The Northbridge Companies CEO Jim Coughlin and President Wendy Nowokunski founded the organization on the principle of doing well by doing good. And through much change over the last 30 years, they have remained true to that intention.
Through the Changemakers series, Coughlin and Nowokunski talk about the key lessons they’ve learned throughout decades in the senior living industry. Now with nearly 20 senior living communities in Connecticut, Maine, Massachusetts and New Hampshire, they discuss their approach to mitigating the risks associated with change, and they provide insight into the diversity, equity and inclusion initiatives that differentiate The Northbridge Companies in a competitive market.
As you think back on your careers in senior living, what changes have you driven at Northbridge or in the industry that you’re especially proud of?
Wendy: I’ve been in the business for over 30 years now. One of the benefits we bring at Northbridge is our experience. I’ve gone from life care communities and continuing care communities to assisted living evolving as a residential alternative to nursing homes. I have seen a lot of change happen in the last 30 years.
I always say senior living used to be the broccoli on the plate of the four major food groups of real estate. It’s really come into its own because even during the downtimes, senior housing is the only real estate that continues to perform. Because we’re not just real estate, we are a need-based service industry.
People have taken notice of the fact that this is a great investment and the demographics are in our favor. The traditional real estate investor has definitely taken note of that and we are no longer that broccoli on the plate.
It’s interesting because right now, we’re going through a staffing challenge and people are always saying, “Well, senior living isn’t sexy, and that’s why we can’t attract new and different people to our business.” Even though we’re no longer broccoli, we’re still trying to be sexy as a career opportunity for people in the future, and we’re getting there.
Jim: In our thirty-plus years in this industry, Wendy and I have had the benefit of learning from some of the best and the brightest — the early pioneers of senior living. We were part of some really interesting startups at the forefront of figuring out how to make assisted living work in the United States.
As things have progressed, it is interesting to watch how capital providers in this space have grown to respect and understand the importance of partnering with the right operator. That wasn’t always the case — operators were viewed as a dime a dozen. But you’re either committed to this business or you’re not, relative to operations, and it requires a significant investment and a significant commitment to culture and the like.
That’s what I’m proudest of at Northbridge. Wendy and I have always been culture mavens because it’s important for the business to succeed, but it’s also important to drive results.
You need to be a compassionate caregiver to commit yourself to this business and without that culture, it’s not going to work. Post-pandemic, a fair share of resumes are coming from people who just weren’t valued during the crisis, saying, “I need to be part of a platform that recognizes my talents and also rewards me for my level of commitment to this business.”
Some people are very content with the role that they play but there are others that are really trying to improve their position. We’ve recognized the importance of understanding their personal goals and seeing if they fit within our organization. That may mean an investment on our part, but it’s been surprising to see how simple it is to remove roadblocks by contributing $500 for books and paying a fee for CNA training. We’re working hard on that and it’s exciting to see people grow.
Last week, we promoted six people, some of whom started on the care side and are now moving into leadership roles. That’s exciting to see.
Wendy: Yes. As an industry, I think we need to be better at not only engaging and growing talent from within our own organizations, but also educating people on senior living as a solid, desirable, fulfilling career choice. A lot of us have workforce development committees and we are working towards that ideal. How do we do that?
We as Northbridge have always partnered on both ends of the spectrum, educating high school students early through our Seniors to Seniors program, where seniors get credit for working a semester in our communities.
We give them training and experience in each department, and I believe our grassroots approach has made an impact.
It is important to recognize and seize opportunities, but also on a global level, it is critical to be positioning senior living as a viable career opportunity that isn’t going away. We need 1.5 million caregivers in the next five years, so where are they going to come from? We need to grow our talent from within and attract and educate people from other industries and push for better immigration policies.
Do you see yourselves as changemakers? And are you always excited to drive change?
Jim: Both Wendy and I are serial entrepreneurs, and there is an intellectual curiosity we’ve applied to senior housing focused on where this business is going. I was with a lender the other day because he was espousing that the demographics were right before us with the baby boomers coming into senior housing and how lucky I was to be in that position.
I said, yes — but it only took me 30-plus years to get here!
I think being comfortable being an entrepreneur and taking prudent risk has enabled Wendy and I to establish a very strong partnership, because when you’re taking risks, it’s always good to be managing that risk and bouncing ideas off of each other. The magic of our partnership at Northbridge is being able to draw upon our experiences and our seasoned team members’ experiences with other platforms.
That’s the most exciting part of being a change agent today and candidly, what enabled us to navigate through COVID so successfully is we’re always managing risk and figuring out how to take advantage of a situation.
In 2008, when everybody else was saying, “Uh-oh, this is a problem,” the families that support us from a financial standpoint were very aggressive in pursuing opportunities. They empowered us to buy some distressed land sites and start construction at very compelling pricing when nobody else was building. We did 11 transactions in the middle of the crisis. We’re deeply committed to this space and we know there’s opportunity.
Wendy: Change is constant. It’s not something that goes away, and I think because Jim and I have the intellectual curiosity he discussed, we’re always eager to learn. We’re always learning from our customers, residents and associates.
We sit down with a cross-section of leadership and frontline associates to understand what’s going on with their lives, their jobs and their residents’ lives. While change is constant, I think we are very good at keeping a pulse on what is going on out there, whether it’s the market, consumer wants and desires or our associates’ needs. That has benefited us both in times of crisis and times of opportunity, and it’s helped us be the best that we can be.
Talk about a time when you tried to execute a change and things didn’t go according to plan. How did you pivot and what did you learn as a leader?
Jim: I tend to be the one who focuses on acquisitions and growth. As we’ve alluded to in the past, we have a very engaged and vocal leadership team. One of the most comical experiences I had was when I went to our senior leadership and I said, “I’ve made progress. I think we’re going to move forward with this acquisition.” The leadership team said, “Absolutely not. We’re not doing that deal.”
That was a really good sign … despite that we didn’t get to move forward with the acquisition. It really showed the empowerment of the team to do this. What I’ve recognized as we continue to expand our vertically integrated platform is that empowerment is really important.
Some of the challenges Wendy and I have faced in growing the organization are focused on finding the right capital to enrich our business plan. We can deliver the returns, but we’ve spent a fair amount of time with some capital partners that weren’t a fit. Thankfully we didn’t move forward, because the rest is history.
Wendy: Jim and I were very definitive about who we wanted and what we wanted to do when we first started the company. That required us to have financial partners that were interested in doing well by doing good. Being able to find groups of people who fit that bill was not always easy to do. That was an interesting challenge, but it’s proven that our original mission of doing well by doing good is still alive. We have a strong culture.
The other thing that has always been a challenge is the adoption of technology. We as an industry have to do a better job finding the right technology and getting our teams to adopt it. It takes so much longer to accomplish that than in any other industry.
How do you think about timing so that a company like Northbridge can innovate without getting too far ahead of the market that a new idea doesn’t work?
Wendy: It’s been four years since we first did our first solar project in one of our communities. Now, the ESG initiatives are popping up all over the place. Everybody’s focused on ESG, but Jim had that foresight from the beginning. We are very good at testing and vetting projects like that instead of throwing everything we have at at them. In looking towards the future and making sure we don’t get ahead of ourselves, we’re very conscious of what’s out there, and we test prior to an all-out change.
Jim: On the solar example, we rolled up our sleeves and developed it ourselves. We learned through that, and it was a learning process. Some things went well, some things were a real challenge. But we learned an awful lot about the industry, the business, the vendors and the process. To Wendy’s point, I think we’re constantly recognizing that we have to be ahead of the curve.
Our advisory platform provides us the opportunity to see what else is happening out in the marketplace, both from an execution and geographical standpoint. This is a business that only caters to 5% to 8% of the total senior [population] because of the price point. Affordability is a real issue.
Dipping our toe in the affordability space through our HallBridge initiative allowed us to learn from tax credit investors and folks who are attacking senior housing in a different way, to bring it to assisted living. That was a 15-plus year exercise and now we’re starting to get real momentum with affordability projects.
Wendy: On HallBridge, I have to give credit where credit is due. Sharon Ricardi, who is our president of our advisory business, has been with Jim and I for pretty much the 30 years we’ve been in the business, but her passion has always been the affordability side. She was one of the first people in Massachusetts to be a part of writing the group adult foster care program in Massachusetts.
We have always wanted to serve seniors in a holistic manner and it’s been so difficult. It’s difficult because our cost structure is so high. Labor is 65% to 70% of our cost. We’re providing dining and hospitality and you name it. It’s very expensive. Without some subsidy layering or options for financing, how are we going to do that?
HallKeen, the partner with which we came together as HallBridge, is a tax credit affordable apartment [firm] with approximately 8,000 units. They had a small portfolio of tax credit and affordable assisted living communities in Massachusetts, and we saw an opportunity to bring our operating expertise together with their financing expertise and take the model before different legislators.
We have a Medicaid waiver program down in Washington D.C., which has been very successful in areas like Indiana. We’re applying that to this project in D.C. in hopes that we can prove its worth as an option for people up in our area and maybe even nationwide. The ability to serve a broader clientele is really important to us because as Jim said, we’re dealing with a very small percentage of the market. We must ensure that they have the opportunity for an enriching and caring environment.
Jim: What’s interesting is that as we’ve pursued this affordability initiative, it circles back to the ESG agenda. Some of the institutional investors’ mandates are centered on affordability, and we’re invested in affordable housing. But how are we supporting the creation of more affordability in our society? Europe did this 7 to 10 years ago, and the U.S. is vastly behind the ESG initiatives, but we’ll quickly catch up.
As we build our three, five, and seven-year plan, we are now in a position to say, “Yes, we’ve tested it, we’ve proved it and here’s how it fits into our business model. Here’s the expected returns we can generate from this initiative.”
Changemakers tend to be risk-takers. Do you agree with that statement? How would you describe your own appetite for risk?
Jim: Well, you have to be a risk-taker to be a changemaker — it’s a matter of how you manage that risk. Over the past few decades, I’ve learned that change can passively affect you or it can actively affect you. Not making decisions or pushing yourself forward doesn’t doesn’t stand in the way of change.
I had a great mentor early in my career when I was involved in a senior housing platform that was hitting some speed bumps. The board was thumping its chest and saying, “The sky’s falling, and this is a real problem.” My mentor sat quietly and listened to everyone saying we should stop acting and ride it out, then he made the comment: “Ladies and gentlemen, we are a shark. If we do not move forward, we die.” That changed the entire board’s focus for the next 45 minutes in the sense that everybody sat, pondered that for a moment, and said, “Okay, how do we move forward?”
Risk is all around us. It’s about how you drive forward and anticipate where the world or industry is going. But to Wendy’s earlier comments, if you can continue to solicit people’s input, it is easier to navigate uncertainty.
How can the senior living industry drive more diversity, equity and inclusion?
Jim: It’s been exciting to watch Wendy get recognition for being a woman in leadership, both locally and nationally. She has been able to advocate for diversity, equity and inclusion well before it was en vogue, and it has been the cornerstone of her entire career.
Eighty-six percent of our workforce is female, so how do we create a platform where they can invest in each other and develop an opportunistic ecosystem? That’s worked out extremely well in Northbridge because of Wendy’s leadership. Within our organization, we are supportive as leaders of diversity, equity and inclusion, but we also encourage our young leaders to define what DEI means to them.
Recently, Wendy challenged me to push the envelope, and we had a group of very dynamic volunteers step up, create a committee, and work diligently for the better part of six months to develop a platform to foster this initiative at Northbridge. It’s our job to break down the barriers that stand in their way, but they’re doing a fine job of pushing the company in a direction of which we will all be proud.
Wendy: We have always been at the forefront of DEI and how providers can achieve that. Northbridge has been in the top 100 women-led businesses in Massachusetts for the last six years, and that stems a lot from the fact that we have a lot of women in leadership in our organization. We consider ourselves women serving women. Our workforce is 86% women, and we’re serving 84% women, and that’s the messaging that we put out there. We’re very inclusionary, and we’re not discriminating against men or anything like that, but it’s an interesting opportunity for women.
We have a lot of families and single mothers looking for a stable opportunity, and part of the reason that we created the Compassionate Caregiver Fund is because we discovered throughout COVID that our associates are struggling. We created the fund to empower our associates with the opportunity for scholarships in various episodic situations in their lives.
We’re very focused on creating a sense of belonging, and we celebrate and embrace the differences in people, the uniqueness of people, and the backgrounds they come from.
I think that in order for other companies to step up, they need to have a culture. They need to create a culture where DEI is core to their beliefs, and they have to walk their talk. Some companies have a pretty package, but when you open it up, there’s nothing inside. If you are committed to DEI, make it real.