• June 26, 2016

    Meet T. Andrew “Andy” Smith, president and CEO of Brookdale Senior Living, the nation’s largest senior living operator. Though he came into senior living from outside the industry, he has for the last 10 years held roles in Brookdale, being named CEO in 2013 and president earlier this year.

    Smith has led—and continues to lead—Brookdale through the largest merger in industry history, in which Brookdale acquired Emeritus Corp. in a deal that closed in 2014. The company now lays claim to more than 1,100 communities across the nation and some 80,000-plus associates. We sat down with Smith at Brookdale’s Brentwood, Tennessee headquarters to learn about how he got his start in senior living, how exactly he manages a workforce 82,000 strong, and how he learned early on never to use the 8-letter “F word” in senior housing.

    Tell me about how you got into senior living.

    I was first introduced to seniors housing in 1985 right after I got out of law school and I started practicing law here in Nashville. My very first client was a company called American Retirement Corporation, which had a new CEO: my predecessor and a great mentor of mine, Bill Sheriff. Even though I was at a law firm in downtown Nashville, I kind of became part of the management team. Then in 2006 when ARC merged into Brookdale, Bill and the board convinced me to leave the private practice of law and to come over and become an actual part of the team, as opposed to an informal part of the team.

    Did that take a lot of convincing?

    It was a tough decision for me. I was lucky, I enjoyed practicing law, I was at a good place in my law firm and I wasn’t looking to leave, but it was so exciting to me to become part of building [something]. At that time Brookdale was, and just like it is today, the largest operator of seniors housing, but it had just come together and had just been formed. I thought: What a great opportunity to have my own little imprint on what the company stood for, what our culture was going to be. I thought, and still think, we had a great opportunity to really transform seniors housing for the benefit of our residents, our associates, and also for our shareholders. It was a tough decision but it was one that I was pretty enthusiastic to make.

    Did you ever think the company would be as big as it is now?

    I knew that we had the game plan to grow and we had the game plan to expand seniors housing, and I think we’re well on our way to doing that.

    I will tell you a funny story about my very first business meeting which was with Bill, who had just started to run the company. I went to my very first business meeting, scared to death about this, so I had pretty simple goals for myself. One was to not make a fool of myself, and then number two was to say one thing that made it appear that I knew what I was doing. Which of course I didn’t. So I sat in this meeting the whole time waiting for an opportunity to say something. Saw my chance, I pounced on it, and I don’t remember what I said but it was a disaster; a complete nightmare. What I had done is, I used the word ‘facility’ and all of a sudden out of nowhere, Bill has this cigar box he must have had in his coat or something and I’m supposed to put $5 in because I’ve used the ‘f-bomb’: the word ‘facility.’ I learned a pretty good lesson. First off, for the measly sum of $5, we don’t want the notion of facility to interweave through our culture. Our communities are our residents’ homes, so it was a pretty small price to pay, but I blew my mission and made a fool of myself and surely didn’t appear to know what I was doing.

    Brookdale headquarters, Brentwood, Tenn.

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    Have you had to pay any more $5 donations?

    You know, I have. Actually I give away a lot of $5 bills to new associates or people joining the team and basically say, ‘Community says it all.’ I probably have used the word facility from time to time, and I’ve gotten Bill to pay me back.

    Tell me about the $5 bill you give people, what’s that story?

    When I tell this story, introducing folks to the company, it’s just a vignette about what our mission is and what our culture is, and so to kind of hammer that home to them, I’ve given [new employees] $5 bills that I’ve signed, and it just says ‘Community says it all.’ Hopefully it’s a reminder to them—not about the word ‘facility’—but a reminder of how important our mission is, how important our culture is and how centered we need to be on taking care of our residents, getting the basic things right each and every time, and then showing that we care in simple and big ways. It’s so much about showing that we care. I like to use this little $5 bill just as a symbol of how important that is. If you go around here you’ll see a bunch of them.

    Is there a jar or something where if you say the word facility you have to put your $5 in?

    No, we don’t do that. That’s a good idea though, maybe we should reinstitute that.

    I do want to talk about the history of the Brookdale-Emeritus merger. Tell me how it first started. Was it a long process?

    Well, it’s a long process in the sense that with two public companies there’s a process you have to go through, and it can seem sort of laborious and there’s a lot of due diligence that goes into it. We’ve known the folks at Emeritus for a long time, and at that time the company was led by Granger Cobb, who unfortunately has passed away. He was a great human being. The way that we were thinking about it was, this is a fantastic opportunity to not get bigger for big’s sake, but to be the best. This was an opportunity for us to really create the first scaled enterprise in our industry, and we thought it was a great opportunity for our three core constituencies: our associates, the people who work here, who make everything happen; our residents, both our current residents and our prospective, future residents; and then also for our shareholders. It came about through conversations, and those ripened into the transaction.

    So it’s been almost two years since the deal closed, how would you say the integration has gone?

    Well 2015—we’ve been very clear about this—was a challenging year for us. Any integration of two large companies is going to be a challenge. As the Emeritus platform transitioned over into our platform, our tools, our systems, our processes, our protocols, there was a lot of change management that goes into that, and that diverts people from their day-to-day job, which is taking care of our residents. It was challenging through 2015, but the good news is, the integration is beginning to get behind us, people are able to look forward. And, they are more freed up on a day-to-day basis to pay attention to what is most important, which is taking care of our residents and attracting new ones.

    Looking back at it, is there anything you would have done differently in the first two years?

    It’s unrealistic to think you can go through a transaction of this size and not have looked back on it and say there are some things you might have done differently. But in the end, we think we had a well-planned integration. We did it very rapidly. I still think that was the right decision to make, but sure, there were some things we would’ve done differently.

    More from the Leadership Series

    What would you say has been the toughest part of the integration?

    Like any people-centered organization, the toughest thing has been so much change management that has been ongoing. I think 2016 is a platform building year for us. I sense a lot of optimism and esprit de corps in the company. I expect that to grow, because people that are here are here because they are passionate about seniors, and they’re beginning to have an opportunity to re-double their focus on that passion as opposed to learning a lot of new things.

    There are a lot of Brookdale communities in Chicago and Senior Housing News has been to several. We went to one to check out your iPad program. It wasn’t the fanciest Brookdale building but there was something about the building—it was just buzzing. It came from two people: the activities director and the executive director. They were running around the building, everyone was having a good time. How do you create that in every single one of your buildings and is that a big challenge? They did a fantastic job.

    That’s the magic. It’s a service business, it doesn’t start at the corporate office. It starts with the community leadership, and it’s important first to understand that, and second to make sure that you do everything as a company to maximize that in our communities. That’s why our focus on what our culture is, what our mission is, those are first and foremost what we’re trying to create as a company. We’re trying to provide people with an ecosystem where they can come in and take their own natural passion for taking care of seniors. You’re exactly right. There’s a vibrancy in our communities; it’s important that the real estate part of the business be up to snuff, but that’s not where the true magic comes from. It’s from the people in those communities doing the basic things right, but also showing that they care.

    We’re trying to provide people with an ecosystem where they can come in and take their own natural passion for taking care of seniors.

    We’re starting to see former Brookdale/Emeritus people that have come up through the ranks and are starting to spin off and start their own senior living companies. Is that something that you are proud of as an organization? Or is there also some bittersweetness?

    Any time good people leave an organization, you’re sad for that, but you’ve also got to be proud and I’m certainly proud when somebody leaves Brookdale because they got an opportunity that’s based on what they did at Brookdale. I take that as a compliment not only to those folks individually, but to our organization, because we’ve helped them grow and get to a place where they can take advantage of this opportunity. You have to celebrate that even though you’re sad. So I guess your term of bittersweet would be a good one. One pretty cool thing that we’re also seeing right now is more than 50 executive directors who left Brookdale have now come back to Brookdale because they’re saying ‘Hey, we understand what you’re trying to accomplish, we understand special things that about Brookdale,’ so they’re attracted to come back. That feels good too.

    Did you expect that to happen or has that been a nice surprise?

    We’ve talked about a lot of change in 2015 and that can be frustrating to people, so I do expect people to be attracted back to our platform and I think we will continue.

    What are you guys expecting in the next year? Do you think most of the monumental change will be behind you?

    The big wholescale changes that we went through as part of the merger are behind us. We’re beginning to not go through giant change management, but [rather] hone and get more effective in the use of our tools and our systems and so forth. Also, [we’re expecting] that people can be freed up to do the most important things, which is forging relationships with our residents. I think that change management will be reduced in 2016 for sure.

    Do you think the changes, going into it, were harder than you thought they would be?

    We knew that the integration was going to be a challenging thing to do. It’s just hard to do something this big. It was tougher than we had planned for, for sure.

    Have you been happy with the recent commercials Brookdale came out with?

    The television commercials? Have you seen them?

    I have.

    I’m very happy about them, even though I start crying every time I see them. To me they so much resound with what we’re trying to accomplish as a company, what our mission is, what our culture is. I think, so far as I know, the commercials are unique in the sense that they come from the perspective of our associates. It shows in each of those, and those are real live Brookdale associates telling their own story; they weren’t scripted, it’s just what they do every day. It’s a powerful expression of how important our associates are and how meaningful they are in terms of the relationships they forge and the care they provide to our residents. So yes, I’m extremely happy with them. They’ve been well received.

    I’ve heard it’s helpful from a recruiting standpoint as well.

    Once we went on the air with the commercials, our job seekers went up by 7%. I think people look at it and say: I want to work at that company because those folks on the commercial, they represent what I want to do.

    Was that part of the strategy when you guys were developing the commercial?

    It was a hoped for part of the strategy, sure. We hoped, and had a strong belief that we would speak firmly to our existing associates, potential new associates, our existing residents and of course potential new residents and their families. Across all of that we thought it was important, good for Brookdale, probably good for the industry, too, to more poignantly capture what it is we do in our communities each and every day. We were trying to hit all of those constituencies.

    Leadership

    This is the leadership series so we have to talk about leadership. What is your definition of leadership?

    I think it’s pretty basic. The CEO has to set the strategy for the company, have a clear set of articulated goals, and then has to motivate the team. It’s a team sport, you can’t do anything on your own. Motivate the team to accomplish those goals. I think the key to that and the key to leadership in many ways is that people have to believe. They have to believe in themselves, they have to believe in the goals, they have to believe in the company, so you have to work hard at getting that belief out there among, in our case, the 82,000 people that work here.

    How do you get 82,000 people to believe?

    The key thing is you want to have your leadership team cascade down the values the company has, the importance of our culture, our stress on mission. In our case, certainly in my case, I have a deep belief in the importance of servant leadership as a philosophy of leadership. You try to make sure that everything you do as a company is self-reinforcing to that.

    Do you think your definition of leadership has changed over the years?

    I would say in one sense, I’ve always thought that servant leadership was the best philosophy, but I think my emphasis on that has grown.

    Tell me what you mean by servant leadership.

    I like to compare traditional bosses to servant leaders. Servant leadership is a recognition that leadership isn’t about you as the leader; it’s outward facing, it’s empowering your team. With traditional bosses, it’s about them, right? They want to climb the corporate hierarchy or they want to climb the corporate ladder. It’s about their own individual success. Servant leadership flips that totally on its head. It’s a recognition that we’re better off as a team. You listen more than you speak. You aren’t an order giver, you’re a collaborative consensus builder. It’s a concrete philosophy that achieves results, but I think it’s a better philosophy of leadership.

    During your time, what’s been the biggest challenge you’ve faced and how did you overcome it?

    I think my biggest challenge, in my business life, has been to continually focus on the importance of people and to continually recognize that for an organization of our size, it is all about stepping back and making sure that you’re focusing on the most important things, which starts with people. It starts with your deep commitment to what your values are, which for us is expressed in our mission statement, and therefore the culture that you want to build.

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

    The biggest risk personally that I’ve taken was probably leaving the practice of law, where I’d spent 21 or 22 years, and coming over and joining the team at Brookdale.

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

    I received this advice a long time ago from Bill Sheriff, my predecessor. I think he quotes from Peter Drucker that ‘culture eats strategy for breakfast’ and I think that means that you can have the best plan, the best strategy, the best tactics, all of those things, but if you don’t focus on the culture of your company, which in our case is a focus on the people that do the magic, it doesn’t matter how good your plan is, you’re going to miss it.

    As a business owner, I obviously don’t have 82,000 employees but even with my 15, culture is hard. Is it something you’ve gotten better at?

    I personally have gotten better at it. I think the company has gotten better at it. As we’re looking at 2016 and moving forward, we’re re-doubling our commitment to what the culture at Brookdale is and how important it is. The great thing is, I think folks who are passionate about working in this industry have a natural tendency, a natural passion. What we have to do as an organization and as a company—and it’s one of our primary objectives—is to have a culture that nurtures that passion.

    If you could recommend one book on leadership what would it be and why?

    Anything by Peter Drucker is great, even though it was written long ago. There’s still so much there. Larry Bossidy’s book, Execution, is great. There is a fantastic book called Lead with LUV; it’s written by the Chief Cultural Officer of Southwest Airlines, which is predicated on servant leadership. You can darn near read it from the time you hop on your flight to when you get back, but it’s a fantastic book.

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

    I’ve had a bunch of great mentors throughout my career. The first one was a guy named Brad Reed who unfortunately just passed away. He was one of my many mentors, but one that particularly sticks out from when I was a practicing lawyer. He was a unique and fantastic man. He reinforced how important it was to act each and every day with integrity, even when there are tough decisions to be made, or there’s an easy path and a hard path and you’ve got to do the right thing. There’s probably no greater compliment to somebody who’s gone on to a better world: now that he has passed, there are many times I’ve thought through a tough thorny challenge before me, ‘How would Brad approach this?’ I miss him dearly. Then I’ve already mentioned Bill Sheriff, who was a mentor of mine, still is a mentor of mine. He was a deep thinker about senior living and aging in general and was just a fantastic mentor to me. As I mentioned, among many things that he taught me was the importance of focusing on culture.

    What do you think some of your greatest strengths are as a leader?

    You’re assuming I have one? [Chuckles.] I think if I had to characterize one of my strengths, I’m passionate about this business. I’m passionate about how important it is and what a truly fantastic opportunity we have to make a meaningful difference in the lives of so many different people. This is great business; from a financial perspective it’s a great business, but it’s also a great business because we have the opportunity to so powerfully affect so many different people in such a powerful and meaningful way. I hope that’s a strength.

    This is great business; from a financial perspective it’s a great business, but it’s also a great business because we have the opportunity to so powerfully affect so many different people in such a powerful and meaningful way.

    What are your greatest weaknesses?

    I don’t do a very good job with work-life balance, probably—well, not probably. That, I can assure you. I don’t do quite as well on work-life balance as I should.

    Is that tough?

    I’m used to working hard and I think for any CEO of any enterprise, that’s part of it. But it’s a challenge, and it’s a challenge for my family more than anything.

    Where do you think you got your work ethic from?

    I’d say from my parents. My dad was an attorney.

    Where did you grow up?

    Here, in Nashville. I have two brothers, and I think my parents always instilled in us the importance of hard work and again, if you’re passionate about something you want to work hard on it.

    Attracting New Talent to Senior Living

    One of the things we’re noticing this year, is the industry is finally starting to attract people to the industry, or making a concerted effort, especially with young people. So say I’m about to graduate college. What would be your pitch to me on why I should consider senior living as a career?

    I would say, coming out of college you have the opportunity to get into a growing field that is going to provide challenging work opportunities with attractive industry demographics and dynamics, and attractive financial characteristics. But the most important thing is, you have the opportunity to do good doing it. To profoundly affect and have an influence on so many different lives that are struggling with the challenges of aging, [and] the opportunities that come from that. Long story short, I would say it’s a great industry from every traditional metric that you have, but at the end of the day, what other industry do you have the opportunity to so profoundly make positive and meaningful differences in the lives you serve?

    Do you think the industry does a good job of taking people on the front lines and giving them a path to succeed?

    I think we can do a better job. Again, this is a maturing industry. It takes special folks with a special degree of passion out there. I mean, let’s face it, they take care of folks who are in an acute period of time in their lives with a lot of emotional situations. Then some of them pass away, and our folks care about them. Sure we can do a better job. That’s a lot of what we’re focusing on. When I talk about tools and systems and so forth, what we are trying to develop—and I think we’re making great progress—is on better tools and systems and protocols, not because they’re cool or because they’re great gadgets or because there’s some financial something or another behind them, but what we’re trying to do is give people tools that simplify their lives. It makes their job easier so that they can spend more time taking care of folks, being on the floor, forging relationships with residents and their families.

    When you say ‘tools’ are you talking about technology?

    They can be technology tools, but it’s really time management tools, technological tools, ways to make our associates’ day jobs easier so that they can spend more time focusing on what’s really most important.

    What’s Brookdale doing to help develop the next generation of leaders?

    We’re entering into an accelerated phase of this. We just hired a new Vice President of Talent Development. You want to make sure you hire the right people, you want to onboard them correctly, you want to give them the appropriate training to do their job, and then you want to help them develop and help them take their career path where they want to go. We have lots of personal development programs inside of our company that we’re focusing on to give people career advancement opportunities. The fantastic thing about Brookdale is the real benefits of size and scale. We can invest in those programs and in the people who focus on developing other people. Then there’s so many different advancement opportunities within a company of our size that I think is a real benefit we’ve got compared to some of our competition.

    How important is technology today?

    That’s a big question. Obviously technology is important in terms of efficiency, but I think technology is going to become more important in two critical areas. I think our customers, our residents and their family members are going to need and want and will demand better technology to connect them with Mom or Dad living in our communities. I think there are real opportunities around technology to improve the tools we give our associates to do their jobs better.

    Is there any certain technology that is getting you excited that you think could really change things?

    I have lots of technology I’m excited about; some of which I’m not going to talk about because it’s proprietary and I think we’re doing some things that the balance of the industry is not doing. I’m particularly excited [about our iPad program]. That’s utilizing technology to provide a better experience, either for our associates or for our customers. We’re incubating lots of different technological programs. You may have seen that we’ve had some entrepreneurs who have actually lived with us as they try to develop new programs. It’s a really cool thing. If you’re interested in developing products and services that address the fact that the country is aging and the number of caregivers are going down, you’re going to call Brookdale. Period.

    I don’t mean this as a knock on any of these types of programs, but there are a lot of shiny little gadgets; too many in my opinion. Then there are simple things like remote monitoring, EHR and even Wi-Fi—things that in theory make a lot of sense but the frustrating thing is that not everybody has it. I feel like the industry is focusing so much on these little gadgets; people are talking about robots, but we can’t even get people to get Wi-Fi.

    You’ve been talking to other people, our competitors. When we went back with the Emeritus game plan, one of the pillars of doing the Emeritus transaction was we had to make a lot of investments.

    What’s the program called?

    That’s called Program Max, but even investments in basic things like Wi-Fi. We invested a ton. There are some basic investments you have to make in order to be in a place to take advantage of new technologies and tools. We’ve made those investments, so we truly do have Wi-Fi. You can’t have electronic health records if you don’t have Wi-Fi, so you have to make some of those fundamental investments in order to take advantage of where technology is taking us. I absolutely agree with that. One of the tricky challenges for Brookdale, and we have a whole team who focus on this in our strategy and innovation group, is to figure out, out of the hundreds of different technologies that are out there, which do you want to focus on and which do you want to maximize.

    We have to continually attract people who want to work in the industry. It’s eminently doable and eminently achievable. There’s getting to be much more of an awareness about how exciting this field is, and how much good we do in people’s lives, but we still have to hire and attract hundreds of thousands of folks to the industry.

    What is the biggest challenge the industry faces?

    We have to continually attract people who want to work in the industry. It’s eminently doable and eminently achievable. There’s getting to be much more of an awareness about how exciting this field is, and how much good we do in people’s lives, but we still have to hire and attract hundreds of thousands of folks to the industry.

    Being Brookdale, the largest provider, do you feel as CEO there’s a lot of pressure on you in order to be a leader in the industry, from a company standpoint?

    As one of the things that comes with size and scale and the visibility that we have, one of my personal objectives is that I need to speak for the industry. Many other people and many folks that you’ve talked to [feel the same].