[ re ]Defining Executive Leadership: What You Need in a Next Generation CEO for Today’s Next Generation Customer

1. [re]Defining Executive Leadership: What You Need in a Next Generation CEO for Today’s Next Generation Customer Presented by Oklahoma Leading Age Conference March 12, 2014 Senior

2. HCapSearchSenior: Dedicated to Nonprofit Senior Living Combined 70 years’ hiring experience 45 years in the senior living market AAHSA/Leading Age leadership Passionate about senior adults – the senior living industry Philosophy and approach

3. The case for [re]Defining Leadership: The Industry Out of the Poorhouse Caring for senior adults has long been the mission of nonprofit, faith-based organizations 1800s – from the almshouse to Homes for the Aged 1954 Medical Facilities Survey and Construction Act 1965 Medicaid and Medicare – Facilities up 140%; beds up 302% 1970s and 80s reforms and regulations 2000: $100 billion industry

4. Post-1970s Yesterday’s Senior Living Community Heavily weighted toward skilled nursing Younger residents with greater needs Drab, institutional Little to offer in food and amenities Paternalistic view of the resident and their family

5. The Market 2012 CDC/NCHS Study of Long-term Care Facilities 58,500 providers serving 8 million seniors across a continuum of services Nearly half -- 22,200 – are residential care communities 15,700 are nursing homes 21% - 25% nonprofit run Only about 5% with 100 beds or more Supply of beds highest in Midwest and West

6. The Market: Users 2012 CDC/NCHS Study of Long-term Care Facilities 1.4 million in nursing homes 713,000 in residential care facilities

7. Today’s customer Older entry demographic Healthier; living longer Higher income/net worth Higher levels of activity and acuity Greater wants and demands

8. The New Customer : Wants and Demands Baby Boom 1946 – 1964 78 million Demanding demographic ‘Generation Reinvention’ Greater percentage of entrepreneurs 50 is the new 30 Dine out often – seek variety Cruise-line mentality

9. How Senior Living is Responding Aging is about LIVING, just right-sized and with services Creating the “main street,” Town Hall Open spaces where residents congregate – grab a scone, a cup of Starbucks and read the NY Times

10. Trends • Creating places where people “want” to live, not where they “need” to live • Ability to seamlessly move from independent living to health services • Lifelong learning and wellness centers - beyond basic fitness • Partnerships foster vibrant communities and intergenerational relationships

11. Trends • Technology promotes independence, wellness • Urban/suburban near retail and services and with walkable streetscapes • Affiliation -- or affinity --- housing • Cooperative models /NORCs

12. What You Can Expect for the Future • Master-planned communities • High-rise senior developments in 24-hour neighborhoods • Affiliation-sponsored housing catering to lifelong learners, religious affiliation and even sexual orientation

14. The crystal ball 2010 LeadingAge Compensation Survey 43% of CEOs in multi-facility senior living organizations plan to retire in the next 5 years Implications Unprecedented competition May drain talent from the ranks of freestanding communities

15. Your hiring market 81% of residential care communities concentrated in metropolitan areas

16. Why you should care? • Impact of CEO turnover : • • Strategic planning • Development of new services • Capital expansion/upgrades • Marketing and brand impact • Residents • Service area • Natural assimilation time

17. New CEO: Greatest Challenges Ever-changing regulations Actual costs vs. perceived quality Keeping up with the trends service models design staffing best practices Identifying and mentoring the right staff in the right place

18. Senior Living Leadership Burnout: The Stressors • The Nature of the Job • The 2 a.m. call • Open door vs. productivity • Equilibrium • Staff turnover • Finances • Quality vs. costs • Census • The Nature of the Individual

19. Coping Strategies Work-life balance Professional Coach Tools to do the Job Exercise Delegating Are these included as part of the annual review?

20. What Today’s New CEO Must Do and Know Partnership with a healthcare provider Move the community out of its own walls Forge strong community partnerships to provide services you can’t do feasibly/economically on your own Be rabid about customer satisfaction

21. Traditional route to the top Work way up through the senior living industry Healthcare Faith-based

22. Hospitality: The New Career Track Penn State New colloquium “Hospitality in Senior Living” Matches the demographic of the new customer Boomers eschew nursing homes but say they will consider rehabilitation in a “hotel-like” facility

23. Bucking Tradition Penny McIntyre Sunrise Senior Living Mark Parkinson AHCA/NCAL

24. What great CEOs have in common Passion Often long-held Hard to be successful without this single quality

25. What is the key to long-term success? Today’s hiring environment features lots of bells and whistles (OAD, Predictive Profiling) One of the most important elements to ensure quality hires and retention: thorough understanding of the community’s culture

26. Succession Planning Critical function of the board Must be fluid and timely Can be threatening

27. Succession Planning Two general scenarios will trigger the need Assess current situation and needs/assets What type of transition environment will the new CEO inherit? Develop the framework Process, decision making, candidate profile, who will be involved

28. Succession Planning The internal candidate Talent identification Professional development plan

29. Critical: A Thorough Internal Assessment Of your community Your resident Your ‘brand’ Internal and External SWOT Long-range plan and goals Culture and history

30. Often overlooked aspect that will build success Seek to involve your STAKEHOLDERS In the process Residents Family/former family members Foundation leaders and donors Community partners and supporters

31. Have No Fear Turnover is only bad if …. The risks of overemphasizing employee retention at all costs

32. What you want: The Basics • Subject-Matter Expertise • Healthcare • Aging • Activity • Wellness • Legal/Regulatory • Strong communicator • Business/finance savvy • Long-Range Planning • HR/Management

33. Plus … Understand and manage multiple bosses Thought leader: know the trends, be able to read the tea leaves and know what to do about it Project Management – to understand what it takes to bring all the pieces together

34. Plus … Enjoys -- or at least understands the importance of -- being out and about Strong on relationships in the community -- more and more, can’t do it on their own anymore Familiarity – or at least a quick learner – of the surrounding community

35. Your Search: Timeline

36. The Search Process: Candidate Progression

37. The Search Process: Candidate Assessment

38. Hiring Considerations Timeline for transitioning Contract By any other name … Onboarding

39. The Contract Review/renewal Compensation A package Ways to get there Performance Measurement

40. Your Legal and Fiduciary Responsibilities Due Diligence What Who How Performance Review

41. Your Legal and Fiduciary Responsibilities Executive Compensation Increased Scrutiny Safeharbor Rebuttable Presumption Compensation Committee Compensation Policies Benchmarking Comparables

42. Once Your New Leader is On Board First Three Months First Six Months First Year Good practices to put in place

43. Thank you! Contact us Jean Bacon jbacon@hcapsearch.com 804-301-4402 (direct) Jennifer Furla jfurla@hcapsearch.com 816-591-5493 (direct) Laura McCray lmccray@hcapsearch.com 913-558-1713 (direct)