Slow Down, You Move Too Fast

Monday afternoon I had the pleasure of speaking with , a Director at Aspex Consulting in Melbourne, Australia.  Aspex is a healthcare consulting practice with particular focus on, as they put it, “healthcare policy, planning, program development, research and evaluation.” Jim and his team worked with General’s Garden as they sought to find someone to help them apply an international model of senior care within the General’s Garden facility.  As many of those in the senior care community ponder what to make of the recent turmoil at General’s Garden, I thought it would be helpful to go back to the beginning and explore what – if any – insights could be drawn from someone like Jim, who was involved early in General Garden’s expansion.  Upon reflection of my conversation with Jim, I believe the difficulties General’s Garden has gone through, the many lessons the developer, investors and staff have learned, are ones worth thinking about as the industry continues to pursue a viable set of models.

Aspex was brought in to advise on the D08 building (where the supported care component of the services were to be delivered within the broader General’s Garden development).  As Jim was describing his initial experience working with General’s Garden, the words to Simon & Garfunkel’s “Feelin’ Groovy” song came to mind:  “… slow down, you move too fast …”  As Jim pointed out, by the time Aspex was brought into the picture, the “infrastructure was already well in progress.”  In other words, General’s Garden wanted help for all the right reasons, but the help had to conform to a good portion of what had already been either built-out or was soon to be completed.  It is easy to see this as primarily an architectural or real estate planning issue; however, the bigger point is that the development appears to have been ahead of planning on what the General’s Garden target demographic would want and, more importantly, would be prepared to buy.

For example and to be more specific, as Jim saw it, “if their target market needed high care, then the rooms were of reasonable size … but if it was intended to be for independent living or for low care, then the rooms were smaller than we thought would be attractive to high net worth individuals.”  Aspex recommended creating more communal space in building D08 consistent with their recommended model of care, which was successfully implemented even though D08 was well into the construction stage when this recommendation was made.  “This meant sacrificing accommodation for amenity, but what they have created is an outstanding facility that is fitted out to the highest standard and consistent with high-care needs” Jim said.

This point of course begs the question of what General’s Garden anticipated as their primary target market.  I have written this before, but old China hands recognize this sort of problem:  new entrants – regardless of industry – see China as such a big market that almost any solution set should be easily monetized.  Said differently, for every China generalist who points to the 1.3 billion potential consumers as reason enough to go into China, there is a sector-specific specialist waving his or her hands suggesting more research is needed and cautioning over assumptions that simple extrapolations are valid.  For retirement communities in China, knowing exactly who your target market is, how you are going to reach them, and what their specific needs and expectations are in terms of how services will be delivered are all preconditions before breaking ground or setting up a licensee.

For those within the CCRC market, it can be tempting to see General’s Garden purely through the lens of a planned retirement community that went awry; however, it is also important not to confuse a problem with the broader real estate development at General’s Garden with issues specific to their particular senior care model.  General’s Garden may not have been a viable real estate development whether or not there was any eldercare component at all.  Issues related to the broader real estate market in Beijing, the location of the development itself, and the price points of the homes offered are all reasons the General’s Garden community may not be viable; whether or not these mean the General’s Garden approach to senior care was on or off point have to be answered with some degree of agnosticism.

The homes built in General’s Garden are stunning palatial mansions.  The General’s Garden model assumed trans-generational living in these large homes; at some point in the continuum of care for the elderly parents, they would move into building D08, where higher levels of care could be provided.  Can we reach any conclusions about where the senior care component may have needed to be modified?  If we can, it should be with a good measure of humility.  As Jim shared, one of the lessons he takes away from his engagement with General’s Garden is that “you can’t say to Chinese ‘this is what you need to do’ … they don’t know themselves what is going to work from the western model … they can replicate the facilities – get the architecture and infrastructure right for sure – but it is the people side and the training that is much harder to get right for their market.”    Jim’s company brought five domestic Chinese staff of General’s Garden over to Australia for training and job shadowing over two months, but as he said even that was “very difficult … we could provide policies and procedures and time in Australian facilities, but the question was always how that would be translated in terms of on the ground activity in China.”

What would Jim have suggested they do differently?  His answer takes me back to the song lyrics:  “… slow down, you move too fast …”.  Jim shared that in the United States or Australia a mega development like General’s Garden would have been approached in a more gradual way.  “You would build, sell, learn, modify; sell more, and incrementally build out.  And this is in markets that are established and pretty well understood.  To me, that is the biggest lesson of all and it is fundamentally a risk mitigation issue.”  For real estate developers and large investors eager to put their capital to work in China’s senior care market, this may be the most important lesson:  even though the demographic argument for China’s senior care market is compelling, absent a well-researched and properly staffed care component, the most beautiful of facilities will not substitute for solid strategy.