Leadership, Change and the Age Wave

A lot of organizations are working on internal change to deal with the unprecedented external change that’s coming with the age wave. Below is a recent interview with Ecumen CEO Kathryn Roberts about that subject. The article appeared in a recent edition of Boardmember Magazine, which is published by BoardSource. Based in Washington, D.C., BoardSource works with non-profit organizations across the country to improve governance. This interview was part of their regular CEO feature called: Leadership Lessons.Leadership Lessons: Riders of the WaveKathryn Roberts, president and CEO of Ecumen, one of the country’s largest nonprofit senior housing and services companies, views the aging of the Baby Boom generation as an opportunity, rather than a challenge. As Board Member learned in a recent interview, she and her 16-member board of trustees are seizing that opportunity by rethinking and reinventing the services and products Ecumen provides to seniors today €” and tomorrow, when the Baby Boom ‘age wave’ hits the senior housing industry.Board Member: You’ve said it yourself: America is on the cusp of an unprecedented demographic transformation. Ecumen is planning to ‘ride the age wave,’ rather than drown beneath it, by innovating services and products. From where does this ability to embrace change come?Kathryn Roberts: It stems from me, my leadership team, and the board €” and there’s absolute unanimity about doing it. In 2004, after I had been at Ecumen for about a year and was starting to put some strategies in place to ride the wave, the board went on a retreat. The members used that time to identify a vision for our future and a five-year plan. Since then, it’s been ‘Go, Kathryn, go. Go as fast as you can.’I may be overstating this, but if this organization hadn’t changed, it would not be looking at its 200th anniversary. And the board knew it too. Five years ago, more than 80 percent of our revenue came from government reimbursement, primarily through our nursing home line. With set rates and declining Medicaid support, we were only going to lose money. Because the nursing home industry is so regulated, our expenses were completely out of our control as well. So our choice was to either change our product line or run through our cash and close up shop.Facing this dilemma, we strategized with the board and came to the consensus that we would need to add services that are less regulated and generate private revenue to offset the inherent losses in the nursing home line. My leadership team and I recommended that these new services include independent housing, assisted living, and care for those with Alzheimer’s and other memory impairments. One of the goals we set in that first strategic plan was to reduce the percentage of our income that comes from our nursing home line from 82 percent to 52 percent €” there is no question in my mind that we will achieve that goal and maybe exceed it.We’re now about to go through the strategic planning process again, and this time we want to be even more intentional. In 2004, we planned in a naïve, intuitive way. In October, we’ll be more grounded in facts €” we recently brought in the state demographer to spend time with the board, and last year, we conducted the largest survey ever of Minnesota Baby Boomers to learn what they’re thinking about the future. The new data we’ve collected will inform the board’s discussions and decisions.BdM: Has there been any resistance to change or push-back from the board?KR: The board has been very supportive, right from the beginning. Throughout these tumultuous years, there has been only one instance when a board member raised the fear that we might be stepping away from our mission to provide the poorest and the neediest with housing and nursing care. But that has not happened. In fact, by venturing into the private sector market and creating business aimed at the new demographic, we will increase our income, thus allowing us to serve the neediest in a more robust way.BdM: To better meet the needs of the aging Baby Boomers, Ecumen is also involved in changing public policy. Is the board supportive of your efforts in this area?KR: Legislative and public policy work was not a part of the old organization. But policy and funding changes are necessary if we are going to meet the Baby Boomers’ demand for a broad range of services, such as technology that will help them live more independently. We are committed to shaping change externally, as well as internally, so we’ve begun to build a board with relevant experience. Our board chair, for example, was chair of a political party in Minnesota, and several board members have political and lobbying experience.BdM: The membership of your board has changed since your arrival in 2003. Is there a trick to recruiting such a talented, supportive board?KR: I have to give credit to Ecumen’s former board members. To make change happen, they knew we had to augment the board’s existing makeup. We have enriched and broadened our board with a variety of backgrounds and skills. The board has helped shape itself into what it is today.Also, we put in place a process that has provided, for the first time, more names on the plate than we need. This allows us to select only those people whose personal interests and skills are a good match with our mission. If someone is not in sync with our goals or lacks commitment to growth and change, we’re comfortable suggesting that that candidate might be happier serving on another board. The board is clear about what we’re trying to do and knows the qualifications and interest needed on the board to make it happen. There is a high level of mutual trust, and that has made all the difference.BdM: How have you managed to achieve that high trust level?KR: I live by two values: I do what I say I’m going to do and I’m transparent €” whether it’s good news or bad. This gives me credibility with the board, and it raises their level of confidence that I won’t blindside them. For example, we had a large and very popular nursing home that had been part of our organization for many years. It was also hemorrhaging money. We could have continued to tread water. But long-term that wouldn’t have benefited this organization. Instead I recommended that we sell the nursing home and laid out why. Decisions like that are never easy. They impact a lot of people. But it was the best thing to do for our organization. Of course, trust doesn’t happen overnight; it’s one step at a time. But however you achieve it, trust is essential, especially if you want to change the way your organization does business.BdM: What advice would you give other nonprofits contemplating transformation in response to major demographic shifts?KR: You have to be bold, be brave, see the vision in front of your face every day, communicate it to interested stakeholders, and then work hard to make it happen. You have to have accountability and measurement. How else will you know if you’re making progress toward your goals?Nonprofits are businesses, and we have the responsibility to be financially successful so we can deliver on our missions. I believe strongly that too few nonprofits are thinking about services they need to change in response to the age wave. For me, my board members, and the people who work at Ecumen, the issue of providing services to the aging is very personal. At some point, we all will need these services €” and there better be good choices.