Ryan Novaczyk, CEO of New Perspective Senior Living, shares the importance of building a servant leadership culture that allowed his teams to have the energy to keep serving during the pandemic. He also discusses how building the right culture is a direct feeder to successful team retention.
Lucas: Welcome to Bridge the Gap, the senior living podcast with Josh and Lucas. A great conversation from another industry leader. We want to welcome Ryan Novaczyk to the program. He’s the CEO of New Perspective. Welcome to the show.
Ryan: Thanks Lucas. Thanks Josh. Very pleased to be here with you this afternoon.
Lucas: Well, I’m going to start off the show with one of my all time favorite stories and not very many people know about this. So this was about 10 years ago. I walked into the Argentum conference. It’s one of my first ever senior living conferences that I’d ever attended. I knew no one, no one knew me. It was a very overwhelming but exciting experience. And I walk into the beginning opener lunch and I get there early, again cause I don’t have any appointments, I got nothing better to do. I walked to the front of the room and I walked all the way to the side and I sat down by myself at a table. The room starts to fill up and I’m just kinda sitting there seeing all this take place. And I feel a tap on my shoulder and I turn around and is none other than your mother and she looks at me and she says, why are you sitting here all alone? Why don’t you come and join us? And it lifted my spirits, a smile came on my face. I got up, they had a seat all picked out for me. I got to meet your father. I got to see Chris Hyatt on your team, who I’d seen and kind of known of before. But they just involve me immediately into their conversations. This was a table full of people that already knew each other and they folded me in and made me feel very, very welcome. And I imagine that that is partly one of the big reasons why your company has done so well and provided for so many older adults.
Ryan: Yeah, Lucas, that’s the first time I’m hearing that story, but I’ll tell you what it does not surprise me. By the way, it’s my mom’s birthday today. So mom, if you’re out there listening, happy birthday, I love you. But that type of act of kindness and collaboration and sharing is really what the senior housing industry has been all about from the beginning. We tend to be less competitors with one another and more true partners with one another, regardless of what company you work for. I learned that early on in our careers from Stephen Beck and our goal is to lift up the entire industry to better serve the seniors each and every day to give them opportunities to live life on purpose and really make a difference for that greatest generation. So I’ll have to remind her of that story when I see her next, but it doesn’t surprise me a bit and we’ve got a unique connection now, Lucas.
Lucas: We do and I would be surprised if she remembers that, but I’ll tell you and all of our listeners, it’s something that I will never forget. It made a very lasting impression. So Josh, there’s a lot of synergy here with Ryan, really glad to have him on the show today. Before we kind of dive into some of the topics today, we’re going to be talking about leadership and culture. We’re going to be talking about y’all’s goals for impacting the lives of older adults over the next two, three, four, five years. But growing, I imagine, so you’re a part of the family business. Did you grow up in this, around this? Was this always your plan and your goal, or is this something that more organically happened?
Ryan: It happened organically. We got into this business because my grandma Betty, my mom’s mom, had Alzheimer’s and we as a family, couldn’t find a place we felt good about taking her and we took care of her for seven years. We learned a tremendous amount about the needs of seniors, particularly those with Alzheimer’s and other forms of dementia. And we kept her busy doing stuff every day, raking leaves, shoveling snow, arts and crafts, music, family events, social events, spiritual events. And most of the time she went to bed because she was tired. She had a big day, not because she was doped up on anti-psychotropic medications, which is too often how we treat some of the behaviors that come with Alzheimer’s and that really formed our foundational belief back then we used to call what’s best for Betty. And today we call it, seniors living life on purpose, and what can we do? What can we do to discover something about the personal history of those residents and make a difference in their lives? Give them an opportunity to live life on purpose each and every day. And so my father taught at a background in hospitality, running restaurants, hotels. I actually started my career in investment banking, working on wall street. I did some money management for some hedge funds. And we were kind of cooking up a business plan in the basement and you know nothing was happening for a few years. And my mom was yelling at my dad, like, you gotta go get a job. This isn’t working and he’s like, no, it’s gonna work, it’s gonna work. And then one deal happened and then two deals happened and then 10, and now we’re up to 24 locations in Minnesota, Wisconsin, and Illinois, serving over 2000 what I like to call feisty 85 year olds helping them to live life on purpose each and every day.
Josh: Oh my gosh, Ryan, that’s an amazing story. Thank you for sharing and Lucas thanks for sharing that story upfront to give me a little bit of insight and our listeners insight. Ryan you’re hitting all of our passion talking buttons. So I think our challenge today is going to be like, how do we turn this off? We’re gonna want to talk to you for a while, but let’s dive in a little bit more on the culture piece because you know, that really resonates. And a lot of people throw around I think too loosely the word culture without really kind of given some substance. You guys are obviously known for your culture. One of the things that we got in talking with your team a little bit prior to this was specifically around a servant leadership culture and kind of what you guys refer to and maybe how that has also helped you guys through the difficult times. Obviously our industry and I’m sure all of the senior living communities like yours have had some difficult times over the last 12 months and that culture is kind of at our core and helps us in those times of difficulty. So can you tell us a little bit about what drives that servant leadership culture for you guys?
Ryan: Sure. Well, people are literally the most important part of our business. We need to find folks that believe what we believe, folks that are passionate about serving seniors, and then we need to serve them. Serve them by giving them the resources they need to do their jobs each and every day. And so years ago we embarked on a kind of a cultural transformation in the organization. You’re always transforming to some degree as it relates to culture, but to really double down or triple down on servant leadership and our commitment to collaboration. And when Chris Hyatt, our president, and my partner and tied my father and our executive chairman tell everybody in the organization, we work for you. Our jobs are to get you the resources to do your jobs. And we believe in these servant leadership principles, um, that resonates with folks, it’s different. Not everybody is architected that way. Many organizations are top-down, they’re dictatorial. They’re not about collaboration, they’re not about servant leadership. And when a company goes through any tests or trying times as we have over the last 11 plus months fighting this invisible enemy, COVID-19, you really find out what you’re made of. You find out who’s standing next to you, who is standing alongside of you. And that foundation that we spent so much time and took so much care to build around the people side of our business. And that culture has paid huge dividends and we’ve accomplished things in 2020 that if you told me in 2019, you’re going to do 5% of these things, I would’ve said you’re crazy. And we accomplished them because we had to. This team literally worked every day from the end of February, through the 4th of July- 14, 16, 18 hours a day. Whatever it took to make sure our residents and our team members were as safe as they could be and had all of the resources they needed to do their jobs and for our residents to live out their lives in our communities. And we were a family before COVID were even more so of a family and a team now, and we’ve been battle tested together. And we are going to come out the other end of this thing much, much stronger than when we went into it. And a large part of that is due to the culture that we had in place before the pandemic began.
Josh; Wow. So Lucas, you and I have talked about this a lot, it’s in the time of crisis is not the time to build your culture. That you got to lay the foundation so that when the crisis arrives, your core team is there and then that culture is what allows you to get through it. RYan, thank you to your team and for your family’s leadership serving so many hundreds of team members and residents through a tough year. Let’s transition a little bit, because there’s a lot of things we want to touch on with you. But I love the talking point in the phrase of you guys, about helping seniors live life on purpose, I think is the way that you referred to that. And you guys have set some goals and I don’t want to misquote that, but correct me if I’m wrong, but I think it was something like 10,000 seniors living life on purpose within a few years. Can you unpack that a little bit for us?
Ryan: Yeah. Well, there’s an old adage if a business in busy growing, it’s busy dying, and I believe that’s truly the case. And so we like to set the big, hairy, audacious goals. And we sell one a few years ago saying we’d like to get to 10,000 seniors living life on purpose by 2025. And we began putting strategy and plans in place to make sure that that happened. And that involved a bit of a transformation across the organization, if you will, a new perspective 2.0 to make sure that we had that foundation poured, the people right, the culture right, the platforms right, the systems dialed in, then standardized ways of doing things, repeatable processes and really kind of try to put the plane together while it’s on the ground or at least flying at a low altitude versus trying to put them together when it’s 50,000 feet in the air. We did all those things and now, despite the pandemic, by the time we got to July – August, it’s almost sad to say it, but many of the things we needed to do to deal with COVID-19 were becoming standard operating procedures for us. And throughout the pandemic, we’ve kind of been a couple months ahead of where we’ve seen the feds and the states and tried to intentionally stay ahead of the game there so we could pivot to growth at the right time. So during the August – September timeframe we started saying, hey, what is going to happen on the other side of this thing. Going into it the industry was already fragmented. We had a lot of folks getting into the industry that maybe didn’t really quite understand it thought it was apartments that it was hospitality, thought it was real estate and now are certainly going, oh yeah, everybody that told me that this was healthcare, it’s healthcare a big time and so I think that’s going to create some pretty seismic shifts in the space as we kind of get into the spring summer and into the later in 2021 and 2022. And so we started to lay some plans for that growth to be ready for it. And we’re doing it across a couple of different vectors, uh, years ago we partnered up with a group called Bolt. They’re a 130 year old family run business, very similar to ours out of Milwaukee, Wisconsin. Big believers in culture, big believers of people focused on healthcare and heavy industrial advent and seniors got out, wanted to get back in. We formed a partnership and we actually opened two new projects with them as our investment partner and development partner in Milwaukee in the middle of a pandemic. Our Franklin location opened in July and our Waukesha, Wisconsin location opened in September. And both communities are literally off to the fastest lease ups in the company’s history and close to 70% of the move ins are independent living. It’s the opposite of what you would think you would think the need driven would be more robust and we’re absorbing 8 to 10 new move-ins per month. So, despite all of the negative press out there, we and many others in our industry are doing great things for our seniors. And when we have an opportunity to present our value proposition to folks they want it, they want to live life on purpose, they want to be around other people. And now that our vaccine clinics have begun, we’ve got light at the end of the tunnel. And we’re going to be very focused on continuing to grow our development pipeline with our partner Bolt. We are also working with them on raising a $500 million programmatic equity facility to go pursue core plus value add acquisition opportunities.
We think there’s going to be a number of those that come available at much more attractive price points, versus where prices were pre pandemic. And we’re looking for folks who maybe there’s been an emotional shift with the ownership. Maybe the owners have been doing this for 25 years and they don’t want to stay in the fight. Maybe they got into the business thinking it was this, and now they realize this is a healthcare and senior focused business. And then find a way to craft a win-win scenario, for those sellers and to deploy that fund. So our goal of 10,000 might actually turn out to be too low. It seemed like a really big number at the time, but I wouldn’t be surprised if the number is not closer to 20,000 seniors living life on purpose by 2025.
Josh: Wow. Well, super exciting to hear that information and it’s consistent as me and you Lucas, get to talk to a lot of awesome providers because of this platform because of the Bridge the Gap network. And you’re exactly right Ryan, it’s very different than what you might read in a headline. The actual reality when you go into these communities what’s really happening. So thank you for sharing that. So you touched on something and kind of gave us a little bit of insight into, I think how you phrased it was potentially some seismic changes coming. We obviously we’re talking in the industry even prior to the pandemic about the changes that were coming, even in caring for the greatest generation, transitioning to the boomer generation over the next few years. But now we’ve got the pandemic as well. Maybe we’re hoping the end is in sight at some point, but can you kind of unpack for us? You guys are obviously very forward-looking. What are some of the bigger changes and what are our responses? What do our responses need to be to the changes over the coming next few, few years?
Ryan: Well, one of the things and it was starting to happen pre pandemic, and I think the pace is going to accelerate is the healthcare value chain that’s out there for lack of a better term has always kind of known we exist. They kind of have known we can add value, but we weren’t in the payer stream, ease of Medicare and direct private insurance. And so we were kind of this afterthought and I think what’s happened, and I think the pandemic has accelerated this is really brought to the forefront. What some of our bread and butter is and how we can add a ton of value to the overall health care value chain. And that’s really around care coordination, chronic care management, whatever you want to call it. Managing risk pools could be something like Medicare advantage some other forms, but we are in such a unique position to help all different components of that healthcare value chain really optimize and deliver healthcare to seniors. In addition to the basic activities of daily living, which we provide them. So bringing to bear running docs, pharmacy, PT, OT, hospice, the dietary could be dental, could be vision, psychological services are extraordinarily important. And so we see and touch those residents every single day. And then we work with all of those different healthcare providers to help produce outcomes for those seniors. So we’re starting to gather data around some of those initiatives in a way that we haven’t been able to do before technology is helping to enable that looking at those medical health records and histories, as it relates to Medicare. And what I think you’re going to find is the players that really find a way to wrap that care coordination model around that resident. And their family and whoever else is making healthcare decisions are really going to come out of this in a differentiated place. And the families are seeing how valuable it is because you’ve had a lot of families that chose, hey I’m just going to take care of my mom through this pandemic. And we have discussions with them and they’re scared. They’re like, I’m scared my kids going to bring COVID home. We didn’t know how to get mom to these appointments? We don’t know what we’re observing, we’re not nurses, we don’t have PPE, we don’t have protocol, we don’t have training. And they’re really starting to see the value proposition. And we’re seeing that even now, I mentioned it with the new openings that we’ve had, we’re still moving in a very, very healthy number of residents each month. It’s not at the level it was pre pandemic, but I’ve got every confidence we’re going to get back to that level, if not exceeded because our value proposition is becoming more and more evident each and every day.
Josh: Well, you know, one of the things, just hearing you talk, Ryan, I imagine you guys have such a unique perspective and appreciation. You shared the story with us earlier in the show about how your company was even born. It was out of caring for your grandmother at home. And so being able to have those conversations and have the empathy and the understanding with these families that are scared and then be able to guide them to resources. And Lucas and I, we’ve talked about it, it’s amazing. I really think our industry has an opportunity to improve even quality life because when partners like you and your communities come alongside the families and you can provide them the resources to care for their loved ones, put their mind at ease. Then they can really focus on the relationship and not have to have all the worries and the stresses and things like that. So super rewarding to hear you say that.
Lucas: Well, you know this is a really fun conversation, Ryan, and we’re really glad that we were able to connect with you guys there. And I know that our listeners right now, Josh, they’re going to want to connect with Ryan and New Perspective and so we’ll make sure that we put all of those things in the show notes. But before we close Ryan, is there anything else that you’d like to share, maybe something on recruiting and retention just about keeping or trying to find new people or any encouragement for those that are in the industry?
Ryan: Sure. Well, every Tuesday we’ve got team member orientation that goes on here at our resource center and I pop in to say hi to the newbies; welcome them to the team, welcome them to the family. And I share with them, I hope that everyone in this room will retire as a New Perspective team member. And I share with them a little bit about our servant leadership principles, one of which is growth. Which isn’t just growing the company, it’s growing the individuals that we serve personally, professionally; helping to develop them and encouraging them to work with their supervisors. If they’ve got aspirations to become a manager or become a nurse or become a salesperson, whatever the case may be. And I share with them that because the company will continue to grow, there’s going to be boundless opportunity for them. And we really want to see folks advance and I go around the room and I ask each individual what community they’re going to work at and every time there’s a good mix of folks and I’ve got a story specific to that community. Hey, your executive director started as our administrative assistant, now she’s running that building or your care team managers started off as a caregiver, and now she’s got 30 people reporting into her or your sales director just retired after 10 years of service with us. And we really kind of share that extension of the opportunity with them and then encourage them to go recruit in their friends. We’ve got team member referral bonuses that we pay out. And I joke around, I’m like, it’s 500 bucks a pop. So if you go find 10 friends, how much is that? And then somebody says, holy cow, that’s $5,000. I said, yeah let’s go get it done. We are hiring at a time when most businesses are not hiring and may even be laying people off or furloughing folks. So we give them that encouragement to go out and kind of be part of the recruiting team and the recruiting engine. But I do think that idea of having a path forward, having purpose, having a career, is a needle mover. As far as retention goes, it relates to just being a job or someplace where I go to work. And then second to that, we as an industry, were taking some really big strides towards this, before the pandemic hit and are now kind of back on this game. We have to turn our recruiting and retention process into a science, just like the industry has with sales. We know how to go get prospects, we know how to nurture those leads and build rapport, we know how to do the discovery and then match the features and benefits that we’ve got that can help them with a solution. And we know how many prospects need to go into the top of the funnel to get a new move in. We’ve got to get to that level of precision with our human resource group and our efforts to bring people into the business. It needs to turn into a science and look a lot like more of the sales process than just posting an ad and hoping some people show up and apply and hoping there’s a couple hires that fall out of the bottom of that, the bottom of that funnel. So we’re on that full speed ahead. I think now with the vaccines coming out, some of that fear factor that had been out there is going to abate a little bit. I think that’s going to increase our lead flow and by applying some more science to it, that’s going to be more leads, more hires, and then we’re going to continue to do all the things we can to build culture and hopefully we have all those folks that join us, be with us for an extended career.
Lucas: Ryan, over at New Perspective, we thank you so much for your time today. Thank you for what your family has built and continues to build in our industry. This is a great time spent together talking about the love stories of the business and everything in between. So wonderful to speak with you today, Ryan, for all the listeners will connect with a new perspective in the show notes and you can always go to BTGvoice.com to listen to all of our shows, including our Contributor Wednesday series, connect with us on social and send us a message. Thanks to everybody for listening to another great episode.