Southwest’s system meltdown in late December is the stuff of business leaders’ nightmares, but the senior living field can learn from the airline’s mistakes, Bob Kramer told me during a recent interview.
The combination of a sprawling winter storm, outdated scheduling software, and supply and process failures are being blamed for an unprecedented number of flight cancellations that ruined holiday plans or otherwise affected an estimated two million customers of the Dallas-based company.
While a corporate board committee and an external consultant dig into the issues to try to ensure that the experience doesn’t repeat itself, Kramer, the founder of aging services think tank Nexus Insights and co-founder, former president and CEO and current senior adviser to the National Investment Center for Seniors Housing & Care, says that one lesson is immediate: Don’t delay in making the investments you need to make to serve your customers and stay competitive. In the long run, it could be cheaper than waiting — on more than one level.
“For a price tag that was in the tens of millions but not hundreds of millions, Southwest made the decision that they didn’t need to … upgrade their entire technology platform on which their whole point-to-point system depended in order to get personnel to the right place at the right time,” he said. “Well, a perfect storm happened, literally.”
Other airlines were able to recover from weather-related delays relatively quickly, but recovery took Southwest several additional days due to its previous decisions, Kramer noted.
“And now they’ve already said they’re going to take a write-off of somewhere between $750 million and $1 billion, just to make whole everyone who was affected by their meltdown,” he said. “And that has nothing to do with the cost of recovering … the mojo of their brand and their positioning as the reliable low-cost airline. That probably will be in the billions.”
A message for providers: “Don’t be lulled into inaction.”
Actions that are needed by those in the senior living industry, Kramer says, include learning to listen to customers without being condescending or paternalistic, and combating ageism by focusing on “engagement, experience, enhancement and enjoyment” rather than “decline and deficits.” And time is of the essence.
“Think how long it takes you to retool, to build a new property, to basically conceive of the product, to design it, to deliver it in built infrastructure and to open it. Well, that customer of 2030, they’re going to be here really soon,” he says. “With the buildings you have now, are they going to be obsolete? Are the buildings you’re building now going to be attractive to boomers, most importantly because of what happens inside of them?”
If it sounds like too much to tackle, then maybe you’re in the wrong business, Kramer says.
“If you see investing in thinking about how you’re going to be addressing the health of your residents where they live and not shipping them out, if you see investing in technology platforms and how you’re going to be able to use data as a luxury you don’t have the time, energy or money for, then you’re probably a candidate to be retired,” Kramer says.
Kramer knows that his words may fall on weary ears as the COVID-19 pandemic continues to take its toll on providers.
“I don’t want to make light of that. So many heroes, and so many operators, and so many on the front lines — whether they’re caregivers or dining staff or maintenance — have gone above and beyond, and many are emotionally, physically, mentally just exhausted and financially stressed at the same time,” he said. “What I’m saying is, we have huge opportunities in front of us, and we need to focus on these opportunities and how we’re going to position ourselves.
“I’m incredibly bullish about our field and about the senior housing and care sector,” Kramer continued. “I’m bearish, though, on the ability of many operators to make the pivots they’re going to need to make and to be willing to make the investments they need to make.”
Listen to the complete interview with Kramer later this month on an episode of the McKnight’s Senior Living Newsmakers podcast. Celebrate him being the inaugural recipient of the Career Achievement Award, part of the McKnight’s Pinnacle Awards, in person on March 7 in Chicago. Visit mcknightspinnacleawards.com for more information and to purchase tickets.
Lois A. Bowers is the editor of McKnight’s Senior Living. Read her other columns here.
