Seniors Housing Business

APR 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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www.seniorshousingbusiness.com 43 April 2018 n Seniors Housing Business a lot of changes at the corporate level, what changes can we expect to see at the actual communities themselves? Baier: We are expanding our program to invest deeper in the organization. We made good prog- ress with our efforts to improve the retention of our executive directors and health and wellness directors last year and are pleased to build on that success. We're improving how we recruit and onboard our new associates into their roles. We will ensure that our associates' interests are closely aligned with the work they do, that they know the work they do is meaningful, and that they receive proper rewards for their efforts. At the same time, we will invest in technology to remove routine tasks so the associates can center their attention on the work they enjoy most: taking care of our residents. Our strategy also improves the focus on our residents and patients. We will continue our work on enhancing our customer value proposition: differentiating based on quality, choice, personal- ized services and associates who care. At the same time, we are discon- tinuing well-meaning, corporate department-driven initiatives that distract from the things that matter most. SHB: On a recent earnings call you noted that there had been an "indication of interest" in buy- ing the company, but Brookdale rejected it. What made you decide not to take the offer? Baier: The board believes Brook- dale can create more value for our shareholders by driving better performance as a public company under new leadership. We believe the rejected indication of interest and our current share price are significantly below the company's intrinsic value and below our net asset value. SHB: Is a sale still on the table for the right price? Baier: Although the formal pro- cess has concluded, as always, our board is committed to evaluating opportunities to enhance share- holder value and will continue to do so. SHB: How do you think your finance background could help to lead Brookdale to greener pastures? Baier: While Brookdale has underperformed, we have a strong foundation and are committed to our mission and to the residents we serve. What has changed is that over the past few months, I've helped formulate a turnaround strategy. I'm working directly with our operational, sales and marketing leadership teams to plan and begin implementing tactics to improve our results. We analyzed our oper- ations to determine what's work- ing and what's not. We developed a concrete plan to focus on the key value drivers of our business model. We are shifting our focus to win locally while leveraging our industry-leading scale, and I'm confident we'll get to where we want to be. SHB: This isn't the first trou- bled company where you've held a leadership position, including Sears and The Bon-Ton. How do you hope to use that experience to help right the ship at Brookdale? Baier: Leadership skills are transferrable. What matters is focusing in on a particular situa- tion, understanding the particu- lars, and determining where the opportunities and obstacles are. At Brookdale, the first step is all about the mission and it's all about the people. This is a local business. And what really makes a differ- ence in this business is the dedi- cated and caring associates that we have who are delivering quality service to our residents. And our plan is about differenti- ating at that local level. We'll have choice. We'll have quality. We'll have caring associates. And our experience will be personalized. That will make the difference for the residents that we serve and for their families. SHB: Even with significant reductions in both your ownership and operational portfolio, Brook- dale is still the largest seniors housing owner-operator in the U.S. by far. The company has over 1,000 communities capable of serv- ing more than 100,000 residents. What are the advantages and dis- advantages of that size? Baier: In organizations as large as ours, there are going to be things that are not discretionary. We don't compromise around regulation. We will make sure that we're compliant with all gov- ernment regulations and license requirements. But when it comes to delivering the local resident experience, these are very local decisions and executive directors have choices on many things. SHB: You've been pruning your portfolio recently. Do you plan to continue reducing your size in this way? Baier: We will continue to look for opportunities to create value from our real estate, like the approximately 30 asset sales we announced in our earnings call, while we pursue our turnaround plan to improve our operating per- formance and financial results. SHB: What's something our readers might be surprised to learn about you? Baier: I learned about being a caregiver when I was young, growing up on a farm in central Illinois. One of my responsibilities was providing care for my blind grandfather. I am a genuine believer in Brookdale's mission of enriching lives, and I personally experienced the importance of it last year when my mom went into a decline and passed away. As we approach an increase in the population growth of people over age 75, this heartbreaking personal experience of my own is one that many people all over the country will continue to endure, and it's something that further connects me to this inspiring, mission-driven organization. n

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