Executive Decisions with David Gehm
Large chains seem to attract much of the attention, but smaller chains are actually more common. The Lutheran Homes of Michigan has been providing care for more than 100 years. David Gehm, the organization's President and CEO, recently discussed some of the reasons why.
Q. While some large operators have sought bankruptcy protection, Lutheran Homes of Michigan has operated for more than a century. What is your secret to success?
A. The key is a strong sense of mission that guides the decision-making of leaders over the long haul. I am convinced that leaders of LHM decades ago based strategic decisions on the same set of values/principles that we use today. Those principles/values sometimes dictate forgoing short-term financial rewards for long-term strength and stability.
Q. As a small operator (three facilities), what unique advantages and challenges do you face?
A. Advantages include the ability for senior leaders to know and interact with frontline staff on a regular basis – providing for both formal and informal communications to remain vibrant. Further, I believe smaller organizations can be more nimble and flexible with respect to change management and strategic decision making. Challenges include the lack of "economies of scale" that larger organizations might enjoy, making a tight operating environment even more challenging. All senior care providers struggle with staffing issues, but I believe smaller operators are particularly challenged in this area with respect to benefits, career tracks and overall compensation.
LHM recognized a number of years ago the possibilities of using collaboration and joint ventures as a way to expand, diversify, and grow while mitigating certain risks. As a result, we have enjoyed a number of successful ventures that include both for-profit and faith-based, not-for-profit partners that have strengthened our operations, diversified our service lines, or opened up new geographic service areas.
Q. Would you say that this is a good time to be involved in senior care?
A. I believe there has never been a better time. It strikes me that the next decade or so will see a collision of societal pressures, political will, demographics, and consumer demand that will create an environment for high quality, innovative providers to lead and thrive.