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Episode 49: Todd Hudgins

Culture Changing with Senior Housing Veteran Todd Hudgins

Lucas: Welcome to Bridge the Gap with Josh and Lucas. We are having a lot of fun because we’re laughing. Great show here today. We want to welcome our really good friend Todd Hudgins of ERDMAN. You are the senior vice president over senior living, welcome!

Todd: Thank you, thank you. Happy to be here.

Lucas: So, we are here at ASHA where the sun is finally back out. We had some rain earlier. It’s been a beautiful day and I believe you did golf yesterday.

Todd: That’s right.

Lucas: How did that go?

Todd: It went incredibly well. I had a blast. It hit them long and straight and not towards the hole all the time.

Josh: Doesn’t matter, you made good contact.

Todd: And I curved a few of them, too.

Josh: Yeah.

Lucas: That’s golf.

Todd: Yeah.

Josh: Well, we did whale watching excursion. Had a great time as well. The fellowship was great and I’m sure it was at golf as well. A lot of great minds here at ASHA and Todd we’re looking forward to getting in your head a little bit today man.

Todd: I heard you saw some whales actually so it was a successful trip.

Lucas: We have the photos to prove it.

Josh: Well, we saw whales before we even got out of the harbor, which they tell us that was unusual. I enjoyed that because I didn’t have to worry too much about getting out deep and getting sea sick and stuff like that. That was my number one anxiety was, that I might get sick.

Lucas: Todd, we’ve known each other awhile. Actually, you to me, you’ve been a mentor to me in the business because of your experience. It’s really helped shape kind of my understanding of how to approach relationships, how to approach leadership. I think that you’re a part of a developing culture and I think that that’s probably why you’re in the role that you’re in today so I’m really grateful for that.

Talk to us about what got you to this point- your background in the industry and why you’re so excited about senior living.

Todd: Well, it’s a long story, but I can abbreviate it, I think. 10 years ago, I stumbled into this as an exit from the marine industry for a lot of different reasons. What I realized is what I was doing before senior living was all about me and it was for me. And it felt good and I made good money and I loved it, but, you know, when I joined senior living I realized that everything I do now is about helping seniors in one form or the other and there’s no way to look at that and not smile. So, it was a really cool transition. I was in the recreational business before and now I’m helping seniors.

It was an easy thing to feel really good about and that just started my journey into senior living. I’m a bit of a voracious learner when it comes to new things. I’ve just been paying attention and asking a lot of questions. Somebody once said to me- you know I started off in senior living in a business development role- somebody once said to me, ‘the most curious people out there are usually the best business developers because they’re just always learning. So, I’ve just made a habit out of asking a lot of questions. That’s turned into some great stuff along the way.

Josh: So, we were talking a little bit before the show about, obviously, I’ve had the opportunity  to work with you a little bit through the years professionally and the different varieties with your new venture that you’re engaged in and one of the things outside of that that you were talking about is the emphasis on culture. I know at this conference we’ve been talking to some of the thought leaders that have been on the panels and so forth, some of the CEOs.

Everybody, regardless of whether they’re talking about design or operations or the real estate function, everybody’s saying the real value is in culture. So, that’s very encouraging to hear people talking about that. But, something that, you know, I often don’t hear from your industry is that we were actually just talking all about culture.

So, maybe you can give us some of your background, what your value proposition, what you guys are working on and how that applies to senior living?

Todd: At ERDMAN?

Josh: Yeah, at ERDMAN.

Todd: From a culture and leadership standpoint, we’re on a specific journey and the company has been on that journey for a couple of years. What is ever present is the challenges in workforce development, you know. Culture is your equity when it comes to building a great employee base and keeping those employees- that’s all you have to offer is your culture. Sure, you can pay well. You can have great benefits and everything, but if your leaders don’t treat the rest of the employees like humans and encourage growth- internal growth-, it’s just not going to work long term.

So, we spend a great deal of time on that. At ERDMAN, we spend probably 50 percent of our leadership team meetings on culture and where we are and where we’re headed and next level leadership- identifying the next level leaders in our organization and providing them the tools to become betters leaders. How to handle difficult conversations, how to handle easy conversations really well and be opportunistic when situations within the company and within the employee base come up, how to capture those moments and how to really help people grow internally.

We spend a ton of time on that and it just comes out. It’s blossoming and it’s fun to watch because people really do grow in the business or in our company. It doesn’t matter their role, they feel like they’re a) contributing to what we do, b) contributing to themselves and c) they know they’re headed in a place that’s better than if they were somewhere else just working and doing their job 8 hours a day.

Josh: Right. Well, so fascinating, because that makes your culture very much a perfect marriage for the operating culture that exists in the senior living community- everybody’s talking about culture. You guys have a unique perspective because you get to work with a lot of operators, a lot of developers, to really bring the vision down to like a reality to help design that, to implement that, to plan that.

Some of the things we’re hearing all the time- Lucas and I talk about this, it seems like it comes up in every show in some fashion- is this whole intergenerational concept. I know you’re working on a lot of projects right now, a lot of them haven’t been released so you don’t have to get into unique partnerships and things like that.

But maybe give us a little insight into some of  the design trends and things like that when people are saying intergenerational. There’s even some confusion on what does that mean? How are people thinking that’s going to be delivered from a design perspective? Do you have any insight on that?

Todd: Well, I think at 20,000 feet, we want to put seniors in environments where there are people of all ages so they aren’t in a silo in a senior living facility stuck in the middle of the woods somewhere.

Out of the number of projects- we’re in different stages from feasibility to engineering and construction on- one of them is a stand alone ILAL memory care and every other single one that’s being talked about in the pipeline right now is intergenerational, mixed use. There’s some active adult. There’s some multi-family close by. There’s some mixed-use including retail, medical office building and we’re trying to produce an environment where seniors are still in the regular population. I think the word seniors is going away. It has to. This is part of that step.

Josh: So, we’re actually talked about is senior living actually going to be called “senior living” in a few years, you know. Who knows? But, one of the things that I think would be a huge value add for maybe you to shed some light on, if you can, is so many people, I think, now are buying into the concept of old and young living, working together, not separating people or segregating people based on age and acuity factors alone. But, when you start looking at putting that model together, you know, you’ve got the whole programming piece, you’ve got the design piece, but then you can come up with this perfect model and then you may not can get it funded because it is a new model and it’s kind of the frontier.

What are some things that you guys are seeing that are helping the developments move along more quickly that’s moving these developments forward and what are some things that you’re seeing that have been bumps in the roads, may be patterns, that if people can get these things kind of factors worked out ahead of time in their models, that it might smooth the process?

Todd: Well, if I understand the question correctly, you know, it’s what are the pieces that have to fall into place to get the deal done?

Josh: Absolutely.

Todd: So, unmet demand has to be there. That’s a function of penetration rates in a primary market area. So, you think, what is that and to me it’s a dark science, right? How many people are we capturing out of the available customers. There’s an idea that you bring an intergenerational mixed use product into a market and it’s going to increase the penetration rate because all of the sudden, senior living is going to be more valuable because it’s different. It’s new.

A bank is going to look at the data and if the data doesn’t support it, then they might look the other way. I think there’s going to be a shift where we’re now talking about this design and this concept is going to change the penetration rate. We’ve got to figure out how to make a bank comfortable with that.

Josh: Well, and so, I think it’s even a steep learning curve because I think in the industry for so many years, you know, when you start looking at feasibility and feasibility studies and market research, you know, while there’s never a perfect science for feasibility, there’s been these generally accepted ratios and mile markers and how you define a primary market and a secondary and we know exactly who our client is. It’s a very narrow age of acuity and income bracket.

When you start dabbling in the intergenerational, it opens up to a lot of different groups and what I have been hearing is that even on the front end in determining your feasibility that, you know, it’s not as easy to arrive at finding those capture rates and those penetration rates because you can’t just order that same old feasibility study that has that very narrow group.

Is there anything- I know you guys participate in a lot of the demographic work, as well, which is a fascinating part of what ERDMAN does. What are you seeing that people are doing that some approaches together that right data to identify the client base.

Todd: Well, we’re pulling the data from several different sources. We take a look at the NIC data but we pull it from Esri. We crunch a few sources of data together to determine what’s there. Are the potential residents the type that are out buying Dunkin Donuts or Starbucks or Folgers Coffee? I’m trying to come up with some different levels.

What level of finishes do we need in building based on what’s there. We’ll pulling the data out. It’s basically based on a model produced for our health care clients over many, many years. We’ve converted it to senior living. So, we’ll pulling data like what kind of health services are being provided in the area right now? That gives us a good snapshot of the acuity level in the area right now. We’re pulling data on what is our employee base look like there? Who do we have to hire from that market?

So, we pick it apart pretty thoroughly.

Josh: A very holistic approach. And I think that is, in itself, one of the huge challenges because we have gotten so used to in our industry having a very defined product, developing a fairly unit to resident to staff ratio driven model that, you know, it’s very vanilla and we can reproduce it because we know how to operate it. That’s one of the fascinating things to me about this change in the talking points of intergenerational.

So, Lucas, you’ve had an opportunity to work some with Todd. I know we didn’t want to make this a commercial about ERDMAN. But, what are some of the interesting things that you’ve been able to spend some time on this year with Todd?

Lucas: Well, a lot of different things just because we have a great friendship. But, what I’m thinking about as you guys are talking is just this element of disruption that continues to get batted around at the conferences. I think that this intergenerational component is definitely going to be one of those things. What are your thoughts?

Todd: Well, I think it is. It’s being talked about. We have an internal research group and they’re out there right now bringing in data so that we can start producing more information in terms of thought leadership on the subject of intergenerational living. We want to produce that for the outside but we also want it for our internal designers because those guys and girls are interested in being on the forefront of that.

It’s coming down the pipeline. It’s happening. The mouse trap that we all see and that we’ve all done for years is not going to go away any time soon, but we’re going to begin to see, I think, this intergenerational scene popping up and you’re not going to be able to deny it. It’s disruptive because it’s brand new and it’s- I don’t believe when you look at the proforma on this that it’s going to look a lot different than this if you just pull out the subset of senior living. It’s still senior living, it’s just we’re increasing what’s around it, what’s right around it.

Josh: So, very interesting. When I look at what you’re doing Todd, you’re doing some- in my opinion- some very out-of-the-box things when you start talking about your emphasis being on culture. You guys are investing a ton of time and have a team that looks at market data and what’s interesting in what you just said is not just for the consumer, but to up your IQ so that you can deliver a value based service to the consumer.

What other kind of things would you say you guys are investing in to be really aligned? I know you’ve had a strong background at ERDMAN being involved in the health care space and with health systems across the country, really dove into senior living specifically and it seems like there’s this trend that I’m seeing that people are who have been traditional assisted living operators as the acuity creep is happening, we’re seeing people jump from, oh, I’m gonna go, I’m gonna follow the acuity and stay more of the health care model and then some are going, I’m going to be more independent living because that’s where the assisted living of old are.

But, I’m also now hearing this talk of a lot of people talking about the future is you have to be really vertically integrated with the health system or at least partnered with the health system. What are your thoughts on that and how do you think that positions you guys to be part of that because you’ve been at that end of the spectrum and now you’re working in senior living? How does that marriage work?  

Todd: Well, we have a great deal of health system clients built over years and years and years. They are the reason that they got into senior living. I think in the board room of most health systems, they’re talking about senior living and many of them are executing on it. I’ve spoken with operators here at ASHA that are intentionally reaching out to health systems to create partnerships. I think co-branding with a health system is a win for the health system; it’s a win for a senior living operator.

You know, we’re kind of digressing from the intergenerational thing because how do you get all of that together and make it work. But, it’s a different subset of what’s kind of disrupting the industry is that over here there are hospitals partnering with senior living operators so that the hospitals can reach that audience sooner. And then over here there are intergenerational models where we want more active seniors. We want them being integrated into the rest of society instead of leaving their house and going to a field. It’s two different things.

Josh: Right. So, I know we’ve got to be sensitive to your time here. You’re very busy. But very interesting, speaking of partnerships, I don’t think it’s any secret that this year our podcast has had the opportunity to align ourselves with some great partners. ERDMAN is one of those. You know, for those listeners that are out there that think, why in the world would ERDMAN be interested in partnering with a podcast?

So, you know, what was attractive to you guys about our audience, about this platform, and speak to that about why this was even of interest to you. It seems really out of the box.

Todd: Well, in our internal discussions of what we want to do, how we want to be seen in the industry, we talk about producing content, producing thought leadership, producing things that can help the industry move forward. As a way to just move through the industry, we want to be a part of it. We want to be a living being in the industry and so thought leadership is a huge part of it.

When you talk about a white paper or any kind of a thought leadership piece, I believe that if you read between the lines of the carefully crafted white paper on any subject, you find what comes out in these podcasts. We dig it. That’s the real stuff. That’s unscripted and it just comes out real.

Josh: Well, it’s been super cool for us because Lucas and I- and I won’t speak for Lucas- I’ll say for me as an operator, that’s my day job, a lot of people think that me and Lucas, this is all we do is podcast. Which would be amazing because it’s fun. But as an operator, it’s so fun to have guys like yourself, the Eric Mendelsohn’s of the world, and all these thought leaders that get on the show and it’s just like we let you guys open up and share what you’re experiencing, to share the struggles, to share the successes, where you see the industry going. And we learn a lot. We know from the feedback from our audience that they’re learning a lot and it’s a special thanks to guys like you that have invested in furthering the platform. So, big thanks to ERDMAN for making a lot of this possible.

Lucas: Absolutely. And with that being said, we will definitely connect to Todd in the show notes. If anybody wants to hit him up, I know LinkedIn is a great place for him. He’s just starting to do some video. Check him out on LinkedIn. We’ll connect with ERDMAN in the show notes and thank you for listening to another great episode of Bridge the Gap.

Thank you to our supporting partners NHI, RCare, NRC Health, TSOLife, ERDMAN and Sherpa.

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Episode 49: Todd Hudgins