In light of the 73 million Baby Boomers coming our way, Founder and CEO of The Springs Living, Fee Stubblefield, discusses the importance of building organizational cultures that focus on building relationships, striving for quality outcomes, and prioritizing people over profits.

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This episode was recorded at the NIC Fall Conference.

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Produced by Solinity Marketing

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Intro

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, Sage, Hamilton CapTel, Service Master, The Bridge Group Construction and Solinity. Produced by Solinity Marketing.

00:38 - 00:49

Lucas McCurdy

Welcome to Bridge the Gap podcast, the senior Living podcast with Josh and Lucas in our Nation's capital, D.C. The Fall NIC Conference. We want to welcome a great guest today, Fee Stubblefield. Welcome to the show. 

00:49

Fee Stubblefield

Thanks, guys. Great to be here. 

00:49 - 00:57

Lucas McCurdy

Very excited to see you. And you know, we were joking before that this is not your first NIC conference.

00:57:10 - 01:07

Fee Stubblefield

No it's not. I have a little NIC experience and can hand out some tips. And, the late night bar at 2 a.m. is where you learn what really happens in the industry. 

01:07 - 01:21

Lucas McCurdy

Yes, I think I have experienced that once or twice. and so, yes, there are a lot of people here. And, you've been coming to NIC since 1997. When did you found, The Springs? 

01:21 - 02:40

Fee Stubblefield

1996. That's when I went out on my own and started my own company. And, with an idea. But we didn't open our first community till 98, so it took me two years to figure out what to do, how to do it, which I didn't actually figure out until years later, but I did it anyway. So we failed our way forward, but opened the first 1 in 1998. Wonderful. And it's been a family endeavor. Yeah, it's a company that I started and, you know, we've kept it close. interesting. So now we're just opening, we're moving the first residence in our new building in the Springs at the Waterfront in Vancouver, Washington, which is a 250 unit community on October 1st.

So that's 20 communities. And  what we've done, I think a little different is we've never sold a building. We still own the very first one we developed and we've just continued to try to get better. Maybe that's just because we've struggled with, I mean, this is a business, we're in a business problem. Right? And so we just can't get to the level of perfection where we feel like we can quit.

We just have to keep trying. And I think that's one of the keys that has made us, made it work. So 20 communities. Now, is that what you were saying? 20 communities. So, and you've held on to those, which is sort of an unusual thing, especially when you walk around NIC and you can see all the transactions.

02:40 - 03:06

Josh Crisp

So what's been the driving motive? Because as you said, it's not an easy business to operate. So what has been your driving force that's kept you in because since the 90s to now, I mean, just in the last handful years, it's I mean, we've encountered so much as an industry. So you put that over 20 or so years. I mean, that's a lot of experience that you've been through. So what's been the driving force and your motivation to do that?

03:06 - 06:26

Fee Stubblefield

You ask that question really well, and I've never heard it asked like that. But if you're going to stay in this business for a long period of time, for me, potentially, if I make it a couple more years longer than I have a mortgage on my house, you have to have a driving force. You have to have a reason to do it. There's a lot easier ways to make money in the world, than in the 24 over seven three, 65 day business that deals with the challenges that we have around aging and the workforce. Right. You've got and that motivation is really laid out in the book, The Culture of Promise.

But it started really simple, just solving a problem for my own family. But what's really interesting is one of the concepts that we talk about in there is Maslow explains this, right? And it shows how challenging it is to do what we do. And so we have to have a driving force or some way with a purpose, a reason to do it that gets you back in. It's got to be something that you truly, deeply believe in. But, you know, if you think about it, as we age, we start off, you know, in Maslow's hierarchy, we start climbing the Maslow's pyramid mountain, and we get up there, you know, we, our parents keep us safe. We finally get enough money, we move out of the house and we have safety and security.

Then we have friends. And, you know, we potentially get married. And then we go on vacations and one day we reach the pinnacle of having an amazing podcast, like you guys and your self-actualized on the top of the world. And then what happens? Time and gravity starts pulling us down the other side. We age right? And it pulls us down. We've been there. We've done that. I don't want to do another podcast again. We’ll let somebody else take over. And then maybe our spouse dies, our friends die, and we're not safe at home. And so as an operator, we get a call from the families that come home at Christmas to visit their parents, and all they've got is ice cream and toast in the refrigerator.

And they're in trouble. And they call us because now they're in a place of safety. they don't really have any socialization going on. And so they're in a vulnerable state of life, and they call us and we move their family in with us. And at the same time, we got younger people starting the journey up the other side of Maslow's, or getting going, that are in a vulnerable place or just getting their life skills.

So we get our workforce trying to stabilize themselves. And we put those two groups together, two groups that are in vulnerable stages of life. And we hang our entire reputation, our business, our world on two vulnerable groups. And so everything that we do here at the NIC, the capital, the operations, you know, the, the all the fun stuff we get to do if it's not in service to that, making that stronger and better.

This is probably a business you don't want to be in because it's just so it's just a vulnerable thing to do. And so you have to have a driver, as you put it. I love that driver that makes you feel like I feel a sense of mission. My grandparents, like both my grandmothers, lived and passed away in our community. So I feel like I accomplished a purpose for my personal purpose that I started out with. And now it's become more about the workforce and the staff and what are the things that we can do so that the rising tide lifts all the boats. And, there's just a lot of concepts around it. So anyway, that's a long answer to your one question, so we better get some more questions.

06:26 - 07:45

Josh Crisp

I want to get deeper into that, because you talked about a lot of things there in that, in the drive and the motivation and the culture and we're dealing with people in a very frail state. And you pointed out eloquently the two different groups that are at both frail states. But, you know, to get a deal, we're talking here at NIC where we talk deals a lot of times and transactions. How do you know? I've found it very difficult in my 15, 20 years doing this to get everyone aligned towards the same mission and purpose.

Because to get a deal together, you've got your capital stack, you know, your equity, your debt. You've got the developer. If you're not the developer, you've got your manager, your operator, all these stakeholders. And if any one of them is misaligned, there's this friction that happens and just between the capital stack and in the owner operator group, a lot of times, you know, it becomes very difficult to do to have a meaningful culture.

So what has been some of your secret sauce that you could share, you know, with our audience, because we got a very diverse audience out there. And, and I know there's a lot of young, very successful people that will probably be the future of our industry. So, I mean, what kind of nuggets of wisdom can you give them?

07:45 - 12:04

Fee Stubblefield

Well, it's one of the reasons why the only non-profit organization in the senior housing space that I donate my time to is the NIC because what you articulated again is very perceptive and accurate. I believe that how you structure your capital is the key for you being able to fulfill your promise to your customers, to your residents, to patients.

And okay, I think a couple things I think of the phrase A rising tide lifts all boats, right? I think a lot of the way we structure these deals at capital. There's people anchored to the bottom of the sea and the tide goes up. You're going to drown, right? You're not going to be there. And so being smart, right, that you got a rope tied to the bottom of the ocean with a big old piece of concrete is probably a good idea. Another metaphor that I like is I think that one of the problems we've had with quality is because we don't really understand what business we're in. Everybody thinks we're inventing this business. Businesses have stakeholders, and our culture is this culture of enrichment. We promise to take care of people. We're in service to people. It's messy. It's 24/7, 365.

It reminds me. So I'm also, I have an interest in, in agriculture. Right. And so, so I don't do orchards, but I'm going to use an orchard as an example because I think it's the best one of all the agriculture that I know. I mean, when you go out or when the farmer goes out and they're going to create an apple orchard, right? They're going to take this ground, look at them. They're dirty, it's messy. They're going to be out there on their tractor. You know, work in the dirt, making sure the soil is, the PH is right in it. And they're going to plant their rootstock. They're going to nurture that. They're going to protect it. They're going to make sure it gets water.

And that's going to happen for 5 to 7 years. Right. And then one day they're going to get a crop of golden apples on this tree. And that's going to last for a really long time. I would contend that what we do is exactly the same business, right? The difference is we're not growing apples, we're growing relationships. But it takes to plant your culture, to give your customers confidence.

You're going to be there 24/7 365 to be resistant and run to the problems, not away from the problems takes time. And I've noticed that when we acquire a building or a company, when we build a building or a company, it's 3 to 5 years, very similar to, you know, growing grapes or an orchard before you get a crop. Very natural principal, before you actually get this crop of relationships. But once you get that, because our product is different, we're not selling microphones or headphones or we're taking care of people. Something that if we were that'd happen to us someday. So it's a deeply personal business. And so you have to approach every problem like it is big, even if you've dealt with it three times, even if the president has forgotten ten times that you've already dealt with this, you have to take it fresh every time and you have to have a point of view.\

You've got to. Your promise to take care of people is an aspirational promise, which is an aspirational promise, which I define in the book. There's two kinds of promises: aspirational promises and business promises. The combination of those two, besides your capital structure, which actually is important to have a structure, the combination of business promises and aspirational promises is a key to success, because aspirational promises are ones that will fail and fall short.

Business promises must not. We take capital from capital providers. That's a business promise. We have to return the money. We have to give them returns. And as operators, sometimes I hear a lot of complaints like, well, they were really hard on me. Well, did you fulfill your business promise? Right. And so we have to choose our capital partners.

Right. And we got to structure it right. And we got to know it's going to take time, a lot of time. That's why we've never sold a building. It just takes too long. I mean, it's like selling my kids. And I know that's probably bad and you know, it's an analogy, but you get so into it and know it so well. To replace that is really hard to think about.

12:04 - 13:45

Josh Crisp

Well, I think it's really hard to think about. And when you put blood, sweat and tears into something for so long, you know, oftentimes you're thinking about what's going to happen to it if, if I get rid of it, you know what? And so I hear that happening, and I think there's a huge shift happening in the dynamic to where, you know, I'm kind of I'm thankful that it it seems that people are starting to talk a little bit more about the relationship aspect of what we do versus transaction of what we do, because we are in the real estate world, we are financing things and there is a transaction that occurs. But it's not like, you know, when that asset manager makes a decision based on a pro forma. If there isn't a lot of thought and intention that goes into what are we actually doing if we make this cut or if we raise this revenue, or if we do this like that, the trickle down effect to actually humans, that are living with you and in the frivolous part of their life and their families have trusted you, you know, it's a huge responsibility.

So as we're seeing so many new operators coming into our industry, I think I've seen and talked to probably at least six new operators at this conference. It's exciting. But they're operators that have been in other verticals that are much more, I would say transactional type of a service. And so I've heard two things I've heard, wow, everyone in this vertical is so friendly. And oh, this is a really tough industry to break into. And so it's interesting how those two have gone hand in hand, but I think it's for all the same reasons that you're describing. 

13:45 - 13:46

Fee Stubblefield

So I'll say some unpopular things if that's okay.

13:47

Josh Crisp

Absolutely. We've done that before. 

13:53 - 17:59

Fee Stubblefield

First of all, new companies are amazing. And I was one. But the same growth principles apply 3 to 5 years, maybe seven, before you can cement a culture. It's like bringing the basketball superstars together, you know for a couple of games where there's no culture, relationship versus, you know, I would rather coach the team that's been together for 3 to 5 years and, you know, outperforms.

It just takes time to build a culture. The other controversial thing that I'll suggest, capital has a business culture of control, which it should promise to their customer. Right. All culture comes from the promise to your customer. Their promise to their customer is, we're going to take your money, and we're going to give it back to you and keep it safe.

That's inherently a culture of control. It's not personal. It's not about you're a nice person. We're taking the building back or we're kicking you out of the building. It's because they've it. They've got a promise. cultures of control need certain types of leaders. They need a control directive. They need directive leaders' enrichment. When you're caring for others, child care would be the same type of business.

That's a cultural enrichment culture, as Bill Snyder calls it. Again, this is in the book, my book, and it's also in his book. He had a great book, Lead Right for Your Company Type. In The Culture of Promise, I kind of take his concept and I break it down. So we are an enrichment culture, which means we're promising to take care of people.

It's messy. We actually the leaders that work best in those cultures are not necessarily directive leaders. Although you have to have all these, you have to have different ones. You got it. You get a business promise which is more directive and aspirational. But fundamentally our industry profession is an enrichment culture, and it leads leaders that are going to be more charismatic.

And I'm not saying charismatic in a religious type of way. I'm saying I'm saying true believers. You know what the driver that you're talking about, what's the thing that drives you and keeps you there? It's a servant leadership perspective in the fact that you know, everything you do is to get that outcome, and you got to be smart enough.

The byproduct is the apples come off the tree, the relationships come off the tree, the good chair comes off the tree, the financial returns come off the tree when you give it enough time. But we're not we're not planting these companies in these orchards with enough time to come in and yank an operator out of a building because it's momentarily not working is like saying, having three years into a tree, growing and coming in with the dozer and yanking out the dozer or yanking it all out, and then bring in another operator and say, I want apples on schedule.

I want apples in a year. It's not going to happen. Or a disease comes in and wipes out like Covid wipes out the orchard, bringing in another farmer and saying, hey, you know, we want to crop up this next year. Can you do it? Well, it doesn't matter what they say, it's not going to happen. So culture is building.

Culture is everything and it just takes time. We need new entrants in the market. Competition is good, but teams have to form. I'd suggest that. What if we went deeper instead of 28 years ago? We're kind of underachievers. There are only 20 buildings in 28 years. Okay. By NIC standards. You walk around here as you're an operator.

If you're an orange badge, you know, everybody wants to know how many buildings you have, how many buildings you have. I mean, what's it? What do they ask? How many buildings? Now? Why aren't we asking what's your quality? What's your quality of life? what's your what's your moderate on your work, your comp. What's your last run on your liability insurance?

Those are indicators of what your culture is like. But, you know, we don't even have 20 buildings. If you structure. Right, we don't need to do any more. You don't have to have 500 gazillion buildings in every market in the world unless you just want to do that, which is fine. It's America. Right? We can build what we see and what we want to build, but do we need that to get the quality? I think deeper versus wider is my vote.

17:59 - 18:43

Josh Crisp

Well, and I would tend to agree with you, but and I think I don't know if you're seeing this, but I'm almost seeing that there, there is starting to be a little bit of a shift. more to hey not is not how many regionals do you have? But where are your regionals focused? How are you servicing your buildings?

I'm actually starting for the first time in my 20 year career hearing those questions being asked at NIC, which is very refreshing to me. I mean, I don't know if you're sensing that or not. Maybe that's through some of your leadership and influence through the years, maybe through your book that people need to read. It just launched. But, Lucas, this is I mean, you go into so many buildings, every flavor of operator there is out there. This has to be something you notice as you go in. It is. 

18:43 - 19:21

And this is such an important conversation. And I'm really glad that we're having this at NIC, because that culture driver that these anchor points, these orchards, it takes time and you're the living embodiment of that and you're not in the background. You're you're here, you're you're you're telling your story. And, people know you here and you're on, you know, giving your time to NIC. And I think that as the industry continues to change and bigger companies and bigger transactions and bigger, bigger, bigger, I think the core of our business is regional, smaller operators. It's really what makes up the majority of our industry.

19:21 - 21:48

Fee Stubblefield

Can I disagree with you? Okay. Not disagree with you, but can I propose a little thought around that too. Everybody says regional operators, regional operators, regional operators. I don't think size matters. In fact, I think you have to grow and we have to become bigger. I think it's how we grow. Why is it that when you grow, theoretically, you're supposed to have more resources?

You'd be able to buy more buying power, you got more experience. So why aren't we getting more quality? Why is there a reverse correlation to size a quality, which is, I think, chapter ten quality growth curve concept. and it's because we outgrow our quality. But I think the opposite is going to have to happen. I think we're going to we I think we have to have operators that have more resources that have invested in growing their quality, and therefore the number of buildings and number of lives you can impact just naturally follows it as a byproduct.

There's a consultant out of Portland, Oregon. I work with Greg Bell, a great guy, and he's got this. He's got this book called Water the Bamboo and we like strings. We bring in all these management consultants over the years, and we try to garner all these nuggets told in a different way similar business concepts. So here's Greg's theory.

Tall timber bamboo they planted, the farmer planted in South America. And for four years, all you see is this little sprout above ground. There's nothing going on. For four years you think nothing happened. And then in 90 days it grows 90 ft and everybody goes, wow, an overnight success. Where did that company come from? Well, it wasn't an overnight success.

So in those prior four years, you guys know the answer to this. What was happening was it was growing down. It was growing roots. So I anticipate you know, I anticipate there's organizing. There's a lot of organizations out there that are doing it right that have been growing roots. They're going to have the opportunity to impact and to grow in a meaningful way.

And the customer ultimately doesn't care about the size of the company or any of that other, to the extent that they get their needs met and their promises met, and you fulfill your promises to them. But you have to have to grow those roots and that takes time. Well, I agree with you. I think it's a great point.

21:48 - 22:09

Josh Crisp

You know, we're coming out of some difficult times for our industry. And I think difficult times show true character. And I think there's a lot of operators, developer owners who have weathered a lot of the storms like you have and are coming out stronger on the other side. And just what our industry is going to need to pivot into the future.

22:10 - 22:31

Lucas McCurdy

Well, this has been an amazing conversation. You've got a book out, Lucas. We're going to connect our fans, our listeners, to all this information. We're going to put the links in our show notes and to our listeners, we're going to connect with Fee and his organization in this book. I know that I'm going to be ordering it and really diving into it. I think there's a lot of lessons that can be learned here for you. Thank you so much for spending time with us today and a busy schedule. 

22:31 - 22:38

Fee Stubblefield

Thank you very much, guys. And all the proceeds of the work goes to funding our Workforce Stability Program. So it goes right back into our frontline workforce. 

22:38 - 22:46

Lucas McCurdy

Awesome. Go to btgvoice.com to catch this content. And so much more. And thanks for listening to another great episode of Bridge the Gap.

Outro

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.

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