The most urgent situation was a community that had been open for 12 months and had attained only 25% occupancy.
Editors Note: This is the first article in a series by Will Nowell the founder of ServiceTrac Live a Senior Housing Forum partner. The series will chronicle the turnaround of a under performing memory care community.
In my senior living career I have had the opportunity to be involved in many “challenged” fill-up projects. By the term “challenged” I mean that a project is performing significantly below the budgeted pro forma and the current leadership is near desperation to get it “right-side up”. In most of these situations the owners are digging money out of their own pockets every month to meet the minimum cash flow requirements and are open to taking drastic action to fix whatever is wrong.
Recently I was approached by a company to help it get back on track. I thought it might be interesting to keep a journal of what happens as I go through the process I use to identify the issues, install proven systems and introduce the accountability needed to change the momentum and move the project to optimum health. My hope is that this series of articles will help some providers know what to do if they find themselves in a similar situation or avoid this scenario all together by recognizing and addressing challenges before they have to call someone like me.
My Core Beliefs
In the spirit of transparency, I need to share some of my core beliefs upfront. First, I believe in the saying that a rising tide lifts all boats. When demand is high, competition is low and the economy is good, most businesses – including senior living communities and their managers – can succeed. It is only when one or more of these factors change that our metal is tested. Second, there is a significant difference between experience and leadership. Great leaders can still get into trouble, especially when they find themselves in a new difficult situation. With the explosive growth in the senior living industry, companies have needed to promote quickly and import talent from other fields. These inexperienced managers may not have had exposure to the specifics of their current challenging situations. Third, while inexperience can be compensated for by wisely gathering vital information and metrics, developing specialized skills and implementing accountability programs, it is nearly impossible to counterbalance poor leadership. I have come to realize that solid leadership can have the highest and greatest impact on whether or not turnaround efforts will ultimately succeed. I have had the privilege to work with and learn from some truly great leaders in my 18-plus years as a service provider, sales trainer and management consultant to the industry. As mentioned, I thought it might be valuable in this series to highlight specific areas where I have personally seen leadership positively and negatively impact the success or failure of a turnaround effort. Stage 1: Confronting Reality For me, it usually starts with a phone call in which a top manager of a company asks me about utilizing a small amount of our mystery shopping or sales training services. Through experience, I’ve learned to listen closely for clues about what the manager may be reluctant to share; what is really happening in his world. The fear is that if they bring a problem to the forefgtb and ring the alarm bell, they may be signaling that they are not up to the job and may soon be replaced. Leadership Insight #1: Managers who are humble enough to quickly bring challenges out in the open and are willing to learn and ask for help early are rarely at the helm of a sinking ship. They also tend to have longer and more successful careers. I have also come to recognize that their requests are often just the tip of the iceberg. Just like we know that anyone who takes the time and trouble to call or visit one of our communities has more urgent needs than they are willing to express, I know that there is usually a more interesting story behind this simple request. And so it was with this latest call. As I visited with the manager and then later with the president of the company, I started hearing that they might be interested in getting a broader proposal for sales training. As I normally do, I asked my standard questions to help build a relationship of trust and discover additional needs. Within a short time the President shared that although they had some very successful properties in their portfolio, they also had a few properties that, if allowed to struggle, could put the company’s future plans on hold. This honest admission set the stage for us to begin to talk about the real challenges, potential solutions and their willingness to make changes if needed. The wheels were in motion. The President and, ultimately, the other top managers, took the time to begin an honest, open discussion of the issues and in short order, we began working together to create a plan of attack. The most urgent situation was a community that had been open for 12 months and had attained only 25% occupancy. The immediate goal became to raise occupancy from 25% to 90% in the next 12 months. This was going to require that the community immediately double their number of qualified inquiries and double their current closing ratios. This journal will attempt to detail exactly what we did each week for the next three months to achieve this goal. Leadership Insight #2: There can be no sacred cows. Sometimes leaders are reluctant to evaluate current established systems that seemingly are working because they don’t want to upset the apple cart. It is sometimes easier to blame problems on employee execution or excuse specific issues as a local, one-off phenomenon. Great leaders see exceptions as opportunities to have honest conversations about the integrity, efficiency and efficacy of systems that are in place. They are open and willing to evaluate existing systems and make improvements and/or major changes, if warranted. The most successful leaders I have worked with actively look for and are open to learning about, and even implementing, new systems. The upfront cost, time and resources needed to accomplish these efforts are often significant and can upset the entire fabric of the culture. But great leaders see these occasions as opportunities to strengthen the team and to identify members who have attitudes or values that could hinder future success. In the next article in this series I will discuss some of the specific challenges we discovered and the steps we have taken together in order to get this property moving in the right direction. Will
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