By Steve Moran
A few evenings ago, I sat down and wrote a rant about Brookdale after seeing the price plunge to their share price below $9.00 a share (now back over $10.00). In my rant I wondered why the Brookdale Board hasn’t done anything substantive to fix the leadership problem.
When I write rants I almost always sleep on them before putting them into the publication process, knowing that rants are often not my best stuff (but sometimes they are). By morning it felt kinda smarmy -- not because it didn’t contain truth, but because I realized it wasn’t helpful . . . it was just a rant.
So . . . I do think Brookdale continues to teach some valuable lessons for the rest of us . . . and yes, last week I sold the shares I purchased for around $31 for about $9.50. Here are the lessons:
Doing the same thing over and over again hoping for different results is not a way to really get better at anything. I know management would argue they are making changes and that there is some progress. The evidence is scant that this is true.
Praying for a change in market conditions almost never works. We call that gambling.
Sometimes baby steps are not good enough. I think you see a theme running through the earnings calls, that things are changing slowly so just hold on until they get better. The problem is the stock price keeps tumbling and, if anything, the market conditions are getting worse faster than the changes being made.
Focus on the most important things first. Almost every time I am at a senior living trade show I cross paths with some technology company that is so excited about having a pilot going with Brookdale. Good for them I guess, and maybe good for Brookdale, but right now they have a huge occupancy problem and that should be the only thing they are focusing time and resources on.
Pilots that are narrowly focused on solving that problem make sense, anything else does not.
A long downhill slide makes recruiting and keeping great people very very hard. I want to be careful here, because I know Brookdale has great people working for the organization. These folks love their jobs, love the people they are working with (and maybe for). They have an “I-will-go-down-with-the-ship-because-it-is-my-ship” approach to their jobs. I admire that.
And, for specific circumstances, great leaders might very well take a job with Brookdale. But over the last few years, we have seen some great, great talent leave for greener pastures and it is hard to be in Brookdale's position and hire the best of the best . . . particularly given the competitive marketplace.
[Another article to come on how Brookdale could solve this problem.]
Great marketing does not solve basic problems. Brookdale has done an amazing job of marketing their communities with their television ad campaign. Every time I see one, I think, What a great place to work or I bet they would take great care of my family member. And I would note there are some really great Brookdale communities. But there has to be more than that.
Brookdale needs bold and audacious actions, not slow and incremental ones. Bold and audacious can feel scary but look at what slow and steady has gotten them so far.
Better than a rant I hope!
And yes . . . I still think Brookdale should put me on the board . . . or better yet, hire me to be their COO.