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Ivoclar Vivadent AG CEO Robert Ganley explains this one rule of introducing people--not to your products--but to who you are as a company.
Mr. Robert A. Ganley has been Chief Executive Officer at Ivoclar Vivadent AG and served as its Chairman of the Corporate Management since 2003. Mr. Ganley served as an Executive Vice President - Operations of Ivoclar Vivadent Inc. from 1987 to 1990 and President from 1990 to 2003. He served as Vice President of Finance - Administration of Williams Gold Refining Inc. from 1980 to 1986.
Howard: It is a huge honor and privilege today to be able to podcast one of my idols, role models and mentors since day one. It's Bob Ganley, he's the President/CEO of Ivoclar Vivadent. You've been with Ivoclar for over 35 years?
Robert: A long time, 35 years.
Howard: 35 years, and you know, in all honesty, Bob, when I got out of school in '87, all the fillings were amalgam. To get out of my school, I had to do 75 amalgams, full 50 teeth, and there was no requirement for any white stuff. I got out and when I think of the cosmetic revolution, I think of you leading the stable probably 20 to 200 of the most outstanding professionals that you can find from here to Germany, to Australia, Canada. You led that revolution. Now that that revolution is kind of of over I the fact that 50 percent of dentists don't even have amalgam so it's there. I look back at that and it's kind of funny because what I credit you most to, is that dentistry was really about mental health, not oral health.
What I realized is when people look in their mouth and they don't like it, they don't own it, the don't take care of it, they don't brush it, they don't floss it. When you start taking out amalgams and putting in composites and bleaching their teeth and use [inaudible 00:01:36] models, and people start looking at their teeth and liking them, they're standing in front of front of the kitchen and the bathroom and they're brushing them and they're flossing them and they're not missing their cleanings. It's kind of like in America, you don't ... You haven't been bowling in ten years, or you own your own bowling ball. You haven't gone skiing in ten years, or you own your own boat. You made people own their own bowling ball more than anybody I know, and that's probably why you have a billion dollar company. So I want to congratulate you.
Robert: Thank you very Howard.
Howard: So my first question to you is the obvious. Last Thursday I just went to the dental school graduation for dental [inaudible 00:02:15]. 5,000 kids just got a dental license and you've been leading the pack for 35 years. What advice would you give 5,000 kids who just walked out of dental school?
Robert: That's a good question. I'd probably give them a barge of advice. Number one, because you have a professional responsibility to deliver quality dentistry to your patients that comes in multiple levels. It comes at technology level, it comes at practice level [inaudible 00:02:48], it comes at communication level, and that means understanding what the patient needs. It's somethings that's not that easy understanding what they need and what they want. We have said for years that thew difference between a patient asking for a specific product or service is mainly one thing that's knowledge. If they have an awareness or if they have some knowledge, they have the ability then to at least explore options. I think it's part of the dentist's responsibility to activate that and to be some kind of conduit of the services towards the patient, but also that the patient needs towards the dentist.
Howard: If we're in the first step and we want to go to the second step. So right now, they've walked out of dental school, and some day they're gonna be on the second floor like you and I are after 30 years, and successful. What individual steps up the ladder would you recommend that they do?
Robert: I'd tell them to act responsibly, work as hard as they can all the time. I think working hard is a function or dedication. If you can work hard in the short term, it's a merely a matter of energy. If you work hard in the long term, it's a matter of creating energy, meaning it gives you power going forward. Work as hard as you can. Be as as serious as you can. Constantly stay on top of technology. You said earlier in our conversation that years ago we were doing amalgams, and then if someone graduated from school learning amalgams, and learning [inaudible 00:04:19] bridge, [inaudible 00:04:21] bridge, and the end of the dental market that at some point in time, after that, gets introduced, white filling materials, gets introduced non-metal restoratives, picked that end otherwise. The questions has to be asked by that dentist. How does he or she learn that? Learn about those materials, learn about that indications, learn about what preparations are necessary, learn about segmentation. Where's all that information at? The dental school starts and stops. After that, it's the dentists responsibility to create their own access for information.
We talk about access as being a big issue in dentistry today, mainly on the point of view of the patient, but I think there's also an access question on the point of view of dentists. We're the access to information in the future. I'm gonna stay current, and staying current and staying responsible, and staying professionally responsible to themselves, to the profession, and to the patient.
Howard: Do you have a sample of that cavity varnish? The glue?
Robert: [inaudible 00:05:21]
Howard: Did you have that right around? Can you show that? Can you get that one out?
Robert: Are you gonna steal the quadrant here-
Howard: No, one of the things that I am most excited about what you're doing. Believe it or not, the product that I'm most excited about, you probably won't even see it coming, it's your, the cavity sealer. What do you?
Robert: My flow protector?
Howard: Yeah. You know, after having about 20 years, what's got me most excited ... For 20 years, I've been building a barn and I'm telling everybody to brush and floss, and brush and floss, and leave tongue scraper and mouthwash, you're cousin Eddie is your cousin Eddie. He's not gonna brush, he's not gonna floss.
Robert: I know cousin Eddie.
Robert: I have lots of them.
Howard: Half the world is your cousin Eddie. Now, I'm really excited because if I don't do that three year bridge and I make the barn out of aluminum, then the termites come home to rest and they can't eat aluminum. They say I got out of school during the golden age of dentistry. Now I think it's the titanium age of dentistry and I'm so excited because it's a lot easier. When I got my diplomat in international congress oral [inaudible 00:06:34] back in the 80's and fellowship of the Miss institute, we had 2D x-rays. We'd open that tissue, you had no idea what you were getting into. You had to have 15, 20 different implants in inventory because you didn't know what you were gonna walk into.
Now it's 3D x-ray, surgical guides, you know exactly what's going on. When I place that titanium implant, it's not gonna come back. The termites aren't gonna, it's not gonna get a cavity, and peri-implantitis, I don't care what they say. Gum disease around a implant is nothing like gum disease around a tooth. A tooth has got that infested cement and it's ugly. Peri-implantitis is more like just, it's rare and it's just kind of an irritation, it's just kind of a something, just kid of a nuisance sometimes for some people. You're product is that applied to teeth every month, is the best thing for this barn. I wish, instead of everybody talking about, what's the next seventh or eighth or ninth generation bonding agent. I wish everybody would be covering these teeth every three months, It should be standard care in nursing homes. When you go to a nursing home ... The impact. Having people come in every three months and having his painted on their teeth. This is how you kill termites on a wooden barn. This is how you ... A fireman fights fire, a policeman fights bad guys, a dentist fights streptococcus mutans and p. gingivalis.
This is the most exciting ... What I wanted to ask you, is this the first of a lot of bio-active products? It seems like in the last 20 years when dentists talk, the almost sound like civil engineers. They're always talking about wear rates and bond strengths and mega-pastules, like they're building a building. Then after 20 years, I look at all the buildings I've built and say, you know what, you talk about how good this bonds on, but the crowns don't fail because the fall off. The filings don't fail because they wear down. Whether you etch enamel and total extend, that's not how everything I did failed. Everything I did failed because a million bugs came back and ate it because your cousin Eddie won't brush and floss every-
Robert: Cousin Eddie again.
Howard: He won't brush and floss. I mean, they're people. One-fourth of American adults smoke a pack a day. So at some point, you've got to get over and say, well maybe we should to try to make a safer cigarette, or maybe we should try to cure lung cancer, because your cousin Eddie is not gonna quit smoking. He's gonna come in your door one day. So now you might be thinking, well maybe there, wasn't, should have made a safer cigarette, or maybe we should have tried to cure lung cancer. For dentistry, do you think the last 25 years was the cosmetic of revolution? Do you think the next 25 years will be more of this to come, to fight bugs?
Robert: Yeah. Howard, you'd like to think to so, and you wish so. The trouble sometimes, the reality is, an uncle Eddie participates in two to three at the wrong end. If dentistry is broken up into, let's say thirds, the last third is replacing teeth, The other third is repairing existing teeth and that first third is preventing the second third and the third part form happening, which is the preventative part. Many people don't participate int heat . You know the statistics better than I do, on the amount of teeth that are sealed for children and the amount of, whether it's prohexadione, prohexadione fluoride combination, with those fluoride applications to young adults and adults after that. It's not the discussed enough. It seems like it's not the real sexy part of dentistry, but it's the foundation of dentistry, which is to prevent disease. This is hat we really try to do.
When you take a look at hose thirds, that last thirds and that middle third today, this is the thing that's talked about. How you make teeth look whiter, and how you make teeth appear better then they were. This part, preventing those other problems form happening. Unfortunately, has less interest carried in the press today, and probably less interest in the public if you measure it by statistics. Simple products like this one, and products like this that are made by other big companies. They prevent disease. It has measurable benefits.
Howard: Yeah, I was more of it to say. More of it's coming.
Howard: Even 28 years ago, I thought dentures would go away, and I'm really surprised that 28 years later, that the PFM was the one that actually died because of your e.max and the dentures just keep trucking along. In Phoenix, it's two parts, it seems like most of the dentures that I do are just one or two [inaudible 00:11:21]. The United States still gets a million immigrants a year. Most of my dentures gentlemen, are from people that just moved from like, Bosnia, Herzegovina, Central and South America. My three uncles, not one of them had one tooth when they got out of high school. Three for three had a denture before they got out of high school back in the day.
Robert: Those could be your cousin Eddie's [inaudible 00:11:41]
Howard: This my, my cousin Eddie's, my all three of my uncles had had zero teeth in the [inaudible 00:11:49], which is, back in the day, grandma only took them if they had a toothache. Then the dentist just pulled it, and I though those days were over. So I'm kind of surprised that 28 years later dentures are still there. They're even making a comeback, and again, you're leading the line with your BlueLine, and your Phoneras.
Robert: The number of dentures being done, whether partial or full, increases every year three to four percent. It's unbelievable still.
Howard: Is that just U.S. or around the world?
Robert: That's worldwide. Even in the U.S. denture, partial exceed the growth of dentures of course. Partial, whether they're sitting and attached to extra tooth or they're sitting on an artificial tooth, being an implant grows continuously. If you're in Arizona or you're in Florida, or you're in any place where you have the moment to go into a restaurant at 5:01 and catch the early bid special. You're sitting, and you look around the room, and people are taking their dentures out, folding and putting them under the napkin and then they're taking the spaghetti. It's really a sad situation. This older generation of people who sadly, have lost their teeth. The other thing they've probably lost is a dentists. They have a denture, they just don't have dentists. There's not enough people really caring for them or connecting with them, and these people, they're in district care. It's an unfortunate situation.
We try to focus, and in other companies as well, on providing services for these people and providing products for these people who need partial or full dentures. We hope it doesn't get to that. The statistics also show that people are keeping their teeth longer, which is a very good benefit for, I think the human population, and it's good benefit for dentistry too, to be honest with you because there are more teeth for you to work on. We would like to see more and more teeth be kept longer and longer and we'll provide more services to repair those teeth. Ultimately, to replace those teeth if necessary, but it would also be nice if the other herd, the uncle Eddie and those three uncles didn't participate in, if more people prevent disease from happening.
Howard: Well, you know what's ... I've lived in every continent but Antarctica, because penguins don't care what I have to say.
Robert: Don't count them out though.
Howard: What's really troubling to me is when you go to like, I was in Africa just recently. It's amazing in Africa, and Asia, and Kathmandu where the doctors are telling all the moms, don't give your kid water because they might get water poisoning and cholera and die. So they're telling them everywhere, upper-class children just drink soda, because Coke is clean and there's no bacteria in the water. So that's good, they don't have cholera and die, but dental decay and obesity and diabetes are off the charts. A lot of Americans are saying, well they should drink less pop. Well the alternative is a dirty well. You don't want your two year old to get a cavity, and obesity, and diabetes, but you don't want them to doe of a bug. So it's really, man, dentistry. When you look at the fact that three billion people make less than three dollars a day, and they're all living off Coke and Pepsi, my god. Dentures will probably just keep growing for probably 100 years to get around the curve.
I also want to say something very interesting about you, because I've known you for 28 years.
Robert: A long time.
Howard: Harvard, I keep mentioning this to my buddy dentist, my fellow dentists, that Harvard Business Review they're always trying to say, what is leadership? When I think of a leader, you're the first guy I always think of. You really are. Harvard Business Review, they look they the CEO's and the top ten performing versus the bottom ten percent, the only thing that really stands out to them is humility. I look at my lifetime, you know I was born in 62 when Walmart was born and Walgreens and all that. Walgreens exploded 30,000 percent in stock because Hollywood makes you think that the CEO is this good-looking guy in Ferrari with a 20 year old runway model girlfriend and charismatic and all this. You're just humble operators. Humbleness makes you listen to the dentists, it makes you listen to your employees.
We see in dentistry that the average American has a job, holds their job for three years. When we go to the 150,000 dentists, the dentists, the dentists who hold their average employee three years makes what the average dentists does. The employers who hold their employees seven years, make a lot more money. Half the people I know, when I first met you, they're all still here. You don't have to, you can't walk ten feet in here without finding someone who's been here ten, 20, 30 years. Your [inaudible 00:16:35] are 18 years. That speaks volumes of you. When I ask the American people to describe a dentist, or a physician, or lawyer, humbleness doesn't even come up in the top line. Listening to your staff so you don't have employee turnover.
So I want to ask you about, what is you leadership .... These kids coming out of school and they're gonna hire their first assistant or receptionist, and for how ever many just quits after two or three years, they're not gonna have long-term relationships with their patients and their community. How were you able to keep so many good people ten, 20, 30 years, and how were you able to deal? You've been dealing with some of the biggest egos in dentistry. The walk of the cosmetic dentists are not known for humility.
Howard: I'm not going to mention any names, but how do you deal with dentists ans staff, and how do you keep a collection of complex humans by your side for 20, 30 years? What are your secrets?
Robert: I don't know if I have any secrets. It's a complicated question, first of all. Running a company, what's the most important part? You have to have a picture of the world you live in. You have to have a view of what you are as a company, and you have to see the road that goes forward for your company within that vision. So that has to happen. Secondly, you've got to be to communicate that to people in a way that's accurate, that's clear, that hopefully, is motivational. That can also be, that can depend on the person. How they hear it and how they react to it. I think what's most important is how a leader can see his company, or her company, in the world, very clearly explain where that company is going, and be able to talk to someone who works for you in a way that connects with them and that they see where you're going. They see where the company id going, and the can see a seat on this tour with this company for them.
It's not that easy when you try to, it's not that easy for a very young person, let's say a new employee. It gets more difficult as time goes on because we always try make people more [inaudible 00:18:44], more experiences, and better for their next job. We hope its with us. If it's nit, I think that's also okay that people grow out of a position. We've been fortunate enough because, let's say the velocity that people are moving in their careers, our company is moving at the same or greater velocity. So we keep creating, we try, more opportunities for the same people and new opportunities for new people. So we can move foreword. I think that's probably the best way to describe it.
We have a rule. We made this rule years ago back, about when I met you. When the original company was here in the U.S. we were struggling a little bit at that time, and if someone asked us who we were as a company, any employee, but even top employees, we would list our products. That's meaningless. We made a rule and we stopped advertising and we said, we have to be able to communicate who we are in two sentences and ten seconds. Two sentences and ten seconds. That's not easy.
Where did we come up with this? This was about the amount of time and the duration of talking that you had when a doctor walked by your stand and looked up, and saw that name, and looked down and said, Ivoclar Vivadent. Can you tell me about the company? From that moment, pop stars, and you have ten seconds to give them a statement. Not longer. You know when they take longer, they drift off. You know when you hit it, they stay. That's when we decided that, after lots of conversation, that we were gonna be the leaders of the aesthetic revolution, and we were gonna focus on quality aesthetic dentistry for the masses, and deliver great products. That was investigated by Vivadent from 1990, lets say when I took over as CEO, until today. We focus on aesthetic dentistry, quality dentistry, and deliver innovation. That's where the phrase came, let's say the invitation, if you remember, "Welcome to the aesthetic revolution."
Yo mentioned earlier, what's the revolution. Things are, there are still revolutions going on> I think when we first started talking, you used the phrase, "The revolution is over." and I sort of squirmed in my seat a little bit. Maybe the revolution, maybe what we call the aesthetic revolution. Well we really changed people from amalgam to white filling materials, not everyone, but it goes the right direction, and we changed them from PFMs where you put ceramic or another material on top of metal, to non-metal options. E.max is only one of them. That revolution, it peaked in the 90's and maybe even to the 2000's. Years and years and years ago, you might remember the name, most people who watch this won't, but Dwayne [Pallman 21:56] was asked, what do you do in the revolution? He said that it's not about revolution, it's about evolution. We are rapidly evolving today as a, I think as a profession, as an industry supporting the profession and there's a population of Americans, or humans, around the world in terms of what we expect out of dentistry, what we expect out of health care, an what we expect out of each one of us going foreword.
That's how I see the evolution, and that's how that message, when you go back to the original question, what motivates an employer? I think if they hear and understand that message, and we actually make that message live in what we do. Whether it's in this product, or it's in this one, or these products. We try to make that message live so that every employee can experience it in a positive way and make the decisions for themselves that this is the place I want to be for my future. To provide for myself and my family, or not. They can make that decision. Fortunately for us, we've been able to keep people here along time. I mean, you'll be talking George [Sazowski 23:01] here shortly on July one-
Howard: He's still alive?
Robert: Yeah, well-
Howard: Is he still alive?
Robert: Something, he should be. George and on July one this year, we'll celebrate 30 years of Ivoclar.
Howard: Wow. That speaks volumes of you.
Robert: Yeah. Well it-
Howard: I mean didn't the Italians say, it was mob that said "The fish rots from the head down." Meaning that the corporate culture, who's in the head. Capital is Latin for head. You're the head of this. This is your corporate culture.
Robert: Howard, it's good place to work. There are many good dental companies. I can tell you from experience this is a good place to work.
Howard: You have, what 50 countries, you have offices around the world? Pretty much every continent that-
Robert: Yeah. We're most everywhere. We had that Antarctic gap like you do, but we're pretty much everywhere. We operate in 100 companies. We had 27 active subsidiaries now in the world. We have more locations than that because we have sales offices in every place. We are very active now in ... I think we're the only one doing this. We're very active in building training centers, education centers. We've opened one up very recently, new offices in Moscow. Big facility in Moscow. It looks right at Kremlin. We've opened up in Saudi Arabia, in [Reon 24:21] Saudi Arabia. I was there for three days for the opening of this facility. Both facilities with training offices. We've opened up now Istanbul also with training offices. We've put new facilities in Vienna, where we've been doing business a long time, but we need a little bit more training to provide more services to people closer. So we opened up a big facility in Vienna, in downtown Vienna. We've opened up new offices now Madrid, we've had offices, but we opened up new offices in Madrid.
Three weeks ago we opened a new training center in Germany. We redid our training center. What are, training center. In these places we train dentists and dental technicians, and dental assistants often times and hygienists. We train them at our services, we train them on our technologies, which are among many, but at least we believe we're very innovative in leading technologies of the world. We see that as out responsibility. Like we said earlier, when people transfer from amalgam to white filling material. They transfer from condensation to bonding. They transfer from PFM. They transfer from one type of perforation to all ceramic perforation, that's another perforation. You have to know indications and that training has to come from someone. We believe it's our responsibility to provide that. It's one of the reasons I'm sitting here with you, other than to enjoy your conversation and your book, but also to take this opportunity to tell your client base and your customer base about what we have to offer. Maybe also to show that [inaudible 00:25:57] that does these. There's other companies as well. There are good sources of quality information from, still from dental schools today from teaching institutes and from responsible manufacturers.
Howard: I want to ... America is still a big market.
Robert: It's the biggest single country market in the world.
Howard: Okay. So a lot of times Americans will sit back and they'll say, well you know Sweden's better at this or Denmark's better at that, and I always have to remind you that Denmark has the same amount of people as just Arizona. The United States is a huge country. It's 330 million people, and a lot of the American dentists have never been to Europe. One of the things I find most interesting is that when you go the biggest meeting in the world that's in Cologne, Germany very other year, it's the IDS meeting.
Robert: International dental show. IDS.
Howard: International dental show. IDS. These like 100,000 dentists there, about?
Robert: This year it was 134,000.
Howard: Wow. Oh my God. There's no lectures. The one thing, I've been there several times, is that the Europeans, the European dentists, they're just more relaxed. They trust their government, they trust their dental manufacturers. When they go to a dental meeting they want to talk to the good, hard-working, honest people like you. Then you come to America and everybody has a gun, everybody's against the government, everybody's against manufacturers.
When I started dental account in 1998, the dentists were outraged that dental manufacturers were getting on there and they wanted to be dentist [inaudible 00:27:26] I told them, and I said "You know what. If you took away my Root ZX, or my X-ray machine, and my bonding agent, my curing light. I'm sitting on my rug with something I bought at Home Depot." I said "I need these guys in the conversation because if we're all saying the product's ready, wish it was blue. You need to know that and you need to be a part of the conversation." I held my ground, I stayed true to myself. Now, Orthotown, to this day, still won't let anybody on unless they're an orthodontist because they're just militant about that everyone else is trying to sell something for money, as if they're giving away free ortho. Dentists said, well the manufacturer trying to sell something, like oh, you're a volunteer dentist? Where are you working? A homeless shelter? I though you sold thousand dollar crowns for 50 percent profit margin.
I really like the IDS model superior because in America, and here's what I'm getting at with all this, in America, they don't trust the government and the big business, and the join the NRA who tells you to fear the government when the President has to get elected every four years but the NRA guy doesn't have to get reelected. He's just a dictator. When you go to Europe, the people walk up to and you and the talk to you and they trust you and you have a relationship. I just think it's a far superior model. The one thing that I want to tell these dentists is that, the other thing I know, so you go to a speaker and the speaker, in my opinion, is feigning expertise and he's saying, well I like this because of this, and this because of this. I go talk to people who had PhD Doctorate in chemical engineering, organic chemistry, that work for companies like your for 20, 30 years, and they go, I don't even know where to begin. They'll go to a grease board and try to lay out all this organize chemistry. The people saying mix this and mix that, do this and do that, they don't even know organic chemistry. So they're feigning expertise and the one thing that I ...
The other thing I wasn't to tell them is beware of the middle man. Why are you going to a middle man between the dental manufacturer? When you go to work on a product, how many years ... Fist of all, describe your research team.
Robert: The research team in Lichtenstein website, it's the home headquarters for R and D. We have nearly 200 people on that two floors now of development. We divide them up into organic and inorganic. So some high level of them are PhD's and then of course there are other levels of education below that. In my opinion-
Howard: Why are dividing them between organic, and inorganic could be ceramics, porcelains?
Howard: Organic [inaudible 00:30:08] and resins.
Robert: Resin-based coming from the one side organic filing material. For example, anything that we would call composites, or plastic based, or resin polymer monomer. Form the other side of the inorganic, for us would be glasses. Anything on the glass side [inaudible 00:30:24]. Whether it's natural or whether it's synthetic, but it's all from the inorganic side.
Howard: How many would you guess are doctors? PhD's?
Robert: Howard, I'd have to-
Howard: Would [inaudible 00:30:37] for a doctor. Like a lawyer is JD, a juris prudence doctorate. I'm a dentist, doctor of dental surgery. How many of those would be-
Robert: Yeah, I don't, I can't really guess, but-
Howard: You can't?
Robert: Maybe I would.
Howard: What would your guess be?
Robert: A lot of them.
Howard: [inaudible 00:30:54] 200. How many do you think are PhD's?
Robert: Let's say, of the ones that I'm normally dealing with, most are.
Howard: How long, like when you come up with a product. How many years from, I got an idea, to, it's ready to go to your dental office?
Robert: Long time. Depending whether it's an adhesive, which is kind of adhesive product. Resin based application like you have over here. The development of it, if it's a baseline development, it can take ten years to get there.
Howard: Yeah. That's my point. You need to be humble. These guys, 200 teams with, I'm guessing 30, 40, 50 PhD's. You don't want to say a number, but it's up there.
Robert: Anyways yeah.
Howard: Lot's of boys and girls in long, white coats. Then they give you this ten years work, this instructions. You know what you do? You're so arrogant, this is what you do. Oh the instruction (cracking) Well I went to some course and some dentist said mix the [hemen 31:54] the acetone. I used the bonding from this and the resin for that. After I add to that, I wet it with polyurethane blue, or chlorex glue. It's like, dude are you a PhD chemist. Then, it keeps going further. The instructions say rub this on for 20 seconds, and the I see your PhD so when they do that, they get a stopwatch and do it for 20 seconds. Then that has another stopwatch. He goes in the tube like that, and next. The your guys have a curing timer and they test it and they say, okay this is 1,00 milliwatts. This is a test. He's using a curing light because, my joke is so you're in buffalo, how many times do you throw, a quarterback throws a pass to the wide receiver of the Buffalo Bills and they drop it?
Robert: Well half the time they drop it.
Howard: Do you know how many times you hand your curing light back to your dental assistant and it hits the floor? Oh, once a month. So you drop this thing 20 times. You never check it to see it work. The PNGs are saying rub it on for 20 seconds. This light is supposed to have this [inaudible 00:32:58]. You dropped your light 20 times. It's ten years old. You don't even measure it, and then when somethings wrong, it's gonna be your fault. I just wish ... I think I am a very humble guy because I, most, my first dental assistant. I got a dozen girls have been with me 10, 20 years. I listen to the patients. I listen to my staff. I just wish dentists, again, like the guy who grew Walgreens 30,000 percent. You don't even know his name. I swear to God, if a dentist had that much money, he'd be having red Ferrari parked on top of the Empire State Building and rename the building. I think you're one of the most humble guys I know, and you're in a billion dollar company and you are as down to earth. Why would a billion dollar company be in Buffalo. That's what I gotta ask you. Why did you pick Buffalo?
Robert: That's a good question.
Howard: Well, you're boys ask you every day. Why aren't we in Fort Lauderdale-
Robert: Only maybe three or four months of the year. When I Ivoclar Vivadent, which is a Lichtenstein based company, when they entered-
Howard: It's cold there too.
Robert: When they entered the U.S. market place they, typical European companies entered this way. Clinical or technical. They would find partners and they would give their products to dental laboratories and make dental laboratories distributors for them. Either the dentist ordered them for, to other dental laboratories. Ivoclar came in and actually decided to build it's own company. At that time, years and years ago, a long time ago, they bought Williams, you mentioned that name earlier. Williams was a very good marketing and sales organization. Williams was headquartered in Buffalo, New York. So when they came in and bought the company, it was residing here, so Ivoclar set up operations here.
Since that time, Howard, we've had lots of conversations about moving from here. We have our headquarters in Canada, it's in Toronto, headquarters in the U.S. also North America here in this facility. The fact of the matter is that of the 250 people we have in this building, there's 250 people in U.S. outside this building in the market. Most of them won't go. We did this survey years ago. They didn't want to go.
Howard: From Buffalo.
Robert: Yeah you know-
Howard: It's beautiful.
Robert: At the end of the day, that's the core of the company. It's not the product, it's always the people. If more than half your people don't want to go, then more than half the value of your company gets left behind. So we stayed here. In the meantime, communicating with customers becomes easier and easier. Either by car, or use a train, or plane, or just by electronic [inaudible 00:35:41]. We can touch and service customers anywhere in the U.S. or anywhere in Canada from our facility, or sometimes, in the world. We're proud to be here. The facility that you're in here today is state of the art education facility for dentists and dental technicians. In western Europe, we're a significant player and we plan on staying here in western New York, but we now have a 150,000 square foot facility we're building in New jersey. All ceramic production only. We have a new education center in Sarasota, Florida, so we do appreciate the weather differences as well. We expand through the U.S. now in other locations as well.
Howard: I want you to go back to the culture though. Explain these, kids getting out of school the difference between the ADA annual meeting and the IDS. Those are two great civilizations.
Howard: In the United States. They're about the same size. They're about a third of a million people. They're just so different in culture, and you fly back and forth between those twp great civilizations, Europe and America, every month.
Robert: Two times a month. I fly every other week between the markets. Howard, it's a hard question to answer. They're similar, and then not. The American Dental Association meeting in it's various locations services the members of the America Dental Association and with the assistance of manufacturers and other. It's a big training, it's a less on training, some on information. It has foot print that's this big. The International Dental show, which as not training at all, other than what takes place at the stands, had 1,100 stands. They chose they highest technology in the world. It's a typical ... It's the launch platform for most companies in the world. Now, every major company does business in the U.S., so they ADA is also important to U.S. companies. Any U.S. company based in the U.S., or participating in the U.S.. The International Dental Show, the IDS is another animal. It's the most prestigious dental show we think, of it's size in the world.
Howard: Do you think the Germans and the, all the Europeans, and the Germans, Scandinavians, Denmark, all those communities. Do you think they're more, just at birth, their culture willing to listen to a manufacturer and say, hey tell me about your product. Where the American are like, I don't want to listen to you. I'm gonna listen to an intermediate. I'm gonna go to a third person between me and your company and listen to what this person says, instead of just going to you and asking.
Robert: I think that's a, it's a broad generalization. I can make a couple specific statements. I think is Europe, or anywhere in Central Europe, where we're located, learning it maybe has a different velocity and a different structure. It's very much more listening oriented. I thin maybe we hear talk more. People still learn at the same rate, I think, but it's a little different. It's like going to your customer and go to your patients. They're all different. In order to teach, you have to understand how people learn. I think at that marketplace you could learn one was in this marketplace, we learn another way.
Howard: Another thing that, when you and I got into dentistry didn't exist really, CAD/CAM and now it's huge. You are the 400 pound gorilla, e.max. I see the numbers, but basically, 80 percent plausible. All porcelain crowns are CAD/CAM. It's pretty much all yours. So I want to know, here's a bug question that's getting asked the most on meltdown. They're just coming out of school with 250,000 dollars of debt. They're saying to get into CAD/CAM, I need to spend another 150,000 on a CAD/CAM and you go from 2D x-ray to 3D x-ray, so I can make surgical guides and place my [inaudible 00:39:48]. That thing is 150. SO my question to you is, you and I are both grandparents now. So if your granddaughter was just walking out of dental school and she says, "Grandpa, I'm 250 now. Do I double down and go 250 more just to pick up a 3D x-ray and a CAD/CAM?" Is digital dentistry that important? How would you answer that.
Robert: I think new dental dentistry specifically, you reference CAD/CAM part which is data access, data design. Those designs translate to operations and the simple machine to make something. That's the CAM part of it. I believe in it. I believe in it as a, in a certain segment of the indications for a dentists I thin chair side delivery, which means the milling of the complete system, I think it's a very good system. I think it provides a great service to the patient and I think it provides a very good income source to the dentist. All the being said, you still have to be able to afford it, and the entry costs are high today. I thin the entry costs will go down over time on the machine.
I think what young dentists face today is a new reality from what it was before. They exit school with huge debt. If you compare it medical years ago, what consolidated medicine, there are many factors in it. What consolidated medicine was technology that doctors coming out of med school couldn't afford the technology need to run a practice. I the [Marcus Wellby 41:22] program and place behind the garage. You can't do this anymore. SO practice is consolidated. Dentists came out of school, entered big practices, and that big practice had their own radioscopy group, their own diagnostic group, they could refer you to all the specialties from one central location very efficiently. Very very economically and from the point of view of the patient, very effectively.
I think dentistry will follow this, but in a slower pattern and it'll be a generational change. I thin young people coming out today, they're gonna have to be in this at some point in time. Data access in the [inaudible 00:42:05] for oral scanning. This is gonna be the move and this will be a trend. It's already a trend, but it'll [inaudible 00:42:11] very rapidly. Design and scan, or scan design and send it to a machine either here, or there. That will be a standard of operation. Not a standard of care but at least a standard of operation. Those dentists who decide not to give in to that because of pure economics, because they can't. They decide to set up a new practice. They'll still do okay. They'll still have some kind of radius of touch within a region. They'll get their patients. The more and more patients learn about other options from television, or from online, or from seeing a magazine, or by a friend who just went to someone else and they did scan this way. They're gonna have to move on this direction. I think that's the power of technology is the power to attract. Patients and it'll attract dentists. So I think this is going to happen. It's a challenge for young dentists today.
Howard: So you're saying that a lot of positions consolidated because to have an MRI machine and a CAT scan and all of these things. It only made sense for your practice to have a CAD/CAM and a CDCT, group practice here. The older dentists are out there and they're gonna say to you, Bob, they're gonna say, "Well when I got out of school I '87, Orthodontics Center of America was the only one on the New York stock exchange, billion dollar [inaudible 00:43:36]. There was a dozen on NASDAQ and they all disappeared and then nothing for then years, they're back. So are they different than the first round? Are these Hartman Dental's and the big, these big chains, are they different? What different about them today than the Hartman, the Orthodontics Center of America, the dozen on NASDAQ?
Robert: So corporate dentistry-
Howard: I guess the question is it was here, they all disappeared, they're back. Are they back for good? Or do you think they'll disappear again?
Robert: No, I don't think they'll disappear. There's always winners and losers in any kind of competition, and sometimes people jump into it. They jump into a program ill prepared. They optimize expectations, but they minimize the input they put in to develop it. You'll see. This is just financial economics. Some will fall off, but some will continue. There are very good success stories today about practices who develop this way, and they attract good dentists, either from existing practices, or dentists from school and they train them. We participate in some of that training. They offer the best technology as they can afford it. So I think there's gonna be survivors and it'll be a trend.
The fact is, that I thin that DR. Gambly, who's been practicing for 40 years and had a good successful practice somewhere, and doesn't do intraoral scanning, and if he has to, he sends things out to specialists. These are very good dentists. I go to one of those dentists. I'm very confident in the work that he does and what his team does. It's still good dentistry and it'll remain good dentistry, but the new technology just offers more and it'll become more interactive. That dentist at that point in time, he won't lose me as a patient. I can go back here and have what I want done if I really want to, but he wont lose me as a patient at my age and at his age. He probably won't get that one. That persons gonna go to a more high-tech practice because they heard from another friend who came out of school, or just graduated, or they met them at a mixer in town for 30 years olds, that this dentist has got that kind of practice, and this is where you should go. It's quality, it's high-tech, and it's tomorrow's dentistry today. It's these kinds of lines that, for Americans, this attracts them. This pushes them in that direction.
Howard: So was that the same, is that going to be your same answer ... When I got out of school, there were 14,000 dental labs. A lot of the numbers I'm reading now, that that's been cut back to 7,000.
Howard: Was that because they couldn't afford to do fancy new e.max and more expensive, more technology? Or was that, a lot of people blame low cost in Chinese labs? Do you think it was more technology got more expensive, or labor got cheaper in Asia? [inaudible 00:46:33]
Robert: There's lots of the answers to that all boils down to how you run a business and the responsibility of leadership, I believe. The statistics show, well you used the numbers. There were 14,000 and now there's 7,000. I can't name, if I subtracted the two, I have difficulty reconciling between, where would the 7,000 go? Give me the names of 5,000 of them .Many of these labs were marginal. Many of these labs are one generation labs, and it was decided by the owner that he or she would not hand it to the son, and it was not marketable. So they just, the children went and became dentists, maybe, but the children went and did something else professionally. That family, who serviced that dental laboratory, where the father and mother was the owner, or co partners, let's say. This just ends. I think we see a lot of that. It's sort of a generational exploration of parts of the strata of the dental laboratory market.
At the end of the ... It's proven that the best labs will survive. The best labs meaning they get the knowledge, they get the technology, they can communicate solutions to patients and dentists, and if a dentist has an issue, that laboratory can be his or her partner. These labs are gonna, they'll continue to flourish, they will continue to invest, and they'll continue to grow. The fact is, as the bigger labs get bigger and they invest more, they can produce same quality of us. This will just happen because of all the technology. Now they have to pay a lot of money to make that technology, but nevertheless, with that investment they can produce lots of product from CAD/CAM technologies today.
So I think in the lab business that's the dynamic of safety place. You've got some people just falling off the table, some by election and some by default. They just can't survive. The survivors break into several different groups. I always think of life in thirds. There's a high high end lit dental laboratory, two or three person, five, six person lab with high-end [ceramas 48:49] to do chair side shading ans chair side characterization and really connect. These people are survivors. There's is the high production layouts who can produce good products at good prices with all the technology at any option you really want because they have them all at the dental laboratory. They will survive. The ones in the middle that can't say they're this, and they can't quite say they're that, they're in the danger zone. They will probably get a little bit compressed.
Howard: I want to keep asking you, I'm down to only eight minutes. I want to to keep ... I bumped into you in at least five, now that I'm thinking in my head, I've run right into you.
Robert: You've actually run into me two or three times. Walking into me
Howard: A lot of these American dentists, they've never seen the IDS meeting, we talked about that. I'm looking to also talk about the fact that I see it so different. In America, the dental schools, the only other thing that you do is the hygiene school, and they do an excellent job of that. The lab schools are really, they don't really have theta. When you go to Germany and Hong Kong, the dental laboratory is a huge part of the education. They train their lab techs like we train our dentists and hygienists. Well you talked about the difference there and which one was better? Should Americans ... Should Buffalo? Does Buffalo have a dental lab?
Robert: We have a dental laboratory program here.
Howard: At Buffalo?
Howard: I bet you had something to do with that.
Howard: Do you?
Robert: It's part of the state university and New York system. It's part of the community college system. SO it's a two year degree in dental technology [inaudible 00:50:24] your community college. There's also a technical school. A separate technical school. Both very good. What happens in Europe, let's say historically, because it also changes. There was a very high level of training for dental technology and you reached levels. You could reach a ,aster level. This was a measured graduated level of technology. Dental technologists who achieved this level, they communicated this. That they hit this level of certification. That they were masters in [inaudible 00:50:58] masters in [inaudible 00:50:59] and it carried great value. There's also another level below that which is also very high.
In the U.S. The masters level was never really achieved, although some schools, historically, like LSU, they also had very good programs. What happens in the U.S. is there are fewer programs and fewer dental technicians today available and existing. This is just a fact. I the developed market in Europe, we're seeing some of the same thing now. We're seeing fewer dental technicians available. In some cases, fewer dental technical schools. What causes that trend, it's a little bit hard to say. If you think about it. Someone coming out of high school and going into college, or maybe not going into college, that's thinking of a career. Dental technology isn't at the top of there head. It's not, I want to be a policeman, a foreman, a doctor, or I want to be a ceramist. It's inside information.
We used to have a rule, we still have a rule here, we don't hire family in our company in the U.S. We had to change the rule because we had so many people that were within families that were trained in dental technology or dental hygiene even, because they knew our business and they had been in here before and we inadvertently created kind of career expectations from families. They wanted to be a ceramist. They went o school and then we hired them here. We had to alter this rule because we just couldn't fin enough people. So we said okay, family members we will hire, subject to the position that they're in, of course. If they have experience or knowledge of dental technology or dentistry. We had some in here now. My daughter worked here for sometime. She's a dental technician. One of my daughters, anyway. One's in psychology, but the other one's a dental technician. She worked here fro some period of time.
Howard: You know, I just love travelling around the world because it's seven billion people, and they're all exactly the same, but they have different little environments. I find it interesting, where when you go around the world, most people work in the family business. A lot of names come from family and like, Smith means you're a blacksmith. One this of the dental student shave a dentist in their family tree. I also think another interesting thing is in ... Most of the world you have a nuclear family where the whole family lies together and they have arranged marriages. Though arranged marriages have a nine percent divorce rate. Americans, they call it a love marriage, and the little kids around pick someone to love, they have 50 percent failure rate, but the lowest divorce rate is if both couples are, have a doctor, dentist, physician, lawyer, it's a nine percent divorce rate. The same divorce rate as the arranged marriages in Europe.
So if two little kids run out and they just love each other, that's a 50 percent failure rate, but when two people meet in dental school and get married, they only have a nine percent chance of getting divorced. When they get married, it's a third of a chance for each one that there's another dentist in the family. I just see all these incredibly, happy family dentists where the guy meets the girl in school. They get married. Her dad's a dentist, now they're working together. You go in there and reason I'm prone, you were talking about corporate dentistry where labs have to get bigger to have all the stuff. Physicians have to get bigger to afford MRIs.
I see, I always had a group mainly because, when I got out of school I was 24 and I just thought it was just boring being the only dentist there. So what did I hire? My buddy friends from Creighton. Looking back, I should have hired someone that was 20 years older where he knew what was going on, but I go want my buddies in there because we were in there playing all day. When I see a burned out dentist, drinking Listerine who's pre-suicidal and just a wreck, he's always all alone. When I walk into a group practice you instantly feel the energy's higher. When I walk in and it's a nuclear family. Dad's a dentist, daughter went to dental school, married a guy that ... They're like the most blissful. They're just having fun. They're just getting paid a lot of money for having fun.
So I'm down to two minutes. I want your close and I want you to turn it back on to, that little girl is 24 years old. She just walked out of dental school. She's got 250,000 dollars in debt. She's going to a small town Parsons, Kansas. You said, and Warren Buffett said "If you cant explain your business on a five by seven post card, you don't have a business." You said "When a dentist walks by a booth, you gotta explain, like a player, in ten seconds, in two lines." Give her some advice. When she opens up her dental office, what should her ten seconds be? What should she focus on?
Robert: We actually, and she should focus on what she believes in, which is, I think when looking back into why she got into dentistry and hopefully, in dental school. It confirmed all those expectations and all those beliefs. Now she sits in that practice, waiting for the patient to come in, and she has something to say, meant that I hope she would do. If I walked in to her practice, what would I want to hear her say> I'd want to hear here say, thank you for coming. I'm committed to your oral health. I want to talk bout you and your oral health. I want to talk about what you need and what services I can provide, and I would like to be your oral health partner in the long term. We will thing in the long term and I will give you all the services you need, not more. I would look forward to serving your family as well. I'm here for you and I committed my life to dentistry, and I've committed myself yo you.
That's what I would like to hear. I would like to experience it. You know, trust isn't a matter of words, trust is a matter of experiences. Once I hear that, I'm interested. Once she does it, it's confirmed, but you've gotta do it every day. It's like your articles say, your editorials. You gotta do it every day and you gotta hire people who believe in what you believe in. That's the hardest part of hiring people is get some kind of congruency. They don't have to absolutely like you, but they have to believe in the same things. In a practice it's important, in a company it's important, and I think in life it's important to get this done. That's what I would tell her. Not that she has to listen to me. Smarter people than I am. From a patient point of view, and I'm a pretty good patient, that's what I would expect.
Howard: Well, he's a humble man. That's why I keep saying. The guy runs a billion dollar company for 35 years and he says, why listen to him. I would only [inaudible 00:57:45] Seriously Bob, you're the smartest, most vision, most humble, most down to earth. You're the rock star of dentistry.
Robert: Thank you very much.
Howard: Thank you for an hour of your time.
Robert: Thank you very much. It's a pleasure and I'm looking forward to reading your book.
Howard: Oh, thank you. Thank you very much.