How DSO Leadership is Redefining the Dental Support Industry

The DSO space is teaming with opportunity. Opportunity for dentists to build and receive unprecedented returns on their investments. Opportunities for non-dentists to pour capital into a relatively disorganized marketspace and receive returns that have dried up in many other investable marketplaces. Opportunities for team members to further their careers well beyond private practice and opportunities for executives to catapult themselves into the C-Suite arena.

And that, my friends, is where the largest challenge in our current environment comes from. Leadership, or rather the dichotomy of leadership, as Jocko Willnick references in his appropriately titled book (well worth the Amazon purchase) is the delta between what is expected as a leader and what is actually needed. It is a phenomenon we witness regularly in daily life, often espoused by the poorest of managers we have all had at one point in time.

Dental Support Leadership 1.0
In the beginning, many of the “executives” within the dental support space were former dentists, who had a reasonable grasp of business and could shine in the midst of their brethren because of this acumen. The beauty of this arrangement was the connection to the team and patient. It was intrinsic – a part of the DNA of the dentist/leader.

Completely accustomed to patient care, this first crop of executives felt that they could operate their corporations in much the same manor. Minimal oversight and loose management styles with a definitive bend towards the empathy that being a dentist required. It was a beautiful arrangement, until it wasn’t. It worked, until the business elements of private/group practice demanded a more structured albeit corporate approach to leadership.

At its best, the empathetic dentist leader was a perfect representation of what everyone had hoped the industry would evolve into. Dentists leading dentists, inspiring better care, running more efficient operations, all while keeping a direct eye on the patient, outcomes and surrounding environment. Further, the external view of these organizations was relatively muted, as these fledgling group practices and DSOs largely flew under the radar due to their dentist led root structure.

At its worst, it spiraled into mismanagement, poor monetary responsibility and a structure that wasn’t scalable by any measure. Many owner dentists watched as they built up organizations, often with minimal infrastructure, only to watch them crash and burn at a certain point due to mismanagement and poor business leadership.

Dental Support Leadership 2.0
Welcome to the world of private equity. Previously demonized for their corporate oversight and P&L focus, these sources of capital required a higher level of financial understanding, leadership hierarchy and directive adherence. To say the least, it was a culture shock to the dental support world.

As worlds collided, dentists were rapidly pushed out in favor of corporate executives who could operate businesses according to developed PE protocols. This collision resulted in the complete devaluing of numerous mid-market DSOs with previously bright growth opportunities, that were now dominated by internal strife, cultural degradation and a rapidly decreasing bottom line.

Corporate objectives work, until they don’t. And when that tipping point is realized, the fall is violent and expedient. Executives clashed against clinical leads, owners, previous DDS executives and everyone in between, and a trail of carnage was left in their path. For many reasons, this was largely responsible for the level of disdain that many in the dental fraternity felt for their potential corporate sponsors, and justifiably so. Often, corners were cut clinically or on the staffing front that sacrificed the integrity of the healthcare organization but satisfied the bean counters. This is also where the notion of “quotas” came from, albeit that’s more of an old wives tail than actual reality within most of these types of organizations.

Thankfully, as evolution often does, eventually the hard edges get worn away and an environmental balance is struck.

Dental Support Leadership 3.0
And this is where we find ourselves today. Having witnessed competing leadership ideologies over the past 20 years, as an industry, we finally begin to strike a balance.

Gone are the softer tones of doctor driven, laze fair leadership styles. Quickly regressing are the hard driving corporate juggernauts solely focused on numbers-based leadership. Our current evolution of leadership methodologies place a firm emphasis on the culture within an organization and the ultimate value on patient care. This balance allows us to integrate the importance of KPIs as they relate to the provision of benefits for the team, payor relations and successful vendor management strategies, while also focusing on the patient experience, and how our internal culture impacts that experience.

Long gone are the days of quotas, improper clinical oversight and an internal hierarchy with the executive team at the top and the clinical staff at the bottom. We are finally reaching a point of balance within the marketplace where the business management functions are orchestrated by business people, while the patient care functions are orchestrated by clinicians, with an ongoing collaborative effort between the two occurring.

As a result, the surrounding market has begun to rethink the role of DSOs within the industry and there is a significant tone of collaboration beginning to reverberate throughout the space. Be it for a long or short time, we have finally reached a point of synergy and those executives in the market who are both cognizant of, and able to operate within both environments (cultural and financial), will ultimately lead tomorrow’s DSO space. This properly aligned structure allows us to build more successful organizations, with happier team members, who then provide better patient care. Win. Win. Win.

And a final word of warning to those organizations still mired in leadership ideologies that should have expired long ago, people want to work for integrity driven, culturally healthy organizations that value individual input and personal/professional growth. As the pendulum swings towards these types of organizations, good people will naturally migrate in that direction, leaving the remainder of the talent pool lacking the necessary skills to run a successful entity. This will be a simple lesson in business evolution at its finest.

I’ll be at the DSO Education Forum meeting April 30th-May 2nd
at The Aria in Las Vegas and would love
to meet prospective group practice owners.
Email me to schedule a time to meet.

Written by: Josh Swearingen
Director, Corporate Development
Connect on LinkedIn 

Read Josh’s other articles:
The One-Stop Shop Delivery Model – This is Just the Beginning
From Scale to Sale: 5 Tips to Maximize the Value of Your Group Practice & Ensure it is Scaled for Success
The One-Stop Shop Delivery Model – This is Just the Beginning


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