WEBVTT

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All right,

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today we're going to talk about a phrase

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that everyone who's ever worked inside a

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large healthcare organization has heard at

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least once.

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And maybe you Googled it to see what

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it meant.

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also usually a little bit of dread

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attached to it.

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And the phrase is,

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what's the EBITDA impact?

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Now, if you're a clinic director,

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a regional operator,

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or someone working inside a PE-backed

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healthcare organization,

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the size doesn't matter.

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You know exactly what that question means.

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It means the conversation has just shifted

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from clinical care to financial

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performance.

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Now,

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Larry's been watching this happen across

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healthcare for years, not just in PT,

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but in dental service organizations and

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other consolidated healthcare models.

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And his argument is simple and pretty

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provocative and likely to make some people

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uncomfortable.

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EBITDA was supposed to be a reporting

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tool.

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And somewhere along the way,

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it became the mission.

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So today, let's unpack how that happened,

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what it's doing in physical therapy,

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and what a better scoreboard might

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actually look like.

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So Larry, let's start here.

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EBITDA, what is it?

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Because I'm sure clinicians out there

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probably heard their director say it,

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but if you were going to explain it

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to an eighth grader, how would you?

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Yeah, thanks, Jimmy.

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EBIT was born, first of all,

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EBIT is a non-accountant accounting term

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because it's not a generally accepted

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accounting principle,

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but we'll get to that maybe.

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But it was born out of a legitimate

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need when private equity really started

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rolling up fragmented industries well

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before physical therapy got in the mix.

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We're talking like in the eighties and the

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nineties, cable companies,

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those kinds of things.

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you know, basically healthcare,

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then dental, then PT.

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PT was a lagger.

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They needed a common, you know, language.

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Think of it as a currency to compare

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different businesses, you know,

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a small practice, for example,

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in rural Texas and a twenty location group

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in New York have very,

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very different tax jurisdictions,

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different financing structures,

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different depreciation schedule.

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If I buy a computer versus I have

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a fifteen-year-old chair, for example,

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What EBITDA does is it strips the noise

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out of that and lets you make as

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best you can an apples to apples

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comparison across that portfolio.

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So that's sort of the narrow context.

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It's genuinely useful.

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And our lenders requirement,

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our leverage covenants are demonstrated

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based on EBITDA multiples or the capital

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structure uses that language.

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You know,

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the shift happened when the metrics

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stopped being descriptive and became

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prescriptive or became what people chase.

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That's when I started noticing it.

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When everybody was using that language is

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when you start to notice it.

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When clinic directors stopped being asked,

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how's the clinic performance doing?

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And they were starting to be asked, well,

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what's your EBITDA?

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You know,

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like that's the end thing to say.

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And that's the moment the tool became the

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mission.

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And that usually happens when compensation

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structures get tied to it.

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And once you pay people...

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you know, to produce against the metric,

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you've told them what the organization

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actually, you know, values.

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I think, you know, as a whole,

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EBITDA is a great common language,

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but if it's the only language that you

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speak,

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you're going to have a lot of misdiagnosis

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over a lot of problems.

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Yeah.

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In the article that you just wrote,

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you can find it on LinkedIn and on

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your sub stack.

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You talk about how adjusted EBITDA has

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almost become what you call this fiction

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contest,

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where companies start adding back more and

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more things to make the number look

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stronger.

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So what kind of adjustments are we talking

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about?

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And why does that make the number even

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less reliable than you just mentioned?

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Yeah,

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so if you walk into any kind of

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management presentation,

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what they're going to try and show you

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is I think it's mostly referred to as

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a bridge.

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It's effectively a slide that starts with

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sort of the gap net income,

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not to get too much in the weeds

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here,

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but it walks you through step by step

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to the adjusted EBITDA.

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Then it has the add backs and they

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sound reasonable.

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and isolation, restructuring charges,

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M&A transaction, audit fees, you know,

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de novo losses during kind of an initial

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time period while they ramp up,

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management fees, COVID impacts,

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storm impacts, you know, snowstorm,

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owner comp that's considered above,

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you know, normal compensation.

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And some of these obviously are entirely

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legitimate.

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The problem is that there's no

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standardized definition of adjusted

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EBITDA.

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It's a non-GAAP measure.

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Every sponsor defines it a little bit

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differently.

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Everybody takes liberties with that.

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Your covenants from the bank allow certain

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things and don't allow certain things very

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inconsistently.

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Even USPT,

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which is a company that I love and

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have been big fans of them and their

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founders and now their CEO, Chris,

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And it's one of the only publicly traded

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PT companies we have,

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and soon with select medical going

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private, the one,

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is they're legally required to disclose

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that this adjusted EBITDA number should

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not be considered in isolation from GAAP

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measures.

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And they would never say that,

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and almost nobody in the room would pay

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any attention to it,

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but it's required because, as I said,

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GAAP

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generally accepted accounting doesn't

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recognize EBITDA.

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And then I love the other term,

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adjusted EBITDA.

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It's like a double entendre.

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So one of the more uncomfortable ideas in

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your piece,

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and I know you're not shy about making

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people uncomfortable,

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especially when you have the receipts,

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is that EBITDA doesn't just measure

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performance.

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It can actually change behavior.

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This is where I feel like it starts

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to get dangerous.

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What kinds of decisions start happening

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inside clinics when EBITDA is the main

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target and not clinical care or clinician

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health?

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Yeah, that's the question.

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start making decisions based on EBITDA.

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So EBITDA is a lag measure.

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And typically what we like to see in

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physical therapy are lead measures.

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As I say to all my managers,

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I'm a data guy as well,

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but you can't have a quantitative data

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without also giving me qualitative data.

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And you can't have a lag measure like

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EBITDA without a lead measure like call

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rate, acceptance rate.

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And we can talk about that.

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But what I see people happening is chasing

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the target.

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EBITDA results

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from doing other things right,

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rewarding your clinicians,

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being centric around the physical

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therapist and PT assistants,

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or in the dental world,

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our dental professionals,

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our dentists and our hygienists,

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And how do you enable them?

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How do you gauge them?

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What is your retention rate?

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How are they, you know,

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how many owners do you have in the

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particular clinics?

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And so when you start chasing EBITDA,

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you're chasing a number.

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And so what I've seen unscrupulous CEOs do

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is, you know,

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I heard about one recently that got rid

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of their PTO policy.

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In other words,

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if you leave or you get fired,

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you take no PTO with you.

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Well, why is that?

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Because now you could take the PTO,

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adjust it back,

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and all of a sudden your EBITDA climbs,

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right?

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The good news is the sophisticated

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investors, the sophisticated buyers,

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they can now sift through this.

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And now what I hear is a new

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term.

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And it's a term I actually use.

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It's called clean EBITDA.

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Clean EBITDA is without all these bullshit

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and all these other kinds.

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Obliquely, you know, by not paying it.

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of other things right.

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And as you saw from my article,

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there was a hat that Greg White, Dr.

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Greg White gave to me and say,

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you know, people over EBITDA.

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You get what you emphasize in business.

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You know,

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everybody says you get what you measure.

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You actually get what you emphasize.

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If you emphasize EBITDA,

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you're not going to get EBITDA.

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Every CEO that I know that chased EBITDA

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has failed.

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Everybody who's chased,

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and this is why PTs make great

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entrepreneurs and make great leaders of PT

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organizations,

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because they know in order to keep their

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clinicians,

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they got to approach things clinically.

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They got to approach what drives a

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clinician.

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No physical therapist, no dentist,

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no doctor ever went into business to chase

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EBITDA.

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They did it to do meaningful,

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impactful work.

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They did it because they wanted to help

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people.

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And so that's what we have to remember.

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It's really the basics and common sense.

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And we have to make common sense,

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common practice.

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Now,

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you make a pretty strong argument that

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EBITDA treats clinicians as a cost line,

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when in reality, they're the business.

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They're the thing providing the service

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that is our profession.

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So how does that disconnect show up inside

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physical therapy organizations

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specifically?

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Yeah, no, that's the real question.

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You know, physical therapy companies,

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their assets wear shoes.

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They go home at night.

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They go to bed at night.

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Right.

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And they're the ones that produce

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revenues.

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That is the first start of the equation.

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You know, I used to have this sign.

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I'd have all clinics put on their wall.

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It was a picture of our patients.

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And underneath, as it said,

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we eat because of you.

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The patients come in.

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We produce the revenue.

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It's a conduit.

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And then we produce enough profits to keep

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everybody employed,

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keep the lights on and everything else.

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And what you see start to happen is

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they start to have morning productivity

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meetings.

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They start to have morning meetings.

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optimization, units per visit,

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all of these metrics,

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they're not qualitative,

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they're quantitative,

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and they frankly drive physical therapists

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nuts.

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Now,

00:09:50.554 --> 00:09:52.235
the art and science of all this is

00:09:52.275 --> 00:09:53.317
how do you balance it?

00:09:53.817 --> 00:09:55.337
I'm not by any means suggesting you

00:09:55.378 --> 00:09:57.980
shouldn't use sound rationale, dashboards,

00:09:58.653 --> 00:10:00.472
and appropriate metrics to drive your

00:10:00.533 --> 00:10:02.514
business or to measure your business.

00:10:02.573 --> 00:10:04.274
It's when the measurement becomes the

00:10:04.333 --> 00:10:06.975
driver of the business rather than the

00:10:07.014 --> 00:10:10.635
driver being the absolute embodiment of

00:10:10.995 --> 00:10:13.255
caring for your employees and caring for,

00:10:13.375 --> 00:10:13.975
in turn,

00:10:14.336 --> 00:10:16.277
your patients that drive the results.

00:10:16.317 --> 00:10:19.177
So I just see this all the time.

00:10:19.217 --> 00:10:20.798
They create these committees.

00:10:21.398 --> 00:10:24.818
They terminate founders and PTs that drive

00:10:24.859 --> 00:10:25.418
the business.

00:10:26.359 --> 00:10:28.600
And all it becomes is a dumbing down

00:10:28.639 --> 00:10:29.419
of the profession.

00:10:29.440 --> 00:10:31.360
They make PTs into widget makers,

00:10:32.000 --> 00:10:34.581
and they forget that PTs are the drivers

00:10:34.642 --> 00:10:35.462
of the business,

00:10:35.582 --> 00:10:37.783
not the standby byproducts of the

00:10:37.803 --> 00:10:39.203
business.

00:10:39.244 --> 00:10:39.403
Well,

00:10:40.024 --> 00:10:42.144
you pulled out a story and an analogy

00:10:42.164 --> 00:10:43.166
that I'd never heard of,

00:10:43.225 --> 00:10:44.826
but it's pretty simple to follow,

00:10:44.846 --> 00:10:47.126
which is the Soviet nail factory story.

00:10:47.667 --> 00:10:48.827
Can you explain that idea?

00:10:48.888 --> 00:10:50.567
I love it because it's pretty obvious,

00:10:50.587 --> 00:10:51.349
it's pretty quick,

00:10:51.849 --> 00:10:53.570
and I feel like it applies really well

00:10:53.610 --> 00:10:54.570
to healthcare metrics.

00:10:55.791 --> 00:10:56.150
Yeah.

00:10:56.191 --> 00:10:58.131
So the Soviet nail factory is a really

00:10:58.192 --> 00:10:59.951
interesting one because I used it

00:11:00.032 --> 00:11:00.272
actually,

00:11:00.292 --> 00:11:02.131
I think in my last Substack post to

00:11:02.211 --> 00:11:04.153
illustrate the point about Goodhart's law.

00:11:04.932 --> 00:11:07.193
And it's the perfect illustration of it.

00:11:07.634 --> 00:11:09.894
The Soviet factory managers were basically

00:11:09.913 --> 00:11:12.955
given a production quota, make nails.

00:11:13.434 --> 00:11:14.595
So they made the quota work.

00:11:14.715 --> 00:11:16.655
When the target was the number of males,

00:11:16.755 --> 00:11:18.395
they produced thousands of tiny,

00:11:18.556 --> 00:11:19.416
useless nails.

00:11:20.196 --> 00:11:22.716
We're producing hundreds of patients that

00:11:22.756 --> 00:11:22.976
aren't

00:11:23.600 --> 00:11:25.381
coming back because they were moved too

00:11:25.422 --> 00:11:26.741
quickly because they were used to

00:11:26.782 --> 00:11:28.562
measuring units per visit and how much

00:11:28.623 --> 00:11:31.183
turnover in patients could I have?

00:11:31.504 --> 00:11:34.105
So the factory produced a small number of

00:11:34.186 --> 00:11:36.025
enormous, completely useless nails.

00:11:36.626 --> 00:11:38.368
And that's what happens when that's the

00:11:38.408 --> 00:11:38.827
target,

00:11:38.888 --> 00:11:40.327
but the target was hit and they were

00:11:40.427 --> 00:11:41.428
rewarded for it.

00:11:42.188 --> 00:11:44.330
We reward PTs for hitting or their

00:11:44.409 --> 00:11:47.091
managers for hitting EBITDA when EBITDA

00:11:47.110 --> 00:11:49.873
doesn't really respect free cash flow.

00:11:50.113 --> 00:11:51.793
Most of the PT platforms I know now,

00:11:51.832 --> 00:11:52.874
particularly the larger ones,

00:11:53.333 --> 00:11:55.495
aren't producing enough cash to even pay

00:11:55.514 --> 00:11:56.774
the interest on their debt.

00:11:56.855 --> 00:11:58.456
I mean, these platforms are in trouble.

00:11:59.615 --> 00:12:00.856
And so what you have to do is

00:12:01.496 --> 00:12:03.057
you have to realize it's ruining your

00:12:03.077 --> 00:12:04.177
healthcare organization.

00:12:05.298 --> 00:12:07.158
Set EBIT as the target and the rational

00:12:07.219 --> 00:12:08.500
operators will hit it.

00:12:08.740 --> 00:12:10.360
They'll do it by suppressing clinical

00:12:10.400 --> 00:12:11.140
compensation.

00:12:11.500 --> 00:12:13.621
They'll do it by really suppressing CapEx

00:12:13.642 --> 00:12:15.422
and other kinds of expenses that you need.

00:12:15.682 --> 00:12:17.082
Then they'll come up with all kinds of

00:12:17.123 --> 00:12:20.384
things to be under or non-recurring ad

00:12:20.403 --> 00:12:20.783
backs.

00:12:21.105 --> 00:12:21.845
They may even make

00:12:22.424 --> 00:12:25.027
sign-on bonuses, you know, and add back.

00:12:25.307 --> 00:12:26.967
They may even make certain benefits and

00:12:27.128 --> 00:12:27.649
add back.

00:12:27.749 --> 00:12:29.210
Now, enough years, you know,

00:12:29.230 --> 00:12:31.250
there really has been a materially large,

00:12:32.371 --> 00:12:34.133
you know, materially producing, you know,

00:12:34.173 --> 00:12:35.974
platform acquisitions in the last two

00:12:36.014 --> 00:12:36.374
years.

00:12:36.453 --> 00:12:37.475
And it's because of this,

00:12:37.514 --> 00:12:38.174
not just in PT,

00:12:38.336 --> 00:12:40.336
but in healthcare and even in dental.

00:12:40.817 --> 00:12:42.958
And so your sophisticated buyers and

00:12:42.979 --> 00:12:45.019
investors are sifting through this and

00:12:45.039 --> 00:12:46.380
they'll make their own adjustments.

00:12:47.422 --> 00:12:48.822
They won't take your word for it.

00:12:48.842 --> 00:12:50.423
That's what quality of earnings and all

00:12:50.484 --> 00:12:52.304
these checks and audits are all about.

00:12:53.566 --> 00:12:54.086
So yes,

00:12:54.126 --> 00:12:56.349
the giant useless nails in healthcare,

00:12:56.389 --> 00:12:57.769
and I would put EBITDA at the top

00:12:57.809 --> 00:12:58.370
of that list.

00:12:59.390 --> 00:12:59.811
Yeah.

00:12:59.870 --> 00:13:00.130
I mean,

00:13:00.192 --> 00:13:01.873
the people who you're looking to invest

00:13:02.212 --> 00:13:04.134
are now savvy enough to see how you're

00:13:04.154 --> 00:13:04.914
gaming the system.

00:13:06.035 --> 00:13:07.878
Hopefully this leads to less people gaming

00:13:07.898 --> 00:13:09.418
the system because it's sort of not

00:13:09.479 --> 00:13:10.279
fooling anybody.

00:13:10.480 --> 00:13:11.821
So, all right, well,

00:13:11.900 --> 00:13:13.142
then we got to hold your feet to

00:13:13.162 --> 00:13:14.222
the fire then here, Larry.

00:13:14.524 --> 00:13:15.384
Here's the last question.

00:13:15.423 --> 00:13:17.166
If EBITDA shouldn't be the North Star,

00:13:17.767 --> 00:13:19.587
the next obvious question is, well, great,

00:13:19.687 --> 00:13:20.288
what should be?

00:13:20.349 --> 00:13:21.730
What would be a healthier,

00:13:22.210 --> 00:13:23.812
what would a healthier dashboard actually

00:13:23.851 --> 00:13:26.173
look like specifically for a physical

00:13:26.214 --> 00:13:27.134
therapy organization?

00:13:28.436 --> 00:13:30.437
Yeah, so let me set some context.

00:13:30.636 --> 00:13:32.576
The business of physical therapy is not

00:13:32.616 --> 00:13:33.577
that complicated.

00:13:33.677 --> 00:13:35.118
We can make it complicated,

00:13:35.197 --> 00:13:37.558
and we do by having much too large

00:13:37.599 --> 00:13:39.000
of a dashboard, in my opinion.

00:13:39.059 --> 00:13:40.600
We have way too many BI tools.

00:13:40.639 --> 00:13:42.100
We have way too much data,

00:13:42.140 --> 00:13:43.260
but not enough caring.

00:13:43.681 --> 00:13:45.361
We have way too much numbers,

00:13:45.981 --> 00:13:47.182
but not enough compassion.

00:13:47.542 --> 00:13:48.623
We have way, way,

00:13:48.663 --> 00:13:51.244
way too many streams of emails on

00:13:51.303 --> 00:13:53.985
productivity without fundamentally

00:13:54.024 --> 00:13:56.024
listening and understanding the heartbeat

00:13:56.264 --> 00:13:57.926
of, in our case, physical therapists.

00:13:58.346 --> 00:14:00.509
but what i've proposed is what i really

00:14:00.548 --> 00:14:02.591
refer to as a four pillar you know

00:14:02.650 --> 00:14:04.433
framework because there are some

00:14:04.494 --> 00:14:06.855
differences that you can take into account

00:14:06.897 --> 00:14:09.339
amongst these four pillars and again two

00:14:09.600 --> 00:14:11.903
two premises don't give me a you know

00:14:12.062 --> 00:14:14.225
an objective data without a qualitative

00:14:14.405 --> 00:14:16.107
one and the second one is

00:14:17.447 --> 00:14:17.628
You know,

00:14:17.687 --> 00:14:19.509
don't give me a lag measure without a

00:14:19.568 --> 00:14:20.188
lead measure.

00:14:20.208 --> 00:14:21.409
And so you have to have a,

00:14:21.450 --> 00:14:23.990
you know, a flavor of all of those.

00:14:24.049 --> 00:14:25.591
But if I was defining the four pillars,

00:14:25.990 --> 00:14:27.551
and since we're talking about financial,

00:14:27.591 --> 00:14:28.751
I wouldn't put that number one,

00:14:28.792 --> 00:14:30.831
but let's talk about it first.

00:14:30.951 --> 00:14:33.552
I would lead with unlevered free cash

00:14:33.592 --> 00:14:33.972
flow.

00:14:34.472 --> 00:14:37.274
So it's EBITDA minus CapEx minus working

00:14:37.293 --> 00:14:39.534
capital, you know, now it's again,

00:14:39.575 --> 00:14:40.294
gets in the weeds,

00:14:40.335 --> 00:14:41.615
but what it really tells you is what

00:14:41.655 --> 00:14:44.096
cash you really have that is, you know,

00:14:44.255 --> 00:14:46.216
over and above, you know, your spending.

00:14:47.072 --> 00:14:47.332
You know,

00:14:47.373 --> 00:14:48.754
that's the number that tells you where the

00:14:48.793 --> 00:14:51.115
business really can sustain itself.

00:14:51.975 --> 00:14:53.037
Even it tells you what it looks like

00:14:53.076 --> 00:14:55.097
before the bills come due is how I

00:14:55.278 --> 00:14:55.898
refer to that.

00:14:55.918 --> 00:14:57.318
So that's kind of the financial side I

00:14:57.339 --> 00:14:58.720
would use on lever-free cash flow.

00:14:59.159 --> 00:15:00.780
On the operational side, there's a lot,

00:15:00.821 --> 00:15:03.562
but I like same growth, store, you know,

00:15:03.743 --> 00:15:04.703
increased organic.

00:15:04.943 --> 00:15:06.205
Everybody talks about wanting to buy

00:15:06.225 --> 00:15:06.504
things.

00:15:06.544 --> 00:15:06.684
Well,

00:15:06.705 --> 00:15:07.966
show me a company that can grow

00:15:08.025 --> 00:15:09.947
organically first and then let them buy

00:15:09.966 --> 00:15:11.967
things, right?

00:15:11.988 --> 00:15:13.970
That's the lead measure is can you grow

00:15:14.029 --> 00:15:14.610
a clinic organically?

00:15:15.173 --> 00:15:18.035
before you can buy something and then you

00:15:18.115 --> 00:15:19.836
maybe earn the right to buy things.

00:15:20.076 --> 00:15:20.397
Yeah.

00:15:20.456 --> 00:15:21.758
Now a new patient volume.

00:15:22.158 --> 00:15:24.099
I like that because it goes to throughput.

00:15:24.178 --> 00:15:24.359
You know,

00:15:24.399 --> 00:15:25.840
are you growing the number of new

00:15:25.879 --> 00:15:26.320
patients?

00:15:26.360 --> 00:15:27.880
What are the number of new patients per

00:15:27.961 --> 00:15:29.982
PT that they see in a day?

00:15:30.482 --> 00:15:31.043
As you well know,

00:15:31.082 --> 00:15:32.803
I like PlanetCare completion rate.

00:15:32.903 --> 00:15:35.046
It's it's a tough one,

00:15:35.086 --> 00:15:35.846
but it's a good one.

00:15:36.886 --> 00:15:37.606
I liked, you know,

00:15:37.647 --> 00:15:39.067
the number of patients that kept their

00:15:39.128 --> 00:15:40.969
visits, you know,

00:15:40.989 --> 00:15:42.389
that didn't that didn't you know,

00:15:42.429 --> 00:15:44.390
I think it's a proxy for quality almost.

00:15:45.159 --> 00:15:46.380
And, you know,

00:15:46.421 --> 00:15:48.241
these are sort of the leading indicators

00:15:48.261 --> 00:15:50.063
that predict the future of EBITDA than

00:15:50.104 --> 00:15:51.144
what EBITDA stands for.

00:15:51.544 --> 00:15:53.385
Then I think a third category is clinical.

00:15:53.426 --> 00:15:55.248
So again, financial, operational,

00:15:55.268 --> 00:15:56.989
and then I like to refer to it

00:15:57.109 --> 00:15:57.589
as clinical.

00:15:57.609 --> 00:15:59.311
And this is a real outcomes, you know,

00:15:59.331 --> 00:15:59.910
scorecard.

00:15:59.931 --> 00:16:02.072
You can use whatever third part validated,

00:16:02.572 --> 00:16:05.554
you know, measure you want, photo,

00:16:05.634 --> 00:16:07.417
promise, functional improvements,

00:16:07.476 --> 00:16:08.037
all these kind of,

00:16:08.057 --> 00:16:08.857
there's a bunch of them.

00:16:09.138 --> 00:16:10.177
You know,

00:16:10.238 --> 00:16:12.418
if the C-suite can't tell whether your

00:16:12.458 --> 00:16:13.860
patients are actually getting better,

00:16:14.019 --> 00:16:15.860
EBITDA number serves without a purpose,

00:16:15.980 --> 00:16:16.221
right?

00:16:16.681 --> 00:16:18.261
And so you have to live with that.

00:16:18.282 --> 00:16:19.442
You have to have that clinical one.

00:16:19.481 --> 00:16:19.741
In fact,

00:16:19.802 --> 00:16:21.383
I'd move clinical to the first of the

00:16:21.423 --> 00:16:22.062
four pillars.

00:16:22.823 --> 00:16:23.504
And then, you know,

00:16:23.524 --> 00:16:25.065
then I would call the fourth pillar

00:16:25.105 --> 00:16:25.424
people.

00:16:25.945 --> 00:16:26.565
You know, in fact,

00:16:27.225 --> 00:16:29.066
I would have people first, probably,

00:16:29.125 --> 00:16:31.267
clinical second, operational third,

00:16:31.287 --> 00:16:32.467
and financial, you know,

00:16:32.528 --> 00:16:33.687
fourth on my four pillars.

00:16:33.727 --> 00:16:35.269
And other people, it's retention rate.

00:16:36.028 --> 00:16:38.250
It's those engagement scores.

00:16:39.101 --> 00:16:41.802
um i i like to call them inspiration

00:16:41.923 --> 00:16:43.864
corey we used to measure patient set or

00:16:43.884 --> 00:16:45.423
you know employee satisfaction and i went

00:16:45.443 --> 00:16:46.804
to employee engagement now i actually

00:16:46.845 --> 00:16:49.304
think it's employee inspiration which

00:16:49.325 --> 00:16:51.446
keeps them inspired or how do they keep

00:16:51.505 --> 00:16:54.067
inspiring i like you know stay interviews

00:16:54.106 --> 00:16:56.268
how many of you completed in a given

00:16:56.288 --> 00:16:57.467
year these are people who are actually

00:16:57.528 --> 00:16:59.808
staying you finding out why these aren't

00:17:00.288 --> 00:17:02.471
exit interviews, which is very HR-ish.

00:17:02.510 --> 00:17:03.692
These are people, you know,

00:17:03.731 --> 00:17:04.972
getting to know why people stay,

00:17:05.032 --> 00:17:06.413
what's working, what's not working,

00:17:06.694 --> 00:17:08.556
what we need to start doing, stop doing,

00:17:08.596 --> 00:17:09.636
and keep on doing, you know,

00:17:09.656 --> 00:17:10.458
that kind of stuff.

00:17:12.239 --> 00:17:13.500
And all those things give you a chance

00:17:13.539 --> 00:17:15.301
to fix something before it becomes a

00:17:15.362 --> 00:17:15.761
problem.

00:17:15.821 --> 00:17:20.165
So that's the dashboard that I'm fond of,

00:17:20.246 --> 00:17:22.048
and certainly in the organizations I've

00:17:22.067 --> 00:17:23.048
been blessed to run,

00:17:24.450 --> 00:17:26.651
and I'm currently working in a leadership

00:17:26.711 --> 00:17:26.892
role,

00:17:26.912 --> 00:17:27.992
and those are the things I look at

00:17:28.032 --> 00:17:28.272
first.

00:17:28.880 --> 00:17:30.140
Yeah, I like how you flipped that,

00:17:30.319 --> 00:17:31.300
where the thing we're talking about

00:17:31.361 --> 00:17:33.320
EBITDA, or even the financial metric,

00:17:33.340 --> 00:17:34.721
that comes fourth out of four.

00:17:34.741 --> 00:17:35.561
It's got to be there,

00:17:35.942 --> 00:17:37.242
but fourth out of four.

00:17:38.163 --> 00:17:39.242
I do like this conversation too,

00:17:39.262 --> 00:17:40.644
because it's not anti-capital or

00:17:40.723 --> 00:17:41.564
anti-growth.

00:17:42.443 --> 00:17:43.964
It's really about just understanding what

00:17:44.204 --> 00:17:46.365
we're measuring, what we produce.

00:17:46.545 --> 00:17:47.125
I always like to say,

00:17:47.726 --> 00:17:49.026
what game are we actually in?

00:17:49.046 --> 00:17:50.227
Are we understanding what game we're

00:17:50.326 --> 00:17:51.067
actually in?

00:17:51.567 --> 00:17:53.047
And then what measurements are pushing the

00:17:53.106 --> 00:17:54.928
organizations to do that better?

00:17:55.307 --> 00:17:56.930
correctly or do that well,

00:17:57.109 --> 00:17:58.451
and then you get to sort of define

00:17:58.490 --> 00:17:59.392
what well looks like.

00:18:00.272 --> 00:18:00.613
Absolutely.

00:18:00.633 --> 00:18:01.814
It's all about culture and people.

00:18:01.894 --> 00:18:02.075
You know,

00:18:02.095 --> 00:18:04.636
culture is not the enemy of EBITDA.

00:18:04.737 --> 00:18:06.598
Culture is the engine of EBITDA.

00:18:06.818 --> 00:18:07.339
Absolutely.