CEO Lilly Donohue discusses the relocation of Holiday Retirement to Orlando and the drivers behind the company’s strategic decision to attract fresh talent and maintain its competitive edge.
Moving corporate headquarters is never a cakewalk. But when you’re uprooting a 47-year-old company from its northwest birthplace and moving it clear across the country to Central Florida—knowing you’ll have to replace the lion’s share of staff—you’d best strap in for a bit of a wild ride.
But while Lilly Donohue, who took over as CEO of Holiday Retirement in 2016, knew the site change would mean some temporary angst and upheaval, she also knew the country’s largest provider of independent senior living needed a little shaking up if it was going to attract fresh talent and maintain a competitive edge.
The coast-to-coast move did exactly that, injecting a cultural breath of fresh air while cutting operating costs to grow profitability. As Donohue explains in the following interview, a leaner Holiday Retirement is now on solid footing, enjoying rising occupancy in its living facilities, healthier numbers and, it goes without saying, the Florida sunshine.
What prompted the search for a new home?
Largely, it was a strategic decision. We needed to remember why we do what we do—that had gotten lost over the past couple of decades.
We are actually several businesses. One, we’re providing a home and housing our residents so we’re in the real estate business, because you have to find the building, maintain the building and create value in that real estate. Two, we’re one of the largest food and beverage businesses. We prepare 37 million meals in a year, so if you compare us to any restaurant business, we’re pretty sizable.
We’re also in the hospitality business—we have to clean rooms, create activities—and we’re kind of indirectly in the healthcare business because our residents have healthcare needs and obviously, in the late stages of their lives, healthcare is a big part of who they are.
You have to do all four parts really well. Once we made that realization, the natural pivot was to think about real estate as the major driver. Wherever the largest amount of capital goes tends to be where the expertise is. That wasn’t the hiring of people to prepare the meals and clean the rooms—it was the real estate cost. So historically, the business was top heavy with real estate experts. But I had this wonderful experience, right before coming here, of building a senior living business in China and I went with no knowledge. I had the opportunity to build it from the ground up and the real secret is that the magic is in what happens inside those communities, the relationships you build and the services you provide that ultimately drive people living in those communities, and that creates real estate values. It’s not the other way around. It’s not, you build the real estate and then they will come. It’s, you provide great experiences then they come and then your real estate is worth something.
So you had to get back to your roots?
Right. The business used to be about service and taking care of people, but, along the way, it shifted to the real estate piece. So that was the driver to make a strategic decision to recognize the company resources, which is what prompted us to look at new headquarter locations. We wanted to move more resources into the local communities and help them make better decisions, but really keep those decisions close vs. inside a headquarters.
One of the things that starts to happen as companies get large is you start to see more of the decisions happening on the corporate side, but every time you separate the decision making from your customer or when that gets farther apart, you’re not meeting the needs of customers as quickly as you should be.
So we wanted to modernize how we operate so we can be more adaptive and nimble and therefore serve our customers better. We also know we’re entering into that aging world—they call it “the silver tsunami,” and I hate those words, by the way—but there will be more older people as a proportion of our population, so you need to have your local teams be able to react and serve those customers. So that was the big strategic decision to change locations.
Where did relocation fit into the larger strategic framework you had for moving Holiday into financial health?
I don’t think about it as financial health because that makes it sound scary—it’s more looking out into the future and saying, what’s changing in your market and how do you stay one step ahead of folks. So that was us realizing that the magic is in the services and the relationships, so we needed to start really investing in our people. If we don’t try to attract the best talent and think differently we’re not going to be able to serve that next generation of customers.
How did access to talent factor into your search?
We have to attract the best people so we can serve our customers better. So you really have to focus on the people side of it and what is going to draw the best people. So I like to think of it as, what’s going to make me want to move? What’s the best way to work, live and play?
For living, you’re looking for more affordable housing, good education, good transportation. On the work side, you’re looking for talent and clearly the Orlando area is known for the hospitality and service industries so you have a great talent pool for that on the work side. The other thing is, I’m always trying to get people to think about aging differently. This is a pretty awesome job, frankly, something that I found late in my life, but I feel like I found my life’s work. There are so many wonderful reasons to be doing this and we need to attract a new talent pool.
When I think about the colleges and universities, it excites me because it allows me to touch them earlier in their career cycle. You have Rosen College (of Hospitality Management), and Rollins and Valencia colleges, so it’s a great place to be attracting folks to come from a work perspective. From a play perspective, it’s pretty easy, you have the arts in downtown Orlando, which is a destination spot for people. And of course, Disney is right here. There are lots of fun things to be doing and the weather certainly helps on that front.
Winter Park, in particular, has good schools, is family oriented, very beautiful and close enough to downtown so you can enjoy everything the downtown area has to offer, but also have that small town feel.
What percentage of the staff moved with you?
A small percentage. I really couldn’t have picked a farther move. The business was built in Oregon, but we were really looking for a place that had the live, work and play function and, of course, on a personal front, that sunshine is really nice compared to Portland weather. So it was a small percentage that came over, but the folks we expected to move over did.
Have you scaled back up?
We have about 160 people and we wanted to hire the majority of the candidates in Orlando, because that allows you to have a fresh approach. Attracting new people definitely challenges some of the ways we were doing things. That can be annoying sometimes, I suppose, but it’s actually the right thing to be doing for the business—challenging yourself on how you could be doing better and meeting the needs of your customers better. As a company, [that diversity of approach] makes us smarter. It also hopefully creates a new culture that’s innovative, risk-taking and fun. It was one of the best things we’ve done and we’ve kind of hit it out of the park. We recently got a “Great Place to Work” designation, and we were the first of all senior living companies to get that. We also made Fortune Magazine’s inaugural list as one of the Best Workplaces for Aging Services.
You touched on the challenge of attracting new talent to an industry that isn’t necessarily seen as sexy. Will you be partnering with the local schools you mentioned to help develop curriculum and possibly create a pipeline of talent for the company?
Yes, and yes. We couldn’t be better situated to partner with local schools. We’ll be kicking off an internship program most likely in summer of 2019. We are working with Rosen right now and they’re coming up with an aging curriculum in service so we are definitely looking forward to helping with that. As far as having people from our company teach, we’ve talked about it informally. We’ve even thought about taking real life problems, things we want to improve in our business, and presenting them to the students to come up with a best solution, almost like running a contest, and we would reward them with some kind of cash prize that they could use to pay for their education. There’s really no cap to learning and we would be crazy not to be listening and taking advantage of all the young folks and thinking a little differently, a little outside the box.
What surprised you about making this move that you wish you’d known in hindsight?
I probably underestimated the impact of having 150 or so new people come together in such a short period of time, which is effectively building a new culture—and creating a new culture is not easy to do. You’re trying to build that trust and also just learn the business lingo in our industry, while staffing up and making sure you’re still running your day-to-day business. We are America’s largest independent living operator, so none of that stuff can really stop, and there are needs happening all across the nation that we have to meet. But again, I think we knocked it out of the park. If you have a really clear mission, if you’re transparent and you value your people, you’d be amazed at the amount of energy and work creativity and effectiveness that really comes together. So, scary as it was going through the change, we couldn’t be happier about where we are today.
What kind of help did you receive from the Orlando Economic Partnership?
They were pretty great. They’re very proactive so that really helped us. They cared about some of our concerns, listened to what our business issues were and they’re great at trying to connect you with other businesses in the area. If you think about the theme of applying a fresh approach to things, you want to stop and pause and listen to what other people are doing. Even though you may be in different businesses, lots of issues are the same. To be able to make those connections quickly was incredibly helpful.
Any other advice you might offer CEOs considering relocation?
Make sure you have really strong buy-in from your leadership team because there has to be cohesiveness in that process. It’s always going to be a little harder than you think. But if you’re moving for all the right reasons, which are hopefully customer related, you just have to stick with it and you’ll get there.
Originally published in Chief Executive Magazine.