Brookdale CEO: ‘Execution, Execution, Execution’ is Mantra for Mega Earnings

For Brookdale Senior Living (NYSE: BKD), it’s full speed ahead. At least, that’s the message from company leaders, who are trying to hit the gas pedal on growth and leave integration woes in the dust.

Twenty-seven months after the nation’s largest senior housing provider announced its acquisition of Emeritus Corp., all of the highly-publicized integration challenges are “in [Brookdale’s] rearview mirror,” CEO Andy Smith said during the company’s Investor Day on May 26.

Brookdale is officially one company, with one management team, and every member of that team is “completely confident in the company’s vision and its plan for moving forward,” Smith said.


That plan? Unlocking the potential for organic growth that is inherent in Brookdale’s platform.

“For the next several years, what we are focused on as a company is organic growth,” Smith said. Brookdale is confident its plan will deliver “tremendous” growth and cash flow—and make it the most cost-efficient provider industrywide.

“We’re well on the way in this area,” Smith said.


Brookdale’s plan for 2016 includes $70 million in cost savings, an amount that is made possible due to the company’s scale, Smith explained. At present, Brookdale has 1,121 communities with about 108,000 units throughout the United States.

As a leadership team, Brookdale executives will concentrate wholeheartedly on streamlining and simplifying operations.

“Our team is going to be laser-focused on execution, execution, execution,” Smith added. “Operational excellence—doing the basic things right—doesn’t sound very sexy, but generating cash flow is sexy.”

Brookdale has projected that by the midpoint of 2018, it will have grown its adjusted EBITDA to more than $1 billion and its cash flow to $420 million, Smith said.

Restoring the magic

The company’s biggest strength and most important asset, he emphasized, is its frontline staff.

“There are 82,000 folks at the foundation of our company,” Smith said. “That’s where it starts and stops.”

Brookdale has previously shed light on its plans to reduce staff turnover at the community level, which proved a big problem for Brookdale during its integration with Emeritus. Now, Brookdale shows signs of positioning itself as an attractive place to begin a career, and stay on as a team member long-term, according to Mary Sue Patchett, Brookdale’s executive vice president—community and field operations.

Several executive directors who left Brookdale during the Emeritus integration have made a decision to return to Brookdale, Patchett said during the Investor Day presentation—and for two main reasons.

First, Brookdale’s national platform offers career opportunities that are much better than the career opportunities offered by Brookdale’s competitors, Patchett said. Second, Brookdale’s proprietary management tools make employees’ lives easier.

One of these tools, the Brookdale Excellence Standards Tool, or B.E.S.T., is a fully digital tool that was years in the making, Patchett said. B.E.S.T. makes more than 500 metrics available to Brookdale associates in real time, every day. At the same time, it enables Brookdale to increase staff retention and boost resident experience, Patchett said. Brookdale briefly touted B.E.S.T. during its last earnings call, but shed more light on the tool during the Investor Day presentation.

Specifically, the tool provides staff members with clear expectations regarding what to do and how to do it, enables fully transparent performance management and ensures cost, accountability and performance, she said.

Brookdale implemented the tool because it is expected to enhance the lives of staff members across the company, according to Smith.

“It’s not because the tools are cool—although they are—but they simplify and streamline the lives of these folks,” Smith said. “These operating tools are designed to free folks up who are on the floor to create that magic in our business.”

Written by Mary Kate Nelson

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