For over 20 years, Jesse Marinko has worked in the senior housing industry, holding multiple positions with major brands such as Sunrise and Benchmark before launching Phoenix Senior Living in 2014.
Through the Changemakers series, Marinko shares his journey of growing Phoenix to a portfolio of 63 communities in the southeastern U.S.
Marinko describes the importance of serving the middle-market more efficiently and effectively in the coming years, and he talks about the lessons and experiences he took away from the pandemic. He also provides insight into his approach to change with respect to timing, strategy and infrastructure.
Looking back on your career in senior living, what changes have you led that you’re especially proud of?
During my time at Benchmark and my time here in Phoenix under my own flag, I’ve prided myself on recognizing the industry’s youth, in terms of how long our industry has been in place.
There’s not only a talent shortage, but also a recruitment shortage, and that has been a focused effort at Phoenix.
We’ve made a strong effort to create training and educational platforms built for high-touchpoint customer service people by understanding how effective tactics in other industries could translate into senior housing. That’s not the norm, and I am proud of our effort.
For senior housing to succeed in its infancy, we’re going to have to bring in new talent and train people who don’t have tried and true senior housing experience. At Phoenix, we recognized that early, and we created a branded model, recognizing the gaps in service offerings for markets and creating a blended solution, whether that’s middle market or our new Hammocks brand.
It’s basically like if an active adult met an independent living community and had a baby. You bring all the services of an IL into an active adult environment. You build a clubhouse that is staffed and managed correctly. You build a lot of non-wasted space. I am proud of the company, both Phoenix Senior Living and Phoenix Development Group, for taking this progressive lens.
Do you consider yourself a changemaker, and are you excited by the idea of change even when it might be difficult?
I love challenging the norm, but I don’t have a desire for defiance.
You have to really separate those two, because some people want to go against the grain for the sake of going against the grain. Coming from a true Southern background, the best saying my mom ever told me was, “You have two ears and one mouth for a reason: shut up and listen to what people are saying.” I believe in listening … instead of assuming that I understand the issues inside and out.
I am not afraid to try something new, but I need an explanation of the ‘why.’ I want to understand the problems and whether a non-traditional solution will lead to a better outcome, but I am open to doing something that others haven’t done, because this industry requires change. It cannot afford to stay stagnant.
The transition from the greatest generation to the baby boomers is night-and-day, and each of those models is totally different. I’m excited how the new consumers’ needs drive the shift to a more customized senior housing experience. With that, I think you’re going to get exactly what you want at a higher quality.
What are some ways you think senior living needs to change in the next five years?
Again, we have to figure out how to serve the middle-market model effectively and efficiently, and we have to attract labor. If you are only going to run a high-end, market-rate senior housing company, I think growth will be pretty tough over the next 5 to 10 years. The greatest number of people need $2,500 to $3,500 [a month] senior housing.
Then, I think people who have cut their teeth at larger shops should continue to spin off and create their own shops. That forces the local cultural norms onto organizations because the leaders are close to the business. They’re out there preaching the message with more motivated employees and better execution on planning.
I don’t think size necessarily has to dictate a lack of quality. What dictates a lack of quality is the absence of leadership from the business. It just means as we get bigger, I have to work harder to stay plugged in.
Talk about a time when you tried to execute a change and it did not go according to plan. How did you pivot and what did you learn from that situation?
COVID happened and nobody knew what to do. When that first happened, we saw all the health systems reaching out, saying, “We’re over-bedded, what are we going to do? Do you have any beds?”
So, we made a big announcement that we emptied out one of our communities and made it a COVID positive haven to partner with the health care systems.
We lost a ton of money on it. However, because I had good partners, everyone understood our intent. It was a good moral decision, but a bad business decision. I thought it could potentially create a profit, but it led to even more losses than we were experiencing before. We were so wrapped up in caring for the residents that by the time we looked up, [some] of the residents never paid a dime. The health care systems — Northside, Emory and WellStar — were great … My biggest takeaway is that if we moved a little slower and did a little more fact-checking on the front end, we would’ve been much better off in the long run.
Those are great examples. We’ve talked about this a little bit in the past but even though that didn’t work out from a financial perspective to take in the COVID residents, did it create goodwill with your local health systems?
They know who we are, but I hoped it would have created a long-term health care partner relationship. It did not. Here’s the thing — health care systems are an ecosystem all their own … If you ask them who are, they would say, ‘They’re a nice company that helped us.’ But they don’t send us more referrals.
How do you innovate without getting so far ahead of the market that a new idea doesn’t work?
If you want change, the captain can never leave the helm of the ship. You have to stay there and be willing to answer all the questions, all the rebuttals, all the whys, all the nos. If you believe in change, you have to spearhead it because change is never convenient. You’re never going to be ready for change. I was never ready to start Phoenix. Paul Klaassen was never ready to start Sunrise. At some point you just make the decision to do it. Wherever the hell the chips fell, they fell.
I’ve pushed and initiated many change programs that were out of the norm. I got a lot of questions and resistance, but I thought we could pilot it in one location, then roll it out across all 60 if it worked.
Timing will never work in your favor. Just start the dialogue, work through the problems and questions, come up with solutions and be receptive to their feedback. The program might not necessarily be exactly how you envisioned it, but as long as the intent of the initiative is still intact, that’s all that matters.
Do you agree that Changemakers are risk-takers? How would you describe your own appetite for risk?
‘Risk’ is the way to explain someone’s uneasiness with your decision. At the end of the day, we could all say risk is as simple as taking a right turn down a road you’ve never gone before. Risk is being fed up with the results you’re getting and tired enough to try something new. But my appetite for risk is certainly higher than most. I started my own company with zero institutional capital.
When I told my wife I was quitting my corporate job at Benchmark to start my own company, she was like, “What the hell are you talking about? Are you crazy? Are you really doing this?” To me, it was the most sound, educated decision I’ve ever made. I knew the risk and I didn’t think it was risky. On the surface, many people would disagree. But I understood that I had to raise capital, find a good site and create a [project portfolio management] methodology to raise money.
I had investors … I had good relationships with banks. I knew it might take a little bit of work, but I felt like it was going to get done.
How do you think senior living can facilitate more diversity, equity and inclusion in the coming years?
I am very fortunate to have a mother who was a big pioneer of women in leadership. My mom was a senior salesperson for Emory Healthcare, and she also served as a vice president and senior vice president for Sunrise. She was a senior vice president at Benchmark as well. For me, seeing women in leadership was natural. For my organization, I have no qualms with anybody stepping up so long as they have the capabilities and leadership ability.
We recently were lucky enough to bring Summer Blizzard aboard as our VP of Business Optimization Asset Management. Yolanda Hunter was my number two hire, and she helped me grow the business tremendously. Since then, I’ve been able to motivate her to start her own company. Now she owns her own company, where she does health care training platforms in multiple states.
Those are the types of things I’m proud of with respect to diversity and inclusion, and it’s always been part of the fabric of who we are from day one.
Are there any particular technologies you have found especially effective in driving change or that hold a lot of promise for the future?
Continuing down the path of electronic medical records is going to be huge. With that said, I think the limitations [on care] the state regulators put on us undermine the importance of electronic medical records … If I can’t give clinical care, then do electronic medical records really matter? Probably not.
I think right now, from a technology perspective, the more intuitive we can be on financials, sales and marketing, the better off we will be.
Our industry really focuses on giving personalized concierge care. I think the more intuitive we can become with consumer needs through programs like LifeLoop that track the number of activities a resident goes to, the more success we will see. Data around how people interact with our properties will become the most influential data in my opinion.