The Personal Decision That Led to Change and Growth
John Dean of Mid Michigan Physical Therapy shares how a family decision led to a partnership with Doctors of Physical Therapy, how he told his staff, and what owners should know about 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 with us a former client, a friend of our firm, John Dean. John is the CEO of Mid Michigan Physical Therapy. Welcome, John. Thank you, Paul. So, Mid Michigan partnered merged with Doctors of Physical Therapy back in April of 2021. When Mid Michigan made that merger with DPT, they were a three clinic business and they have expanded and have added a fourth clinic that John is overseeing as well.
So congratulations on your growth, John. Thank you very much. Yeah, it's going very well. Awesome. Awesome. So, this is something that I've been actually very anxious to talk to you about. And what I'd love to know is when did it first hit you and your wife Glenda? When did it hit you guys that it was time to merge your company with a larger company? Well, you know, my wife, as you know, is a physical therapist also, and we've worked together for about more than 25 years, and Mid Michigan was going up and going for about 15 years.
And we always believe that at some point the time would be right to sell our practice and move on. And you know, over the years, we've looked at different potential models of how that could work. And and so we weren't really sure when that time was going to be. And then we ended up having our first grandchild and then my wife made it very clear to me that you know we needed to create a path whereby she could retire within one or two years and obviously spend more time with now three of our grandkids and so forth.
So, so of course I ignored her as long as I could and then and so ultimately did need to sit down with her and figure out, you know, what would be a path forward for us and Glenda, you know, she fulfilled a lot of roles for us within our practice. Very much on the administrative side. Something that really I had really no desire to step into when she retired. Because I was always more on the operation side of things and what have you. And so it became quickly apparent that the very best option for us was to look for a larger company that we could merge with and essentially unload her role onto the new company and then hopefully that be in a situation where that new company would also have a role for me because you know I've got a few more years to go hopefully.
Absolutely. That that's a great story. And so it really was very personal a personal family decision that Glenda was going to step down. You were going to stay in, but you needed that support that Glenda was providing and you needed to find where you would get that support. Perfect time to find a larger company and you guys made that personal decision and powered right through it. And I commend you for that. Thanks. 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?
Well, sure. We actually started the process kind of prior to the COVID 19 pandemic and and so you know we we recognized that you know as therapists we do have this we have this tendency to think that we can do everything better than everyone else. And but in this instance you know we kind of recognize you know this is a huge decision for us. You know, we've developed our practice over a 15-year period and we kind of need to get this right and we don't want to goof this up and we felt that, you know, we really need to get an expert on board to kind of guide us through that process.
So, that was that was kind of sort of where we met. Glenda is always a little low on the trust scale there and so forth. So she took a bit of convincing and that's really of course as you know we reached out to Martin Healthcare to kind of sort of guide us through those steps with the hope that we wouldn't take any missteps along in the whole process. Yeah. Yeah. No and I can remember that first meeting I believe it was at a diner up there.
Yeah. Yeah. Absolutely. So, John, what advice would you have for owners who right now, just like you guys, who were really struggling with making this decision and they may be still on the fence. What advice do you have? Well, the first thing I think that people think about when this starts coming up is you know, obviously they want to know what their motives are of why they want to go to that next stage. You know why is the time right for them and then if they feel that okay you know I want to retire or I want to merge a bigger company or whatever their circumstance is they've kind of got they can kind of go down two paths they can decide that they want to try to go it all alone or they can kind of recruit really someone who specializes in that area and I suppose you know I kind of think about it as a person who you know if you lived in a really nice home and in a nice neighborhood and you wanted to put it up for sale, you know, would you put a sign in your yard and put a an ad in the Sunday paper or would you recruit the best realer in the area to help you with that process?
And really for me, it's not any different. So it seemed really natural to us to, as I said, reach out to yourselves. And I think [clears throat] that's a really great first step because, you know, one of the things that people want to know is, you know, well, what is my what is my practice worth? What's my baby worth? You know, and often times a person may think, well, my practice is worth 7x or I should say 10x. And and it's actually only worth 7x or maybe it's worth 12x.
And so by getting somebody else involved, it really helps bring some objectivity to the table. So I think that's really important. So you have that first step of establishing you know what the value of your practice is and then I think it's really important then to work with someone like yourself who really knows kind of sort of the landscape of like mergers and acquisitions and what have you and of course someone like yourself then also has those connections to reach out to some of those bigger companies that might be a good suitor for that practice.
Yeah, I you know and John, I remember back to some of the early conversations with you guys and the way in which you were kind of walking and moving through this made so much sense and that first step of okay, really what's our value in today's market that brings that objectivity versus going out to some of the acquirers out there and figuring out your value from them just doesn't make sense. And I think you guys you know had the forethought of let's figure out where our value is objectively look at this then we take it to the bigger companies and I commend you both for that.
So one of the big concerns of every company out there that's looking to potentially merge, sell, partner with a bigger company is how are their staff going to react? H how did you guys tell your staff and prior to breaking the news to them did you fear what their reaction might be? Yeah. You know first of all I would say that u we felt that it was important to keep everything quite confidential until we really had all the eyes dotted and the tees crossed and we knew everything was definitely a go.
And so once we knew that was kind of sort of all in place, then our next priority really was to get with our team and share our decision and what have you and we headed in. So we decided what we wanted to do is put together bring them all together for a meeting and put together kind of a PowerPoint presentation and you know and this is something we've done routinely on an annual basis anyway in terms of you know the where our company was going where you know how we that and over the years you know we had you know addressed different challenges talked about the growth of our practice and what have you and we really presented it kind of sort of in the light that this was really the next logical step forward for us.
To merge with a larger company within our community where you know competition was heating up and so forth and really emphasizing in this kind of healthcare arena that this was a step that we felt would really you know ensure their job stability for many years going forward. And so, you know, we really kind of shared with them the decision and obviously promoted really all the good things that would go with that and we really felt really positive about our decision to merge with Doctors of PT because we felt that it was a really a great culture fit and you know we felt that you know our clinicians you know their daily lives wouldn't be changing very much and things would essentially as far as patient care was concerned would continue along the same track that we're already on and really a lot of the essential changes would be really more occurring on the back side of things.
So, you know, obviously we did fear what reactions people would have because it's natural for people when they get that big news to see, well, you know, how is that going to impact me? How is it going to affect my job? And so forth. So, so when we headed into that presentation, you know, we try to somewhat anticipate the questions that people may have and then kind of sort of address those pretty comprehensively and you know, obviously provide lots of opportunity for discussion and what have you.
So that people really felt good about our decision. I think also the fact that they knew that, you know, I wasn't bolting for the door or whatever else was such they knew that, you know, I was going to be part of the new operation. I think that was also a key part that if I and you know you know trust of course isn't built up overnight and I and I feel that our team has learned to trust Glend and I over the years and so when we when we announced this decision you know I think we had that kind of kind of history of trust to lean on and in turn it did go very well.
In fact, here we are a year later and every therapist that was with us when we first merged with Dr. PT is still with us today. So, I think that's, really good. That's terrific. And, you know, it sounded like I mean, you had been through and we're not totally through it yet, but you had been through the major formal discussions on getting through COVID. Yes. Had to keep this confidential. You know this was something that was there all the way through co with you guys and so it was natural and it made so much sense the way you guys did that which was a presentation on now here's the next step we're taking and I think that boded really well for how your staff responded and the fact that you've really lost you know none of your professionals going through this right so what did you how did you decide that you wanted to use a professional advisor, Martin Healthcare Advisors, and how did you evaluate the candidates?
And what was your criteria for making that decision? Well, you know, as I as I kind of explained earlier, I felt, you know, reaching out, to Martin Healthcare was kind of a no-brainer for us, first of all, because we recognized that we really did want, you know, expert guidance in this whole process. And as you know, you lined us up with one of your one of your very capable team to really guide us through that process, answer all the questions. Dave you know, he obviously screened the potential suitors for our practice and so forth.
And and really we were we were able to kind of sort of rule out many of those pretty quickly. We quickly recognized for our practice and the way we practice that a lot of the kind of sort of big players out there in on the national scale really weren't a good match for us. In fact, and as you know, we were kind of sort of almost giving up hope that there was a match out there for us for a practice like ours that had, you know, such a strict criteria of what we wanted because, you know, we you know, we wanted to find a company that really did resemble us in terms of culture and how we treated patients and so forth.
And, you know, we're established in our community. We know all the different physicians that come to trust us over the years and what have you. And so we wanted to make sure that we picked a company where none of those relationships would suffer. So, you know, as you know, we we met with Aaron Craig, the CEO of Doctors of PT, and really took an instant u liking to Aaron. I know that you know him. He's very personable, high energy, and we just loved everything he had to say in regards to ourselves.
You know, we felt if we went one of the bigger players, we'd just be like another dot on the map. And we could see with Aaron that he was going to really value our practice. And you know, one of the things he said to us early on is that, hey, you guys have run your practice real successfully for the last 15 years. And you know, why would I step in the way of that? You know, I just want to partner up with you and make things better.
Not fix something that's not broken. So, that was kind of music to our ears. And, you know, Dr. PT has just been, really wonderful to work with for us. Yeah, that's awesome. And, and I'm glad you know, brought out for us some of those key attributes that, you know, doctors of physical therapy had that was the match was the match for you and the criteria that you had built. And I think that it's not uncommon for companies to have a very specific criteria on what they're looking for their future.
And you guys did a great job really laying that out. Because without that, how do you really know what you're looking for? So you guys did a great job with that. Thank you. So everybody dreads or anybody going into this process that they dread integration and so having now been through a large part of your integration. Tell us a little bit about how that has gone and any advice you would have for companies out there who are looking to do this potentially this year or next on how they could best prepare for that integration process.
Well I think one of the things to start off with is you really got to be very proactive. It it's not a process that happens overnight. So first of all you know if this if selling or merging your practice is kind of sort of on the horizon and it's something that you think that you're going to move toward in the next year. The time to take action is actually now versus later. Because it is a process. It's a huge decision and really being proactive in all of that and getting that expert input even months in advance I think has great value.
So I think that that's a really good starting point. The next thing is that of course many of us who've worked very hard over the years we tend to be very focused on well what's our practice worth? What's the value of our practice? And so while the financial part of it is important, I think and you had you had mentioned this to us in our in the early phase of our process is to get that culture match is so important especially if you know one owner or more is going to stay on with the new company.
It's so important to work with a company that you know you're going to do well with in the long run. So, I think that's so important to consider. I think the other thing and I've spoken, as I mentioned, a couple of other owners that have considered, you know, selling their practice in the next year and they kind of come to me with questions about well, what did you need to change? And they've kind of sort of expressed their reluctance to change. And I think it's important for any prospective PT owners out there that they're looking to sell their practice is that you've got to look and see how you can offer value and you've also got to you've got to have a very flexible mindset.
It's it's really helpful if you can kind of sort of step in the shoes of that potential partner and see what they're looking for too because if you're going to kind of dig in your heels and you're not going to change, it's just not going to go well. You've really got to go about it from a kind of a okay a more of a win-win scenario. And I think if you do that heading into this and seeing how you know your practice can complement that future partner that that's a really kind of sort of healthy u mindset to go into this with.
Absolutely. John, what I'm hearing is that you and Glenda looked at change as how can we make this positive change? How can we prepare? So, this is positive change versus, you know, change in what historically we've all thought, which is these changes are just going to be bad. No matter what, they're going to be bad. You really lifted you know, from kind of down in the weeds to no, let let's look at this as positive change. Yeah. I mean, we've been very fortunate in terms of like like to partner with Dr.
PT. We've really been blessed. I mean, they've got a wonderful leadership with Aaron at the CEO, a great executive team around him, and then for us, you know, we've had a great culture match. Our team has been, you know, very excited. I mean, they've done wonderfully over the past year. And then from a cation patient care standpoint, nothing has suffered along the process. So, it's been like for us, it's been like a win-winwin. So, it's been pretty awesome. Yeah. So, happy to hear that. It's great to talk to folks that have been through this and to have such a great outcome as you guys have.
John, I cannot tell you how much I appreciate you coming on with us today and sharing for our listeners your experience going through this process. I think you gave them a lot of value today and I really appreciate your time. Okay. Well, you're more than welcome. Thanks, Paul. So for all of you out there, if you have any questions on any of the topics or any of our discussion points today, just click below and let's talk. Thanks and have a great day.
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