One of Scotland’s biggest private care home companies celebrated its 25th anniversary last week – but Balhousie Care Group is hardly resting on its laurels. At a celebratory event at Piperdam Golf and Leisure Resort, the founder chairman of Balhousie, Tony Banks, also unveiled Steve White as the new chief executive. And the new man, in what is a newly created post, said the duo had set a target of doubling the size of the business within the next five years after weathering a severe financial crisis two years ago.
Balhousie’s homes, with 900 residents and about 1,300 staff, are concentrated in the central belt. But, showing the scale of ambition at the group, White highlighted both geographical expansion and business diversification as key elements of its forward strategy.
When asked if taking the business south of the border was a possibility, he said: “Yes. There’s lots of research showing it is primed for expansion. I would be foolhardy to assume we can do that just in the area we have been. Tony wants to grow the organisation from the size it is now at a similar rate within the next five years. Our personal challenge is to say we can double the size of it again in that period.”
In terms of diversification, White, a 54-year-old Englishman with about ten years’ experience in the sometimes controversial care home industry, cited a potential move into funeral services. “People often benefit from having funeral planning in place. But we want to be having those conversations as far as possible in advance of what can be a traumatic time for families.”
White, a former CEO of Sussex Housing & Care and the Blackwood care home business in Scotland, said such diversification could also turn into “cash cows” to help keep up standards and services at the core care home operations, as would increasing use of technology.
“It could be a saving grace for the care industry. Through technology, for instance, we can reallocate staff to spend more time with home residents. Paperwork can be a burden for them.”
White, who has been in situ at Balhousie for two months, has a history in change management, working with headcounts of between 5,000 and 10,000 in areas ranging from building works divisions to crematoria and leisure. This included a lengthy spell with Edinburgh council municipal services when he lived in the capital for eight years.
He acknowledges that Balhousie’s financial recovery from the brink of collapse a couple of years ago has provided the firepower and credibility for the new expansion blueprint. Last year its revenues increased by 6 per cent to £34 million, booking a pre-tax profit of £1.6m compared with a loss of £276,000 in the 2015 financial year.
Occupancy rose 5 per cent on average, while operating profits rose 58 per cent to £4.9m. Debt also came down to £37.8m in 2016 from £39m in 2015. Without giving details, White said the more positive financial trends had continued in the financial year to September 2017. He said the business had also been helped by Balhousie’s successful bank refinancing in June 2016.
“It sends a strong message that we are stable in terms of survival and growth. People are approaching us on a day-to-day basis about new growth opportunities,” he added. “Parish councils etc have said to us ‘we need care homes in our vicinity’. Other business partnerships sometimes indicate to Tony or me that they would like to come under the Balhousie umbrella.”
He said that he was cognisant of the need among Balhousie’s expansion plans not to take his eye off keeping the existing operation and staff engagement in fine fettle. He says the group does not want to take risks that would harm the core business. “I’m an engager of staff, I empower them to levels they perhaps have not been involved with before.” White said this is important because one of the key challenges of the care home sector continues to be over-burdened staff in a tough job heading for the door.
“The challenge is the mass exodus of nurses leaving the industry. That trend looks set to continue. They are disillusioned with the whole sector. They don’t grumble about the hours because it’s a vocation, they don’t see it as a job. But money is an issue, people inevitably move from care organisation to care organisation even for 50p extra an hour. One consolation is that Balhousie’s staff turnover is currently better than the national trends.”
It may be partly why the founder and his new right-hand man were keen to express appreciation that 180 Balhousie staff members attended the Piperdam event, from all departments and at all levels. The invitees were the result of a peer-to-peer selection process in which staff were asked to nominate colleagues for prizes.
On the subject of business egos, meanwhile, did White think there was any intrinsic challenge in working alongside the founder of the business, something that is still his baby, so to speak?
White doesn’t duck the question. “Tony is an entrepreneur at heart. He has often said he has taken the existing business as far as he can. His ambition now is to grow Balhousie beyond recognition. For him to go out and fulfil that wish he needs to rely on someone with motivational skills regarding staff back at the house. Everything in life and business is about relationships. I understand what the dynamics are. I know what drives Tony up the wall and appeases him. He is demanding as every business founder would be. You are either excited by that or you are haunted by it. I’m excited.”
White is aware of the public relations dangers in the care homes industry, with what seems a fitful flurry of high-profile cases of staff at some operators revealed by newspapers or television documentaries to be mis-treating vulnerable elderly residents. He said he felt a paradoxical mix of regret for individual scandals that tarnish care home operators that are otherwise performing a good or even “fantastic” service, with a warning bell going off in his head.
“Yes, I believe compassion in the first instance. Managed care is not easy at the best of times. We should not just think ‘thank goodness it’s not us’,” he said. “But it is a wake-up call. When you watch such a documentary, for example, you run back to base camp to double-check how you are managing risk, and that support mechanisms are there for staff.”
It is sad, but a defensive financial characteristic of the care home sector is the seemingly inexorable rise of dementia in an ageing population. White said that when he came into the industry a decade ago there was a general feeling that the worst of the problem could be solved by transferring patients to dedicated dementia homes. But he added that between 60 and 80 per cent of residents in care homes nowadays have got dementia so it would be impractical. So is the problem insoluble? He replied: “I adopt a sort of Pacman approach. I run down the corridor and if I hit a wall, I look for another solution.”
One “solution” that he is a fan of and won’t be tinkering with is the Balhousie Participation Charter launched this year by the company that commits to residents getting a bigger say in the care they receive. He wants to build on it by getting residents to produce the annual report of their home’s performance and how it could be improved. White said: “I want to roll that out over the whole organisation. We are talking about bucking the trend. We are going to say to residents ‘you tell us what we need to be doing better’.”
He said it fits in with one of his watchwords – “inclusiveness”, of both residents and staff.