Confessions of a Chief Strategy Officer: Senior Housing Industry Lacks Imagination

Too much so-called senior living innovation is not innovative at all. And unless the industry becomes more imaginative and nimble, it could be “toast,” despite the huge coming wave of aging baby boomers.

That’s according to one chief strategy officer with a senior living provider company, who is featured in this latest latest installment of Senior Housing News’ “Confessions” series.

The goal of this series is to share candid perspectives that might be hard–but helpful–for readers to hear. To encourage this level of honesty, the chief strategy officer has been kept anonymous.

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Do you work in the senior living industry? Do you want to participate in the “Confessions” series? Email me at: [email protected] Confidentiality will be maintained for all sources for this series.

Do you think senior living providers pay enough attention to long-term strategy, or have a firm understanding of what good strategic planning involves? Do you think there are enough chief strategy officers in the industry?

I think it’s less a question of paying attention to strategic planning and more an issue of doing the right kind of planning. Strategy isn’t about goals and objectives—it’s about identifying a clear, coherent set of actions that an organization needs to implement in order to achieve its reason for being. And that reason for being, as Harvard Business School Professor Clayton Christensen says, is to do the job customers hire us to do.

Based on the undifferentiated, cookie-cutter products our industry is selling in the marketplace, we have a very limited understanding of what customers actually want and need.

Developing a deeper understanding of our customers, their needs and desires, and then turning those insights into an actionable strategy should result in a rich array of solutions focused on different sets of demands. Instead we have an entire industry pretty much executing from the same unimaginative playbook. It’s depressing.

Beyond bolder strategic thinking, we also have serious issues with our tactical execution. There was an interesting article recently in the Harvard Business Review about the strategy-execution gap. I think everyone can point to examples of planning where the blame was put on implementation—“We had a great plan but we failed to execute it.”

But the article suggests the bigger problem is flawed planning—too many companies still following the old “plan-then-do” approach. There’s just too much rapid change and uncertainty in the world today for this kind of approach. One of our biggest problems as an industry is that we are soooo slow to change. If we don’t start to adopt a more agile, test-and-learn approach (“decide-do/refine-do” in the article), then we’re going to be screwed.

Rather than ask the question “Do you think there are enough chief strategy officers in the industry,” ask yourself if there are enough strategic thinkers, whatever the title. My answer would be no. Too many people in senior living have been trained to be very A to Z in their thinking, very punch-list-oriented … tactical rather than strategic. And very risk-averse. We need more people who can look beyond the obvious and what we’ve been doing for years, who can think strategically and execute tactically. Or at least play well with and appropriately guide the tacticians.

Demographics are going to favor senior living in the future, but sometimes I wonder if the industry is being too complacent, and that some companies’ “strategy” is just to wait until aging baby boomer come knocking. Am I being unfair? 

The Silver Tsunami as the greatest business opportunity since the G.I. Generation for our industry is a crock.

OK, maybe the opportunity isn’t a crock, but the knee-jerk assumption that it’s going to lift everyone’s boats is. The next wave of older adults has even less interest in our products than the generations living in communities today. Any other industry that has a total market penetration of less than 10% would have been declared a failure long ago. There should be alarm bells ringing in every senior living organization.

Our current customer was largely raised during the Depression, a time of great deprivation. I think that’s one reason they’ve been so forgiving of the so-so living experiences we deliver … anything’s better than the Depression, right?

These folks are going to be replaced by one of the most demanding generations in history. Baby boomers have changed every industry they’ve come in contact with, and senior living will not be the exception. Those who think they’ll settle for what our industry currently puts out there are fooling themselves.

Most of our current customers choose us out of necessity, not because we’re doing such an awesome job of delivering a rich, purposeful life experience. We love to tell people that after moving in, our residents always say they wish they had done it sooner. But there are far more people who are happy not to have made the move. A prospect’s home is always our biggest competitor, and technology and various cultural shifts are making it a tougher competitor every day.

Safe to say that you think the industry is not being innovative enough in developing products and services for the future?

The short answer is no, we’re not innovative at all, and we should probably retire the word because most people don’t know what it means. They also don’t understand that there are several different types of innovation. Some forms are focused on the innermost workings of an enterprise and its business systems and achieving greater efficiencies. Others are about service performance. Many are experiential.

Adding more dining venues isn’t innovative. Having an electronic health records system isn’t innovative. Much of what we see as a senior living innovation is usually pretty common in the “real world.” The thing you have to remember is that prospective residents and their families aren’t simply comparing your community to other communities; they’re comparing you to the world they live in.

That world has universally available Wi-Fi and voice-assist technologies (hi, Alexa) and transportation on demand and dining on demand and so on. That’s what I mean when I say the home is one tough competitor.

There’s an entire world of innovation out there that we can either take advantage of and weave seamlessly into our communities, or we can continue to make excuses why we only have Wi-Fi in our common areas. Imagine telling someone that you only have electricity available in the common areas, but if they run a really long extension cord you can light them up. It’s almost that ridiculous.

What are the biggest challenges to being innovative in senior living?

I think the biggest challenges are (1) fear of failure and (2) resistance to change.

To be innovative, you have to be comfortable living in a rapidly changing world with lots of unknowns and greater comfort with failure. We’re understandably risk-averse because when we fail, there are sometimes real lives at stake. But that doesn’t mean we should avoid failure at all costs. We learn more from failure than from success.

Lack of capital is often cited as a constraint on innovation, but sometimes I think that’s really just an excuse. Where you spend signals where your priorities lie. I will say, however, that investors in our industry need to stop thinking of senior living simply as a real estate play and start looking at funding product development and operations.

How do you think real innovation is achieved? Do you need to balance being realistic and meeting the market where it is, versus getting ahead of the curve?

As I think I said earlier, successful innovation begins and ends with a deep, empathetic understanding of your customer and her needs. We talk a lot in this industry about our need to deliver patient-centered care. What about delivering customer-centered experiences? Too much of our product was either designed decades ago with very little changing over time, or designed with our business imperatives dictating what we deliver and how we do it.

The typical dining experience of limited venues and limited hours isn’t reflective of how people want to eat. It reflects planning based on certain business objectives, staffing models, etc. The same thing goes for transportation. People want to go where they want to go, when they want to go. Instead we tell them that the bus runs at this time to this short list of destinations. These are pretty basic needs our residents have, but we’ve got to do better to align product and service design and delivery with what they actually want and need.

Our industry spends spectacular amounts of money on bricks and mortar and not nearly enough on experience design. Some of the most engaging and profound experiences can be found in relatively modest settings. We need to get our priorities in order.

What’s your biggest pet peeve(s) in your role as chief strategy officer? What are some things that make it harder for you to succeed in your job?

When strategic execution gets derailed because new “opportunities” suddenly appear to distract us. If the new penny is sufficiently shiny, people trip over themselves trying to explain how this new thing actually IS in alignment with our strategy, so let’s go chase it … What’s particularly frustrating is that the original choices often come after months of deliberate planning, while the shiny penny is pursued with less rigorous attention.

Strategy is about making choices. Those choices are bets on what’s the highest and best use of limited resources. Being nimble and adapting as we learn what works and what doesn’t is absolutely critical, but you can’t do everything.

Another big strategic challenge is finding and committing talent to innovation projects. Your best people are usually already over-committed to immediate operational priorities. Adding future-focused work on top of addressing immediate organizational needs is asking a lot of your team. Some would argue that you need a separate, dedicated group that focuses on developing new initiatives, but you’ve got to involve the people who ultimately will have to put new ideas into practice.

Ideally, innovation comes out of an ongoing dialogue between subject-matter experts, the customers you serve and smart people who may have limited knowledge of your product, but whose lack of knowledge enables them to ask the right questions and suggest things that those of us too close to current product might never consider.

What do you wish people (either in your own company or in the industry as a whole) understood better about your job, what you do each day and what your function is in your enterprise?

Staying on top of strategic execution is hard in a big, complex organization. You typically have scores of people throughout the company who are operationalizing their interpretation of the strategic direction. Ongoing involvement and communication are critical for the person who has been tasked with the responsibility of ensuring we’re on the right strategic course. It’s easy for busy people to leave you off the e-mail list, or out of a meeting, when you need to be in the loop on so many things.

It may feel to some like a control issue, but it isn’t. Well, maybe it is a little.

What is keeping you up at night, from a business perspective?

How emerging technologies, resistance to change, deep emotional ties to the home and the financial realities for so many people conspire to keep people out of our product. If we don’t build a congregate living experience that makes staying at home pale in comparison, then we are toast.

Previously in this series:

Confessions of a Senior Housing Architect

Confessions of a Senior Living Operator