Q&A: Thinking Outside the Box in Senior Housing
The Kendal Corp.'s Vassar Byrd on how alternative business models can help senior living providers reach financial stability.
In a period of high labor costs, supply chain disruptions and overall economic uncertainty, maintaining the unique charm of individual communities while ensuring financial stability is a delicate balancing act for senior housing providers.
A not-for-profit organization overseeing 10 senior living communities from Pennsylvania to California has developed an alternative business model that allows single-site communities to celebrate their distinct identities while benefiting from the operational support of a larger entity.
By providing central services such as information technology, human resources, business development or marketing, The Kendal Corp.’s model helps single-site communities maintain profitability without sacrificing their local flavor. Additionally, as the Baby Boomer generation continues to age, demand for senior housing options is only increasing but supply is nowhere near meeting it. So, beyond simply building more, creative solutions are needed, believes CEO Vassar Byrd.
How does your business model work exactly? Â
Byrd: Kendal operates what we call a ‘federal model’ which prioritizes diversity of perspective, opinion and voices in decision-making. Kendal does not own or have direct control over affiliates. Instead, we partner with affiliate organizations to provide support and services. Because affiliates retain their autonomy and sense of individuality, and we don’t have a traditional ownership model, TKC organizations preserve their unique identities even though they are part of the larger Kendal system. Further, we do not dictate to affiliates what should be their strategic direction, marketing messages or target audiences. They set these strategic priorities and Kendal helps deliver.
Instead of having a corporate team onsite to make decisions for affiliates, they have their own onsite team plus the Kendal team. With the added operational support of the Kendal team, each affiliate has a deeper well of expertise and experience to help them achieve success.
Ensuring each senior living community has strong leadership—including the board in nonprofit spaces—is crucial. As a Quaker-based organization that champions consensus decision-making, we are uniquely positioned to provide board governance best practices, including guidance on how to build a dynamic, effective board. Not-for-profit board management can be a time-intensive process, especially for organizations that do not have much experience in this area, but it is key to the successful operation of any senior living community.
Why do you think this model works? What are the core principles guiding your organization’s approach to senior housing?
Byrd: We believe that all individuals—regardless of age—deserve to feel comfortable, included and welcome in the place they call home, whether that means a senior living community or a single-family home. As an organization that supports senior living communities and aging services across the country, Kendal does not take a one-size-fits-all approach to senior living. We believe in the power of community. It’s our job to help each Kendal affiliate preserve their autonomy and identity while growing even stronger. Whether they were developed as a Kendal affiliate or joined the Kendal system at some point in their history, all Kendal affiliates retain the unique identity they have developed over time.
Unlike most multi-site organizations in senior living, Kendal acts as the ‘bottom-up supplier’ to Kendal affiliates so that they can focus on building and maintaining community. The Kendal Corp. helps affiliates leverage their own resources as single-site communities and organizations by providing supportive services such as HR, payroll, IT and marketing. This allows affiliates to focus their attention on strategic planning, building connections within the community, and developing their own story, identity and culture—all of the things residents, staff and board members value most. Things quite difficult to do as a mandate from above, as part of a giant corporation.
The field of senior living is brutally competitive. Senior living providers should work to ensure they are deploying their limited time and resources in the areas that provide the most impact to the residents they serve.
So how are decisions made in this federal model?
Byrd: The federal model helps dial in what it means to ask for and be respectful of every individual’s opinion when working to reach consensus. This practice of inviting everyone to the table helps us more thoroughly understand a problem before making a decision. While this process takes time on the front-end, once a path is chosen, there is the ability to act quickly because every person has been part of the decision-making process, so it saves time on the back-end.
How exactly does being part of a larger entity help individual senior housing communities achieve and maintain profitability?
Byrd: In the federal model, TKC and the affiliates share costs across the system. We can share the cost of software, licenses, research, as well as human expertise. Smaller organizations often cannot afford to retain the very best HR or financial personnel and systems, as an example. A single-site community can have excellent people working onsite, but the additional layer of Kendal system resources and expertise ensures that the best possible decisions are being made with the organization because there is a larger team working together.
Having highly functioning, highly educated and highly experienced people helps each organization make better choices at a lower cost than if they had to buy every single bit of expertise a la carte, on their own.
READ ALSO: Why the Future in Senior Housing Is All About Health, Affordability
Tell us more about how you support smaller organizations in expanding and updating their facilities despite limited capital.
Byrd: For most organizations, you’re going to go through major expansions and redevelopment maybe a couple of times within the span of one person’s tenure as the CEO or Executive Director. In addition, you don’t do the same thing each time, so it’s very hard to get a body of knowledge and expertise because it is mostly one-off projects. When you’ve got a partner who has done hundreds of projects in all different kinds of markets, you can really use that to your advantage. It gives each affiliate more leverage. That sort of expertise is almost impossible to find inside a single site. It’s expensive and there isn’t enough constant work to employ an expert full time.
As a partner with affiliates, Kendal works with the affiliate to ensure the project achieves the return they expect, while providing an unbiased perspective to help them make smart decisions. Sometimes killing a project quickly is the best advice we can offer. When you only get paid to work on a project, like most consultants, that is a message that is rarely delivered.
How are you adapting your senior housing offerings to meet Baby Boomers’ needs?
Byrd: I have seen firsthand the drastic changes in what consumers want in senior living over the last decade. The most important thing to offer the next generation of senior living residents is choice. Senior living providers must offer flexibility in a variety of areas from dining services to pricing strategy.
Incoming residents do not want to live in a community that narrows their options or steps on their independence. They want a community that works with them as a partner. We try hard to create a collaborative environment with the residents and members we serve that fosters idea-sharing and compromise.
The residents are an amazing source of energy and insight. Their firsthand perspective living in community is valuable and having a collaborative mindset will help make your organization much more sustainable over the long term. An engaged community will create high occupancy. Residents and members don’t make all the decisions, but they provide a lot of input into those decisions. This balance is not always easy to strike, but this is how you build an authentic community.
What immediate solutions are there to cater to the needs of this growing, vulnerable population?
Byrd: We offer Kendal at Home, a ‘life plan without walls’ model, in select states. Residents of Kendal-affiliated brick-and-mortar communities where Kendal at Home operates can also have membership in Kendal at Home. In the regions where this operates, Kendal at Home can serve the affiliate’s wait list while residents are waiting to move onto the Kendal campus.
Kendal at Home can also serve the people who, for whatever reason, may not want to move into a senior living community. They may never move into a community, yet they may still need those health, wellness and support services that can be found at a Life Plan Community. Kendal at Home provides services to these individuals in their homes. Such services are very important for the future of senior living, and we need to shine a spotlight on it.
What are the biggest challenges you’re seeing in the sector today?
Byrd: The biggest challenges to date include the cost of providing services and the cost of building new communities. Brick-and-mortar senior living communities are still broadly appealing, but I am concerned this model will inevitably transform into a solution accessible only by very high-income older adults in this country. This is unacceptable. The challenge is how do we offer a broad range of appealing choices to every person in the later part of their lives—because we all deserve choices. Truthfully, we’ve gotten a little stuck on bricks-and-mortar. We need to consider alternatives.
Older adults in our country deserve to have a menu of good choices available to them when looking into senior living options. It’s a huge challenge and we need to work on the solution of making it accessible to people.
What are your hopes for the senior housing sector going forward?
Byrd: My hopes for the field of senior living are that we are disrupted in positive ways and always looking for solutions for the individual members we support and serve. We need to be looking for solutions regarding how older adults live their lives when they are done with their primary worklives. My hope is that they can do different, innovative things with the support of organizations like TKC.
I believe many more types of solutions will come from many more directions, not just from traditional senior living providers, whether not-for-profit or for-profit. There should be an explosion of opportunities offered from all different directions. There are many ways we can move forward. However, we need to move away from traditional thinking. It will take many different perspectives to blow up traditional ideas and think forward.
