NIC Chats Podcast with Kelly Cook Andress

Introduction: (00:00)
Welcome to NIC Chats, ideas and inspiration from senior living leaders with hosts, Beth Mace, NIC's chief economist, and director of outreach. Get to know some of the people influencing senior living today and perhaps learn a thing or two from their experiences.

Beth Mace: (00:18)
Hello, and welcome to NIC Chats podcast. My name is Beth Mace and I am the chief economist and director of the research and analytics team here at NIC. I'm so happy that you can join us today. The focus of the NIC Chats podcast is talking to interesting people that have ideas. And I think you'd like to hear about, as you listen today, I hope that you'll find some humor, some insights, inspiration, and hopefully what I call an aha moment when something pithy or insightful is said, a light bulb may go off for you. Before I begin, I also wanted to let you know that NIC's 2021 fall conference is just a few weeks away. It will be held in person in Houston from November 1st to November 3rd register quickly, if you want to attend. Now, as I say on with the show. So I'm delighted that our seventh NIC Chats podcast is with my friend and much admired colleague Kelly Cook Andrus. Kelly is the president of Sage Senior Living headquartered in Wallingford, Pennsylvania. Kelly, thank you so much for joining us today.

Kelly Cook Andress: (01:21)
Thank you, Beth. Hello.

Beth Mace: (01:23)
Nice to see you. Nice to talk with you. So, as I mentioned, I'm going to have three statements about Kelly. One is true, two are not. And as we go on with the chat today, you'll find out which is true, which is not. So one of those statements is that Kelly, you have a lot of empathy for your residents because you, yourself and your family have been planning on downsizing from your family home for over a year. That could be true. That could be false. Second. You own a small RV you bought for tailgating that your friends have dubbed the urban assault vehicle. And third, this can be true. This could be false. You recently slept on a mattress on the floor for nearly three weeks in a one bedroom apartment in New York city. So we'll have to wait a minute to know which of those is true, which is false, but let's get on here with this. So first, um, Kelly, I'm interested. Tell me more about the Sage Senior Living.

Kelly Cook Andress: (02:18)
Sure. I'm happy to do that. First off, Sage Senior living. We get up every morning at Sage senior living to help our residents live to the power of you. We do that currently in 12 operating communities. We opened two communities last year during the pandemic. So that was an interesting twist on Sage life, but, we have 12 communities, 1,265 apartments. We have projects, we have assisted living memory care. Kind of a traditional 90 bed assisted living communities up through independent assisted memory care, rental continuums, and then just opened our first active adults, supportive active adult community. So of our 1,265 apartments over the past five years, our portfolio has shifted from about 30% independent living to today, it's about 50% independent living and with the projects we have coming online over the coming years, known projects that are under development or pre-development now we're going to maintain that unit mix of approximately 50% independent or active. We have 700 associates right now as well.

Beth Mace: (03:38)
So, how do you differentiate AL from, excuse me, IL, independent living from active adult.

Kelly Cook Andress: (03:43)
Well, that's jumping right into the industry issues. You know, it depends on basically what's included in the rent, whether or not meals are bundled in, sometimes utilities. All of our communities are heavy in hospitality and supportive in the life enrichment arena. So it's really more around the meal programs and being flexible with those meal options. Some transportation may or may not be included. In supportive active, certainly probably wouldn't be included in just straight active adults. So there's a, there's a whole host of the hospitality programs, that differentiate.

Beth Mace: (04:27)
So really interesting because it's a really big topic in the industry right now. Active adult versus independent living. Is active adult the new independent living? Is independent living more like assisted living? So it's something that NIC is tackling and trying to really differentiate or determine if there is any differentiation in the products. So I believe that you specifically define a Sage senior living community as a place with sophisticated surroundings, unparalleled hospitality and customized support. So why are each of those descriptive terms important when you think about Sage?

Kelly Cook Andress: (05:01)
Well, let me start by saying that we started as an assisted living based company. So excellence in care is at our core. We don't believe that great care is a differentiator upfront. Although it's certainly is an experience enhancer and is absolutely great care is, is a base, is a requirement, and everything that we offer from there we go into the things that you mentioned, the sophisticated surroundings, the hospitality and the customized support. So the differentiators are basically around personal choice. If handling your needs is basic dignity, then we want, it's your wants and desires that bring your joy. And so unparallel hospitality is about treating the individual as an individual and going where residents lead us versus, a prescribed, offering of services. So, hospitality means great food options. It means fabulous swanky parties on the one hand, but maybe ukulele club on the other hand, right? So, hospitality, is focusing on what the residents, what are our residents, what our customers want from us, not only what they need from us. So the food services is clearly part of hospitality, but the customized support is also about not only your needs, but your wants and desires. And all of our residents have come to us with their own personal idea of what they want and in assisted living customized services, our care associates absolutely know what our residents need, but they also know how to complete that experience for them, with handling what they, and frankly their families want, from the experience in assisted living, independent living. It's what may be a little more focused on what the resident's wants and desires are. That means differentiating our food programs. It means tailoring our apartments. It means tailoring their day through our mosaic program, tailoring their day to what they want to accomplish. And then with a sophisticated surroundings. Sophisticated surroundings means beautiful textural, you know, it's a full sensory experience to be in our spaces, but there also have to be varied and appropriate. Just like in our homes there's spaces that are more formal. Spaces that are less formal. Spaces for big group offerings and spaces for small group offerings. And ultimately I think the differentiator withSage is, is that I would absolutely live in my communities. I would live in my assisted living communities. I would live in my independent living communities and my 55 plus.

Beth Mace: (08:14)
I think that's a really important question or answer actually, because that's not always the case. And I've talked to a lot of owners and operators and you ask, would you live in your own property? And sometimes you hear them say, oh, I'm not so sure. So I think that's a pretty strong endorsement that you would without a second thought, go ahead and live in your property.

Kelly Cook Andress: (08:33)
Absolutely. And you know, we'll, we can talk more about that later, but when you focus on your residents and your tenants as customers, that allows you to serve a much wider, to fulfill a much wider spectrum, of age spectrum, resident needs and desire spectrum.

Beth Mace: (08:58)
Great. Okay. So I'm going to shift a little bit. Well actually I have one more question. Businesses are increasingly focusing in on diversity, equity, inclusion. What's been happening at Sage on this.

Kelly Cook Andress: (09:09)
Well we're a little different. We're a woman owned, family owned company, and we did decide specifically to work on our diversity and inclusion about five years ago. We said, we've got to find some men to work here. We've always had a very high population of women in leadership roles and in our organization, women of color. And today I think we have a well-rounded, leadership group in our communities and that filters down or filters up depending on how you look at your org chart to our department heads. And so as we grow, we see that diversity as an important part of growing with us.

Beth Mace: (09:51)
That's great. That's really great. Yeah, it's good, good to get those men in there. Right? All right. So I'm going to shift a teeny bit to a personal story. So what led you to wanting to work with older adults?

Kelly Cook Andress: (10:06)
I actually answered a blind ad in the newspaper back in 1989, I think it was, or 1990. Back in the day, people remember back in the day, it was the middle of the great recession. I was in Northern Virginia, I think the largest employer, one of the larger employers in that area at that time was the RTC, which was the bad bank that...

Beth Mace: (10:34)
Resolution trust corporation, that's what all the banks, all their loans went into a foreclosure and the federal government got involved. Yeah, I was involved with the RTC myself.

Kelly Cook Andress: (10:45)
Okay. And so I was interviewing at the RTC and I answered a blind ad to work with seniors, and I actually ended up going to an interview at Paul Clawson, Paul and Terry Clawson's home...

Beth Mace: (11:00)
And who are Paul and Terry Clawson?

Kelly Cook Andress: (11:02)
The founders of Sunrise.

Beth Mace: (11:05)
Just happen to go to their house for dinner.

Kelly Cook Andress: (11:07)
Yeah, exactly. So, I went in and Paul hired me very quickly. I think he hired me for what I say is four reasons. One is that I knew how to do Lotus 1, 2, 3.

Beth Mace: (11:21)
I remember that.

Kelly Cook Andress: (11:23)
I know that back in the day and I was cheap. So that was important. You know, sunrise was a small growing organization. They had just opened the first mansion property. So the fact that I was cheap was good and I quickly came to understand, you know, during the interview, I came to understand that Sunrise was equal parts campaign, equal parts entrepreneurial company, and equal parts social movement. And so I was fortunate and honored to work for such a charismatic entrepreneur at 22 years of age. And to see that and learn that you could do big things as a young person,

Beth Mace: (12:12)
That's amazing. I know the classrooms myself, although I didn't have dinner at their house and they were pretty amazing. He was definitely a role model for sure.

Kelly Cook Andress: (12:21)
I just wanted to say real quick. I also learned at that time, I was fortunate to learn at a very young age to keep my head on a swivel competitively because I saw firsthand what we did to the skilled nursing industry and when assisted living came into being, it decimated the private pay market of the skilled nursing industry. And so I think that by living that on the assisted living side of the ledger, I have learned to keep my head on a swivel so that nobody does that to my business.

Beth Mace: (12:58)
That's really important. And today, and with the baby boomers coming, we're going to see a lot of changes and a lot of different programs and a lot of different products being offered. So to really understand what the baby boomer wants and what the consumer is demanding, I think is more important than ever. So let me ask a little bit more about that entrepreneurial spirit that you, that you followed from Paul. How does that lead into your sort of path that you've taken through your career?

Kelly Cook Andress: (13:23)
Well, people have told me in the past that I'm hard to work for, and I think that entrepreneurs are hard to work for. I think that we can be demanding and unforgiving and, and impatient, and that if we don't understand that about ourselves, we burn people out. I think it takes a certain amount of charisma and confidence just start a company from scratch and to build it. So, I listened to those people that told me I was hard to work for, and I've tried to moderate those issues in myself. As I said about always keeping my head on a swivel. We can be going down a course and your operational team is right in there with you. And then you can say, well, what about this? Is this a risk? Are we vulnerable over here? And that can be very stressful for operating teams who are trying to move 700 to a thousand associates and 1200 residents in that direction. So we have to be very careful as entrepreneurs to a be appreciative and to be not change courses maybe as quickly as you'd like,

Beth Mace: (14:45)
I would imagine that during the last horrible 18, 19 months of COVID, that that swiveled mechanism, that ability to be agile was more important than ever. Has that been the case?

Kelly Cook Andress: (14:57)
It was having the sophisticated managerial team with you is important because I think what we learned is that as leaders, some of us had to stay, you have to stay out of the details in order to make good strategic decisions. So we couldn't all be in the tactics at all times, even though we had this intense desire to know everything that was going on so that we could make good decisions in a vacuum. I mean, a vacuum as far as nobody could tell us this is the process that you should follow. So leaders lead and part of that was staying out of those, it was staying out of the details. So you could be a strategic leader.

Beth Mace: (15:51)
So, I recall that one those, like, what am I was talking about earlier that aha moment. Sort of staying in your lane a little bit and knowing what it is that your job is, but also trusting your staff and trusting your management team. And, and that's, to me a really good sign of leadership. You know what you're supposed to do, but you don't have to do all the nitty gritty. You trust your staff to execute it. It may not be exactly how you would have executed it, but nevertheless, you're empowering them. And I think that's critically important.

Kelly Cook Andress: (16:20)
We really saw that. I saw general McCaffrey speak once and at one point he was leading the Gulf War. The military is great at studies and time studies and he said, and I remembered this during COVID specifically. He said that at one time they did a study and he had a leadership meeting every morning, kind of what we would call stand up. And they did a time study that said they could not get their message out to everybody in 24 hours before the next day's stand up.

Beth Mace: (16:58)
Wow. Wow.

Kelly Cook Andress: (16:59)
It was impossible. So what he did was he expanded the number of people that were included in that daily briefing. And by doing so, it was by the end of the war, they had 7,000 people on that daily briefing every morning.

Beth Mace: (17:14)
Wow.

Kelly Cook Andress: (17:16)
And that was critical to getting the message out straight to the people who had to tactically implement it. So where we tend to want to be very organized about, he tells her, she tells him to work through your org chart in times of crisis. Sometimes it's better to expand your daily communication. So that information gets out to who it needs to get out to.

Beth Mace: (17:46)
It's empowerment. It's empowerment.

Kelly Cook Andress: (17:48)
Exactly. Although real briefly, the other thing he said is that leaders are Tyrannosaurus Rex's and if you picture a Tyrannosaurus Rex, they have really big mouths. And so you have to understand as a leader, that everything you say is exaggerated versus the person underneath you. Second is they have very small arms. They don't do anything themselves. They rely on other people to do their bidding. They have fast legs. So they want to run really fast all the time. And then finally they have those big tails so that if you change direction, that tail can wipe out a lot of work that your leaders have done behind you.

Beth Mace: (18:30)
Wow. That's a really good analogy.

Kelly Cook Andress: (18:32)
Isn't that great?

Beth Mace: (18:33)
So let me go back to those three statements that we started at the beginning, and I'm going to tell you one of those, and I want you to tell me whether it's true or false. So do you, in fact, own a small RV that you bought for tailgating that your friends dubbed the urban assault vehicle?

Kelly Cook Andress: (18:51)
Absolutely. Yes, we do. We own a Dodge Class B motor home that we bought when our kids, were... Our son was in high school and our daughter was in college. They played sports and so we tailgated out of it. And it was great for concerts and tailgating and actually I was on the phone with Brian Sunday, our friend from AEW this morning, and his kids are eight and 10 in soccer mode. I said he should buy it because it's perfect.

Beth Mace: (19:20)
I just saw Brian yesterday actually. Okay. So I'm going to switch gears now a little bit to the industry perspective and specifically on what you think is the largest challenge facing our industry today

Kelly Cook Andress: (19:33)
On a day-to-day basis I am not worried about the capital markets necessarily. I think that the capital markets will follow the baby boomers. You know, it has throughout their lives. Especially in income producing real estate, right? So, I'm not so worried about that. I think one of the biggest challenges we have today is the labor force and workforce issues, attracting people. You know, good, solid middle managers and upper level managers to our industry. So that is what I think is our largest realignment that is going on right now. It's the trilogy between capital management and the workforce. And so...

Beth Mace: (20:20)
Oh, I was just gonna say any solutions? What do you do for your properties in terms of staffing?

Kelly Cook Andress: (20:26)
Well, you know, we've been, we've been very fortunate and, knock on wood, that we haven't had to use a lot of agency, which is great.

Beth Mace: (20:32)
Oh yeah. That's huge.

Kelly Cook Andress: (20:34)
So part of our solution is also having great partners who understand when they need to make an investment in human capital. And so we've used differentials, we've used quality pay increases, spot increases to bring people up to market who we felt like we were had become underpaid just because they'd been with us a long time and didn't have the jump around pay increases. So, also we are doing a lot more management training so that we can promote from within, in order to show that this can be a career for you. Most people, you know, we'd like to see a solid 30% of our future leaders coming up through the ranks. With 30% also coming from outside of the industry so that we get those new and great ideas. We've had success in attracting from the hospitality industry. I think we need to learn how to tip on the food service side. One of the reasons we struggle sometimes in our dining rooms is because we can't get the career waitstaff and front of house people because they're not incentivized by their nightly tips. And that's a big limiter in those that will come to work for us. The other thing we have to do is, is make our communities easier places to work.

Beth Mace: (22:10)
What do you mean by that?

Kelly Cook Andress: (22:12)
More staff. You know, basically, and that's the trilogy, the realignment between capital management and the workforce is, you know, there is going to be some degradation of margins because of staffing, because of staffing requirements. And so, capital and management are going to have to adjust a bit.

Beth Mace: (22:40)
I actually think that in the long run, you'd be better off because if you can create any loyalty among your staff, it's going to make your residents a whole lot happier. Happy residents are going to keep future length of stay. Increased length of stay is going to affect your bottom line. So I don't think it's a particularly a short sided at all, to try to provide incentives, to get a loyal team of workers that want to stay and that I think will beget success in and of itself. So, yeah, I was going to ask about but maybe we've already answered it. Now, the second sort of standard question as a way to grow talent in our industry. So is there any other thoughts you have on that or I want to move on to the next question?

Kelly Cook Andress: (23:16)
Well, I think we have to also attract older workers back to our workforce. Like we have a lot of, we have a lot of jobs in our, in our communities that older workers can do. Including, you know, food service, concierge, even some housekeeping. You know, I see us easing up with when there's additional workers in the building, the jobs become less strenuous physically. So I think that's important. Attracking immigrant.\, Attracting an immigrant workforce, I think is important.

Beth Mace: (23:52)
How about volunteerism? I know a number of not-for-profits know that are really focusing on volunteerism because it serves a couple purposes. Well, it actually creates community. It creates purpose for an individual and it can help on labor. So it's sort of like a win-win-win.

Kelly Cook Andress: (24:09)
Exactly, and my kids went to private schools and when we went to, when we first went to our private school, we started from the public school assumption and we said, oh, we'd like to be involved in the classroom and we're volunteers and do this. And they said, well we have all of our needs covered because we can't rely on volunteers. But it doesn't mean there's not a role for volunteers. And so it's kind of the solar energy issue. Like you still need energy when the sun ain't shining. So you still need all of your, your needs and basic services covered by a paid staff, but the volunteers can really help take you to that next level of fulfillment. Where we talked earlier about fulfilling the needs and desires. That's a, that's a wonderful place to use volunteers.

Beth Mace: (25:06)
I think people want purpose and that's a way to give people some degree of purpose among other things. So that gets me to one of the later questions about an innovative way to strengthen our industry. Maybe it is volunteerism. I don't know. Do you have any other ideas of something innovative? You've talked a lot about them already with some of your parents and programs and anything that we're missing that you want to talk about.

Kelly Cook Andress: (25:31)
Yeah. I'm stunned we don't have robots in our communities.

Beth Mace: (25:35)
Really?

Kelly Cook Andress: (25:36)
Yeah. I said about five years ago to my team, when we're designing all of our spaces, we have to get ready for the resident that is five foot, five feet long. Wow. And people kind of look at me like I'm weird, but I assume like a lot of our residents are going to have the walker, which takes up about a foot/foot and a half. And then them, they take up about a foot, foot and a half, and then I assumed they would have a robot trailing behind them. Carrying their stuff, maybe carrying their medications with them. Maybe, you know, kind of a rolling little mini trash can where they can, you know, I don't, I didn't vision it quite like the Jetsons where it had a face and arms and walked around. Those robots, I think are a way to really enhance independence by freeing up what we carry. And so I, I really could see that. The other thing that I think that we should be doing that we're not doing is that there's a lot of focus in the industry on predictive indexing and using technology for predictive purposes. I think we need to look at our staff, at the work that our residents do more like the repetitive roles... the repetitive functions that are going on and manufacturing lines and things. So that if we did workforce protection. Protecting our lower backs in a way that's better than just a belt or assisting with lifting heavy things, we'll help with transport. So I, I really think that we need to look to technology for workforce assistance as much as resident need predictivity.

Beth Mace: (27:31)
That's really interesting. Okay. So let me go back to the statements again. So have you really just recently slept on a mattress on the floor for nearly three weeks in a one bedroom apartment in New York city? What's that about?

Kelly Cook Andress: (27:46)
Yes, I did. And actually it was a... it's true. It was a one bedroom apartment that we thought was a two bedroom, but we had to put in the wall to make it a two bedroom.

Beth Mace: (27:59)
Who's the "we?"

Kelly Cook Andress: (28:01)
So my daughter moved to New York city and she has some sight issues. So if she was getting settled, I wanted to be there to be sure that it was functional and also to be sure that the wall got put in the one bedroom to make it a two bedroom. And so I learned about living in kind of tight spaces. And I will tell you, I came home immediately after that and redid some of our models because our residents that are moving from large spaces to small spaces, everything has to have a dual purpose. Like you don't have a lot of single use things in your apartments if you, when you live in small spaces, right. And so convertible tables and swivels and things like that, that really do enhance the quality of, of your environment when you live in small spaces. So I learned a lot and eventually the bit the bed showed up the day before I left,

Beth Mace: (29:02)
Just as luck would have it. Well, that's really interesting. So, certainly our day-to-day lives do inform a lot of what we, what happens in the real world. So I've one last question, and then we'll wrap it up. So who are some of the influential people in your life?

Kelly Cook Andress: (29:19)
Well, clearly my parents and my family. My dad was a farmer, my mom was a teacher. My grandparents lived across the street. I was born and raised in, I was born in San Diego, but raised in a small farming community in Southern California on the Mexican border. So they taught me to work hard, play hard.

Beth Mace: (29:37)
I like that.

Kelly Cook Andress: (29:37)
And we went as family farmers, we went bankrupt. And in the 1980s, when many family farms did and they were so resilient, they both went on. They were in their early fifties. They both went on to very successful careers after that. Made a midlife change that was for the betterment of all of us. They also taught me to pick my battles and, and a lot of life was showing up and listening. You'd be surprised how many times, if you just keep showing up, you're the last man standing and successful. You know, being resilient. Clearly, Paul Clawson was a big influence on my life. I grew up playing tennis. So Billie Jean King and Martina Navratilova, they changed the way women played tennis.

Beth Mace: (30:29)
They absolutly did, absolutly did.

Kelly Cook Andress: (30:29)
And then most recently my family, clearly my kids, their resilience, they're so smart. They think so differently than I do. And I think that's, that's healthy and that's taught me that young people definitely need to come into this industry.

Beth Mace: (30:46)
Absolutely. Hear, hear on that and I can see them. I'm sure you're that equal influence on your children as your parents were on you. So Kelly, thank you so much for your time. Great conversation we've had here. You've given me a lot of aha moments and things to think about, and I hope our audience feels the same way. So, with that again, just thank you and we'll see you hopefully befor so long face-to-face.

Kelly Cook Andress: (31:08)
I agree. I'll see you in Houston.

Beth Mace: (31:10)
That's good.

Kelly Cook Andress: (31:10)
Thanks a lot, Beth.

Beth Mace: (31:10)
Okay. Thanks.

Kelly Cook Andress: (31:10)
Bye-bye.