As printed in The Marketplace - 2018 - September/October
By Mike Strathdee
Ron Schlegel’s interest in seniors developed at an early age.
When he was 10 years old, his father, Wilfred, purchased the Egerton private hospital, a nursing home in London, ON. Ron and four of his siblings, along with their parents, moved into an attached apartment.
He carried meal trays and ran errands for residents before school in the morning, again at noon and for the evening meals during much of the next two years. “Once I got the trays finished, I could go play sports.”
Doing homework at the bedsides of residents meant he sometimes benefited from the assistance of retired teachers. And there were always other tasks to be completed. Ron typed up monthly ministry reports for his father, who worked as a farmer and pastor in addition to operating the nursing home. “He involved me a lot in those ways.”
Farming and the nursing home were the two threads that formed Ron’s early life and have stayed with him. “In both cases, it gets into your blood.”
Six and a half decades later, those early involvements endure, on a much larger scale. Founder and chairman of the board of RBJ Schlegel Holdings Inc., he oversees a family enterprise that is the largest private operator of seniors residences in Ontario and the biggest commercial producer of turkeys for meat in Canada.
The Schlegel family also owns a nationally recognized mental health, addictions and employee assistance program company, and a commercial and residential development division that works to create vibrant urban neighborhoods.
All told, the Schlegel ventures employ more than 8,000 people across Canada. There was no grand strategy on how Ron became involved with so many different enterprises.
He never dreamt that his family would work in so many different areas, let alone the size these operations would reach. “They grew on their own, organically for the most part. I was never a seller.”
Ron bought into the nursing home business early in his adult life, while juggling careers farming and teaching at the University of Windsor. After selling Egerton, Wilfred Schlegel became a partner in a 98-bed nursing home. As his health deteriorated, Wilfred sold his shares before Ron could make an offer. Learning of Ron’s interest, the partner stepped aside to let Ron buy that stake over five years.
Ron went on to teach at the University of Waterloo for two decades, helping to set up the department of Health Studies and Gerontology prior to turning his attention to business full-time.
Schlegel Poultry seems at first glance not to be an obvious fit with other Schlegel operations. Ron admits that the turkey business is his way of staying connected to farming roots. But he quickly makes a link to other operations, using health as the common denominator.
Just as Schlegel Villages deals with (residential) health care for seniors and Schlegel Urban Developments works to build pedestrian-friendly communities, the turkey division produces healthy food, he said.
“We tried to achieve a scale in each one that is competitive, of a size that is sustainable. Each one stands on its own.”
All three of Ron and Barb Schlegel’s sons have leadership roles in the company. Rob is chief financial officer, Jamie is president and chief executive officer, and Brad is vice-president of design and construction.
“I told each of them, I’m not going to twist your arm,” Ron said. “Too many fathers have done that, wanting their sons to take over the business. I told them, I’ll hold the door open, but you have to walk through it.”
Jamie and Rob got involved in the business in the early 1990s. Their brother Brad, a former professional hockey player who played for two NHL teams, for several European teams and won two Olympic silver medals with Team Canada, joined in 1997.
As his sons progressively became more involved in decision making, Ron decided in 2005 that all growth had to come as a result of their efforts.
Jamie has never wished that the family was involved in less areas of business. “They’re all interesting in their own way,” he said.
He credits the senior leadership teams in each division for allowing the business diversification within RBJ Schlegel to be successful.
Schlegel Villages has 19 homes totalling 5,000 beds across Ontario, with four expansion projects underway. The choice of the village name is deliberate. Each facility tries to be a community hub, offering use of space to local organizations without charge on the condition that residents can be involved.
Schlegel Villages has tripled the number of seniors facilities it operates over the past decade. “We think in terms of whether we can serve people best in terms of our model,” Ron said.
Asked about the geometric growth in the scope and size of various Schlegel enterprises in recent years, Jamie notes that “geometric growth has been three generations in the making.”
“Grandma and grandpa laid the values foundation on which we built the modern organization,” Jamie said, repeating a story he tells often as part of onboarding new leaders.
“Mom and dad kind of further developed that, and Dad kind of overlaid the vision of the villages, the RIA (the Schlegel-UW Research Institute for Aging), the bringing together of research and practice… Now it’s the third generation continuing that forward, standing on that rock-solid foundation.”
The Schlegel organization’s most important differentiator is the family culture, Jamie said. “That goes back to the values that grandma and grandpa lived their lives by.”
Measured growth has involved ensuring each division has solid footing before taking the next step across the stream, Jamie said, repeating one of Ron’s business maxims.
“We have an interest in trying to lead, being the best, but not to be the biggest,” he said.
Dealing with the growth in the organization hasn’t changed family dynamics, Jamie said. “We work together as we always have.”
A major emphasis for RBJ Schlegel as the organization grows is keeping decision-making as close to the customer as possible to maintain a nimble, entrepreneurial environment. “We want to get to the point where 95 per cent of all decisions in the organization are made on the front line, not in some meeting room separate from it.”
Attention to culture-building activities and habits has become increasingly important for the Schlegels. “Our biggest challenge today is to maintain the family culture, with this growth,” Ron said.
This spring, RBJ closed a deal to buy the St. Jacobs Farmers Market, whose previous owners, Mercedes Corporation, included long-time MEDA supporters in the Milo and Ross Shantz families, plus a number of other community shareholders.
When the second generation owners of the Mercedes businesses approached the Schlegels, they initially weren’t interested in buying. “As we thought about it more, it did fit into our overall Schlegel Urban Developments strategy,” Ron said.
Five years from now, the Schlegels hope to develop the theme of the farmers market in ways that haven’t been tried yet, on unused land in the 45-acre parcel north of Waterloo. ◆
Homewood purchase a major growth point for Schlegel
Luck is where opportunity meets preparation, the magnet on Ron Schlegel’s refrigerator at home suggests.
“That’s always been our guiding philosophy in many ways,” he said in reflecting on the growth of various Schlegel businesses.
Nowhere has that been truer, perhaps, than in the events that led to the acquisition and growth of what is now RBJ Schlegel holdings’ largest division, Homewood Health.
Homewood provides outpatient mental health and addictions treatment and management programs, as well as employee and family assistance services. The Guelph-based organization has grown to over 4,500 employees across Canada, more than half of RBJ Schlegel’s total head count.
RBJ Schlegel’s relationship with Homewood, which began in 1997, developed in different ways than anyone expected. Schlegel first partnered with the Guelph-based organization to more aggressively develop retirement homes. They started out with a plan for three sites. That relationship grew in 1998, when the Ontario government issued a call for proposals to dev-elop 200,000 long-term care beds.
The two organizations submitted six joint proposals, five of which were successful.
Homewood, at the time a publicly traded company with 650 employees and over 800 shareholders, was a low-risk firm that paid consistent dividends and took a long-term view, highly compatible with the RBJ philosophy, Ron said.
That changed in 2010 when a private equity firm made a play to purchase Homewood.
RBJ Schlegel had been accumulating a small ownership position in Homewood with the goal of gaining influence and a board seat. Knowing that private equity firms seek short-term returns, the Schlegels brought in advisors and offered a higher, successful $210 million bid to attract shareholders and scare off the private equity firm.
What the Schlegels didn’t fully realize at the time was, they weren’t just buying a renowned addictions treatment and mental health organization. Just prior to the hostile takeover bid by the private equity firm, Homewood had purchased a Vancouver-based human solutions firm, getting into the employee assistance program business.
Since purchasing Homewood, the Schlegels have acquired other mental health hospital operators. Homewood now includes hospitals in Montreal and Victoria providing in-patient treatment, mental health and addictions services. The division has employee assistance arms in major cities across Canada, and outpatient treatment clinics in Vancouver, Edmonton, Calgary, Mississauga and Montreal.
Ron chairs the Homewood Research Institute, a not-for-profit organization that works to improve the outcomes of mental health and addictions treatments by partnering in research that enhances practice.
The Schlegels draw on well-connected businesspeople and public figures to advise Homewood. Former governor general David Johnston, a Schlegel friend since his days as president of the University of Waterloo, is a member of the Schlegel Health Care and Homewood boards. “He has contacts and connections worldwide,” Ron said.
Schlegel has also tapped a former Ontario premier and a former deputy minister of health, the former head of a major Canadian meatpacking firm, and the former president of a Canadian steelmaker as board members to ensure best governance practices within Homewood Health. ◆
Aging research is primary passion of Schlegel patriarch
He hasn’t been a university professor since 1991, but research related to aging and seniors remains one of Ron Schlegel’s primary passions.
RBJ Schlegel, his family holding company, has made seven-figure gifts to numerous organizations, including a community sports field in Kitchener, where he lives, and to set up MEDA’s volunteer program.
Those gifts are dwarfed by a 10-year, $50 million commitment to the Schlegel-UW Research Institute for Aging (RIA).
The RIA, a centre of excellence for aging attached to the Schlegel Villages University Gates seniors complex in north Waterloo, has partnerships with several post-secondary institutions. A local community college’s personal support worker and nursing students take their courses at classrooms at the site. Many will do practicums there as well. Textbook lessons can be quickly followed up with hands-on, experiential learning with residents.
Doing research on site at a seniors facility provides a living laboratory. When researchers find something that works, they don’t wait to publish results before trying it, said company president Jamie Schlegel. “We get this kind of real-time application of research that happens.”
The RIA facility includes research on bone density, “fast forward aging” that affects astronauts on the International Space Station, who lose bone density during their off-planet trips. The RIA is the primary organization to study the health effects of being in space for the Canadian Space Agency.
“Can you prevent it? Can you recover from it? Can you slow it down? All those questions can be studied,” Ron says.
Currently a three-storey building, the RIA is bursting at the seams. Three more floors are being added to accommodate additional research.
Ron has received numerous local, area and national awards for community and business leadership, “probably more than I deserve.”
Community building is a common theme in these honors. One expression of that interest in community is exploring growth in spirituality in seniors. “It’s the only dimension of a human being that can continue to grow until the very last day,” he said. “Everything else will start declining, even if we age well.”
The RIA partners with Conrad Grebel University College to support a specialist in spirituality and aging who does research, teaches graduate courses on the subject, and conducts an annual spirituality and aging seminar.
A Schlegel initiative that got a lot of media attention this year was a green park bench with the words #ElderWisdom written on it. The bench visited 15 cities across Ontario. People could come sit and chat with a senior. This simple idea sparked requests from across Canada and several other countries.
The Schlegels are working to realize a dream that Ron’s father, Wilfred, articulated four decades ago. Wilfred wanted the back half of his Shady Pines campground in southwestern Ontario to become a meditation/spiritual development centre. The seniors camping facility, slated to open in 2021, will include yurts or cabins and washrooms designed for seniors. “I’m going to be my own customer too, so I’m driven to make that happen,” Ron said.
He has no plans to retire. At age 75, after several serious bouts of pneumonia and open-heart surgery, he has slowed down somewhat. “Eight hours (a day) at this point, cuz I have to allocate time for my health.”
“Like I’ve always said to people, when they ask when I’m going to retire, it’s impossible to retire, because I haven’t worked a day in my life. How can you retire when you’ve never worked? It’s just been a lot of fun.” ◆