Beyond Consolidation – Enabling Sustainable Value Creation in Dental Service Organizations

1. Establish Unified Leadership

DSOs comprise individual and local practices, each with individual operation management, record keeping and patient interaction methods. Integrating each practice into a cohesive network with consistent operating standards requires a strong, unified leadership foundation. Effective DSO leaders are

• Operationally focused – capable of managing multiple practices across regions
• Culturally adept – skilled at fostering a unified culture that supports integration and staff retention. Because they are typically not clinicians, leaders must thoughtfully manage practitioners – many of whom are founders and entrepreneurs – as well as staff accustomed to autonomy. High emotional intelligence (EQ) and effective change management is critical for balancing organizational alignment with respect for legacy workflows
• Value oriented – DSO leaders must continually deliver value back to individual practices, ensuring integration continually enhances, rather than diminishes, success

Finding DSO leadership talent can be difficult, especially as experience does not necessarily correlate with expertise on how to drive sustainable, transformative change. Further, competition for talent is strong, with qualified candidates in high demand. DSOs must prioritize leadership searches early to avoid disrupting key growth milestones.

2. Standardize Operations and Performance Management  

Each individual practice that comprises a DSO will have unique methods for tracking performance. DSO leadership must evaluate, map and consolidate individual systems into a unified performance management system with trackable data and clear key performance indicators (KPIs). This foundation becomes critical for identifying operational inefficiencies and capturing value creation opportunities. Critical pieces to get right include

• Define a common language for KPIs – Each practice may measure “production,” “collections” or “chair utilization” differently. DSOs must standardize definitions so results are comparable across the platform
• Establish core KPI set – Too many metrics can overwhelm teams and dilute accountability. DSOs should start with a small mission-critical KPI set – such as chair utilization, treatment acceptance rates, collections and patient satisfaction – before layering in secondary measures. The goal is to create clarity and focus, not noise
• Align incentives with KPIs – Providers and staff should see a clear connection between daily actions and performance outcomes. Incentive structures tied to chair utilization, patient satisfaction or revenue cycle efficiency reinforce consistent behavior
• Adopt a standardized practice management system (PMS) – Running multiple PMS platforms across practices creates reporting blind spots and operational drag. Implementing a single PMS enables uniform data capture, integrated scheduling, centralized billing and real-time performance dashboards. A standardized PMS also facilitates staff training, improves patient experience through consistent touchpoints and lays the groundwork for advanced analytics
• Establish accountability at all levels – Performance dashboards are only useful if someone is responsible for actioning against them. Assign clear metric ownership (e.g., claims processing to revenue cycle leads, chair utilization to practice managers) with regular review cadences to identify key challenges and continue to explore solutions for driving improvement
• Create feedback loops to encourage best-practice sharing – DSOs that excel go beyond reporting metrics – they create systems for cross-practice learning. Highlighting top performers and sharing successful processes helps spread proven approaches across the network. Importantly, insights from peers often carry more weight than “top-down” directives, fostering stronger adoption and engagement

The chart above exemplifies a more robust DSO KPI framework. Contact us to discuss creating a KPI framework for your business

3. Prioritize Clinic Culture and Effective Change Management

Clinical staff like hygienists, dental assistants and providers are in high demand. Dental hygienist employment is projected to grow by 7% from 2024 to 2034 – a figure much higher than the average for all occupations.² As the aging population retains more natural teeth and therefore demand for preventative dental services rises, more staff are required. However, enrollment in dental hygiene programs declined during COVID-19. It may take years for the workforce to fully rebound. In addition to the competitive talent environment, new private equity ownership – and the resulting cultural shifts – can create friction if existing staff perceive increased scrutiny or rising expectations. High front-office turnover due to concerns around new policies or compensation can require practices to more frequently hire and train – which can lead to mistakes and frustration among clinical staff, resulting in low employee retention.

Constant recruiting, hiring and training can quickly become expensive and can shake future buyer or investor confidence. But the root turnover cause is often not obvious. To mitigate attrition risk, DSO leadership needs to consider key factors when crafting operational strategies, including

• Effective change management – Maintaining elements of the original practice culture where possible can ease the transition
• Clinic culture – Prioritize hiring doctors and office managers who treat staff with kindness and respect, upholding performance standards while also operating professionally and constructively
• Training programs – Offer training to uplevel existing staff and quickly upskill new hires, minimizing friction that can arise from employee mistakes and instilling a sense of professional development and growth within each employee
• Total Compensation – In many cases, DSOs are paying a premium to retain clinical staff – particularly providers who are critical to practice success. However, competitive compensation alone cannot guarantee adequate retention. Many DSOs achieve strong results by emphasizing work-life balance, professional development, expanded benefits and flexible scheduling. The most effective approach often combines both compensation packages tied to performance metrics that give employees a direct stake in the organization’s success, alongside benefits and incentives that foster long-term satisfaction and motivation