Section 5: Culture, Leadership & Alignment

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As DSOs scale, the biggest risks rarely come from clinical output, facility expansion or investment cycles. The real pressure builds inside the organization. Clinics begin to operate at different speeds. What once relied on personal trust now depends on leadership, clarity and consistency.  

Culture becomes the hidden variable that determines whether operational progress converts into EBITDA growth or stalls due to fragmentation. A recent healthcare IT M&A survey reported that 44% of respondents rated culture and leadership clashes as the biggest risk, more than poor integration planning or data issues [33]. 

Most DSOs underestimate this shift. They invest heavily in acquisitions, branding, technology and governance frameworks, but the internal environment is left to evolve on its own. In short, the DSO becomes a group of clinics rather than an integrated organization. 

This section outlines how DSOs can build leadership structures that scale, embed a culture that supports growth, and align clinics around a common standard of performance. The goal is simple: create a system where people understand what good looks like and feel equipped to deliver it. 

The People Problem

Most DSOs think growth issues begin with operations or finance, but in reality the biggest constraints usually sit within people, behavior, and leadership alignment. As a group scales, the distance between the leadership team, clinical teams, and support functions widens. Decisions take longer. Communication becomes unclear. Accountability drops. This creates friction that affects cost control, service quality, and ultimately EBITDA. 

People problems also compound silently. A single misaligned regional manager can change how a whole cluster interprets priorities. A culture of avoiding difficult conversations can stall performance improvement. Poor communication can break implementation of the DSO model. These challenges rarely show up in a P&L straight away, but they show up in churn, inconsistency, and a weaker valuation. Fixing the people problem is therefore a strategic investment, not an HR exercise. 

1. Why Most DSOs Fail Due to Leadership Disconnects

In most underperforming DSOs, the real breakdown happens when leaders do not share the same priorities, decision-making style, or expectations. Poor alignment at the top creates operational confusion at the clinic level. This leads to misinterpreted targets, inconsistent policies, stalled initiatives, and low trust.  

Over time, growth slows because teams do not understand what leadership wants or why decisions change. 

Leadership disconnects also damage culture and retention. In fact, in a recent survey of DSO employee sentiment, 69% of respondents cited weak leadership as a top contributor to negative culture [34]. 

When managers communicate inconsistently, clinicians and support teams lose clarity on standards and processes. Staff turnover increases and operational knowledge leaves. This leads to higher recruitment costs, more locum reliance, weaker patient experience, and lower productivity.  

So, how do you undo leadership-related issues? 

Set unified expectations 
Create a clear leadership charter that outlines how decisions are made, how priorities are communicated, and what behaviors are non-negotiable. This gives every regional and clinic leader a consistent reference point, reducing mixed messages and improving execution across all sites. 

Build a consistent management rhythm 
Implement a predictable cadence of reviews, check-ins, and performance discussions. When every clinic operates within the same rhythm, information flows more clearly and issues surface earlier. This protects the organization from operational drift and strengthens accountability. 

Define the leadership model 
Clarify what effective leadership looks like inside the DSO. This includes communication standards, coaching expectations, escalation rules, and conflict-resolution processes. A shared model prevents each manager from operating in their own style and reduces variation in staff experience. 

Strengthen the regional layer 
Regional managers are often the single most influential role in a DSO. Invest in their training, enable them with data, and set clear operational KPIs. A strong regional layer reduces bottlenecks at the top and ensures clinics receive consistent support. 

Create two-way communication channels 
Establish structured feedback loops that allow concerns, ideas, and operational realities to flow back to leadership. This helps senior teams respond faster, adjust priorities, and avoid being disconnected from clinic-level challenges. 

Develop succession and capability pipelines 
Identify high-potential people early and build structured pathways for them to step into leadership roles. This prevents capability gaps when managers leave and ensures the organization can scale without losing momentum. 

The Investor–Clinician Divide

Practice ownership among U.S. dentists declined from 84.7 percent in 2005 to 72.5 percent in 2023. That shift increases the need for leadership alignment and shared culture inside DSOs [35]. 

As a DSO scales, the gap between investors and clinicians becomes one of the most persistent sources of internal friction. Investors focus on capital efficiency, returns, scalability, and predictable performance. Clinicians focus on patient care, professional autonomy, and long-term clinical outcomes.  

Both sides want the group to succeed, but their priorities often diverge in practice. This misalignment affects everything from treatment planning and staffing to budgeting and operational policies. 

If this divide is not managed intentionally, it weakens culture and reduces EBITDA. Clinicians may feel that financial decisions undermine patient care. Investors may feel that clinicians resist operational discipline.  

This tension slows decision-making, stalls standardization, and creates inconsistent patient experiences. Closing this divide is not about choosing one side over the other. It is about building a shared operating reality where clinical excellence and financial performance reinforce each other. 

1. Understanding Each Side’s Mindset: Profit vs Patient

Investors evaluate the business through risk, returns, and scalability. They need predictable numbers, standardized processes, and strong governance. This lens drives decisions around cost control, workforce planning, and operational efficiency.  

Clinicians, on the other hand, evaluate the organization through patient care, professional standards, and daily operational realities. They want the time, tools, and support to deliver consistent clinical outcomes. They resist rigid frameworks when these feel disconnected from treatment needs.  

The challenge is not the difference in mindset but the misunderstanding between them. A well-run DSO bridges these expectations by building a shared language, shared metrics, and shared priorities. 

Clarify value drivers 
Help clinicians understand how EBITDA is built, how costs behave, and how operational consistency strengthens long-term patient care. When the financial model is transparent, clinicians make better operational decisions without feeling controlled. 

Explain clinical pressures 
Investors need visibility into the realities of patient flow, complex treatments, chair-time limits, and staffing pressures. This prevents unrealistic targets and enables more grounded budgeting and planning. 

Define mutual success metrics 
Create a balanced scorecard that reflects both clinical outcomes and financial performance. When both sides track the same goals, decisions become easier and tensions reduce. 

Bridge through data 
Use clinical and operational data to show how good clinical practice improves financial stability. Examples include reactivation rates, treatment acceptance, recall compliance, and operational chair utilization. 

Address autonomy concerns 
Give clinicians autonomy within a clear framework. This means setting guardrails, not micro-rules. It protects patient care while allowing the DSO to maintain standardization. 

Set communication norms 
Build structured touchpoints where clinicians and investors discuss priorities and constraints openly. Regular conversations reduce assumptions and avoid last-minute conflicts. 

2. Practical Ways to Align Objectives and Expectations

Alignment begins when both groups see how their actions affect the long-term success of the organization. Investors must recognize that sustainable returns depend on strong clinical culture, consistent patient care, and stable teams.  

Clinicians must recognize that disciplined operations and financial clarity enable better investment in equipment, training, and growth. A DSO grows faster when both sides understand how each decision affects EBITDA and patient outcomes. 

The most effective DSOs create alignment by designing systems that translate clinical decisions into financial impact and financial decisions into clinical realities. This requires shared planning processes, integrated communication, and predictable workflows.  

When clinicians are involved in operational decisions and investors have visibility into patient-level realities, alignment becomes part of the organizational rhythm rather than an occasional discussion. 

Create shared planning cycles 
Involve clinicians in annual planning, budgeting, and forecasting. This builds trust and ensures targets reflect real clinical capacity. Joint planning prevents disconnects and improves goal ownership across the network. 

Co-design operational standards 
Bring clinicians into the process of designing protocols for scheduling, equipment usage, compliance, and treatment workflows. When clinicians shape standards, adoption improves and operational efficiency strengthens. 

Integrate clinical leadership into governance 
Place experienced clinicians on executive committees or advisory boards. Their insight helps investors anticipate risks, build stronger policies, and steer decisions that respect clinical realities. 

Provide business education for clinicians 
Offer training on financial metrics, benchmarking, and operational performance. This empowers clinicians to engage in commercial discussions confidently and reduces misunderstanding around targets and costs. 

Creating a Culture of Ownership

A DSO cannot scale on systems and capital alone. It scales when the people delivering care every day feel personally invested in the long term success of the group.  

When clinicians see themselves as contributors to growth rather than employees following instructions, performance becomes more consistent and patient experience improves.  

Ownership is not only about equity. It is about giving clinicians the information, context and support they need to make commercially intelligent decisions without compromising clinical quality.  

A strong ownership culture reduces resistance to change, improves participation in groupwide initiatives and drives predictable EBITDA because clinicians understand how their day to day actions influence financial outcomes. When engagement is high, the DSO spends less time firefighting and more time building scale. 

1. How to Make Clinicians Think and Act Like Business Partners

Many clinicians enter practice with strong clinical capability but limited exposure to finance, operations, or commercial decision-making. 

In fact, 42% of dentists surveyed in a recent DSO poll reported receiving little to no business training, reinforcing why structured commercial education is essential for true alignment [36]. This creates a natural gap when DSOs expect them to engage with budgets, KPIs, and EBITDA-driving initiatives.  

To build a high functioning DSO, leadership needs to translate business expectations into language clinicians understand and respect. The goal is to show how better forecasting, higher treatment acceptance, consistent data entry and operational discipline directly strengthen the clinic they work in.  

When clinicians see the commercial impact of their decisions, they naturally begin to act like partners in the enterprise. 

Explain the Money Flow 

Clinicians need a simple view of how revenue turns into profit. Show the link between chair utilization, pricing discipline, treatment conversion and EBITDA. When clinicians clearly understand why certain decisions matter, they begin to participate in the financial side instead of resisting it. 

Share Local P&L Insights 

Give clinicians visibility of their clinic’s performance through brief monthly reviews. Focus on practical drivers such as failed appointments, lab costs, material waste and throughput. When clinicians can see their own numbers move, they take more responsibility for improving them. 

Tie Actions to Outcomes 

Connect routine behaviors to measurable results. For example, accurate coding improves claim acceptance and lowers rework. Timely notes support audit readiness. Consistent recall follow up improves long term revenue. Clinicians respond well when the commercial impact is made real rather than theoretical. 

Reward Clinic Level Contribution 

Introduce small but meaningful financial incentives tied to local performance. This can include conversion improvement, compliance accuracy or hitting utilization targets. Even modest rewards can shift behavior because they reinforce the message that commercial discipline matters. 

Build Decision Confidence 

Clinicians often hesitate to make business aligned decisions because they fear losing clinical autonomy. Provide clear rules, escalation pathways and the rationale behind operational expectations. When people understand why decisions are made, they are more willing to take ownership of them. 

Celebrate Operational Wins 

Highlight clinics that improved KPIs through better teamwork and operational discipline. Share short case examples inside the network. Recognition builds positive pressure and helps clinicians see that operational success is as valued as clinical quality.