Meet Lynne Katzmann, founder and president of Juniper Communities. Juniper operates 18 communities across New Jersey, where the company is based, Colorado, Pennsylvania and Florida. An entrepreneur at heart, Katzmann comes from a long line of businesswomen and credits her upbringing in part for making her the successful businesswoman she is today. Taking a forward approach, Juniper is making strides with its approach to technology and staffing, among other areas that often challenge senior living providers. We sat down with Katzmann to hear how her business savvy has evolved over time, why women make for good leaders, and why managing millennials is shifting the industry’s take on staffing.
Tell me about how you started Juniper.
I started Juniper when I was very young, much younger than I am today. I went to school in London and I studied the German Social Insurance System between 1883 and 1911. A totally esoteric topic, one would think, but it wasn’t.
When that was finished I did a Medicare demonstration project, started a not-for-profit company and then went to a dinner party and was invited to go to New York to help run a public health care company.
What was the name of it?
It was called Metrocare. It operated skilled nursing and retirement housing in Florida, California and New Jersey. When I got there, I worked directly for the board of directors. We grew the company and we started a managed care division in which we partnered with Baxter Travenol [now Baxter International Inc.] and doubled the company’s value in two and a half years. It was taken private and I went on to form Juniper. I was, at the time, in my early 30s and I didn’t know what the hell I was doing, if you want to know the truth. It was great fun. I put together some angel investors.
Were those the original investors?
Those original people are still with me today. It was friends of friends. We raised initially $440,000 to seed the company. Later on, over the course of the next 10 years, we raised about another $11.5 million. We thought we were going to be a private REIT, and ended up just having to do property-specific deals because we weren’t able to raise the $100 million fund that I thought we would raise. We bought our first properties in 1990.
Did you buy your first property with $400,000?
No, I raised another $1 million of that $11.5 million we’ve raised. In all, we have raised funds in four tranches..
What year was this?
I started the company in 1988, we did our first deal in 1990.
With $1.4 million?
Okay. Now you went out to go get debt, tell us that story. You had the property lined up already?
We had the two properties lined up. We were buying properties from what was Horizon Healthcare Corp. It was Neil Elliott who came from Hillhaven. He was an interesting guy. He needed to get rid of some properties so he sold them to us cheap. They were dogs. We hired someone by the name of Andy Turner who had just left Neil, who started a company called Sunrise. Sunrise became a very large company, long after that. At the time he worked with us he said he was only going to operate six to eight properties so that ours would get full attention. That didn’t happen.
So yours were some of his first properties?
We owned the properties, and he managed a couple of those properties, or leased them. Our strategy was simply to buy under-managed properties, put them with people who knew what they were doing, have them essentially turn around the financial operations, increase cash flow and buy it back from us. That’s what created the investor exit.
At what point did you decide it wasn’t the right strategy?
It evolved. In 1988 skilled nursing facilities (SNFs) were the thing to do. There was no way out. In the early 90s we went into assisted living. Originally, assisted living was [achieved through] renovations, so we bought a couple of properties in Florida and we renovated them. That was 1994-95. At that point we decided we were going to construct, so we designed our own buildings. We still have those buildings in our portfolio, they’re great buildings. Construction almost killed me. The design part I love, but the construction part was not for me.
In what way?
Builders do business differently. I am a ‘what you see is what you get’ person, so I expected certain levels of perfection and they didn’t think that was necessary, so we got into fights from Day One. Maybe sometime I’ll forget those bad memories and try it again from there.
What happened that made you decide to do things yourselves?
My expertise was not in operations, it was on the finance side. I’m pretty good at finding a strategy that will keep the capital costs low so that you can put money back into operations. What we learned is that triple-net leases became harder and harder to do with the economic terms we wanted. We ended up doing management agreements. Management agreements shift the risk and reward. We took the risk, we also got the reward.
More from the Leadership Series
Were there new challenges to that?
Yes, but it’s been great. It’s a different set of issues. You’ve got regulators, and people problems. When you’re doing just the real estate piece it’s not a big people issue. When you operate, it’s all people.
When you started to operate, how did you have to change your style from being in finance to learning how to lead?
The key to my leadership style is that I don’t give up. Juniper trees are survivors. We named the company Juniper for a reason. Junipers grow everywhere in the country, they’re ubiquitous. They’re scrubby and they survive. You’ll see the juniper up on the hill blowing, but it doesn’t die—and juniper berries make gin. At that time I drank gin and tonics so it made a lot of sense. That’s a true story.
The key to my management style is that I don’t give up. Juniper trees are survivors. We named the company Juniper for a reason.
Are you sure we can’t publish that?
I don’t know, I’ll think about it!
Because that’s awesome. You don’t drink gin and tonic anymore though?
Well… I do.
Just when you’re feeling nostalgic?
Just when I’m feeling nostalgic! So that’s how Juniper got its name.
So were you drinking a gin and tonic when you came up with it?
Probably! At least one or two…
You asked about leadership and the juniper, and being everywhere is one thing, but being able to survive and to thrive in adverse conditions is something that I think is a hallmark of a good leader.
For a good leader, or for someone with my leadership style, it’s extremely exciting because it provides an opportunity to think about how you’re going to put the pieces together in a different way to make sure that you not only survive, but thrive. When we moved from the real estate side to the operating side, yes, there were challenges and we had to weather them.
During your time, with ‘juniper’ signifying being able to survive through anything, what was the biggest challenge you’ve faced so far after starting the company?
There have been a couple of times where cash flow has been really tight. We have quite a bit of cash at the moment, but the industry ebbs and flows.
As an entrepreneur do you feel like you bore that burden?
Yeah. It all stops with you. If somebody screws up, it’s your fault. If someone does well, they get the reward. But ultimately, you get the reward. I am so proud of the culture we built and I’m so proud of the people who do the work at Juniper. I’m the conductor of the orchestra, I stand in front and wave my little wand and hopefully wonderful things happen. The people who work with me are really key. The people who continue to work with Juniper because they believe in what we believe in—that’s a double bottom line, which simply means doing well by doing good and creating quality of life for the people we serve. That’s really what it’s all about.
Being a Senior Living Entrepreneur
How would you define your culture?
We’re very people-oriented. We believe that people are the key to our success. We believe that if you have the right people, as Jim Collins says, [in] the right seats on the bus, and you give them the right tools, they’re going to produce a product that people want to buy. If people want to buy your product, and you’re at all good at expense control, you’re going to make money. You can then reinvest. We’re about making money, but doing it in a way that makes people’s lives better.
Culture is nothing more than attitudes, values and behaviors of a group. A culture has to share certain values and then it has to act on those values. It’s those common values and behaviors that make culture. For Juniper, we’ve defined our values, we know our behaviors. It’s fairly methodical if you want to know the truth. We actually have a program called the Juniper Experience which outlines our core values and then relates specific behaviors to those values. We’ve done it in a way that allows every member of the organization at any position level [to participate].
Have you always known that you were an entrepreneur and wanted to start your own enterprise? Or if coming out of that skilled business you surprised yourself to go down that road?
I come from a long line of entrepreneurs. A very long line. If you’ve read Juniper’s propaganda you know that I had a grandmother who is on the front of our brochure.
She and her sister started a business in Germany, not because they wanted to be entrepreneurs, but because they had to. They had no dowry, their family had no money. If they wanted to get married they had to do something to earn money. My grandmother’s business became her dowry. She gave me permission to do things as a woman that I just always believed I could; it was never an issue, because of my grandmother. She’d done it well, and if she could do it at her age in her way, then why couldn’t I? So I never questioned it.
I learned very early on that not everybody was going to give me the money I wanted. I had no experience, I had no track record—which sometimes is a better thing. Here I was, this little late-twenties small woman with a big mouth. I wasn’t going to take no for an answer. I realized that certain people gravitated to me and some people didn’t.
I learned very early on that not everybody was going to give me the money I wanted. I had no experience, I had no track record—which sometimes is a better thing.
“People” meaning the bankers and investors?
When I started Juniper I raised money from a small group of people. They invested with me, small sums of money, $10,000, $20,000 a piece, really small amounts. I would meet them in their kitchen, we would meet wherever. What they got from me was they saw that I really cared about making people’s lives different. They really saw that I was a socially-minded individual. Yeah, I wanted to make money, I wanted to support myself, I wanted to make a fortune in five years and then go off and have children and not have to work. Well screw that; that didn’t happen.
People invested in me because they liked what I believed in and they believed in the same thing. People wanted to do something for older people, but they didn’t want to do it in the traditional way. They didn’t want to be associated with the traditional image of long-term care. They wanted someone who really wanted to bring it to a new level.
Then I had to go find debt and I learned a powerful lesson. It was in 1988-89. Beverly Enterprises had issues and no one was lending to senior living. Here I come in with my couple of buildings and I want the Bank of Boston, which no longer exists, to finance them. I fly up to Boston—a big deal when you don’t have a lot of money—from New York and I made this big PowerPoint presentation, and it was really clear to me as I got through the discussion that I wasn’t going to get any money. At the end of the conversation there were a couple of analysts in the room and one of them leaned over and said, ‘Can I ask you a question? Why are you doing this?’ I said that I’m doing this because when I get older I want there to be a place that I want to live in. I want to make the world a better place. For me, and for other elders as well. That’s why I’m doing it.
I don’t do well in certain environments, but the environments I do well in, I do very well. I can raise money from those people. I never had any problem raising money once I learned that lesson.
So when you walked out of there with no money, you actually felt pretty confident that you would get it somehow?
Oh yeah! And I got it.
Tell us the story about your son.
I was going to make a zillion dollars and I was going to go and retire with my zillions of dollars from my hundred million dollar fund so I would never have to work again. You know me, I’m always planning to work, but I thought that was the way it was going to be. I grew up with a stay-at-home mom and I was going to be a stay-at-home mom. Well, I was 36 and that little biological clock was going tick tick tick time bomb, I better do something about this. I got pregnant, but I was the supporter of my family so I didn’t stop working. I had my son on a Wednesday night, and by Friday mid-afternoon I was back on the phone. Andrew traveled with me 75,000 miles the first year he was born. He came everywhere with me. We have investors in Europe, so we went to see them when he was five months old. His first passport picture shows him being held up with a bunch of spit on his shirt. I worked through it all, and it was great. What I learned from that is that if you don’t like kids, you’re not going to like old people because they spit up and they drop things and they pee in their pants. If you didn’t like my kid, you weren’t somebody I wanted to work with.
So were you going to board meetings with your son?
Yeah, I nursed him.
That’s pretty forward thinking!
I didn’t think anything of it! When you don’t have a choice, you do it. You just go for it. It’s human, what’s wrong with that?
You simplify being an entrepreneur and make it seem so matter-of-fact. Do you think people might over-complicate entrepreneurship?
Entrepreneurship is very different than being in a large corporate environment that you did not start. Entrepreneurship involves strategic vision. People would probably argue with me. I think it’s a different way of thinking about things that goes back to problem solving. When I teach entrepreneurship—and I do—I talk about the three P’s: passion, planning and perseverance.
Entrepreneurship is very different than being in a large corporate environment that you did not start. Entrepreneurship involves strategic vision.
Do you think there need to be more entrepreneurs in the business?
I think there are plenty of entrepreneurs in the business. You need many different types of people to make an industry like this thrive.
Why do you think having no experience can be a good thing?
You have no track record. You have no negative track record. You have a clean slate.
Something we’re reporting on is that we see a lot of people coming into senior housing now without a great track record, especially on the development side. Do you think that is also scary?
I think that’s problematic. Although for me, it’s opportunity, because they’re going to build buildings and they’re going to try to fill them and run them and they’re going to realize it isn’t as easy as they thought it was going to be.
It’s a tough environment. We’re highly regulated and we’re taking care of old, frail people who want to live full lives. It’s complicated and I think developers who don’t understand that they need a good operating partner—and many do know that—can get themselves in trouble. The opportunity for us is that they will likely fail and we’ll be able to buy those buildings.
How many years do you think it’s going to take before the first ones start to crumble?
In certain markets, I think it’ll happen in the next two to three years. But only in certain markets.
Any markets you want?
I think I know the answer to this, but what’s the biggest risk you’ve taken in your career?
Well, you hate new construction.
Actually, I have another answer to you: people. Managing people is hard. It’s really hard. It’s really great, but it’s really hard.
Why is it hard?
It’s hard for two reasons. Number one, not everyone is like you. As a leader, a good leader, you need to be self aware and you need to be able to understand what others think and want in order to make a collaboration and team really function. At the end of the day, if you want any peace as an entrepreneur, as a founder, you will know you have to have a good group of people who work with you. To make sure that continues you have to know them, know what makes them tick, and you have to work with that. I think that’s a big thing.
What’s the best piece of advice you’ve gotten in your career?
Trust yourself. Believe in yourself. Know who you are. Be true to who you are. Know your boundaries. Know where your strengths and weaknesses are and work from there.
You mentioned Jim Collins. If you had to recommend one book about leadership which one would it be and why?
I love Jim Collins’ book for Juniper, “Good to Great.”
Who would you consider to be your mentor?
My first mentor was my grandmother and she allowed me as a woman to be confident in who I was and to believe that I could run a business. At the end of the day, I’d like to believe that women have equal status to men in the business world, but look around [at] NIC, what do you see? How many women do you see?
There are a lot of very powerful women in this business too.
There are some very, very powerful women and I feel really good that three of the largest public REITs are headed by women. Yet if you look around, what do you see? You see mostly men. What’s interesting about that in our industry is, who provides the care? Women. Who are most of the people at the lower level [of providing senior living services]? Women, right? But why aren’t they at the top?
Why aren’t they? The biggest trend I’ve seen this year is that executives are finally getting serious about taking care of their lower level employees to help them rise up in the industry.
There are a couple of reasons for that. One is pure survival. When the economy picks up, people don’t want to work in seniors housing. Why? Because jobs are everywhere and you can work at Starbucks or Costco and get $20 an hour, but you don’t have to deal with people. Unless you love to work with people, particularly old, frail people with whom you’re really doing some things that are often hard, both emotionally and physically. Now there are some other things going on in the industry that are also tough. One: succession planning has to happen. The second is $15 minimum wages.
Have any of the states that you’re in implemented it?
No, but Juniper’s being proactive. We have a 15×20 [$15 by 2020] program and we’ve already started raising our minimum wage or starting wages, substantially, across all of our buildings. We’re planning to get to that level or beyond by 2020. We actually implemented it starting April 1 at all of our buildings.
Are you optimistic? There is a lot of talk about the challenges of managing millennials.
It’s fascinating. I’ve been doing a lot of reading and a lot of interviewing people recently. I’m learning that people are purpose driven, they do care about social responsibility, and a company that has a track record for social responsibility is attractive, but there are other things that are also important to millennials. Work-life balance is really important. It comes down to commute time, how much travel will I have to do? How much vacation?
Can you have that as an Executive Director? An Executive Director is an entrepreneur within their own building to a certain extent.
I’m seeing people wanting to have authority, wanting responsibility, but being fairly protective of another part of their life that they find important. What’s attractive to a lot of my team is that they can do different things. You’re not stuck in a particular role.
I had someone who did most of our Medicare cost reporting come to me 10 years ago and say, ‘Lynne, when I get older I want to operate, I want to run buildings.’ So today, she’s our best manager, by far. She still oversees the budgeting process but she is our best regional director of operations.
In 2012 you guys implemented an EHR.
When you want to do an EHR, you look at the cost of the software and think, ‘Oh, can I afford the $60,000 per year on software, and how am I going to save money somewhere else?’ That’s not the cost. The cost of technology is infrastructure (meaning wifi, equipment, software), and then it’s training and people. We thought we needed to do it to survive.
How is it paying off?
Because we were early adopters and utilized the full spectrum of products and we committed to it completely and we’ve been collecting data and using it to drive operations for more than a decade, we’re just in a really different place from most other companies. Even companies with money, very large companies with lots of money, it’s a lot more difficult to fully implement an EHR across a 400-building company than it is at ours.
Do you think there are going to be good operators that are more than just regional operators? There’s always debate as to whether Brookdale is ever going to work out.
When you’re providing care to a human being on a one-on-one level, and you’re dealing with local regulators, you have to play their game. Even if I have great data, if you don’t like me, you’re not going to buy from me. If you’re a regulator and I’m giving you data in one way, and you say that you want it in another, you’re not going to get the money. It’s problematic. It’s harder to be a national operator.
I’m curious about your traveling. Can you speak to if you think your leadership style has been influenced by your travels or by being immersed in other cultures?
I love to travel. Why do I love to travel? I love to see how other people live. I love to see how they do things. I feel that when you visit a different culture you broaden your perspective on life. In every place I go, I go to supermarkets. I love traveling and I think everybody should travel because it really opens up your mind. At the end of the day, having a fresh, clear mind helps you be a good leader.
How do you clear your mind?
I travel. When I’m at home, my mind is never turned off completely and in today’s world with smartphones, we’re never disconnected. When I went to Africa, there was no cell phone, there was no electricity. You just turn off. We sail a lot. We charter and captain our own boats and when you’re out there in the middle of nowhere, you’re disconnected. A couple of days is always good, but taking two or three weeks off really allows you downtime [and] gives you the energy to recharge your batteries.
In terms of the influence of women on your life and becoming an entrepreneur, you’re very intentional in promoting women.
If you want to change business in this country, you have to do one thing, and that’s make sure that 50% of every corporate board is women. I think it’s that simple. There’s a lot of research about what happens to a company when you put women on the board. Not every woman is a feminist, [but] women are good business people. There’s a dynamic that changes, there’s a sensibility. It’s one of the things that happened when I became a mother. I didn’t grow up to be a mother, it was not something I saw myself as. I saw myself working and doing other things. Being a mother requires a different sensibility. Including women in decision-making roles at board levels will change the way we set up goals for companies. I think that will have a huge impact on business in America.
What do you think the senior living industry specifically can do to help foster women in more executive positions?
We work with a couple of big vendors, and what I’ve started to do is simply say, ‘Where are the women? How many women do you have in the top leadership team? How many women are on your board?’ I’ve come pretty close to refusing to do business with some companies that weren’t at least willing to discuss the issue. I believe that 50% of every corporate board should be women and that we as an industry need to make that happen, and we need to make sure that we’re mentoring women and giving them the confidence and the experience and opportunity to get them into the C-Suite. Simple answer.