As the recently appointed CFO of The Pennant Group (NASDAQ: PNTG), Lynette Walborn has her sights set on multiple avenues of growth — including expanding the company’s workforce.
Walborn came to Pennant from Raising Cane’s Restaurants, LLC, where she was vice president of financial reporting and tax, overseeing acquisitions, accounting systems and equity management.
The Pennant Group, Inc. is a holding company of independent operating subsidiaries that provide health care services through 97 home health and hospice locations in 14 western and midwestern states. In this model, relationships between local operators and corporate leadership is crucial and a key focus of Walborn’s early days with the company.
Hospice News spoke with Walborn about her ties to the health care space, her priorities for Pennant’s hospice and home health subsidiary, Cornerstone, and the labor headwinds confronting the industry.
You came to Pennant from outside the health care field. What drew you to health care?
I was actually introduced to Pennant by one of the board members, Barry Smith, who I worked with for about 13 years in his family office. I had been exposed to hospice early on in my career with him, not that I worked for that company, but just what he had done already in the hospice space.
Barry came to me with this opportunity, and it was something that was very intriguing. The industry is one where I think there are a lot of growth opportunities. I love the idea of being able to provide life-changing service, which is what Pennant is about. And so after getting to know the Pennant team, and what my skill set already was.
In working with Raising Cane’s previously, they grew significantly, and just looking at [Pennant] as an opportunity to continue to learn and grow in my own career, and also provide that life-changing service to both the team members that I’m working with at Pennant and the people that we’re providing services to.
How do you think that your experience in other industries will inform your approach to financial leadership at Pennant?
I think being previously in the restaurant industry, the growth that we experienced there, we went from about 225 restaurants to over 650 in the six-and-a-half years I was there. And I know that with the growth that we want to have at Pennant, that experience, even though it was in a different industry, there’s a lot of those things that still are going to flow — revenue-driving, finding the right operations to acquire.
All of those pieces were things that I got to experience at Cane’s. Again, in a different industry, but the building of systems to actually support that growth within the service center is a concept that Raising Cane’s also had to do during that time.
The other thing that I think really translates well between Cane’s and Pennant is that Cane’s was very operational-focused with really wanting to build the leaders at the operational level. Pennant’s service center concept, where we have a service center that provides support to those operations but doesn’t dictate what those operations are doing, is a very similar model to what Cane’s did.
How do you as CFO collaborate with those local leaders throughout Pennant’s footprint?
Having been here for six weeks so far, I have spent a bunch of time actually getting to know those operational leaders. So at the market level, I’ve met with the market leaders from both Pinnacle, which is the Senior Living side, and then Cornerstone, which is the home health and hospice.
They’ve been working on building tools that use the strengths of those functional leaders in the service center, especially on the finance side, that can drive those results and allow the operational leaders to do what they need to do to drive operations to provide better service and use that functional expertise to really drive better results.
Can you talk about some of your priorities as it pertains to the hospice segment?
For me, again, it’s being able to provide leadership at that operational level with tools that can help them to provide the service to those families and the patients that are in that end-of-life situation. Then we’re giving them tools that allow them to focus on that end-of-life experience so they’re not having to spend as much time driving the business side, they can really focus on providing services.
So given that expertise, how can we get to better financial performance, because we have different stakeholders, whether it’s the customers that we’re serving or our shareholders?
We have to provide for both of those pieces, and I think that there are tools that we can provide that give additional support at that operational level to drive the financial results that allow us to continue to grow our care.
What are some of the major headwinds that Pennant is battling right now?
Labor is definitely one. It’s one that we talked about in our earnings calls. It’s finding the right people to be on the team and make sure that we create an experience that allows us to reduce turnover.
Creating that great experience for our employees is one of the core values that we have, “customer second.” It’s one of those things when you think of it that kind of sounds counterintuitive, but I think that, truly, when we’re providing these life-changing services, we really have to focus on taking care of our employees.
As we do that, it will reduce turnover, which is a huge driver of labor costs. That’s one of the big pieces. And then again, it’s just reacting to what the market is doing, finding opportunities to grow our hospice census and also growing from an acquisition side.