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- [00:00]
A
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B
This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We try to bring to you the best guest in the most efficient way possible every day at the Becker Business and Becker Private Equity Podcast. We're thrilled today to feature our December CEO of the Month and this for me is a great pleasure. We get to Visit with Stacy DiStefano and Stacy's the Chief Executive officer of Consulting for Human Services. She is a brilliant leader and a terrific person. Stacy, we are so thrilled to have you with us. Before we get started, could you take a moment and introduce yourself and tell us a little bit about consulting for human services?
- [01:16]
C
I sure can. Thanks for having me, Scott. It's always great to be with you. So I'm a solution focused clinician by training, which makes me a little unique in the CEO role. Right? I'd say executive more by experience, definitely. An entrepreneur by passion and most significantly a parent navigating a child with IDD who's now an adult, believe it or not, and one who has gone through the addiction system. So I feel that all of these experiences really shaped how I've led through my career and how and why I started consulting for Human services. So we're really a national advisory firm. We support behavioral health and IDD organizations, but we see ourselves as champions for provider sustainability. So kind of coming to that work through the lens of being a therapist, a problem solver, an executive and an entrepreneur, it's really helped me walk through the lens of my clients and to build a team that really supports that mission driven work.
- [02:14]
B
Thank you. And take a moment on. I'm gonna ask you a few different sets of questions to help guide us through our discussion today.
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The first is, and I'll ask you after about this, some of the trends you're seeing between sort of private equity and not for profits and more before we get to that, you've spent your career sort of helping organizations transform and scale. When you see organizations that really are able to scale and those that can't, what's the biggest differentiator that you sort of think about and see with teams that really could accelerate and those that don't.
- [02:51]
C
Yeah, that's a great question. And I think this transcends both sides. The private equity, the for profit and the nonprofit side. To me, it's not anything on a balance sheet. It's really about culture and it's about teams that have that sense of agency and that shared vision. So the ones that are successful to me are the ones that not only have, you know, psychological safety and they understand why they're doing what they're doing, they're their communication around strategy is clear. But the teams that have individual folks who really understand the impact of that individual contribution where they can help that mission go forward, how the team has an interplay and connection across each other and with each other and have a real empowered decision making. And so the opposite of that, what I've seen are teams that struggle are teams that I would say see change or growth as something that is happening to them rather than something that they can impact. You know, it's kind of like, Scott, that we can either shape the future versus the future is happening to us mentality. So to me, it's all the culture forward.
- [04:01]
B
Thank you. And I love that you do a lot of work both in really leading people through mergers and combinations and helping people scale. How do you sort of balance big picture vision of what something should look like with the day to day realities of running a complex organization?
- [04:22]
C
That's a big one. It impacts organizations of every size. We work with some organizations that are a million dollars total revenue and then we work with organizations that are a billion dollars total revenue. And I think that issue transcends size and the real work of being a CEO. And this is my experience as a leader as well. It lives in that tension between the future and the now. Right. So you're responsible certainly for looking out the window of the car, you know, responsible for the horizon where your organization's going to go. How do you stay relevant but strong, but you're also accountable for, you know, today's payroll and today's clients and putting out the fires today. So for me, the high performing CEO is really one that sort of builds and protects around three practices. And I, and I try to have a little list of these by my desk to remind me because I fall short of this sometimes. You know, first is that ruthless priority around clarity. So, you know, every decision is from the short list of what matters most today. I think the best CEO really continually refines and communicates those priorities to the team so that you're using your best and highest skill set. If everything is urgent, you know, nothing is strategic. I think that is something that we try to live by for sure here at CFHS and our guidance to our clients. And the second is really around designing a system so that you don't have to hold it all as a leader. Right. When you create a leadership structure, structure where that execution of those different verticals within your organization, you know, are empowered operators or leaders or directors or managers. If it's a small company, the CEO kind of shepherds that alignment, but not the task lists of that alignment. That's really important. You know, if the CEO is running the day to day, your strategy is just unattended. And I think the last one is about that operating cadence that just connects outcomes to action. So what are the metrics that you have as a leader? You know, weekly execution things, monthly, monthly performance, quarterly check ins, whatever it is. But tying a dashboard and rituals together so that, you know, the small steps really snowball into real movement.
- [06:35]
B
Thank you. And talk about it. You do a lot of work in and out of healthcare. Talk a little bit about the situation, the sort of tension between not for profits and for profits in the acceleration. And should for profits in the private equity be worried about what's going on with the not for profit sector?
- [06:56]
C
Yeah, yeah. It's such a great topic. I could talk for hours on this alone. And it's something I don't think gets enough attention in health care in general. So one of the most significant trends that I've been watching over the last few years, and we're certainly actively involved in. Is that exactly what you said? The acceleration of nonprofit merger and acquisition. So we know on the data side that the deal volume is rising. Right. And we are looking to probably have in health care a higher transaction year than we did last year even, and some even project more than the year of 2021 when we had the spike after Covid. And the volume's definitely rising. We don't have as much data on the nonprofit side, but anecdotally I can tell you the volume is rising there as well. But one of the most interesting trends is, is the sophistication of the deals on the nonprofit side. So we work with organizations across both sides.
- [07:50]
B
Right.
- [07:51]
C
And your tax status is not your business model. So nonprofit doesn't mean charity. Right. Nonprofit just means you don't pay taxes in the traditional way. The for profit side, it doesn't mean you own no profit and nonprofits now that we see are really approaching growth and the readiness for growth and the governance around growth and the integration of merger and acquisition with a level of discipline that has historically lived just on the private equity side. That is so exciting to me. And honestly, I do think private equity should be paying attention. I don't know about afraid, but leading nonprofits are really becoming more business savvy and we've seen this professionalism of the nonprofit space in the last five years that it's exciting to me. And I think they're setting the new bar for more strategic experience expansion. So when you think about the for profit side, right, the for profit cycle and the private equity side, there's like a three to five year transaction cycle. When someone is acquired on the, the private equity backside, you already know you're preparing for the next sale. That's not how it works on the nonprofit side. There isn't a flip there. There is a long term compatibility, a long term marriage, if you will. And so we have to think more on the culture and mission side up front. But they're now also starting to look at the business case. And so it just goes so much deeper than what we've traditionally seen in the last five years. And I think it's exciting and fascinating.
- [09:18]
B
That is fascinating, Stacy. And talk a little bit about sort of the data accountability, technology, AI. What are you watching there and how are people weaving that into day to day operations and what's changing and what should we be watching?
- [09:35]
C
Yeah, data and technology. Listen, that was a nice to have five to 10 years ago and it's a must have now on the back office side, whether it's revenue cycle and note taking and asynchronous learning and all sorts of things. Compliance AI certainly is all over our sector, as it should be in many ways. But now it's just table stakes I think for the health of, of an innovative good organization. You know, we see this on the clinical side a little bit too, where we're seeing more digital health and care and tools on the AI side. But you know, this is something that we're going to continue to see from a regulatory lens, from a reimbursement lens, you know, on the provider side for healthcare, we're starting to see some CPT codes from Medicaid and Medicare get paid for for technology delivered services. So this isn't something that you can sit out if you're a provider. You've really got to be at the table here. It's quietly weaving itself into the day to day oper, you know, and none of this is slowing down. So when you think about, you know, the things that are intangible, the workforce pressures, you know, the political situation we're in, the rates, workforce requirements, Medicaid redeterminations, and then the challenges on the commercial side as well, with margin and scale, you know, these are things that we don't have control over. So we've got to be, I think, more tightly wound than ever in our operations and in our strategy so that you can thrive beyond this.
- [11:02]
B
Thank you. You've had this great success over a long period of time. Take a moment on what leadership habits or routines have you found to be essential to your success during high growth or high pressure periods of time?
- [11:18]
C
Oh, gosh. You know, I think there are so many things that we have to deal with as leaders in this organization. You know, certainly in a consulting frame, we're an ad hoc part of dozens and dozens of client organizations. And when I look at some of the brightest leaders and when I look at what are the things that they do on a daily basis, it's really about that balance between the discipline on the operations side and staying ahead of the things right in front of you, balanced with really allowing yourself to dream about what your organization can be. And one of the biggest sort of gas pedal or breaks that accelerates that process is your board. And if you're on a, you know, private equity side or a for profit side, you have a board that has different components to it and you may have acquired some of those board members with your transaction or with your, you know, private equity backed service. But on the nonprofit side, your board members are acquired much differently and they have different skill sets and they don't always come from a skills matrix the way you've acquired them. So managing your board, educating your board, taking your board on a journey of where you want your organization to go, I think that is one of the toughest things to do, but the most important things to do as a leader today, because without that board support, without that board supporting your direction, that is something that could really anchor you in a negative way and sort of drown the organization. So I think board management is just one of those things not talked about enough that is so critically important.
- [12:58]
B
I love that you work closely with healthcare organizations, other organizations that are navigating rapid industry shifts. What emerging trends do you think leaders should be preparing for currently?
- [13:12]
C
I mean, there are so many things happening right now in our space. I think one of the things for leaders is how are we finding the next generation of leaders because there is a very competitive landscape with talent. And how are we recruiting talent, how are we retaining talent and what's the pipeline to keep them mentored and engaged to stay with us? You know, I saw an interesting statistic. It might have even been something that you posted within the last six months that said the average job turnover right now for a mid to executive role is two and a half years. Two and a half years. I know. You know, when my dad was in career and he worked for New Jersey Bell, you know, for a long time, the Bell Corporation, way back in the day, started answering payphones and he ended up as a vice president of sales. He was with his job for 25 years. Right. And that's what we grew up, you know, in my generation and your generation expecting. But we have a whole new workforce of talent now, and I think we need to think about how and how to engage with them differently, how to keep them excited and how to keep them close to us because we want them to stay and give those talents to the organizations that we run.
- [14:24]
B
Thank you. No, I love that there is so much change going on. At the same time, we talk so much about culture and organizations and it's often very hard to get right sometimes. You know, when you're in a good culture, people like being there. They're good at what they do, they get things done. Other places, you know, you're in a horrendous culture, people are out to get each other, they're sharp elbows, it doesn't seem cooperative. And you never know quarter to quarter whether things will be successful or not. What have you learned about building cultures that helps work, that fosters accountability, helps create alignment, helps cause momentum. What have you seen and learned?
- [15:02]
C
Yeah, I mean, gosh, I've certainly been on both sides of that equation. I spent the first, you know, I'd say 12 years of my career at a place where the culture was excellent and supportive and in sort of a flatline hierarchy where at all levels, folks were encouraged to use their voice and experiment and bring ideas to the table. And then I've been other places where, boy, it's chilly in that room, you know, and it's not warm and you are, you know, sort of pitted against each other. You feel that lack of collaboration. So, you know, I think people really want to work at a place and feel good about a place where they spend most of their time. And culture should really accelerate your mission. And it's not something that kind of sits on top of it like a motivational sticker. You know, culture should make your goals easier to achieve, not harder. And, you know, when you have psychological safety and when you can build in communication and you hold each other accountable, I think culture is easy to get, right? So, yeah, it can be tricky. But when you put the right leaders in place and you start with communication, right, from onboarding, you know, what are your team rituals? What are the things, you know, that folks rely on for feedback loops? What happens when you make a mistake? Those are the types of things that I think that feel good for people. It's not really something that you can just write. It's something that you have to celebrate. And, you know, also, I'll share. Growing up, I had the pleasure of having my. My maternal grandmother live with us for a really long time. And she shaped a lot of who I am today. And she used to always say, you get what you tolerate, right? And I think that plays in right here as well is the culture from a leadership standpoint. You're going to get what you tolerate as a leader, because it all stems from the top.
- [16:46]
B
Thank you. And Stacy, one more question. Looking back at your career, what is the defining challenge or turning point that helped shape how you lead today? And what advice would you give leaders facing similar moments?
- [17:01]
C
Oh, gosh, I mean, so many things right now, I would say when I look back, I mean, 30 years is a long time to be doing this work. But I think some of the most I would say painful personal things or the part of my life that was really painful personally, have really shaped and almost gifted me with the philosophy that I have today. And so in 2008, I'll share with you. I was really in the first couple years of probably my first senior leadership directly actor role. And my youngest daughter at the time was 4, and she was very unexpectedly diagnosed with brain cancer, and she died three months later. And I'll tell you, when something like that happens to you, it really redefines, first of all, your sense of what's a crisis. Right. And so I think about that in terms of everything that I thought was terrible that had led up to that point in my life really wasn't so terrible when you think about that, that, that three months in comparison. And the gift of that is that everything forward has really been put in a different perspective for me. And so, you know, for me, I think while you never get over something like that, that experience really helped me redefine, you know, what's urgent, what's important, and not to sweat the small stuff. And so, you know, going forward, when Something happens in an agency, whether it's, you know, an organization that's financial, whether it's operational, whether you really miss with a client, you know, you. I have that perspective now of it's solvable, it's fixable, it's not the end of the world, it's not the worst thing. So it gives me a little more levity in dealing with things that feel stressful or problematic. It's really reset my sense of, you know, what. What do I have to focus on? What's terrible, right? And what can be fixed. And the other part of that, you know, I think that I take with me is when I think about that time and some of that time I was still trying to go to work, and then obviously a good period of that time I was not. I was with her and then took about a month leave of absence before coming back to my role. And, you know, there was a lot of talk around, you know, would I come back and what would I do and what is this going to be like now to come back and lead a team and work forward. And although I couldn't certainly impact what was happening or what had happened, I really could decide what was going to happen next. I wanted my leadership and my life to really be more about resiliency. What that really taught me is no matter what the hard thing is, no matter what has happened, that you can't control, you can control what you do next and how you show up. That is something I think was incredibly impactful for me then the last gift or insight of that piece is really when I think about the times during that period where I walked into the grocery store, I walked to the gas station to pay to get my gas or whatever I was doing. No one around me knew what I was going through at that really horrible point in my life. Now I try to give people a little extra grace because I don't know what's going on for them. I think that best piece I can say is while that was a really challenging time and definitely a turning point for me and my family, it gave me some leadership gifts that I'm really grateful for and that I've used over the last 18 years.
- [20:26]
B
Thank you so much. That is a incredible perspective that you have, and I appreciate it so greatly because it really does let you sort out what's really important and what's okay. And we often say to our children, things are good, they're bad, they're all okay. And once in a while you run into something that's just not okay. And it is what it is and be able to differentiate those things is so important. And I love your perspective. Stacy it is a great pleasure for me to get to visit with you on the Becker Business, the Becker Private Equity Podcast Again today. We're fortunate to feature Stacy DiStefano, consulting for Human Services, our December CEO of the month. What a great pleasure to visit with you. We thank all of you in our audience for listening. We remind you always please go to Amazon. Buy our latest book pre ordered on Amazon the hardcover Building Great Businesses, Create Momentum, Overcome Setbacks and Scale with confidence. Thank you for listening to the Becker Business and the Becker Private Equity Podcast. Thank you very, very much.
- [21:34]
C
Thank you.
- [21:38]
D
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