The SHB Interview: Sean Kelly, President & CEO, Kendal Corp.

The key to industry growth may lie in smart partnerships and an open mind.

By Jeff Shaw

Given that he is only the third CEO in Kendal’s 50-year history, Sean Kelly has a lot to live up to.

Taking over the role in 2016, Kelly succeeded John Diffey, who spent more than 20 years in the position. Similarly, Diffey’s predecessor — Lloyd Lewis — founded the company and also spent more than 20 years in the CEO position.

“Those were not shoes to be filled,” says Kelly of Diffey. “I had to find different shoes.”

Kendal is a nonprofit owner-operator that uses a federated or affiliate system, meaning each community operates independently. Kendal provides marketing, operations and structural support from its corporate office in Kennett Square, Pennsylvania. 

All but one of Kendal’s existing affiliates are continuing care retirement communities, and on a large scale, averaging 281 units per community. At 3,654 units, Kendal ranked as the 45th largest operator of seniors housing in the United States as of June 1, 2018, according to the American Seniors Housing Association (ASHA).

The company was founded on classic Pennsylvania Quaker values in 1970. The name Kendal was chosen by its founders to recall an English town important in early Quaker history, and also to honor the 17th century Kendal Fund, which provided philanthropic support to early Quakers.

Seniors Housing Business spoke with Kelly about Kendal’s plans to push seniors housing into brave new territories, and why he thinks Kendal’s structure encourages that innovation.

Seniors Housing Business: Tell us about the history of Kendal as a company. 

Sean Kelly: Kendal really started as an idea before it became a company. 

Back in the late 1960s, there were some very forward-thinking older adults in metro Philadelphia, becoming uneasy seeing how the balance of their life was going to play out. They got some financing to explore and build the first Kendal, which opened in 1973 and then blossomed into this organization.

The company has always drawn from its very beginning — groups of people who are willing and able to look around and ask some fundamental questions. How do we take what’s here and make something better to suit our needs? That notion of a pursuit of constant pursuit — curiosity that leads to innovation and change — has always been a part of Kendal.

What’s also been a part of Kendal is a deep appreciation for each person. Kendal started with the idea that every single person has something to offer, and is to be listened to and cherished, whether that person is a staff member, resident or individual on the street. 

The consulting company that I worked for previously (Retirement Living Services) had some pretty dynamic leaders, and they were devotees of the Kendal way based on how they ran their business. Everything would rely on how well we listened to the people we would serve. The idea of listening has been a big part of my growth in this sector.

I was introduced to Kendal in various ways through the industry. The company is hard not to notice because it has done so much worthy of notice. The idea of providing care that eliminates the use of social, physical and narcotic restraints is an ideal that was borne out of this respect for every person.

SHB: When did you get involved in the company?

Kelly: I was first introduced to Kendal in 2006, but didn’t start working there until 2008.

One of the hardest things I had to do was leave my colleagues at RLS, but it was the right thing to do. For me personally, I loved the work we were doing with organizations like Kendal, but I was also growing more and more interested in what happens after the consulting work is over.

We would open communities, but my business was to go from A to Z and then hand it over. But I’ve been inspired by what happens inside the communities, and the people who live or work there. Being part of the life for these places was increasingly important as my career went forward. Kendal was the right opportunity with the right company at the right time. 

My start date was the month after Lehman Brothers went down. (The company failed in 2008 during the global financial crisis and was subsequently sold to Barclays.) I was very fortunate to have been on the outside of all the tumult across all the development companies in our sector because I was able to spend time learning what made Kendal tick in the aftermath of the financial crisis.

SHB: You were promoted to CEO in 2016, replacing the retiring John Diffey, who served in the role for over 20 years. How do you feel that transition went? Have you been able to fill those big shoes?

Kelly: At the end of the day, the transition went really well. It was a little weird because I was named as John’s successor, but he had a year of work still to do. 

He was instrumental in displaying his trust in me. John had always allowed for me to play in all the spaces around Kendal. Even though I was in development, growth and mergers, I was always given all sorts of access to finance and HR and everything around our communities. He trusted me to get on with it, so we were able to get a running start on the transition.

What we’re doing right now is very different, but it’s still based off what the Kendal founders were looking for in the late 1960s, and it’s all based on John’s work.

John took over for the founding CEO, Lloyd Lewis, who demonstrated our values and inspired a lot of people in this sector. Similarly, John Diffey is an inspiration. Among the things he offered to me was a deep appreciation for where we came from. He enabled our affiliates to implement innovative programs without feeling the need to lord over them. He trusted them, and that enabled them to flourish. That’s very much a part of this larger Kendal.

SHB: Explain the structure of Kendal and its affiliates.

Kelly: People call us a federated model — all the Kendal communities are brought together by a set of bylaws and an affiliation agreement. The corporate office oversees all aspects of branding and consults with affiliates on leadership decisions.

Likewise, the manner in which each affiliate chooses to present itself is also in that agreement. Since the mid-1990s, Kendal has been this decentralized model. We became that way because of the geographic spread. 

The affiliates were saying, “We need maximum freedom and leadership if we’re going to survive and thrive in these disparate market areas.” As a result of that practical ideal, we grow by adding affiliates that we do not control from the top down, but are aligned with a strict set of values.

We’re unique among even nonprofits in this structure. So many others are able to leverage scale from the top, but we don’t do that.

Increasingly, it is important to residents that they understand who’s standing behind a community, beyond the brand. Who are the local people I might know that could add to the credibility and trustworthiness that I’m going to live with for the next 30 years?

We’re out in the market all the time now for leadership staff. We need to partner with those around us, whether it’s a hospital or school or something completely different. 

We’ve had five new community-level CEOs come into the Kendal system since I started. To a person, they are dynamic inside and out. They can be on the dance floor and look down from the balcony all at once. If we had a traditional executive director model, we wouldn’t get the caliber of people that we do.

We’ve got 14 organizations — ourselves and the 13 communities — stitched together by affiliate agreements. We’ve discovered more than 14 ways to do just about everything. What we’re zeroing in on now is who is doing it best. What are the systems available by way of new technology that let us do the best things more often, and how do we embrace them as organizations?

Take a deep breath

SHB: You were in a seniors housing consulting firm for over a decade before being brought in-house at Kendal. Did you bring any unique perspectives, transitioning from having seniors housing communities as clients to being an internal executive?

Kelly: As a consultant it’s your job to be of service to your client. That doesn’t mean I’m here to do as you ask. It means I am coming into relationships as a thought leader and thought partner. The people with whom I worked really embraced the need for that kind of a balance — to be a thinking leader and also a partner, which means collaboration.

When I came to Kendal, I came in as director for new business development and growth. Because of Kendal’s reputation, especially post-financial crisis, we could receive half a dozen phone calls each day from people wanting to be part of this organization.

We decided to take a step back. We realized we had chances to make major moves, but our first order of business was to be of service to the existing Kendal communities. We took this notion of development and growth and instilled those values into Kendal affiliates. 

We were a bit of a catalyst in helping the affiliates work in a different way at what their own growth and evolution could look like, by thinking about different ways to diversify. That notion of the Kendal corporate office being of service to the affiliates has really changed our organization. 

It’s very different than the work of PR and communications, which shouts externally about Kendal. We spend most of our time talking among ourselves, communicating within the organization about who we are and where we want to go.

SHB: At the 2019 NIC Spring Conference, we saw that Kendal is working on some very interesting concepts, including an intergenerational community next to the University of Pennsylvania campus and a Zen-themed community in California. Tell us a bit more about what you’re doing with these projects and why.

Kelly: We have realigned the focus of our work to first look at ourselves and make sure that we’re leading and collaborating on the growth of each affiliate. We spend a lot of our resources doing that. Having said that, we do have peripheral vision and we exercise it.

We are determined to do things that move the needle. We are determined to do things that occupy a different space in the box. With that sort of mindset, a 10-year conversation with the San Francisco Zen Center yielded an idea in 2016 that we could really get our arms around together. 

Why do that? Number one, we discovered we and the Zen culture have a lot in common about how we value people, honesty and space, how we seek better ways, how we come at issues with an open-mindedness about what might work better. The marriage of those ideals together came a lot more naturally than folks would’ve realized.

The ideals of Zen communities out West line up with the Quaker communities out East. There was enough synergy that we were willing to explore this thing. It’s an opportunity to amplify who Kendal is and how it relates to the evolution of senior living.

With this new project in California, we’re married to the existing community in ways that we had not been previously in these projects. We’re part of a mixed-use development that is diverse, and are considering activities that relate to the operations like having a working farm or working restaurant on the property. Here our residents aren’t just engaged, but are doing some of the work. 

We’re integrating healthcare, not by way of the closed-door clinic, but through a center of health and well-being that’s proactive, not reactive. This is a game-changer in how we see healthcare and well-being.

Having a dedicated space that’s specifically for meditation is very different, although it’s not that different when you look at what drives people to seniors housing. We have 3,500 people on an “interest list,” and we’ve never had a list that big this early in the game. 

The work at Penn is not nearly as far along. We’ve had 18 to 24 months of analysis, a lot of market work, and a dozen or so focus groups. We’ve seen a handful of sites, and we’ve met incessantly with leadership at the university, Penn Medicine and Penn Geriatrics. 

We’re more serious than ever about the possibility of this being the place where older people will go to for education, clinical care, primary care, socialization, health, fitness and community. It’s a different model, but driven by what we think is the right way to go and what people tell us is important to them.

Kendal has a deep history of linking to universities. Our residents, in particular, like to interact with local colleges and universities, but we’ve become much more intentional about those linkages. 

For example, Kendal at Granville is on a piece of property owned by Denison University. We’ve had residents that are alumni and faculty. But until recently we’ve never had a formal agreement on internships and different opportunities for students to live on the campus.

At Kendal on Hudson with Pace University in Westchester County, we’ve always enjoyed relationships where residents can go take classes. And we have student internships, but we never said out loud that we were doing it on purpose. 

Just in the last couple of months we announced a partnership to grow the relationship and build programs for staff and management in Westchester County and Manhattan. That’s a big deal. It’s always been right in front of us, but now is the time to be among these colleges, and also in partnership with them.

We’re seeing the colleges and universities also gaining from these relationships. There’s value in the retiring faculty. There’s extreme value in the classroom, having diversity in membership of the class. What happens after class at the coffee shop is even more amazing. 

We want to be a part of things, and if we’re not we’ll be in peril. Seniors are telling us that “we plan to grow old on our terms.” Their insights are forcing us to revisit how we create these communities.

A shifting landscape

SHB: What else is Kendal offering that’s new and different?

Kelly: We see Kendal at Home as an opportunity for growth. It’s really a long-term-care insurance program built on the care coordination model. It allows us to take the risk of providing insurance and then drive the outcomes.

At the end of 2018, Kendal at Home had 311 members — 95 couples and 121 single members — with an average age of 80. One-time membership fees range from $17,008 for a couple who are both age 50 to $43,473 for a couple age 89 or older. Monthly fees for a couple 50 to 59 years of age are $750, and for a couple 80 and older the monthly fee is $425.

There’s also a program called Vitalize 360 — a joint venture between Kendal and Hebrew Senior Life, a Harvard Medical School affiliate — that we use across the Kendal system. It enables health and wellness coaches to meet residents where they are and engage them in conversations that matter. Whether it’s a care plan or a life plan, it’s developed in ways determined by the resident. Coaches help with physical, social, intellectual and spiritual health.

We see seniors becoming excited and enlightened when people ask what matters to them and what they want to do with the rest of their life. We can observe them through the lens of outcomes, and move the needle a bit by reducing how often they go to the ER, how often they go to the hospital.

We have to keep moving. We’re a growing organization, but what makes us able to grow and evolve are the values that brought us here to the party in the first place. They show up differently than they did in 1999 and 1969, but they’re what got us here.

SHB: What’s something people in the industry would be surprised to learn about you?

Kelly: More often than not I’m seen as talking a ton, probably too much. Because of that, there’s not a lot that people don’t know about me. I wear a lot on my sleeve. Where we came from at Kendal means a lot to me. And this idea we can be transparent with one another — that resonates with me. I act that out pretty naturally. 

But quiet space is good, and people might be surprised how much I enjoy listening, learning and embracing quiet space. Before every meeting at Kendal, we take a moment for quiet. Everyone has his or her own thing to do with that quiet space. Some of us have grown to embrace it and use it for the silence alone.

There’s a centering effect that we all need, but which I particularly need in this work. We have a lot to say, but we have to take advantage of the quiet and put it to good use. n