• October 29, 2018

    Meet Chris Winkle, CEO of Sunrise Senior Living. A Buffalo, N.Y. native, Winkle began in the CEO role in 2014 after serving as the company’s chief operating officer—a position that brought him to Sunrise in 2013. Prior to joining Sunrise, he served as CEO for MedQuest, Inc., an outpatient operator of diagnostic imaging services. A graduate of Case Western Reserve, he previously served as president and CEO for Mariner Health Care, Inc., and as chief operating officer for Integrated Health Services and held various management roles in speciality and rehabilitation hospitals.

    Spotlight on Technology

    Looking at the huge universe of tech, how are you thinking about what the best opportunities are going forward? Are there technologies in particular that you think are promising for the evolving the resident experience?

    We have done electronic health records, and eMAR. We’ve got TELS. We’ve got OnShift. We’re doing tableside dining. We did something called, “improving move-ins,” where we automated the move-in process. Technology is a huge, huge part of our strategy. In many ways we’re also kind of data obsessed. But I think the distinction is I’ve seen a lot of industries and companies that will slap on technology because it’s “the thing to do.” We’re constantly looking at how it enables us to get better at our fundamental business. And that is an also an obsession of ours. So we’re going to always look at how we can perfect what we do.

    So what we’re always looking for, is how do we reduce the non-value-added waste? And there are going to be different technological solutions that come along, that we’ll adopt and continue perfecting.

    And we coined a term, “foundational growth”. We said, “If we look at ourselves for the next five to ten years, we’re going to be growing rapidly,” but everything we’re also going to be doing is building the foundation for the future. So one of the things we saw way back then was that if we do all the things we think we can do, and we’re kind of starting year five into that ten-year growth plan. We did all the things we can do, now we’re just at the starting line. And how many industries can say that?

    Everything we’re doing, is really building the foundation for what we see here. And that’s everything that you talked about from Medicare Advantage to our development, to all of the operational improvements we’re making.

    We sat down with Winkle to learn about Sunrise’s approach to growth and branding, the company’s early foray into Medicare Advantage, and where he sees opportunities to excel through technology.

    Senior Housing News: How did you get involved in senior living?

    Winkle: It was ironic. My entire career has been in healthcare. I was an accounting business major at Case Western and I had a fraternity brother come across the hallway on a Friday afternoon with a phone in his hand. He said, “Oh, by the way, my aunts who work in this hospital are looking for somebody to help with their work papers.” And then he said [referencing the phone], “Oh, and this is my aunt.” I got on the phone, then I went in to meet them at the pediatric rehab hospital where they worked. It was called Health Hill Hospital For Children. They had me do some paperwork for them. Then one Saturday, the CEO of the hospital walked in. “Do you know computers?” he asked. “Do they teach you at school?” I said, “Yeah, why Tom?” They were on the cutting edge with their first PC-based accounting system and it was a total disaster. And he said, “So can you help?” I said, “I’ll take a look.” So I then got into the weeds of what the right answer should be and worked with a company in Wisconsin as well as the hospital and our board. They pretty much approached me after that and said, “Our Business Office Manager is moving to Maine, so we want to create a job for you, so that you’ll stay with us.”

    And they made me Business Office Manager, Director of Finance at that time and gave me other operating departments so that I would stay with it when I graduated and that’s probably the only reason I’m in healthcare today, and it was great opportunity. And being in pediatric rehab was incredible. During my lunch hours I would go up and play basketball with the kids. We had a handicap hoop and we could lower it. It was totally inter-disciplinary.

    I thought I was going to law school when I started school. Obviously, I had no desire to do that. But I just loved health care and stayed with it and 34 years later I’m still here.

    So, was Mariner your first senior focus?

    That was Integrated Health. I ended up becoming the COO of that company. Mariner was my first CEO job.

    I started there in 2000 less than a year before they filed for chapter 11. Frankly I was kind of like the choice between either going to a trustee or some of the directors coming down. So it was kind of a baptism by fire. It was not the most fun thing to start into but I got dog years of learning because of it.

    And when you took that job at Mariner did you have any inkling of how things might go at the company?

    For me it was an opportunity. I was aware of where things most likely would head when I got in and really got into the details. So I was kind of one person who said, this is pretty much the path that we’re on.

    If you look at the nursing home business back then, many of the nursing homes went bankrupt when the balance budget act went in and there was kind of an over-under line on the sector. Those that stayed with traditional nursing care made it.

    So is that your MO? Do you like to be in those high-pressure situations where you’ve got a surprise on your hands?

    I wouldn’t say it’s my MO, it has just turned out that way. After we sold Mariner, I was recruited by a company called MedQuest which was an imaging company and there was a turnaround. And so then all of a sudden, I get labeled a turnaround person…Which I don’t really think is my nature. I like to be part of something for a long time. And that’s really where I think we are at Sunrise. I don’t really want to be transactional. I don’t want to look for a quick flip. I like the fixing for the long term. I told my board when they hired me, and it’s was probably a stupid negotiating point, but I said I had no intention of ever leaving. This to me is my last job.

    Was that in 2013 for the COO role?

    Correct.

    Where was the company at that point and what was going on in your mind when you were debating whether to come on board?

    From a personal perspective, when I first started at Mariner, my family was in Baltimore and the company was in Atlanta. I commuted for four straight years between Baltimore and Atlanta. So I’d made a decision that I was going to do anything big until my youngest sons were out of school and that really happened in 2012. So in 2012, I decided I’d test the waters.

    So I was looking around at a few different opportunities, and then the Sunrise call came in. I knew one of the board members and came in to interview. They had made a strategic decision at that time that they were not looking for a health care person, but they talked me into the COO. So there I was going from 2000 all the way to 2013 when I’d been a CEO and all of a sudden, I was taking a COO job.

    It was kind of the classic case where you love the company, it was a long-term play, check your ego at the door and do what you think is right for you and your family.

    A new CEO came on board and then all of a sudden we were transitioning again, and we had another owner and that team decided they wanted me to stay on board and assume the CEO mantle.

    Can you talk about some of the thinking that went into your accepting the CEO role and some of those challenges that you were facing out of the gate?

    The company had been through a lot. It had gone from public to private in January 2013. New ownership came in, people like me were coming in, and  everybody was trying to get a feel for where we were headed. I’d been with Sunrise about four weeks….I felt like I had been there four years. So from a cultural perspective, the company was incredibly welcoming. Even my wife would say to me, “It feels like you’ve never had this kind of a fit before.” And it really has been.

    I didn’t feel like we’d missed a beat.We went through another transition and did our first leadership conference right around that time, and I give the credit to the culture, which is incredibly resilient. People just seem to stay focused and ride with it.

    How do you define leadership?

    Leadership to me, is really trying to find a common vision. One of my very first leadership roles was as the president of a fraternity that was about to get kicked off campus and so trying to convince [the membership] you should put money into a newsletter to your graduate members as opposed to having an open campus party.

    Leadership to me, is really trying to find a common vision.

    It’s all about getting people to buy into what the vision is.

    So you were a turnaround artist, right from the start. [Laughs.] How would you describe your leadership style?

    I like to solve problems. I don’t like finger-pointing at all. What problem are we trying to solve, and let’s figure it out and keep moving on. When we formalize and craft our visions, my role is to get support for the visions.

    Chris Winkle, CEO, Sunrise Senior Living

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    Can you talk about a particular challenge you’ve had to overcome or the biggest risk that you personally have taken in your career?

    I think probably the biggest risk I ever took was the risk of coming here. To take a step back is not something people are comfortable doing.

    It was the right field for me, but it was a risky proposition at the time. Some of the new ventures that we do are risky. Things like Medicare Advantage.

    If you’re batting a thousand you’re probably being too risk averse.

    At the leadership level, do you think that Sunrise is doing a good job of attracting top quality talent and grooming future leaders?

    At the leadership level, we’ve had very little turnover. We’ve got an “EDIT” program, which is Executive Director in Training. We’ve got a department coordinator in training. We are always looking at things that we can do to prepare folks for the next day and the future opportunity. In the sector, finding the labor force, which is a talented group of caregivers, is the single biggest challenge.

    I think the industry is doing a lot, such as Argentum’s certification process. One thing I am struck by is how collegial this industry is versus others. I look at the other CEOs as peers and friends. And I think it’s very, very unique to senior housing.

    What are your thoughts about the supply cycle and development plans? What’s the pace you’re looking at?

    I’d call it a modest pace. We’re looking at a half-dozen communities a year as our sweet spot.

    We’re clearly going after the markets where we think there’s value creation opportunity. It takes a lot longer to identify and get through the entitlement process, but that’s our cadence and what we’re trying to do. Construction cost is an issue and we’ve had to look at some projects and say ‘We don’t find that interesting anymore.’ What the sector is finding with a lot of the newer supply is it puts pressure on some of the older supply in that market.

    But in the scheme of things, I don’t think that we’re overbuilding. I think the demographics will catch up and so it’s like everything else—what’s your timeframe? If you’re a long-term value investor, I think that you’ll be there. I think labor is by far the larger issue.

    Is there anything that you think should be done to encourage more people to come into these roles that the industry needs?

    It’s going to be about attracting people who think about health care earlier in their progression and see if there’s a career opportunity, long-term.

    It’s going to be about attracting people who think about health care earlier in their progression and see if there’s a career opportunity, long-term.

    What does a Sunrise development look like today and how are you thinking about Sunrise properties being homogenous versus sub-brands?

    One example of our “brands” was our 2014 acquisition of Gracewell assets in the UK. If you saw them, you’d say they’re just not Sunrise. I equate it to going into a Marriott versus a W. They’re just different. And we did a brand study and clearly a Sunrise was synonymous with assisted living, Gracewell was more synonymous with health care. We had a team meeting around that time and the question we posed was, “If you had to do it all over again, is every community that we now, say brand is Sunrise, would you keep Sunrise?” I had not one person say yes.

    We’ve got to be more like the hotel industry. With respect to the Sunrise Villa brand, we’ve got these communities under management and we did not make a branding decision right away. We really studied it, we listened, we talked to residents and families, we looked at the communities, their operating model and we said, you know, this is just different in terms of the type of acuity.

    We are looking at it and saying: What are the opportunities given a particular site?

    Given the different brands, what are your thoughts on the ability of senior living in general to offer different price points?

    A lot of what you see typically with lower price points is that there are limitations on the acuity that those communities can take. When you start truly allowing aging in place, you get a lot of complex residents, which requires a higher cost of staffing model. If you were to look at all of the differentiation in assisted living versus hotels, you’d see those limitations in terms of what acuity the community is willing to take.

    In a past interview, you talked about the coverage that Sunrise has in key markets and how that theoretically should make you attractive to health systems. Has Sunrise been working with health systems and how does that relate to Medicare Advantage?

    Years ago when were talking about health care reform, the thinking was we’re all private pay, why do we care? And the answer was, although 99.5% of our population is private-pay, 99.5% of our population are also Medicare beneficiaries.

    Basically you’ve got two choices: be inside this conversation or outside this conversation. If you’re not part of the Medicare continuum, [health systems] really don’t think of you. And that doesn’t mean you don’t have a lot of activity going on, you do, it’s just not anything that gains a lot of traction. The more we thought about it, we said, “In order for us to really get a seat at the table, we need to be at the head of the table and in order to do that, we’re fulfilling our vision to truly changing quality of life for all seniors.”

    When you really look at it, what created assisted living? Well, assisted living became an alternative to nursing homes. If we don’t do something here, we could wake up one day and find that we have a whole lot of managed care plans that are attempting to influence what we’re doing at the communities. So the choice we made is we’d rather drive that. And then on the other hand, it’s an interesting value proposition. You’re paying for your mom to be at Sunrise, but for Medicare benefits, you’re on your own.

    That’s essentially the dilemma families have. This really gives them the opportunity for one-stop shopping. We can help you administer the Medicare benefit as well as taking care of you.

    We decided to jump into the deep end first on this one. We think 10 years from now, you’re going to have to have that kind of an offering to be competitive.

    We’ve heard there’s a challenge in getting enough beneficiaries signed up for the plan to make it viable.

    Yes.

    How has it been building up enrollment in the plan? Would you consider opening it up to other providers?

    We can’t share a specific numbers, but it’s been very steady. Our customer base is discerning so the sales cycle is longer, but it’s been very consistently steady in all of our markets, and we’re as bullish about it as we ever were, so we knew that this is the long haul.

    As we’re growing, one the things that we’re evaluating is just the question that you pose. What critical mass must I have in a market versus where will I need to find partners?

    How do you think Sunrise became a “best place to work” and sustained that culture for so many years?

    [In general] we’ve stayed committed to the mission, we’ve got people who just love what they do and we try to be both customer- and team member-obsessed. If you do a great job taking care of your residents and you do a great job taking care of your team members, that’s going to continue. We continue to find ways to measure that, on a more real-time basis, and looking at ways to even get more specific improving in those areas. I just don’t see that changing ever.

    And how does the company approach scale? How big is too big, and where do you start to lose the culture?

    A lot of it’s structural, and the perception is sometimes that companies get too big. I think you have to separate the structural component from the size, because you don’t hear people talking about how big Marriott has gotten.

    How many countries do they operate in? How many brands? It’s about maintaining the culture. And if we get to a point where that the culture is sacrificed, I think that would be something that would make us say, “Okay, maybe it’s time to take a pause here.” It’s really tough to say what that number is. We are in four countries and yet the culture seems to be pretty intact. So that would suggest to me that we still have room. It’s hard to say how much room.

    So I think there are obviously benefits that come with scale, and I also think it’s about your position in the marketplace. If I have four or five different products offerings that I’ve all branded all Sunrise, that’s going to be confusing in the marketplace. And then I might not be successful in that market,. It doesn’t mean I was too big, it might have been a branding mistake, or I entered into a bad deal. So I think we have to separate those in looking at how we can support the platform, the structure that we have in the business and the culture.

    How do you think about memory care and the portion of communities going forward that are going to be dedicated to it?

    We’re continuously evolving and we’re always looking at better ways to deliver our programming.

    We have flexibility in our design that allows us to grow based on what the market tells us.

    Standalone memory care is not something that we’re looking at doing. We like having both. The challenge is, what is the blend and balance between both? We typically go two thirds, one third in most of the communities, but the ability to flex that was a key design feature that we made going forward. Because you can have all the data in the world, but the markets speak and when they call, you’ve got to be there for the meeting.

    If you had a CEO dashboard, are there specific metrics you would like to see on that would help you do your job better?

    It’s continually evolving and we’ve got lots of key performance indicators, but I’m always asking the same question, which is, “Do we have too many? Do we have the right ones?” You know, “How do we evolve these? Are they real-time?”

    To wrap up with a personal question: What do you do for fun or to blow off steam?

    I’ve got my granddaughter who lives ten minutes away, which is a blessing. I love to hang out with her. I like movies and podcasts and all those things. I like to travel when I’m not work-traveling.

    My wife’s into horses. So I live a gazillion miles away, unfortunately, with Virginia traffic. We also have alpacas, chickens, dogs… 

    And I’m from Buffalo. I love eating chicken wings.

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