CEO Fresh Take: Achieving Walt Disney-Level Customer Service

Is Lutheran Homes of South Carolina (LHSC) CEO Frank Shepke trying to be Walt Disney?

Well, you could sort of say that.

Since joining Irmo, South Carolina-based LHSC in February 2015, Shepke has made it one of his goals to guarantee the customer service LHSC provides is worthy of “five stars,” emulating the customer service programs pioneered by the greats: Conrad Hilton, J.W. Marriott and, of course, Walt Disney.

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Frank Shepke
Frank Shepke

Similar goals have been set by for-profit senior housing executives before. Shepke, at the helm of a nonprofit, has adopted the mission as his own.

LHSC owns and manages five continuing care retirement communities (CCRCs), a non-medical home service and a hospice program. Prior to joining LHSC, Shepke served as vice president of operations for Heritage Enterprises, one of the largest, privately held health care providers in Illinois.

This is the latest installment of CEO Fresh Take, a series of conversations with nonprofit CEOs who are taking the reins as signs point to more urgency around scaling up and competing with a booming for-profit sector.

SHN: What, in your opinion, is in store for the senior housing industry?

FS: Our industry is changing rapidly and the rate of change seems to be doubling every year. Of course, I’ve noted the consolidation that’s occurring. I believe that this will continue and eventually make it extremely difficult for small operators to remain competitive and in business unless they have a very boutique or niche offering.

I also think the industry will need to continue to develop more affordable options, as many baby boomers were not as good at saving as their parents. Being able to compete on price and quality simultaneously will be important.

SHN: Does LHSC plan to adapt to the influx of baby boomers?

FS: We do plan to adapt. Baby boomers have high expectations—these expectations are probably going to be one of the main issues we’ll be confronted with.

SHN: What kind of expectations are you anticipating?

FS: To start, a “one-size-fits-all” model doesn’t work anymore. Baby boomers desire more flexibility in contracts for residential care—having flexibility is going to be critical.

Baby boomers also have an appetite for larger units and more amenities. I do think we need more affordable rental options for baby boomers.

SHN: What role do you envision technology playing in the future of the industry?

FS: I think technology and its use in “smart apartments” and cottages will continue to grow. Our new residents live in the “online world,” so things like communication, safety, monitoring and maintaining a healthy lifestyle will all be enhanced and driven through an electronic medium.

At LHSC, we foresee continued growth and expansion of our technology platforms to better use analytics in our quality improvement efforts. We are fully committed to the use of technology for services for our clients and the betterment of our organization.

SHN: What other trends are you seeing in the industry?

FS: I’m seeing people desiring to age in place for as long as possible, an influx of new operators funded by real estate investment trusts (REITs), and the building of new continuing care retirement communities by private equity.

I’m also seeing wellness programs in all levels of care, from independent living through skilled nursing, and more CCRC “at home” programs. LHSC has a new one called “Be Well at Home.”

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SHN: What’s at the top of your agenda as a new CEO?

FS: I know some new executives come in with plans for what they will do in the first 100 days, and honestly I had some of these notions. But I found it was more important to do some listening to find out what our people thought were the most important issues. We were able to work on revitalizing our strategic plan, and it’s my intent and hope to deliver on the many areas of growth and improvement we’ve identified. My hopes are to infuse a sense of excitement and urgency in delivering on our promise of quality care for the aging population of South Carolina.

SHN: What’s in store for LHSC in 2016?

FS: Among other things, we’re planning to enhance our customer service programming to deliver world class services—comparable to what you might find at a Walt Disney operation. Many providers say they have “world class services,” but few have the data or outcomes to support those claims. Our approach will be evidence- and outcome-based to show that we can “walk the talk.”

SHN: Walt Disney—can you expand on that?

FS: Sure. Health care and senior living has grown so much over the last five years that people often think about it as a commodity, and they struggle to differentiate the quality claims and promises of providers. I really believe that innovators like Conrad Hilton, J.W. Marriott and Walt Disney got it right when they focused their efforts not only on the service, but on how people feel about those services. We remember how the staff members make us feel much longer in many instances than the actual service itself.

At LHSC, we have embarked on developing a true “5-star” customer service program. We’re envisioning an organization-wide effort that will include training for every employee and measurement of our performance at all levels. We want to create a mark of distinction to differentiate us from other providers in our markets.

This initiative has received the full support of our Board of Directors and management. We also anticipate making it a significant part of the evaluation of all of our employees— it will be tied to their compensation. One of the names suggested for the program that I really like is “Five Alive,” meaning it only takes five extra minutes of effort to create a 5-star experience for those we serve. I really think this is the type of effort that our clientele expect and deserve.

SHN: What else is in store for this year?

FS: We’re also working on expanding our partnerships with hospitals and the acute care community, as we are positioning ourselves to be a quality partner in the post-acute continuum—including participation in accountable care networks.

That said, we are actively trying to partner and be ready for ACOs in South Carolina. It’s critical for us to be a very well-versed partner.

We’re also planning to expand our wellness and home- and community -based programming, including non-medical home care, hospice and our “Be Well at Home” programming.

SHN: Does LHSC plan to adopt the term “Life Plan Community?”

FS: We wanted to take that on, but we’re having a dialogue with the state about whether we can include that terminology in our licensing.

SHN: Are nonprofits at a competitive disadvantage right now, or have they been in the last few years?

FS: I think we are at a competitive advantage for having a spiritual component built into our offering. Unlike some organizations that distance themselves from their faith-based origins, I think you’ll find more providers looking for opportunities to meld wellness—both physical and spiritual—into their offerings and provide a more holistic approach to care that people desire. I think we’re well ahead of the game on that at LHSC, and we intend to stay there.

SHN: What’s the most exciting thing LHSC has done since you’ve taken the helm?

FS: Launching our new location at Rice Estates, a 44-bed rehab facility.

Perhaps down the road we’ll expand our residential offerings to supplement these 44 beds of nursing care. The independent living programming at our Heritage at Lowman campus is scheduled for next year.

Written by Mary Kate Nelson

Read previous CEO Fresh Take interviews:

Improving the Bottom Line with ‘Gatorade Philosophy’

Why CCRCs Need to Turn Competitors Into Allies

How ACTS Invests Big in Both People, Property

How Nonprofits Should Use Their Competitive Advantages

Embracing Seniors’ Aging-in-Place Dreams

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