By Jack Cumming
Business is grounded in trust. It begins with a customer trusting a purveyor to provide promised value. That requires a CEO who puts customers first. Lately, though, YouTube etc. have brought us examples of CEOs showing incredibly poor judgment. Perhaps it’s the ubiquitous presence of cameras or the tenor of the times, but we seldom now hear of CEOs who emphasize high integrity above all else unless, of course, we listen to Warren Buffett.
Trust Squandered
My first experience of this disconnect was the Captain of the Costa Concordia. Despite the responsibility of his position, he abandoned ship when a crisis struck. The crisis may even have been of his own making. This contrasted sharply with the image we have of the Titanic’s captain going down with the ship. It made me begin to wonder, “What have we become?”
More recently, though, two images of poor character have been on public display. First, there was the image of the CEO cavorting with his HR vice president at a Coldplay concert. Many people laughed knowingly. Employees and others are often ready to believe anything nefarious of those who have authority.
Now we have the image of a CEO snatching away the cap that a tennis player gave to a young, starry-eyed fan. Talk of self-centeredness. This was the pinnacle of crass behavior. How do people like this ascend to the C-suite? Yes, these are just isolated instances, but they are undermining faith in the integrity of those with business authority.
Trust is Central
This is particularly of concern for senior living. More than most any other industry, the senior living industry calls for the highest standards of trust. Leading a senior living enterprise should be an act of service. It requires acceptance of a very high level of responsibility, and the vulnerability of those served can bring criticism and even unmerited lawsuits. That calls for a thick skin and high personal values.
Recently, Amy Comey Barrett, the Supreme Court Justice, spoke of how her acceptance of the post was an act of service since she and her husband knew beforehand the kind of cruel criticism that would follow. That call to serve might be the most important quality that a senior living CEO or other leader can bring to the undertaking.
People First
This came to mind recently when I was reading accounts of what some senior living industry observers take for granted. It’s common to view senior living as little more than an investment opportunity, an asset class. Recent conversations about the turmoil at Brookdale have centered on financial metrics, reflecting the common aphorism that profit is the sole social responsibility of business. Admittedly, these are money-oriented commentators, but good character still involves people and the principles of good faith and fair dealing.
The not-for-profits are somewhat better. They don’t omit the resident-consumers altogether from their thinking. Still, money opportunities are also top-of-mind there as well, and there are very few panels featuring residents or prospective residents, much less residents who might challenge some of the prevailing industry mythology.
The New Consumer
There is a great deal of speculation about the coming consumer and also much jubilation about the aging boomers. I don’t see concern for what will follow the expected boomer boom, nor is there fear that it might not eventuate as now anticipated. But, that’s all money talk.
Let’s not forget that consumer. Jeff Bezos famously had a seat reserved in meetings to represent the consumer. He focused on customer service and customer value and was satisfied to manage to break-even results consistent with the security of growth. That paid off well for shareholders. It can also pay off for those in senior living with not-for-profit values, even if they convert to gain the capital resources and flexibility of conventional businesses.
The Sage of Omaha
Warren Buffett famously lives a modest life and values integrity above all else. He also tries to avoid investing in commodity businesses, and cookie-cutter assisted living is very much like a commodity. Buffett prefers companies that achieve a dominant market position because of the business advantages that follow from the power of a trusted brand.
Brookdale might have achieved that but failed in execution. The opportunity to create such a brand, or brands, as Marriott and The Ritz-Carlton have done for hotels, still exists. Will anyone have the derring-do to seize the opportunity? A trusted brand begins with a reputation for quality customer value. That’s hard to achieve and easy to lose.
The humanistic skills of high integrity and good character may not appeal to the business imagination, but they are the roots of progress. The opportunity for businesses to innovate and to supersede competitors, even remaking entire industries, is part of the privilege that we enjoy as Americans. Opportunity lies in the dream. The dream is to put customers first and to give them a seat at the table. The consumer voice can be the key to the future.
