Turnarounds at GM, UnitedHealth Offer Lessons for Brookdale

In 2009, automotive giant General Motors (NYSE: GM) and insurance company UnitedHealth Group (NYSE: UNH) both found themselves at a crossroads—and the ways the organizations went about navigating their transformational times could provide valuable lessons for Brookdale Senior Living (NYSE: BKD).

In June 2009, following years of turbulence and financial losses, Detroit-based multinational corporation GM declared bankruptcy. A few months later, at the behest of its then-vice president of global human resources, Mary Barra, GM whittled down its 10-page dress code into a two-word mandate: “dress appropriately.”

The dress code change was made, in part, to help overhaul GM’s employee culture during a time of significant transformation—and the organization believes that the decision helped to usher in a new atmosphere, and sense of empowerment, companywide.

“Simplifying [our] dress code from a several-page document to our current policy, ‘dress appropriately,’ is just one example of the many things we’ve done to create a culture that fosters teamwork, creativity and innovation,” Kerry Christopher, GM’s internal communications director, told Senior Housing News.

Specifically, the new dress code helped GM, as a company, feel less bureaucratic, and helped eliminate the need for micro-management from top executive leaders. At the same time, it gave managers more authority to make their own common-sense calls over what is and is not appropriate.

Like GM, the nation’s largest senior housing provider—Brookdale Senior Living—has found itself turning over a new leaf, and is encountering some of the same challenges in overcoming bureaucracy and transforming its culture.

Brookdale didn’t declare bankruptcy, but in February it did announce the completion of a strategic review process that resulted in several leadership changes, including the departure of Andy Smith as president and CEO.

Cindy Baier, Brookdale’s former CFO, has replaced Smith as the company’s president and CEO. But Baier also calls herself “chief keeper of the culture,” she told SHN.

This self-given title is all the more important as the Brentwood, Tennessee-based senior housing giant looks to execute a turnaround, both in terms of its share price and operations.

Baier has been tasked with transforming a massive organization. She plans to empower its roughly 82,000 associates in the process, while simultaneously creating a better work environment.

Encouraging employee autonomy

When Brookdale merged with Emeritus Corp. in 2014, leadership became responsible for creating a cohesive employee culture that would carry the resulting company forward.

Insurance giant UnitedHealth Group had already been through this first-hand.

Though certainly a daunting task, establishing a cohesive culture post-merger can be done, Dave Sparkman, senior vice president of culture at UnitedHealth Group, suggested at the SHINE 2017 Senior Care HR & Human Capital Executive Summit last October.

In 2009, UnitedHealth was “adding a company to [its] portfolio every month, large and small,” Sparkman explained. Naturally, it became incumbent on UnitedHealth to integrate these new employees into the organization’s culture.

This was not something that was going to happen on its own, Sparkman said.

“We [couldn’t] have all these [new employees] floating around without saying what’s expected of them,” he explained.

At the same time, UnitedHealth was struggling to engage its own longtime employees. In 2009, according to Sparkman, overall employee engagement among the company’s approximately 140,000 employees stood at just 72%.

To go about fixing this, UnitedHealth decided to “diagnose” its existing culture through interviews with several legacy UnitedHealth employees. During these interviews, staff were asked about the organization’s current culture, and the dream culture they envisioned for the organization.

Then, UnitedHealth began hosting two-day orientations regarding what was expected of all UnitedHealth employees, new and old. As of October 2017, 17,000 employees had been through the orientation workshop, and 13,000 had been through a follow-up workshop, designed to take place six weeks later.

Like GM, UnitedHealth ultimately determined that the best way to empower and engage employees was to inspire them to do the right thing, and trust that they will follow through. For this reason, the workshops are not a “lecture series,” but “insights into how to be,” according to Sparkman.

This strategy has resulted in a notable increase in employee engagement—from 72% among 140,000 employees in 2009 to 82% among 225,000 employees in 2016.

“The key for us, at least, was we weren’t telling people what to do…we were allowing them to discover what they, as individuals, should do,” he said.

Brookdale embraces fun, empowerment

Employee culture is top of mind for Cindy Baier, especially as she works to steer Brookdale in a new direction. And like GM and UnitedHealth, it’s seeking ways to increase employees’ sense of autonomy and engagement.

Baier, for instance, stands 100% behind the four elements of the provider’s culture—passion, courage, partnership and trust—but she also hopes to add in a bit of fun.

“We’re always looking for fun ways to engage our associates,” Baier told SHN. “We’re really trying to give our employees a fun way to think about what matters to the company and to our residents.”

At Halloween, when Baier was still Brookdale’s CFO, she and Mary Sue Patchett, Brookdale’s executive vice president of community and field operations, dressed up as M&Ms—Baier in green and Patchett in red. On Christmas Day, Baier visited local Brookdale communities in the Nashville area to talk to residents and help them celebrate the holiday.

Now, as president and CEO, Baier is continuing to engage regularly with regional and community-level Brookdale staff nationwide.

“I’m spending at least 20% of my time trying to get out into the field or into our offices doing town halls and community visits,” she said.

All the while, Baier is intending to empower individual executive directors to be leaders in their own right.

“Executive directors are the CEOs of their own communities,” she said.

Barra, who is now GM’s chairman and CEO, has suggested that offering employees this kind of autonomy can have an invaluable impact on employee morale and engagement.

“If you let people own policies themselves—especially at the first level of people supervision—it helps develop them,” she said at Wharton People Analytics Conference, according to Quartz. “… [These] small little things changed our culture powerfully. They weren’t the only factor, but they contributed significantly.”

Because many of the employee recruitment, retention and empowerment initiatives that Brookdale has launched in recent months are “competitively sensitive,” the organization is unwilling to discuss them publicly. Still, they’re proving worthwhile, according to Baier.

“We’re having success in improving retention in top community leadership and in improving all of the retention within our communities,” she said.

Written by Mary Kate Nelson