• February 1, 2016

    Meet Jack Callison, CEO of Enlivant. Callison is no stranger to the industry: he brings two decades of multifamily and senior housing experience to Enlivant, including his most recent role as CEO of Holiday Retirement. Callison joined Enlivant during a time of flux, concurrent with the company’s acquisition and privatization by TPG Capital in 2013 and a complete name change and rebranding a year later. We sat down with Callison in his Chicago office to hear about leading a company through ‘massive’ change, the best advice he’s ever received, and why it’s better to own a challenge rather than sweeping it under the rug.

    Turning Around Assisted Living Concepts

    You walked into a tough situation here at Assisted Living Concepts, now called Enlivant. Why was it the right decision and why did you want to take it on?

    I didn’t view it as a tough assignment; I viewed it as an exciting opportunity. Throughout my entire career I think I’ve been really passionate about three things:

    One is building culture, two is building teams and three is building a highly scalable operating platform. I grew up in the multifamily business at Archstone, where we grew from $3 billion in assets to about $22 billion over a decade, and so along the way really developed a unique appreciation for operations and people, for an organization of that size.

    The senior housing industry is one that is just incredibly special, and I think most of us view this as an honor and privilege to serve this generation. We can do amazing work where we’re balancing both margin and mission—it’s incredibly rewarding.

    Back to the scalable operating platform piece of this: as we did our diligence with [our investor] TPG Capital, what we found was as an organization we knew the markets intimately; not dissimilar from where we had operated previously.

    We toured 50-60% of the communities before I signed on to do this, along with my senior team and TPG. The companies had fallen out of grace, and there were some—frankly—self-inflicted wounds that had occurred. We found that it was more of a cultural issue and a leadership issue, which can certainly be fixed, and that’s what really got us fired up about the opportunity.

    There was a lot of hard work and a lot of short-term pain, but we are incredibly fortunate to be completely aligned with TPG, our owners, in terms of what needed to happen for the organization. That meant taking the company out of the public arena, into the private context where we could invest heavily in culture and people and building up this operating platform.

    So, there was massive change. We had some huge regulatory issues that we had to address, occupancy was spiraling, and we had cultural problems galore.

    As a result of that, we made the immediate decision to physically move the company from Milwaukee to Chicago as a fresh new start: No. 1 to build a new mission, vision, and values for the organization to really chart that due North for us going forward.

    Right out of the gate we replaced 16 of the top 16 executives. In the midst of moving the company from Milwaukee to Chicago, we replaced 80-85 people of our 90 corporate support professionals. In addition to those staggering numbers, we also replaced about 85% of our divisional and regional operators, clinicians and salespeople across 19 states.

    Wow. How long did it take you to do that?

    All of that took place over the first two years. The leadership change was radical, it was fast, it was swift. It was very much a revolution as opposed to an evolution, if you will.

    We knew we had to rip the Band-Aid off and were very determined to make it happen the right way. We couldn’t have done that in a public company context, but really because we were so aligned with TPG in terms of what needed to happen, combined with their financial support—they put over $50 million in cash on our balance sheet on day one—we were able to affect the kind of change and transformation and we had the resources we needed.

    In your first 100 days when you stepped in, what were your goals?

    Candidly, trust was a big issue with all of our constituents. With employees, with residents, with regulators, with vendors. So one of the very first things we did was map out a very clear mission, vision and values. But to do that we had to connect with all of our different constituents.

    In the first hundred days, one of the very first things I did was embark upon a CEO listening tour. We met with employees—our housekeepers, our chefs, our caregivers and almost every single region across the company and did town hall meetings.

    We asked two big global themed questions [of employees], one of which is: If you were king or queen for a day, what do you want this company to stand for? What’s the company’s mission? How do we distinguish ourselves? What is our vision for the organization and what are our core values?

    We asked two big global themed questions, one of which is: If you were king or queen for a day, what do you want this company to stand for? What’s the company’s mission? How do we distinguish ourselves? What is our vision for the organization and what are our core values?

    The number two was a little bit more tactical because we knew that there were some short term pain points that we could address. We asked three very simple questions: What should the company start doing, stop doing and continue doing? It’s amazing; we asked those simple questions, we listened, and we got really good insight. That was with the employees first and foremost. When I say employees, we were in the communities, so this also included feedback sessions with residents.

    Then we embarked upon a similar tour with all of our state regulators. We proactively knocked on their doors and said, ‘Look, we know the company has, from a legacy perspective, had many challenges, and at the end of the day we view our relationship with regulators as a partnership. We own this, we’re signing up for this, we’re going into this eyes wide open and we’re not going to sweep things under the rug.’

    More from the Leadership Series

    The receptivity from the regulators was incredibly positive, far more than we anticipated.

    Really? I thought you’d get beaten up a bit.

    No, and frankly, so did we, and that would have been fair given some of the dynamics at play. But [we were sincere in] what we were trying to accomplish, and [owned] it and [communicated] it, and we put 90-day business plans in place with them. We said OK, these are challenges we need to overcome, here’s our plan to do that, and we’ll come back and we’ll communicate with you on a regular basis. In doing so, we very quickly returned to the point for the company where all of our assisted living buildings are re-licensed today. Twenty percent of those buildings had lost licensing prior to the acquisition.

    The organization is doing exceptionally well and we’re on track to achieve full stabilization this coming year. Because of that, we’re now in a place where we have the ability to think about growth. From the very beginning we said we didn’t want to simply come in and fix occupancy problems and regulatory problems, we wanted to build a sustainable operating culture that is highly scalable.

    That’s the fun part: Through acquisitions and a variety of growth initiatives, how do we begin leveraging the many skills and talents of our workforce and the culture we built? People are excited about the opportunity to advance our mission.

    Enlivant, Chicago, Illinois

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    In a lot of articles I’ve read about Enlivant, you’ve talked a lot about technology. How important is it to Enlivant?

    In some cases size does matter, and that gives you scale and the ability to invest in technology. The way I think about technology is it’s incumbent upon me as a leader to ensure that our teams have the tools they need to do their jobs effectively.

    The more we can do to automate certain functions means we’re freeing up precious time in [our teams’ days] to do what matters most—which is provide outstanding care and interface with our residents.

    The more we can do to automate certain functions means we’re freeing up precious time in their day to do what matters most—which is provide outstanding care and interface with our residents. I do believe there is a huge role here. I also believe that as you look forward in the senior housing industry over time, the ability to measure outcomes will be critically important to referral partners in establishing credibility as an industry.

    Also, one of the first things we did as an example as part of this transformation, was to really build out a robust financial planning and analysis (FP&A) function. One of the tools they needed was an Oracle [Business Intelligence] system that interfaces with all of our other systems, which gives us real time visibility that we didn’t have before. We have the ability to leverage technology to where Dan, my COO, or I can come in at 7 a.m. and go through reports, call the divisional SVP who calls the regional director who calls the ED at a community…and we can affect change at 8:30 a.m. that same day. Having that visibility is so critically important to being responsible in your business. So it’s something we continue to think about all the time.

     

    The Next Generation of Senior Living Leaders

    Let’s transition a bit to bringing younger people into this industry. Say I’m about to graduate college. What would your pitch be for why I should come to the senior living industry versus hospitality?

    I think more than almost any other industry I can think of, this is an industry where people can see a tangible impact and have a meaningful career. You’re impacting someone’s life every single day.

    From a recruiting perspective, one of the great things about our organization and in many cases the industry as well, is that on one hand, our pitch to everybody in part of this journey is: ‘Look, you can work in an industry where you’re making a meaningful difference.’ But two: ‘You’re working in a very entrepreneurial, fast-paced, innovative organization and sometimes you don’t see those two lines intersect like they have here.’

    We have a number of very talented, smart people, who are coming out of MBA programs and say: ‘I don’t know what I want to do yet in life, but I know I love serving seniors and I’m getting exposure to so many facets of the organization.’ It’s very dynamic, it’s fun, [it allows someone to grow] professionally, and they engage with us in a very unique way.

    Do you think the industry is doing a good job bringing people in?

    As an industry, we’re starting to make strides in getting that word out. I participated in many CEO conferences and industry conferences here in the last 12 months. Argentum, American Seniors Housing Association, and NIC are all collectively doing an outstanding job.

    From a recruiting perspective, our goal as an industry is that we want to be a top-5 employer of choice. In many cases that may need to start at the middle school level, the high school level, community colleges, and undergraduate programs. In many cases, senior housing isn’t really well understood, and it’s incumbent upon us as industry leaders to tell our story about why this is such a compelling industry.

    There are a lot of great things going on in the industry. The University of Southern California’s (USC) gerontology program is one of many examples.

    [At USC] they have a great gerontology program where CEOs from the senior housing industry are participating with them and trying to contribute to curriculum. They’re doing executive leadership courses where in addition to their students, we are sending some of our own rising star employees to USC’s leadership training courses.

     

    The Importance of People

    Would you say attracting people is the biggest challenge the industry faces?

    When it comes down to it, ‘people’ is always the most incredible thing that determines your success.

    You can have the best training programs, systems and play book, but as an industry it’s one of those things that keeps us all up at night. I heard last week that as an industry we need to hire 900,000 people over the next 10 years. 350,000 of those are new positions.

    Where are those people going to come from? Senior housing is sometimes notorious for musical chairs where employees bounce from one senior housing company to the other. We’ve got to groom more talent and to become much more attractive as an industry and an employer.

    Talent is always the toughest thing that we all deal with, so I think that’s probably one of our biggest challenges.

    What about bringing people in from different industries, is that part of the answer?

    Absolutely. We have several profiles of senior professionals [at Enlivant]. One is senior housing veterans. Several of our divisional [executives] have 30 years of experience and have managed portfolios in terms of unit count, and revenue that is larger than the entire company.

    But they signed up to work with us because of the mission, the culture, the transformation and ability to build a scalable operating platform.

    The second group of people is from outside of the senior housing industry. As one of several examples, our head of human resources is Pete Smith, who was previously the global head of HR for Burger King. Prior to that he was with Auto Nation and kind of grew up at Pepsi and Frito Lay. Our general counsel came from GE Healthcare. Prior to that he was at the SEC, and prior that he was a litigator here in Chicago with Sidley Austin.

    [We need to bring in] those individuals who have seen what good organizations look like outside of senior housing.

    The third group of people is in some cases ex-consultants who we didn’t hire as consultants. They came to work for us as project managers who are helping with the transformation and to help us build the operating platform. We also have younger graduates who say: ‘I want to be in the senior housing industry. I want to be exposed to many different facets of the organization.’ We give them opportunities to plug into different facets of the organization, so it’s an amazing growth opportunity.

    That combination of seasoned veterans, people from outside of the industry, and young, smart talent who love to roll up their sleeves, get dirty, and learn, has been a winning recipe for us in terms of personnel.

    Is that last group, the young ones that just want to learn, is that rare in the industry? That would seem to be a pretty special breed.

    I could not agree more. I’m incredibly passionate about that profile of individual. To me, that is the next generation of leadership for our organization. I don’t think it’s as common.

    When I think about the next generation of leadership, succession planning and growth, we can’t just keep going to the well and tapping into the same pool of people. We’ve got to broaden our horizons.

    That diversity of talent I described makes us a better company.

    In what way?

    You’ve seen the whiteboards across our office and that’s very much why we’re a whiteboarding culture—most of us at Enlivant are new in the last several years. We’re not burdened by the way things were yesterday. We ask our team: How did you do it at Burger King or Marriott? How did you do it at Walmart? When you don’t have egos and you exhibit the humility we talked about earlier, you generally get to a really good place. It’s a very collaborative type of culture.

    Speaking of whiteboards and the office — I was expecting a bunch of cubicles and your standard office. Maybe I’m wrong to have thought that. Is that part of the way you’re trying to attract people to come work here?

    Absolutely. We try to create a very dynamic, collaborative, fun place to come to work. The natural light, the whiteboards…we’re not Google, nor do we aspire to be, but quite often people say, ‘Wow. This is not at all what I was expecting to see.’ It’s very intentional on our part. We want to be a little bit different, more cutting edge, a little more innovative…we have a heck of a lot of fun.

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

    [It came from] Scott Sellers. He was the CEO of Archstone when I was there. He had an amazing impact on me in terms of my thought process from a leadership perspective. He is someone whom I today continue to admire as a mentor and role model and who really modeled what it meant to be not just a great CEO, but to be a great human being.

    I’m a pretty ambitious, driven, Type A individual, and [Scott] constantly reminded me that at the end of the day, when we’re all 80, 90, or 100 years old, hopefully what we’re going to care about most in life are relationships.

    While we’re all very career-driven, at the end of the day, family and relationships matter more than anything. Keeping that balance and that perspective doesn’t mean you aren’t driven or hard working, but so many times as executives we spend the first half of our careers heads down trying to get from point A to point B and we neglect relationships. Then in the second half of our careers, quite often we realize the importance of those relationships.