• October 4, 2017

    Meet Richard Brewer, President and CEO of Commonwealth Senior Living, a provider of independent living, assisted living and memory care services across 22 communities in Virginia. The Charlottesville-based company began through the acquisition of three properties in 2002 and has since expanded as a regional operator within the state. Brewer first learned about the business through the mentorship of the owner of a yacht, while serving as a member of that boat’s crew post-college. He has since served countless job functions within senior living communities, including his post today as chief executive.

    Spotlight on Technology

    In what areas have you been making major tech investments?

    Our investment in our operating systems was significant, and it’s not a one-time cost. You need lots of people to really pull the data out. We collect tons of data, but the people who need to see it aren’t experts in these software programs, so someone has to pull it out.

    Is there any data point you wish you could have?

    I’d love to know the market occupancy and average daily rates. In the multi-family business it’s very transparent.

    Do you think the industry’s done a good job investing in technology up to this point?

    I think there are a lot of good programs, but they don’t talk to each other, and that’s sort of a challenge. I won’t say it’s seamless, and it is expensive. Passing meds electronically was the first thing I wanted to do when I took over the communities 15 years ago. It took five years to have a program to do it, and I think the programs are now the best they’ve ever been, but they could get better. Our technology needs to be in the hands of our associates who are on the front lines. Gathering all this data and pushing it to mobile phones is going to be critical.

    We sat down with Brewer to hear his take on the staffing crisis, why his mom made the best secret shopper around, and how he has learned a thing or two about management through his own son working at Chick-fil-A.

    Tell me about how you got into senior living.

    I went to James Madison University in Harrisonburg and graduated having never created a resume. I didn’t apply for any jobs, so I got home and I was working as a temp proofreading the Alaskan Legal Code for LexisNexis. Truly inspiring…Not really, it was miserable! Then I was offered a job on a yacht going to the Caribbean as crew, so I quit my job the next day and got on the boat. The guy who owned the boat actually opened the first assisted living community in Virginia.

    What was his name?

    Jim Bullock. We took off for a year and we sailed from Maine down to Cuba, to the Virgin Islands. The boat only goes seven miles per hour so you’ve got a lot of time to talk! I thought I’d go to law school after I got out but [Jim] had some health issues and decided to restructure his company, and I sort of helped him out with paperwork and he taught me about NOI and valuations — this is the late ’90s — and I ended up going to the NIC conference 20 years ago. I had a sheet of paper and I walked out with what was, at the time, the national record price-per-bed deal, and I became a deal junkie. I thought that was pretty cool. He more or less retired and sold some of his communities and kept others, and so at 24 or 25 years old I was running these other communities, and took part of the proceeds and invested in the remaining properties to fix them up. It was a family company, so I did everything from working with the banks and getting financing to going to the buildings and painting the hallway and mulching the yard before the banks came and visited. When an executive director left I became the executive director. When the cook didn’t show up I cooked dinner. When the third shift didn’t show up I’d go in and work third shift. I got all this experience at a young age and absolutely loved the business. There is no better feeling than when you walk out of a community knowing you’ve changed the lives of your residents and their families who come there. It’s a very rewarding job. It also is a good business. I had a lot of fun doing it.

    It was a family company, and I wasn’t family, so the opportunity came up to acquire the buildings we had actually sold some years before, and that was the start of Commonwealth.

    When you were on the boat, how did senior living come up? Did the owner want you to come work for him?

    I loved boats, and when you’re on a boat you can’t call the repairman. When you’re in the middle of the ocean you learn to do everything, fix anything, cook…He would talk about the business, and I was interested and asked a lot of questions.

    What made you interested?

    I was pretty young and didn’t know what I wanted to do with my life. If he bought a yacht, I’ve got to think that he did pretty well. He was a really interesting guy. He did everything. He managed Flatt and Scruggs back in the ’50s or ’60s. He owned a bar called The Library in Nashville. He sold jukeboxes and he did all these sort of cool things, then he got into senior housing. I was curious.

    Tell me about starting Commonwealth.

    The opportunity came up. The buildings we had sold were run by a big national operator and they would probably check on them once a quarter. Very smart guy reached out to me.

    Who?

    Dick Cory. He asked if I wanted to look at the opportunity and I said sure. We looked at them, and what happens when buildings are under-managed is they don’t do as well. One thing you see is that they don’t reinvest in the properties, so they begin to look worn. I talked with Dick. The cash flows had fallen, and we acquired the three properties. They were in good markets. They didn’t have regular onsite management and they did not have memory care, so they were little 40-bed buildings.

    What year was this?

    It was 2002. We looked at them in 2001 and closed in 2002, and our strategy was to invest in the communities, provide intensive support — that meant me — and to add memory care services. That gave us several opportunities. One, we could increase census in the existing buildings. Two, to increase retention by providing services people need and three, economies of scale.

    With just three buildings?

    With three 40-bed buildings versus 80- or 90-bed buildings, it’s a far different financial outlook. That’s what we do. We look for opportunities to add value.

    How did you go about starting the company? Did you end up raising some money?

    I partnered with a private equity group run by Dick Cory, and we’ve worked together since day one. We still work together.

    When you bought the first three buildings, were you nervous?

    Well, yeah! I didn’t know what I was doing! I felt like I knew why they weren’t working. It was very exciting to start a new project, but I quit my job the day my daughter was born, so I was unemployed and hoped it worked out. On the first deal we closed, I said I wasn’t going to spend money on a hotel room, and that I was going to sleep in the building until we got it to work. I did sleep in the building. I didn’t get much sleep, but I got to know the residents very well.

    Any sleepless nights in those first couple of days?

    Oh, yeah. Personally, I think the problems we have today are very similar to the problems we had back then. We’re humans taking care of humans and people love to talk about the things that go wrong, but there are thousands of miracles and great interactions that happen every day. Humans make mistakes.

    More from the Leadership Series

    Is it true you had no intention of becoming a national provider?

    Yes!

    Why’s that?

    I feel the need to connect with the buildings on a regular basis. We can be in any of our communities in a four-hour drive. We feel it’s very important to be in buildings. It helps our culture. I think there are a lot of benefits to being a regional provider, and the size that we are versus being a one-horse operator where you really can’t afford the support services we have, versus being a national provider where you sort of lose touch a little bit. We’ve had some success attracting talent from the larger providers. I think what runs across the business is the people who work and love working in the care business, and they want to see the impact they make every day. When you’re in a regional company, you want a new policy? You create a new policy, get buy in, you can roll it out, and you can actually walk through a building and see your impact every day.

    Richard Brewer, CEO, Commonwealth Senior Living

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    Do you still enjoy going and walking through the buildings?

    Oh, yeah! I love going to buildings. Our human capital strategy revolves around identifying who the top talent is in the company. We benchmark turnover of top talent, and basically if we’re losing the people who share our values and are good at their jobs, we’re doing something wrong. Once a year, I go to each community and meet with our top talent and then Earl, our COO, comes six months behind me and he meets with the top talent and we make sure they understand the business plan and why we’re doing what we’re doing. I ask them what’s going well, what’s not going well, and what will you tell me that no one else will?

    That’s a great question.

    You learn you have very smart, passionate individuals in each of the communities. They’re not children; they’re adults. I ask them: My main goal is to make sure you love going to work every day and you have the tools you need to do your job. What’s making it difficult? We talk about technology all day. Technology is a pain! The wi-fi doesn’t work, the internet’s broken, that sort of thing. I can identify what’s sort of happening across the company, not just a particular building.

    Do you find the same problems are happening in pretty much all of the communities, or does each community have different problems?

    I’m looking for the ones that are happening across the company, because that’s a support issue that we can improve. Particular problems in a building usually goes back to not having the systems in place we know work. For example, we had a meeting last week and found a problem that was very simple. The handsets didn’t work. They said we used to have a system in place but they stopped doing it. When we had that system in place we were never short on handsets; they were always charged. The difference when you meet with top talent versus everyone on staff is top talent will tell you what the problems are, and they will tell you how to fix them. It’s fairly common when you go to a staff meeting and everyone is there; top talent is usually pretty quiet. The people who speak up are the people who are unhappy. They may be good people, but just might be in the wrong place of employment.

    How do you find the top talent you keep talking about? How do you identify them?

    We went through a process several years ago to identify our core values. We interviewed a third of the people who work in the company and asked them what’s going well, what’s not going well. Why do you come to work every day? We boiled all of those responses down and sat down with our senior leadership, and that’s how we came up with our core values. Every associate in the company, everyone in the company is measured during their annual review of how they live those values every day. That is as or more important to how good they are at their job. You can empower people who share your values because they have more information than you do, because they’re closer to the customer but they’d likely do the same thing you would if they share your values. The values piece is very important. You can’t train values. If a team member doesn’t share our values, that person won’t do well in our organization.

    You can’t train values. If a team member doesn’t share our values, that person won’t do well in our organization.

    What are the core values?

    Everyone comes to work because they care. It is critically important to speak up. The housekeeper who sees Mrs. Jones, who usually gets dressed every day, is laying in bed not dressed. If she speaks up, we can be onto an issue before it becomes a problem. Our company is built around adding value. We encourage everyone to take ownership of where they are.

    When you’re meeting with these people, does it help that you’ve done a lot of the same jobs that they’re currently doing?

    It gives me perspective. I am very aware of what goes on in the communities.

    Do you worry about the new people coming into the business, that they just don’t know what they’re doing?

    I worry when somebody who has no experience comes in based on demographics. If you build a new building, you need 10 years for the baby boomers to actually need our services, and you’re not going to make it unless the market is there. It’s not just residents. The real challenge is how are you going to staff your community.

    Nobody seems to have the answer.

    Unemployment is low. It’s more competitive. Senior housing doesn’t sound sexy when you’re in college, so you don’t have people flooding out of college. But you want to do well? You want to be really successful? Go into senior housing because you’re going to do incredibly well. You’re going to learn. When the wave comes, there will be many, many opportunities.

    We started to see NIC data start to show signs of occupancy pressure. How do you think operators get through this rough patch?

    You grow and evolve. You don’t get through it by slashing your pricing, because people aren’t picking a community because it’s the cheapest place in town. You have to be smart. You have to be efficient in how you operate the property. You can’t cut expenses to be successful. You need to provide services. It has to be a value proposition for the resident who’s moving in. I think that’s a very easy sale from our side. It depends why the occupancy is down. If occupancy is down because you have five new competitors that opened up in the market, you manage that one way, versus another building that had a dip in census and a key leader position turned over.

    Were there any lessons you learned during the last downturn in 2007?

    I’d say we operate much different today than we did a decade ago.

    How so?

    We were much more of a top-down organization. The company was smaller, with [essentially] three people who were looking at every detail. We flipped that around in 2014, and I’m now the lowest person on the totem pole, and the frontline is the top and everyone in between’s job is to support the people above them.

    What made you realize you needed to do that?

    Being scalable. You really can’t know everything. What happens when you’re in an organization that’s top-down driven and the people at the top think they know everything and the people at the bottom actually know everything, is you get a big disconnect.

    What happens when you’re in an organization that’s top-down driven and the people at the top think they know everything and the people at the bottom actually know everything, is you get a big disconnect.

    Was that a big change for you the owner?

    It was a tough year but probably the most fun I’ve ever had.

    Really? Why?

    You’ve got problems, you’re trying to figure out how to turn them around, you’re talking with all the people. Your product is really people, so it was a year of talking to our people, figuring out what challenges they were having, how we could help them, and then putting the systems and the right people in place to do it. And seeing the results that came afterward were pretty phenomenal.

    Was it tough for you to be more hands-off?

    Yes. Definitely. I’m a hands on-guy. That was certainly difficult but necessary. I still like to know what’s going on, but I understand I don’t need to know everything that goes on. I’m sort of a data junkie, too, and we collect lots of data and you can look at a number, but it doesn’t really tell you anything. You have to look at the trend of what’s happening and look at different events that happened during those timeframes. If you look at census, we’ve been going straight up in census for 15 years, but we’ve also been adding buildings for 15 years, so you have to look at your same stores. You have to sort of understand what’s going well, and it’s always good to try new things, but you have to go back and make sure the things you tried are having an impact.

    If you had a CEO dashboard, what kind of data would be on it that you’d look at every Monday?

    You’ve got to have more people moving in than moving out.

    Is it that simple?

    We look at lots of data, but my dashboard is the phone ringing, inquiries—I’ve got a two- or a three-year trend on that. Look at your doors — move-ins and move-outs are the sort of the thing I need to glance at weekly. Quarterly we look at outside referrals, and move-out reasons among many other things.

    How are you collecting all of this data? Are you using technology?

    Yes.

    LEADERSHIP

    What’s your definition of leadership?

    As the leader, you need to lead by example. You need to do the right thing. You need to be candid, say what you mean even though people may not want to hear it. You’re always trying to surround yourself with people who are smarter than you are, but also make sure they have the tools they need to do their job.

    During your senior housing career, what’s been the biggest challenge you’ve faced?

    It always comes back to hiring and labor and how can you get better, how can you be the best employer out there. How do you draw new people into the business.? I’ve gone to greater extents than many other folks have, and everyone talks about Chick-fil-A and what we did when we measured our top talent. We asked them where they came from and I found the trend that our top talent in the company didn’t come from healthcare. They came from outside the business. They worked at Chick-fil-A or were volunteers in the community, and took the caregiver class and moved up. That’s how we came up with our Hire for Heart program. I kept hearing about Chick-fil-A, and I have a 16-year-old who’s a hellion, but he’s going to do very well. I got him to get a job at Chick-fil-A.

    Research for Dad?

    He’s been working there and he loves it. I ran into their recruiter or their manager in Starbucks one morning and she was there recruiting kids who came to Starbucks to come work at Chick-fil-A. She knew the kids, she knew their parents, and was very connected. She called [my son] on a Sunday afternoon, New Year’s Day, and talked him, and told him to come in for an interview. She said, “He’s a great kid but his hair’s too long. He’s got to get a haircut.” I’ve been telling him for six months he’s got to get a haircut, and he ignored me, but [after the interview] he cut his hair. He went in and had a blast his first day. He came home, and he had an app on his phone where he could get his training videos, he could see his schedule. He got financial information, he could swap shifts, he could talk amongst his teammates, and he could see all the managers and he could go on social media—he got all of that on day one on his phone. I thought that was pretty cool. I think they did a good job making sure he was comfortable, and he was certainly very clear on what he could and couldn’t do. Two weeks later, he gets a motivational text from his manager.

    What’d it say?

    It was talking about leadership and it had a video. The Super Bowl was about to air. He gets a text and it’s an announcement from Chick-fil-A saying they’re doing a new advertising campaign that’s going to come out during the Super Bowl with virtual reality glasses. He sits down, watches the Super Bowl, comes out and goes, “I knew about that!” That connection through the phone helps build on the great job they’re doing in the building. Now, we take care of people and change lives, and I want to bring that philosophy into our company and our buildings. I think that’s where our opportunity lies.

    Honest question: Did you want him to get a job at Chick-fil-A so you could learn what they’re doing?

    Absolutely! I mean I like the sandwiches, too, but I was very, very interested in how it worked.

    If you offer him a job, do you think he’d leave Chick-fil-A to come work for you?

    I would never have my son work for me. He’s going to work much harder for himself, or somebody else.

    Did you tell the recruiter?

    Yep! People talk about the competition. In our business, the competition is people staying at home, and so I think having open conversations with your competitors makes you much better. I don’t understand people’s hesitance on sharing their rates and occupancy. You want an educated marketplace. We tour competitors’ buildings with some regularity because to understand what’s happening in your building is one thing, but it’s important to understand what’s happening when your customer goes to another building.

    Is there anybody you think is doing a really good job when you go on tours?

    I think we are. We do regular mystery shops. When we were small, I hired a mystery shopper to go look at our buildings. It was my mother. She gave me very unvarnished feedback which I found to be very useful.

    We do regular mystery shops. When we were small, I hired a mystery shopper to go look at our buildings. It was my mother. She gave me very unvarnished feedback which I found to be very useful.

    Give me an example. What would she say?

    She would say: “Your activity program stinks.” Or, now this is 15 years ago, she would say: “The housekeeping wasn’t good.” I can’t remember everything in her report but she didn’t beat around the bush. She was tough. That was very valuable because you don’t want to hear fluff; you want to hear where you need to improve. We bought another building and I asked my mom about it, and she was in the demographic of who you would want to know about the building. She’d never heard of it, and said that was telling.

    What’s the biggest risk you’ve taken in your career?

    Quitting my job the day my daughter was born.

    Tell me that story.

    I worked for this family company and I learned the business. I loved the business but I wanted to grow. They were focusing more on home care at the time. This opportunity came up and sounded like a phenomenal opportunity, but when you think back to 2002, it was the low point in the industry. Things were not going well. Deals were not working. People were questioning: Is this business going to work? I think I found a great partner to take a risk on me, and I certainly put everything I had into trying to make sure it was successful. I think the buildings that have been the hardest to turn around have taught me the most.

    Can you give me an example?

    Well, census cures virtually any financial issues. If you have building where census is not growing, you’re trying to pull all these different levers to try to move the needle. Do you have the right people? You always think you have the right people, but you don’t know until you have that performance. So when you’re turning a building around, you’re looking at your team: Do I have the right people?

    Back to your daughter being born. Did your wife think you were crazy?

    She was actually very supportive of it; she’s a risk-taker. She was working at the time, so I knew I wasn’t going to starve. She thought it was a neat opportunity.

    Was there ever a time you thought it wasn’t going to work out?

    I’m sure I’ve had those thoughts, but they were fleeting. Our services are very valuable to the people who need us, and our market theoretically is bigger today than it was yesterday, and it’ll be bigger tomorrow than it is today. We’ve got to keep our product affordable so that enough people can afford to come. The workforce piece is really the piece that is probably the most critical that no one has figured out how to address it.

    What’s the best piece of advice you’ve received in your career?

    I was always encouraged to not be afraid to ask. Not everyone will say no. Don’t be a spectator; step up. The work we do is really important, but it’s not for bystanders.

    Who would you consider to be your mentor and how have they helped your career?

    Jim Bullock was certainly my mentor from the outset. I saw this guy who was successful, and he wasn’t afraid to jump out and try something new, and he inspired me to think that I could do it. Dick Cory was my partner along the way. He’s done a good job of taking a very high-level view of what I’m doing and asking questions and making sure that I continue to move the organization forward.

    Was it hard to leave Jim?

    I was ready to grow. He and his wife were a great partnership for me. He was the entrepreneur and would jump into anything. She was the details person. I learned both sides from it and you’ve got to have that blend. Somebody does have to deal with the details, but if you get mired in the details, you’ll never do anything new. I think they taught me to be aware of both sides of it and build a team of people who complement each other’s skills.

    What’s the biggest challenge the industry faces?

    I already told you that! It’s all about labor, man. All about labor. How are we going to get people to see the benefits of working in our industry? Our schools need to be helping us build a workforce to take care of seniors in the future.