Scott Blackman | Shore University

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The Strategic Smile | Dr. Scott Blackman's Blueprint for Orthodontic Excellence

Dr. Scott Blackman is a Founding Partner of Southern Orthodontic Partners. As Dr. Blackman transformed his orthodontic practice using strategies from the hospitality sector, he saw a partnership with Shore as an opportunity to increase scale and impact the orthodontic industry. This is his story about choosing to sell his practice and the personal and professional growth that followed.

Southern Orthodontic Partners (Nashville, TN) is a network of orthodontic practices in the Southeast. Affiliated practices offer general orthodontic services including correction of crowding and overbite, spacing via braces and Invisalign, as well as teeth whitening solutions.

Transcript

Introduction

Scott Blackman: This is about aligning yourself with the right people. Growth is hard and getting harder. So what are you going to do five years from now? How are you going to sustain your legacy and your brand? How are you going to make that handoff that you have to make?

Michael Burcham: Welcome to Microcap Moments, a podcast from Shore Capital Partners that highlights the stories of founders, investors, and leaders who have taken on the challenge of transforming ideas and small companies into high growth organizations. The journey of building and scaling a business takes one down many unexpected pathways.

It's a journey where we learn from our mistakes fall down often, but have the entrepreneurial grit to pick ourselves up and persevere. Within this series, we will share these stories of success and failure of the challenges and the rewards faced by those who dare to dream big. And through their lessons learned, we hope to inspire others who are on a similar journey of becoming, growing, and leading.

In this episode, I am talking to Dr. Scott Blackman, the founding partner of Southern Orthodontic Partners. Scott began his career as an associate orthodontist in the practice. Over time, Scott had the opportunity to buy out his senior partner and made the business his own. In doing so, he brought his own view of what created memorable customer experiences through his learning with the Ritz Carlton Leadership Center, and the practice grew significantly. As the orthodontic industry began its shift away from a business that had been largely driven by referrals from dentists, to one that was focused on direct consumer engagement, Scott believed that if he could connect with like-minded doctors who valued both the customer experience and the quality of care provided, he would have a winning strategy.

He found a kindred spirit in Shore Capital and became the first orthodontist to partner with what is now known as Southern Orthodontic Partners. Today Scott serves in a clinical leadership role with Southern Orthodontic Partners, working with other like-minded physicians to make a positive impact in the industry.

Scott, your journey has been quite remarkable. You began as an associate doctor in an orthodontic practice, went on to lead and grow that practice and then became the founding business when Shore Capital launched its orthodontic platform in 2019. I know being the first in on a new concept isn't easy.

Tell us a little bit about your journey to reach the decision in the first place, and then perhaps some things you've learned along the way.

The Orthodontic Industry

Scott Blackman: So it really starts with being passionate about what you do and looking ahead far enough to say, how am I going to be winning in a future state? I came into a practice that was founded back in 1948.

This was a practice that was known for excellence in patient care and excellence in orthodontic results. I came out of orthodontic residency in 1997, and when I came out it was very referral-based. For example, orthodontist did the tooth straightening, dentist did the dentistry, and pediatric dentist did the pediatric work.

And it was 100% almost referral based. Suddenly these referral patterns, there was a big behavior change in the industry and we started seeing other people doing what we like to do. And so in my mind I think, okay, well how are we going to be different? In the mid 2000s along with that we started seeing early consumerization of healthcare.

We started seeing a shift in practice transitions, and we started seeing consolidators starting to enter our space. Further, bringing DSOs, hiring orthodontists, and so that was a real big shift. And so all these things were happening at once. And this coincided with a remarkable, memorable experience at a hotel company, the Ritz Carlton.

And I spent about six or seven years with that company learning best practice. I've developed sort of a twofold vision, phase one was complete a cultural transformation once I had the reins of the practice. And then the second part of that vision was to then scale that brand that was created, increase the number of people that we serve and how well we serve them.

And so that was SOP. I thought that private equity would be the most efficient way to engage and build the brand. And I started proactively meeting representatives from different firms. I joined an organization that really exposed you to a lot of those people and nothing clicked. For whatever reason, I couldn't see myself working in this fashion or with these people or whatever.

I proceeded to go on and get an associate started and do that part first. And through a serendipitous meeting I met John Hennigan in the summer of 2018, and Shore was working on an orthodontic platform. They had been studying the orthodontic space for I think, 10 months or so prior to that meeting.

Interestingly, the standards, the mission, vision, values, had some similar languages is what we had. There was complete alignment there, and the more I met the people at Shore, whether it was a vice president, an analyst, a partner, the people with Shore enlivened those standards and values, and so I surrounded myself with the right people.

That's a synopsis of the journey.

Michael Burcham: A couple follow ups on that. You spoke about seeing the market shift and the changes you are seeing in referral patterns, consumer behavior, and practice. When you saw those changes happen, what was the driver? Was your driver, man, I'm really worried what this is going to do to a practice, I better have a plan. Or, boy, I love these changes. I've got a plan. I just need to find a partner. When you saw these market changes, what was going through your head, to look for options, instead of saying, I just gotta slug this out on my own?

Scott Blackman: It's about vision and where you want to be. Michael, I think that it's being growth minded.

I know that personally, I don't want to be where I am five years from now. I want personal growth and professional growth, and then how do I set the course for that? And it is just about having purpose that's bigger than yourself.

Balancing Leadership Roles

Michael Burcham: Thanks, Scott. Over the next portion of our discussion, Scott talks about the importance of striking a balance in his work as he continues to lead a practice while also serving in a leadership capacity with Southern Orthodontics.

When you think over the last several years, this group you're a part of has grown from two locations to a lot of location and hundreds of team members. Tell us how that journey has been for you personally being a part of that to some things you've learned about yourself becoming part of such a big organization when you're kind of the ringmaster of your own circus in your own practice.

Scott Blackman: Well, it hasn't been easy. My biggest challenge has been balance. I want to be further along than where I am, but yet I understand that I have to do maybe X, Y, or Z first. That practice focus has to still stay front and center. Yet there's a vortex that's pulling you into this world of business development and human resources and things that you're very passionate about that you want to get right and help and serve other teams and so forth, but you just can't.

And so, and then wanting to be better at things than you are. There's been some struggles and some challenges personally just in learning that balance. But then it's been just so humbling and gratifying to see how far we've come in such a short period of time.

Developing a Sense of Purpose

Michael Burcham: In the following portion of our interview, Anderson asked Scott about scaling his sense of purpose.

Scott shares his belief that the secret to this success is alignment, creating the organization's compass through shared mission, vision, values, and finding your just cause.

Anderson Williams: You know, you work from a strong sense of purpose and values forward as a leader of a team, as a leader of an orthodontic practice.

During this growth and in this transition, how have you scaled that connection through different work, through different team members, through different roles, that deep sense of purpose and value that's driven you to date as an orthodontist, as a practitioner.

Scott Blackman: It's 100% about alignment and whether we're talking values and purpose in the executive meetings with SOP or we're talking to a prospective doctor who is selling.

It's about finding your people and it's about being selective and who you choose to work with or on board, and it's about creating that alignment. Are we for everybody? No. Do we want to be for everybody? No. So it's about alignment of value and having a dedicated focus and process of conveying that. So it's about finding people that believe in the same mission, vision, values, purpose, just cause and then they're there.

You find those people and then you work together with them to scale.

Insights for Doctors

Michael Burcham: In the following portion of our conversation, Scott shares some of his insights and lessons learned for other doctors who are considering having a financial partner such as Shore Capital.

In the marketplace, there are a number of doctors across many specialties that are making the same assessment you made.

Back in '18 and '19 and looking for as the market changes, what kind of partnership do I need and is private equity a potential partner for me? Now that you're several years past that decision point, what kind of advice would you give to a doctor who's been clinically successful just as you have been, but feels the need or the market shift to do something?

What advice would you give them when they're exploring a partnership like private equity and maybe some lessons learned in how highs you have? If you could look back to your younger self and give yourself some advice, what would you say?

Scott Blackman: First of all, practice will forever be different, and a component of that is generational differences, but this is about aligning yourself with the right people.

Growth is hard and getting harder. So what are you going to do five years from now? How are you going to sustain your legacy and your brand? How are you going to make that handoff? That you have to make and in private equity, the beauty of it is, and I think a key differentiator for Southern Orthodontic Partners is I tell potential partners that your practice grows by a factor of Emily Leonard.

It grows by a factor of Jeremy Jones, you know, in operations. We're bringing this skill and talent to the team. We're not a company that's coming into the practice and telling you how to do things. We're working with you to make you stronger, better, grow teams, grow people. And that's just as an operator on an island, I can't hire a, an Emily Leonard.

I can't hire a, a John Nelson. I can't hire a Derek Walsh to come in and do all of this. And so it's about being stronger together and it is about how is your practice going to perform next year, five years from now, how am I going to create a legacy and sustain. Looking back if I could give myself some advice, is that, hey, number one, I'm, without question making the right decision, and, what took you so long? So it would probably be what I would say.

Customer Experience

Michael Burcham: You mentioned earlier in your opening remarks, some of your lessons learned in modeling, some things you saw in behaviors at the Ritz Carlton, but the underlying theme isn't necessarily their brand, it's what you learned about customer experience and how you make people feel. I think were your words.

I know many clinicians who quite haven't mastered that just yet. So what was that 'aha' and how have you created that sense of how we make them feel into both your practice and how you're helping that across the larger business.

But let's start with your practice. How did you get that sense of awe for customers embedded in a practice that you acquired, that you didn't start?

Scott Blackman: Great question. It starts with people, period. It's first who, and then it's what you're going to do. So it's about number one, defining what you're setting out to accomplish, having a just cause that is compelling.

But the big 'aha' moment was that you have a purpose. If your purpose is creating relationships with clientele, with patients, then you have to have people that can do it and that are excited to do it. And then you have to align yourself with those people and seek them out and develop what I call select versus higher mentality.

And then be hyper-disciplined around it. Don't waiver from it. That's the 'aha' moment.

Deciding to Sell a Practice

Anderson Williams: Scott, I want to follow up on that because we've talked about your decision to sell your practice, join partner with SOP, but then we've also talked about really some profound changes you had made for the positive in the culture of your team.

Prior to that decision, how did you approach your team and what was their reaction to your decision to start SOP?

Scott Blackman: They were anticipating it. In April of 2012, that was the line-in-the-sand moment for the team. It was, here's where the bus was going, this was the vision that we were going to phase one. We are going about a cultural transformation to create a brand that stood for not only excellence in orthodontics, but the feel good, the relationship, the I can't wait to be there, my next appointment type of brand.

We were successful, went through the processes we just discussed to get to that point. Phase two of that, which they knew about a long time ago, was then now we're gonna scale it. So this team was number one, very excited because they were part of something that was happening that was very impactful and, and they were passionate to help make it happen.

And when time actually came, number one, they trusted my leadership, thankfully. And so they were supportive.

Anderson Williams: And you had set the stage, the story had begun collectively, not just for you in 2012.

Scott Blackman: Exactly right.

Anderson Williams: Right, that story had begun and you were building toward this, so there wasn't a surprise, even with the anxiety of the reality of how it may or may not unfold.

I think the important thing is that when you drew that line in the sand in 2012, you said, we're going in a different direction and this is what it's kind of gonna look like and we're gonna build this together. So selling wasn't a surprise, it wasn't a wait, is something wrong? Are you trying to get out? It was all part of what you were sharing with your team.

Scott Blackman: Exactly. A lot of it was what's going to change and it wasn't what was going to change, it was, how's all this going to get better? This team is aligned with the vision, they want to increase the number of patients we serve and how well we serve them.

Since that time, we have opened another location. We're growing. Our team is bigger and stronger and happier, so they were completely aligned with the vision there.

Michael Burcham: As our conversation turns to Scott's role on the company's board of directors, he shares some of his insights and learnings through his board engagement, as well as his opportunity to impact the business in an overall fashion.

Scott, like many of our founders, you serve on the board of directors of the company, but not just in a founder role. Also as a key clinical leader role, because we have such a philosophy that our boards are a combination of the business acumen of the business, whether it be clinician or another category of industry, and our leaders.

What are the insights you've gained sitting at a board that you might not have ever seen running your practice, and how has that shaped and changed the way you see business?

Scott Blackman: The expertise at the board table is remarkable, and I'm a better business person at the local level from these experiences, it has really sharpened the sword and not only business leadership, but just team leadership overall.

It's very powerful to have doctors at the table and if doctors voices can be heard, and it's really for the naysayers and say, oh, any negative stigma that the word corporate brings to the table is quickly offset by the fact that doctors' voices are heard, they have a meaningful voice at the level. We have five board doctors at our table, and that's very, very powerful messaging to the broader orthodontic specialty.

What you learned from the experts at the table is profound.

Healthcare through COVID-19

Michael Burcham: So for any clinical leader going through COVID-19 was a pivotal do or die moment. A lot of hard decisions had to be made, probably both at the practice level and at the enterprise level, which you are a clinical leader of. Talk to us about some of the adaptions innovations, changes, lessons learned, going through that and helping part of something more significant helped you weather that.

Scott Blackman: Looking back on it, Michael, I couldn't have imagined having gone through that as a solo practitioner, the support that we had was so important. For example, number one is taking care of your team, making sure that they make it through, they're in a good place financially, emotionally. We had a fund that was set up through Shore and SOP, that, apart from the furlough pay and, how we arranged their time off, nobody suffered.

We were closed for about six weeks, and step one, it's all about safety. And so through, again, the connectivity with, Shore we had a COVID expert, a physician that serves Washington DC that we had numerous consultations with. We could separate what we knew, from what we didn't know, fact from fiction about the virus, and we created a clinical practice guidelines in sterilization and infection control guidelines.

Number one, it's Maslow's hierarchy. It's keeping the team safe first. Doctors got together and we created a way to do consultations amidst being closed. And we ended up, creating a virtual consultation platform. In six weeks I did 80 consultations from home and we built a base of patients upon opening that, it took us two months to get through and it was super well received and the word got out and we stayed all very busy as doctors being closed during COVID.

So again, power of partnership, Michael.

Why Did You Choose this Career?

Michael Burcham: In the next part of our conversation, Scott shares a key question he was asked when he chose to become a triathlete that has stayed with him throughout his entire career. And the question was this, why have you chosen to put yourself in this arena?

As an entrepreneurial founder and now part of a bigger business, you always feel this sense of pull and sometimes even sacrifice between your work and your family. You're much further down your professional journey than many other founders that we may speak to. What have you kinda learned about how you balance all those things and what are you still learning that you might want to share with our audience?

Scott Blackman: Well, first you find a saint and you marry them. So, because, I couldn't do it, without the support of, my wife for sure. About 25 pounds ago in pre adventure with, helping create SOP, I was a triathlete that traveled around the world, you know, competing in triathlons. It was my passion and my golf, so to speak, but I, really devoted a lot of time to it, and one of my acquaintances and friends through that, her name is Paula Newby Fraser.

She is the eight time Ironman World champion, only woman to ever win it eight times, but 86 to 96. But we were a training camp in San Diego, Michael and she, we were sitting in a room with some really top tier athletes and she looked at everybody around the room, and she asked me one of the best questions I've ever been asked, and it was, why have you chosen to put yourself in this arena?

And we sit there and said, well, that's obvious, right? But then you think about it, and none of us ever won a dime from doing this. We're about to commit to waking up at 4:00 AM didn't go into work 20 hours plus a week, doing this training just to get to the finish line of this race and then hopefully to the big one in Hawaii.

I think back on that and to present time, why have I chosen to put myself in this arena with Southern Orthodontic Partners and taken this chance? And again, if your answer is to have a big cash payday as a founder, then you probably need another purpose. I don't think that's a great purpose. That's a great outcome, we all want to do very well, obviously, but as an overarching purpose that's gonna make your industry better 50 years from now, that's probably not the purpose. But, I think it's about having purpose, Michael. I think it's trying to leave something you care deeply about in a better place and working hard to make it happen.

The real gift of it all has been the people I have met. I think I'm not an expert much of anything, but I am an expert at surrounding myself with really, really special people and the relationships that I've made along this journey and who I'm partnered with. Be it a doctor or somebody from Shore or anybody on our team, that's the real reward.

We're creating something very, very special together and having a heck of a good time doing it along the way.

Michael Burcham: Given your formal education was largely clinical, many folks say partnering your practice with private equity and going through that journey is a different version of an MBA almost. How does that resonate with you, and talk about the key two or three areas you perhaps have learned, changed or grown from a pure business acumen for having made this journey.

Scott Blackman: We reviewed PNLs. We had a process monthly for doing that. But beyond the numbers, it's about managing people. It's about giving people developmental pathways.

It's about balance. But this has been, an incredible journey where experts at the board table, you, Michael, through Shore University, and these are learnings that make us better business people. How to be a manager versus a leader. These are things that going through dental school or orthodontics school, we don't have a day of MBA training.

We don't have a day of finance. We don't have a business class or a series that we have to go through. So again, surrounding yourself with very special people. It's a constant process of learning and the tools that we get, we put into practice every day.

Choosing a PE Partner

Michael Burcham: So, Scott, earlier you said in your gut you knew that Shore would be a good partner. Talk to me more about that and what made perhaps others not feel so right, or what made Shore seem like the right partner for you?

Scott Blackman: Absolutely. The best way to summarize interactions with other PE, potential PE partners was production before people. It was more about scale and not really understanding why I'm at the table.

There were not very many moments of transparency. I believe in that intuition, that sixth sense, and I think certain things you just know or you don't. When I met John Hennigan and then you, Michael, and proceeded to meet others, I was very intentional about wanting to spend time with people on the team because what I found was that even the analyst that was a Shore member, or like I said, a Vice president or Justin Ishbia himself, the more time you spent in established foundational relationships with certain folks, that the mission and vision and the values posted were not just words on the wall.

People lived them and, and you could tell, just through interactions that the authenticity was there, the time and patience was there. There was a seek to understand why I was interested in doing what I set out to do.

Anderson Williams: When you started the process, you had done some research on private equity. Did you have criteria you knew or what you were looking for?

Did you have enough frame of reference there, or was this an iterative process where you really were feeling like that felt rushed? This felt different? Were you collecting your criteria through the process or did you have a sense of what you were looking for as you began?

Scott Blackman: I wanted my focus, Anderson, to be on people.

I know that the focus on people worked at the local level. I know that teams grew stronger with a focus on people and great leadership focused on people. And I saw the same thing, quite frankly, with Shore, and I didn't see that in other companies. Early on, our first hire was John Nelson, our CEO, and guess who the second one was? Emily Lenoard. The willingness to invest such a great investment early on is just proof that we're going to be a people-driven, people-focused organization.

Michael Burcham: When I asked Scott about how he knew he had found the right partner in Shore Capital, he refers to his know, like, and trust checklist. I think you'll find his comments really helpful.

So, Scott, you've been spending a few years looking at potential partners. You're kind of at the 11th hour with Shore. There are many founders that get to that pivotal moment and sometimes second guess themselves. All kind of questions go through their head. You clearly made the decision to move ahead, but what went through your head during that time and how did you come to decision, this is right for me?

Scott Blackman: That was a big day. The night before, you're laying awake and going through a mental checklist, and you are at that cliff edge ready to take the big step. And fundamentally for me, Michael, the first question on the checklist was, is this aligned with my purpose? I'm here, I've chosen who I'm doing this with, nobody's making me do this.

Is my purpose aligned? And yes, do I trust these people? Do I know them? And do I like them? Yes, that's big for me. I think that if you establish this know, like, trust trifecta, that's the foundation for a great sustainable relationship. And those three boxes were ticked. Is this gonna be good for my specialty?

People will know how we're different and why we're different. Is this good? Am I gonna leave a specialty, an industry that I love and am passionate about in a better place than before this? The track record with Shore speaks for itself. None of us can predict the future, but what we do have is a track record of a great company performing in and out of industry fluctuations, economic fluctuations, and that too was a check.

Making an Impact

Michael Burcham: So Scott, you said one of your key drivers and objectives in making this decision was to have impact in your industry. Talk to me about what's happening and the things you're doing now, that you're really proud of, that it's making such an impact.

Scott Blackman: Orthodontics as an industry has a terrible problem with associate doctor retention, for example. We have presently a 37% retention rate, which is dismal.

At SOP, we have a strategic charter that is focused on winning with this new generation of doctors coming out of residency. We have stood up a leadership academy that's equipping our young doctors with business skills. It's a mini MBA program where we're literally able to now grow future leaders, give them teaching and education that we do not get in dental school and orthodontic residency programs.

They will be better business people. They will be better leaders. We're creating developmental pathways for each doctor. Each associate doctor gets a development plan that we'll see them through. We have a transition strategy. We have a two year cycle, including the leadership academy that will equip the practice, the senior doctor and the junior doctor to make successful transitions that will then sustain the legacy of that practice.

Very, very important for us. We are working with our practices now at SOP to make them more consumer facing. We as an industry, orthodontics struggles with patient intake. We have doubled down on CRM patient intake practices that help us recruit and retain patients. We have a social media platform website development, so we're helping our practices become more consumer facing, making it easier for patients to get in to see our doctors.

Michael Burcham: So one of the key strategic approaches that your organization has made to the market is not to replace local brands that doctors have built, but actually to build on them and strengthen them. That's a bit different than many other consolidators in an industry too. What has been the power of that to these local practitioners and their local communities, by you choosing to amplify their brand, rather than almost replacing it with a corporate brand?

Scott Blackman: That is why so many do not want to consolidate. Number one is that we have all created something very special. All of our partners have tremendous brands. We would never go in and try to change or recreate a brand.

There is only so far that we are capable of taking a brand, some bigger than others, but we all have to position our practices for the future. Nobody can tell me how better to serve my community, how better to treat my people. If we have a successful culture there is immense opportunity in coming in and working with doctors and teams to make us better, stronger, and more efficient, and that's the real power.

Michael Burcham: Scott, one of the key philosophies of Shore is we let our doctors always lead clinical decisions, but as their partner, we bring really strong business acumen, and if we each do our part, we create a great company. You're getting to live through that. I'd love to hear how you think of that and what's proven true for you in that philosophy as you all have built this business.

Scott Blackman: The track record, Michael speaks for itself with the expertise and support that we bring to our practices tables via Southern Orthodontic Partners. We have managerial and administrative support, for example, that we've never had. Well, that allows a real shift in focus on a week on week basis. We get significant time back to give patients a better experience, to deliver better outcomes, to have heightened focus with team and team engagement.

It's tremendous and it's significant time, week on week. As a group of doctors working together, we share best practice. We have a great process for doing so. We've become bigger, better, and stronger businesses through this partnership. It is a true partnership.

Michael Burcham: Scott, thank you so much for spending time with us today.

I think your insights and your own story is gonna be enormously helpful to other founders and congratulations on all the success so far and the work you're doing and, we're really proud you're part of this Shore family.

Scott Blackman: Proud to be a part of the Shore family, and always a pleasure to spend time together and I really appreciate the opportunity.

Thank you.

Michael Burcham: This podcast was produced by Shore Capital Partners with story and narration by Michael Burcham. Recording and editing by Andrew Malone. Editing by Reel Audiobooks. Sound design, mixing and mastering by Mark Galup of Reel Audiobooks.

Special thanks to Scott Blackman and to Anderson Williams who shared in the interview with me.

This podcast is the Property of Shore Capital Partners, LLC. None of the content herein is investment advice, an offer of investment advisory services, nor a recommendation or offer relating to any security. See the terms of use page on the Shore Capital website for other important information.