PDSA example: simplifying pricing

Travis Timmons shares with host Andrew Stotz how a decade of frustration running his physical therapy practice turned into joy once he discovered Deming's philosophy and embraced systems thinking. Through PDSA cycles, clearer processes, and genuine team involvement, he transformed Fitness Matters from chaotic growth to a scalable organization getting stellar outcomes. His story shows how small businesses can create stability, joy in work, and remarkable results by improving the system rather than pushing harder. TRANSCRIPT

0:00:02.1 Andrew Stotz: My name is Andrew Stotz and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm here with featured guest Travis Timmons. Travis, are you ready to tell us about your Deming journey?

0:00:19.7 Travis Timmons: Hey Andrew, thanks for having me. And yeah, very excited to share our journey and how impactful it's been on both our company, but also me personally and my family. So, super excited to kind of share where we started before Deming and where we're at today. So I'll just dive right in if that sounds like a good...

0:00:39.9 Andrew Stotz: Yeah. And I think just for the audience here, I'll just mention that Travis is physical therapist, founder and president of Fitness Matters in Columbus, Ohio, going on his 27th year of business. And you know, you and I have had some discussions. You've had a lot of great things that you've written and we've gone through and I think it's really an exciting story, particularly for a small mid sized business owner who's just frustrated as hell that things aren't going the way that they want. And I think your frustration a long time ago was a driving force. So I'm excited for you to share your story. So yeah, take it away.

0:01:22.6 Travis Timmons: Yeah, very excited. Yeah, 2000 is when we started, January 2000. So coming up on 27 years, as you mentioned, do physical therapy and wellness. And the first 10 years I was in business, pretty good at being a physical therapist. Started my own business and had no idea how to run a business. I knew a lot about physical therapy, but just kind of shooting from the hip in regard to business. Spent about a decade struggling, frustrated. We were growing, but growing slowly, growing chaotically. No process, it was just a, it was a heavy burden, to be honest with you. We were growing, but it was kind of Herculean effort on my part.

0:02:10.1 Andrew Stotz: I'm just curious how you were feeling at that time. Like there's gotta be a better way or this is the way business is and I just gotta muscle through this or how were you feeling at the time?

0:02:21.0 Travis Timmons: I was feeling frustrated and isolated. Didn't quite know where to turn. Yeah, I guess that's how, and just a burden. Didn't want to let the team down, I did not want the business to fail. I knew we had something different to offer. Just really had no idea how to scale that in a professional way. And along the journey was very fortunate to have a client who had a very successful business, took me under his wing. Ray Crook is his name. Started mentoring me and as luck would have it, he was familiar with Dr. Deming and a very long story short, after several meetings with him over time, some mentoring, I'd read the book along the way, the E-Myth Revisited and had some learnings from that book that really jumped out at me and came to the conclusion, both with reading that book and some feedback from Ray of basically, hey, it's time to grow up and turn this into a real business. If you're going to do this, let's do it right. And at that, around that time he introduced me to Kelly Allen with the Deming Institute. And you know, so we were 10 years into some chaos, had really no process, just would try stuff, see if it stuck or didn't.

0:03:43.5 Travis Timmons: If that didn't work, didn't really have any way to measure if stuff was working well. So really just a lot of chaos. And became introduced to Deming through Kelly Allen about 10 to 11 years into our journey and man, was that a breath of fresh air in terms of like having a direction to go in. After a few meetings with Kelly, him getting a better understanding of what was important to me, I think him just really understanding that I was serious about wanting to turn our organization into a large, professionally run and well run organization that would have a positive impact on people's lives, both team members and clients. I think he kind of, I think that we were so bad off he took pity on me to begin with, just to be honest with you, and he was like, man, this guy needs a lot of help. He could do some good in the world with what the services they have to offer. But if he doesn't figure out how to run a business professionally, they're never going to scale.

0:04:44.0 Andrew Stotz: And it's interesting that you reached out. I mean, there's a lot of people that are stuck in that situation and they really don't, either they don't reach out or they're afraid to reach out or you know, maybe they think there's no solution or nobody's going to help me. And you know, certainly when you're small, you also don't have huge budgets to hire people to come in and fix your business. You know, I'm just curious, like what drove you to even reach out?

0:05:09.8 Travis Timmons: I think I was fortunate enough to, A, have the mentor with Ray. And then secondly, have always been a believer in you got to check your ego at the door and know that you don't know everything. I think I've seen Business owners that are afraid to admit they don't know everything and so they keep things insulated and that just doesn't get you anywhere.

0:05:35.7 Andrew Stotz: Yeah.

0:05:36.3 Travis Timmons: So I just was fortunate kind of how I was raised as arrogance isn't a good thing, so check your ego at the door and learn from, learn from people smarter than you. And so I kind of took that fully at heart and like, all right, I have no idea how to run a business. I need to learn how to do that from really smart people. Read a lot of business books over the years, but the Deming philosophy, when I was introduced to that at the two and a half day seminar, went to that. I got to the Deming two and a half day in, I think that was 2013. So I was 13 years into the entire journey by the time I had met with Kelly, done some learning. And then at a time where the Deming two and a half day was offered in Ohio to where I could get to it, to your point earlier, budget plays into things for small businesses. So I was able to drive to that one and that two and a half day seminar just opened my eyes up to things that I knew in my heart but had no idea how to make that happen.

0:06:46.2 Travis Timmons: And what I mean by that, Andrew, is one of the key things I took away from that first two and a half day is Deming's belief that roughly 96% of issues within an organization are not people issues, but they're process and system issues. And that aligned with my worldview of if you hire good people, which we did, they show up every day wanting to do a good job as long as they have a good system and process to work within something that's professionally put together. So that was takeaway number one that really resonated with me. And the person responsible for said system is me. There's no passing the buck as the owner. And that resonated with me. It's a big responsibility to own a business in terms of the people and clients you're responsible for. And there's no passing the buck. You're responsible for the system at the end of the day.

0:07:42.3 Andrew Stotz: Yeah. I remember when I was 24 attending Deming seminar, when I was working for Pepsi, and it was a little bit different situation than yours. I could see, though, the same thing resonated with me. I could see that people were hemmed in by the system. And even though many people in the factory had really good intentions and they wanted to do a better job, they literally couldn't because they didn't have the tools or the budget or the this or the that. And a lot of times it's easy for senior management, particularly in a big company, to say figure it out, your job is to figure it out. But that only goes so far and there's eventually a point of exasperation for people working in a company that, like, I just, there's a limit here and I'm not going to kill myself trying to do something that I can't change. And so it just, I was coming from a very different perspective as an employee in a huge company versus you at a perspective of, this is my company, I set the rules.

0:08:46.5 Travis Timmons: Yeah, can do whatever we want. And you mentioned something there. It reminds me of a quote from that first two and a half day, and it still sticks with me a decade and a half later. Almost a lot of businesses complain about the term. We have a lot of dead wood in terms of employees. And the quote, I remember Kelly sharing this, it's like, well, did you hire dead wood? Because if you did, that's on you. Or did you hire live wood and kill it and that's on you from your standpoint of, from a system. And I'm like, man, 100% true. And I hired, I had good people on our team, but we didn't have good processes to keep from killing that live wood I would say. So, yeah. And to your point on budget, yeah, I had and still do have quite a bit different budget than Pepsi. Right. So one of the other things that jumped out at me early on that made Deming very approachable and something I could engage with very easily as a small business owner was the concept of PDSAs, the Plan-Do-Study-Act.

0:09:58.5 Travis Timmons: That was a game changer for us because I was like, all right, I don't have to hire a big business consultant. We don't have to hire or pay for a bunch of software. There's very simple things we can do via the Plan, Do Study Act PDSA method that we can create systems or improve upon systems and those little experimental ways and not have to bet the farm. You know, you see a lot of businesses that try to go through these huge transformative activities, bring in a new software to fix all their problems. Things that are very expensive with no real way of understanding what their aim is, what their theory is, or even if it'll work. So, yeah, your comment on budget there, I think, is what makes Deming so approachable for any size organization, but the budget's really not a limit from the PDSA standpoint. So those were some of my key takeaways very early on on my first two and a half day Deming, it was an eye opener and just really resonated with how, how I saw the world in terms of from a human level. Just had zero idea as a physical therapist with no business training on how to implement and run a professional organization.

0:11:13.8 Travis Timmons: So as things evolved, kind of went from the kind of the term chaos to process. So after that two and a half day, I went back to our team, which was small at the time. I think we had, we were a very small company at the time. I think we had 10 employees, nine or 10 team members at the time and just presented to them like, hey, this is going to be how we run our organization. There's this thing I heard about this guy called Dr. Deming. Some of it's going to seem a little odd, but this is how we're going to do things. And just started out early on, like just with PDSA, educated them on what that meant and we're all going to work on things together. So immediately it started enforcing a culture of improvement and collaboration and voice. Rather than Travis just coming up with random ideas, we worked on them together, made the system visible and then put some experiments in place. I talked to them about operational definition. That was a new term to me and gave them some examples. We wanted every client to have a good visit with us.

0:12:29.2 Travis Timmons: What in the heck does a good visit mean? Right. We didn't have an operational definition of that, so we created an operational definition of this is a good visit at Fitness Matters. So those were some fun things early on.

0:12:42.3 Andrew Stotz: I'm curious. There's two things, the first one is for someone that really doesn't know anything about PDSA, the Plan, Do, Study, Act process or cycle. Could you give an example either of one that you did early on or one that you think is the best illustration of the application of PDSA so people can understand what you're saying, because I know it's a big part of what one of the, let's say, tools that you've used in your process.

0:13:10.1 Travis Timmons: Yeah, one of the early on ones we did that was fun to do with the team because it changed our pricing model for our private pay team. Quick example, like we do personal training and Pilates muscle activation technique. Traditionally in that world, people buy those visits one at a time or you'll buy a package of 10 or 20 at a time at a discounted rate, volume, volume pricing, right. So we had that, we had 10 pack and 20 pack of personal training. We had a 10 pack and 20 pack of Pilates, same for muscle activation technique. And we had clients that would do sometimes all three of those services, but for them to be able to optimize their discount, they had to buy a 20 pack of Pilates, a 20 pack of personal training, and then the same with muscle activation technique. So after learning some things with Dr. Deming at the two and a half day that Kelly presented at, it's like we got to be easier to do business with. Be easy to do business with and how can we do that? So our PDSA was how can we change our pricing model on the private pay services to be easier to do business with and optimize how clients can move in our system freely.

0:14:25.9 Travis Timmons: So part of the concept of PDSA is you trial it, you put your whole theory together of what you think will be true. How are you going to study it? How long are you going to try it? So we had four clients that we knew well, that we told them, we're trying this new pricing model. Would you be willing to experiment on this with us? So we didn't roll it out company wide. We just tried it with a small segment, and we called it Fitness Matters Dollars and the do the Fitness Matters Dollars package. Then the client could use that discounted bundle of money for any of our services. So the discount applied to any of the services they did rather than having to buy a bunch of different packages. So the beauty of it is you can try it small. Had we gotten it wrong, we could have thrown it out and only five clients would have experienced the error. And they knew they were part of an experiment and they were happy to help us improve. It was a big win. That was 12 years ago. That's still how we do our pricing today.

0:15:29.1 Travis Timmons: It makes it very easy for clients to optimize their health within our system and not have to spend a bunch of money with us and have a lot of monetary resistance moving about our system. So that's one example that comes to mind.

0:15:41.4 Andrew Stotz: That's a good one. And I think if you think about, let's say an accountant may say, well, but wait a minute, the cost of three different services is different and that's the idea of how do we simplify this for the client, and that's interesting. Now, did you write it down, did you go to a Whiteboard. How did you actually go through that process?

0:16:02.9 Travis Timmons: Oh, that's 13 years ago. You're testing my...

0:16:06.5 Andrew Stotz: Oh, well, you can think about a current one, too.

0:16:09.6 Travis Timmons: 12 years ago. Yeah. When we're doing a current one, we'll get together as a team. Like, we're having our annual team off-site the end of January. And we'll come up, we try to come away with three, maybe four PDSAs as a team, and we'll write it up on the whiteboard. What's the problem we're trying to solve? Another key quote I've learned from Kelly Allen over the years is "the problem named, is the problem solved." So we want to make sure we're naming the right problem first. What really is the problem? So we talk about that through our entire company so that I'm getting feedback from all pieces of the system and then we'll map it out. Sometimes we'll do fishbone charts to look where in the process are we trying to do an experiment? And then there's the PDSA kind of chart that we'll use for bigger ones so we can study it. What's our aim? What's our theory? What do we think is going to happen with this experiment? How long are we going to study it, and what's our expected outcome? So part of the PDSA magic, as you know, is what are you trying to accomplish by what method, in what time frame, and what do you think is going to happen so you can go back and test your theory after you've studied it? So, yeah, sometimes we, if it's something bigger system-wide, we put it down on paper. We have a PDF that's fillable for each new PDSA.

0:17:35.5 Andrew Stotz: And for some people listening, they may think, well, I mean, isn't that what business does? I mean like owner comes up with an idea and says, yeah, I think we could try this and see what happens. Right. And ultimately everybody's kind of poking in the dark in business. We're not given a manual nobody really knows what we're doing. What's the difference between the way that you are poking in the dark, trying to hey, let's try this, let's try that compared to the PDSA.

0:18:08.5 Travis Timmons: I don't think I learned that till my second Deming two and a half day. So the second time I went, I took some senior team members with me so we could get more eyes around what in the world is this Deming person, who is Dr. Deming? What's this System of Profound Knowledge? To answer your question, I think the realization I had that I didn't have before, kind of going down the Deming journey is I didn't view our business as an entire system. I lacked that awareness of system view versus pieces and parts view. Pre-Deming, there's a problem over here and you go chase that fire and then another problem pop up over here, and to your point like there's lots of books out there on how to solve problems or you know, you hear like there's books out there on ownership thinking. And you know, it's like, well, do you have a culture and a system and by what method do you give people the ability to have that ownership thinking? Yeah, I think that's was the big aha of looking at the entire system. Whereas previously I was looking at it in silos and only trying to solve problems when a fire arose rather than system operationally efficient, trying to get efficient and optimizing the entire system. So that was probably one of the big aha's for me. Didn't happen day one. But as I got to understand Deming more, the system view of how it all has to be working together for optimization just changes your lens totally.

0:19:51.5 Andrew Stotz: So you've talked about PDSA, you've talked about operational definitions, you've talked about systems thinking, three core principles. One last thing on PDSA is like, I wonder what percent of the total value of doing PDSA comes from doing PDSA. In other words, the actual part of forcing yourself to get people in a room to discuss what's the problem, the Fishbone diagram, think about what's our aim, what's our theory, what's our hypothesis? Let's write that down. How are we going to study that? How we know if our hypothesis was true and you know, that type of thing. And sometimes I, after listening to you, I was thinking it, I suspect that a large amount of the final benefit you get from a PDSA is really front end loaded in all the work that you do to set it up.

0:20:48.3 Travis Timmons: Yeah, yeah. Going back to your comment earlier Andrew, on when you were at Pepsi, if I heard you correctly, you didn't really have the ability to share voice or to have an impact on the system. I think you're spot on, the PDSA itself, a couple things, number one as a small business owner, you got to check your ego at the door. Your team sees stuff happening that you don't have visibility on and they're probably going to have better ideas on how to fix it than you might if you're removed from it a step or two. And then the culture of like, oh, Travis is going to listen to my ideas. I find value in that. And then when we implement a change, like nobody likes change. Right? But when you've worked on it collectively as a team and you're ready to move forward with it, that's a game changer. You're not pushing a string at that point. Everybody's leaning in because they understand they're part of the solution and you're allowing that. Where a lot of businesses are top down, command and control, that doesn't usually work very well. So yeah, I think you're spot on, Andrew.

0:22:02.5 Travis Timmons: I think that so much happens with the PDSA process from a culture and team involvement. And if you don't have that, you're going to have a hard time retaining team members, in my opinion.

0:22:16.9 Andrew Stotz: So you look like a pretty relaxed guy compared to probably what you were like many years ago when this all was going on. Maybe take us through. Okay, so you're implementing these things and what's happening, what changes are happening, what transformation is going on with you and with your organization?

0:22:36.9 Travis Timmons: Yeah, so it's a multi-year process that we went through. Still a lot of work, you know, it's not like, hey, this just solves every problem. It just changes all the lenses you look through and you have a by what method path. Here's how we are going to think about our business. So that got rid of a lot of confusion for me. I knew how we were going to go from this size business to my, we had a BHAG, Big Hairy Audacious Goal from Good to Great. We wanted to have four facilities. At the time I went through Deming, we had one. We wanted to have four facilities or more to see if we could replicate our high level of care, team member engagement, all those things. So we were working, I was working just as many hours then. It just was not frustrating, it was exciting. It was a lot of collaboration that was energizing and everything as we scaled got easier. I was not going to be able to scale our business with what I was doing because had I scaled it, the headaches would have just been out of control. The loss of revenue, like there would have just been so much inefficiency on our organization.

0:24:00.4 Travis Timmons: So I would say for that next from 2013 through 2018, we got really locked in. So we spent about, I was a little conservative at the time. I was also in Army National Guard, so had a trip across the pond and just wasn't quite at a point where I could financially roll the dice and start multiplying locations and stuff like that. But around 2018, 2019, we got to the point where the team knew Deming well. I felt like we put a lot of systems, processes in place that were replicatable and I'm like, all right, here comes a real big PDSA. We're going to go get another clinic, we're going to go do another location, and we're going to test it. So that was a big PDSA. A lot of the ones we had done up to that were small. At some point you got to go a little bigger. And we were very confident in our model. So we acquired a practice in our town and like, hey, 80% of what they do is what we do, 20% is not Deming and service lines and stuff like that. So our theory, our PDSA, was can we acquire and put Fitness Matters, culture and process in place and grow?

0:25:26.3 Travis Timmons: And we did. We were very successful with that. I had team member retention with that. You know, a lot of times when you buy out another business kind of, people head for the doors, including the owner. That owner is still working with us six years later, then we started growing. It's like, all right, here we go. We can do another one. We can do another one. Put leadership in place at each location that understand Deming. We have our processes written down. We have operational definitions written down. People know what PDSA is. If they're new to our team, it takes them about six months to figure out what all these acronyms mean. So now we're going quicker since, you know, since in the last four years, as an example, we've tripled our physical therapy volume and doubled our private pay wellness volume. And in the service line, that's fairly fast growth. Probably not fast in the IT world, but in the service line growth in a very competitive market with how physical therapy and referrals work. There aren't many private practices left out there because it's so competitive where we're thriving.

0:26:41.4 Andrew Stotz: It seems like a hard business. It seems like a hard business to scale because there's this personal aspect, there's this interaction. You know, think about the exact opposite. I don't know, let's say Instagram or whatever. There's zero personal interaction. It can scale to billions. What are the constraints to growth that you feel in your business.

0:27:03.3 Travis Timmons: So constraints are reimbursement from health insurance, referrals from physicians, because health care is consolidating. So a health care system buys up smaller organizations, physicians, and then they have physical therapy within those systems and then they're highly encouraged to refer their physical therapy in-house. So that's a big challenge for us. So we don't, we're not owned by physicians. So we have to, we have to be the best at what we do for physicians and clients to want to choose us. So one of the things Dr. Deming really big on at quality, right. You have to continually have a system that has improving quality as you grow. And the way we grow is we have our outcomes. So how well a patient does at the end of a plan of care is roughly 35% higher than national average. We're 35% above the competition because of our processes, our system, our clients, how we look at integrating our clients from the first visit, the first phone call, follow-on visits, the entire, again, thinking back to that system conversation. And I think a lot of businesses, if they haven't been exposed to Deming, they miss that very critical piece of, if your sales isn't aligned with your implementation, isn't aligned with your billing process, anywhere along that service line, going through that fishbone, if it's all not good, like we could give excellent physical therapy care, but if we have a horrible billing system, we lose clients, end of story. If we have a horrible process of answering the phone to schedule evaluations, we're out of business.

0:29:00.0 Travis Timmons: Could have the best physical therapists in the world. So, yeah, that's what it's allowed us to do from a scaling and fun standpoint. And kind of now almost 27 years in we're at a point where, one of the litmus tests I had, like, if we do this well, if we really are all-in on Deming and it's system process definitions and we have it mapped out, this should run without Travis. And I see a lot of business owners are the choke point. Like they want to be the problem solver for everything. Everything has to flow through them, slow stuff down. You're not getting all of the information from your team that could solve problems so much quicker. So one of my litmus tests early on was like, if this really works well, the business should run without me present certainly for weeks and weeks at a time. And we're there. So that's why I look Relaxed now. I didn't look this relaxed a decade ago. So, it's fun, it's fun.

0:30:11.5 Andrew Stotz: I was looking for my Out of the Crisis book, but I went online and I wanted to highlight two of the 14 points because it's something that you mentioned about improving your process and all of that. And the first one is the first point and you know, it's the first point for a reason. And number one is "create constancy of purpose towards improvement of product and service with the aim to become competitive and stay in business and provide jobs." And number five is "improve constantly and forever, the system of production and service to improve quality and productivity and thus constantly decrease costs." So how do you embody that in your business, this, because when I first read the "constancy of purpose," I originally thought it meant pick your direction and stay constant with that. But then I started to realize, no, no, it's about how are we improving our product and service.

0:31:18.9 Travis Timmons: Yeah. So if you're not evolving with, technology is everywhere. Right. So if you're not paying attention to that within how it impacts your business and constantly trying to optimize how technology interfaces with your business, you're in trouble. So, like, we're right now getting ready to, I'd say once a year we do something fairly large within technology. Next year we're going to probably be changing our documentation software because there's a newer one out there that instead of having four different softwares we have to interface with, there'll be one. So that cuts down on rework, that cuts down on learning time for a new team member. There's less resistance for clients to understand how scheduling and billing work. So I don't know if I'm answering your question, Andrew, but I think from a standpoint of, I think it was Jack Welch I heard say years ago in an interview, "there's two ways a business is going. You're either growing or you're dying." And that resonated with me, there's no sitting still because if you do, you're going to get run over. So that's always looking through, can we make it easier to schedule?

0:32:40.0 Travis Timmons: Like right now we don't offer online scheduling for physical therapy. We will in 2026. And if we don't figure that out, it could be a reason that we would eventually go out of business. So I just looked through that mindset. There's always somebody coming after you.

0:32:58.7 Andrew Stotz: Yeah, yeah, that's...

0:33:00.3 Travis Timmons: Complacency doesn't work.

0:33:01.3 Andrew Stotz: I like to think about when I was young and I took a break and I stood still. I was standing on the flat ground, no problem. But now with my 87 year old mother, if she goes one day, two days, three days without movement, she's going backwards and it's harder to catch back up. And I start to realize she's operating on a plane that has been slanted against her. And eventually the slant will win against all of us. But in the world of business if you think, well it's not about growing or dying, well, there's someone out there trying to take your business by providing a better product or service. And that's just the reality that actually is invigorating to know that, and as Dr. Deming said to have a great competitor is such a valuable thing. If you're just poking around and you're doing okay in market you're probably not going to improve as much. So that the focus on improvement is something that I just find really fascinating. There's another question that I have which is these days, way I look at like the job of leadership is that it's like imagine a very strong magnet ahead of you and you're constantly pulled to that magnet.

0:34:37.7 Andrew Stotz: That magnet is the average, the consensus what everybody's doing. And you can't help but feel that force. And if you don't realize that you're being affected by that force, you're just being pulled into it. And what I mean by that is if you say, well, what if we tried something different, a different way of doing something and then you go to customers, no, sorry, your competitor does this. If you don't do that, I'm not going to give you the business. And so you're naturally drawn towards the center or towards consensus, but what you're doing is trying to pull your business and yourself and your thinking and your team away from that and saying there's a different way. And how hard is that?

0:35:24.4 Travis Timmons: It's hard. You have to have a different lens. Comment earlier, the problem named is the problem solved. One of the things, I love that analogy. I've never heard it described that way. In physical therapy it's very common for a physical therapist to have two or three patients scheduled at the same time because the problem that was named by most organizations is poor arrival rate. And if you have holes in your schedule you're not getting paid. So they look at that as a revenue loss. So to answer your question, that's where our industry is. Like you got a double, triple book or you're going to have lower revenue. Well, what that does is it increases, in my opinion, increases the likelihood that people are not going to come because they're going to have a bad experience, they're going to have poor outcomes. Physicians are going to stop referring because their patients aren't getting better. So problem named is the problem solved? And we pulled, I like that magnet. I'm going to use that one. But pulled away and said, no, if we provide one on one care at a very high level and the entire system works well for the patient, they're going to show up, they're going to continue to show up.

0:36:49.0 Travis Timmons: They're going to be happy to pay for the service we're offering because it's going to be exceptional. And because they show up, they're going to get better. And because they get better, they're going to go tell their doctor and then more doctors are going to refer to us. And that's thinking much differently. So that gets to the problem name, problem solved. Or using your magnet example, we are like, physicians come and talk to us all the time. They're like, are you really only seeing the patients one-on-one? Are you really doing that? Because nobody else says they can do that. It's like, yes, we are. That's exactly how we're doing it. And that's why you're here talking to us right now. Because it's so much different. You can't, there's some things that are just immeasurable. Like Dr. Deming talks about that quite a bit. We don't have to market, we don't spend... I shouldn't say, we don't have to market. We don't spend nearly the amount of money on marketing that our competitors do because we have physicians saying, hey, what's different over there? That's invisible. Right? That's invisible.

0:37:56.9 Andrew Stotz: And they weren't saying that in the beginning, but over the time they got that...

0:38:01.4 Travis Timmons: Yeah, yeah. It's a process, but you know, like the flywheel. We use that flywheel example. And now it's like, we're having a hard time hiring enough team members to keep up with the growth. One of the other thing's, "joy in work." Dr. Deming talks about joy in work a lot. And that's to your question earlier about continual improvement and jobs. So we exist, there's a lot of burnout in healthcare. You can't hardly open a business article.

0:38:37.7 Andrew Stotz: Seems paradoxical.

0:38:40.4 Travis Timmons: But it's because two and three patients at a time burdened with administrative stuff. So we also exist because, man, it's so fun when you have a team member join you from one of those other organizations and we've had eight new team members we've hired since July. And I have what I call a fresh eyes lunch with them a month in. And every one of them has said, my spouse can't believe how much happier and more enjoyable I am to be around. If that doesn't motivate you to want to continue to grow, I don't know what does. So that's the joy in work piece that Dr. Deming talked about a lot.

0:39:24.6 Andrew Stotz: And let's now talk about one other thing, which is I was just talking, I gave a speech last night in Bangkok to some business owners and then we had a dinner out and I was explaining to them that like, there's a disease that's come from America, not from Wuhan, China, in this case. It's come America, it's spread all across Thailand. And you really have to be careful with this disease. It's a deadly disease. And I said, and particularly Thailand, where there's harmony. People enjoy working together. They want a fun environment, they want to make friends at work. It's a little, it's very different from a US work environment where it's like, go there, deliver, go home, separate lives. That's not the way Thai people see work. And the disease is, the disease of individual KPIs and saying everybody, by optimizing each individual, we are optimizing the whole. And I'm trying to get them to realize like, there's another way. And I'm curious I'm sure if you're getting people from the bigger institutions and stuff, they're being KPI'd to death. And how do you, how do you manage the idea that I don't want to optimize the individual, I want to optimize the whole system, but yet I also want employees to know they gotta do a good job. So how do you manage that?

0:41:03.2 Travis Timmons: It's hard when somebody comes, because you're right, there's a lot of PTSD. I've got an example from today. So we turned on, within our system, there's a net promoter score that can be sent out to patients automatically after their first couple visits with us. And we turn it off and on from time to time just to get the voice of the customer, right. I think Dr. Deming talks about the voice of the customer and who all. So it's like, hey, we haven't done that in a while. We're going to turn it back on. And there were several therapists that were like, wait a minute, you're scoring me? And then if I get a low score, I'm in trouble. So we have to spend a lot of time educating the team on some of that old head trash. It's like, no, this is to study the system and where we can improve either improving our operational definition, whatever it is, give the team member tools on how to handle a difficult client. But to your point, you have, people's brains are so wired in the way you just described. So part of it is we, we let them know up front, like, here's why we don't have employee of the month at Fitness Matters.

0:42:15.4 Travis Timmons: Here's why we don't have the parking lot for employee of the month at Fitness. Like, all of those rewards, how all of the negative unintended consequences that can go along with that. Like even giving an individual an award in a group setting. Like, we had a team who's one of my clinic directors, the business she came from before, they had like a WWE, like the heavyweight wrestling, big champion belt. They had one of those. And each week somebody would give the belt to whoever they thought was the best employee that week. And she didn't get it for like two months in a row. And she was crushed. She's like, people don't like me. So it's fun to talk about the negative unintended consequences of the individual reward, the individual competitions. We could talk for an hour about motivating via monetary motivation. That's probably a whole nother podcast. But to answer your question, we have to make it very known why we don't do those things. Because as much as people hate some of that stuff, they also expect it. Yeah, why don't, why don't we have employee of the month? You mean I'm not going to get in trouble if I get a low net promoter score from one patient?

0:43:34.3 Travis Timmons: It's like, no, we know we hire good people. We know you do your best job every day. They could be upset because their billing didn't go correctly. So we just need to know. So I don't know if that answers your question, but it's a big thing because you do have to still track KPIs or you're out of business. Like, you do have to know what's going on within your system to measure it. It's just that concept of we all are responsible for the output of the system and the system has to produce exceptional results.

0:44:06.7 Andrew Stotz: Yeah, yeah.

0:44:07.9 Travis Timmons: And we have to have a weight by what method. We have to have a system to create whether you're doing plumbing, electrical work. Like if you're going to scale a business, you have to have a repeatable product that can scale.

0:44:23.2 Andrew Stotz: Yeah. And one of the answers to that too is if you believe 94% of the problems come from the system, then even when an employee is identified as having a bad net promoter score, then the question is, does the 94% apply in that situation? Well, generally yes. And so let's dig in. I have some people that ask me like my, one of the guys last night at this event works for a bank and they have put KPIs into everything. And he was saying, I just can't escape. But another guy was like, well, I have my own business and I can do what I want. I've implemented KPIs, but what should I do? I said the first step in disentangling yourself from this individual KPI situation is just to disconnect compensation to the KPI. So just right there, there's still incentive for the employee to do something bad for the organization to do their best. But when you remove that compensation aspect, you've really taken away a huge part of the incentive. So even if you have to keep KPIs, take away the tie to compensation and then they say, well, that's the whole reason why we're supposed to do it is have the tie to compensation.

0:45:44.5 Andrew Stotz: And I said, yes, it's a little bit of a circular references cannot be resolved.

0:45:49.7 Travis Timmons: Right. Yeah. And I think we even give examples to the team as much as we can around why we don't do those type of things. Here's what would happen. And most people have worked in organizations when you point it out to them. So again, Dr. Deming talks about making the system visible. Point it out to them. If I bonused you like you see this, this used to be a thing at car dealerships. When you're buying a car, hey, you're going to get a call to rate your experience with me. If you don't give me a 10, it's going to impact my pay. And you're like, what? So we talk about that like hey, the net promoter score. If we did the same thing here and bonused you on every 10, then you're going to be bothering your patients to fill that survey out. Or if you're afraid they're going to give you low score, you're not going to, you're going to encourage them not to do it. And then me as the owner, I'm not going to hear about system breakdowns. So to answer your, I think it's an important thing that a lot of businesses like number one, don't tie compensation to your KPIs.

0:46:58.3 Travis Timmons: Like just, it's an output of the system and then explaining it to them and giving examples over time because their brains even though they hated it, like we don't do performance reviews, annual performance review. And people hate them. And I still get asked like hey, when are you doing my annual performance review? It's like do you want to do one? Well no.

0:47:21.2 Andrew Stotz: Yeah. We dropped performance appraisals in 2016 in my coffee business here in Thailand and we never looked back. We didn't come up with any particular stunning replacement. We just knew it was bad and we were willing to just walk away from what was bad. I want to wrap up and just get into the... What are the, let's talk about kind of extrinsic versus intrinsic. There's some external factors that we can say this Deming implementation provided these benefits to our company and then there's this internal or intrinsic benefits that you're getting. Maybe you can go through some of those benefits of where you're at now, what you're able to do now and we'll close it on that note of kind of what's the hope for somebody that's stuck in the situation. They're the entrepreneurial seizure, they're the technician, they're great at physical therapy, they start their physical therapy business and they're just scaling chaos basically. Tell us about, give us hope.

0:48:37.8 Travis Timmons: Yeah, no, happy to, the reason I have had the opportunity to speak in a lot of different settings about Dr. Deming and the reason I do it is because it's brought so much joy to me personally and to a ever growing team. It's having a positive impact on lives and the more I can do that, that gets to the intrinsic motivation. So the joy in work, there's a lot of bad organizations out there that just suck the life out of people. So that's my intrinsic motivation at this stage of the game of if Fitness Matters is bigger, so more jobs, there's more people having a positive experience in life and our outcomes being 35% higher, our community is getting healthier. So that's the intrinsic motivation at this stage. It's fun. I know again, we're not perfect. So continuous improvement to our conversation earlier. But the intrinsic motivation is the busier Fitness Matters gets, the busier Fitness Matters gets because of high outcomes and it's positive experience for more people in life. Extrinsically, I guess that gets to community outcomes. So that's intrinsic and extrinsic. You know, extrinsically, if you get this figured out, it's very easy to scale a business.

0:50:06.0 Andrew Stotz: And tell us about your scale, where are you at or where are your averages versus national averages? You know, what have you accomplished that's driving that external factors, let's call it.

0:50:19.4 Travis Timmons: Yeah. So a couple things. One, externally, a practice like ours nationally on average is growing at 9% to 10%. We're currently clipping along at 25% to 30%. So you know, that flywheel effect and chaos is no longer there. So we have process, so it's easier to scale. The other extrinsic piece is because of our outcomes and continuing scale, we're able to negotiate better rates with our insurance companies to reinforce our strong desire to keep one-on-one care model. So Deming talks about who all is part of your system. So insurance companies are part of our system and we don't have a lot of control over them. But because our data is so powerful externally, we have been able to negotiate higher rates than most of our competitors because our data speaks for itself.

0:51:23.2 Andrew Stotz: Faster growth, the ability to negotiate better terms because you're delivering better product and service generally means higher profit margins.

0:51:34.2 Travis Timmons: Yes.

0:51:34.6 Andrew Stotz: Fast growth with higher profit margins generally means you're generating more cash and you're no longer in cash crisis all the time and you have resources to decide, okay, now we want to expand or we want to invest or whatever.

0:51:50.9 Travis Timmons: Right.

0:51:51.4 Andrew Stotz: Is that...

0:51:51.9 Travis Timmons: Yeah, the cash crunch was real those first 10 years. So yeah, to your point, when you get to the other side of that and process is a big part of that so you're having a whole counting process, but yeah, you get to that size. But yeah, the intrinsic piece, one of the reasons I talk about Deming as much as I can. I've got two sons that are in college. My hope is there's more companies in the world today than there were 10 years ago that know about Deming, because that means there's a higher likelihood that my boys will work at a Deming company. And just seeing what a lot of companies do to people, we as owners have a big responsibility, I feel, we have a big responsibility to have a positive impact on our employees. And you're, as an owner, are responsible for that, in my opinion. And if you get it right, man, is it fun to look in the mirror or sit down with a team member or their spouse and be proud of, be proud of what you built. That's at the end of the day, the intrinsic motivation.

0:52:57.9 Travis Timmons: If you can be proud of what your product is and proud of the impact you're having on your team to where you're not sucking the life out of them, but actually intrinsically motivating them. There's not much else you can accomplish in business that was worth more than that, in my opinion.

0:53:18.5 Andrew Stotz: Yeah, wonderful. That's a great way to end it. What's the likelihood that our children are going to be working in a Deming company? Well, that's the whole reason why we are here talking about it. So, Travis, I want to say on behalf of everyone at the Deming Institute, I want to thank you for this discussion and of course, for listeners out there and viewers, remember to go to deming.org to continue your journey. This is your host, Andrew Stotz. I'll leave you with one of my favorite quotes from Dr. Deming, and I believe it's probably one of Travis's too people are entitled to joy in work.

0:53:56.0 Travis Timmons: Love it. Love it. Thank you, Andrew.

0:53:58.0 Andrew Stotz: Yep.