By Steve Moran

I have a couple readers who love to call me out when they disagree with something I have written here or published on social media, and I love them for this. They help me rethink what I believe, what I wrote.

Billionaire investor Ray Dalio says that if he could offer only one piece of advice, his best advice, it would be this:

Listen carefully to people who disagree with you.

He expands on this idea, saying:

I needed to replace the joy of being proven right with the joy of learning what is true.

Thought Leadership

There is a lot of thought leadership going on in the industry right now. Lots of people talking about staffing, the changing demographics of the aging population, the worker pool, technology data, how to market, how to sell, and how to best serve people with dementia.

This is a really good thing, but it can be a dangerous thing. Here are some examples of things that seem kind of settled because some experts have said it, but maybe there should be some other ideas:

  • No one (really meaning “hardly anyone”) wants to work in senior living.
  • Boomers are going to want a very different senior living product than their parents and grandparents wanted.
  • The older population is growing so fast that in 10 years, we won’t have enough senior living communities to meet the needs.
  • Nursing home reimbursement rates are never high enough.
  • The 5% management fee is not enough.
  • Communities need separate executive directors and sales directors.
  • We can never get our staff turnover rates below 50%.
  • There is a huge middle market crisis.
  • More technology is better.
  • Robots will never take the place of people.

It may well be that some of these things will turn out to be true. But what if they are not true? What if we were to ask what the world would be like if these things that everyone knows to be true were not actually true?

The problem with believing these things to be true is that if they are true, the next course of action is clear, or at least clearer.

The 5% Management Fee

I am going to use this as an example because almost everyone I talk to believes that 5% is inadequate, but what if it is adequate? Here is how that might work:

  • You hire an executive director and pay them, say, 50% more than the going rate for a given market, plus a performance bonus. Because you are paying that much, you are going to hire an “A player.”
  • That ED then hires an A player sales director, chef, activity director, and nurse.
  • They all get turned loose to do what A players do, and pretty soon you have a full community with a waiting list.
  • You continue to supply the things that central offices do extremely well: accounting, HR, marketing campaigns, investor interfacing.
  • All of a sudden you need a regional to show up once or twice a month and ask, “How can we make your job better?” You don’t need a regional for everything — each one of whom is jockeying for position and sucking up the time and energy of those who are doing the real work.

I have seen this done. There are lots of small operators who are running great communities without a regional for everything. Mostly they just figure it out — or on those occasions when they can’t figure it out, they go hire an expert for a few hours, a few days, a few months.

I am glad to serve as an industry contrarian, but you need a few in your organization as well.