By Jack Cumming

You don’t need to be old to see the benefits of the senior living lifestyle. Who wouldn’t want convenience, community, friendship, hassle-free housing, and more, all right at hand?

This is the first in a three-part series. In this part, we concentrate principally on a problem that now handicaps senior living, its image. In the second article, we look at possible remedies. In the third article, we break free of all the industry’s self-imposed limitations to look at bold, and very bold, ideas for transformation.

We Start With Lost Opportunity

Why does A Place for Mom top every search for senior living nationwide?

Wouldn’t you think that the top position would go to an enterprise that actually provides senior services? How did it happen that the senior living industry has let this visibility get away?

Not only that, how is it that top place goes to a firm that gives the industry little value beyond its market presence? How does lead grabbing make senior living a better industry? Does A Place for Mom recommend the highest quality “places for Mom,” or does the firm recommend those who pay “referral” fees?

Image Matters

Letting A Place for Mom create the industry image shifts the attracted customer from people wanting a better life for themselves to children dealing with problem parents. Those children don’t think they’re seniors. They know who is. It isn’t them. It’s their parents.

That adult child often reaches out to A Place for Mom thinking, “Hey, we’ve got a problem here. Mom can no longer be trusted to live on her own. We’ve got to shuffle her off to a place where she’ll be safe for what’s left of her life.” That gives the industry an image that conceals the full positive potential of the residential senior living business model.

Many of those adult children who turn to A Place for Mom are old enough themselves for today’s senior living. By “old enough for senior living,” we mean accepting that a rigid age restriction makes sense and is desirable. That is itself, perhaps, the senior living industry’s most defining and most questionable premise.

Why does the industry focus on the shrinking market of the frail, failing, and very old? Why do providers cast aside younger adults who might want the convenience of dining packaged with maintenance-free housing? There’s no law that says you can’t supplement better living with health care services. That availability nearby doesn’t make the place a health care facility. Standby health care is a necessity for all ages. Attracting younger residents will bring vitality and purpose to the whole resident community while giving more people the benefits of better living.

Building a Solid National Brand

Consolidations are already taking place in the industry. That is a positive market force that can gain momentum with national branding. You may be thinking that Brookdale is a national brand, and there are other lesser-known enterprises that operate nationally. Brookdale may have had the opportunity, but its corporate leadership has not been able to capitalize on this. At this stage, I think that many would consider Brookdale’s image to be less than what it might be.

Just because Brookdale has squandered the opportunity to become, say, the Marriott of senior living, doesn’t mean that the opportunity isn’t there. It will require someone with savvy, business judgment, and determination to provide the leadership. The industry’s fondness for tax exemption is not helpful. It can be much easier to expand an organization and to elevate its culture if ownership shares are involved.

Business is about people before products or services. Satisfied customers and happy employees are the marks of success. Trailing is money and profit. Satisfy people. Give them life fulfillment. Make them love what you do and to want you to succeed, and the money will follow. It’s not that money isn’t important. It’s just that it’s secondary to purpose.

J. Willard Marriott, who built the Marriott Corporation, pronounced his people principle to be, “I find that people don’t work for money. They work at a place where they are treated right and they think that they’re accomplishing something.”

The same might be said of what residents hope for from senior living — good treatment and meaningful purpose. Of course, a business has to have revenues greater than costs. But you can grow a business infinitely. Cutting costs maxes out at 100%. A countinghouse perspective seldom succeeds.

Capital Market Advantages

For-profits offer many advantages over nonprofits, not the least of which is that they pay their fair share of taxes. No established nonprofit runs long in the red. True, some myopic corporations put profit before customer fulfillment, but a corporation that gains a reputation for customer value has something precious. Reputation is based on performance, not tax qualification.

Yes, “nonprofit” still has positive market appeal, but an investor-funded business that is run for people before profit is as much “not-for-profit” as is any technically tax-exempt entity. Assuming it’s not myopic, a business dependent on profit can claim to be “not-for-profit” with as much credence as anyone. What matters is to get the word out to let prospects know that the business is run for them, first, followed closely by long-term soundness.

Organizing as a tax-paying enterprise provides flexibility for reorganization, as shares can be used as an alternative to cash. Tax-paying enterprises also have access to equity capital, which can create a fairer business model for housing older people. For our purpose here, investor involvement tends to ensure managerial accountability and a faster-paced dynamism.

Branding and Substance

Breakout branding is best achieved with a groundbreaking new concept. It will take both culture change and astute promotional marketing to change senior living’s often negative image into something positive and desirable. The trick, of course, is to create a nationwide brand that offers consumers what they want so that they love your brand for its unique plusses.

The right team, chosen more for talent than for experience, and committed to improving how Americans live, including how our older citizens live, has an unmatched opportunity to change America for the better, to help the environment (single-family housing is ecologically wasteful), to restore community living, to better support two-earner families, and to benefit the owners from the endeavor.

Branding doesn’t have to mean ownership, though many brands do involve central ownership. It can also mean franchising or something else. We think of the Ford family “owning” and running the Ford Motor Company, and they do, but Ford’s local presence is through dealerships. Imagination reaches not only to what an enterprise does but also to how it is organized and financed.

Thinking creatively about what the future might look like as a spur to entrepreneurial undertakings is a topic for future articles. We’ll take that up in parts 2 and 3 of this three-part series.