Episode 84: Joel Nelson

President and CEO Joel Nelson shares culture and strategy implemented through Life Care Services. 

Watch this episode here. 

Lucas: Welcome to Bridge the Gap podcast, the senior living podcast with Josh and Lucas. We’re in the thick of it here at NIC 2019, the fall conference here in Chicago. We have the one and only Joel Nelson, CEO of LCS. Welcome to the program. 

Joel: Thank you. Good to be here. 

Josh: Awesome. Thanks for coming out. It’s such a busy show. I know you’ve got a busy schedule. So thanks for carving out some time for us.

Lucas: Joel, before we dive into your background, I just want to first mention what you guys are doing as far as a cultural perspective, which clearly is the forefront of disrupting and changing the the next generation of what seniors housing is or senior living or aging or whatever you want to  call it now, is a big piece of that. You as a big operator in the space, you clearly are putting resources into recruiting and retaining and trying to attract people to this business, tied to a mission. I saw some videos and some of the content, you guys are doing a podcast. What’s your thought process behind all those things?

Joel: I think it all starts with the people right? And our company’s always been a company that’s based on the fundamentals of our top three assets. We always talk about culture number one talent number two, vision number three. And so if you really going to walk the walk between culture and talent, then that’s an everyday process. Twenty four hours, seven days a week. We’ve taken a lot of additional efforts of recent because we know talent is an expensive resource out there or maybe a resource that’s not as plentiful as we all need with growing companies.  And it’s been a company that that has shifted a little bit and balancing, certainly cultures always remained the number one uno, and that’s just who we are as a company but our company is changing and evolving. 

And then as a result of not having that internal talent, thinking back when I joined the company 33 years ago, I was a 21 year old college kid, worked for health system for about less than twelve months and join this organization at that time in 1986, we had 21communities and I can remember sitting at the events like this, Leading Age at the time because we were predominantly a not-for-profit manager at that time. And you know, I was sitting at the table with the CEO and the CEO’s wife, and the full leadership. 

And so as we look at the talent going in, we still are very very heavy on professional development and and we talked about vision 2025 and some of the things you’re you’re hearing on out podcast etcetera, but what we really do believe in is investing in the future and I’m only one of many that’s had the opportunity to spend most all of their adult career in such a rewarding field. But then on top of that, there’s so many great people that work in the space and and everybody may not be the right for the LCS culture but being able to bring in people not only from within the industry, but external to the industry that has very strong cultural and mission alliances to what LCS is all about.

Josh: I love that. So just hearing you talk and just learning about you know, the 21 year old that you were, you had some health care background, but there’s a lot of 21 year olds out there probably the majority of 21 year olds don’t have that background. Many of them, I would argue the majority of them, don’t even know what senior living is. It seems like that is just a really untapped group with endless potential to help us meet the labor challenges. Do you guys believe that? If so, do you have some specific initiatives around that? Can you talk to us a little bit about that? 

Joel: Yeah, absolutely I believe, but everybody knows what it is to be in hospitality management of managing hotels as we said here or going to school and becoming a CPA or an engineer. And when you say senior living, what’s that mean right?

Josh: Right.

Joel: And I think an effort that our foundation has really taken the lead in, and my compliments to my predecessor who isn’t finished yet at Kenney, I don’t think you’ll ever be finished but that is so passionate about the opportunities that are out there for the future. And so Vision 2025 that we’re doing in collaboration with all of the associations and with the providers in the universities and then each of the associations has their own strategies. I’m on the Workforce Development Committee with Argentum and chair that committee as a board member. And you know, in our communication and our strategy through Argentum, it’s about getting ambassadors like the three of us who know this space, know what it can mean and know the career opportunities, not only from a personal reward and alignment as part of the mission, but this can be a lucrative career. I mean there are highly compensated individuals. You know if you think about it,  I was running a CCRC at 22, today there are folks out there running them at 25, 26, 27, and those individuals they bring energy, they bring passion, they bring love, they bring care to the seniors and at the same time making very competitive salaries and compensation plans. 

So, we are working it just almost from all angles, but I would encourage and we do in our company, one of our targets in Argentum is to have 500-plus ambassadors. That really needs to be a 1,000 ambassadors out there, and then growing from there. And I go to a capstone class at a university, we’re involved with several of the colleges and universities and it doesn’t have to be in fact, it’d be better if it wasn’t the CEO who was the old guy, but taking the talent that we have as an organization that is closer that can connect with those college grads and even going lower than the college grads and starting in high school and saying, look at this community, wouldn’t it be great if you were running it some day? Or look at this company that’s this big real estate company dealing with reits, and private equity as financial minded individuals. And it cuts across so many areas. 

Technology- we could probably spend this whole session talking about the  fun stuff that’s going to be out there if you’re if you’re really interested in advancing technology and serving seniors. So we’re all over the board in trying to penetrate as an industry, we’ve just got to be a collective unified effort out there saying take a look. And this conference is an example. I know there were several students here attending this conference. 

Josh: Yeah. 

Joel: Think about you know, why isn’t there a 100 or why don’t we have 250 students here. Now that’s going to take some personal or not personal but each of us as providers in capital sources, maybe we have to sponsor one or two of those kids to get them here, pay their flight, pay their lodging but what a great exposure.

Josh: I love that you almost answered my next question right there with the whole sponsoring because one of the things: our audience is growing. It’s very broad. There’s even a  growing sector of our audience that know nothing about senior housing, which is very encouraging to us that were now penetrating that a little bit. But this Vision 2025 as you mentioned, there’s obviously I know a lot of complexity around that, a lot of strategy but to our listeners that are out there in the senior industry, there all stakeholders, what are some of the low-hanging fruit things that would be consistent with the strategy and initiatives that we could put out there as a challenge to say do these one, two, three things in your local communities, in your regional platforms?

Joel: Well I think it starts with education and information right, and we all have our avenues to the high school systems and in schools within respective markets. We talk a lot about multi-generational leadership and an interaction in our communities so taking those resources and connecting them. We had a bring your child to work day and so we had probably 50 kids they all had to be 12 and under. So I start talking to them about who would like to be a chef, and then I show a little video of our chef contest. A national chef of the year that LCS has and then you know, we had a little session about tell me what your mom or dad does at LCS, and you can imagine. Just fun stuff to get them to begin thinking about, boy this was pretty cool to think about what mom or dad does, etc.

And so it’s education and informing and then in addition to that, I think Vision 2025 is a pretty simple simple goal. I think we can blow it out of water if we all get behind it, but we want to have 25 providers. And we want to have 25 universities, by 2025, about 25 to 30, and we’re producing a thousand graduates a year in senior living/hospitality management, etc. Now if you’re really into the development side, maybe it’s architect with a minor in senior living management but getting that exposure, and that’s really what we’re talking about is we have to change the image of our of our industry. This is fun and exciting, it’s not the old folks home. This is an exciting career track for individuals to think about as they’re beginning to have those thoughts about college. 

And another thing is communicating to, you know, as a parent and a son going off to college here next year and having graduated my daughter, as you think about colleges they could sit down have these conversations as they are doing tours and say there are guaranteed jobs and there are paid internships. And that’s, you asked me what we can do in the industry, the days of having the two-week tour or shadowing, let’s go beyond that and see if we can’t have more paid internships either through a semester or an off semester, which some of the universities and colleges are already doing, or through the summer. And we find some of our greatest talent through the kids who have had exposure through high school work in the communities, maybe on the maintenance crew, maybe in the dining room, maybe as caregiver and then they’re advancing because we’re pulling them in for a summer internship at the communities while they’re still in school. And then when they graduate no strings attached, but this year we hired nine new what we call in our PDP, they’re associate directors. It’s our professional development program, seven of those nine individuals came through our summer internship. 

Josh: Oh that’s cool. So macro-level, how do we change and get the attention of these university systems to where it’s like hey, senior living’s a thing. Because you know, as you said hospitality and all these other sectors, there’s specific programs all around the country for those, so what is the strategy behind that? And how are we going to get these 25 institutions or more?

Joel: I think part of it is working and there’s a number, to my surprise, as the team started putting together Vision 2025, there are a number of programs out there in healthcare administration. And I think it’s beginning to get a little bit of a bend to the senior living side of healthcare administration. And we’re seeing that, we’re even seeing master’s programs being developed in senior living and so that’s new. 

But the way we get out there and in getting the colleges and more importantly the students, is you got to be out there telling the story. There’s all kinds of business grads and while it helps to have a health care or business administration in going to run a community, but not necessarily, you know, we have six companies and you don’t have to be a business or healthcare administration to be running one of those companies, development, real estate and so forth. 

So the dividends are going to be not immediate, but we have to take our turns and being out in our local markets and this is something that could be done and fits so well with our industry because we are so geographically diverse. LCS is not the right company to be on the west coast, but there are some companies out there you think about Seattle: Merrill Gardens, Leisure, 180, AEGIS, the list goes on with really high quality. I mean it doesn’t have to be one of the bigger organizations, there are some fantastic smaller regional players. They have to be in those teaching a capstone class. Just one night or one evening or one afternoon in the class, but they have a part in the capstone class and business.

Josh: I love that and we’ve talked about that Lucas a lot, that our industry we do an awesome job at producing love stories,  we just have historically done a really bad job at telling the love stories. And so that’s something I think that’s great encouragement for our listeners. I love that and it sounds like we need to do a better job at talking about these programs that are already out there. Because that’s something I don’t hear of that much. And so I think that can be a focus of the future podcast topics.

Lucas: Absolutely so I want to transition point here. LCS is a fascinating operator. It’s very different than some of the other ones, because you guys are involved in not-for-profit and for-profit, you developed your own, you mentioned, six different companies. Can you tell us a little bit behind the scenes on the makeup of all that? And there’s a lot going on. How’s that all managed?

Joel: Well great question, and I think if you take us way back and I’ll do a fast-track through this. 45-plus years ago, LCS was founded and a lot of people think, you know, today we’re the second largest operator and top 15 owner and it’s not all about size, I want to stress that. And I’ll talk about how me and each the businesses on a more regional and an intimate basis, but LCS was really started as a development company and we were founded by a fourth-generation general contractor, the Weitz Companies. Weitz Company is still in senior living construction and Fred Weitz was billed as first CCRC in 1961 in Des Moines, Iowa. So that’s how we were birthed, but Fred recognized that there was a void, a gap in well-intended organizations they didn’t have the development expertise to get the communities full. Soon later, we need somebody to operate these communities as well. And so that’s really how we became who we are. All six companies are senior centric. We don’t do anything that doesn’t touch the lives of seniors and that’d a cord of who we are and our mission. 

And the way we do it is we really operate all of them as six separate companies, think of a holdings company with six separate companies, but one of our primary principles is interconnectivity and interdependent. So you can’t run a development company without being interconnected with the operator, or interconnected with the purchasing company that we have, or the insurance companies that we have. And from an operations execution perspective, we have a dozen plus-minus offices regionally across. Ideally, it isn’t one hundred percent so I don’t want to misrepresent the facts here, but ideally if you take our regional office in Charlotte, North Carolina, you say draw 3-hour compass or a direct flight from Charlotte that’s how we’re going to serve that. So we have a Southeast company. We do the same in San Diego, California. We do the same in St. Louis, Missouri. We do the same in Indianapolis and repeat that. And so our cluster is really to try to build regional based service platforms that take advantage of a national network of resources.

Josh: I love that. I love that and we’ve heard tons of people say that the real key is to not lose that local serviceability, that regional serviceability. So obviously, that’s one of your secret sauces of how you’ve taken this massive company, but not lose sight of the service and I love the specific region that you’re in. That’s awesome. 

Joel: But we took a little step forward. We call it the next gen ops model because it’s even more important today, then I think it’s ever been,we’ve reduced those business unit offices and regional offices so individuals only have five to six communities. And so if you’re a regional ops manager, you’re not going in for the board meeting or going in to meet with the owner or going in for an afternoon finance committee meeting, you’re going to go and spend a couple days and you know the community, you know the staff, you know the residents and it allows us to drive to a greater degree of execution success on our primary signature programs. And so it’s a model we’re having some awesome early success with. It takes more resources, but I feel that it’s all about the personal touch.

Josh: Absolutely and I can personally witness. I came up through the regional ranks. And what a tough job those regional roles are regardless of what you’re in. And I can’t tell you, well I can tell you because you know, but the burnout rate of most regionals and they have families, they have life issues, so not only am I’m sure it’s helping your bottom line. But from just a labor standpoint, I have to imagine that’s a very positive recruiting tool of like hey, you’re not covering 11 states. You know, you’re you’re actually going to be home a few nights and enjoy your family. So that life quality, harmony thing that we talk about often on the shows is the real deal.

Joel: And if you think about that story back to the careers, I mean, this is this is something that you can do it still have a family life, right. And we’ve got evidence of that today and hopefully we’ll see a lot more of it, but if you’re going to reduce the size of those portfolios, guess what? That creates more jobs and more career opportunities for upward growth as you grow through as an organization. 

Josh: I love that. Well what an exciting conversation, thank you for spending time with us today. 

Lucas: Absolutely. So we’re really just getting started here at the NIC conference. It feels like I’ve been here for a couple of days already, and it’s just getting started. I’m sure you have too. You’ve been to many of these events before what are your goals and takeaways out of this event going into Q4 in 2020. 

Joel: Well, I think I always personally come to NIC to learn. And you know, we think we hear and we know everything, and what people are doing in some of the trends. But the data that NIC puts out and paying close attention to that data as we look at labor, we look at the economy. Just was in a meeting this morning and went through the the next publication of the blue book if you will that you guys have seen, and so I think it’s it’s taking some of that information. 

Obviously we’re here to to network, be with our partners, clients and meet new people. But it’s also looking for opportunities on how we can improve the space and we all play a part in that. And NIC, I think gives us the data and some of the real fact that you can take back and build on how is that going to impact my execution pieces or how do I put that in my execution strategy? As an example, do you slow down development, do you accelerate development, or do you continue doing what you’re doing? And that’s a big topic today because there’s a lot of factors that NIC is tracking closely to hopefully give us some guidance.

Josh: Has your regional model helped you be quick to adapt and change and innovate, because we know we’ve heard from a lot of the big operators that wow, it’s like there’s- things are changing so quickly it seems like as soon as we implement and start getting something the next trend is already ahead. So is that something you feel like you guys have had sort of a competitive advantage in an edge with this new kind of system you’ve put out?

Joel: Oh boy, loaded question and this is the last one. 

Lucas: We buttered you up. 

Joel: Listen, we can never do it quick enough. I will tell you that there’s just so many priorities out there that it is moving quickly.  And we have PDPM, PDGM, we’ve got all of those different programs. And that’s just a piece of it on the reimbursement. So we try to be very quick, and transparent but this industry is moving and I don’t think any of us are moving fast enough along with it, but we’re sure trying.

Josh: Yeah, well you guys are doing an awesome job. Thanks for what you’re doing for your leadership in the industry and taking time to help influence the thought leadership surrounding our show.

Lucas: Yeah an entire career dedicated to this space. It’s really remarkable. Thank you so much and also thank you. We’ve become friends with many of your team members; Jelena, Allison, and  Chris Berg helped us set up this meeting with you. You’ve got a great team, great people really appreciate it and really rooting for you guys.

Joel: Thank you so much, appreciate being here. 

Josh: Awesome to have you.

Lucas: Thanks for listening to another great episode of Bridge the Gap.

Thank you to our supporting partners NHI, RCare, NRC Health, TSOLife, ERDMAN, TIS, and Sherpa.