By Steve Moran
I recently published an article titled “What Is Senior Living?” that was rather critical of the senior living sector. I wasn’t super happy about publishing it, but it addressed important points that need to be talked about.
What Do We Do?
We are an industry that is largely driven by this idea that when done right, senior living is an asset class that can be a cash cow. It is why the REITs that specialize in senior living do so. They only have a single goal, and that is to make money for their investors (and their C-suites, if we are brutally honest).
I am a hard-and-fast believer in capitalism. I don’t think profit is a dirty word. But we have this huge problem in the investment world where there need to be quarter-over-quarter investment gains. This means cutting costs, including staffing, this quarter, hoping revenue will increase next quarter, and we can make up for the reduced services when that happens.
Except that never seems to happen. Even if the profits go up — or especially if the profits go up — that money mostly flows into the pockets of investors.
The Right Path to Profits
The right path to profits and profitability is building a great business that is sustainable over the long term. This means understanding that as we create value for residents (and team members), occupancy will grow, and at the same time sales and marketing costs will decrease. Residents and family members will be happier, and profits will dramatically increase.
This means focusing more on creating great resident experiences and less on controlling costs (though I am not suggesting that managing costs is unimportant).
Right Now, Today
Right now, today, senior living is super jumbly. People are excited about the rapidly growing number of older people and worried about the cost of providing good to great senior living and the growing affordability gap.
It is chaotic and confusing. It is times of chaos and confusion that represent opportunity. If you create a great resident and family experience, solve those big problems of growing older, you will have full communities and will be able to charge a premium for the experiences you provide.
It means being the best at what you do in your marketplace, which is all that counts.
There are two more things:
- Create a compelling workplace where team members feel valued and love coming to work every day.
- Tell the story of how you are creating great experiences for residents, family members, and team members.
Do this in the chaos and confusion, and you will have tremendous success. The old Southwest Airlines did it. The old Zappos shoe company did it. The old Starbucks did it. Amazon is still largely doing it.
You can do it too.
This is not an industry thing. You can only control what happens in your organization, in your communities. If you are struggling with occupancy, you don’t need to be. Get your resident and family experience right, create a compelling workplace, and tell your story well.
Your success will blow you away. It will blow away the industry.
