Episode 1546 - Next gen: growing & scaling your business

Alan Fredendall // #LeadershipThursday // www.ptonice.com 

In today's episode of the PT on ICE Daily Show, ICE COO Alan Fredendall highlights the key principles behind growing & scaling your practice, using McDonald's as an unlikely but successful example.

Take a listen to the podcast episode or read the full transcription below.

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EPISODE TRANSCRIPTION

00:00 ALAN FREDENDALL

Good morning, PT on ICE Daily Show. Happy Thursday morning. Hope your day is off to a great start so far. My name is Alan. Happy to be your host today. Currently, I have the pleasure of serving as Chief Operating Officer. I'm a faculty member in our fitness athlete division. We're here on Leadership Thursday. We talk all things practice, management, ownership, small business, leadership, that sort of thing. Leadership Thursday means it is also Gut Check Thursday. Gut Check Thursday this week is a workout I actually did this past Monday. It is 9, 15, 21 calories on a rowing machine, power snatches with a barbell, 75 pounds for gentlemen, 55 pounds for ladies, and pull ups. Ascending reps game automatically. You should proceed with caution as you get more tired. The reps go up, something we don't like to see too often. Also very redundant in this workout on pulling and grip, right? Pulling on the rower, you have grip on the barbell, and then you have grip and pulling up on the pull-up bar. So it gets redundant, gets really grippy, even with that light barbell. That barbell should be so light you could do all of those rounds unbroken if you really needed to. Maybe one break in the round of 15, maybe one or two breaks in the round of 21. Definitely should be aiming to get that workout done under or around the 10-minute mark. I did that, rested three minutes, and then did 9, 12, 15, rested three minutes, and did 6, 9, 12. I don't recommend doing the extra two rounds. Just stick with the 9, 15, 21. That's plenty of fitness for the day. Courses coming your way from us here at IEFCE. I want to highlight our Extremity Management division led by Lindsay Huey, Mark Gallant, and Cody Gingrich, the newest lead faculty to join the Extremity Management team. You can catch those three out on the road this fall. A couple of different courses coming your way. September 9th and 10th, Mark will be down in Amarillo, Texas. Lindsay will be out in Torrington, Wyoming. The next weekend, September 16th and 17th, Mark will be on the road in Cincinnati, Ohio. The weekend after that, Lindsay will be on the road September 23rd and 24th in Twin Falls, Idaho. The first weekend in October, the 7th and 8th, Lindsay will be up in Ridgefield, Connecticut, and Mark will be in Rochester, Minnesota. November 11th and 12th, Mark will be down in Woodstock, Georgia, which is north of Atlanta, kind of out in the suburbs. The weekend of November 18th and 19th, Mark will again be on the road, this time in Murfreesboro, Tennessee. That's a little bit southeast of Nashville. Cody's first weekend as a lead faculty in the division will be the weekend of December 2nd and 3rd. That'll be out in Newark, California. That's the Bay Area, the Fremont area. And then December 9th and 10th, the last chance to catch extremity management for the year will be in Fort Collins, Colorado with Lindsay. So that's what's coming your way from the extremity division.

03:21 GROWING & SCALING YOUR PRACTICE

Today we're going to be talking about hiring from the viewpoint of growing and scaling your practice. And I want to highlight the McDonald's story. So I want to talk about kind of what's always in our mind when we're thinking about growing our team, which is that little voice in the back of our head that says, geez, I hope the person that I hire is mostly like me, right? When we think about growing our team, we're often thinking about how to basically mirror or replicate ourselves. And while that's not 100% possible, that is the goal as we grow and scale. That what we're really talking about when we're bringing new people on the team, we're growing our current practice. We're thinking about maybe even a second location. We're thinking about maintaining our standards of how we run our business, of how we practice physical therapy and preserving our company's culture. So we're going to talk about the who, the what and the how. The who today is going to be McDonald's. Yes, McDonald's, the Golden Arches, the fast food company. The what is going to be talking about how they grow and scale their businesses. And the how is going to be the foundational training that every member of the team has, how that relates to your team as a physical therapist growing your practice and how shared belief systems are really important. So as a company grows, those things tend to get diluted over time. Over multiple generations of leaders and employees, teammates, whatever you want to call the folks who work with you. As we tend to get many generations deep, we noticed a subtle decline in quality and culture of when you first went to the business, when it was a single owner operator, you knew the owner. You knew how things went. You had a relationship with that person. And maybe when you come back to that business, our business in this case being physical therapy, maybe you can't see that provider before. Maybe their schedule is full and they offer to have you see another provider. As the customer is the end user, how do we know that that person is good as the first person? And how do we know that the 10th person is as good as the third person? And so on and so forth. And unfortunately, what we see happen is companies tend to grow, especially as they tend to grow to new locations and maybe even start to franchise. We see that that stuff just gets diluted over and over again until the current business that we are going to no longer resembles the initial encounter with that business. Maybe even to the point that as the customer is the end user, we decide not to give that business our money anymore. So how do we avoid that? How do we avoid the customer coming to that conclusion?

07:26 THE WHO: MCDONALD'S

Well, we need to start with the who. We need to start with McDonald's. If you're not familiar with McDonald's, we'll talk about that and we'll talk about how they grew and really the foundations that allow them to grow there. So love or hate them. Everybody has their thought immediately in their mind, their knee-jerk reaction about McDonald's, but they certainly know how to run a business. They know how to deliver a consistent product. That product, at least in my personal opinion, may be quite mediocre. But dang, when you go to McDonald's in Texas or McDonald's in Michigan or McDonald's in Seattle, it doesn't matter. McDonald's in Hong Kong, it is maybe mediocre, but it's consistently mediocre, right? A McDonald's hamburger in Texas tastes the same way as a McDonald's hamburger in New York and the fries are the same and the experience of purchasing from McDonald's is largely the same as well. So they know how to deliver a consistent product and we want to figure out how they do that. They also certainly know how to grow. McDonald's has been in business for 83 years, almost 100 years of continuous business. We've talked here on Leadership Thursday before about how many businesses don't make it to the one-year mark, to the five-year mark, that about the 10-year mark, 75% of all businesses are gone. They have gone out of business before they reach the 10-year mark. So to have been in business almost 100 years continuously is quite impressive. They are the largest restaurant business in human history. They have $24 billion a year in gross revenue. Now that is an amount of money that can be hard to conceptualize. Let me break it down for you. If you haven't heard of ATI Physical Therapy, they are the largest chain of physical therapy clinics in the world. They only grow $600 million a year in annual gross revenue. So any town that is big enough to have a McDonald's, a Walmart, probably also has an ATI Physical Therapy for reference. Nonetheless, McDonald's is almost 40 times larger. They are present in 120 of the 195 countries on the planet, and they are the fourth largest employer in human history. Of the largest employer on the planet currently is Walmart. The second is the Chinese Government Railroad. The third is the Chinese Government Police Service, and the fourth is McDonald's. So of the jobs that you could currently get, you can't go work for the Chinese Government Railroad or police service. You can't just go drop an application and start. We're talking about the second largest American-based employer on the planet. Now if you haven't seen the movie The Founder, I highly recommend you watch that movie. It's one of my most favorite movies. Every time I watch it, I take something away from it. Came out in 2016, and it's really kind of the tale of the start of McDonald's and the growth of McDonald's across the country and eventually the world.

11:27 THE WHAT: SUCCESSFUL GROWTH

So that's the what we're going to talk about today. We're going to talk about the franchising of the McDonald's Corporation. Amazing movie. Nick Offerman and John Carroll Lynch play the McDonald's brothers who formed the first McDonald's out in California many, many, many, many years ago. And Michael Keaton does a great job playing Ray Kroc, the guy who finds the McDonald's brothers and becomes the person that franchises McDonald's into the business that it is today. So the original McDonald's started out in San Bernardino, California. It was a one-location restaurant run by the McDonald's brothers. They had a very systematic way of approaching a business. They practiced and trained and redesigned the restaurant again and again and again to optimize efficiency, to basically make burgers and fries and shakes as fast as possible in the almost pre-drive-through era of you had to drive to McDonald's and walk up to the window and order your food. And they created a wonderful, flourishing business that Ray Kroc stumbled upon. He actually was selling a machine that could make six milkshakes at once. And he was hand delivering it to the McDonald's brothers out in California when he watched just how busy their restaurant was all day long and decided this, these guys are onto something. If we could take this business and multiply it, we could really make a lot of money. So those brothers practiced. They had their employees practice work, right? They trained almost military style of running and operating their business. And they did so with a systematic approach, a fundamental approach to how to cook and serve food in a high quality, yes, but also a consistent and efficient manner. And it was built upon a common foundation of training and also of shared values of we want to deliver a high quality product, but we want to do it efficiently. People don't want to sit and wait 30 minutes for a hamburger. They want to be able to walk up to this window and a couple of minutes, get their food, pay and be on their way. Right. The person that's on lunch break or grabbing a bite to eat after work or before work or whatever, walk up, grab your food, go again in the pre drive through area, definitely the pre door dash era of delivering a high quality product. Very, very fast. So Ray Kroc stumbled upon these guys and started to franchise it. Initially did not go the right way. And I think it's important to know that it did not start off in an amazing way that immediately started cheapening ingredients, started using premixed milkshakes instead of actual milk in the milkshakes and initially started with a model that had really minimal control over new locations and leaders. And early on, and you'll see this if you watch the movie, McDonald's all over the country was completely random and different as far as what you might expect. You might find a McDonald's in Illinois that sold hamburgers and french fries and milkshakes, but you might go to a McDonald's in Wisconsin and find barbecue food. You might go to a McDonald's in St. Louis and find them selling tacos. So they kind of had a rocky start that they got away from their foundations. They no longer kept that regimented training, that regimented shared value systems. But I'll tell you the tale of how they turned it around. One of the cooks that worked at one of the original McDonald's, his name was Fred Turner In 1961, he created a training system called what is now known as Hamburg University of saying, hey, this is getting crazy. Every location that the customer goes to, they might be serving completely different food. There may be a completely different experience. They might be dirty at one location, unbelievably clean at the next, a different food just all over the place with consistency and quality. We have to fix this. And that kind of evolved with Fred Turner working alongside Ray Kroc into forming now what is known as the present day McDonald's, which again, the food may not be the highest quality, it might not taste the best, but darn it, it is consistent. And that is really the values that McDonald's presents today. Consistency and simplicity and uniformity with a goal and a shared belief system of quality, service and cleanliness. So they formed this university back in the 60s, Hamburg University. They now have locations in eight countries. They started in 1961. That guy, Fred Turner, who was just a cook, worked his way up and eventually became the CEO of McDonald's for 20 years and really kind of led the global expansion of McDonald's across the planet onto every street corner in America, into 120 countries across the planet. Down to really specific stuff. He was really insistent that fries had to be cut 0.28 inches thick, that one pound of beef should make exactly 10 1.6 ounce patties, so on and so forth. Consistency, the ability to replicate that business across not only shifts at the same location, but at every location across the town, across the state, across the country and eventually across the planet. So that is the who, that is the what.

13:59 THE HOW: SHARED TRAINING & BELIEFS

Now we need to talk about how, how did they get there? Again, they had a rocky start, but how they arrived at where they're at now, again, one of the largest, most successful businesses in the history of our species. How did they get there? They get there these days by being very, very selective that each addition to their team is of similar quality to the rest of the team, that they have a shared belief system and that they all go through the same foundational training of when you are maybe a line cook or fry cook or you work the drive through McDonald's. Yes, you are just an hourly wage employee, but once you are maybe going to get promoted when the regional manager, when the owner decides your management material, you go to Hamburger University. If you are thinking about starting a McDonald's franchise, you also go to Hamburger University. They are very selective in who goes to Hamburger University. Only 1% of the people who apply get accepted. And the goal of Hamburger University is to teach managers and owners how to run a McDonald's to the McDonald's standard. Again, we have that common shared training foundation. We are hiring people with a shared common belief system. We are allowing the business to grow and scale without the end user, the customer being really able to notice any change in quality. McDonald's is doing it right. If you leave your house at 6 a.m. and you have a 12 hour road trip and you grab a coffee from McDonald's and a McMuffin at the start of your journey, if you stop at McDonald's four states away for lunch or dinner, it should feel almost exactly like the McDonald's that you stopped at at the start of your journey right by your house. It should really be no different. And even you have probably done this and if you haven't done this, you are a liar. You have gotten a drink at McDonald's in the morning on a long road trip and you have stopped maybe at multiple McDonald's along your route to get a refill of your drink. And again, if you haven't done that, you are probably lying. A lot of us have done that. So that replicated experience location over location over location. And I think we have a lot to learn from that model. And that model does not start with putting money first. It does not start with putting numbers first. It starts with making sure that we are incredibly selective of who we let join our team. And so that brings me to the how. How do we do that? We do that by being extraordinarily picky with who we let join our team. A lot of people will see your clinic, your business, whatever you are doing, being very successful and they want to invite themselves to come on board the ship. They are happy to stop by and drop off their resume and let you know that they are ready to start a position whenever you are ready to start paying them. And oftentimes we find ourselves as our business, our clinic, our practice is growing. We need people more than we care about exactly who that person is. And we have the mindset of we can train that person later. We can mentor that person later. All that matters is that I have more patients on my schedule than I can see. I have a month long wait list. I have a three month wait list. I have a six month wait list. And that's money I'm not capturing now. So I'm just going to hire that person who walked in the door and threw their resume on my desk. And we can't do that. Not if we want to replicate a really high quality experience, a consistent quality experience for our patients and our clients. Not enough businesses are picky enough at this process of making sure that person has the same beliefs that we do, making sure that we have a common shared foundation of training. Us here, we now only hire students who do a long rotation here or folks who have passed the ICE certification exam. That's where our standard is at now. That tells us that person either we have trained them in our training, our foundation as well, and we find out if they have our common belief systems or not, or we know that is on board already because they have passed such a rigorous certification as the ICE cert. But not enough of us are that picky.

17:23 WHEN GROWTH GOES WRONG

And what happens if we don't do that? What happens when growth goes wrong? I want to just share a hypothetical example, speaking of the extremity management division today. Imagine that folks just have maybe even a little bit of a difference in what they believe and what they have been trained to do as physical therapists. And we say, you know what? They're only like 20% different. It doesn't matter. It doesn't really matter at the end of the day. Let's just hire this person anyways, even if they are maybe 20% different than the rest of the folks already on the team. Let's take an example of Lindsay and Mark from our extremity management team. Let's say that Mark believes that the foot, the ankle and foot, has no orthopedic value whatsoever. When he teaches his course, he just kind of glosses over that material and maybe even ends his class early. He ends faster than he planned to, right? Maybe he just kind of flips through the slides, shows a couple techniques, maybe an exercise, and he says, you know what? The ankle is really not that important to the body. Have a great weekend. Thanks for being here. Bye. And we're done at 3.30. Now, as we take that person who is now going to train more people underneath of them, the next person Mark trains is likely going to give even less attention to the ankle and foot. They're going to pass over even more of the fine details. And you can imagine if we take that now several generations deep, three, four, five generations deep, that that next person teaching extremity management may not even teach the ankle and foot, right? They may delete it from their slides entirely. Hey, we don't teach that in this course. Which is not true at all, right? Now we have a consistency problem in the product. What about the other end of the continuum? What if Lindsay believes the opposite? What if she believes the foot is the most important structure in the human body? What if she believes that great toe extension is linked to developing Alzheimer's disease? What if she spends so much time on the ankle and foot when she teaches extremity management that now her classes run until 7 p.m. on Sunday? Again, we have for a different reason, a consistency product, a consistency problem with the product we're delivering. Now again, that same example, as we get multiple generations deep, you could imagine the next person Lindsay trains underneath her maybe believes the foot is even more important and spends even more time on the ankle and foot. And maybe three, four, five generations deep, that person spends all of Sunday talking about the ankle and foot. We don't even talk about the hip and the knee anymore. Everything's about the ankle and the foot. And eventually what we come upon is a divergent offering of the same product. That the consistency of the product is diminished or absent entirely. And we have an entirely splinter product being offered. We're now offering two separate products from the same company, even though up many layers above in the leadership position, we're trying to figure out why the inconsistency is there. And it comes from not having that shared common training foundation and that shared belief system. So who is McDonald's? What is how they have franchised across the planet into one of the most successful businesses And the how is being really particular in who you let on your team and making sure that they already arrive with similar belief systems about how to practice physical therapy in a common training foundation. So many people arrive, new students, new grads with a wide variety of beliefs depending on where they went to school, what continued education courses they may have taken after it really can lead to that divergent offering of product that really creates a consistency and a quality product for your business over time. And again, in our mind is the original owner, the leader of the business. That's something we're trying to avoid at all costs. When we think about hiring new people, we're thinking about how can I essentially copy myself as much as possible so that when people come to see this new person I've hired or this eighth new person I've hired or my new location, how can I be sure that they get the same consistent product that I initially delivered when I started the business and it comes down to that shared common training foundation and that belief system. So that's the first part of this series. I want to take you all through the who, the what and the how. Next time I want to talk about once you have actually found that person, where do we go from there into the nitty gritty of things like operating agreements, things of making sure that our training foundation stays the same as we move through our practice, as we move through time together with these members on our team. I hope this was helpful. I hope you have fun with Gut Check Thursday. I hope you have a wonderful, fantastic Thursday and a great Labor Day weekend. We'll actually see you next week for a little bit of talk on carbohydrates on Fitness Athlete Friday. Have a great Thursday. Have a great weekend. Bye everybody!

21:52 OUTRO

Hey, thanks for tuning in to the PT on Ice Daily Show. If you enjoyed this content, head on over to iTunes and leave us a review. Be sure to check us out on Facebook and Instagram at the Institute of Clinical Excellence. If you're interested in getting plugged into more ICE content on a weekly basis while earning CUs from home, check out our virtual ICE online mentorship program at ptonice.com. While you're there, sign up for our Hump Day Hustling newsletter for a free email every Wednesday morning with our top five research articles and social media posts that we think are worth reading. Head over to ptonice.com and scroll to the bottom of the page to sign up.