James Lee addresses the leadership approach that change is a process, not an event.
When we love our work, it doesn’t mean we don’t want it to change. It means we want to be good stewards of change. Senior living is poised for meaningful and positive changes, and while different people will become passionate about changing (evolving) different parts of the picture the process of change management is something we should all examine more closely. Many of us focus on what we want to change, but the preceding step is understanding how to enact change. It begins with one fundamental correction to a practiced assumption: change is a process not an event.
Hi there, this is James Lee. Thanks for joining me for another episode of Bridge the Gap Contributor Wednesday. Today, I wanted to talk about change. Change, that thing that we all love to do. The thing that we all love to tell other people to do. And it’s very, very hard to do ourselves. Definitely speaking from personal experience here, but as a leader in the industry and as somebody who loves this great industry of senior living, I’d be the first to tell you that we need change. And I don’t always just mean big sweeping visionary change. I also mean practical change. Change in doing things a little bit differently, changing up a process, something that doesn’t work at the community level, communication between corporate and communities, lots of different things can certainly fall into the category of necessarily change.
But I don’t as much want to talk about the things that need to change as I want to talk about the process of change and managing change. That phrase “change management” gets thrown out a lot, and I think most of us just kind of have a superficial kind of idea of change management. If somebody were to ask you, you know, what has changed management? We will just kind of reverse those two words. And we’d say, you know, leaders have to manage change. They have to manage the process of change, but that’s like saying, how do you make spaghetti? And telling somebody, well, you put the ingredients together and you get spaghetti. Yeah. I mean, technically that’s true, but, but there’s no directions to that. So I wanted of walk through at least what I understand to be some of the steps necessary to change.
And it starts with one fundamental correction to an assumption that we have. Change is not an event. It’s a process. Change is not an event. It’s a process. I think that in and of itself could be a pretty big aha moment. And I’m going to ground everything back in that simple statement. In fact, I’m going to reverse it here. Change is a process, not an event. Let’s lead with the affirmative change is a process, not an event. All right. So let’s dig in.
I’m referencing John Kotter’s stages of change management. So I’ll try to link some information on that if you want to follow along, but there’s about eight core stages of change. And so I want to talk about, you know, what, what that is, what actions are some things to avoid, some pitfalls to avoid there, and then I want to kind of give specific examples in senior living. If you’re listening to this and you’re not in the senior living industry, of course you can easily kind of segue this into your own field.
Again, this is about change management, the process and not specifically the things that we need to change about the industry, although I will give some examples to illustrate each point. So here are kind of the stages of change management as an overview.
First establishing a sense of urgency. That’s step number one, step number two, or I guess stage number two would be forming a powerful coalition, a team of people who can get that done. Stage three, create a vision. Notice the vision does not come before establishing a sense of urgency and then getting that coalition of people together. So stage three is creating a vision. Four is communicating the vision two separate steps, creating, and then communicating the vision. Fifth. This is where we actually get it in front of people. Notice how many stages that are before we get it in front of people. Stage five is empowering others to act on that vision. Once you’ve communicated it. Now you got to empower people to act on it. And it doesn’t happen by just saying here go.
Stage six, plan for and create short term wins in our industry we often call this the low hanging fruit. Not that that’s an exclusive senior living phrase, but I hear it a lot. Certainly in our circles that low hanging fruit you got to plan for and create short term wins. Seven, stage seven, consolidate these improvements and produce more change. Change is iterative. So you put the things that work together and then produce more change from that. And then finally institutionalize new processes. My boss calls it hardwiring processes. I love that phrase.
It’s taking something that’s just kind of out there and an idea and hard wiring it, institutionalizing the new approaches. So there it is. Those are the eight stages we’re going to go ahead and dig into each of those and give quick examples.
Alright, here we go. Establishing a sense of urgency means that you’re under the belief that the status quo is more dangerous than the unknown. And think about that in senior housing, senior living today.
What is the status quo? I think that COVID-19 has just kind of exposed and brought all of that to the surface. The tide went out and we saw was on the shore and the operators that were struggling before that had the challenges before this exacerbated it. I’m not going through hardship, but operators that, that were struggling before for kind of fundamental business reasons, it’s just made it worse.
So here’s kind of that death spiral that might sound familiar to you. Community has low occupancy. So you’re going to lower prices to raise occupancy. This lowers your NOI, this lowers your margins, your profitability. So your profitability is cut so you need to cut expenses, bring your expenses down. And then there’s the push for more sales. Now that we’ve cut our expenses as much as we can, we’ve got to get more sales on top of it, but we had to do it at lower prices. So this just adds more of that smaller margin and on and on and on we go. It’s a race to the bottom. This is the death spiral that a lot of people are familiar with. So how do you get out of that? Well, at this stage of change management, we don’t need to worry about how we’re getting out of it. We just need to agree, we need to get out of it.
The status quo, keeping things exactly the same is more dangerous than the unknown, than trying to change things and move to a different path. We talked about innovation. We talk about change, introducing new ways of serving seniors, but we’re stuck to this model, even though we know it doesn’t work, we are stuck to it because it’s the known variable. It’s the known variable of work of, okay, this isn’t exactly where I want to be, but this is what’s asked of me. I’m just going to keep pacing forward. So stage one is establishing a sense of urgency. That’s just an example, but you can take that kind of broad example and bring it to something smaller. Let’s say that you have a move-in process and it just isn’t working. How do you establish a sense of urgency around needing to change that?
Well, a lot of the times whenI’m working with my own team, I try to put it in the perspective of the customer’s experience. And I think if you can describe what that process feels like to a customer moving in, particularly during COVID and that process goes awry. That’s a pretty detrimental effect to your business. So you can establish, establish a sense of urgency by taking the perspective of the person that it affects most in, in our industry. Certainly it’s the customer. Once you’ve done that stage, number two is determining who’s going to make up the team to move this change forward. So Cotter calls it, forming a powerful guiding coalition. And what you’re doing is assembling people who have a shared commitment to the new way of doing things. And they have to have enough authority, enough power, when he says powerful coalition, what it really means is that there’s enough people on that committee, on that team that can roll out the change that have enough credibility to do so.
A lot of transformation efforts fail right here because the manager responsible for instituting that change might delegate it to somebody else who ultimately doesn’t have that authority. So here’s an example I’m the corporate director of sales for our organization and let’s say that I needed to change the way that we measured our key performance indicators. And then let’s say that I delegate that to one of the sales directors of one of our communities and said, Hey, come up with a project, come up with something that you think would work well for measuring and holding people accountable to KPIs, and they come up with something brilliant. And then I say, great, go ahead and pilot it, let me know how it works. And that’s where it dies. You know, actually it died before that, in the way that I set up the change management team. Change management does happen through a team and you need a bunch of people at different levels, at different hierarchies that can work together to create that change, because it’s going to need a lot of people from various levels to roll that out.
It’s kind of like sponsorship of the change. You need to get it at all levels that it affects. So usually the people missing from that coalition are the high level managers who need to kind of not even lead the meetings and not lead the efforts, but they needed to be part of the iterative process so that when it does come time for them to support it as a communicating that the group came up with they’ve been a part of that building process from the beginning. Just as likely you’re missing people at the field level, you’re missing people at the community level who are going to be most impacted by that change. So again, using this example, if I come up with something that I think is brilliant and roll it out to the field but I haven’t involved anybody from the community level.
There’s a good likelihood that I’ve missed something. In fact, that’s almost a certainty that I’ve missed something. So as often as you can when it involves a change affecting multiple levels, and honestly, what change doesn’t? You gotta make sure that coalition of people involved comes from each of the hierarchies that it touches. Some pitfalls other than that is that: we relegated to somebody outside of the department. So, you know, we might send it to somebody in HR or somebody on a strategy team. But it has to be a line manager that’s involved. That’s a pretty critical person in the process. So change has to be kind of born from people that it affects. It’s going to be extremely hard to take a consulting approach and bring somebody in from outside that line or that department, and say, Hey, here, fix this and Institute it. They can come up with a wonderful process, but change has to start from the people who are going to be affected by it. So that stage number two, forming a powerful guiding coalition.
The next stage here is creating a vision. We could probably do an entire episode dedicated to this stage alone, but creating a vision, it’s something to direct the change effort. And there are certainly, there’s certainly a lot of different ways that we can talk about this. But you know, if I were to simplify this, the vision is the why, right? Why are we creating this change? It can definitely be rooted in that stage one, which was creating a sense of urgency. And it’s being able to convey what the status quo is and why we need to make a change.
How will we be affected if we don’t make a change? The vision is the why. It’s the anchor that we come back to as the change process iterates and moves forward. And for the people most affected by the change, if we’re asking people to do a process differently they’re the ones who have to kind of endure the brunt of that change. You need to be able to answer the question ahead of time what’s in it for me? From their perspective, what’s in it for them that they adopt this change? You know, people don’t want just stuff to do. They want something to believe in. They want to get involved in something that engages their creativity and their mind and fall in love with their job again. And in most cases, change management is just, Hey, we developed a new process start using this form now.
I’m guilty of it, you know, on both sides. I’m guilty of putting things together out of pressure for acceleration and not necessarily pressure from above, not necessarily a pressure from a supervisor saying, Hey, James, get this done. But it’s just this internal kind of lack of clarity that here’s the priority. This is the thing that needs the most attention when other things get onto the plate as they will, I need to protect this core thing.
So what we tend to do is we shortcut processes. We skip stages because we feel that pressure to accelerate the change. And we use words like implement when we should say, or think about words like iterate. We don’t implement change. We started, we observe, we iterate, we grow it, we see that it takes time. Change management, good change management takes time. The bigger, the change, the longer that it’s going to take to institutionalize that change.
Stage eight comes at the end. And again, there’s a pretty specific correlation between the magnitude of the change and how long it’s gonna take for us to get there. So I think creating a vision has to encompass all of that. Now note that at the beginning, that vision is going to start a little bit vague and that’s ok. For somebody like me when I see a vision as part of kind of a change initiative. And I think, huh, that’s kind of loose. That’s not great, you know, and you almost kind of lose buy-in at that step. It is perfectly okay that at the very beginning of that coalition, that the vision might start a little bit vague because of course it is you haven’t iterated anything yet. That vision might come from a single individual at first typically kind of the highest ranking person in the group will probably lead off with some kind of a vision that again, is going to start a little bit vague. That’s okay. The job of that leader though, is to explicitly make it known, Hey, we don’t have to live with this. This is the vision. This is the guiding kind of principle of why we’re doing this. This is the status quo, and this is where we want to be. So here’s the vision of how we get there, or where we want to be, not even how, but here’s the vision of where.
That’s the job of the leader, but they also need to qualify how we get there is up to this group where we’re going is up to me is up to the leadership group, but how we get there, as long as we all buy in that, the, where it makes sense, the how is up to this team. So that’s an important distinction when we’re creating the vision.
All right, the next stage, and another big one here, communicating the vision. Let me start with the pitfalls here of communicating the vision, and that is under communicating the vision or doing it just once at the beginning and then just assuming people remember that. The other big pitfall here is that we behave in ways that are kind of anti-vision. So we say, hey, here’s what we’re doing, here’s why we’re doing it. This is going to be great. And then the first time that we act in the opposite direction of that vision, you’ve lost all credibility for that change management. Because it becomes just another example for people who are most affected by that change to see, oh, okay, this is just another project that they need to roll out. I don’t really need to buy in cause look, here’s an example of how they didn’t apply that principle in the first place.
So to give an example: Let’s say that one of the change management initiatives had to deal with how we internally deal, deal with team building conflict resolution, et cetera, et cetera. And let’s say that one of those kind of guiding principles of the vision is when we have a conflict on the team, we put it on the table. We’re going to have a culture and a commitment to when there’s a problem, we don’t go to our back channels and go above people and talk to this person, talk to that person, but we’re going to put it on the table. If we need to bring other people involved, we’ll put respect and all of that on the table, and we’re going to deal with this directly.
Great. That’s a perfectly good component of a vision when it comes to conflict management. The very first time that a leader is seen acting in opposite of that, when there’s conflict that comes up and the leader says, you know what, let’s take this offline. Let’s just kind of deal with it. The person’s a little sensitive about that when we do that that is acting in a way that’s opposite of that. Struggling with words here this morning, my coffee is still kicking in, cause I’m recording this at five in the morning before my baby wakes up. That’s a separate episode altogether.
So coming back to the point though of communicating the vision: We have to use every possible means to communicate that vision and the strategies for achieving division. So we can’t just say here’s the vision one, two, three, and then repeat, repeat, repeat. We have to also communicate the strategies of how we’re going to get there. We have to communicate how we’re getting there, where we are in the stage of development or implementation or iteration or institutionalizing it once it’s all done.
So constant communication throughout the process and then using multiple channels to communicate that. So it cannot just be, I sent you an email on this per our last conversation or timestamping communication. That doesn’t work. That is authoritative. That’s just kind of like covering yourself but communicating a vision, it is on the shoulders of the leader and certainly the coalition that you put together, that they are constantly like the promoting and talking about that change. So use every vehicle possible. It’s not just email. Do it in your phone calls, do it in a text message. And repeat, repeat, repeat. Create posters and flyers that people can put in there in their office.
You know, just that, it’s almost like affirmations. If you’re going through your own change in a personal way. Let’s say that you’re losing weight, getting fit. You might have affirmations all around you. You’re going to remind yourself what the vision is, what the goal is. And I think a really great example here is like a wedding. You know, whether you’re the bride or the groom, a lot of people kind of go through this big effort of the wedding day. I want to look great in my tuxedo. I want to look great in my wedding dress. And here’s the goal, here’s the deadline. And then you’re kind of reminding yourself along the way.
It’s rare that in business we act with as much kind of fervent excitement towards a goal like that personal example of a wedding day. But imagine if we could imagine if we created a vision that was compelling enough for people who said, hell yeah, I want to do that. Of course, I want to work towards that vision. This person is pumping me up. They keep reminding me of where we are in our path towards that change. So I’m all in. It’s communicating that vision is certainly going to be, I think, one of the toughest parts of this is because it takes such a long time to do it. And you can’t wane in your enthusiasm.
The other component of this is that you’re going to be teaching new behaviors that set by the example of the people on that change team on that change committee. So if you helped create the vision, if you helped communicate the vision, you sure as heck better be leading by example.
So let’s go back to, well, okay— Let’s pick another example in senior senior housing. Let’s say that we wanted to change the way that we communicate or work on projects together. A lot of teams across companies right now, think of a project that you’re working on that involves another department or another level. So outside your department or outside your hierarchy, and think about how you’re coordinating and communicating. There’s a good chance that that’s just being done through email somebody, the master kind of holder of the Excel spreadsheet, or the Word document, maybe at best, you have a SharePoint where you can kind of put all your documents together, and it just kind of goes back and forth, back and forth. And let’s say that that’s the process that needed to change. And you looked at some tech platforms, some web-based platforms that also had an app, and you could kind of communicate in real time. And that’s easy, easy enough to do.
But let’s say that that’s the thing you’re changing. And you’re telling people, hey, we’re all going to communicate through this platform now and not just through email and SharePoint. The coalition, the team, that’s kind of putting that together, they should be the first ones to be showing that example. We are leading the change through example. So if you kind of rollout or pilot a new web-based platform for project management, but then somebody on the team or multiple people on the team, keep communicating outside of that platform and go back to email and hey, who has the latest spreadsheet? That’s obviously, you know, killing some of the change.
That’s a simple example, but if you apply that example to a bigger way of doing things, something that’s a little less concrete is like a pricing strategy in senior living. That’s a pretty big thing. That’s a pretty big thing to change. So imagine all of the ways that the change coalition could almost sabotage their own project in something as big as pricing strategies. So that’s where we have to kind of hold firm to, alright, we’ll go into a new way of doing things. It’s going to feel uncomfortable. I need to communicate out to people where we are. And again, I need to lead the change effort first.
Stage six, I think no stage five, sorry, I haven’t been keeping count as I’ve been going. And I also feel like I’ve been prefacing before I talk about each stage that that’s the most important, I guess they all feel important, but here we go again, this is another important stage, which is empowering others to act on the vision. Empowering others to act on the vision. That word empower certainly gets thrown around a lot. We say the word empower usually in conjunction with accountable. So, you know, we asked the question, how do we hold people accountable, which I think is kind of the wrong way to ask that. And then almost always the kind of affiliated word or thought to that is well, we’ve got to empower people. That’s the problem. We can’t just hold people accountable. We have to empower them. But in reality, the people kind of speaking in that cadence mean the same thing. And I think we needed to reconstruct how we think about the words, accountability and empowerment, but again, maybe that’s another episode. I’m just teasing future episodes here. But empowering others to act on the vision here means that we have to remove or alter the systems or the structures that undermine the vision.
So let’s say going back to the Excel spreadsheet, example of project management: If we’re going to remove that system or the structure that could undermine it, we have to just kind of completely do away with it and we have to move towards something else.
This notoriously happens whenever we’re adopting new technologies within our communities. We kind of have a let’s keep, you know, imagine you’re a monkey swinging through branches on a tree. I don’t know why I use that metaphor a lot, but I do. But let’s say you’re holding onto the past branch while you’re swinging into the next one. It makes for a pretty rocky swing if you’re holding onto the first branch. And that’s what we do a lot of times when we adopt new technologies, we’re going to keep system one while we’re transitioning. We’re going to keep it while we have system two. We want everybody to use system two, but as a fail safe, we’re going to keep system one. We have to just remove it. It is kind of ripping off the bandaid there. And while certainly there’s gray areas and certainly there’s a lot of good thought and good arguments that can go kind of opposite to this, keep in mind, this is an example, and it’s not going to be a perfect one, but we have to remove systems that undermine the vision. If we say this is a non negotiable that we have to document things electronically, then do away with the paper log, right.
And the fear here is that, well, gosh, if they don’t log this into our system, at least we have it somewhere. And if state comes in or if we have a survey— and I get that, that’s a very real fear. That’s a very- it’s based in compliance, which is good in our industry, but it just means that we haven’t brought the right people into the coalition for change. It means that we haven’t communicated the urgency of that vision. It means that we aren’t constantly reinforcing where we are in the implementation of that. And so and it might mean that we didn’t bring caregivers and med techs into that coalition. So empowering others to act might first mean removing all of the things that are going to undermine the vision. And kind of in conjunction to that is we have to encourage people to take risks. Change by itself is nontraditional. Change by itself means we don’t know what’s going to happen, and we have to encourage that behavior within reason, of course, I think oftentimes leadership kind of sets the boundaries of play, and then kind of where you kind of go within that lane is up to you. And that’s the risk tolerance for projects based on how important they are to your organization.
So all ideas, all activities, all actions— these are all kind of on the table, encourage and infuse some excitement into that process. One of the biggest pitfalls in this stage of empowering others to act on the vision is the high ranking saboteur. And the saboteur, by the way, is not always consciously the person that thinks that they’re this avatar. Failure to remove powerful individuals who resist that change effort is surely to kill the change initiative. Here’s a big mirror moment. You, the leader might be that person. So you need to make sure that as we go through, this people can sniff it out really quickly that if you are resisting the change, but you are in charge of making that change happen, people can sniff that out pretty quickly. And you’re setting people up to fail for very different reasons, career or political reasons. But you know, hopefully, I mean, if you’re listening to podcasts like this, you probably are not the one who I’m not preaching to the choir there.
So more likely than is that there’s somebody in the chain who’s gonna resist that. Somebody who’s gonna booboo the changes that are going to cross their arms and say, this will never work. If you have somebody and particularly the higher they are in the hierarchy and the greater the importance that this change happens, you need to get that person out of that seat very quickly. The change process is more important than that one person’s ego. And frankly, that person probably has been destroying morale and they probably are the impediments to change in the first place. In other words, they’re probably the reason that you need this change management at all.
So that pitfall if you’re a leader in a position to make that change, make that influence on the team be on the lookout for the high ranking, the powerful individual who is going to resist the change. And it may also not be somebody in a high position. It may be somebody who has social influence. So it may be somebody on the team that isn’t above or managing other people, but somebody who has a lot of kind of social ability, they’re the person that others kind of gossip with. They’re the person who goes to lunch with people all over the team and it looks like they’re being a good teammate, but what they’re doing is they’re drawing other people to kind of vent about some of their frustrations.
We all have come across that person before and this person may actually even be a high performer. So, that’s the tricky part of leadership is that you gotta be able to kind of cut through all of that and figure out, okay, this person is not in a powerful position in our organizational chart, but this person has a lot of social capital and they’re using it the wrong way to undermine this change. So you gotta find them, you gotta be proactive in doing so.
Empowering people to act on a vision in a lot of ways means removing their barriers. It doesn’t mean like, ra ra cheerleader. You got this, although that’s certainly helpful. In a lot of real practical ways, the leader can most help the change effort by removing the stuff that’s going to get in the way, get those boulders out of the road and let people drive.
Now stage six stage six: Plan for and create short term wins. That first part sounds odd, but planning for short term wins means that you are conscious and aware of that low hanging fruit kind of getting to the quick win. This also, by the way, is really helpful when you are in a new role or even more importantly, when you’re onboarding somebody into a new role. Planning for them to get short term wins is a huge boost in morale. It’s a boost in confidence. It kind of hardwires processes early on. So for example, if I’m onboarding a new sales director, I’m going to try everything in my power to help them get their first move in as quickly as possible. And it may not be directly through me. It may be through another kind of change agent but in an optimal scenario, you really should be prioritizing the short term win for that person ahead of everything else.
I am not perfect at that, but it is something that I think about. Change management and something as simple as onboarding a new person on your team means you gotta plan for their short, short term wins. So this means like maybe getting a project in front of them that has, you know, medium to high importance, but a short kind of turnaround. So not necessarily a change initiative, but hey, this is something that we’ve needed to kind of organize for a long time. And we know it’s going to help us, you know, you seem very organized. I loved hearing about that in an interview process. What do you think about taking this on for us? That’s planning for and creating a short term win.
So when, when it comes to the broader topic here of, of managing change planning for, it means that we’re going to define and engineer kind of visible performance. So define an engineering visible performance improvements means being very clear about that low hanging fruit. Here’s where we are X here’s where we want to go, Y, and when we get there in this amount of time, this is going to help us to get to stage two, right? And we got to encourage people to take, take some leeway with that and bring their ideas into those short term wins. That’s really where we’re going to kind of reinforce that that behavior is good, it’s welcomed, and it’s encouraged.
So the big part of this kind of the, I don’t know if you, I don’t think we’ve talked about like a character stick orientation to change management, but if we were here’s the carrot part of it: You’ve got recognize and provide some meaningful rewards for people who are contributing to those improvements. So just as much as we’re going to remove barriers and we’re going to remove the obstacles and the impediments to that change, when people are instituting that early on, man,, you gotta bring a lot of recognition around that and creates a meaningful rewards for those people. It may mean something as simple as at a standup meeting saying, hey Jonathan has been using the, the new electronic process, just, just really perfectly. We love that. He’s leading off with that. Here’s a gift card, thanks for your great work. And then the next time, the whole shift did a really great job. We’re going to take you guys out to lunch. Thanks again, for, for leading the change here for us, it’s making a big impact and then explaining how it’s made an impact.
Not that it’s just compliance, you’ve done what we asked you to do. But the second part of that is the team has been great about putting all of the data into the system. And as a result, we were able to take a look at that. Our nurse from the corporate office was able to look at that and we caught something we wouldn’t have otherwise seen. And this morning we’re gonna we have a care conference with a family to discuss it. So this just made that resident’s life a whole lot better. Thank you guys for doing that. Let’s keep it up. That is an example of how we are rewarding people, not just with like tokens and gift cards, but rewarding people for how they’ve made an impact. Remember, people don’t really care about your projects and your ideas. They care about their work. They care about their own mission. They care about their own passions for why they’re doing this. So if your change vision does not include what’s in it for them, you’re going to fail. Nobody wants to work for your vision. They want to work for their own vision. They want something to believe in not something to do.
Pitfalls for planning and creating short term wins is that we leave short term success up to chance, right? When we don’t think about when we don’t include in the planning process, what’s a short term win that we can really kind of go for that’s meaningful, but then we can communicate when we get that done, you have to plan for that. You can’t just leave that up to chance.
So I’m going back to the example of onboarding a new person onto a team. How can you plan for that short term win? That I gave some examples of the sales director getting their first sale pretty early on into the process. That means that you might have to jump in and help a little bit more. We have to create a plan for that when the other big thing here is that you failed to score a success early enough into the process and big wins too. So short term successes, great small wins to kind of add up to big wins, but if you’re 12 months, 18 months, two years into the change effort, and you don’t have anything meaningful to kind of take away from that, of course, it’s going to kill it. In fact, you’ve probably lost enthusiasm all along the way. And again, we’re talking about big change management here. So not just like we need to Institute a new process, but let’s say that we’re going into another kind of line of business altogether, or we’re creating an entirely new revenue stream.
Think about companies in a lot of senior living organizations are doing this now, but really focusing on ancillary revenue. So the stuff outside of just the room and board and the level of care part of why some of you may know Buc-ee’s certainly if you’re here in Texas, Buc-ee’s is a huge gas station and they have figured out how to make people excited about gas stations. They talked to people about it: They have the cleanest bathrooms around, and it’s absolutely true. They have highly paid employees that clean the restrooms, like OCD team. And it is seriously the cleanest public bathroom you’ll ever go to. But in addition to that, even though like, oddly enough, the bathroom is kind of what draws you in. Initially there’s, it’s like, the store is massive. You have like hundreds of guests pumps outside, but you walk in and it’s an experience. You got all sorts of stuff you can buy. But what’s really kind of great about the Buc-ee’s kind of business model is that they have so many things that they have packaged in terms of food and beverages. High margin things where they’ve drawn the people inside of the convenience store. And now they’re selling these things at high, and that’s where they’re winning. That’s just, that’s awesome. They’re probably not making any money on the gas. But when you buy a Beaver nuggets, this is a thing, look it up when you buy Beaver nuggets, you’re probably giving them 70, 80% margin on those things, if not more. So this concept of ancillary revenue in senior housing gets us away from being married to the fixed costs of the building.
There’s a lot of just built in costs and labor. Of course the labor of having to take care of people inside of our communities. So when we think about ancillary revenue, those might be things like food to go membership programs for people who won’t move in, but can benefit from some of our services maintenance services to our people in our database, in our CRM sending our maintenance director to hot prospects or wait lists to help them at an unchanged out light bulbs and stuff like that. There’s all sorts of different ways that we can build ancillary revenue.
But imagine if that was something that you put out there. And then after two years, your ancillary revenue really had a moderate if not nonconsequential improvement. So let’s say one from 500 bucks the first year to 1500 bucks in year two for a community. That’s certainly not meaningful enough for people to Institute that change. But if it went from 500, the first year to a 100,000 bucks in year two, and you’ve radically changed your profit model and that it went from a 0.05% of your total revenue to 5% of your total revenue. That’s something right. Maybe that means there’s opportunity to make that 10% or 20% or 50%.
So change initiatives sometimes are just experiments to help you get towards even bigger change, which brings us to stage number seven, consolidate the improvements and produce more change. You cannot know early on all of the things that are going to happen through that iterative process. So you have to plan a stage in here where you’re consolidating the things that worked removing the things that didn’t, and then rolling that forward into the next change. So you’re using increased credibility from those earlier wins to change the systems around you to change the structures and the policies that have undermined the vision in the first place.
So you’re saying, hey, we want on this. Look at this example. So we’re, we’re going to take those pieces. Here’s what we learned from it. And then we’re going to go after something bigger and all along the way you’re removing those undermining factors that have been present at your community or your company. Now, you’ve got to hire and promote people who can implement the vision. So we’re gaining momentum. So you gotta bring people in now’s the time for subject matter experts. The, the initial people to have kind of built that change and having leaders who can get it to this stage is great. Now we bring in more heavy guns. These are the folks that are gonna help you to accelerate that change.
But don’t forget that you got to go back now to kind of stage number one. You don’t get to skip everything else about creating the vision and empowering people to act and getting a powerful coalition. You can’t skip that in this step. This is where you go back to the beginning of the circle and follow that again. Don’t assume that an earlier victory means that you can just kind of continue it . If the change initiative has fundamentally kind of transformed, you’ve got to start back at stage one, which is the point by the way. Pitfalls here are declaring victory too soon. Again, something I I’ve definitely been guilty of is that in the enthusiasm for getting something rolled out and put in a place and you know, chances are, you’re going to find those early wins, particularly if you’re planning for them and then declaring victory too soon with the, with the very first kind of initial performance improvement and saying, hey, look, we did great. This is working. It kind of actually if you just stop there, it kind of takes the enthusiasm away. Ironically, so, so declaring victory too soon in the process here, it allows people to kind of take a break and say, okay, well, that was great. And then they don’t think about the bigger problem that has to be solved.
Another pitfall here is that you’re allowing the resistors, the kind of the people who didn’t want this change to happen in the first place, you’re allowing them to convince the folks who are wanting the change that everything was achieved, right? So this is a really sneaky way that, that people kind of undermine change is if you’re declaring victory too soon, or the detractors declaring victory too soon, they might say, Hey, wow. It turns out that thing was really great. So I guess we’re done moving on. And so you know, it’s just this weird kind of psychology that happens within organizations of the people who tend to undermine our processes. Most the visit detractors are clear to identify, but that earlier example of the person who has social capital and kind of just happens to be the listening ear and elicits that kind of frustrated criticism of the company. They’re not there to listen to your issues. They’re there to kind of stoke the fire. So allowing resistors to kind of convince the troops that the war has been won on that that’s one of those tactics.
So pulling back to the broader picture of this stage: We’re consolidating our improvements and we’re producing more change from that. Iterate, transform. Let’s go to the next stage.
We’re at the final stage of that, the change management, which is institutionalizing those new approaches. Now that we’ve gone through all of that effort, we have to kind of summarize it. We have to have a debrief of what we just achieved and how we’re going to hardwire those processes. So at this point, we have to articulate the connection between the new behaviors, what we’ve been doing, our input, and then the actual success to the organization and the input. Here’s what we did. Here’s what came from that. Here’s how this has impacted the lives of our customers. Here’s how it’s impacted the lives of our employees. We gotta be able to bridge that gap. Wow. I just said the show title in the podcast. Wow. Nerd alert. I know hashtag.
We have to create leadership development and sexy succession plans now that are consistent with this new approach. So those people during the change initiative that we’re the kind of the cheerleaders, the risk takers, the positive influencers, man, they really showed you what they’re made of. Those are the folks that I hope that along the way, you’ve been kind of identifying as, okay, this is somebody that can help lead the change effort. We mistakenly think that a subject matter expert makes a great leader, but great leaders make great leaders. These are people who have the best interest of the company at heart, the best interest of others at heart, and can identify, Hey, this is something good. I want to be a part of that. And let me lead other people to that. Those are the people that you need to refine and build their leadership skills. Don’t just promote people who’ve been in the position for 20 years or 15 years or 10 years, just because they’re an expert in that subject does not mean in any way that they’re prepared to lead other people.
Again, this is the lesson I’ve learned the hard way that it’s not just expertise in the material that I know, it’s my growing knowledge and how do I manage human behavior? How do I participate in it? How do I influence it? And how do I lead a team of people that have different thoughts, different emotions, different motivations, that’s the core of leadership, certainly at this level, but, but at every level, leadership is not about what you know about the subject matter necessarily. And think about how arrogant that is, that, that your subject knowledge is just gonna win the day that. The idea, is so great that everybody else must, you know, surely get along. I think that that’s a pitfall for a lot of people. And so when we’re institutionalizing this new approach that came from the change management project, we got to promote and create succession plans that include more of those authentic leaders.
Some pitfalls here: not creating the new social norms and those shared values that are consistent with the changes. When we connect the dots, we have to live the dots, right? So again, throughout the process, you’re finding and identifying people who are not going to be a part of that and let them move on, let them find the place where they’re excited about the change. I do honestly think that letting people go, who are not fitting into the direction of your company, it’s a good thing for that person. It’s a good thing for the organization, but it’s the right thing to do for that person. People are good. People have good intentions and they need to find the teams where they feel like they compliment what’s going on, and they’re not just the naysayers. So it’s the right thing for both signs.
Also a big pitfall here is promoting people into leadership positions who really don’t personify the new approach. So this is kind of an extension of that earlier point, but maybe you have a regional director of operations who’s been in that role for a long time. They were involved in the project cause they’re the only regional director in that region. And because the change initiative happened but maybe they weren’t the cheerleaders. Maybe they were the kind of the people kind of just doling out here, you do this, you do this, you do this report back to me what happened. And maybe you didn’t catch that maybe 90% of the team outside of that person just had enough enthusiasm to get this across the finish line. Imagine how deflating it would be if that regional director now gets promoted to a vice president’s role or division president, whatever the next title is, and imagine how deflating that would be for the rest of the team.
So promoting people into a leadership position that do not personify this new way of doing things, you might as well have not done the change effort at all. So that’s the risk. That’s the behavior of the organization that says, this is the thing we want. And then you’ve just now identified all of the people that can help make that happen. Promote those people. Take a chance on those people. It’s how we’re going to change. The whole landscape of senior living and senior housing is that we figure out different ways to promote and build bench strength. And it can’t just be, you’ve done this role long enough. Thank you for your service. Now you get to move on to the next level. Let’s have people demonstrate that they can Institute change, that they can bring people on board and have people working toward a vision. And not just that they executed by delegation.
Change management. Let me end where I started: Change is a process, not an event. Change is a process, not an event. There’s a lot that we want to change and we want to change it because we love it. We’re in this industry because we love it. A healthy level of frustration is okay, but we can’t stop at criticism. We can’t stop it complaining about the things we don’t like. We got to learn these things like if we’re talking about change management, but don’t really work at understanding how do we get through that? What are the stages of change management? What can I learn about that? To kind of improve the likelihood that this is going to work for our organization? You have to be the one to bring it. Listening to podcasts like this is part of it. You’re trying to bring new ideas and new ways to create that change in your environment. And I encourage you to bring this to your team. Not this episode, per se, but the idea that you’re going out and learning things to improve the way that you contribute to your organization, into your team. That’s how we get there. That’s how we get to that change because you brought it to the table. So keep doing stuff like this. Do things like this yourself.
By the way, you don’t need a platform like LinkedIn or Bridge the Gap or anything to be an agent of change. If you’re listening to this, it costs you 20 bucks to go buy a recorder and a microphone puts your ideas out there. That’s it. If you’re on LinkedIn, ignore all of those connections that just want to sell you something, puts your idea out there better, or for worse. You’re going to figure out what resonates with people. You’re going to get good practice at articulating your vision. So let’s do it. Y’all let’s get out there. Let’s change this industry that we love for the better. I’m here. I’m here with you. Thanks again for listening to an episode of Bridge the Gap Contributor Wednesday. I’m James, make it a great day.