, two days in a row.

After the first day, we go out to eat together, have some drinks, and decompress a little bit. We don’t tend to talk about the practice actually, which is really nice. This is a time for us to connect and strengthen our leadership team and get some real work done for the practice.

Another quick note, at this point, two years in, most businesses are starting to consider self-guided EOS rather than continuing to work with an implementer. So an implementer is an external consultant who comes in and leads each of these eight-hour days that I’ve mentioned.

So at two years, most businesses are considering transitioning away from the implementer and doing what’s called a self-implementation. [00:05:00] I’ll talk more about this a little bit later but we are going to hang on and use our implementer for at least one more quarterly meeting.

So what was actually going on heading into this annual? Well, my energy was tempered a bit. It’s been admittedly a tough two months in our practice. The fall was rough, y’all. The annual retreat went well, I will say that, but it was rough for two other reasons. The first one was that our transition to salary was hard. It was much harder than I thought it would be.

We started to prep for the salary transition back in, I think March or April of 2023, we rolled it out to the staff in terms of what their salaries were going to be, all the details around [00:06:00] the salary transition, what it would look like, what it entails. We did all of that starting in August of 2023. We met with folks in September of 2023, and then we rolled it out halfway through November of 2023.

So this is a long runway for the salary transition. What I learned is the numbers were not the problem. People had questions about the numbers and how we were going to convert hourly payments into a salary. We did have to overcome some beliefs that this is just a Trojan horse to get people to work more hours without getting paid for them. That is not the case at all, but we worked through those questions.

So the numbers weren’t necessarily the problem. What was the problem was more the people stuff like the emotions, the feelings, the change management. [00:07:00] I talked about this in the salary episode from two months ago, but many of our staff understandably had some big reactions to the change and there were lots of questions after we actually implemented it.

Even though we did the best we could to transition salary and prepare people, there were a lot of little anomalies, nuanced situations, and exceptions that we just were not able to predict. People understandably were a little shaken up by that and did not like the ambiguity as we figured out the answers to some of these unpredictable questions.

The biggest challenge was figuring out what to do when people didn’t hit the hourly minimums required for their salary. A few folks were concerned that they were going to get fired or lose their benefits. [00:08:00] Even though we clearly stated throughout the process that that was not going to be the case, people were still concerned.

We ultimately decided to give people a grace period for November, December of 2023 as we all adjusted to the salary and their hourly minimums. We reduced the hourly minimum requirement by 15% to give people a little bit of a buffer before any kind of action was taken. So that was the biggest problem.

And like I said, there were just a lot of little questions, like how do we account for group therapy time if there are more or less participants than anticipated? Do all missed appointments count or just certain ones that we charge for? Just little questions that were hard to anticipate.

I’d be lying if I said that we have solved everything but we are definitely working through it and things [00:09:00] are in a better place with salaries now. Again, the feeling’s much more difficult to manage than numbers. As is the case with many of these situations, emotions override data, and we learned very quickly, maybe not as quickly as we should have or could have that you can show people numbers as much as you want, that feelings are going to persist even in the face of black and white numbers or data or calculations. Change management is a real thing, y’all. It’s a real thing.

The other tough part is that we’re going into this annual down a member on our leadership team. Our assessment director who had been with the practice for almost seven years at that point decided to strike out on her own and [00:10:00] that’s a huge loss. Losing people is always hard, especially testing folks. She was our assessment director and especially folks who’ve been with the practice for so long. She was one of my longest-tenured employees and it’s a huge loss.

We’re still working through it as a team, both logistically and emotionally, but it certainly changed the tone for the annual because our leadership team was only three people. I was a little concerned about what that was going to be like. Ultimately, I think we emerged much closer. The three of us were much closer than we were when we started and that was a nice silver lining.

So all that said, I was feeling a little burned out on running the practice and was just really hoping for a positive experience from this annual to get us back on track. So that’s all the background.

Again, this is meant to be somewhat messy. I’m pretty transparent. This is just [00:11:00] what’s happening as we head into this major marker for our leadership team.

The structure is as follows. First day of a two-day EOS annual is big picture. The agenda is like so. We review the prior year and prior quarter’s numbers. So did we hit our targets? In this case, the answer was yes for the most part. We didn’t hit everything. We were slightly under our target for profit but we did really well. So we hit our numbers. That’s always a good thing.

We spent a lot of time doing what’s called team health. You have to keep in mind EOS is designed not only for mental health practices but all kinds of businesses that may be slightly less or significantly less emotionally attuned and so this is basic team-building stuff. It’s pretty simple but [00:12:00] it’s still really cool. We went back over the book Five Dysfunctions of a Team, I talked about this last time but it’s Patrick Lencioni, I’ll link it in the show notes.

Great book. It’s a leadership fable. It’s a story. It’s a fiction book but it reads like nonfiction. You get inside the inner workings of a business as the leadership team works through a number of issues. He uses the story to illustrate these five dysfunctions of a team, which are the absence of trust which leads to fear of conflict which leads to a lack of commitment which leads to absence of accountability, and then finally leading to inattention to results.

This is a bit of a pyramid structure. Trust is at the bottom. This is the core [00:13:00] baseline bedrock feature. If you don’t have trust, then you can’t do conflict. If you don’t do conflict, people have a lack of commitment. Without that, you don’t know what you’re accountable for and without accountability, you don’t know what you’re measuring. Nobody pays attention to results.

We went through the five dysfunctions of the team, we rated ourselves. This was eye-opening in that we perceive that our leadership team is actually pretty strong in each of these dimensions but when we extend these dysfunctions to the rest of our practice, it was much shakier. So you’ll see this as a theme as I talk through the content of our meeting and how to rebuild trust and connection with the rest of the practice.

We also went through some exercises like answering questions about ourselves, personal questions to give the other leadership team members some insight into our personal background. [00:14:00] We also did an exercise that I found really interesting and somewhat challenging. It’s called the Johari Square. Basically, people got to share something that they appreciate about you and something that they would either like you to stop or start doing.

So last year, the request that I got was to be more nurturing, for lack of a better word, to be more emotionally attuned, to not just jump to problem-solving, and to have a little bit of a softer side with folks. There was that.

The feedback this year was a little bit different, folks requested that I actually be more direct [00:15:00] with what I was getting done and to stop avoiding tasks that I find boring or uninteresting. They had me pinned down. This is a little bit hard to hear but it is true. I tend to prioritize things that are interesting to me. I think that’s relatively normal but it was getting to the point and there were a few examples where it was hurting our practice and putting other people on the leadership team in an awkward position because they were waiting on me to do things and I was not prioritizing those.

These are relatively simple things in the team building world but it was still pretty connecting. It goes to show I have such appreciation and gratitude for my leadership team that they can call me out on my bullshit and the stuff that I’m doing to get in the way of our practice. In fact, it just happened again last week [00:16:00] when my assistant director called me out and did so in a way that I could hear even though it was hard. So I just have a lot of gratitude.

This meeting is a good time to be able to do that and we have the time to process through it. That’s one of the markers of a healthy team. So lots of gratitude for my leadership team.

On that first day, we also did what’s called an organizational checkup. It’s a 20 to 30-question quiz on a variety of topics about the practice and how we’re doing in each of the six key areas of EOS: the vision, the people, the data, the processes, the issues and actually getting traction. We’re doing okay. Our score was about the same as it was last year, maybe a little bit better which is nice, but it gave us a lot of areas to improve.

Let’s take a break to hear from a featured partner.

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All right, let’s get back to the [00:19:00] podcast.

To conclude the day, we did a SWOT analysis. This is one of those business acronyms that sound silly, but SWOT stands for strengths, weaknesses, opportunities, and threats. This is cool. We get to identify what’s working well, what’s not working well, things that we could pursue as opportunities, and external threats to our practice.

Luckily, we did not receive a lot of external threats, which is great. We do have some opportunities, of course, we did really well. We’re always good at identifying the weaknesses, honestly. The main takeaway from this exercise is that it generates a lot of issues to put on the issues list and work through.

So that’s how we end the first day is we identified lots of issues. We’re putting issues on the issues list, things to process, things to discuss, things to solve [00:20:00] for the following day.

Before we wrapped up, we did check in on our values, our core focus, our niche, our marketing strategy and our three-year target. I’m not going to spend a lot of time on those because we didn’t change them very much but it’s important to know that EOS, very structured. We’re talking about each of these things in pretty good detail just making sure that our values are clear. Our focus is clear. Our niche is clear. Our marketing plan is clear and our three-year picture is also clear.

So that was the first day. It was great. We went, like I said, grabbed some drinks, got a little food, had a really good time together and we came back pretty refreshed for the second day.

So day two is more like a typical quarterly meeting. We started by reviewing our three-year picture, making sure that we were all in agreement with that, which we [00:21:00] were. We reviewed our issues list, made sure that all the issues we wanted to get on the list were on there.

As a sidebar, if you forget, this issues list is pretty central to the EOS model. The issues list is the place where you keep track of everything that you want to talk about, all the problems, all the concerns, all of the struggles, that’s the issues list.

So we reviewed that list. We did a keep, kill, combine, which means we will look through it to see if there are any duplicates or any things that we could combine into the same topic. We got rid of some things that we didn’t need on there and made sure that we were in a good place for later when we were going to actually start working through some of those issues.

Then we spent some time on our one-year plan. Of all the content, this was one of the most engaging and [00:22:00] difficult experiences of the two day and this is why. Over the past 10, 11, 12 years, we have grown a lot.

Just to give you an idea, this is how much we’ve grown from year to year over the past several years. Let’s start back at the beginning and whenever I started tracking this, 2011 or something. So 1st year, 150% growth. You read that or heard that exactly right. We doubled and a half. So 150% growth, next year, 75% growth, next year, 22%, 50%, 65%, 20%, 31%, had a low point at 12%, then up to 51%. Then the last two years, we grew 32% from 2021 to 2022, and then [00:23:00] 41% from 2022 to 2023 in terms of top line revenue.

That’s a lot of growth. I went from under $100,000 in gross revenue in the practice to nearly $3 million. So we’ve grown a lot to say the least.

So why is that relevant for the one-year plan? Because this is the first year that we have very deliberately said we want to flatten the curve. We are not going to grow our top-line revenue this year. We’re going to stick right where we’re at because we want to focus on our profit and our people.

So this was really tough. For me, I’m very performance-oriented and I certainly have come to equate growth with success, more money, all [00:24:00] that. It’s hard to disconnect from that but as a lot of people say, top-line revenue is a vanity metric. It’s really easy to grow. It’s really easy to keep bringing in revenue and growing your practice. The difficult part is doing it methodically, mindfully, deliberately, and truly scaling, not just growing. So doing this in a way that your team is stable and the profit is stable.

So that was a decision we made. I had to disconnect a little bit from the growth mindset and realize that success was not just reflected in our top-line revenue but it was going to be reflected hopefully this year in increasing profits, improved systems, and most importantly, trust and cohesiveness among our team.

So part of this is that we had to realize that we just weren’t growing intelligently, even though we’ve had these conversations [00:25:00] before in hindsight, we’re just not doing it as well as we want it. So we’re going to slow down. We’re going to stop adding people. We’re not hiring for growth, we’re hiring to replace any folks who might leave but we’re not trying to increase our staff and focus on systems and relationships to rebuild the trust among our practice.

So that was one of the most compelling and difficult parts of the day as we backed away from any true growth this year and then focused on modest growth for the next two to three years.

Another big part of EOS, those of you who have been listening might remember is rocks. Rocks are just goals. So we set our rocks for the quarter. We’re always dialed in making them very measurable and realistic.

So we are going hard on our admin team. Our admin team has been in a little [00:26:00] flux over the last several months. We’re still dialing that in. So a big rock is just getting our admin team stable and hiring a really good admin leader.

We’re focusing a lot on technology, so we have been using a system called PracticeVital which tracks sessions, hours, and units to help monitor clinician productivity, essentially, and whether we’re hitting our goals. It’s a really cool piece of software for anyone with this on their radar. If you need to be tracking these numbers, it looks at session counts or units build, cancellation rate, retention rate, churn rate, a lot of things that are relevant for therapy but also relevant for testing as well.

Again, that’s PracticeVital if you want to go check them out. I’m not getting paid to endorse them or anything but we’ve really enjoyed the software so far.

[00:27:00] We’re also focusing on anchoring into our new payroll and benefits software. That is a huge transition which we did as part of the salary move. We are using a software called PayCore. I would not recommend them very clearly. I’ll say that again; I would not recommend PayCore. They’ve been a nightmare to deal with. If we could do it over, we absolutely would not do it over and go with them. We would go with someone different but we are bought in at this point and it’s a lot of sunk costs and we’re going to stick it out for a quarter and see if they’re worth staying with. So that is a goal for us.

And then we spent a lot of time during this day doing what’s called IDSing, identify, discuss, and solve. So we went back to the issues list and identified the most important ones, and with the help of our implementer or consultant, we worked through some of these issues.

One of those was [00:28:00] our admin team. We restructured our admin roles and decided which ones we need to hire for, which ones we can keep our existing folks in. That took quite a bit of time. It’s harder than it might seem, y’all, figuring out who needs to do what on your admin team. The second one was we talked a lot about how to rebuild trust with our employees.

As I start to wrap up, what are the reflections? This was an interesting annual in that I walked away with a lot of quotes and simple statements that really stuck with me, that’s not always the case, but that was the case this time.

I want to just read some of the things that got said or presented that really stuck with me. The first one was, it’s not what you preach, it’s what you tolerate. This is speaking to pretty much any aspect of your practice. So any policy you might have, any [00:29:00] expectations for your staff, any goals, it’s basically like it doesn’t matter what you say, it’s what you do that matters, and that stuck with me.

That’s very relevant. I think a lot of us, we have lofty goals or values and when it comes to actually putting them into practice, it’s harder. So it’s not what you preach, it’s what you tolerate.

Another one is if you let the wrong people stay, the right people will leave. So this gets at the idea that if you have a hard time letting go of folks who are not a good fit for your business, eventually the folks who are a good fit are going to get tired and walk away.

As part of the team building, I found out that my assistant director can juggle. That was really cool.

One thing that [00:30:00] I’ve mentioned that also came out of this is that this is what we’re calling “our people-focused year”. We’re doing a lot to build trust among our team.

Another little platitude that came out of this is in any decision, you have three choices. You can accept the situation; you can change or adapt to the situation or you can end the situation. So those are your only three choices when it comes to anything you’re wrestling with.

The last thing that I’ll throw out there is that the longer I do this, the longer I figure out that owning a business is a state of relatively constant chaos punctuated by moments of peace and not the other way around. So I myself believed and I hear a lot of practice owners with the belief or the question, I suppose, of when will this settle down and just be chill? When will we get [00:31:00] to normal? When will we get to the easy time? When does this become easier?

The answer is, you might have those times briefly but there is no getting there in most cases. It’s a roller coaster especially as you run a larger business and bring on more people. They’re, like I said, constant state of chaos punctuated by moments of peace.

Final reflections, it’s kind of weird. I was looking back on the notes from our last annual and my thoughts there are still actually very relevant in that it feels like we are still making pretty big, hard decisions to move our practice forward and continue to work through this dynamic of what I would call making the leap from a bunch of friends who work together, which is relatively loose, not a [00:32:00] lot of accountability to what I would call a legitimate business.

There is a lot of grieving through that process as we transition to more of a business, some people don’t like that. It comes with more structure. It comes with expectations. It comes with accountability and with accountability comes holding people accountable and enforcing when folks aren’t accountable, and that sucks sometimes.

It creates the opportunity for people to be unhappy and potentially leave, then these are just difficult choices as a leader and I’m sure any of you know if you’ve had to make hard decisions that it’s no cakewalk.

So I built this practice with the intent of creating a close-knit group of folks who actually enjoy one another and their work. I don’t think it’s mutually exclusive to running a successful and profitable business, but I will say focusing more on the business definitely means disappointing some folks, [00:33:00] excluding potential team members if they’re not a good fit and moving into that place of company over individual people.

It’s really hard. I’ve told my team two times that this past year, 2023 was the most difficult year of leadership in our practice that I’ve ever had. I’ve come as close as I’ve ever been to feeling burned out in our practice and continuing to work through that. And like I said, I’m just thankful that I have a great leadership team to help.

I am feeling burned out on the daily work, as much as I try and my team tries to pull me out of the minutiae, it keeps creeping in. If you’re struggling with this as a practice owner, I’d say just consider this validation, it’s really hard to truly back out and [00:34:00] only do the visionary work. There have been a lot of great moments. And like I said earlier, it seems like those moments are the punctuation marks rather than the norm, at least so far.

Onward and upward with this journey, we’ll be back in April 2024 after our next quarterly meeting which might be the last one with our implementer so stay tuned.

All right, y’all. Thank you so much for tuning into this episode. Always grateful to have you here. I hope that you take away some information that you can implement in your practice and in your life. Any resources that we mentioned during the episode will be listed in the show notes so make sure to check those out.

If you like what you hear on the podcast, I would be so grateful if you left a review on iTunes or Spotify or wherever you listen to your podcasts.

And if you’re a practice owner or aspiring practice owner, I’d invite you to check out The Testing Psychologist [00:35:00] mastermind groups. I have mastermind groups at every stage of practice development, beginner, intermediate, and advanced. We have homework, we have accountability, we have support, we have resources. These groups are amazing. We do a lot of work and a lot of connecting. If that sounds interesting to you, you can check out the details at thetestingpsychologist.com/consulting. You can sign up for a pre-group phone call and we will chat and figure out if a group could be a good fit for you. Thanks so much.

The information contained in this podcast and on The Testing Psychologist website are intended for informational and educational purposes only. Nothing in this podcast or on the [00:36:00] website is intended to be a substitute for professional, psychological, psychiatric, or medical advice, diagnosis, or treatment.

Please note that no doctor-patient relationship is formed here and similarly, no supervisory or consultative relationship is formed between the host or guests of this podcast and listeners of this podcast. If you need the qualified advice of any mental health practitioner or medical provider, please seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with expertise that fits your needs.

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