This paper presents a strategic implementation plan for Emeritus Senior Living, a major U.S. assisted-living operator that expanded rapidly from 135 to 479 communities between 2000 and 2010 while sustaining significant net operational losses. The plan addresses mounting quality-control failures — including a rare "D" compliance rating at one facility — and proposes three coordinated phases: strategic downsizing through the sale of underperforming facilities, internal quality improvement through centralized standards and personnel development, and public image rehabilitation through community engagement and transparent evaluation. The paper outlines objectives, functional tactics, action milestones, task ownership, and resource allocation for each phase.
In one regard, the senior assisted living community sector is one of the most stable and fastest-growing industries in an otherwise stagnant domestic marketplace. This is to the advantage of the firm that has been at the center of our research discussions to this point. For Emeritus Senior Living, however, this advantage is today being offset by a number of internal performance patterns that must be addressed.
Indeed, the model for growth at Emeritus has to this point been extraordinarily successful from a purely economic standpoint. According to Emeritus (ESL), "at the end of 2000, Emeritus was a small senior living company with an operating portfolio of 135 communities and a capacity for 14,100 residents. Ten years later (December 31, 2010), we are one of the largest operators of senior living facilities in the country with an operating portfolio of 479 communities and a capacity for 49,700 residents. Truly, this has been a decade of transformation for Emeritus." (ESL, p. 1) However, as the implementation plan outlined hereafter will show, there is also a need to reverse a number of trends that have emerged over the course of this decade of growth. Among them, issues of quality control and economic performance per facility are imperative to address.
Though Emeritus has thrived by opening or acquiring 479 facilities to date, it has reported net operational losses for a sustained period, to an extent that calls for an adjustment in approach and orientation. According to Traecy, the company lost $104.8 million in 2008, $53.9 million in 2009, and $57 million in 2010. This is a pattern that the implementation plan proposed and outlined here is intended to repair. The plan is predicated on several key steps that should shift the focus of the company from growth to product refinement. Accordingly, it calls for three primary steps: the closure of underperforming facilities; the tactical improvement of existing facilities; and the rehabilitation of the Emeritus product and service image.
Before Emeritus can resume the types of growth activities that have made it dominant and expansive over the last decade, it must now focus on matters of quality control. Therefore, the most important objective driving the proposed implementation plan is to engage in what might be termed a "correction" in the size of the company. Its approach of creating myriad economies of scale has produced greater flexibility as it has expanded. But this has simultaneously reduced centralized control and the measure of consistency that will ultimately distinguish Emeritus positively in a sector where reputation is tantamount to success. This objective is tremendously important for Emeritus, which has recently absorbed a number of blows to its reputation that directly reflect the critical importance of regaining its central mechanisms for control.
According to Villarreal (2011), Emeritus was recently struck with an extremely negative quality and compliance review. Villarreal indicates that "according to the Bureau of Health Care Quality and Compliance, a recent investigation gives 'Emeritus at Las Vegas' a rare 'D' rating. That's the bureau's worst rating without shutting a facility down. Their report details startling infractions including caregivers ignoring the calls for help from one woman lying on her side on the bathroom floor in her own feces. The facility reportedly failed to ensure 30 of the 96 residents received medications as prescribed, and 13 of the residents did not have one or more medications available for at least four days." (Villarreal, p. 1)
Beyond a reasonable doubt, the core objective driving the implementation plan is the need to ensure that no such infractions ever occur again. While the firm has issued a public apology and pledged to correct such matters, this situation is directly reflective of the need to reverse current growth patterns and shift focus to internal regulation and better quality control.
"Retraction, internal controls, and reputation repair steps"
"Timed milestones and assigned roles for each phase"
"Funds directed to quality, HR, and public relations"
The success of this implementation plan will hinge very much upon the commitment of personnel to change. Personnel at the individual facilities will have to make the rhetoric of positive change a reality. Therefore, it is necessary for this implementation process to be highly employee-centered. As the plan laid out above demonstrates, once the difficult decisions relating to corporate downsizing have been made, the success of change at Emeritus will depend a great deal on the company's ability to motivate improvement in its personnel as well.
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