By Steve Moran
It has been a long time since I have written much about Brookdale. They continue to discourage me and drag down how the industry is seen by the general public. One of the big reasons I hate writing about Brookdale is because there are many, many very fine leaders who are, at the local level, impacting lives and changing the world.
Writing about Brookdale feels like I am disparaging those people, when I am not.
On January 9, 2024, Brookdale released its December 23 occupancy report, where the bullet points proclaim:
- Fourth quarter 2023 weighted average occupancy increased 80 basis points compared to the third quarter 2023 to 78.4%.
- Achieved twenty-six consecutive months of year-over-year weighted average occupancy growth.
- December’s weighted average occupancy increased 130 basis points year-over-year, and grew nearly 900 basis points since the start of the recovery in March 2021.
It sounds pretty good, except for two things the bullet points hide — which you can uncover by looking at the fine print:
- The weighted average occupancy actually dropped from 78.4% in November to 78.3% in December.
- The ending occupancy month-to-month dropped even more, from 79.6% in November to 79.3% in December.
Then there is one final thing. … The NIC year-end occupancy rate is 85.1% — more than 5 percentage points higher.
Adidas, Brookdale, Senior Living, and Rapid Turnaround
It was against this backdrop that I read “The CEO Who Gave 60,000 Employees His Cellphone Number.” The article is all about how Bjørn Gulden took over floundering Adidas with the goal of turning it around in short order.
He has now been at the helm a little more than a year and has taken the company from losing more than $700 million in the final quarter of 2022 to a projected profitability in 2024.
He did it by doing things differently … including giving out his personal cellphone number to all 60,000 employees, which translated into 200-plus calls a week in the early days of the turnaround. Here are some quotes from the article. Look at them from the context of Brookdale or any other senior living organization that is struggling.
“The challenge, he said, was “to wake up the people who didn’t understand we were losing.”
“He found a company that had forgotten how to do the simple things.”
“‘Our industry isn’t that complicated,’ he said, but at Adidas ‘there was a culture of finding reasons not to do things.’”
“From his days playing soccer, he remembered how some players would ‘hide’ on the field, seldom making errors but achieving nothing. He felt that a similar fear had paralyzed Adidas.”
“’Just do it! Break some rules!’ said Gulden, a blond and youthful 58-year-old who invariably sports an Adidas tracksuit top and sneakers.”
“There were also too many ‘lame ducks’ at the top of the company, Gulden said. Now more department heads report directly to him and make prompt decisions on new products and concepts.”
This final quote really hit home with respect to our industry:
“Why wait?” he asked.
There are enough older people with the financial resources to fill every single senior living unit in North America (yes, you too, Canada). Their lives would be better living in senior living than at home. The senior living capital providers would be so much more successful; owners and operators would sleep like babies at night — if only we were willing to believe the industry can be turned around.
If only we were willing to break some rules, get rid of some lame ducks, make prompt decisions, wake people up to the idea that we are failing, and sell shoes. We are talking about people living the last chapters of their lives.
The Biggest Lesson
The biggest lesson of all was that the people, the 60,000 employees, knew what needed to be done to turn the company around. When their CEO stopped talking to them and started listening to them, and then used that knowledge to make the company better, things turned around.
I can’t imagine ever getting the call, but Brookdale leadership, I am here and ready to help you make this happen. Give me nine months, and in only three months, publishing those monthly occupancy reports will become a lot more fun.