Revolutionizing Senior Care: John Darby’s Boutique Approach to Assisted Living

Intro  

Welcome to another edition of inspired stories where leaders share their experiences so we can learn from their successes, how they’ve overcome adversity, and explore current challenges they’re facing.

Anthony Codispoti (08:12.793)
Welcome to another edition of the Inspired Stories podcast, where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codaspodi and today’s guest is John Darby, CEO of Mercy House, a company with eight assisted living and memory care facilities in central Texas. They know that it can be difficult to find the right community for yourself or a loved one

which is why they provide the best elder care in and around Central Texas. They specialize in providing assisted living and memory care in their small facilities where they use a family -oriented model of care to ensure that everyone feels at home at Mercy House. They offer tours so you can see firsthand the quality of the facility and the care that is delivered consistently. John is also the CEO of Torch, the Texas organization of residential care homes.

He holds the Certified Assistive Living Manager credential. He was honored by the Business Examiner’s 40 Under 40 Emerging Leaders list and also honored by the Olympians Leaders for the 21st Century. John is a 1997 graduate of the University of Washington and earned a master’s degree in business administration from Concordia University. He graduated with a 2001 Leadership Thurston County class and later earned his Six Sigma Green Belt. Now, before we get into all that good stuff,

Today’s episode is brought to you by my company, Adback Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cashflow by implementing one of our programs. Results vary for each company and some organizations may not be eligible. To find out if your company qualifies, contact us today at adbackbenefitsagency .com. Now back to our guest today, the CEO of the Mercy House.

John, I appreciate you making the time to share your story today.

John Darby (10:13.376)
Anthony, I’m excited to be here.

Anthony Codispoti (10:15.685)
All right, so John, tell us about the journey that led you into the senior care industry in the first place.

John Darby (10:22.638)
Sure, so I spent most of my years growing up sitting in a Medicaid nursing home that made headlines from the 80s. I had an uncle that had MS and also had some intellectual disabilities. He was declared…

John Darby (10:49.966)
After he was declared terminal, he lived another 15 years just by sheer willpower. And so we would go to, you every holiday, every birthday, every anniversary was spent with Uncle John because that was going to be his last Mother’s Day. That was going to be the last Christmas and he managed to hang on.

But as I sat there as a teenager looking around, not really knowing the way the world works, but thinking that there’s gotta be a better way to care for our loved ones. And fast forward to 30 years later, when I came across this boutique model of senior care, was like, the heavens opened up and I heard angels singing Beethoven’s Ninth.

And I came across it working for Torch, the trade association for boutique assisted living facilities. And found myself spending time with successful business owners that run these small homes. And a couple of years of spending time with them, it kind of started to rub off and I thought, yeah.

Maybe I could do this. Maybe I know how to do it. And after thinking about it for a little while, a friend approached me and said, I think you’re right. This is a great model. spent a little bit of time looking around. The right opportunity came along. And we jumped in, certainly.

I want to say at the right time, you know, when you look at the aging of the baby boomers, there’s, you know, many in the industry call it the silver tsunami, is that there’s going to be far more seniors that need care than what currently we have space for. So it felt right. It was kind of a perfect storm. And so we jumped.

Anthony Codispoti (12:41.595)
So prior to this, you had different work experience outside senior living and you came to work at Torch as an association that was supporting these boutique senior living centers. And so that was kind of your first foray into this world. Aside from what you witnessed, you know, with your uncle growing up, this was kind of your first foray on the business side of things to, that thought I had 30 years ago as a teenager, there has to be a better way.

John Darby (13:00.994)
Yeah.

Anthony Codispoti (13:10.627)
Somebody has in fact, multiple people have in fact come up with a better way. This is really intriguing. This is something I want to be involved with. Is that right?

John Darby (13:18.624)
It turns out I wasn’t the only one thinking that and bam here we are.

Anthony Codispoti (13:24.227)
And so what was the first opportunity that came up? Was it an existing facility that you could buy into or was it the ability to build a new one? How did it get started?

John Darby (13:32.11)
Yeah, so it was an existing facility. was an owner who was looking to exit the industry and he actually closed the facility, gave everybody 30 days notice when I found out about it. And over the next five or six weeks, we negotiated a deal for us to purchase it.

And as we were doing that, just as we were coming in, the last resident was moving out. And so while we purchased an existing facility, it was with no staff and no residents. And so, you know, we immediately began scrambling to try and save the staff and work on our tails off to get residents. we actually spent probably the first six weeks of operating it with no residents.

So that you know that fun time when there’s money flowing out and nothing coming in

Anthony Codispoti (14:29.689)
And you’re probably like, shake your fist at the sky, like, why couldn’t we have done this deal like a month earlier before they started having the residents leave?

John Darby (14:35.67)
Right, exactly. Exactly.

Anthony Codispoti (14:40.013)
And so, okay, so you’re hitting the ground. I’m not even gonna say running, you’re stumbling, right? Because like you said, you got all this money going out and no money coming in, because all the residents are gone. I guess I got two questions here. How did you fund this? And how did you start getting residents back in the doors?

John Darby (14:48.941)
Yeah.

John Darby (15:00.398)
Sure, it turns out that SBA loves these boutique assisted living facilities because the majority of the asset that in this case that we purchased was real estate. And so we were able to secure.

secure an SBA loan that was pretty heavily collateralized against the real estate of the home. And so in this case, we were able to purchase the facility for the cost of the real estate, but it had much more value as a business. And so my partner and I came up with a little bit of money and went off running. And then when it comes to filling it up, you commented that I was stumbling. Yes, we were stumbling, but

we were stumbling. You know how when you’re running downhill and your body is going faster than your legs will carry you? It was at that pace that we were stumbling. And I think that one of the things that I’ve been in and around small businesses and business in general, one of the miscalculations I made when it came to coming into this industry is it never stops. It never closes.

when you’re, you if you’re in a subway franchise or you’re an insurance agent or any myriad of other small business opportunities, you know, you get to at some point hang up the phone and go home. We don’t get to do that. It follows us, you know, and we’ve got, you know, we’re staffed 24 seven.

until we’re not, until somebody gets sick. so guess what? That’s me. So I always say that, know, getting into this business, I didn’t know it at the time, but you’re gonna stick your hand in somebody else’s butt crack to clean it up. And I have done that more times than I care to think about. And so…

John Darby (16:55.794)
You know, we’re, when we’re, as we’re being successful filling it up, that just created more work for us on the backend, having to race into, you know, to fulfill the holes in the schedule. You know, cause in a lot of places it’s, let’s just have less customers. Let’s, you know, if you’re in, in fast food, you can close the, close the drive through or close the lobby or close early or, or it just takes longer to get your lunch.

not an option for us, right? We’ve got these residents that we’ve looked their family in the eye and said, we’re going to take care of them. We’re going to give them the care that they deserve. And as I was saying, we, really, I was thinking about this awesome team that I had just hired. And it turns out that they were indeed awesome, but life happens. And so it ended up being me.

Quite a bit more than than I thought it would happen You know, I would take my tie off from my day job and roll my sleeves up and go go love on some residents But you know having said that you know, nobody else do I know where the middle of their workday might involve playing bingo or Sitting down with the resident and playing cards I I learned early in my in my tenure with with this business that if if somebody in one of our buildings wants to play cards for money

Don’t do it. They will clean you up. Yeah, they can play pinnacle like nobody’s business. Once lost all of my lunch money to a guy playing poker, good times. But it’s certainly been fun. When it comes to filling our beds is how we think about it. I suppose that we’re the same as most other companies when we think about census, getting more customers.

Anthony Codispoti (18:14.875)
They’re sharks,

John Darby (18:43.458)
But I think that we come at it from a different perspective. When I talk with my team about it, I honestly believe that we provide the best care possible in the communities that we operate in. And so when I have an empty bed, that means that there’s somebody out in the community who’s getting less care than what they deserve or than what’s available to them because they’re getting it somewhere else. One of my…

most powerful cause to action, this was about two years ago, there was one of a larger facility down the street from us that had an elopement. Somebody disappeared out of their building and they went looking for an elopement.

Anthony Codispoti (19:28.079)
And what’s the term for that? Okay.

John Darby (19:31.054)
They eloped and they went looking for the resident, couldn’t find him. They’re calling 911, there’s the silver alert that goes out. We’re looking for this elderly gentleman who was found two days later in the building. He had passed away.

I tell my team that as a boutique, there’s no way that’s happening just because of our layout. Our buildings are small. Residents sitting right there. Hide and seek is a really quick game in our buildings because they’re small. That’s not possible. And I feel a responsibility to my community and I tell my team that man would be alive today if he were in one of our buildings just because of the model of care.

And, you know, I understand that bad things happen and you just, can’t fix all of those things, but the model that we have care delivery that we deploy just doesn’t allow for things like that. And so we talk about census, we talk about filling our beds, but it really is from the perspective of delivering the highest level of care.

that our seniors deserve. When we go to grow our team, our number one hiring criteria is, you love people? I can teach you everything else that I need you to know, but I can’t teach you to love people. And so in our industry, you you tend to look for people with experience. You know, we certainly like that just as much as anybody else does. But if I have to pick between two staff members, potential staff members, where one has worked in another facility,

taking care of multiple seniors and another one has gotten their experience at home caregiving for their grandmother I’m gonna pick that one because they’re doing that because they love their their grandmother they love their family and so again I can teach you how to properly bathe different types of people with different types of conditions and I can teach you to med pass but at its core I can’t teach you to love people

Anthony Codispoti (21:23.897)
Mmm.

Anthony Codispoti (21:42.591)
You know, several things that I want to unpack, but the last one in particular, I have a great aunt who just went into a senior facility here. She’s still very mobile and active and can care for herself. And we went to visit her a couple of months ago and it sounds exactly like the type of facility that you have. She was so happy and excited to be there. We spent most of our two hour visit getting introduced to

other residents, but mostly to the other people, the people who work there. And she’s like, and this is Billy and he does this for us and he’s so great. so yeah, what a difference that experience makes compared to what you described, you know, for your uncle when you were young.

John Darby (22:15.573)
Right. Yeah.

John Darby (22:24.301)
Yeah.

John Darby (22:28.238)
Yeah, well, it’s a calling, right? My staff members drive right past that Dairy Queen with the sign that says starting at $16 an hour.

to come work at my building for something less than $16 an hour to take care of people because that’s who they are. We call our staff caregivers because that’s what they do. And it is easy to just think of that as a title. It’s not just a title. It’s a reflection of what it is that they’re doing. And so, you one of my favorite things to do, both in an interview, but I’ll just check in with my staff is what do you love about your job? And whether they’re working for somebody else,

and or working looking to work for us or working or they do work for us the most frequent answer I get is they love their residents they love spending time with their with their people and and just fortunately in our case and then again I mean I want to reiterate this is that the the folks working down at the building down the road they love their people too it’s a calling for them as well for us it’s just the care delivery model is different we actually give you time to

to be able to spend time with the residents and people that you develop in a relationship with. It’s not uncommon. In fact, probably one of the highlights of me being in this industry came during COVID when the city of Austin was limiting funerals to 10 people. And one of my residents passed, 10 people got to go to her funeral and they asked me to be one of her pallbearers. It’s not uncommon for…

Somebody’s obituary to actually call out specific staff members names You know, we’re a private business. We’re for -profit But we on a regular basis get families wanting to make donations To a private business and I’m like no, no, you know, we’re for -profit. We’re good They’re like no, no, you guys took such great care of mom and it actually loved that when that happens because I didn’t turn that around to our staff and I’m like Well, wasn’t me that did that every day. Let’s have a party. Let’s buy some gifts

Anthony Codispoti (24:32.474)
Yeah.

John Darby (24:35.2)
let’s do you know a spa day for the girls that did take care of your mom. It ends up being a win -win.

Anthony Codispoti (24:40.355)
No, that’s cool. So yeah, talk to me more about what makes your model different.

John Darby (24:48.512)
So, well, we put our resources into payroll and into care as opposed into real estate. And so when you come into my buildings, I don’t have marble countertops, I don’t have stainless steel appliances or anything, and that’s on purpose because I’ve never sat with somebody and their family as they’re passing on and heard somebody say, I wish there were marble countertops in here.

but rather I hear, we love the level of slash the frequency of care. And so for us, our model is one direct caregiver to seven residents. The industry really is probably one to 16 on average, just the way you look at the way the costs break down. And so for us, you just have more time to spend with residents, but then we put resident care.

first. And when I say that, don’t mean to imply that others don’t as well. But the way we operationalize that is, if you’re in a resident’s room cleaning their room and you’re about to take out their garbage, but they’re like, hey, let’s chat. If you have your choice between taking the garbage out,

or spending a few minutes with the resident, spend it with the resident. Absolutely. I’ll pop by and take out the garbage. And, you know, I’m fortunate that we’re still a small business. And so I do get to do that. I do get to call bingo. I do get to stop and grab coffee and bring it to the girls on the way in and then have, you know, the resident who realizes what I’m doing. Like, hey, what, you know, where’s mine? A couple of weeks ago, I was coming into a building and was passing a passing the grocery store and just on a, on a whim stopped.

and grabbed a couple of dozen roses and took both all the staff and all the residents a flower and said, hey, I just, got you a flower. And they’re looking at me like, are you crazy? Why not? And I got these 90 year old ladies that, know, with dementia, you know, looking at me kind of suspiciously. And I’m like, look, you can’t tell my wife that I’m buying you flowers, but I got this for you.

Anthony Codispoti (26:55.29)
That’s great. And you know, what’s cool there is I think one of the things that we saw, especially going through COVID is how important that human contact and that human connection is. had a friend who, you know, works in elder care facilities and she was saying, you know, the lack of that contact during COVID, there were people who took such a nosedive in terms of their

physical state and especially their mental state. And it was probably a year ago I saw her and she’s like, and it doesn’t seem like it’s coming back. Like, and so I think that really highlights the importance of what you and your team are able to do, right? Hey, this person wants to talk. I don’t have to take the trash out right now. Like our ratios are a little bit better than most places. I got a little extra time. Let me spend a few minutes with them. That’s going to light them up inside.

that’s gonna make that brain neurochemistry fire in just the right ways, it’s gonna make them a little bit happier that day.

John Darby (27:54.508)
Yeah, well, and the other thing is, you when I go into large facilities and there’s some gorgeous opportunities out there and they do deliver the level of care that their model allows. But, you you go into their dining room, it’s a beautiful dining room, it’s big and there’s tables everywhere and there’s one or two people sitting at every table. For us, we recognize that as a smaller facility and some people’s concerns are, hey, you know, I want more interactions and more sociability. Unfortunately, you can’t depend on that from other residents.

And so we fill that gap with our staff. Not too long ago, we had a resident who, while she loved to read, her eyes would get tired after the first page or so. Me or one of our team members would stop and, hey, let’s finish this out. She wanted to do her daily Bible reading so that she could get through it in a year, but her eyes wouldn’t let her. She got to do that at Mercy House.

Anthony Codispoti (28:47.515)
That’s cool. Now, I’m curious. You’ve gone after this model of smaller facilities. Is there something about the smaller facility itself that allows you to deliver this more connected version of care? Could your same care model apply in a larger facility?

John Darby (29:07.895)
So.

I would generally say no. And so when I say small, so most small residential assisted living, right? So in Texas, there’s about 1200 smalls. A whole bunch of those are just a home that have six, eight or 10 people. They don’t have a sign out. You don’t know what it is, right? Just every now and then you’ll see a different home health or hospice companies car sitting out front. Our buildings are a little bit bigger in that they’re 16 beds a piece. But I think the difference is while

while we do, I do think that our people are the best, which isn’t to say that those folks working in the bigger buildings aren’t good. But when I talk about the model being different, you know, the story really comes out when you look at COVID. COVID hit larger buildings much harder than it did the small ones, because in the small ones, we not only know the residents as the administrator, we’re on a first name basis with the residents themselves, but with their families.

And we’re able to recognize that our customer isn’t just the resident, but it’s the family. You know, a large portion of our our residents that come are coming from home with a spouse that’s a caregiver or a, you know, a son or a daughter that they’re trying to manage their own life. They’re trying to raise kids and, and work and do all of those things. And now they’ve added on trying to care for mom.

In this small model, what we tell folks is that you’re able to be the husband again. When you’ve got some time to spend with your wife, it’s your wife. It’s not somebody that you’re caring for. I don’t ever, ever want to see my mom butt naked, but that’s what a lot of these folks are doing. I’m going to have to go help bathe my mom. That’s uncomfortable for mom. It’s uncomfortable for me. There’s a lot of guilt that goes with that. There’s a reversal of roles.

John Darby (31:06.614)
but now I’m wiping hers. But that diminishes mom’s quality of life and it diminishes mine. Whereas in the boutique setting that we offer, come and hang out with mom and you get to do the puzzle like you used to do. You don’t got to worry about tracking down medications and any of that. And so I think that just the smaller scale…

allows us to have a relationship in place that when you’re dealing with a couple of hundred families or even a hundred families just is a lot more difficult.

Anthony Codispoti (31:38.775)
Hmm. John, I want to go back to a little bit more at the beginning, because you had become familiar with the senior care industry from your time at torch, but you’d never actually run one of these businesses. I’m going to guess that there was some kind of a learning curve, both in delivering the care, right. And then on the business side of things, what was that like? What resources did you have available to kind of help you with the learning curve on each of those?

John Darby (32:09.462)
So, know, I certainly had, so, you know, spending time with Torch, I’m spending time with other successful owners. I always tell people that my Mercy House is a conglomeration of best practices.

You know, we’re able to see who’s doing medications the best, who’s got the best culinary program, who’s got an amazing activity program. And, you know, the industry is very collaborative, but in my role with Torch, I got to spend time with those individuals to be able to learn from them on a regular basis. And so I would say from the, from the, you know, the technical portion of the industry,

I was far ahead of others. And as I say that, I don’t think that’s unique to me. Regardless of what industry you’re in, you’ve got a trade association, you’ve got a state association, you’ve got a local chamber of commerce where you can go and meet what tends to be the more successful people and you can learn from those. Not just because I work for a trade association, I tell everybody, go join your association, volunteer, because that’s where you’re gonna learn and you’ll save yourself a whole bunch of time.

on the learning curve and a whole bunch of money.

And so, you I would say that I started out on First Base because we bought an existing one. There was still all the policies and procedures in place and we were able to save most of the staff and so they were able to point things out and teach us how things were done. So I would say that just by buying a business, we got to First Base. I would say that, you know, having the relationships with other successful owners in the space got me to Second Base. And then I would tell you that I struck out three times in a row.

John Darby (33:53.728)
I tell people that if there’s a mistake to be made in this industry, I’ve made it. Fortunately, it’s never been on the care side. We’ve always had really successful outcomes with our residents, but on the business side, let me tell you, I tell people that the longest I’ve ever worked is 36 hours straight, where I’m not just, I’m not just.

work in where it’s a, let me grab my phone and sit here and run to the bathroom. There was no bathroom break. Like in 36 hours, I’m working straight through.

because I was it, I was the last line of defense. And as with any entrepreneurial effort, you’re the only one as the owner in the organization that doesn’t get to say no. And people say, hey, you own it. And I’m like, sometimes I own it, but most of the time it owns me because again, I don’t get to say no. And so somebody can say, they don’t wanna work that overnight shift. They can say, no, I don’t wanna go to the grocery store. No, I don’t wanna go and pass that med.

Everybody in my organization can say no, but me and okay. Yes, there’s you know, we ramifications for those but at the end of the day You know something needs to be done on Christmas Day

not only am I the only one that doesn’t get to say no, how good do I feel about yanking somebody away from their family when it’s my business? And so, you know, this is the hardest thing I’ve ever done. And if, you know, there’s been some times where, you know, they say, you hit rock bottom and there’s nowhere to go up from there. That wasn’t my…

Anthony Codispoti (35:29.497)
you can find a new low.

John Darby (35:31.618)
So well for me it was just you know I hit rock bottom and then I’d smack my face as I was getting drug along the bottom so it wasn’t a hit rock bottom and I popped right back up and so you know again this this business does have a tendency to chew you up and spit you out and then laugh at you when you’re sitting there like

did I get into? And so, you know, I would say the first two years in this business was really difficult. We started to get things figured out. And then once we once we thought we had it figured out, we’re like, hey, let’s just go buy five buildings at one time. And

it didn’t just start all over again. It started all over with a couple of tons of bricks just beaten down on us. And it went back into a couple of years of tough times before we were able to start to get our feet under us and figure that piece out as well.

Anthony Codispoti (36:28.303)
Can we maybe get into like a specific example of a particular struggle that you guys went through during this time and how you came through it?

John Darby (36:33.752)
Sure.

John Darby (36:37.326)
So for us, again, my philosophy of offering the best level of care and that everybody deserves a great life, we sometimes give more grace to a potential resident than what we ought. And what I mean by that is you will, 80 % of all assisted living residents have some form of memory deficit.

and they’re individuals who dementia has just taken so much of their identity that they’re not who they used to be. And some of them can be, know, the diseases has turned them into a monster really.

And we took in a resident that had been removed from a couple of other facilities. We had hoped that the smaller boutique setting with a higher level of care would meet his needs. And so we accepted a resident who we should not have. And the resident, again, he wasn’t who he used to be.

faced with you know struggling with the disease as much as he is and so you know he would you know his life was miserable he would he was an amputee so he only had one leg and so he’s you know not mobile had had extreme behaviors became violent when when the sun went down

And if you got within arm’s reach of him, he would smack you. If you got within his throwing reach of you, he would throw anything he could get his hands on at you. Again, not him. You know, it’s definitely the disease running its course. And we worked really hard to try and meet his needs and we just weren’t able to. Well.

John Darby (38:36.094)
You know, and that’s just the physical stuff. The verbal abuse was just non -stop. Recognize that, you know, we’re taking care of a population that grew up in a very different time. So they have a very different view of race relations, a very different view of gender relations. And while, you know, most of the population is adjusted, and I would say that our residents adjust as well, once dementia starts taking away your faculties,

all of that propriety goes out. And so there was a significant amount of verbal abuse that our staff was taking. Again, this is a really small home. It’s just two caregivers. And it got to the point where staff was calling out because they couldn’t take the abuse. And I couldn’t blame them. Somebody who was screaming at the top of their lungs for 12 hours straight in a small home, it wears on everybody. And there just wasn’t

good solution and unfortunately there’s a gap in our system in being able to deliver care to somebody in this situation. I’m happy to say that eventually his medical team was able to get him on the right mix of medication that helped him be who he really is and he ended up living successfully for a number of years in a larger facility. But there was about a 50

15 -day period where you know my shortest day was 16 days where I was the direct caregiver You know, that’s the point where I work, you know work 36 hours straight where I didn’t dare take eyes off of him Because I mean not only was he a danger to other residents and to staff. He was a danger to himself as well and so I You know there was in that 15 -day period Can be also through there was more than one time where I was pushed

Anthony Codispoti (40:12.079)
Wow.

John Darby (40:33.632)
past my breaking point where I didn’t know if I wanted to come back from there. I mean, I was so far past that breaking point that I didn’t know if I wanted to come back from that breaking point. And, you know, in a time like that, it’s really hard to remember that it’s a business. It’s really hard to remember that this is a person, that this is a person who deserves care and that this person deserves love.

Anthony Codispoti (40:35.301)
and

John Darby (41:03.468)
but the disease had just taken his mind so far that there weren’t good solutions that we could offer. again, it took us a couple of weeks to be able to help him get a solution. But during that time, again, more than one point where I was pushed past my breaking point where I was glad I was alone, where I…

Anthony Codispoti (41:22.298)
Yeah.

John Darby (41:28.622)
I’m sure that I looked like a zombie, but didn’t know because I was afraid to look in a mirror. And at that point, you know, it was an act of God that I made through it. It was only by the grace of God that I made it through and, you know, was able to, you know…

him having a successful outcome really had nothing to do with us except that we were able to provide him a safe place to be while a solution was able to reveal itself.

Anthony Codispoti (42:03.897)
You guys were a bridge during this difficult time while the medical team was, you know, working on his meds to get him to a more stabilized place. You know, and I think, one of the nice things that comes out of a really challenging situation like that, that you went through is you find, you discover that you are capable of even more than you thought was possible. You find.

a new level of inner strength, not that you, you never want to be back into a situation that pushes you so far again. but you know that you’ve, you’ve, you’ve, you’re made of tough stuff. Like you, you can, you can endure and come through it. And I’m curious, you know, after having gone through that, was there anything about your procedures or your policies that you guys changed going forward? Or if it was just kind of like.

man, that was kind of a, just an outlier and nothing we could do differently next time.

John Darby (43:06.754)
Yeah.

Well, so we, you know, we certainly swore to ourselves that if there was anybody questionable in terms of their behaviors, that we would just help them find someplace else to live, but, wouldn’t accept them into our building. And so, you know, coming out of that experience, it was just a hard no. If somebody had any even suspected behaviors, we were going to, you know, let them find another place to live or somewhere else to live. Having said that, we’re, our heart is for seniors.

So we have, we’ve never had a situation get that bad. We’ve had some close because we do tend to lead with grace. A lot of our peers in this industry are corporate.

or much larger entities owned by much larger entities. And so they have some boxes that gotta be checked or not checked for them to be willing to care for somebody. sometimes there’s a story beyond the assessment. There’s a story to be told that just isn’t told in the paperwork. And so we do find ourselves tending more toward the…

I say leading with grace, it’s, we think we can do it. Let’s go ahead and try and take care of this individual. We have gotten a lot more, you know.

John Darby (44:27.51)
with our legal agreements and things, gotten better at making sure that the family understands that we’re willing to try this. But if it doesn’t work, we need to have something lined up after the fact. And in that first situation, obviously it was the family had never been in that situation. It was our first time going through something like that. So we didn’t have a contingency plan. If we took him in without knowing if we could take care of him, if we didn’t, and when we find out we couldn’t, we’re like, we don’t know what to do.

Whereas now we’re much more careful that when we do take somebody in that we’re questionable about whether their behaviors are going to fit into our population. We’ve got a contingency plan in place to mitigate that sooner. So would say that was the biggest thing.

Anthony Codispoti (45:14.523)
Okay. So, you when I talk to a lot of business owners who are the founders, right? And they started something small, in your case, one facility, and it took them a lot of effort and a lot of work, a lot of sweat and tears to figure out how to run this small entity, right? A lot of learning curves, business side, care side. And it takes a certain set of skills to be that startup guy.

You don’t often see that same person be successful as the business grows because it requires a different set of skills. You’ve got to put different structure, different processes in place, and it can be hard to kind of step back and delegate some of that. Talk to me about what that arc has been like for you.

John Darby (45:47.629)
Yeah.

John Darby (46:05.738)
So, certainly it’s not been a smooth arc, I’ll tell you that. But yeah, but I would say that I actually with my skillset went the other direction. I wasn’t a skilled day -to -day operations guy. I was much more of the skilled back office.

Anthony Codispoti (46:10.65)
never is.

John Darby (46:29.494)
leadership, let me focus on those things that went in to learn the day -to -day operations. And so, you know, I came to it with a business background, with, you know, working in management and nonprofits for so many years and managing people. I would say that it’s easier to learn how to pass the med than it is how to run a staff meeting. And so I had those run the business skills

already, not all of them that I needed. And so, and you know, with for us within our organization, you know, we’ll take the best caregiver and, and promote them up to be the supervisor. And then we’re telling them, look, your job is no longer to be the best caregiver. Your job is to help all the caregivers be the best caregiver.

And that’s a different skill set. And that takes a different level of humility and a different level of self -discipline to not be the one to jump in and help. if I see a task that needs to be done, if I do jump in and do it, that means I’m not doing these other three things. And so for many people in an organization, that’s a hard shift. I would say that for me, it was easier

Anthony Codispoti (47:23.087)
Yeah.

John Darby (47:51.264)
because I started out with that business knowledge slash business skills, jumped into the day -to -day operations for the first two years, and then slowly worked my way back out of that. Having said that, the growth curve in learning how to run one was just as steep from zero to one as it was one to two.

Anthony Codispoti (48:15.433)
Mm.

John Darby (48:16.054)
and then a completely new, just as steep learning curve when we went from two to five to then seven. And I would say that, so we just, acquired our eighth facility this year.

knock on wood, thank you Lord, that was a fairly, fairly flat learning curve there, and as we were able to assimilate that. But I would say that that’s primarily because the learning curves before us were so steep. and you know, when I say that the learning curves were steep, there was a cliff in there. You know, we came out of COVID when we went from two to seven, because we bought five at one time, we went from two to seven.

All of our projections said, hey, this is gonna be great. We’re gonna be profitable from day one. And by the way, all of our projections were based on 4 % interest rates and they didn’t stay 4%. And so now our debt service is 50 % more than our original projections. That’s just one. We also didn’t anticipate what it would take for us to grow.

when they’re so far away. Initially all of our buildings were within a couple of minutes of each other. Now my two furthest ones apart are four and a half hours, four and a half hours? Three and a three and a half hours apart where it’s a trek just to get there. And so the work doesn’t start until I get there.

Anthony Codispoti (49:36.58)
and

John Darby (49:47.111)
And so as, you know, as when we went from two to seven, there was a financial cliff that without, you know, a couple of acts of God.

We wouldn’t be here. And of course the stress level in making payroll for five people is very different than when you’ve got 75 people standing there saying, hey, you know, I got a car payment coming up. I need to pay for daycare. I’ve got very different level of stress than either that, you know, that sole proprietorship. And so, you know, sometimes it did make me think, man, why not just go be a CPA and work for myself and it’s just me. So yeah.

Anthony Codispoti (50:24.367)
take some of that stress off. Yeah. So how…

John Darby (50:26.814)
Cool thing, but when I talk to my CPA buddies, they seem to be just as stressed.

Anthony Codispoti (50:32.591)
The grass is always greener, right, John? Yeah. So how has your role evolved then as you’ve gone from one to eight facilities?

John Darby (50:34.368)
Right, exactly.

John Darby (50:41.94)
So, interestingly enough, that’s been a really hard transition. Whereas, you know, there was a time where it was my job to take care of all of my people. And over the five years, there’s, as the company has grown, the number of people that it’s my responsibility to take care of has gotten smaller and smaller. Till now I’ve got, you know, while there’s…

somewhere between 80 and 90 total staff members for the company. I’ve got four direct reports that I spend most of my time with. And then there’s a larger leadership team of about 12 people that I’ll spend time with developing them. But a lot of them, it’s my four direct reports that it’s their job to develop them. And so it really has gone away from the day -to -day operations. And you know, I still jump into QuickBooks and in fact,

our bookkeeper just hates it. She’s like, hey, I’m gonna be gone for two days, but only if you promise not to get into QuickBooks. you know, it’s, we’ve got a date that the books are supposed to be closed by. if, you know, that day’s getting close, I’ll find myself in there like, well, here, I’ll just go ahead and do this. And she’s like, no, stop, quit. You know, not only is that my job, it’s you don’t know how to do it right. So, you know, it’s been completely different to where now the job is really just leading people.

and helping them grow decisions. so, wow.

You know, the beginning of my career, I spent a lot of time in trainings on, you know, the technical portions of the job is let me go learn the best care and the best trends in dementia care. And, you know, what are the trends showing on dietary supplements and in all of the technical portions of the job. Now, my trainings are more along the lines of say, John Maxwell, and how do I help my people go get that information? How do I help them be the best that they can?

John Darby (52:41.484)
And sometimes that’s uncomfortable, There isn’t the joy of the direct resident care. Nobody smiles at me at the end of a staff meeting the way they do at the end of the bingo game when I get to hand them the prize.

Anthony Codispoti (52:58.575)
Yeah, I was talking with someone the other day. I want to see if I can find the quote. I wonder if this is something similar to maybe what you’ve used in giving employees feedback. have very high standards and I’m confident you can meet them, which is why I want to give you some feedback. I thought that was pretty great. I think that comes from the author Adam Grant.

John Darby (53:20.318)
That’s a great quote. I love that.

Anthony Codispoti (53:24.059)
So are you still in a position where you occasionally cover shifts and you’re wiping poop out of people’s cracks and is it a bit removed from that?

John Darby (53:33.954)
I’m a little bit removed from that. And as I say that, sometimes I kind of miss it. I don’t miss the have to do it. And maybe that’s, know, I’ve got the luxury of being able to miss it, right? Cause there was a day when, you know, I’ve got a full day of meetings planned today, but you know, for tomorrow, and now I’ve got to go in and cover a shift overnight. You know, this business is a human resources business. It’s pure HR. And…

we rise and fall on our staff members. And in the smaller facilities like ours, we don’t have backup to the backup staff members. I’ve got 10, 12 people in each of my buildings to cover my floor.

And so I don’t have a whole bunch of people I can call if somebody gets sick. And so I do have the luxury of missing it. You know, but as I say that, I’m certainly saying that through the lens of when I do work alongside of my staff, they kind of push me out of the way for the more difficult stuff. They’ll be like, no, no, no, I know how to change the, you know, their pull up better than you do. Even when I’m there coming through a building for a staff meeting or something, and I see the garbage, I’m going to

grab the garbage and take the garbage out. And there’s the things that go, no, no, no, you, you know, don’t do that. I’m like, no, no, I’m, can take the garbage out when I see something done. I expect you guys, when you see something that needs to be done to do it, I, yeah, exactly. So I’ve got to be able to, to accept that as well. So, so sometimes I miss it. Honestly, I miss the Colin bingo a little more than I miss the helping somebody go to the bathroom.

Anthony Codispoti (55:05.819)
You’re setting the example.

Anthony Codispoti (55:18.927)
I don’t think anybody would fault you for that. You made an interesting point about your business being an HR business, right? it’s tough work and you don’t have the margins to pay folks a lot. I’m sure you’d like to pay them even more. mean, you talk about how people are driving past the Dairy Queen on the way to work at your facility and there’s an opportunity to make more per hour there. I’m curious, John, what kinds of things that you’ve…

tried and found success with to first recruit good folks and then once you get them in the door to retain them.

John Darby (55:56.758)
So, I mean, the first thing is just as we’re looking for people that love people, therefore, I love our residents, we love people. And so, you know, first and foremost, we take care of people, period. And, you know, as I say that, there was a caregiver who…

on shift her, and this is a little bit earlier in our business, but the ethos is carried through. She got off shift at 10 p at 8 .45. She found out that her dad had passed away. And so she called the manager at 8 .45, tears in her eyes, who called me. And I lived 30 minutes away. I said, I’m on my way.

I wouldn’t have you know by the time I got there or by the time I found out it’s nine o ‘clock to be on my way it’s 930 p And I’m sorry it’s 9 p And so I’m gonna get there at 930. I’m gonna give her 30 minutes back

It’s gonna take my whole evening, but I’m gonna give her 30 minutes back 30 minutes that she can go be with family She can go and do what needs to be done for her family And so there was that was an easy decision. I’ll be there I will go and give you this 30 minutes and so then you know as you know, ensuing days comes we’re like hey What what can we do? How can we help and you know? no, there’s nothing we can do and well, then we got wind of that again unexpected event

The family didn’t have money for a family dinner after the funeral. I stepped up and said, we’re there. We will take care of it, right? Now, so, you know, it’s not a seven course meal or anything, but we went out and got fried chicken and grabbed some potato salad and some rolls and all of that, and we brought it. That story happened earlier in our career, but now that I’m thinking about it, this in the last couple of months, one of our key leadership.

John Darby (57:55.624)
team members, dad died. And when I went to the funeral, I was blown away that half of the people at the funeral came from Mercy House.

is that we take care of people. And our team knows that when I come through and ask, how are you doing? I might mean, how’s your shift going? How’s Mercy House going? But I probably mean how’s life. I want to know about your son. Did he make the, you know, was trying out for the football team? How did that go? And so it’s not uncommon for, you know, me to get invited to funerals of our team members or the marriage, the weddings of our team members and things. And so we just love on our people. We’re also pretty creative with how we spend

our money. And so I just was in one of our buildings for our employee appreciation day where we rented a bounce house with water. It was a bounce house. was kind of an obstacle course. And then we ran races through it, right? So it was for the kids, but of course there’s only a prize for the adults for races and gave away a hundred dollar gift card. We’re a fun place to work. I was in a staff meeting in another building and I realized that

I’m about to get up and address the team and I don’t really have any opening warm remarks. Hey, I love you guys. So I’m like, hey, everybody stand up. We’re doing rock, paper, scissors.

turn to the person next to you, the winner takes me on and the winner gets $100 gift card of their choice. So we certainly like to have fun. We’re all in it for the same reason. As with any team, know, we’re, we’re, that’s working together 24 seven, sometimes in stressful situations. You know, the, the, the work pushes us, but you know, we’re just consistently reminding us, Hey, we all want the same thing.

John Darby (59:42.662)
We do work very hard on developing our staff members and so at a leadership level, we’ll read books together. So my leadership team, we’ve read Radical Candor and we’ve committed ourselves to be radically candid with each other. We’re gonna give each other feedback whether it’s comfortable or not. We just got done with Dale Carnegie’s How to Win Friends and Influence People. We’ve read Jaco’s Extreme Ownership. I’ve actually negotiated by

cars for some of our staff members that didn’t have any skills, they’d never done it before, they didn’t have anybody in their life that they could do it for them, so I’ve helped them buy cars. I’ve actually gone to the dealership and sat there and said, nah, we’re not doing that, you need to come back with a better price. And so that’s what I love about being a small business is that you walk into any business and they want to do those things, but many of them just the way they’re set up, they just don’t have the ability to do that.

Anthony Codispoti (01:00:39.983)
So it’s still a relatively small business, right? You’ve got eight facilities. What are the future growth plans like, John? What do you think?

John Darby (01:00:49.674)
So we’re determined to grow right. And you know, as I say that the, our…

Our desire for growth really comes from the realization or the belief that we offer the best care, that our model gives seniors the care that they deserve. And again, that’s nothing against anybody else. It’s just the way that we’re set up allows us to deliver that. And so our growth plans start there is that where can we genuinely help people? But I do believe that the best way we can

help people is by being a successful business. You know, if we weren’t a successful business, we’re not able to pay for a family dinner for a staff member who’s having a funeral. We had a staff member who lost her fob on shift to her car. And so she worked the overnight. It’s six a It’s time to go home. Can’t find the fob. I spent five hours looking through. We went through the garbage twice. It never turned up. Well,

A fob on her car was like $500. She didn’t have $500. We bought the fob. I can’t do that if I’m not running a successful business. And so we’re determined to grow where we can actually make a difference, which of course does come back to ensuring that we’re going to stay a profitable business because the worst thing in the world would be for us to grow beyond our ability to grow, which hurts our ability to help the…

the that we’ve already made to families that live in our Mercy houses today. So we’ll grow. How big? I don’t know. You know, I think that, you know, when you look at the population growth just in Texas, for example, the population of seniors in assisted living is expected to double in the next 10 years, but there’s only about 15 % of the beds of today are available. And we just don’t see

John Darby (01:02:56.558)
a lot come on online. So I think that we’re in an industry, growth industry for sure. We’re fairly committed to only buying facilities. All of the eight that we have are facilities that we acquired.

I’ve come to the realization that I know how to run a successful assisted living facility. I don’t know how to successfully build a building. So rather than go through that learning curve, we’ll just focus on what we’ve already learned. And so we’ll, know, the right opportunity and, you know, a big part of that is geographically. I actually spend time in every one of our buildings every week. And so we recently had an opportunity that was about the same distance as most of our buildings are

Anthony Codispoti (01:03:18.394)
Hmm.

John Darby (01:03:40.872)
from where I live, but it was just the opposite direction and felt that I really couldn’t do that justice at being in the opposite direction. So we’re certainly looking for opportunities to grow, but we wanna make sure that it’s the right growth.

Anthony Codispoti (01:03:55.231)
That makes sense. You know, I’m a big fan of creative problem -solvings. I’m curious, I did a little background, that there’s an innovation that you sort of introduced in terms of scheduling. Can you tell us more about that?

John Darby (01:04:10.88)
So yeah, most of our peers in the industry and most of the folks that I’m learning from really focused on eight hour shifts. And we stepped away from the eight hour shifts and just says, when does care need to be delivered?

and realized that first of all, overnight, and most folks in the industry are lower their staffing overnight because residents are sleeping and have less care needs. But we got a little bit more creative with that and said, well, rather than stick to just eight hour shifts that run six to two, two to 10, 10 to six, we’ve got the first person that’s running that. But then let’s look at our population. if you’ll get a set of residents that they’re kind of late risers, they don’t get up until 8 a or so.

I did just call 8 a rising.

In this industry, we’ll have folks getting up at 5 and 6 AM, but we don’t have a wake up time. Our philosophy is this is your home, we just happen to work here. So if you get to staying up late watching gun smoke and end up wanting to sleep late, knock yourself out. We’ll be here ready with breakfast when you are in your med pass when you’re ready to get up. And so we would look at our population and say, hey, we’re noticing that our residents aren’t getting up till later. Rather than have somebody come in

at six and then have nothing to do, let’s run them from seven to three instead of six to two. Or, you know, we’ve got a group of residents that, you know, they’re really just gonna go down for a nap after lunch. Let’s just have a five hour shift. And so we really begin to focus on the metric of what we call the hours per resident per day.

John Darby (01:05:55.398)
And, you know, kind of with that business background and that MBA, you know, doing some learning from Wall Street and venture capitalists came across the Adiva dashboard where, you know, lot of venture capitalists, they’ll acquire a business that they don’t know much about. They’ll define key metrics as here are the things that we’re going to focus on. And then I’ve just got a one sheet piece of paper that gives a graphical

depiction of what’s going on with that metric. And so we focused on amongst other things, hours per resident per day. Our biggest expense is payroll. Payroll is twice as much as everything else put together. And so we watch that very closely. And so we’re looking for a key number.

That changes with the population. If I’ve got residents on the higher needs of the care level, we’ll have more hours per resident per day. But we focus on that very carefully. And when the number of residents go up, the number of hours we’re spending go up. That’s really easy. Everybody’s all quick to hire and add staffing. But we’re just as quick to lower hours. If our population declines or if we’ve got

residents who don’t have as much care needs, we’re going to lower those.

once we arrive at the target, we’re going to work really hard to hit the target. From a business perspective, of course, I want the least hours possible. From a care perspective, I want the most hours possible, right? The answer is really in the middle. If I get too low, that means my residents aren’t getting the care that they deserve. If I get too high, that means that I’m not running a sustainable business. And so we take those six key metrics and we measure them on a weekly basis.

John Darby (01:07:47.65)
for most of us as small businesses, we close the book around the middle of the month for the previous month, which means that we lost money last month, but it’s six weeks past it. There’s nothing I can do about it.

for us because we’re measuring those metrics on a weekly basis, we can jump in. so for example, if you know, one of the metrics that we watch is, is household expenses. And so if you’re running low on your household expenses and you come across a great deal on Amazon for, you know, say for latex gloves, which we use a lot of latex gloves at heart, I’m a bootstrapper. There’s gotta be a less expensive way to do that. I learned early on the one thing you don’t go cheap on

is gloves. We’re asking people to stick their hands down in places that we don’t ever want to think about again, let alone stick our hand there. You better be giving them good gloves to do that. So as you’re looking at your household expenses, you found a sale, but if your metrics off, you can’t afford to buy those. Whereas again, most of us would just say, hey, we’ve got a great deal here. Let’s go ahead and buy it. And so we measure those on a regular basis and have those conversations so that we can manage what’s going on in our business. And so while

Anthony Codispoti (01:08:32.9)
Hmm.

John Darby (01:09:01.632)
all does revolve around the care and it’s all hugs and kisses on the front end. We’ve got some pretty solid metrics that we’re watching closely on the back end to make sure that we’ve got the sustainable business model to be able to continue hugging and kissing for the long haul.

Anthony Codispoti (01:09:20.581)
John, you’ve obviously learned a lot in the years that you’ve been operating these facilities and growing the business. I understand that you offer master classes where you take some of that knowledge and you help support other facility owners. Can you tell me more about that?

John Darby (01:09:39.096)
Sure, so in my role at Torch, so we’re the trade association for the boutique facilities. As I said, when I said that there’s a mistake to be made, I’ve made it. And so I’ve kind of developed a, here’s what I wish I knew. But because Torch is a nonprofit that serves the industry, I also have access to the best experts. And so…

Both from, know, I’ll teach some of those master classes, but we’ll go out and get folks from the agency, the licensing agency, to actually spend time saying, here’s what you really need to know. And so I would say that, my perspective as an operator has really helped us put together a…

this startup masterclass that helps people understand what it is that they need to know. And I would say, you know, a consistent theme is this is hard work. From the outside looking in, you know, we all dress up nice when we’re on camera. But you know, there’s a chance that when the camera goes off, this comes off and I’m going to go and scrub out a toilet that somebody clogged up.

And so, you know, that’s kind of a consistent theme for us, but that master class really is to try and help people understand what you’re getting into.

Anthony Codispoti (01:10:54.287)
That’s great. John, I just have one more question for you. But before I ask it, I want to do two things for those listening today. If you like today’s content, please hit the subscribe, like or share button on your favorite podcast app so you’ll hear more of it. I also want to let people know the best way to get in touch with you. What’s that?

Anthony Codispoti (01:11:31.235)
And then the website for Mercy House is just mercy .house, correct? Yep. So anybody looking for senior care in the Central Texas area, check it out. They’ve got eight facilities and growing. So last question I have for you, John. I’m curious, what do you see the big changes are that are coming to your industry in the next five years?

Anthony Codispoti (01:15:21.737)
Well, John, I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Anthony Codispoti (01:15:32.315)
Folks, that’s a wrap on another episode of the Inspired Stories Podcast. Thanks for learning with us today.