Why This Already Successful Owner Finally Decided to Partner With a Larger Company
Joe Sullivan, CEO of Peak Performance Physical Therapy, joins Paul to share why he partnered with Ivy Rehab, how he told his staff, and what owners should expect during integration.
Full transcript
Generated from the episode audio and lightly edited for readability.
Good afternoon and welcome to another episode of Paul Martin's Crucial Conversations. Today I am really excited to have a former client as well as a colleague and friend of Martin Healthcare Advisors. We have with us today Joe Sullivan who is the CEO of Peak Performance Physical Therapy. Joe, welcome. Glad to be here. Thank you. So, Peak Performance and Joe Sullivan entered into a partnership with Ivy Rehab back in September of 2018. Peak Performance is a four clinic company that LA with the largest clinic in Limbbrook, New York.
And Joe, again, we are really glad to have you here and glad to have our audience as well. So Joe, I've been wanting to ask you this for a long time, but my first question is when did it first hit you that it was time to sell Peak Performance Physical Therapy? That's a good question. When I first met you, I don't think I even had that decision fully baked yet. We were looking our options with a rapidly growing force location enterprise and I was looking to get better at what we were doing and possibly even look at the potential of acquiring and building from our own organically.
And we went and we engaged you guys all to kind of sit down and evaluate where we were and what our strengths and weaknesses were and what our options might be in order to accomplish that. And through really good dialogue between your team and ours, we started coming to the conclusion that it might be a really good idea to take the idea we were looking to achieve and partner with someone that's already doing it with a track record. You know, we would have been able to probably do it on our own, but starting for the first time would have taken a lot of learning curve lumps and made it take may have taken a lot longer to get to where we were looking to land.
So through several conversations we agreed to say let's start thinking about some other large groups that would be good partners to align with and just evolve from there. Yeah. And Joe, you know, I remember that as well. And what I remember most about that and a story that we tell often you know in our office is that you came to the planning session with a very open mind and open to looking at all the different strategies and making sure that the strategy that you chose was the best for yourself, the best for your business, the best for your staff.
And yeah, so it was a real thoughtful process. And I commend you on having that open-mindedness because no, in our initial conversations, you never mentioned partnering or selling to one of the larger companies. I think it was a it was a good experience because I went in knowing that if you're being smart and you're leaning in with people who are specialized at what they're doing, it's good to listen as much as you speak and kind of just explore what the potential would be. So it was it was a it was a good relationship on both sides because you didn't enforce anything.
You kind of just said let's explore the options on the table and it flowed very naturally. Yeah. Yeah. So after you made that decision but before you were really in the thick of the process did you ever have any moments of doubt? I don't think anyone goes through life saying that there's not a moment of doubt that they're considering otherwise they're going in blind. Right. Great advice. I do think just looking at the situation and weighing the pros versus the cons and keeping an eye on the bigger picture and saying, "Look, where is it that I really want to go?" And it's more about where I want to go and the time frame that I'm looking to get there, where I was able to retrofit, for lack of a better word, just the strategy that was going to work best for us to visualize, okay, in a year or two or three, what do I want this to look like?
So you I think that there were always some hesitations about what the future would be when it's uncertain, but if you take a look and make a plan and keep your head down and stick to it, it's harder to become an anxiety laden by it. Yeah. So, so you went back to your plan when you had those potential moments of doubt. So Joe, you're in a perfect position to give advice for some of the business owners that are out there today that we're talking to who are really struggling with this decision.
They're on the fence. What advice would you have for them? I think I'll sort of rephrase what I was just hitting a little bit earlier is really give some heartfelt thought to what you want your life to look like professionally, even personally, and just where you want your organization to land in a in a three-month window, but then go out, go 18 months, two years out and say, "Where do I want to be with this?" people come in with different motivations. I don't know if I could do a one-sizefits-all, but if you're looking to grow, think about what that would look like.
If you're getting towards the end of your career and you you're working until Thursday until you're working for yourself, then that's a different motivating factor. But I think to just go in and realize what it is you really want, you know, and come up with a really good first option and then also evaluate what would be a good second option or other ideas. So you're not walking in with the plan three steps in. You know, go in with a couple of outlines and then fill in the blanks, but always keep an eye on the big picture on where you want to go and then the little details become little and they don't become bigger than they need.
Yeah, great advice. Great advice. And you know staying on this topic of kind of driving to this decision, what were some of the real key factors internally and externally you know that were happening at the time back in 2018 that drove you to this really major decision. I think that we were the reason why we started looking outside of ourselves was the fact that we realized that we had grown tremendously within a short window. And like everyone else, you spend all your energy just trying to catch up energy just trying to catch up to running your operation in a way that reflects how you want it to run based on more interference and more challenges that come across.
And I think that we realized at that point I realized that I can't I'm past my own capacity and that unless we recruit externally in I was about to hire them. That was what I was saying. I was thinking, okay, I'm going to go to you guys and you're going to hook me up with some knowledge and you show me where I'm strong and I'll hire and we'll do this on our own. But I think it just got to a point where I realized that we were struggling to stay as good as we were u based on having to grow and accommodate all of the all of the additional load and that entails.
Sure. Yeah. I remember some of our in some of our initial conversations, not only with yourself, but some of your top staff that were involved in this process, just how proud you were of what you had built and the wanting to even make it better. So, you were good. You wanted it to be great and continue to drive forward. So, yeah, I commend you for that. You know, a big reservation that many business owners out there have is how am I ever going to tell my staff?
And so, prior to prior to breaking the news to your staff, what did you think their reaction might be? That is probably one of the biggest concerns that teams have. And I think it comes to where you think, well, if the deal doesn't go, it's going to create flight. That it's a reflection of dysfunction at the top or and some people fear change. So, you may have some flight based on that if you get it out too early. I'm going to say from having us had gone through this and then been with Ivy as I've watched and very involved with other sites going through the same process, I think there's probably more made out of that in most instances than needs to be.
And I think that look, you can't you can't announce it when you're at the first cup of coffee with a with a suitor. But when you're starting to get down and getting get getting ready, the teams figure it out because during diligence, you're locked in that room and you're doing all these extra meetings and phone calls. So, I think it's worse to maybe hold back longer because they know something's up, you know. And interestingly, we ran a meeting when we announced this and we called all of the offices into the one site and there were rumors I was dying.
There was rumors I was quitting, you know. So, I think you're going to have that. And I think once you get to a point where you're that busy and you're that distracted because, you know, you need to commit to diligence to get all this done. So, I think once you start getting to the point where you're that distracted, hey, we got some really great business deals that we're cooking on right now. Would show a team that you're forward thinking and that we'll fill you in later because it's a little early yet.
We just want to make sure we're good. But there's some really exciting stuff that we're working on that's going to enhance the business. Oh, it a business opportunity. Keep it super vague, whatever it might be. But I think hiding it makes you look worse. And you brought some of your folks kind of into the fold a little early before the actual deal. And then you brought everybody to one site and you kind of laid out, you know, what had happened. What was their reaction? You know what?
We celebrated it. I I'd like to say that we buffered any concerns. I don't really think there was 100% people doing cartwheels and all that in the room, but I think that they were very much assured and we rolled out champagne. You know, this was town hall. We were at that point were a day or two from closing. Admittedly, I created a problem for myself operationally later by waiting that long, which is why I said don't do that if you could help it. But we were we were there.
We had the Ivy executive leadership team and we had champagne and we were celebrating this and it was perfect because we rolled out right away the announcement, but then we rolled out the new partners and all the opportunities that are available to the team. It was way less about how I benefited from anything or even the company as a as a nefarious entity, right? It was, okay, this is how our teams are going to benefit. And check out all the continuing ed and all the opportunities right away before they could blink or even gasp.
We were just rolling out the positives for them. And I think it I think it made it a lot better. We really had very low attrition. And that's the thing too to bring up. We had low attrition because we paid a lot of attention to it and Ivy did a great job with the HR side to make sure that the teammates were the first the first focus for us to make sure they knew everything was all right. Yeah, I'm really glad you shared that and share some of the details of that.
I think you know for the folks out there that's one of the biggest obstacles that business owners see is how are they ever going to tell their staff and what is their staff going to do? And Joe, you know, knowing the leader that you are, I can certainly understand why and how your staff followed your lead, but you turned it into a celebration. And you know, that's what it was. And what I also heard you say is it wasn't a celebration just for you. This was celebrating your staff and moving them into a new phase of you know their education as well as their you know their positions their actual positions.
So yeah, I really commend you on that. So what steps did you take in kind of going through this process to make sure that Ivy was the best partner at that time for peak performance? Well, we did have some meetings with you know, we got some background information. You guys were very helpful and not just in saying here's a list of companies and it got even a little bit more detail is the wrong word but it got more thorough where we were not just talking about the financial performance or the growth strategy or the dots on the map.
It was about okay what's the leadership like you know we were inquiring about that but you guys were very forthcoming and honest and straightforward about where the cultural fit might be and knowing what you guys know about the key players and the leaders and organizations out there. It was good to find a match and I'm sure you did your analysis of us and said, "Okay, what are these guys like? Who would match up well?" and then just having the meetings and really just sitting down looking at eyeballs and having conversations about what the company's doing and what their goals are.
And some had different goals, some weren't as organized. Some just didn't connect Yeah. In the same way. And I had I had to have faith that I was partnering with a company that was as like-minded as I could find and I'm glad I found that with ID. So, as you look back and the other companies that obviously we vetted, what were some of the specific key attributes of Ivy that brought you to that decision? Well, it's funny, right? The first meeting with them is there's an it's all about the people and they have the they have the best practices and all this and they come in and it was it was very friendly and open I always come in with a little New York cynicism you know and I was like this is almost too friendly you know and it was I had to kind of sift through that a little bit and I was like okay no really is this going to be what it's like afterwards and I think That was that was where the big difference was with Ivy was it was they were very real.
You know, even Michael and Jeremy and Robin and Aaron, they came in and they were just very straightforward. It was like we were just having a conversation and I liked that it was exploring mutually whether the partnership would work. Some of the other ones were more trying to press to try and acquire yet another site and were a little more pushy and salesy, which made me think it was really more about them than it was about us. And I kind of got a better feeling that this was something that we would take steps together with Ivy and it was a it was a better fit by a lot.
Yeah, you hit that really well, you know. Michael Rucker, as I know you know, you know, not a physical therapist, coming out of really big health care business, but I can tell you that he went and visited a single clinic, small single clinic about 1/4 the size of your company in the Midwest. And you know, these small physical therapy clinics have a way about the conversations they want to have. As physical therapists, we communicate in a in a certain way. They they said he was one of the most impressive healthc care entrepreneurs they had ever met.
And I think that bodess really well to just what a downto-earth, you know, great person he is. And I think that you nailed that really well in how he set the I'm sorry. Yeah. No, go ahead. Yeah, he set the tone. He set the tone really well. And then when we got more substantive, you know, Troy is the guy running the running the machine and Yeah. To get somebody that was able to balance out that personal side with driving and his job. You have to drive it and being able to balance out getting accountability but not forgetting about the people that are involved along the way was really kind of that second phase where we said, "Okay, what's it going to look like once we're operating?" It made me very comfortable that we would be working well with someone that saw things very similarly.
Absolutely. So the big fear for ALS for many private practice business owners is also going through an integration and what that would actually mean to the business. What advice would you have for owners that are contemplating a partnership potentially 2022 2024 2023 I should say on how to face this integration. I'd say buckle up. No, buck do buckle up though. Buckle up more during diligence. And that's sort of what I was referring to before. I think in trying to be so methodical and paced, we created unknowingly more work after closing on integration by not necessarily opening up the process earlier.
And we ended up having so the change gradient was greater. We had to accomplish things by certain time frames, but there was more to accomplish because we didn't get as much of a head start and I think that just expect that it's going to be very time consuming. I would say this to make sure that you either yourself earmark time or get somebody on your team to earmark time to really focus on the daily operations of the site sites or site whatever the organization and the and the physician engagement and the growth development mindset, right?
Because between diligence, negotiations and or discussions, diligence and then integration, I went back to some of my docs and I haven't seen you in five months. Where you been? I'm like buried. You know, I didn't say it that way, but and I'm like, you know, and you see a dip because you're distracted. So, minimize the distractions and make sure you don't forget about the business moving and not just keep it alive, but keep it flourishing and add that energy to the system so that you don't end up seeing that inevitable drop because you just can't do too many things at once.
Yes. And just know it's going to be a lot of time, you know. So, I'm here really honestly you start the integration during due diligence really. And the more you're able to prepare through that, the easier that integration would be. Is that fair to say? Yes, absolutely. You're still going to have to get it all done. So, if you hold off because you want to hold off, you're adding more to the back end of the equation. And to the degree to which you're comfortable and you realize that if that secrecy creates its own form of dissension in your in your in your teams, let that happen sooner, let your team know and really open mind.
Look, you partnering it is something where if you find the right partner, you're not flipping the place on its head, but there's just a lot of change management and it's systems. It's it's just plugging in ADP and all the little things that are there. And look, if you're I don't want to say at the top of the organization, but if you're one of the leaders, I mean, you're the one that asking for the change. You're the one you're the one promoting it. You're the one looking for it by establishing the partnership.
Folks in your regular positions can be very change averse. And I would say to make sure that you leave time with your HR team or you just walk around and sit next to them for a couple minutes, say, "How's it going?" But I think we could have done better. We did a nice job, but we could have done better just sitting with someone if they were looking a little skittish, you know, and kind of let them not be as stressed out. Yeah. Rather than just saying, "It's going to be time.
It'll get better." Absolutely. Yeah. Joe and you know what I'm hearing from you is you took that personal responsibility versus this is just them know it's us and I'm going to sit down and I'm going to talk through it. You know that that's a very good point because you're being asked to make changes and in some of these changes depending on even some of my core leadership in your core leadership you got to get that straight early too like there's going to be change. You can't go back and say we used to do it this way.
You have to say, listen, you know, there's ways where we're going to just adopt new ways of doing things and kind of just kind of rate it in life. Changing how you enter a payroll in a system isn't really going to change much in life. So, just get ready for it and change it. Sure. The whole idea is you're not changing your approach to patient care. You have different reporting and you're pressing some different buttons on a new EMR. And and if you kind of prioritize where you get amped up, you'll get through it a little bit better and you won't get all you won't get all excited about things you shouldn't with small areas.
There's going to change. You you're asking for change though by partnering, right? So, sure, you know, welcome it. And a good dialogue between the team that's working with you and you will kind of call out and raise issues that are more significant and wrestle with them. Don't sweat the small stuff. So Joe, what I heard you say, and I just want to make sure I heard it correctly, is that a lot of the systems around the professionals, the therapists changed, but your approach to clinical care and your approach to patients stayed peak performance.
I'm going to agree with that. You know, I think there's a little more reporting. Look, you know what? And we realized too, we were missing certain things. Yeah, I told you we were growing faster. So having better systems in may mean that you're doing a little bit more data entry and to become compliant or document or code correctly. But it probably in retrospect, you're making me realize we could have recycled that message ahead of time and said, "Hey guys, listen. We're doing this as an improvement.
We need to do things we weren't doing before, not hey, we didn't say it this way, but the question is big co comes in and makes us change things. So I think I think getting ahead of it, realizing how you could message earlier would be very helpful. So at some point along this whole process, you decided to use a professional advisor to help you with you know the execution and of this transition. How did you evaluate the candidates for that and what was your criteria for making that decision in choosing you guys?
Absolutely. Yeah. A lot of conversations, different people, even just walking around private practice section with other owners, finding out what's going on out there. I I'll give a plug to Tom Carden because Tom came in and did a presentation and all of the AV didn't make it in. Something didn't happen. It was either a thumb drive didn't come in or the AV didn't work. And I kind of liked it because he's a pretty real person. And he's like, well, I don't know if he I don't know if he said it.
Screw it. I'm sorry if this is seven delay. Let's just have a conversation. And he flipped it and it showed, okay, these guys are able to just kind of convey in real terms. I identified more with that style of communication than a formal PowerPoint. And then just poking around, finding out what was out there. And then just having a couple conversations where we had interviewed you folks and some other folks as well and just kind of again just looking for the right fit, someone you want to work with that you think is going to offer you something that's positive.
And kind of partner up along the way, not just not just read a list. Absolutely. And Joe, you made the process fun as well. And I think we always we always seem to perform better when we're having fun. And it was a good time. You helped to make this a fun process for sure. Well Joe, I cannot tell you how much I appreciate some great information that you've given our audience today. I also will tell you that I have, you know, in talking to many of the, folks at Ivy, how they have just, how you have just embraced the opportunity, and have taken full advantage of all the opportunities with Ivy.
And, you know, I commend you for that. You didn't you didn't you know hide re really come forward and I really commend you for that. That's awesome. And Joe, thank you again for speaking to us today. But my pleasure. I look forward to doing it again. And so for all of you out there, if you have any questions on the conversation that I had with Joe Sullivan today, just click below and we can talk. And if you have a question for Joe, I'd be more than happy to put you through.
Thanks and have a great Hey Paul, just a second. I wanted to add that one thing at the end. We we talked about where we wanted to land. Yeah, we yesterday we this week opened up our 11th site on Long Island. I'm sitting here in Brooklyn where we're taking on oversight of four and an acquisition. It's just been an incredible growth strategy and pattern. So, by putting our heads down and working together, we absolutely took off and it's been it's been a really great result, not just a an experience along the way.
So, 11th site. So Ivy now has 11 sites on Long Island. 11 on Long Island. 12 in a couple of months. That's awesome. That's awesome. Congratulations. Appreciate it. All right. Thank you. All right. Thank you. And for all of you today, click below if you want to talk and I look forward to talking to you in the very near future.
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