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Changemakers: Joel Nelson, President and CEO, LCS

Over the course of three decades in the senior living industry, Joel Nelson has witnessed — and driven — many changes.

Rising through the ranks at LCS, one of the nation’s largest senior living organizations, Nelson played a key role in starting the company’s real estate business. As president and CEO of LCS, he now is responsible for leading all business lines in the LCS Family of Companies, which includes an operating portfolio of more than 130 communities.

Through the Changemakers series, Nelson talks about the greatest changes he has faced in his senior living career, why being prepared for change is critical and how he prepares for change within LCS and the industry at large. He also discusses changes that he believes are needed for the future, including in areas such as workforce and wellness, and a more unified approach to industry advocacy.

Thinking back on your career in senior living, what are some of the changes you’re especially proud of leading?

I’ve had the good fortune to be in the industry for the last 36 years, and there have been many changes in LCS and the senior living industry during that time. The one I’m most proud of is when I was given the opportunity to start our real estate company back in 2010. It was transformational for the company and who we are, and it has driven even more changes as a result.

There’s a lot to be proud of in this industry, which is why I stuck around for so long. I’ve been on multiple association boards, and for the last couple of years, I’ve served as co-chair on public policy and advocacy for Argentum. I’m very proud of what we were able to do during these challenging times. I think we’re at the very beginnings of getting an ear that might be open to some change in the perspectives of our industry. There’s a lot of more work to do there, but we changed the pendulum.

Take me back to starting the real estate business. Was it an easy decision for you to make, to lead that effort? And how large is LCS’ real estate business today?

When Ed and the board came to me and said, “We’d like you to start this up,” … they put enough confidence in me — with the help and support of themselves and others — that I could learn that real estate space. It was big pivotal change because I was transitioning oversight of the LCS Companies, and virtually creating a start-up with three people. We were very disciplined as an organization that, “You’re out of operations … you’re going to be on the board and you’re going to run real estate, that’s it.”

Probably, one of the primary reasons I did take it was I felt like, one, I was being given the opportunity, which was a compliment that the board had that trust. Secondly, as a company, I could see what we were changing to; if I wanted to be successful in the role I am today as CEO, I needed to get that experience and foundation.

In 2010, we owned a handful of communities. Predominantly, they were opportunistic distress properties that we had purchased. We had developed a couple properties back when we were part of the Weitz family, that we got as part of that change when we became 100% employee-owned. Our vision forward was really two things. One, we wanted to have greater ownership and expand that growth curve, but we also wanted to diversify from being predominantly a third-party life plan/CCRC operator to a life plan and rental operator/owner. Today, we’re 40-plus rental communities that we have acquired or developed under our real estate platform. Then we have an additional 16 life plan communities. We’re at 54 owned communities today, since 2010. It’s manageable growth, I call it. It’s been very good for the organization.

How have you changed as a leader in your tenure with LCS?

All leaders go through cycles. There are cycles of learning, cycles of leading and cycles of change. All three of those require adaptation as a leader. Maybe it’s the new market; maybe it’s new clients. I think the biggest change I’ve experienced as CEO of the organization is taking a back seat in problem-solving.

As an operations guy, that’s what I know. We dig in, roll our sleeves up and solve problems. At the highest level, I’ve had to figure out how to take my experience and ride alongside my team members to help drive change and solve problems within our industry. That’s a marquee of LCS — giving back what we’ve all received in our own professional development. As CEO, it’s critical that I get the next generations prepared to continue the legacy of LCS.

How are you approaching diversity, equity and inclusion in LCS and the industry at large?

It’s a big topic. Speaking of change, it’s a very important piece of LCS. Diversity, equity and inclusion have always been on our radar, but not to the degree of discipline that we’re giving it today.

Clearly, our frontline employees have great diversity, but how do we take that frontline employee diversification and bring it up through the organization? We have some great success stories where we’ve done that, but it needs to take place at a higher level.

We reached out to our employees and leadership who have special expertise or special interest in DEI, and they came back to executive leadership with the recommended priorities. They wanted our blessing. I think we all have to do better, but as a leader, given the size of LCS, I think we have the opportunity to get in front of it. That’s what I aspire for the company, and our executive leadership team is very focused on that.

Do you consider yourself a changemaker? And are you excited about change, even when there is a lot at stake?

Full transparency, I can’t say I’m always excited about change.

Change doesn’t always come at a time when you have the capacity to address it. Often I’ve found that change comes at the most unexpected times, but I believe that’s what makes our work so meaningful. As I look back on 36 years in the business, I’ve always tried to anticipate change and stay in front of it. We’ve always prided ourselves on being a very consumer-centric company.

Trying to understand the direction of the consumer and then the product helps tremendously, but we also have regulatory change — every two to three years, if we’re lucky. That’s just part of the business. Being able to pivot and adapt to new changes is a lot easier than trying to fight it and go against the grain. When they come, execute as best you can, learn from those mistakes and apply those in the next round of changes.

Does it always excite me? No, but it’s probably one of the things that keeps me deeply engaged in this industry, because I think with change comes benefit.

Do you think the senior living industry is changing fast enough?

That’s a yes and no for me. If you think about being consumer-centric, you’re working with generational changes, which are good and bad. Generally, the industry’s done a pretty good job of listening to the consumer, and we’re seeing it today in another evolution of our product with active adults.

Additionally, if you look at how assisted living and memory care have changed over the last 10 years, I think the industry’s responded well to those needs.

Where I don’t think we’re changing fast enough is in the technology area, but there’s a lot of untested technology out there. I think that’s holding us back a little bit. And then we’re not moving fast enough to address the change in the workforce. It will be an uphill battle until we’re able to better connect what we do and the career opportunities available to people in senior living.

How do you innovate without getting so far ahead of the curve that the market is not ready for your idea or product?

You have to time the market with your research. We’re going to do multiple focus groups, because what might work in one geography is not going to work in another. Again, it’s going back to being very consumer-centric, and having the flexibility to listen to that consumer.

I think the timing of change is probably best executed when taking the time to anticipate the change and make sure we’re not catching up — when that change starts to come into place, we’re already there. We have a strategy, and now we have enough confidence to execute on that strategy.

The way we address and manage wellbeing today is drastically different from even 10 years ago. If you think about what some of our wellness centers and our wellness programs were 5 to 10 years ago, it’s dramatically changing, and it can change at a pretty fast pace. The consumer wants an active, vibrant, healthy lifestyle. I think that’s where, as providers, to be able to address and bring in that change goes beyond having a gym or fitness facility. It’s all metrics of wellness, and the balance of our residents, they want to be involved, they want to have a purpose … and that will be integrated with our future generations’ definition of wellness.

Talk about a time when you tried to execute a change and it didn’t go according to plan. What lessons did you learn?

There have been many. A pivotal point in my career and the company was getting into real estate, and there were a lot of mistakes made as we learned that business. Today, we operate two distinctly different platforms.

When we chose to diversify our product and take a more aggressive owner position, we discovered we were best suited for multiple continuums of care and the larger size of the communities. Our infrastructure was not appropriately sized for a 60-unit community or an 80-unit community. We determined just philosophically that we wanted to have more than just a straight memory care building. We went and said, “We’ll have memory care in all of our communities, but we’re going to have it along with AL, IL and have the continuum as we move forward.”

As we looked at that, we went back and reset our entire rental strategy in 2018. Our COO today, Chris Bird, came in and did a masterful job executing that change.

We did two things. We first changed the size, and said, “Our best niche was to be in that 120 to 150-plus unit with multiple levels of care.” The second part that we changed was moving to portfolio relationships. We have programmatic JVs on the development side, and we have programmatic strategies on the acquisition and ownership side. We’re not doing one-off, one-site developments, because they don’t align with the efficiencies, scale or consistency for us to implement all of our best practices.

As I said, there were many mistakes and lessons in that area alone. Today, we like where we’re at. We’re looking to grow our third-party managed business and will remain engaged in both the development and acquisition business.

Do you agree that Changemakers are risk-takers? How do you describe your own appetite for risk?

Without question. Change requires some level of risk tolerance. Myself and the LCS leadership team have a strong appetite for risk. That said, we have a strong appetite for risk in a very disciplined way. We like checkpoints, we like data, we like historical experience and we like established, measurable metrics, but risk is the exciting part. We have been more progressive with risk-taking throughout the years, but always in a disciplined and calculated fashion.

The post Changemakers: Joel Nelson, President and CEO, LCS appeared first on Senior Housing News.

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