By Steve Moran
I sometimes feel as if there are two polar opposite Brookdales operating under the same name.
The Nimble Exciting Brookdale
There is the Brookdale that is aggressively exploring new technology and new programs. This Brookdale seems amazingly nimble and aggressive, behaving more like a young, hungry start-up than the behemoth of the industry. They are doing new things, trying new things and exploring ways to be at the cutting edge of caring for the nation's seniors.
They are at the forefront of some exiting research initiatives that will keep residents healthy longer.
The “What The Heck” Brookdale
Yesterday (March 3, 2015) Brookdale announced their Q 2, 2015 earnings. The highlights/lowlights included:
- A decline in cash from facility operations (from $0.63 per share the prior quarter to $0.60
- A 0.3% decrease in EBITDA
- A same community monthly revenue per unit growth of 2.8% compared to Q2, 2014.
- Average occupancy for all consolidated communities in the second quarter of 2015 of 86.5%, a decline of 90 basis points from the first quarter of 2015 which was a decline from the prior quarter.
I was not terribly surprised by the results I had heard rumblings from a number of people that occupancy seemed to be getting worse rather than better. The stock price over the last number of weeks would seem to indicate the market generally sensed it was coming with the stock sliding from more than $38 per share to around $30.60 today (August 4, 2015).
What It Means . . . If Anything
On one hand this is just one company that, while facing some challenges, is still fundamentally healthy and moving forward. On the other hand, because they are so big, they become the face of senior living to regulators, pundits and enemies of for-profit senior living and as such Brookdale is hugely important to every operator.
In a couple of days I will publish a second lessons-we-can-learn article.
Back To Basics
As I talk to people across the country that work with and for Brookdale there seems to be a high level of frustration that even small obvious decisions, that would clearly benefit the company and individual communities, are painfully difficult to get made. This suggests that politics are a huge hindering factor.
I also hear from people who work at the local and regional levels that they are required to spend many hours a week doing reports and participating in telephone conference calls. This is time and, more importantly, energy that is not being spent on the team, residents, families and prospects.
The very worst part of all of this is that over time these stress-inducing, non-productive activities frustrate and drive away star leaders, which make improvement incredibly difficult.
I love the innovative stuff Brookdale is doing and want them to be successful beyond anyone's wildest dreams. I am convinced that they need to focus on the basics:
- Figure out how to give local leaders (executive directors) ownership and freedom to make their communities work in the local marketplace.
- Teach regional and divisional leaders how to be inspirational.
- Focus on making every single employee love working for Brookdale, because that makes residents and families love Brookdale.
- Lighten the administrative load at the community level so that managers can spend their time doing things that will make a difference.
Wishing nothing but the best for Andy Smith and every single Brookdale team member, family member and resident.