Assessment Report Presented by : Roger North Brian Black Lynette Meck North Group Consultants

1. Assessment Report Presented by: Roger North Brian Black Lynette Meck North Group Consultants May 9, 2014

2. Consultants’ Accountability • Executive Summary • Observations • Organizational Chart / Structure • Recommendations • Consulting Support • Team View

3. I. Consultants’ Accountability To assess and support the organizational development of Moravian Manor. A. Project Design 1/14 – 3/14Various conversations between David Swartley and Roger North to discuss a potential engagement 3/6/14 Assessment proposal approved 3/31/14 Orientation of assessment participants at Moravian Manor 4/7–23/14 Interviews conducted 5/9/14Assessment Report presented to Executive Committee of the Board at Moravian Manor TBDAssessment report to be presented to Moravian Manor team members

4. I. Consultants’ Accountability - continued B. Assessment Interviews

5. II. Executive Summary Moravian Manor is a ministry with a clear vision and mission. It is distinguished among its peers by providing exceptional, person-centered health care in a “community within a community.” Through strong leadership at both the Board and Executive levels over many years, Moravian Manor has developed and maintained a distinct culture and work environment. The culture is rooted in faith and is characterized by excellence, caring, integrity and teamwork. Moravian Manor team members recognize and appreciate the positive work environment. The organization employs numerousteam members with many years of committed service, including some in significant leadership roles. There is a sense at Moravian Manor that everything is good today, and yet everything is about to change.

6. II. Executive Summary The organization is embarking on a major residential living expansion project known as Warwick Woodlands. The project will be located on a new campus, which is intended to be integrated into the “community within a community” of Moravian Manor. At the same time, a number of long term key leaders of the organization are scheduled to retire from the organization within the next several years. These two significant transitions in the life of Moravian Manor present both great challenge and great opportunity as the organization moves into the future.

7. II. Executive Summary The great challenge, recognized by Board members and team members alike, is the need for Moravian Manor to move forward purposefully with a “BOTH/AND” and not an “EITHER/OR” approach. Moravian Manor must purpose BOTH to maintain its position as a marketplace leader in delivering exceptional, resident focused health care AND to expand its reach and strengthen its future through the Warwick Woodlands project. As David Swartley aptly stated in his CEO Message in the 2012-2015 Strategic Plan, “We also recognize that when we expand onto a new campus, our current residents and facilities must be top priority.” Therein lies the challenge.

8. II. Executive Summary The great opportunity lies in the current strengths of the leadership and culture of Moravian Manor. These serve as the foundation within the organization on which to purposefully build a bridge from the current leadership team and structure to a next generation of leadership. The next generation leadership must have appropriately expanded capacity and be committed to nurturing the current cultural and care-giving distinctives of Moravian Manor.

9. II. Executive Summary As Moravian Manor moves into this compelling future, it will be essential to recognize the following organizational realities and opportunities that constitute the primary themes that have emerged as a result of this Organizational Assessment: 1. Mission and Values As Moravian Manor strives to maintain its current distinctives, while at the same time adding new components to the ministry, the organization must remain firmly grounded on these distinctives.

10. II. Executive Summary 2. Culture and Work Environment Purposefully cultivating and nurturing the distinctive culture and work environment at Moravian Manor is a foundational component of the long-term health and strength of the organization. This directly animates the ability of the organization to maintain its distinctive niche in the marketplace of delivering exceptional health care. There is a strong sense that, “there are a lot of great things here  let’s not lose them  but we have a large challenge ahead of us.” 3. Leadership/Management While the organization is well-managed, leaders in the organization are “stretched” with management tasks. Leaders, therefore, do not have the time or capacity to “lead” the organization as they might desire. Nor do they have the capacity to lead in a manner that will be essential for the future health of the organization.

11. II. Executive Summary 4. Executive Capacity and Structure There is not sufficient leadership capacity on the Executive Team. Further, there is not sufficient overall leadership “bench strength” in the organization to move into the “BOTH/AND” future. 5. Strategic Plan and Future The Strategic Plan for Moravian Manor is well-conceived. The Plan would benefit from the inclusion of a fifth major section relating to “Organizational/Cultural Development.”

12. Observations A. Mission and Values • Moravian Manor has clear and compelling written Vision and Mission Statements. Team members are animated by the commitment to provide exceptional, person-centered care to all residents throughout the continuum of care, but particularly in the health care center. • To our knowledge, the organization has not published any written Core Values. However, there is a very definite set of values [“beliefs we hold which drive our actions”] that are evidenced in the day to day operations of Moravian Manor. The “observed” values include: • Excellence • Compassion and Caring • Integrity • Appreciation

13. Observations A. Mission and Values (continued) • Team members affirm that the leaders of the organization exemplify and model the vision and mission and the “observed” values by their examples. • The vision of Moravian Manor as a “unique community within a community” is not just an aspiration. This reality appears to separate Moravian Manor from many of the other CCRCs in Lancaster County.

14. Observations - continued B. Culture and Work Environment • There is a sense that the distinctive culture at Moravian Manor materially contributes to the lower than industry average employee turnover. • The culture is also a driver of the exceptional care provided to residents, particularly in health care. • Team Members are unequivocal in their understanding and affirmation of the “resident-centric” focus of the organization. Despite the unwavering focus on quality of care for residents, there is a strong sense that the organization cares for team members as much as the residents.

15. Observations - continued B. Culture and Work Environment (continued) • There is a high level of social engagement among team members and residents. Team members gather with each other and with residents over meals or coffee. There is a sense that “the café is like a front porch.” • Expression of appreciation for staff is regular and systematic. It is evidenced in small daily acts of kindness as well as scheduled monthly appreciation events. • Those in leadership are viewed as approachable and as inviting feedback from team members.

16. Observations - continued B. Culture and Work Environment (continued) • The organization is characterized by a considerable number of long-term team members. They have been strong, positive influencers of the culture of Moravian Manor. Several long-term team members are leaders in the organization whoare planning to retire within the next several years. • There is an overall sense that communication is open and encouraged in the organization. However, some team members are concerned about the impact of the project on the culture and operations of the existing organization. Some of this concern appears to arise from a lack of clarity among all team members regarding the Warwick Woodlands.

17. Observations - continued C. Leadership / Management • The organization is well-managed. Team members across various disciplines aspire to work as a team to effectively execute the day to day operations. • The basic human systems of the organization are done quite well. • The organization provides some training for those in management relating primarily to human systems. Recent data suggested since the implementation of this human systems training, employee retention improved by approximately 10%. • Major operational decisions are made primarily by the Executive Team. Team members affirm their respect and appreciation for the functionality of the current Executive Team.

18. Observations - continued C. Leadership / Management (continued) • Sharon Leese, Joyce Krushinski and Peggy Kammerer, are likely to retire within the next several years. These long-time leaders have a particularly positive effect on the culture and working environment. They also carry much organizational knowledge and history with them as they transition. Their combined effect on the culture should not be underestimated. • The tendency toward leaders carrying a heavy load of management tasks begins with the CEO, who very capably carries a significant number of daily management tasks. This overload of management tasks limits the CEO’s leadership capabilities.

19. Observations - continued D. Executive Capacity and Structure • With the current stretch of leaders with managerial tasks, coupled with the introduction of the Warwick Woodlands project, there is not sufficient leadership capacity on the Executive Team. • In addition, the organization lacks sufficient overall management “bench strength.” • The organization is highly vulnerable to the loss of the CEO. There is no apparent successor to David within the organization.

20. Observations - continued D. Executive Capacity and Structure (continued) • Team members identified Jennifer Shutt, Donovan Carper and Cindy Meier as high potential leaders within the organization.

21. Observations - continued E. Strategic Plan and Future • The current Strategic Plan for Moravian Manor is well-conceived. The Board of Directors and Executive Team should be credited for engaging in this important planning process and for moving forward with the implementation of the Plan. Publishing the Plan so that it is accessible to team members, residents and other constituent groups is also commendable. • Moravian Manor is purposing BOTH to maintain its position as a marketplace leader in delivering exceptional, resident focused health care AND to expand its reach and strengthen its future through the Warwick Woodlands project, all while maintaining its distinctive culture and work environment.

22. Observations - continued E. Strategic Plan and Future • The planned major expansion of the organization through Warwick Woodlands represents a “re-scaling” of the organization. In many respects, this re-scaling could result in Moravian Manor more closely resembling the size and residential living unit mix of many other local CCRCs.

23. IV. Organizational Chart/Structure

24. V. Recommendations • Develop clear, written Core Values to provide a foundation and point of reference as the ministry further expands. • In order to sustain the distinctives of Moravian Manor into the future, the organization will require leadership and a culture that can flourish in the context of “Both/And,” as opposed to “Either/Or.” In the future, the leadership and culture must serve BOTH the rich and the poor, BOTH the well and the not well, BOTH younger and older, BOTH long termers and new leaders, and BOTH the existing site and the future site. • Succession planning must be purposeful in the recruitment, retention and development of team members who are strongly aligned with the distinctive culture of Moravian Manor.

25. V. Recommendations - continued • Purposefully cultivate and nurture the distinctive culture and work environment at Moravian Manor. The high level of caring for BOTH residents and team members is a critical cultural distinctive at Moravian Manor that should not change. • Place a primary focus on the growth and alignment of the Executive Team. • Develop a cohesive Executive Team that can function in the unexpected absence of the CEO. • When recruiting new leaders for the organization, place a premium on hiring leaders with significant ability and capacity to think globally and strategically.

26. V. Recommendations - continued • Implement an internal leadership development program for current high potential team members, which could include individual executive coaching. • Leadership focused directly on the Warwick Woodlands project is essential. Whether contracted or employed, the function should report to the CEO. • Implement a systematized communication plan that provides for the complexity of a growing organization.

27. V. Recommendations - continued • Along with the strategic marketing and promotion of Warwick Woodlands to the community at large, purposefully engage all Moravian Manor team members with respect to the project. • Add an additional section to the Strategic Plan focused on “Organizational/Cultural Development.”

28. VI. Consulting Support We have received excellent cooperation and support from all participants throughout this assessment. We have, with your cooperation, met our mutual objectives. It would be our privilege to continue our working relationship and support your continued growth. At your direction, we have prepared a leadership succession plan for your consideration. We consider your trust and confidence to be a privilege.

29. VII. Team View