Announcer:
Scalpel of Truth is presented for educational and entertainment purposes only. Leisa Krauss is a profit strategist and business consultant. She is not a licensed therapist, HR professional, attorney, or your mom. Strategies discussed are based on her extensive experience in the medical aesthetics industry and are not medical, legal, or financial advice. And with that, here’s your host, Leisa, the Bitch’n’ Beautician and Profit Queen.

Leisa Krauss:
Welcome back to the Scalpel of Truth Podcast, where we talk about the shit in medical aesthetics that everybody’s thinking about, but not everybody is willing to say out loud. Today’s topic was actually requested by three different people in the last month, because it happened to them. The episode is “When Your Rock Star Becomes Your Competition.”

All right, Bitchachos, let me set the scene. Many times I have heard this same exact story in at least the last 10 to 15 years. They had an employee who became an absolute rock star. They trained her, invested in her, taught her how the practice operated. She learned the patient journey, the systems, the sales process, the culture, the marketing, the promotions, the treatments, and essentially got a front-row seat to how a successful medical aesthetic practice operates. And then she decided to open her own. Not three provinces away. Not something in a different industry. She has now become the competition, and some of the existing team may leave to go with her.

After hearing so many of these stories, and especially three requests in the last month, I thought, oh shit, we better talk about this. Everybody says, including me, hire the people who think like owners, develop the leaders, train your people so well they wouldn’t want to leave. Fantastic. Until they fucking do. And suddenly the person you spent years developing is opening a clinic 15 minutes away, offering Susan at your front desk another $3 an hour to come with her.

And now, before everybody starts sharpening those pitchforks, I want to make something very clear. An employee wanting to become an entrepreneur does not automatically make them a bad person. They’re allowed to be ambitious. They’re allowed to grow. And people are allowed to decide that they want to build something of their own. But as an owner, you’re also allowed to protect what you spent years building. Those two things can coexist, and that is what today’s episode is about.

Because one of the biggest mistakes I see owners make is assuming loyalty is a business protection strategy. It is not. Loyalty is wonderful. Culture, extremely important. I talk about it all the time. Relationships matter. But none of those replace proper business infrastructure.

And here’s the irony, folks: the better your business operates, the easier entrepreneurship can look from the employee side of the desk. They see the patients come through the door, treatments being sold, memberships being purchased. They see that event that generated 100K. They see the full schedule. They see, if they can pull it up, the revenue that has been generated within your EMR. So they think to themselves, you know what? Fuck, I could do this. I could do this.

What they actually don’t see is everything underneath it. They don’t see what it took to get there. They don’t see the years when payroll was terrifying. Equipment payments, leases, insurance, lawyers, accountants, software, merchant fees, marketing spend, the inventory that sits on the shelves, the HR nightmares with staff. How about the cancellations, the no-shows, the taxes, the sleepless nights? The years spent building a reputation before anybody gave a shit who you were. They see the beautiful swan gliding across the water. That’s what they see. And they don’t see the legs underneath paddling like a motherfucker. They don’t see that.

When you’ve built a really high-functioning practice, you can actually become a victim of your own success, because you make things look easy. And that employee may genuinely believe, I already know how this works, because they’ve watched you do it. But knowing how somebody’s machine operates and building a machine from zero are two completely different skill sets.

Sometimes the employee isn’t simply taking inspiration from what they’ve learned from you. They’re trying to recreate the exact blueprint. I’ve seen where we’ve got the same promotions, membership structure, patient experience; the vendors are all the same. They’ve got the same lasers, the same skincare that sits on the shelf, the same pricing philosophy, the same marketing concepts. And sometimes they even begin recruiting from the team that you built. That’s a bit of a bitch. That’s where this becomes a different conversation, because there’s a huge difference between “you inspired me to become an entrepreneur” and “thank you for building my business plan for me.” And owners need to understand that distinction.

So what do you do? First, you stop assuming that this could never happen to you. That’s where we go wrong. I’ve watched versions of this story, like I said, happen repeatedly throughout my career.

And second, understand something I teach consistently: inspect what you expect. That applies here too, folks. Know who has access to what. Who can download patient information? Who can export reports? Who has access to your financials, your marketing calendar, your membership numbers, your CRM, your administrative access? Who knows your vendors? Usually all of them. Who has access to your standards of practice? Who has a copy of your training documents?

And I’m not suggesting that you operate a business from paranoia. You don’t want to come from a place of paranoia. That’s awful. I’m suggesting you operate like a formal business. Access should be based on what somebody needs to perform their job. Not, “Well, she’s been with me forever, so she’s got the passwords to everything.” No. No, no, no.

I want you to look at your retention strategy, because if your best employee is responsible for generating hundreds of thousands of dollars for the practice, and their only reward for exceptional performance is that you tell them they’re doing an amazing job at the Christmas party, eventually somebody is going to start doing the math here. Okay? It doesn’t take a math leap to start doing this math.

Your compensation strategy needs to make sure it’s staying attractive. And that can mean performance bonuses, revenue-based incentives, leadership bonuses, profitability targets, additional responsibility accompanied by additional compensation. They want a career progression plan. They want recognition. There are so many things and so many ways to structure that.

The goal isn’t to make somebody financially dependent on you. It’s to create a situation where your rock stars can look at their future inside your organization and think, there’s still somewhere for me to go. Because sometimes entrepreneurship isn’t actually the dream. Sometimes it’s just growth. Growth is the dream. Opportunity is the dream. And they feel like, oh, I need to go out and start a clinic myself and be an entrepreneur. They confuse that. And if somebody believes they’ve hit the ceiling within your practice, they may decide the only remaining ceiling is to break their own.

Now, none of what I’m saying here guarantees that somebody won’t leave your practice. You can’t handcuff talented people to the treatment room. You just can’t. And you shouldn’t want to. What you can build is a practice that doesn’t become dangerously vulnerable when one person decides to walk out the door.

And that’s what we’re talking about behind the velvet rope today. Because for my Inner Circle Bitchachos, who are already members of the VIP Inner Circle, we are going much deeper. We’re talking about the psychology behind why your highest-performing employee may become the person that you think, “Oh my gosh, they may go out and build something.” We’re talking about compensation and revenue incentives. We’re talking about career paths, confidentiality, non-solicitation, intellectual property, contractual protection that you should be discussing with qualified employment counsel within your province, your jurisdiction. We’re talking about access to the patient data and the proprietary business information that you have. We’re talking about what you do when somebody starts recruiting your team to leave.

And most importantly, how do you build a practice, essentially a business, if you will, that can survive losing a rock star? Because if one employee leaves, and that person leaving can cripple your practice, you don’t just have an employee problem right now. You have a system problem within your practice.

So, Bitchachos, we’re going behind the velvet rope. If you are not an Inner Circle member, I encourage you to hit the show notes and go ahead and get yourself signed up. Head over to scalpeloftruth.com, and you can unlock all the profit strategies and business consulting that the VIPs get in every episode. And we’ve also got some rockin’ PDFs that Producer Pete has added for us to give you extra value. So for my current members, let’s go!

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