• April 21, 2017

    Meet Douglas Schiffer, president and chief operating officer of St. Louis, Missouri-based Allegro Senior Living. The company, which has ties dating back to the late 1800s, now owns and operates about a dozen senior housing communities in Florida and Kentucky. Schiffer, who began his senior housing career in finance and development, eventually took the helm as president of the company, after managing its operations for many years. A musical term with latin roots that means “lively,” Allegro holds a strong focus on the lifestyle and experience in senior housing, from dining to amenities, under Schiffer’s leadership.

    Spotlight on Technology

    Are you investing in any technologies now that you think will be important in the future?

    There are two types of technologies that we are thinking about. Those that the resident directly interacts with, and those that support and benefit the resident even though they function in the background.

    For the former, we are heavily interested in internet technologies. I’d like to see each apartment unit able to have communications and entertainment autonomy. We’re working towards making each apartment work just like a single family home with individualized smart-home features. These might include personal Apple TV or Roku boxes, segregated Wi-Fi, etc.

    For the latter we are focused on software services that help maintain a resident’s independence transparently. An example would be the use of med-management and EMR’s. A resident is not much interested in how we help them as long as they are able to have the highest independence possible for their situation.

    Why do you think senior living has been slower to adopt technology than some other hospitality models, such as hotels?

    Senior living is a personal-relationship business. It always comes down to the direct hands-on relationship between one resident and one associate. Technology is secondary. We’re not about getting a person through the system faster. We’re about creating the best environment for their needs. It’s hard to create that with automation.

    Is technology more important today given pressures facing operators such as declining occupancy and some areas of oversupply?

    Technology is more important now as we try to improve the resident/associate relationship. As we are able to take “to-do’s” off the associate’s desk, we are able to give them more time with the resident. It does have a corporate benefit as well in that we’re able to reduce overall associate numbers, allowing us to only hire the best associates who do the job for more than just a paycheck. As more properties are built, there will be a strain on employment. For the good associate, why not work for the community that allows for the most face-to-face interaction? Good tech will make that happen.

    We sat down with Schiffer to hear about his philosophies on leadership, how dining should be a top priority in every community, and why the best senior living employees are doing their jobs for more than just a paycheck.

    What’s your background? Where did you get your start?

    It’s a family business. I started some time ago when I was quite young going around with my father.

    How young?

    It’s truly a family business. I was 5 or 6 years old. We’ve always been in the real estate business. I actually started at Love Funding, which is a mortgage banking company. It was one of our family of businesses. There I was a loan originator and eventually moved my way up. I did that for about 15 years and eventually transitioned. The last five years I was at Love Funding, I was only doing senior housing. I was doing nursing homes and assisted living.

    We then started up another company, Hallmark Senior Housing. About two years in, it started to grow. I came over and really got into it. I was kind of the dirt dog, I would go around and look for sites. That was 17 years ago in 2000. I started really being on the development side acting as a junior developer, then moved up to actually developing one of the properties. Then 10 years ago, I moved over to operations, eventually moved to COO and now I’m running the company. My father is still the CEO, so it’s truly a family business.

    Is it true the company dates back to the 1800s? What was the evolution?

    It started in 1875 as a Midwest company based out of St. Louis. At the time there wasn’t a whole lot of financial engineering that was taking place in the U.S. We actually found some old letterhead that says “Bringing East Coast Money West”—that was kind of the tagline. St. Louis was a major financial center and our roots go all the way back to that, when it was Edward K. Love Realty Company. When we started Love Funding that was going back to our roots. We’d always been a real estate company with that financial services on the side. It progressed through to the mid-1970s, and that’s when my father joined up with Andy Love and they started to build out a family of companies. Hallmark was 1998.

    Then when did Allegro come to be?

    It was really a name change. Hallmark Senior Housing was a senior living company, and we were building basically a real estate company. We had one of our sister companies, Love Management Company managing, and we were naming the properties Allegro. Probably around 2009 is when we did a name change. I’m a big believer that you think you work for the company that’s your email address. We had people who were allegroliving.com, we had people who were lovemgmt.com, and we had hallmarkhousing.com—and everybody thought they were at different companies, but they weren’t. So rolled it all into Allegro, and that’s when we started to be known more in the industry, because branding counts. You really get the sense that it’s one company at that point.

    How many properties now fall under that Allegro brand?

    We have 11 properties and we continue to build. Compared to a lot of the other folks in this business, we’re a small- to medium-size, but we’re more boutique. We’re now building two communities per year. We have one that’s under construction now, that’ll be 12; it’s in Winter Park, Fla.

    Do you see more potential to develop in other states?

    That’s the goal. Every time we would run demographics, and we’d get a good piece of dirt in Georgia or South Carolina or somewhere else that made a lot of sense for us, we would come back to Florida because the demographic piece has worked so much better there. What we try to look at is folks who are 85 and older who have annual incomes around $50,000 — that’s our benchmark. There are a lot of cities and areas in Florida that continue to have that opportunity. In other spots, it’s a little bit harder. We’re so well-known there that it’s a lot easier for us to get financing. It’s just a natural thing for us.

    How do you think your experience growing up in this business has changed your perspective?

    It mostly gives me an understanding of the real estate. Working at Love Funding for all those years gave me a great opportunity for understanding the numbers. There’s a whole empathy piece in senior living; that’s something that always was inside me. It’s a pat statement, but this is a business where you can do well while doing good. I’m not the first to say it, but I do feel that it’s an important part.

    Was the shift to operations a conscious shift?

    It was a natural thing for me. I’m fairly good with working with people, and it’s something I very much enjoy. You can always find people who are good with numbers, good analysts, good people who will figure out how to make the math work. I like the part of interacting with our team. I like seeing how you can get something done. I also love being able to walk through our properties and talk to the residents. That’s a highlight of the day, to hear those stories.

    I’m fairly good with working with people, and it’s something I very much enjoy. You can always find people who are good with numbers, good analysts, good people who will figure out how to make the math work. I like the part of interacting with our team. I like seeing how you can get something done.

    We’ve started to see some of the NIC data showing occupancy pressures on operators, especially in assisted living. How do you think operators will get through this rough patch?

    We’ve been pretty lucky. I’d rather be lucky than good, but I’d super rather be both. Florida provides great site choices, which we get from our development team. That’s helped us with occupancy. It’s good for team members too. When you do that research up front, it helps so that you can really get into the market. Our last property filled in nine months, so that is not an occupancy problem. I’ve noticed it a bit more in independent living than assisted living because people are able to make a choice and are deciding to stay a little bit longer at home. I’m not seeing the pressure. I’m sure it has to do with the size of our organization and where we’re located that it’s not as severe as other places. We’re running about 93% portfolio level right now.

    With new communities coming onto the market with all of the development that’s taken place, do you find it’s even more important to find out what sets your company apart?

    That’s always important. It’s one of the reasons why we did our branding so that we’re very consistent across the board. We play in the higher-end sphere. The goal is to create good value for what we’re asking people to pay. My view is you come at this industry two different ways. You’re either coming from a medical model or you’re coming from a social model. We very much operate from the social model. We have a hospitality background in one of our sister companies, which is in the hotel business. We bring a lot of that hospitality over. We have dining services always top of mind. Lifestyle is top of mind. The way you approach somebody when they’re having an issue. It’s very much the training you get in the hotel business. On the healthcare side, people don’t want that thrown in their face. It’s something they have to deal with. People should come to us because they want to live in a nice place, they want to have people caring for them, but not making a big deal out of it.

    Douglas Schiffer, Allegro Senior Living

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    You mentioned taking cues and elements from the hospitality business. Do you think that this industry has done a good job of investing in technology up to this point versus hotels? Would you agree with that assessment?

    I think they’ve done an OK job. It depends on what type of technology—whether healthcare or hospitality focused. After the recession, in 2011, we opened a community in Stuart, Fla. That property didn’t even have HDTV or wifi throughout the building. Technology moved very quickly from our design time in 2007 to actually having it be ready for residents in 2011. That’s the social side of technology. Can you imagine checking into a hotel without Wi-Fi? It’s unheard of. They aren’t even charging for Wi-Fi if you reach a certain tier. That used to be a common practice. We even played with that idea. Should we be charging for those extra, hotel-like items? We eventually decided not to, and it was really the adult children who pushed it.

    You get to the other side, the medical side of technology, and we’ve got a long way to go. I think we’re getting there with medical records and EMRs, and being able to do what hospitals do where they’re just walking down the hall with a cart—but I’d much rather see that cart disappear and turn it into a tablet. We’re starting to play with just the tablet, but we haven’t really gotten there. I know some of my competitors have gone a little further with that, but I’d like to see it get a little more mature before we play with it a lot.

    The collection of data continues to be a theme. If you had an executive dashboard to look at every Monday morning, what data points would be on it?

    Number one would be occupancy. Then inside of that, I’d love to see some sort of catalog of why people moved out. You want to know if it’s for a financial reason, or if there’s something happening property-level that isn’t great — the food or the care. I want to see what our revenues look like. These are the standard items. Margin is important. We’re in the for-profit side of all of this, so we need to make sure that we’re still able to provide. If we’re not making money, we’re not going to be there to be able to take care of folks, either. I really want to see resident reviews. I’d love a better way to do that.

    More from the Leadership Series

    How do you collect that?

    We do a chairman’s card that’s always available and we push it twice each year. There we’re getting information on both how our staff is operating, but also how the residents are interacting. I want to know what residents think of us and I want to know what our team thinks about us. I think that’s really important. If I take care of the team members, they’ll take care of the residents.

    How do you collect that information from staff? How do you gauge their responses?

    We have an online portal that they can sign in and anonymously complain or congratulate; it has a number of questions and they can interact with us and let us know. It goes straight to our HR department. That’ll give us a pretty good feel across the property of how we’re doing. We’ve even done it now to where we incentivize all of our team, mostly the department heads and EDs, but we incentivize them on a variety of factors. Two of those factors are those resident cards and staff responses. Those help determine whether they’re going to qualify for an incentive. It’s more than just: Did we make money? It’s: Did we make people happy?

    There’s a lot of talk about a personalized approach. What are the challenges to providing individualized care?

    Staffing. What we try to focus on is lifestyle and dining. It’s not even my quote, but once the roof doesn’t leak, then you need to make sure that your dining experience is solid. That’s an activity. It’s three times a day for an assisted living resident. Even if you were living at one of the finest hotels in the world, three meals a day would get a little tiring. People show up with varying attitudes and desires and wants, and so it’s very hard.

    One way to do it is during that interview process when you’re first talking with somebody, when they’re a prospect. Speaking to a customized approach, most properties are built now with discovery rooms. You discover what the person wants, and spend time with them to learn what they’re interested in before they decide to take a tour of the property. Once you’re really able to cater to what they need, they’re your best referral source. I’d much rather have a referral that comes in that way than somebody who comes in just because they drove by. Although I’d take either.

    …discover what the person wants, and spend time with them to learn what they’re interested in before they decide to take a tour of the property. Once you’re really able to cater to what they need, they’re your best referral source. I’d much rather have a referral that comes in that way than somebody who comes in just because they drove by.

    We’ve seen a boom in ancillary services. Is services an area where you see opportunity to grow?

    Whatever fits into an assisted living license, we want to provide. Those ancillary services mostly are happening by third party. We know what we do well and we want to do that. We’re not interested in getting into all sorts of other businesses. But as people have more needs, we have added to what we will do in any one of our communities. Our first communities were independent living only, and eventually you add on a wing of assisted living and figure out a way to add memory care.

    So you’ve evolved.

    We’ve had to wiggle. We’ve had to learn what the industry moves towards. We’ve actually thought of moving into the active adult space. That’s going back to what independent living really was. If you look at assisted living now, it’s what independent living used to be. What we’ve found is a lot of people stay in independent living and bring in home health. While it’s very useful for the resident, I don’t think that’s letting them evolve in the best way because when somebody is independent, home health is only there for a certain period of time; they’re not there all the time. We’re limited in our ability to assist a resident in independent living, unlike if they moved to assisted living. Many of our residents are in independent living and can stay there beautifully. It’s when we need to have that conversation.

    LEADERSHIP

    What is your definition of leadership?

    Setting the stage and allowing people to be their best version inside of a framework.

    During your senior housing career, what’s been the biggest challenge you’ve faced and how did you respond?

    We’re having one of our biggest challenges right now. We’re continuing to grow, and we’re holding onto really good people. We’ve established ourselves as being able to, pretty effectively, train people and get them to be good at their jobs. Then other people come hunting and take our folks. While we can see the value for that individual to move on to some new position, keeping good people and wage inflation have become major challenges. I think the biggest challenge is holding onto folks.

    What do you do to keep them at Allegro?

    Your best employees are not here just for money. It’s more about recognizing the hard work they’ve done, and figuring out other ways to compensate. People who truly care, our top performers, are not just looking for a paycheck.

    Your best employees are not here just for money. It’s more about recognizing the hard work they’ve done, and figuring out other ways to compensate. People who truly care, our top performers, are not just looking for a paycheck.

    What are some of those different ways to compensate?

    Being able to come to industry conferences, education, letting them move up in our corporate ladder. The vast majority of our executive team all came up through the ranks. That gets back to the family business. We have very strong loyalty, and loyalty goes both ways. We’re very loyal to our folks and thankfully they’re very loyal to us. We have 27-year employees, and 14-, and 17-, we always give awards for service in December. You don’t see companies like that anymore that are holding onto people for north of 20 years.

    What is the biggest risk you’ve taken in your career?

    Moving into the operations side. It was something that was not really known to me at the time.

    What’s the best piece of advice you’ve received in your career?

    The best piece is you’re not going to get fired for making a mistake. I guess there’s limits to that … but to strive, to get out of your comfort zone, to not be afraid to try something new, to try something that doesn’t necessarily make sense but you know is right. I think that’s it.

    Who would you consider to be your mentor and how has that person helped you?

    Certainly my father has been a mentor. Our relationship has two pieces: the family ties and also the business ties. There are also other folks in the industry who have been tremendous mentors, and not necessarily because I’ve spent time with them one-on-one, but just seeing what they’ve been able to achieve and try to follow in some of their footsteps.

    What are your greatest strengths as a leader?

    The ability to listen. I’m not going to have the right answer every time. You have to be able to sit back, and listen, too, because it will eventually gauge how you react.

    What about weaknesses? What are your weaknesses as a leader?

    The flip side of that same comment is that sometimes you want to get it right so badly that you won’t make that decision. I don’t hesitate as much now but early in my career I did.

    Say I’m about to graduate college. What would your pitch be to me as to why I should look to senior living as a career path?

    It goes back to the ability to do well while doing good. They don’t have to be mutually exclusive. Most people have a caring heart. Most people are not just out to make some cash. I think if you can get access to that, that part of their social need as well as their financial need, this can be a wonderful business. I think it speaks for itself by how it’s grown. Most of this industry growth is not just because of real estate. It’s mostly because people, yes, found a way to make money, but have strong ability to feel like it matters what they’re doing every day.

    Do you think the industry does a good job of taking people on the front lines and giving them a path to climb the executive ladder?

    I can’t speak for all companies, but I know that we very much work for that. We can train any job skill, the key is finding the person who has the desire and the heart and the want to really perform. All those skills will come and we’ll get them through it. When we interview folks, at the early stages, we’re really interviewing for not specifically that they’re going to be hands-on—it’s do they fit our culture?

    How do you tell? What types of things do you ask?

    It’s a gut thing. It’s how they answer a question. Even right now when we hire an ED and the sales and marketing director. Those two positions in particular, I have the final interview, and I’m not asking any technical questions at that point. I’m asking all culture questions. Why the sales and marketing director? The reason is that sales and marketing directors are going to be the first touch. That’s the first person who’s interacting with the prospect. It’s not all about real estate, it’s about making sure that person feels comfortable and making sure we lead that discovery and learn about the person.

    What about developing the next generation of leaders? What is Allegro doing on that front and what can the industry as a whole do better?

    How do you get somebody into the business in the first place? We like to do internships at properties. Our chief servers during the summer are always college students, and those are some of the best times to see if people have what it takes. Dealing with somebody when the broccoli is hard, or the broccoli is soft, or the broccoli’s not right, you know how they interact with somebody who could just as easily be their grandparent. Basically every one of our positions has the opportunity to come in fairly young and out of school and move them up through. I think the industry is starting to do better in colleges. We’ve looked into partnering with a university to see about getting in early with folks and making it part of the curriculum. I know there are some other companies here that have done the same thing. We’re a little small to be heading up that kind of an interaction, but it’s something we’re certainly thinking about.

    I think we as an industry, if we can start that up where [alongside] certain hotel schools, we could start having a variety of senior living schools, that would be spectacular.

    What is the biggest challenge the industry faces?

    Talent.

    What does the future of senior living look like?

    I think it looks great! Just end it right there.