By Steve Moran
As soon as I saw the news that Andy Smith was stepping down and Cindy Baier, the current CFO, was stepping in as the new CEO I requested an interview with my fingers crossed. It was a huge market-rattling day for Brookdale -- one where their stock price dropped around 20% from an already terrible price.
Here is what the entire package of news out of Brookdale looked like:
The strategic review was completed
Andy Smith is out as CEO
Brookdale announced positive earnings for the first time in . . . a long time
Another buyout offer was rejected
Cindy Baier is in as CEO, formerly the CFO
I connected with Cindy for just a few minutes at the end of the day. I wasn’t sure if it was exactly the right approach, but I asked how it felt to watch the Brookdale stock tumble 20% on her first day on the job. She was totally unphased and started by pointing out that she does not officially become CEO until February 28 and given the end of the strategic review, it was not particularly unexpected.
Where It Starts
The rest of the conversation was more substantive about what her priorities will be. Her primary focus will be on the mission of Brookdale and the people. What this means is a recognition that no matter how big the organization is, senior living is a highly personal local business.
The Big Company Problem
As I have chatted with Brookdale team members and ex-Brookdale team members I have heard three big complaints:
Too many reports
Too many meetings
Too much interference by regionals, meaning the regionals will call or drop-in and expect their needs to be the most important (even if not really very important) which makes it really hard to be an effective local leader
The way Cindy is approaching this is that the executive directors will be CEOs of their own organizations and that they will have a lot of control over how their community runs. This means making local decisions about programming, hiring, marketing, and pricing. They will have the ability to make each Brookdale “a local experience”.
The idea is that the mothership will be there to provide support to the local community but not to dictate as much as reasonably possible.
I pushed on the reporting and meeting complaints and Cindy said they are committed to figuring out how to stop doing things that keep leaders from spending time with team members, residents, and family members. She also said that a big priority for her was to get out to visit a bunch of communities, which might be the most important thing she said.
My Contrarian View
I know many in the industry believe senior living is too personal, too local, and too complex to have a chance of success on the scale of Brookdale. I disagree. I think it is possible. In fact, I believe so strongly that I went out and purchased a modest number of shares in Brookdale (a lot more shares than I dumped a few months ago).
The job won’t be easy for Cindy, but she has a personal track record of success as a leader. I am feeling very optimistic about my purchase which was done before we chatted.
I can hardly wait to see the progress.