Tuesday, October 17, 2006

What Drives Success in the Seniors Housing Industry?

This Breakout Performance blog is dedicated to understanding the factors which drive "breakout" (i.e., exceptional) sales and profit growth over time. Although there are some general aspects of leadership, strategy, and organizational process that cut across industries, the truth is that there are often significant differences between industries. Recent postings have discussed what drives success for venture capital-backed firms.

We recently had the opportunity to study the American Seniors Housing industry with our "Breakout Performance Index" (or BPI) tool. Over 2 million seniors today are served by this industry and -- like it or not -- it's a service we'll all likely use in the next 10 years for ourselves or our parents/family. About 10 large seniors housing organizations from Seattle to California and across to Boston and Maryland participated in our research.

Here are the major findings of what accelerated sales, sales growth, profitability and market share in our research group (ranked in order of statistical importance):

  1. Facing Reality: When problems arose with a new location or product launch, the better performing companies quickly jumped on them.
  2. Preventing Groupthink on the management team: The President and CEO of the best-performing companies in our dataset didn't require that eveyone on his/her team think like him/her. Diversity of opinion was welcomed, not shunned.
  3. Ensuring senior managers were sufficiently challenged in their current roles: We found lower performing companies had more senior managers who felt insufficiently challenged in their current positions.
  4. Putting a clear Succession/Talent Management Plan in place: The better performing seniors housing companies had taken the time to chart out their future talent needs and start preparing for them.
  5. Using conflict on the management team about an issue to result in a better decision: Lower performing companies let conflict shut down a discussion.
  6. Mentoring key staff to pass on knowledge and industry contacts: Lower performing organizations said they didn't have time to do this. However, the better-performing ones did.
  7. Providing clear and objective performance reviews to management: This was an area that many organizations felt they could improve in.
  8. Ensuring there was a sufficient degree of "proactive paranoia" on the management team: Lower performing organizations often felt that were the dominant player in their geographic territory.

If you would like to learn more about the BPI and where your organization ranks relative to others in our dataset or what aspects of leadership, strategy, and process you need to improve in, let me know. We can also provide comparisons to a number of other industries.

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