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[re]Defining Executive Leadership: What You Need in a Next Generation CEO for

Today’s Next Generation Customer

Presented by

Oklahoma Leading Age ConferenceMarch 12, 2014

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HCapSearchSenior: Dedicated to Nonprofit Senior Living

Combined 70 years’ hiring experience45 years in the senior living market

AAHSA/Leading Age leadership

Passionate about senior adults – the senior living industry

Philosophy and approach

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Out of the Poorhouse Caring for senior adults has long been the mission of nonprofit, faith-based organizations1800s – from the almshouse to Homes for the Aged 1954 Medical Facilities Survey and Construction Act1965 Medicaid and Medicare –

Facilities up 140%; beds up 302%1970s and 80s reforms and regulations2000: $100 billion industry

The case for [re]Defining Leadership:The Industry

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Yesterday’s Senior Living Community

Heavily weighted toward skilled nursingYounger residents with greater needsDrab, institutionalLittle to offer in food and amenitiesPaternalistic view of the resident and their family

Post-1970s

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2012 CDC/NCHS Study of Long-term Care Facilities

58,500 providers serving 8 million seniors across a continuum of servicesNearly half -- 22,200 – are residential care communities15,700 are nursing homes21% - 25% nonprofit runOnly about 5% with 100 beds or moreSupply of beds highest in Midwest and West

The Market

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2012 CDC/NCHS Study of Long-term Care Facilities

1.4 million in nursing homes713,000 in residential care facilities

The Market: Users

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Older entry demographicHealthier; living longerHigher income/net worthHigher levels of activity and acuityGreater wants and demands

Today’s customer

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Baby Boom 1946 – 196478 million

Demanding demographic‘Generation Reinvention’Greater percentage of entrepreneurs50 is the new 30Dine out often – seek varietyCruise-line mentality

The New Customer : Wants and Demands

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Aging is about LIVING, just right-sized and with services

Creating the “main street,” Town Hall

Open spaces where residents congregate – grab a scone, a cup of Starbucks and read the NY Times

How Senior Living is Responding

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• Creating places where people “want” to live, not where they “need” to live

• Ability to seamlessly move from independent living to health services

• Lifelong learning and wellness centers - beyond basic fitness

• Partnerships foster vibrant communities and intergenerational relationships

Trends

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• Technology promotes independence, wellness

• Urban/suburban near retail and services and with walkable streetscapes

• Affiliation -- or affinity --- housing

• Cooperative models /NORCs

Trends

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• Master-planned communities• High-rise senior developments in 24-hour

neighborhoods • Affiliation-sponsored housing catering to

lifelong learners, religious affiliation and even sexual orientation

What You Can Expect for the Future

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2010 LeadingAge Compensation Survey

43% of CEOs in multi-facility senior living organizations plan to retire in the next 5 years

Implications

Unprecedented competitionMay drain talent from the ranks of freestanding communities

The crystal ball

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81% of residential care communities concentrated in metropolitan areas

Your hiring market

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Impact of CEO turnover :

• Strategic planning• Development of new services• Capital expansion/upgrades• Marketing and brand impact

ResidentsService area

• Natural assimilation time

Why you should care?

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New CEO: Greatest Challenges

Ever-changing regulationsActual costs vs. perceived qualityKeeping up with the trends service models design staffing best practices Identifying and mentoring the right staff in the right place

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The Nature of the Job

The 2 a.m. callOpen door vs. productivityEquilibrium

Staff turnoverFinancesQuality vs. costsCensus

The Nature of the Individual

Senior Living Leadership Burnout: The Stressors

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Work-life balanceProfessional CoachTools to do the JobExerciseDelegating

Are these included as part of the annual review?

Coping Strategies

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What Today’s New CEO Must Do and Know

Partnership with a healthcare provider

Move the community out of its own walls

Forge strong community partnerships to provide services you can’t do feasibly/economically on your own

Be rabid about customer satisfaction

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Traditional route to the top

Work way up through the senior living industry

Healthcare

Faith-based

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Penn StateNew colloquium “Hospitality in Senior Living”

Matches the demographic of the new customer

Boomers eschew nursing homes but say they will consider rehabilitation in a “hotel-like” facility

Hospitality: The New Career Track

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Bucking Tradition

Penny McIntyreSunrise Senior Living

Mark ParkinsonAHCA/NCAL

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What great CEOs have in common

Passion

Often long-heldHard to be successful without this single quality

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What is the key to long-term success?

Today’s hiring environment features lots of bells and whistles (OAD, Predictive Profiling)

One of the most important elements to ensure quality hires and retention: thorough understanding of the community’s culture

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Succession Planning

Critical function of the board

Must be fluid and timely

Can be threatening

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Succession Planning

Two general scenarios will trigger the need

Assess current situation and needs/assets

What type of transition environment will the new CEO inherit?

Develop the framework

Process, decision making, candidate profile, who will be involved

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Succession Planning

The internal candidate

Talent identificationProfessional development plan

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Of your communityYour residentYour ‘brand’Internal and External SWOTLong-range plan and goalsCulture and history

Critical: A Thorough Internal Assessment

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Seek to involve your STAKEHOLDERS In the process

ResidentsFamily/former family membersFoundation leaders and donorsCommunity partners and supporters

Often overlooked aspect that will build success

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Turnover is only bad if ….

The risks of overemphasizing employee retention at all costs

Have No Fear

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Subject-Matter ExpertiseHealthcareAgingActivityWellnessLegal/Regulatory

Strong communicatorBusiness/finance savvyLong-Range PlanningHR/Management

What you want: The Basics

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Understand and manage multiple bosses

Thought leader: know the trends, be able to read the tea leaves and know what to do about it

Project Management – to understand what it takes to bring all the pieces together

Plus …

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Enjoys -- or at least understands the importance of -- being out and about

Strong on relationships in the community -- more and more, can’t do it on their own anymore

Familiarity – or at least a quick learner – of the surrounding community

Plus …

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Your Search: Timeline

Week Activity/Objective

1 Star-up; Discovery; Stakeholders

2 - 3 Develop position parameters

4 - 10 4 – 6 weeks intensive recruitment

11 - 12 Candidate selection

13 - 14 Interviews (Rounds One and Two)

15 - 16 Selection and Negotiation

DATE Candidate assumes responsibilities

The Search Process: Candidate Progression

Conduct Round One Panel Interviews

Present Initial Pool to

Search Committee – Select Candidates to Interview

Narrow to Initial Pool for

Preliminary ReviewConsultants Review and

Interview All Candidates – Conduct Preliminary Background

ResearchResults Marketing/Networking/ Independent Sourcing

The Search Process: Candidate Assessment

At Semi-Finalist/Finalist Stage

360-Degree Interviews with Stakeholders

Structured Candidate PresentationsIn-depth Background VerificationProfile XT Performance Predictive

ModelingIntensive Qualitative Referencing

Prior to First-Round Interviews

Background Research (Education, Prior Work History, DMV,

Connections)In-person meeting; area tourSupport for Interview Team

(Questions, Scheduling, Evaluation Tools) Bi-weekly, or as Desired

Client updates of candidate pool via Candidate Dashboard Review of

QualificationsInitial Screening

Resume Review Verify

Completeness of Submission Internet Research Social Media Search Personal Phone Call or

Meeting

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Timeline for transitioning

Contract By any other name … Onboarding

Hiring Considerations

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Review/renewal

Compensation A package Ways to get there

Performance Measurement

The Contract

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Due Diligence

WhatWhoHow

Performance Review

Your Legal and Fiduciary Responsibilities

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Executive Compensation

Increased ScrutinySafeharbor Rebuttable PresumptionCompensation CommitteeCompensation PoliciesBenchmarking Comparables

Your Legal and Fiduciary Responsibilities

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First Three Months

First Six Months

First Year

Good practices to put in place

Once Your New Leader is On Board

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Thank you!

Contact us

Jean Baconjbacon@hcapsearch.com804-301-4402 (direct)

Jennifer Furlajfurla@hcapsearch.com816-591-5493 (direct)

Laura McCraylmccray@hcapsearch.com913-558-1713 (direct)