Single-site Life Plan Communities have never had more challenges, disruptions and headwinds than at present. Higher capital costs, labor shortages and increasing labor costs as well as overall increasing operational costs are pushing some organizations to the point of imminent demise. Adding to those concerns are disruptions arising from new technologies and new competitors that demand a place among the list of concerns that keep CEOs up at night. Lack of succession planning at the C-suite level, as well as at the board member level, can create a special set of troubling concerns for some organizations that may necessitate merging or affiliating with larger organizations to gain stability.
But there is a lot to be said for remaining independent by avoiding merging or affiliating. However, this cannot occur without significant determination and deliberate action to do so.
The key is staying financially healthy, flexible and forward-thinking enough to respond to change before an organization finds itself with limited options. The following thoughts come to mind when considering how a single-site community can transform itself into the community of tomorrow while remaining as a single-site organization.
1. Embrace Disruption – It Is Here to Stay
Innovation expert Nicholas Webb describes three forces shaping the future of senior living:
- Hyperconsumerism
- Emerging technologies
- Human experience innovation
We live in an era from Instacart to Amazon same-day delivery to instant information from Dr. Google. It is not unreasonable to think that residents will want similar experiences from organizations where they “invest” their life savings. Residents have and will continue to have high expectations developed by society’s hyperconsumerism mindset.
Staff will want similar experiences and show up to work with similar expectations and, if not met, will eventually not show up to work at all.
A Life Plan Community that creates memorable experiences and offers high value propositions to residents and staff will have a much higher chance of long-term operational success. These areas should be measured frequently by resident and staff satisfaction and engagement surveys to make sure technology has not undermined trust and the human side of care. New technology examples include predictive analytics to anticipate healthcare needs, AI-driven tools for staff scheduling or fall prevention and virtual communication.
Disruption should be seen as an opportunity rather than a threat.
2. Use Technology to Amplify, not Endanger,Your Reputation
As Webb argues, true innovation lies at the “intersection of human experience and technology.” New technologies can be a differentiator between competitors and establish organizations as leaders in senior care. Life Plan Communities must simultaneously embrace new technologies but not at the expense of losing their reputation of high-touch service and positive experiences for their residents and staff.
3. Create Financial Strength and Flexibility
For a Life Plan Community to remain independent, it must be financially sound with a rigorous process for measuring financial performance on a regular basis. One of the main reasons often observed for having to merge or affiliate is unstable or poor financial performance and weak balance sheets.
Healthy reserves provide financial flexibility and allow organizations to reinvest in themselves to prevent deferred maintenance. Fee structures must continually be evaluated and changed as needed to ensure key ratios and cash reserves are not eroding with inflation or service creep in not charging for services provided.
4. Protect Your Reputation and EnhanceYour Value Proposition
A Life Plan Community’s reputation is its single most important asset. It may take years to build but only a relatively short time to diminish or destroy altogether. To protect that reputation, a single-site community must continually evaluate and improve its value proposition. Current and future residents want assurance that their decision to live in the community is worth it.
Ensure that the resident experience is part of the organization’s competitive advantage. Residents today expect clear communication, visible accountability and a genuine focus on quality of life. A strong reputation grows from a culture of trust and responsiveness built daily.
5. Allow Residents to Become Partners inthe Journey
Today’s residents want accountability and transparency, especially in matters of the organization’s financial condition or proposed building plans that may be perceived to threaten or weaken financial condition. Develop opportunities or governance structures for periodic interaction and communication with residents to increase trust. Tap into areas of expertise that residents bring to enhance the culture of the organization. Resident collaboration with clear boundaries can become a strong competitive advantage for a Life Plan Community. Residents can be strong partners and advocates for the success of the organization.
6. Develop a Talented and Forward-Thinking Board
A single-site Life Plan Community must have a board of directors that is informed, engaged and forward-looking. A high-performing board understands that its role is not only to oversee today’s operations, but also to prepare for tomorrow’s possibilities and realities. That requires:
- Long-term vision: looking ahead beyond justone budget cycle at a time.
- The rightexpertise: a mix of skills infinance, law, healthcare, philanthropy, technology, construction and real estate, to name a few, ensures that the board can make well-rounded decisions.
- Courage and adaptability: readiness tosupporttimely, sometimes difficult choices in the interest of long-term viability and sustainability.
Prepared and equipped boards can provide stability and foresight that avoid the need to merge or affiliate.
7. Build a Strong Culture
Peter Drucker once said, “Culture eats strategy for breakfast.” Without a strong and healthy culture, strategy falters and is destined for failure. The CEO often sets the cultural tone for the entire organization—the “tone at the top” influences how people communicate, how decisions are made and how challenges are managed. Successes and failures of an organization rise and fall on the positive and negative characteristics and leadership style of the CEO.
8. Partner to Accomplish More
Remaining independent does not have to mean standing alone. According to Mark Brigman, author of Partnernomics: The Art, Science, and Processesof Developing Successful Strategic Partnerships, a “strategic partnership is a contractual relationship between two or more companies where the mutual intent is to create a competitive advantage.” Partnerships, when structured correctly, do not give up independence. Examples might include joint purchasing programs, shared staff training, shared services for IT or back-office accounting services or collaborations with local universities, hospitals or health networks.
As the African proverb goes, “If you want to go fast, go alone. If you want to go far, go together.” Remaining independent and collaborating with a partner can work synergistically where the results are greater together than working apart. One such example is Novare, which is a group of single-site and small-system Life Plan Communities that have come together through a formal limited liability partnership to collaborate on issues facing the senior living field and individual operational issues all of us deal with on a regular basis. My organization has benefited tremendously from being a member of Novare. We all remain independent but are certainly stronger together.
Conclusion
While the future may not be easy for single-site Life Plan Communities, they can survive and thrive if they embrace disruption as an opportunity rather than a challenge. They must protect the reputation and value proposition by periodically surveying their residents and staff to understand how they are doing rather than assuming all is well. Remaining independent requires financial strength, wise governance in the board room through capable board leadership and the willingness to innovate in both technology and human experience. Organizations that will thrive are those that stay close to their mission, value their residents as partners and lead with intentional clarity and determination to remain.
