Case Analysis and Recommendations for Antediluvian Retirement Home

Antediluvian Retirement Home: Report

Executive Summary

The report concerns some of the issues and conflicts facing the Antediluvian Retirement Home, a high-end facility specializing in care for elderly residents. This report examines some of the more pervasive issues that afflicts this company, and discusses three possible options that will perhaps rectify the bulk of these conflicts. The report then makes its (bold) recommendation for how the retirement home should best proceed and why. Key Performance Indicators (KPIs) are also discussed, as these changes have to be successful to ensure the longevity of the home.

Issues Identification

The case study with the Antediluvian Retirement Home plainly states that it has three strategies in place that guide the overall running, day to day operations and general philosophy of the organization: its high end branding, its attempts to forge sustainability, and its attempts to minimize costs whenever possible, in order to increase profitability.

One of the major issues in connection with this retirement home is directly connected to the food delivery system. At this time, a tremendous amount of waste is occurring, connected to the fact that the retirement homes offers two options at mealtimes: residents can choose between two prospective entrees. There’s rarely an even divide between the amount of meals available and the number of meals ordered, so the kitchen ends up running low on a particularly meal option, and has to make up last minute dishes of the particular variety. Likewise, this also means that there’s an excess of food that doesn’t get used, which is a direct waste of resources. As the case study explained, there’s also an increased in the cost of purchasing fresh fruits and vegetables as the result of an unfavorable exchange rate, which is causing an excess of spending close to over half a million dollars per year.

Another issue that permeates among the retirement home is the issue of efficiency and safety. This is clearly demonstrated in the issues connected to the storage and retrieval of the walkers. The way that they are currently being stored is cumbersome and inefficient, and also represents a major trip hazard for the staff. An additional issue that the retirement home should confront is their failure to capitalize on untapped resources. It would be in the best interest of the home to offer more in-house services such as housekeeping, light-reading and visiting, and this could be an additional service that patients are charged for, allowing the home to generally increase profitability. Finally one of the other major issues is that the retirement home can reduce costs by giving more of their staff members’ dual responsibilities and duties. For example, the IT technicians that assist the residents with their computers and internet issues should also perhaps have a legal or accounting background, if at all possible.

One of the major selling points of this retirement home as a place of care is that it boasts many tremendous outside spaces: the rooftop garden, the koi pond garden, and the general exterior and grounds. The overall maintenance of these green spaces is handled by three different firms, which leads to an excess of costs. It also presumably takes the administration and accounting department an excess of time and effort to keep all the tasks and billing in connection with these outside spaces straight in their heads because of all the separate bills, invoices and paperwork.

Environmental and Root Cause Analysis 

Many of the issues that the retirement home is currently experiencing stems from the fact that the retirement home brands itself as a upscale. This creates an expectation of the aesthetics available, the standards of care and the quality of living. This means that the retirement home has a very steep overhead and there has to be a constant number of residents within the home to ensure that costs are covered and that profitability is imminent. As the case study explains, the high-end aesthetic and values govern much of the decision-making of the retirement home. “This is apparent in features like the green roof, koi garden, library, music room, outside garden, and the trees and hedges. This strategy is in place to attract a certain type of high-end clientele and enable the facility to set prices accordingly. All aesthetics, services and processes must reflect this strategy throughout the organization.” If this is the branding that the retirement home has selected, they really need to better capitalize on this aesthetic, as the residents that they cater to do live in a world rife with options. There need to be more details, regardless of how small, that will set this retirement home away from all potential alternatives, particularly the ones that it loses clients to: its major competitors. There needs to be a more heightened awareness of the retirement homes that this facility directly competes with and how many of those entities do their clients end up transferring into for care. The high-end market exists everywhere, and this retirement home needs to make a more concerted effort to establish itself as a top, luxury provider, rather than making a mere half-attempt at it. This retirement home could better fine-tune their strategy to ensure they do more than just target the high-end market, but also target the luxury market to elevate the bar of professionalism within the elderly care industry. There should be more of an attempt to psychologically develop a luxury experience for all of the residents, including their children who are footing the bill, so that they will find a way to purchase services, products, and make donations for extras within the facility, regardless of cost. Thus, the “high end” environment that the retirement home has created is not doing enough to create profitability for them. It’s keeping their costs high, and the fees they collect from clients also high, but it has more potential for them to charge excessive amounts, and really tap into the potential luxury experience for residents.

An additional root cause of many of these issues at the retirement home is that there needs to be more efficiency, more waste needs to be minimized, and more processes streamlined. There are already methods in place that minimize waste, such as the saving of clean water (used ice water that clients don’t finish) for the watering of plants. This is a great step in the right direction and needs to be increased exponentially in order for there to be a higher level of success and profitability within the home.

Alternatives and Options

The first alternative is perhaps one of the most work intensive, but this work should be viewed as an investment in the institution. Option one: Rebrand as a luxury retirement home by providing more luxury services. The benefits of this move are clear: the home would be able to charge more to residents, perhaps even as much as 25-30% more. This would solve essentially all of the homes profitability issues. It would also assert the retirement home as a leader at the top of the pyramid in terms of luxury retirement homes. The super-rich would know that if they want their elderly parents to have the very best, they need to secure a spot for them within the walls of the Antediluvian retirement home. The money that the retirement home would have to invest in order to rebrand themselves in this manner would be substantial: it would probably amount to several million as an initial investment, and then cost the retirement at least a million dollars more annually in order to keep up this new image and expectations of the residents. A major benefit of this strategy is that if the home went through with it, they would attract a type of resident who is willing to spend the money because they’re receiving an experience in connection to the service. Residents like this might all be coming from different worlds and backgrounds, but they’d all be looking for a comparable type of feeling. It’s important to bear in mind that once this luxury clientele is attracted, many of the people paying to have their elderly parents stay at Antediluvian, will be working with disposable incomes. They will want their parents to look and feel good during this time in their lives, and have a one of a kind experience. The focus for the retirement home under this new branding should be, “expect something extra. Expect the time of your life.” While those are very high standards to set, this does mean that the home will be able to charge accordingly.

The main con involved in this situation is that rebranding is a major overhaul for any company. Even apart from the money that it costs, rebranding means that there’s a ton of organizational and strategic logistics to take care of and it can be a nightmare to take care of. Furthermore, when rebranding in such a manner, this means that one will lose some of one’s current clients. Of course, one will attract wealthier clients in their place, but not everyone will be excited about the turnover. Moreover, rebranding in such a manner means that the Antediluvian home will have to be more in line with the changes and evolutions that continue to occur within the luxury brand world. Rebranding in such a manner means that the company needs to think like a luxury brand and project luxury in order to attract members of the luxury market.

The second option revolves around keeping the current branding, but cutting costs and increasing efficiency. For example, instead of offering two separate options for each lunch and dinner, there can be only one meat dish offered, with a choice of different sides. Alternatively, the two dinner options can be offered twice or week or so. In this manner, there would be a drastic upheaval to the bulk of the waste that is being accumulated for this company. Something needs to be done in order to put a stop to home much money is being spent on food that is not being consumed. These solutions are a direct way to curb that waste. One of the main drawbacks of this technique is that there might be blowback or complaints from the residents. After all, if a retirement home is in fact a high-end destination, then it’s not really fair for them to provide scaled-down offerings to the clientele. Of course, the retirement home could respond to such objections by arguing that they are a high-end but “green” home and that based on such a philosophy, it is their duty to minimize waste.

Another way to drastically minimizing spending and waste and still keep the current branding would be to replace as many members of staff with volunteers, and/or college students seeking to receive credit, or nursing students looking to gain experience. For example, one volunteer could be in charge of organizing and revamping the walker “parking lot” and color-coding them or doing some other form of categorization to relieve the current problems. High school students looking to engage in community service in order to gain credits and to make their college applications look better could be in charge of grounds keeping, preparing desserts and other smaller tasks. There’s no reason why the current staff could not be aggressively scaled down and replaced with able-bodied volunteers. Of course, certain jobs and tasks will always require paid professionals, such as nurse practitioners and physicians, but still many of the positions within the home can be “outsourced” to volunteers. If the retirement home does move forward with this option, they will have to hire a volunteer director who is in charge of making sure that the roster of volunteers is always kept full with people and that tasks are delegated to them appropriately.

The third option is as follows: Keep the current branding but quietly cut costs to make the annual spending more comparable to that of a more mid-level retirement home. This option is the riskiest because it means that there will be a mismatch between service and excellence provided and the costs the residents pay. The reason that this option would work at all is because the retirement home has already paid for some one-time costs that will also make it appear high-end—such as the library, the music room, the landscaping. These are elements that will always make the residence seem high quality, even though these facilities and aspects don’t require much upkeep nor monthly costs. Hence, aggressive cost-cutting in this regard would mean more basic meals, such as cold breakfasts every day except Sundays. Instead of having a menu for residents to select meals from, the chef would work with the nutritionist to provide set meals for all residents, with little choice or selection except based on the variety of sides. The amount of the budget set aside for community activities would be slashed. There would also be a marked increase in the number of additional fees for extras that residents have to pay. For example, instead of having five monthly one on one nurse-resident hours, this and all additional hours would be out of pocket.

This option is least ideal because it really should go hand in hand with a massive rebranding of the image, from high-end to mid-level affordable. This option should really only be used as an emergency means of dealing with the intense financial pressure, as the response from residents is likely to be overtly negative. There might even be a reduction in the client base as a result. This move is so risky, it really should be selected as a final and desperate option.

Recommendation

The best move that Antediluvian retirement home should make in order to engage in the greatest strategic management would be to rebrand itself as a luxury residence for the super-wealthy or for those who require a luxury experience when it comes to elder care. The main reason for this is that this is the direction that the retirement home is already headed in. They already have the infrastructure in place establishing themselves as high-end: a few more investments will make them a luxury facility for elder care, and then they will be able to charge double or triple of what they are charging now. This rebranding will essentially eliminate all current fiscal strains, and it is likely that the home will be able to repay the money spent to make these investments in a few years. Attracting more luxury clientele is also likely to assist in attracting bigger gifts or donation in the years to come, as that’s what such clients like to do.

Engaging in such aggressive rebranding, while still making realistic moves to increase sustainability and efficiency is decidedly the best option for the retirement home. As already stated, the home does have some measures in place that are smart and sustainable, such as using clean water to water the potted plants and areas of the garden. However, such sustainability can be drastically increased to a certain extent. For example, in order to defray the costs of purchasing fruits and vegetables, the retirement home could easily use some of their massive green space to put in an orchard and a vegetable patch. They could hire a few gardeners and some volunteers to be in charge of growing this produce and this could drastically save massive costs per year on fresh fruits and vegetables. Furthermore, this would be an added bonus to the branding of the home as a luxury residence for the elderly: all meals are prepared with farm fresh fruits and vegetables, grown here on the grounds of the residence.