‍Discovery Senior Living is creating a new development strategy in the senior living industry. Tune in to hear Bill Sciortino, COO at Discovery Senior Living, share how his team is creating a collection of brands and operating them effectively while also recruiting and setting team members up for success.

This episode was recorded at the NIC Fall Conference.

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Produced by Solinity Marketing.
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Welcome to season seven of Bridge The Gap, a podcast dedicated to informing, educating, and influencing the future of housing and services for seniors. Powered by sponsors Accushield, Aline, NIC MAP Vision, ProCare HR, Hamilton CapTel, Service Master, Patriot Angels, The Bridge Group Construction and Solinity. And produced by Solinity Marketing.

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Lucas 00:42

Welcome to Bridge The Gap podcast, the senior living podcast with Josh and Lucas here at the NIC Conference. We are rounding out a firestorm of great thought leaders on the program over the past couple of days here in Chicago. And we want to welcome the COO of Discovery Living. Bill Sciortino, welcome to the show.

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Bill 1:01

Thank You. Good to be with you guys.

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Lucas 1:02

It's great to see you.

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Bill 1:04

My first podcast I told you so go easy.

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Lucas 1:07

It's your first podcast, amazing! But you know what, I bet it's not your first rodeo. That's what we say in Texas. It's not our first rodeo. Right?

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Bill 1:12

That's true.

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Lucas 1:13

So how did you even get into the senior living industry?

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Bill 1:16

Like I think everybody in the industry, we kind of fall into it at some point. My background is, I'm from Cleveland originally, moved here in the mid-nineties here to Chicago, where we're sitting today to raise our kids here. My wife was in advertising, wanted to be in a bigger market. And so this was a great place for us to raise our kids. And at the time I was implementing software systems. My father-in-Law was a masonry contractor. You can relate, right? He was building commercial buildings. He built what was Jacob's Field now, Progressive Field.

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Lucas 1:43

Wow.

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Bill 1:44

The tallest building in Cleveland. And I was kind of the inside management guy. I went in there and computerized the company, brought some management principles to him, started capturing data, brick counts and production accounts. He was the outside guy running the field at some point. I said, "I don't really want to own the family construction business. I don't even want to be there. The software computer thing is more interesting to me." So I started implementing systems for developers and for property managers. And I make this move to Chicago and it's a much bigger market. Suddenly I went to big real estate companies and I'm working and I wind up consulting with Ernst and Young, putting in systems for property managers. Well, about that time the end of Y2K hits and they lay a bunch of us off. So I went back into construction as a CIO and a guy that was one of our vendors said, "You should talk to these people at Hyatt. They're going to hire a CIO for their senior living company." I'm like, "Yeah, the hotel company. I'll be the CIO of Hyatt?" Yeah, no, you won't. You'll be the CIO of the senior living company, which I knew nothing about. But they have a brand still. It was Classic Residence by Hyatt back in the day. It's now VV, two letters. I was the first CIO back in 2001, hired by Randy Richardson, who was on the panel here.

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Lucas 2:54

Yes!

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Bill 2:54

And went in there to build systems and move information around and thinking this senior living thing's going to get more sophisticated. And 23 years later, I think we're still waiting for systems to catch up and still trying to move information around. Same challenges all these years later.

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Lucas 3:09

Amazing.

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Josh 3:09

Wow. So we're here at NIC. There's so much going on. Our industry has had some hard knocks over the last few years. Some tough challenges to overcome. So what are you thinking about strategically for discovery and for everything that you're working on? As we forward looking into 2024?

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Bill 3:26

For me it's, it's all about acquiring talent. I'm trying to get the right people on the bus with me and get them on the right seats. We're garnering a lot of interest because we've grown so fast so people can see there must be something good happening there. On the other hand, I have a lot of existing partners that I need to keep happy. So I can't just move everybody and change players rapidly. I've got to take care of the existing business. We have provide value for those investors, but at the same time, start scaling this thing up to a higher level of sophistication, which to me is the fun part. My boss is the deal maker, Richard Hutchinson. He says, "I go out and I do the hunting and you, you divide up the kill. "So the rest of us staff, we decide kind of how we're going to put these communities, where they're going to be and how we're going to operate them effectively. It's a good challenge.

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Josh 4:11

So you just gave us super high level and I'm just thinking, okay, there's a lot of weeds down in there. So when we start talking about just the basics of day-to-day blocking tackling, how you actually do that. Can you give us a little bit, we don't want you to unveil all the secret sauce, but what are some of the things that you're focusing on every day to achieve that?

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Bill 4:30

Because we've grown so rapidly and you think about our industry, you guys are in it. So you understand. There's so many different layers to it. I don't have really that many communities that are anything alike. The core of our business, the root of our business was in large campus style communities that had maybe 300 units. A big independent living plus assisted plus memory care. That was Discovery Senior living for many years, just the Aston Gardens brand. One of our best capital partners came, took us out to Texas then, and we went into the conservatories, a similar brand, kind of a higher end rental brand. But since then, when I got to the company, there was 40 some communities. Now we're 270 in 36 states.

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Josh 5:08

Wow.

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Bill 5:09

But again, it's all across every sector of the industry. There are some big units 300 unit communities, but there's some that I have that are 39 units that used to be Elivens. I have some that are 84 units of assisted living and memory care. And we're all these different markets. We're not just in places like Naples, Florida or, or Chicago, big markets. We're in a lot of little markets like Burleson, Texas or Waxahatchee, Roswell, Georgia, smaller secondary and tertiary markets. So I need to have brands that work for those markets too. So what our thesis has been for several years is let's not try to be one flavor in all these different places, and it doesn't need to be called Discovery in all these places. Our thought was why can't we have a collection of brands? Like if you were a Marriott hotel, right? You were a Sheraton today. It's part of the family. What so are the courtyards and the AC Marriotts and the Autograph collection than the Hamptons. Why couldn't we have a group of brands that fit these different markets that are completely unique and stand on their own? So what we've been focused on for the last three or four years is not only taking on new communities, but finding a fit for them based on the market. And so they don't have to all be called Discovery. They should be hyperlocal because that's what most of our customer wants. They were in those communities because their kids were there, or their homes were there, their churches there, the golf community, whatever it is we're trying to solve for all these hyperlocal environments with a collection of brands.

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Josh 6:34

That makes a lot of sense. Especially when you compare it to the hotel. I think we all understand that. So from a recruitment, from a staffing, from a labor standpoint, does that present a lot of unique challenges? Are you having to recruit very uniquely to these specific brands? Or is it kind of the same talent you can kind of plug and play at all the different brands?

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Bill 6:55

That's a good question. It is different in every location. And they make different salaries. Right? So I'll be paying differently based on what level of responsibility they have. So our idea is for the big brands, you're gonna have a more experienced Executive Director. He or she's gonna make X. I have to have regional people. We wanted to go beyond just regional people and they're hardworking people. They're driving around in their cars, either as the traveling nurse or the facilities person or the ops person or the salesperson. That's a traditional setup. We wanted to do something different because again, our thought back to the original strategy was, let's not just collect a bunch of communities and then fail. We wanted to have something that can scale and can be easily replicated in different parts of the country that can still be unique. So our thought in the national brands, we have, instead of regionals, we have what we call national brand managers.

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Bill 7:42

Many of them have higher degrees, they have a different level of experience in this industry. I can turn over the big cruise ships to them and know that they can get in front of a capital partner and they understand their P&L in depth. They understand that what the capital partner wants to hear as far as investment, that's a higher level of person. Then I go out to the small marketplaces. You might have somebody who was an Executive Director at a small, like I say, 84 unit assisted living and memory support. They get a little more responsibility. They become an Area Manager. Maybe one day they become a Regional Director of Operations. That's a different level than I'm willing to put on the national brands, but there's a fit for that. And then those men and women are really necessary to us. And so we're trying to have opportunities for people to move around the brands or if they relocate from one part of the country to another, there's some Discovery product might be called Marada or Terella or now here in the Midwest, Lakehouse is a brand, but I'll have some brand in some market that can work for you. We want to keep you in our system.

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Josh 8:36

Oh, absolutely. Lucas, I mean you're seeing a lot of these properties all across Texas. Some of the ones probably he's talked about. What are your thoughts as you're going in and seeing these different brands?

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Lucas 8:45

I've read the articles and seen the growth. I think everybody has. We've been at these conferences for many years and we've heard of people discussing what you are already implementing. I would say it seems like maybe you're one of the only operators that's really doing this on a national level in the way that you're doing it.

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Bill 9:03

I think that others may come around to our way of being and we're not being secretive about this. I think Richard's been saying this from the various stages for several years now at NIC and ASHA and Argetum for several years now. But it's still really hard to do because a lot of people are either married to one brand or one way of doing things. And it's been that way for 30 years let's say in this industry. You progress from an ED to a Regional, then you become a Vice President. And then there's lots of Vice Presidents and Regionals. We have several examples in this industry where that didn't work out so well and companies had to scale down. So we use those in some ways as a lesson, a cautionary tale to say, we're not going to scale to fail. That's something Richard tosses around the office often. So let's be more strategic. Let's start to think like, can we see the bigger picture at the end? What does this look like at the end? Are we in all these states? Do we have this kind of a striation of brands that go biggest markets to the smallest? If I can see that at the end, okay, now I can go and recruit specifically to your earlier question, Josh. I can go recruit specifically and have a profile of a person that fits so that every day I'm not looking for a unicorn. I feel that what sometimes I am looking for a unicorn. Some man or woman who knows everything about the P&L and they want to drive around all day and they're goning to be promotional and they're going to be positive and they're going to be a good leader and a good trainer. And it's hard to find these people.

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Josh 10:24

Sure.

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Bill 10:24

So we're trying to put them in positions where it's more natural. They're in the markets already. I don't have to move them if they don't want to. I can set 'em up for success where they are.

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Josh 10:33

On the real estate side here, everybody's talking about how tough new development is. Construction's difficult, costs are difficult. So we're hearing a lot of mergers, acquisitions, information. How do you take this legacy product to make it relevant today? Can you take legacy product and convert that into some of the brands that you are working with? Or is this complete new development strategy?

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Bill 10:54

No, good question. We've been able to take legacy product. Now to do that, I have to have the confidence of my capital partners because if they give me a collection, let's say, of five or six communities down on the Bayou, okay, so I'm in Louisiana, Mississippi, and they say, "Well, we're just going to give you these. Don't mess 'em up. Give us the cash flow. We've had others." Okay, go with our thesis. We have a brand dow there called Summer House and we think it works for this. And we're goning to keep building out that brand. Are you okay with us changing the banner on the front sign? Again, most of them are, unless they're a unique, you know, legacy brand, like a community like The Summit or the Trace. We keep those brands, the Aston Gardens that we have, we don't change those brand names, but otherwise most have been fairly amenable to changing the names and say, we're fine as long as you manage it and kind of get us where we want to go together.

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Bill 11:40

That's why typically we co-invest too. I'll say another advantage we have going back to kind of the construction refurbishment part of the business, we're also fortunate not only to have good facilities, people that are willing to travel, but we have our own in-house construction and design team. So when I first go in there, I not only am assessing the talent, who do they have here, what open positions they have. I see a critical position report every week. The ED, the salesperson, what we call the DHW, the Director of Health and Wellness, the facilities and the chef, those four or five positions kind of make every building run no matter how big you are. So I'm quickly assessing who's the talent onboard and what open positions do I have. The other thing I'm looking at is the physical plant. Because I just want to be honest with them. If you're going to give me this challenge, when's the last time you changed the carpeting? I mean, do I have soiled ceiling tiles? Did somebody fix the roof? Is the front entrance and the the sense of arrival there? We want to come in and say, here's how we think you should be managing the asset and what you should be investing. Are we on the same page together? Are you willing to have the units the way we want them? Are you willing to do a proper unit turn that we come in and and sell this together? The best capital partners are completely aligned with this. So changing the name is sometimes irrelevant to them. As long as we're direct on strategy and work together.

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Josh 12:52

Lucas. This is a lot to absorb. We're getting for sure the masterclass at four o'clock on NIC Tuesday.

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Lucas 12:58

That's right. That's right. Well, and you know what, you can only get this type of content and information on the Bridge The Gap network here. And so Bill, we really appreciate your time here. So final thoughts on 2024. I mean 200 plus communities. I mean, are y'all going to be 400 plus communities? 500 plus communities?

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Bill 13:15

We're fortunate that we have in effect a mandate, we have a new investor that came into us last year. And that was in the news of course, that Lee Equity partners in Coast Wood came in and bought a majority share in our company. So, as Richard said, from the stage today, Discovery Senior Living is not the operator of all these different brands I'm talking about. We're the holding company, the parent company. I do most of my work for the parent company trying to decide where will these brands fit and these ancillary companies, the design group, the construction loop, the home health, all the operating groups. Now we have a new challenge. We have to integrate ISL Integral and Solstice is part of ISL. So those hundred plus communities are coming on. So I have a real challenge at the end of this year into next, to make the HR departments come together, the finance departments come together, and then what are all the underlying systems?

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Bill 14:01

And as an ex-tech guy, the CIO originally, that's kind of fun because again, I have investment money behind it to do this to say, don't just make a real big company with lots of locations. Make a platform that can scale. And so again, we have that investment behind us. So we're doing some things, not just fixing all the systems, but let's say, what is the biggest challenge to bring on all these new communities? The assimilation. Why don't we have a dedicated assimilation team? They go into these markets immediately with an operator, a salesperson, a nurse, a facility. We assess and go in like a SWAT team. We're also going to have an optimization group. Some of the communities we get, let's face it, are turnarounds. They're struggling for whatever reason. Too much competition in the market. No capital investment, the ED left.

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Bill 14:44

There's a million stories, right? Everybody at this conference knows them. Why don't we have an optimization group? Instead of me dumping that on the local, regional team and say, you've already got 12 communities, I just gave you two more and they're terrible. We're going to have an optimization group that turns them around. And the other platform we're trying to build, which is something we really feel strongly about, is a national learning center. So I can give people a career path to stay in the business, not to opt out and say, as soon as I get an offer from Target or Chick-fil-A or something, I'm out. Or I'm going to go work in the hotel business or restaurant, whatever it is. We need to keep these people in our industry. So we're thinking there's got to be career paths. So I could take anybody at some point in their career if they're willing to learn, I have some path for them to either become the department head or the ED or the regional I described before. So training to us is going to be a key driver. We think of retention and making our platform successful. But again, I've got a lot of work to do.

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Josh 15:38

Well, a wealth of information.

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Lucas 15:39

Bill, you should have your own podcast.

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Bill 15:41

Because I like to talk a lot and wave my hands?

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Josh 15:43

No, well, your passion is evident and it's appreciated. And it's making the industry better and obviously helping fuel the growth of discovery and what an exciting time it is for you guys.

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Bill 15:53

It really is. And I appreciate getting a chance to talk about it here. And hopefully I'm attracting some people to hear this podcast say, "I should probably go work for that guy. He's going to have a place for me."

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Lucas 16:01

There you go.

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Bill 16:02

Because again, that to me is the magic. Getting people in here who will come in with original ideas and help me solve these problems. I need it in every state.

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Lucas 16:09

Well, there you go. Well, there's the call to the listeners. I know they're going to want to know how to connect with Bill and Discovery. Just drop down in the show notes, we'll connect to Bill and Discovery so you can reach out and be a part of this momentum that discovery is creating right there. Bill, thank you so much for spending time with us and giving us this knowledge.

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Bill 16:27

Thank you, gentlemen. Happy to be on Bridge The Gap and I hope you'll have you back sometime.

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Josh 16:31

We'd love to.

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Lucas 16:31

Absolutely. Absolutely. And to our listeners, thanks for listening and go to btgvoice.com, download this episode and so much more. We'd love to connect with you. Thanks for listening to another great episode of Bridge The Gap.

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16:41

Thanks for listening to Bridge The Gap podcast with Josh and Lucas. Connect with the BTG network team and use your voice to influence the industry by connecting with us at btgvoice.com.