Senior Living Executive Directors Think Like Employees, NOT Owners
7 Steps on Transforming the Mindset of Your ED’s in Independent Living, Assisted Living, Memory Care and Active Adult Communities to Think Like a Leader and Take Ownership
Most of us have a song that serves as a time stamp of our lives. When it comes on the radio, we are instantly transported back in time.
For me, that song is I Can See Clearly Now by Johnny Nash
“I can see clearly now the rain is gone; I can see all the obstacles in my way. Gone are the dark clouds that had me blind, it’s gonna be a bright, bright sun shinny day. I think I can make it now the pain is gone; all the bad feelings have disappeared. Here is the rainbow I’ve been praying for, it’s gonna be a bright, bright, sun shinny day!”
What was my pain you ask? 1000 plus staples!
In my early twenties, I was promoted from assistant manager in Daytona Beach at the retail chain Contempo Casuals to store manager in Gainesville, FL, about two hours North. The major barrier I had to overcome was getting the university I attended, Embry-Riddle Aeronautical University (long story) to allow me to complete my education remotely, through independent studies so I could move. Back then, this was rare, and I was told no three times. I kept asking as I wanted this promotion and ultimately the Director agreed. I was one of the first early graduates of this program which is thriving today!
Less than two weeks later, I was managing my first store in Gainesville. I had worked all day and decided when the store closed, I would stay the night to tidy up the backroom, it was a disaster. At 10:00 pm, I walked into the storeroom and saw the restroom, realizing that I had to start there. This was the one space every employee would use multiple times a day and well, they were a captured audience! It was here that I would have their attention.
There were ugly posters all over the walls and as I began to pull them off, I realized there was a good decade of staples as well. This store needed a clean slate and while I didn’t want to do it, I did; one staple at a time, I began to pull them out of the wall.
From about 10:30 pm to 8:00 am, I worked in that restroom. I spent at least five hours pulling out staples! Think about that for a moment- thousands of staples; and like a surgeon, I pulled them out one at a time. Around 2:00 am, I hit a wall and was beyond ready to quit when this song, I Can See Clearly Now, came on and I felt a sense of motivation in realizing I had most of those staples out. If I could persist and complete the job, the sun would indeed shine again, ha!
By morning, I had bare walls that were ready for a fresh coat of paint and a whole new palette for mental affirmations that would soak into people’s minds, transforming their thoughts about their capabilities as they used the restroom. Long story short, my store went on to be one of the top performing stores in the nation. Out of 300 stores, we were regularly in the top five in sales and units and my team was unstoppable.
That song, I Can See Clearly Now, has come on at pivotal moments of my life since that time and it always takes my breath away. It’s that moment I stop, take in my life and give thanks.
- When I was walking along the ocean in Daytona Beach, after resigning two years later from my manager job (against everyone’s advice) to help my mom launch her corporate janitorial service. Realizing we were at $45K per month in sales after an exhausting first launch year, I reveled at the song as I took in the fact my risk had paid off. I heard it again several years later when we sold that business and I was in Tampa starting a new career in professional speaking.
- The song came on a week or so after my wedding when I realized I had just married the love of my life, the one person who always believed in my wild, crazy dreams and that would be on the journey with me for the rest of my life.
- I heard the song again the day my Company Bild & Co landed on the Inc. 5000 Fastest Growing Companies list.
I can’t tell you how many times this song has come on at just the right moment, as if to remind me of the significance of THE STAPLES IN THE WALL. It was in that restroom, all those years ago that my work ethic was defined. I didn’t want to pull out thousands of staples, but I did it.
That task, while tedious had to be done and I did it knowing it would clear that path for a stronger tomorrow. WHILE I DIDN’T OWN THAT STORE, I TREATED IT AS IF I DID. My manager Robbie developed that passion in me, in leading by example, and investing in my training and education, showing me what was possible in my career path.
It’s that same work ethic that allowed me to build an international company with loyal employees who know their value and impact on the world; to publish three books, turnaround companies that others deem lost and exceed my wildest dreams.
It’s that work ethic that sets me apart from those businesses that started at the same time as mine, but didn’t make it. When I hear this song today and I’m facing a challenge or feeling depleted, it fires me up and reminds me of how far I’ve come and how much further there is to go. But one hour, one day at a time; just like pulling those staples out, one at a time, I know I’ll get through it.
HIRE PEOPLE TO THINK LIKE OWNER
I’ve tried to find and develop team members who, like me, will go the distance. Whom despite their annoyance, will pull those staples out one at a time and trust me, they do! I watch daily as Jennifer, Dana, Jocelyn, Dawn and Stephanie unite to tackle challenged communities, as Amy and Alyssa bring teams from all over the nation together into a 10 minute daily huddle, one community at a time, to focus them on what they CAN DO VERSUS WHAT THEY CAN’T. I watch as Rachel undertakes a seemingly impossible task of completing 100 competitive shops in a window of 30 days, against insane odds or Jen in accounting, who gets our budgets accurate down to the penny and relentlessly uncovers every stone to figure out where we are off, so our books are tight.
One small change, one day at a time, the Bild team stares down the staple and then extracts it! This team doesn’t give up and it’s because they treat my business and our clients’ business as if it were their own.
I set up my team to feel like owners, to be personally invested in the success of our company. When working with clients, they have the same mindset, their business becomes ours. This is why it’s so frustrating when they encounter Executive Directors who don’t see the community as their own but as a job; a place they go to work, who refuse to have a growth mindset, to learn new processes that will improve the business performance and the betterment of outcomes for everyone involved.
The most successful Executive Directors treat the business like it is their own and understand they aren’t there to manage a budget and the operation, but to fuel the success of a thriving business valued at $30,000,000 to $50,000,000 with hundreds of employees, residents and family members who benefit from the output of the business every day.
The constraint our industry is facing is that many communities have Executive Directors who were never empowered by their ownership group to act like an owner. The goal of this blog is to help you act and better understand as an operator or investor how to begin that shift within your organization.
7 STEPS TO CREATING EXECUTIVE DIRECTOR OWNERSHIP OVER THEIR INDIVIDUAL COMMUNITY
1. IT STARTS WITH PROPER HIRE
The first place to start is today, with proper selection and hiring of Executive Director positions that are being filled. This is the single most important position you can hire for your community or your $30,000,000 business (give or take). This individual will determine your revenue, net operating income, staff retention, care and service delivery, reputation in the community and more.
You must have a systematized process, backed by research, that allows you to identify, interview and hire the right Executive Director for the community and culture they will be part of. Even if it takes 90 days to find the right one, it’s worth the time, energy and effort because the right one will stay for the long haul and grow your business while the wrong one will drive your business in the ground, destroy staff and resident morale, along with your reputation and then leave. It can cost up to $290,000 a year for a bad hire depending on the position. This is the one role you can’t afford to get wrong.
When our team goes in to turnaround an under-performing community or region, this is the first thing we do; dive into the role of ED, we re-interview, evaluate, assess and set a personal growth plan to get them where they need to be or, should they fail to engage; we allow them to move on. Read more about our process HERE.
2. CONTINUES WITH PROPER TRAINING
Every Executive Director needs to be properly trained on the business of seniors housing. Most are simply trained in the business of health care and the operation of a seniors housing community. This is not enough. To take ownership, Executive Directors must understand the business in full to include: How are prices set and why, what impact it has on NOI when discounts are provided to new residents, impact of paying $7.50 per day for food per resident versus $13.00 per resident per day. They need to know the why behind motivating and recognizing employees for great performance versus not doing it at all and the impact of paying a strong salesperson an $85K base salary per year versus $70K base salary per year. There are so many aspects of seniors housing that an Executive Director doesn’t understand because they have never been taught. For many, their sole task is to manage the day to day operation and the budget. While operators could get away with that yesterday, it doesn’t work today. We need Executive Directors who think like owners and that means treating them like owners.
One great way you can start understanding how to build your Executive Directors up and empower them with knowledge, tools and training needed for them to take OWNERSHIP is through our upcoming webinar in January. Seats are limited. Starting 2020 with the opportunity to educate your ED’s could have a MAJOR impact on performance this year. Click the image below to start
3. REINFORCEMENT AND RECURRENT TRAINING
Just because you introduce a concept to an Executive Director, like premium pricing apartments or reviewing care fees monthly to ensure what is being provided is exactly what they are being billed for, does not mean they get it or will do it. All training must be reinforced on a daily, weekly or monthly basis. When new habits are created, checklist and accountability are needed to ensure execution or it simply won’t happen. We need to say the same things over and over until the Executive Director gets it and begins to see the payoff for their efforts, ultimately moving on to a new habit that strives to improve business performance.
Moreover, training creates engagement and employee satisfaction and retention. In a recent national survey of over 400 employees spanning three generations (Baby Boomers, Generation X, and Millennials), 70% of the respondents indicated that job-related training and development opportunities influenced their decision to stay at their job. According to the American Society Association for Training and Development (ATD), companies that offer comprehensive training programs have 218% higher income per employee than companies without formalized training. These companies also enjoy a 24% higher profit margin than those who spend less on training. It would seem that continuing to invest in training and development, is a smart choice.
4. INCENTIVES AND RECOGNITION
I can’t tell you how many times I’ve heard Executive Directors say, “Why should I complement my salesperson on a strong sales month when it’s his job?” It takes a confident person to dole out complements to others, but it is the single most powerful tool an ED must use to grow their team. People must be taught how to do this as it doesn’t always come naturally but once they understand and see their ability to positively impact their staff lives in this way, it becomes contagious.
The best way to teach is to lead by example. Consciously begin to speak those complements out loud when you are with your Executive Director or staff. “Wow Betty, you increased revenue 17.5% this month over last, how did you do it?” Oprah Winfrey always says that what people want more than anything else is to be “validated” to be “noticed” and to know that “they matter.” That is what recognition does for people and it’s easy and free to do.
As it relates to incentives, any business owner gets them when successful. Have a great year, you get a distribution of profits. Want your Executive Director to think like an owner, financially incentivize them on top and bottom line revenue. The reason I say top line revenue is that most have been trained to cut expenses to hit net operating income goals. There is nothing left to cut! Focus them on growing top line revenue while maintaining margins and you will drastically see improved performance. People get what they put their focus on. Ever wonder how your community always seems to hit budget? Hmmm…maybe it’s because you hold the Executive Director accountable to “hitting the budget every month.” How about you hold them accountable to 96% occupancy with a 35% net operating income margin?
Whatever it is you teach or expect of an Executive Director, reinforce it over and over. Do not change direction mid-way. One of the most frequent complaints we get from employees is that they have little confidence in their executive leadership team’s new initiatives because mid-way through they tend to lose focus or steam, ultimately changing direction. Most just wait it out a few months to see how serious their ownership or management group is before putting in effort toward new initiatives. That’s why when our team comes in, we oftentimes shock our clients by our determination to stay the course. We don’t relent, don’t give in and we push through when it gets tough because on the other side is that “staple free wall of potential,” the “rainbow we’ve been waiting for,” as the song says!”
6. OWNERSHIP OVER WINS AND LOSSES WITH ACCOUNTABILITY TO PERFORMANCES RESULTS
This is a tough one, but you must give your Executive Director the freedom to make decisions and to live with the consequences. The right Executive Director will learn fast, pivot and succeed the next time. The wrong one will be slow to learn from their mistakes, take few risks and oftentimes just coast through their day to day responsibility. You must raise the bar on Executive Director expectations and challenge them daily to think like owners, act like owners and deliver performance results like owners; and, tied to their own incentives that owners and investors see. I once had an owner tell me that every ED in his portfolio drove a BMW and not surprisingly, every one of his communities was full of a wait list and his NOI goals were hit. He incentivized them with an amazing car, and it worked! While some owners will think, “Well I don’t even drive a BMW, why would I offer one to my Executive Director?” others get it. It’s not about you, it’s about them and understanding what motivates people toward results. The best thing to do is ask your Executive Directors what motivates them? Is it money, extra time off, flextime, or a trip? What will create ownership over results?
7. ALLOW THEM TO SINK OR SWIM WHILE THROWING IN THE LIFE-RAFT WHEN NEEDED
Use decision making choices as a teaching opportunity. Many operators we work with desire to control every aspect of their organization. That is not scalable and in an industry where most operators are developing two to three communities per year, this will come back to bite you. It is vital that your Executive Directors learn and gain confidence through experience, education and reinforcement. Do not step in and make decisions for them or save them when they are floundering, let them learn what they need to learn. Just like you had to let go of the bike when your child was learning to ride, you must do the same with your Executive Director.
FEAR LIMITS GROWTH
Sounds a little scary doesn’t it? The payoff is self-sufficient Executive Directors who are empowered to make decisions and grow the business at the site level and who are rewarded for doing so. It means less regional oversight, and in turn payroll. It means happier residents, families and staff. Your investment in the proper hiring, training, reinforcement and recognition of growth minded Executive Directors means you as an operator or investor can scale because you’ve got the people to do so. Don’t let fear of the unknown stop you from your own company transformation. Consider each of these seven steps an individual staple, tackle one at a time and make room for new beginnings just as you will ask your Executive Directors to do.
We can help you get the wheels turning and training underway. Interested in a 6-Week Executive Director Business Leadership Academy for your organization? Click here