Recently, I was interviewed by one of my friends at Senior Housing News and had the opportunity to share a little about my entrepreneurial story, what I did early on when I started my company, Aegis Living, and why people and company culture are key to our success. I think there are nuggets that any entrepreneur can grab ahold of and hopefully learn from.
Here’s a bit of that interview. (A link to the full interview is at the bottom.)
Looking back on all the changes that you’ve driven in your career, are there one or two that you think have made the biggest difference?
I think Aegis has taken a very unconventional path. From the very beginning, we stood apart to be a very different kind of company, starting with the kind of people we hire. I think over 90% of our people come from outside the senior living industry.
The bridge to your customers is your staff, especially your line staff. You’ve got to make those people delighted in their job every day. That is the whole point, and this [distinction] has been incredibly important to us.
I think culture distinguishes us — I’m just really very proud of ours. No one has really stretched the value curve as we have, where people think, “I am going to pay this much because I believe in a great value.” I think that’s what we’ve done.
You mention the importance for Aegis in hiring a lot of hospitality people. How did you begin that trend?
I’ve been in the industry for 35 years. In my first seven years, I worked for Leisure Care, which I think is an extremely good, service-oriented organization. They hired from various service industries: hotels, restaurants, and so on. I grew up in that company learning about service and presentation and Four Seasons-level service. Then I went to Sunrise, and what Sunrise did really well was high-level care.
As I was building Aegis, I said, “What would be great is if we combine these two concepts: take people who are highly service-oriented and give them Four Seasons marching orders in terms of presentation and customer service.” Then we thought, if we could build a building that was exquisite and combine these three things, that would be quite a company.
I just think the quality of talent we have, and it’s not to sound like an egotist here, is extremely high.
How have you been able to attract that talent? What investments have you made to hire those people?
I think it starts with the way we think. When we first started this, we definitely had great ambitions and dreams about what we were going to do and who we were going to hire. It was hard, until we started seeing some victories. And that starts with how you treat people.
I think this COVID-19 crisis is very relevant to how we treat people, because one of the first things we did was to say, “Okay, we have to take care of our staff … They’re having troubles. We need to consider how people can get childcare, get their kids home from school. We need to look at providing free food, for not only employees but their families, so they can take food home for their families. We need to open up telemedicine to all staff and make sure that people have access to doctors from their home.”
The thing that I discovered early in my career is, I’m a guy with pretty average intelligence. If I want to be super successful, I’m going to have to hire people a lot smarter than me, who have a lot of different experiences than mine. As silly as that sounds, as fundamental as that sounds, that’s been the overarching success of why Aegis has come out as a really successful company.
All you have to do is go down the list of our senior executives. Our president, Kris Engskov, was the president of Starbucks, North America, that oversaw 30,000 employees and $20 billion in revenue. That’s not a normal senior living president. Our chief people officer, Sandra, was the head of Amazon Marketplace that oversaw 24,000 employees and gave the most critical human resource people development decisions to 24,000 people. That’s not your normal senior housing HR person. These are not people you typically find in senior housing, and it’s why I often use the phrase, “The making of the quilt.” The making of the quilt has to do with what each of these people bring — not only their resume but their company’s experience and knowledge and intelligence to our company. Each of these people bring a piece to the quilt. I think it sounds silly in a way, but that’s a huge point of distinction.
I read that in the early days of the company, you were in a position where your son wanted to go to a certain college, and you said, “We’re going to send you somewhere else because of where our finances are right now.” Is that right?
Yes. My son wanted to go to UCLA. We did the tour, he applied, we went through all that. He was set to go to UCLA and [the company] didn’t have enough money to pay payroll. My partner called me at the time. The only money we had was my son’s college fund. We had to use that to make payroll and we couldn’t recoup it fast enough for him to go to school four, five months later.
We said, “That in-state tuition at University of Washington looks really good.” That’s what happened, and he’s never looked back. He loves being a Husky.
Those are the kind of sacrifices that you make as a company, especially a family-owned company, that probably no one will ever know about. You do it and you suck it up, and you just move on.
When you start the first life cycle of a company, you’re making all kinds of sacrifices. I remember I didn’t go on vacation for three and a half years. In fact, my cousin called me a couple of weeks ago, and she said, “Remember year three of the company, I had to pay for you to sleep on the floor of my Mexico condo? You couldn’t afford a plane ticket,” and I’m like, “Yes. Why do you have to remind me of that?”
You just do what you have to do. I wouldn’t trade any of it for anything.
Do you have to have a certain pain threshold if you’re going to be an entrepreneur?
Yes, it’s pain tolerance, and it’s endurance. I think that’s really what it’s about. I think a lot of entrepreneurs fall out because they think this is some kind of 100-yard dash, and it’s really not. I would say you better be prepared. You don’t want to go 10 years and not make a profit, but you better be prepared to go five to seven years and not really see any lucrative salary.
Keep in mind, I went from being executive vice president of Sunrise, which was a publicly-traded company, and getting bonuses and stock options and great salary increases, to my compensation in total probably dropping by 60%, 70% for the first three or four years. You just had to make it work. I was young enough that I could do that. I was in my late 30s and thought, “Hey, we’ll just do what we have to do … to make this happen.”
I think endurance is a big thing, and then you hopefully set goals and meet them, and you start to get some windfalls and it starts to work out.
As an entrepreneur, you have to be willing to make the sacrifices and endure the tough times. Putting our people first is one of my top rules for success. Do it, and you will reap the benefits.
Many thanks to Tim Mullany of Senior Housing News for the opportunity to chat and share my thoughts. You can find the full interview here.
Until next time, Live Well, Live Long!