EP36: Create Your Dreams; Dr. David Ahearn

Podcast

Dr. David Ahearn was with Dr. John in the beginning. These docs understand the mastermind culture that helps to create successful dentists and have worked incredibly hard to get where they are today. Dr. Ahearn took a detour on the traditional road map of dentistry and now designs and creates efficient dental operatories along with being a highly productive doctor himself. You wont want to miss his incredible story!

“EP36: Create Your Dreams; Dr. David Ahearn” Transcript:

[music] Welcome to the Double Your Production Podcast with the Team Training Institute. The one place designed for dentists and their staff who want to grow their practices by following in the footsteps of those who have done it. You’re in the trenches. We know exactly what you’re going through. And now your leaders, the stars of the podcast, Doctor John Meis and Wendy Briggs. [music]

Welcome everybody to this episode of the Double Your Production Podcast. I am just totally stoked today because I am here with my longtime friend, a person who is a dental genius, one of the most intellectual people I know, Doctor David Ahearn. How’re you doing, Dave?

Hi John. It’s great to be here. It’s really wonderful to have the opportunity to reconnect and start this.

So yeah, it’s been a while since we sat down together for sure and we had lunch and we talked about a bunch of things and we were walking through some of our history together so and that was pretty fun.

It was amazing to think back it’s heading towards two decades ago that we bumped into each other at a meeting– can we–?

Yeah sure.

So Greg Stanley who many of you remember and revere had a group called The Elite Doctors. It’s a little embarrassing. When I got the thing I said, “Don’t show this to my staff because they’ll give me crap about it.” And so we had to send accountant’s financials to go ahead and get into the meeting which I expected to be the little pony amongst thoroughbreds which is really true because I–

Remember they had a gold level and a silver level [crosstalk]?

Yeah, [inaudible] silver platinum or something. And so I got there and I was just surrounded by some just folks that I just revered.

Same.

And John started to put us together after that meeting and the group that came from that was really something that I don’t think will ever be quite replaced. That moment in time when the industry was changing that much, when there wasn’t a lot of dialogue amongst practices producing big numbers. The guys that were doing it didn’t know even who to talk to.

Right. And frankly, most of them didn’t know there was anything special about what they were doing. They didn’t have a frame of reference.

Didn’t have a frame of reference, right. There was no frame of reference to go ahead.
And now with social media, the internet, now there’s some frame of reference but it’s really skewed because so much of what’s there is inaccurate–

Just like any other social media now. Then we didn’t have information and so people didn’t know what they didn’t know and people were doing extraordinary things. So sharing started to happen but it was truthful sharing. It was shocking to go ahead and see some of the things going on. Now a lot of my time is kind of having my BS meter on trying to sort through and I don’t know how we’re going to get around that really.

Yeah, I don’t either. Back in the day, before all of that when somebody would give me numbers that seemed unrealistic or unreal, I’d hop on a plane and go see them. And that’s when you find out whether the numbers are real or not when they say, “Yeah, come on down.”

“Come on down,” yeah. “Well, maybe you shouldn’t come.” [laughter].

So some of the people in that group – one of the guys in that group – is still the most productive dentist that I know of. He’s hovering now at about $430,000 a month in production with his own two hands. That’s not including any associates, not including any hygiene. Absolutely incredible. And he was in that group and I had the pleasure to go visit him a handful of times. But it was a group of people like that. Wasn’t all the same business model either. So there was the– this group would share, we’d get on the phone every month, we’d have a topic, and we’d beat the topic to death over the course of an hour or so.

But you had a guy that had 10 hygiene rooms. And you go, what does anybody do with 10 hygiene rooms? How can you possibly scale that? How can you get to do all the– I mean, how can one or two docs do all the checks? And so you work through that. Another guy that just did 80% of revenue was sedation. And who’s doing IV sedation back then, right? Really cool spectrum.

Yeah. The guy that had two ops, all he did was large reconstructive cases, right? Another guy with 16 locations. So it was a really broad group, and it was really a lot of fun. Learned a tremendous amount. When we started that group, I was the smallest practice, I believe. It didn’t take me long because I’m a good learner and a good [crosstalk] learner.

Yeah, you’re a good learner. You’re an amazing learner.

So that was super. And so now, we start to fast forward into all the things that have changed. The industry has changed so much in that. And I really want to focus on the thing that I learned from you at the time. You had two companies at that time, so you were only practicing part time. And my focus had always been on total production, actually total collections. And you came in with this idea that was really kind of foreign to me, and that was because you only could work part time, you were trying to maximize a number I didn’t even pay attention to.
Yeah, production per hour.

Production per hour. Yeah, so–

It was–

–tell me about that.

It was really the only metric– I just knew that if I could keep ascending that number while holding the relative costs of the rest of the office [inaudible], I didn’t have to look at anything else. So part of it was my moronic pursuit of not having to look at too much paper or computer screens every month. I mean, I’ll confess that that was a strong part of it. I abhor doing that. I know many of you love doing that, I don’t. But the other part of it was I knew that that was the altimeter if I could just go ahead and keep accelerating that for me and then for associates that I was moving them in the right direction. And so we stop watched everything that we did, and that led us to– once I defined it that way, we started looking at the best manufacturers on earth because one of the things that I think misled many of us is we call it a service business. So I don’t know about you but what a lawyer does and what we do, two services businesses, are totally different animals. We’re really manufactures that have a service veneer. The patient doesn’t come back unless we look like a high service organization but we don’t get paid unless we manufacture something. And so I, 25 years ago, started looking at the best manufacturers on earth which led me to Toyota. I mean, most of my time for the first decade was purely studying Toyota and their disciples, because the airplane manufacture industry which is a little more custom, it’s a little different. So they’re different flavors of lean but lean was the core of what led us on the pursuit of PPH.

And so you’re back at– you have a degree in design if I remember, right?

Yeah. I’m design trained. I grew up in a construction family. I was stupid enough to not just– well, when I started dentistry, it was really hard for me. I was getting killed doing dentistry when we got really successful, and so I assumed that I had to figure out how to make it simpler. What I should have done is just made dentistry simpler and not told anybody else [laughter]. I should have just open a whole bunch of offices just figuring out what we figured out. But my passion is to go hit design. And really a best week for me is spent behind the curtain creating tools to make it easier to do the things that created that high PPH, or created economies to scale to allow people to go ahead and do what those other doctors, that we mentioned in that group, for example, how to have 10, 15, 20, hygiene rooms and have them not have a marginal cost that makes it an impediment to doing that, to allow capacity to [it?] to increase. So most of my time, virtually all my time now is spent on that.
All right, I’m going to go to capacity, and then I want to go to your other businesses.

Sure.

So capacity is something that we–

That was the place we were immediately totally in sync. And this was when everybody knew that was just stupid. And I remember the two of us looking at each other and going, “Wait a minute, like Starbucks doesn’t fill a Starbucks and then never build another Starbucks.” And most dentists were just– it was killing them the thought that they would have a dental practice that would have an operatory empty and 2 o’clock in the afternoon. It was killing them and they were just, “I know I don’t need more capacity because I have room available when no one wants to buy it [laughter].” And once you got over that it’s’ like, “Well, okay, how about Walmart.” Does Walmart, are they bugging out because on Tuesday afternoon there’s checkout lanes not being used, “No.”

No. But they darn well have enough at Christmastime.

At Christmastime.

Right?

At Christmas, Easter, Halloween, they got all the checkout lanes open.
So in dentistry that looks like I need to be booked out two weeks to be successful. I need every room, every person, booked out two weeks to be successful.

Yeah. How would that work for Starbucks? Yeah, no coffee for you. Once you just change the name and you go, because the dentist is like, “I’m amazing because you can’t get into me for two weeks.” Really? I mean, really? I mean, just apply Starbucks. Starbucks is amazing because you can’t buy coffee there today. Okay, Target is amazing because you can’t get a shirt today. You have to apply to get a shirt. It makes no sense at all.

And so, demand tanks.

Right.

When you don’t have capacity, if people can’t get a cup of coffee at Starbucks, they’re going to Dunkin’ Donuts. They’re going someplace else.
They’re going someplace else, and they’re certainly not telling their friends to come because that friend is going to get in the way of them being able to get there.

That’s right.

So you have every reason to not have that be a problem. And dentists are still off base on that. They think somehow if you can get in today the patient thinks, “Oh, it must not be a great place.” That’s exactly the opposite of what the patient thinks.
Yep. That’s exactly right. The idea of exclusivity and scarcity doesn’t play well in our kind of business.

Yeah, making someone feel like [they’re?] the center of the universe and how soon you can see them are not enemies of one another.

Right. That’s right.

I mean, you feel like the center of the universe if you can get in right now. It’s the opposite. I don’t know how dentistry got to be on the opposite side of that because if you just walk toward it, it’s like, “I can see you right now because you’re so important.”

Yep. Yep.

And okay, now let’s try it again, “I can’t see you for two weeks because you’re so important. No, I can’t see you for two weeks because I’m so important.”
I’m so important, exactly [laughter].

It’s like they got it [completely?]– and all of us were misshapen in that thought coming out of dental school. And just try to get out of the– we’re all groaning. It’s like a tomato grown in a jar. We’re all  all misshapen coming out of this. I’m sure there’s some professors that are [inaudible] listening to this who are going to be totally mad at me. I was a professor at Michigan and NYU. I’ve been there, but there’s things we learn in dental school that are distorted, and it takes a while to unwind them, to think like the customer.

So you started studying manufacturers and lean processes and you started to apply that to dental practice. So why don’t you–?

Well, what happened was I designed– actually, what happened was I was unhappy. I wanted to be an associate forever is the reality, and, apparently, I’m not good associate material, and so during– I live in New England, a zero-growth area, and during the last, last big recession, the doctor I was working for, trying to be an associate, hired a consultant from California who came in for one day and talked to the doctor’s wife, and they concluded, the two of them, that the problem with the practice was me.

Yes. That was an easy sale [laughter].

That was an easy sale. It’s like, “Here. Collect the money.” And so they gave me– the unemployment rate in my area was 17.5% at the time, and they gave me 90 days to go ahead and vacate, and I had no money because I wasn’t making crap as an associate in that practice. I was getting killed, so it was true that I wasn’t producing a lot. It was because it was a kings of twits kind of place. And so I had 90 days, and I didn’t have a lot of money and I didn’t have a lot of money, and I had a family with some medical stuff going on, a young family, and I borrowed money from folks that make cement shoes for a hobby if you don’t pay it back. I had about 120 days to pay it back, and I built a practice from foundation of seeing in 10 days. Don’t try that, and don’t ask me to do it again, but what you learn under duress is useful, and so other doctors started coming to us. Man, I had been studying Toyota while I was working in that practice because I was getting killed with the set up that that guy had, and I was trying to make changes to it, and they really weren’t interested because they knew they were right, and so I– and I didn’t know. It just made sense that other manufacturers didn’t do it the way Dennis did, but he didn’t really understand that that had any relevance to dentistry. And so from there, Dennis started showing up and going, “Hey, would you help me with a design?” So I didn’t think of it as a company for years, John. I mean, for years I didn’t go, “I’m going to start a company.” I went, “I don’t want to get killed doing dentistry and I don’t want to get killed by the mobsters who I borrowed the money from. I want to pay that back.” And I don’t look good in cement shoes. I don’t really swim well with cement. So given that, we were to go ahead and build the practice and it wound up, in the beginning of the second year, bigger than the practice that had been there for 20 years. And from there, I was able to start studying the process. Then I was really able to start making progress, and so I went to the manufacturers because I didn’t want to make the stuff that– I mean, we made the equipment for this new office, so we built it in that time period. It was actually 110 days. The dentist by the name of Milt Glicksman let me use his office for 10 days, so I could see some patients to make enough money to finish the thing up. I am eternally grateful to him. I wish he was listening now. He’s since retired. But, in that time period, I made all the equipment, I went to the manufacturers and said, “Hey, we can make equipment that’s almost half as expensive and twice as productive.” And I went to the– I got an audience with the third largest manufacturer, and I didn’t– I just thought maybe they were distracted that day.

Yeah, that half is expensive [crosstalk]–

I just like half– well, so I went [crosstalk] to the number in the industry at the time and they totally blew me off on why the process was different and had different philosophies or blah, blah, blah, blah, blah. And so I got a meeting with Ken Austin in [inaudible] and who has since passed. And ken said, “Well, you’re not my customer.” And I wasn’t a customer of his because I made my own equipment, so I wasn’t listening to what he said. No, no, you’re not– the dealer’s my customer and actually my team is my customer, and their customer’s the dealer, and the dealer’s customer is you. And so I’m going to make what my customer wants. And my customer wants is the stuff that were selling now.

Good for him [crosstalk]–

And it was so– it was like I was so pissed. And I walked out and I revered that man because that was the truth, that was the truth. And so once I was able to internalize that, it just made sense that no one else was going to make this stuff and it was stupid enough to– [inaudible] knew how to make stuff. So we had all ready done it once and then in the time that this wasn’t happening, a couple of [inaudible] came over and begged me so we made some more stuff. And all of a sudden we were in the stuff making business. But I will promise you nowhere I have a life to do list, a one-page list and nowhere in it says have a 70,000 square foot factory on a 10-acre campus. Nowhere on that list does that exist. It’s crazy.

Yeah, sometimes your future shows up and you don’t–

Yeah, yeah, it’s God has a sense of humor, so is your company still split between design and products?

We design for folks that want to go ahead and do whatever they want to do, but most of the folks that come to us come to us with a plan for productivity.

Okay.

So I mean, and again the way I didn’t realize this at the beginning, but if I can go ahead and do the dentistry twice as effectively, how you spend the time if you want to go ahead and bring that back to twice as much customer service or twice as much revenue per hour, or you want to go ahead and be able to do Medicaid because you can live on their fees, it doesn’t really matter. And so there are different flavors for different segments of that and we finally have, with the new factory for years we were in an old industrial building and we just couldn’t produce fast enough. I mean, the reason was I still wasn’t committed to spending the millions and millions of
dollars to build the– it wasn’t on the list, remember?

Right, right.

Yeah, I work off the list and it didn’t say build the big factory. So finally we– I got it through my head that the only way to continue to create the product that I wanted, the new product, I mean, that’s really my blessed wife’s, “Do we really need the factory?” No [laughter], but I may open, make new things. And so we’ve got a market offering from really entry-level product that it’s not as productive as the high-end stuff. But the high-end stuff still [inaudible] the cost of typical rooms and the lower productive stuff is way more cost effective. It’s not the cheapest– if anybody’s listening, if it’s not the cheapest equipment, I’m not going to go there. I want stuff that’s incredibly productive at a great price point. We also made it all hot-swappable. [inaudible] to ever mention this. So if you go in with the lower end product and say you say, “Our dentists are only going to 6 to 7000 bucks an hour.” Well, you don’t need to buy equipment that’s going to produce 1,200, 80 to 100 bucks an hours, you could go in with less productive, less expensive equipment, but if your doctors get to a certain productive level, you can actually literally disconnect it with the dentist that want to buy the used stuff, plug in the higher productive stuff and keep going. All right. And nobody else can do that we’re talking equipment. We’re talking about chairs, doctor chairs, assistant chair, units–
We’re now lights.
–lights.

[I mean?], we now have everything in the industry except an autoclave in terms of heavy gear. [I don’t want?] to make an autoclave because you’re going to blow it up and you need a guy around the corner to fix it. Not doing that. You heard me [inaudible] that as a public product. You know what’s going to happen there [laughter]. No, I will not.

Stay tuned, everybody.

Stay– yeah. No, I don’t want [to make an autoclave?]. But we tried to figure out to make or affiliate with best in class, and for us– I mean, I have good dealer relations, but we just want to be able to sell that directly because I want to keep the cost under control and I don’t want to have the margin taken away so that I can’t– we spend more on R&D than anybody else, in part because I can, but in part because I’ve got some margin that I can go ahead and impart on that and I don’t, have to worry about it.

Well, the only person you have to focus on as a customer is the one that’s actually taking care of patients, right?

That’s right. That’s right.

So it really changes how you think about equipment–

Yeah, doctors come to us with problems.

–and how you think about design.

I mean, doctors come to us with problems, and it’s our job of figuring out what the priority is in terms of solving that problem.
So ergonomic products is your company, and people have a really hard time understanding, well, what does that mean, equipment that will support this productivity level versus this productivity level. So can you just throw out one little nugget that–?

So you got a car, okay? I mean, there’s a Chevy Cruze, and there’s a Tesla with a– okay, I’m just saying, okay [laughter]? And both of them will get you to the restaurant. One of them will get you to track day too, and so our job was to go ahead and have something where we had to study what caused productivity. I mean, that was the foundation, was what caused productivity. And the interesting thing about what causes core productivity is not having to stop. So there’s a bigger picture. The piece of equipment is sometimes– it’s confusing in situ. If you just look at the piece of equipment standing in and of itself, it doesn’t necessarily make sense. It’s like if you looked at a dead bird. If the only bird you had ever seen was a dead bird, you’d be like, “Why are these furry things on the sides? Oh, these are warmers for this animal that runs on these little feet.” If you looked a dead bird, you wouldn’t necessarily figure out exactly what these things on the side did, and so sometimes when people look at the equipment– I mean, we used to go to trade shows and people are like, “I don’t know what the heck that–” because in situ, it doesn’t make sense because productivity’s a system. And the more important part of productivity isn’t each individual piece; it’s the flow of the office. So the best example of that is Southwest Airlines. So I am rich and I’m spoiled, so I get to fly first class; I don’t fly Southwest much. But if you want to be on time, if you want to get on a plane quick, you fly Southwest because they’re going to get you on the plane, they’re going to get you somewhere on time, they’re going to do it in a nice sort of way, and there’s not going to be a lot of hitches. And I’ll tell you that there’s a lot more time that I spent on other airlines when they’re fooling around with the avionics before I [had to take off?] on the plane, and it’s kind of scary.
So I fly just two airlines; Southwest is one of them. And I fly them both a lot, and Southwest, I love because they go.

They’re always on time.

They’re on time and they go. And they’re a little clever about how they do things, and–

Well, Herb Kelleher figured out what [matter was?]– I mean their speed limits in the air, so they don’t even– we can go faster. I mean, if you think about it in dentistry, I can produce twice as fast as you can on the clinical side of things. There’s nobody restricting that, and still, dentists manage to go slow. On the airline industry, once the plane is in the air, they’re all flying the same speed, yet Southwest can turn a plane around with– I think they can get 1.4 times the turns per day of some of the other airlines, which is how they make money. They make money on the turn rate, and so it’s the same thing in dentistry is never having to stop during a procedure is far more important than figuring out a way to save 10% of the time on a root canal on the clinical side of it.

One of the lessons that I learned from you that took me a while to really get a grasp of was that you do– you did, at one time, a lot of video study, watching people and how they move and how they practice, how they affect their body and where they have to reach and–

The first videos were embarrassing.

Yeah. Yep.

That’s how you start. Start with bad and you get to look good [laughter]. Yeah. We still do–

And so, I had always– when I thought of producing more– or producing more per hour, I thought it was somehow drilling faster or having the right burr or this or that, and you shared with me how no tooth– burr on the tooth time, hands and mouth time, really isn’t that much different–

It’s the minor 10% of the time. And so it’s shocking how we all orient that way because we’re dentists. I mean, we go to courses. We’re required to go to courses. They’re important but I don’t need to go– I’ve been to, I don’t know– I’ve been to 50 endo courses. I really probably don’t need to go ahead and shorten my cycle time on doing a root canal further. I mean, for the next decade, I probably don’t. I need to make sure that when I get started, everything’s there, ready to deploy. Or if I’m doing a crown and it turns into a root canal, then I can get that stuff deployed in 30 seconds. In a typical office, if that happens, the chances of getting that converted to start the root canal and get it finished are nil. And so it’s those kind of problems: sterilization, resupply, restocking, and the flow of air. So many times, we’ll work with practices– you know what? There’s a third component that you probably don’t know, but we started about two or three years ago. We say we’ve always designed and equipped the nation’s most productive dentists. Well, we went back and studied offices that we had doubled the productivity of. I was feeling righteous because we had doubled their production. And so, a couple of my staff members at [Ergo?] said, “Well, how do we know we really did a great job?” I said, “Well, they adopted the system. They doubled production. They say they love us. We’re [thrilled?].” And he said, “Well, you tripled and quadrupled production. What did they do?” I said, “Well, why don’t you go visit them?” So I don’t like to leave town, as you know. And so, we sent people out and they went to a few great practices who were very happy, and we were horrified. They came back so mad at me about the doctors to my staff members. So we now go and do clinical training–
Oh, really?

–for doctors because– and so I felt smart for a minute. You know when [we’re talking?] about being wrong, where you should get to being– so I felt bad because I had totally missed that. For a decade, I’m thinking I doubled their production. I really have helped people that are my friends. And I realized we really should have tripled their production we just [inaudible] and create areas they had the opportunity to. I had no idea because I didn’t go. So we sent the people to go and they make simple tweaks to the [practice?] and they triple production. So then that’s something we start doing. Well, that felt smart for a couple of months when we realized that really there are a whole bunch of practices and we should just go and tweak them. We [don’t?] have to just redesign them. They’re messed up now. And they’re not [inaudible] the revenue [inaudible]. They’ll never build another office if they’re messed up now. They don’t have the revenue. So a certain amount of money you spend to go ahead and just take it so it’s not horrible to produce dentistry there and get it to be good. I mean, the average dentist, the average doctor production is like 440-some dollars an hour.

Yeah. It’s really–

I don’t know what happens with the three-quarters of the rest of the hour from my perspective. So I was disconnected from that. I mean, it’s on me. This is [inaudible] being wrong and knowing you. So I’m totally wrong. And so we now send people out [inaudible]. They’re going and now just reconfigure, get the production, and then the doctor suddenly can go, “Oh, now I see how we configure [relates?] to we produce.” And it liberates them to be [inaudible] make decisions before it was kind of an act of fate. You’re going to retool and you have to trust other doctors that you’re going to change something the way that you did things to get the results.
Well, that’s where it was when you designed the addition [inaudible] my office.
Yeah. You [inaudible] take on total faith.
Yeah. We [laughter] had the [inaudible] [laughter].
[There was?] staff when it was your place that they were ready to kill me at least [inaudible]. But I say [inaudible] deflected to me instead of having taken [inaudible] [laughter] and no. We’re just good. It’s appropriate.
[inaudible].

It’s fine. Just go [inaudible] [laughter].

And so we did your design. We did your equipment. We did really [inaudible]–
Yeah. You [inaudible]–

–all of the principles.

–you reconfigured how you did sterilization. I mean, John, you’ve always been an amazing student. Man, I wanted things that are just amazing about you. And folks that do know John know this. If you don’t, nobody learns faster and better than you do.
Yeah. That’s because I–

And no one–

–was so dumb, I had to learn.

No [laughter]. I mean, you just started [inaudible]. It takes me longer to go ahead and beat it in. I would love to say that I’m a strong learner because I spend all as much of my time learning, but I don’t learn as quickly as you learn.
Yeah. One of the things that when I’m evaluating practices to purchase or when I’m advising higher-level clients and we’re going through their [PNL?], and one thing that there is such a tremendous range on is how much people are spending on supplies. So there’s some practices that are under 4% of revenue on supplies and there are practices that are 16, 17, 18 [inaudible].

Yeah. It’s weird.

Yeah. And so when I was running a group practice, we were trying to figure out exactly how we were going to be able to reduce that cost over a series of offices, right? So, of course, I’m a learner, and so [inaudible], I went, “Who’s got the lowest percentage? Well, I’d go and look at it. What do they do?” And so I didn’t think of the effects because at the time when I did your design in our sterilization and storage area, I wasn’t thinking about cost reduction. I was only thinking about if I can just drive more revenue to marginal profit dentistry suite, I’ll do really well. I wasn’t even thinking about reduction in cost. My costs were low, but I wasn’t even paying attention.

Yeah. You weren’t paying attention. Right.

And so some other things that we found when we compared– now I’m thinking about  costs, right?

Right. Right.

This is because I’m running a bunch of practices right now. That’s a place where we can make changes easily. So what did I find? Well, just all the principles that you were talking about.

The same principles?

The same principles, minimum amount of inventory, minimum amount of space to store things, storing things in a visual way.
And if you don’t have it stored in a visual way you can’t go ahead. So it’s A leads to B. If you don’t have it visual, then there’s no chance that you can have a small enough amount to have a turn rate. And what you want is a turn rate on that. That’s what affects your cost.

And yeah, that’s pure Toyota.

Yeah. And it is so true. So we were talking at lunch, and it was your phrase, and I love it because I know exactly the feeling. And you said, “I love it when I’m wrong.”
Yeah. It sounds really not logical, right [laughter]?

I knew exactly what you meant.

It sounds not logical because the funny thing is the best ideas come from having something that you are wrong about, something that you may have held as a dear truth that you start to see cracks in. And when you hold it as a truth you really need to be suspicious of that because you assume that you have all the data. Being right about something assumes you have all the data. And you’re not going to have all the data. And you may be in a marketplace or in a situation where the data set is changing. When you are wrong about something it has a certain strength to it, a certainty. You get your butt kicked and you are like, “Yeah, I was totally wrong on that.” You can actually move on from that easier than from the place of, “I’m Right.”
Right. So I’ve heard the phrase the more confident that you feel the more curious you should be because the more confident you feel, you may be completely wrong. But if you keep that curiosity it’s a way to keep it in balance.

You got a chance that you can go ahead and discover.

Yeah. Right. And one of the things I’ve done in lectures and small groups is I’ll ask a handful of people how they feel when they are wrong. And they usually say, “Oh, I feel bad,” or, “I feel disappointed,” or [crosstalk]–

Yeah. You should feel the opposite. You should feel awesome. You really discovered something.

And so I have to tell them– knowing how bad they feel when they are wrong, I have to tell them they are wrong because what they are describing is how they feel when they know they are wrong [laughter]. Right?

Right. Right.

And how you feel when you don’t know you are wrong you feel you are right.
Right. That we are not very good with ambivalence. That middle area, humans are not great at. I don’t know. And if you think about what curiosity is, curiosity is actually in that I-don’t-know state. And many people are good with wrong – they don’t like it – and they are great with right, and they are not very good in the middle. And so I think being comfortable in that middle state is a really good thing, and that’s what curiosity is.

Yeah. Yeah. That’s right. And it takes a certain amount of maturity to sit there and be okay sitting there while it sorts itself out.

Yeah. And with the equipment, we knew that we were right because Toyota spent $30 billion before we started. And we built on their principles. It doesn’t mean that the equipment doesn’t change every single year. Every single year something evolves to go ahead and take that to a new point which means that you were wrong about something. You learned something.

Yeah. That’s right.

And one of the biggest reasons that we continue to work directly with doctors is I lose that connection with learning if I don’t have that connection with the practices. We get more pure data from practices than any other manufacturer by a factor of at least a hundred.

Yeah. Nobody else cares because–

Nobody else could get the data.

They get the data but it’s from the wrong customer, right? It’s from the supplier.
Yeah. What the margin was for the supplier on the product which is exactly not what
the dentist cares about.
What’s the total spend and what’s the margin for the supplier.

That’s right.

That’s what we’re trying to maximize because that’s what their customer is.

Yeah.

And good companies, good people, and they make some good things but their focus is a little bit different.

Well, the irony of it is, if we can double doctor production, really, we’re like the [inaudible] container. The dental dealers make money selling the [inaudible]. And if I can double or triple doctor’s production, they’re going to buy three times as many cotton rolls. They should subsidize me to make equipment for doctors. It’s not going to happen. [inaudible].

But it’s the same reason why we have relationships with suppliers is because they understand that when we come in and teach principals that are related and certainly complimentary to the ones that you teach, that productivity goes [inaudible].

Yeah. And there’s not a conflict in that. A conflict is there’s someone on the equipment side, the dealer, and that’s a problem. In your situation, you could come in and just plain help them so it makes it easier to go ahead and do that.

Yeah. For sure.

Yeah. [inaudible].

So if somebody wants to learn more about your processes and learn more about your companies, how would they go about doing that?

The best place is the design ergonomics which is the design website which is really where all the knowledge flows through, and that’s desergo.com, D-E-S-E-R-G-O, dot com. That’s the best resource. We have manuals, we have training systems. We have things, again, all related to the clinical side of practice. I maintain that I am still a management midget and this is not the side that we live. We do spend the time, so much of the time we gain on being nice to customers in the practices but it’s not the area. What John knows, I will never be particularly good at. But if you want productivity or design or more capacity and less space, that’s what we do.
For those of you who’ve seen me lecture, when you go on that site, you’ll recognize some of the things because we certainly show off some of the design impact or design features that I used to make my office more productive to make it so that I could have a smaller footprint because where I was, I only had so much room. So I could have a smaller footprint that was every bit as efficient and frankly felt bigger than the apps that I had from another design. So I encourage you to go to that site. There’s lots of stuff on there to learn from. And it gives you kind of an idea of where you can go to get started. And with our consulting clients, we do the same thing. We start with a particular thing because we know we could drive their revenue up really fast if we do that. Now they’ve got the money to spend on harder things that’ll going to have the [crosstalk]–

Really, it’s nice to be in the freedom business. Give people freedom business. It’s a wonderful feeling. I mean it’s one of the reasons that people say, “When am I going to stop doing this and go hang out on St. John.” I’m not. This is too great to go ahead and have families impacted and grandkids joining practices and all of the things that come from that, huge rewards. That makes it worth it.

Well, I am so grateful for all the things that you have taught me over the years. You’ve been so gracious with your knowledge and with your time. And I just wanted to, again, say my thanks for that and say how great it is to be spending time together.
[inaudible] really get together. Great to get together. Thanks so much.

You bet. Thanks, Dave.


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