Senior Living Attracts Leaders From Other Industries, Retaining Them Is A Challenge

As the new year gets underway, senior living and care providers are making some leadership shifts. Recent moves include:

— Aegis Living named a new president and a new COO

— Aras Erekul exited as Watermark Retirement’s National Director of Integrative Wellbeing

— Trilogy Co-Founder and former CEO Randy Bufford has become CEO of Synchrony

The changes are not as dramatic as, say, Sunrise’s CEO change early last year; but, I do think they reflect notable challenges and trends in senior living.

In this week’s exclusive, members-only SHN+ update, I analyze these leadership transitions and offer key takeaways, including:

— Leaders from other industries are attracted to senior living; retaining them is a challenge

— Now is a time for providers to cultivate an entrepreneurial culture

— Covid challenges are burning out some leaders, energizing others

A retention challenge

I was disappointed to learn that Erekul has departed Watermark. He joined the Tucson-based provider in late 2019 after being in leadership with pioneering wellness company Canyon Ranch.

Watermark has been focused on wellness essentially since the company’s inception, and particularly since introducing an “integrative wellness” framework in 2018. Erekul’s mandate was to lead Watermark’s “grand vision for wellness” and create a unified approach for the company’s growing portfolio.

The relationship with Erekul ended on a “positive note,” a Watermark representative informed me, but the provider does not intend to fill his particular role going forward. Despite this, I’m sure Watermark will maintain its focus on wellness; at the recent SHN BUILD event in Chicago, Watermark Chief Investment Officer Brian Schachter reiterated that the company intends to create communities that promote wellness in their design and operations.

But while I’m sure that Watermark will forge ahead on its wellness strategy, Erekul brought some excitement and fresh energy into the senior living sector that I think will be missed.

For similar reasons, I was sad to see Cindy Kent recently depart as president of Brookdale Senior Living (NYSE: BKD); a former 3M executive and Best Buy board member, she joined Brookdale in Jan. 2020.

And senior living lost another exciting recent addition when Kris Engskov — former Starbucks executive and Clinton White House official — stepped down from his role as president of Aegis Living last fall.

I don’t have a lot of insight into why Erekul, Kent and Engskov left their senior living positions. Certainly, they did not anticipate a global pandemic when they joined the industry, and the stresses and shifts in strategy due to Covid-19 naturally might have influenced their decisions.

I do think it’s worth flagging that both Engskov and Kent moved on to join startups. Engksov will lead a private equity-backed home health startup. Kent is now COO of Everly Health, a digital health and diagnostics startup reportedly valued at around $3 billion.

There are many reasons why leaders from other sectors are drawn to senior living, including the mission-oriented nature of the industry and the demographically-driven growth curve. But I think talented and ambitious people also see that senior living is a rapidly maturing industry, and while a first generation of entrepreneurs has accomplished a lot and is still leading successful companies, a new generation of entrepreneurially-minded leaders can take senior living businesses to the next level.

Certainly, Engskov spoke to this belief. He compared the senior living industry to the coffee industry of two decades ago, when he first joined Starbucks.

“It was at the time a pretty small, entrepreneurial company that was values-oriented and thought it could change the industry and consumer tastes,” Engskov told SHN in 2019.

During the pandemic, senior living providers have been able to hire leaders from more dramatically destabilized industries such as hospitality and restaurants. To retain this talent, I think providers should evaluate whether they are empowering new hires to pursue novel ideas and push for innovation and growth.

This is not to say that Watermark or Aegis or Brookdale failed to do so, but to emphasize that simply attracting talent from other sectors is only the first step, and that the industry will only reap rewards in the long-term by retaining this type of talent.

Companies should be commended for attracting new talent to the industry in the first place — and in Aegis’ case, Engskov’s replacement also is someone that the company hired from outside senior living: Sandra Preyale, who has been Aegis’ chief people officer and previously worked for companies such as Amazon and Coach.

With Preyale’s promotion, Aegis elevated Lee Kaufmann to SVP of HR. Kaufmann also joined senior living after forging a career in another field — retail — with a resume that includes Zales, Target, Nordstrom and Gap.

So despite parting ways with Engskov, Aegis is a strong example of how senior living can attract and retain diverse talent from other industries. In fact, CEO Dwayne Clark has compared hiring to making a quilt — “one patch may be Amazon, one patch may be Starbucks, one patch may be Nordstrom, one patch may be Costco, one patch may be Four Seasons.”

And he credits this infusion of talent with driving Aegis’ strong performance:

“I think that’s our essence. That’s what makes us unique, better, more sophisticated. It’s what creates the value and why we’re able to charge the most, why our margins are the best. All that’s not by accident, it’s by design.”

Bufford’s return

Providing one example of an entrepreneur who helped create senior living and is still going strong, Randy Bufford has taken on the CEO role at Synchrony.

As Co-Founder and former CEO of Louisville, Kentucky-based Trilogy, Bufford is highly regarded within the industry, with other executives in the field citing Trilogy as a model they are seeking to emulate.

One defining aspect of Trilogy is the company’s diversification — the portfolio is nearly a 50/50 mix of senior living and skilled nursing communities, and Trilogy also has a number of ancillary services businesses.

Now, those ancillary services of pharmacy, therapy and lab are being brought together under the Synchrony brand, with Bufford coming in to lead the combined entity.

This brings Bufford back into an executive role after stepping down as Trilogy’s CEO in 2019 and transitioning to chairman of the board. And I believe he’s once again in a position to help keep Trilogy a model that other providers look toward.

More providers perceive the need to diversify revenue streams in light of Covid-19 occupancy losses, while also driving toward greater health care and clinical capabilities in order to deliver more coordinated services. These are among the major goals of Synchrony.

“What I discovered as I dug in a little bit over here is we’re not collaborating internally for the clinical outcomes that we want to have, so back last summer, we said, look, we’ve got to step this up,” Bufford told Senior Housing News, speaking of how the ancillary services were working with each other and Trilogy communities.

In addition to achieving greater collaboration, he also is aiming to raise capital to further expand Synchrony and enhance its services both for its primary client — Trilogy — as well as other organizations.

In explaining his decision to become Synchrony’s CEO, Bufford said that he sees this as a way to contribute toward Trilogy’s Covid-19 recovery, given that CEO Leigh Ann Barney has an enormous challenge in focusing on the core senior living and skilled nursing business. He’s “Trilogy for life” and energized by the task at hand:

“Even though I’m an older dude, I still love working and love what I do and have a passion,” he said.

I think his comments get at an aspect of the senior living industry that has sometimes been overlooked in the last two years. There’s been a lot of chatter about Covid-19 leading to burnout and precipitating CEO turnover, which undoubtedly is happening in some cases.

But I’ve also observed that many long-time leaders, including many of the entrepreneurs who have built and led their businesses for decades, have risen to the challenges of Covid-19 with renewed vigor and — to use Bufford’s word — passion.

I consider Aegis’ Dwayne Clark another example; from the earliest days of the pandemic, he was speaking out about the company’s Covid-19 protocols, the research and work he was doing with health care experts, and playing a leadership role in the industry’s response.

Likewise, Juniper Communities’ Lynne Katzmann and Kisco Senior Living’s Andy Kohlberg were on the leading edge of innovations in testing, and they expanded their portfolios in the midst of the pandemic. Just yesterday, we published a piece that Lynne penned, sharing her vision for a new senior living model to pursue in 2022 and beyond, informed in part by the pandemic.

I could cite other examples as well, and the industry is lucky to have this class of leaders — as we see that consumer demand and confidence remain robust, they should be thanked for the role that their knowledge and commitment played in keeping senior living strong and as safe as possible in the last two years.

But another comment that Bufford made also made an impression on me, as he described the Trilogy board of directors floating the Synchrony CEO position to him:

“They said, ‘Hey, do you want to do this? Do you want to sign up for four or five years?’”

The “four of five years” underscores that Bufford and the board already are thinking about how long his tenure will be and, I’m sure, they are or will be working on succession planning.

Just as Bufford is a role model for how he led Trilogy, I think he is a role model in acknowledging a timeline on his tenure at Synchrony.

Given their zeal for the industry and seemingly boundless drive to build their businesses, handing off to new leaders could be among the hardest challenges that senior living pioneers have faced.

Whether they recruit from outside the industry or promote from within, I believe finding new leaders who share their entrepreneurial spirit, and allowing that spirit to flourish while passing on some of their deep expertise, will be among the greatest aspects of their legacy.