Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSSE and at ICE's exchanges and clearing houses around the world. And now, welcome inside the ICE House.
Pete:
Over our nearly 300 episodes, a carefully crafted pattern of storytelling has emerged to take listeners into the room with our guests with the goal of connecting our audience with the people, companies, and ideas that are shaping the financial and larger world. The power of the podcast medium is the shared experience of technology allowing us all to be transported across time and space to hear the information straight from the guest's lips.
Pete:
Over the past three years, though, we've all had a uniquely often frustrating, shared experience involving technology and an older generation. We've all found ourselves at some point during the pandemic troubleshooting with an older relative or acquaintance, trying to use Zoom, FaceTime, or Skype for the very first time. With a mixture of frustration and then guilt for feeling frustrated, we've all tried to stay composed as we inevitably looked up their ear, nose, or eye, as they held the screen too close. That same experience was happening at scale across every senior living facility across the globe were thousands of associates patiently helped resident after resident bridge decades of technological advancement to connect them with a loved one.
Pete:
Our guest today, Cindy Baier oversees the more than 40,000 Brookdale Senior Living associates who helped countless parents, grandparents, and elders connect with the world despite being under lockdown. She joins the podcast to talk about her book Heroes Work Here: An Extraordinary Story of Courage, Resilience, and Hope from the Front Lines of COVID-19. That's coming up right after this.
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Connecting the opportunity is just part of the hustle.
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Opportunity is using data to create a competitive advantage.
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It's raising capital to help companies change the world.
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It's making complicated financial concepts seems simple.
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Opportunity is making the dream of home ownership a reality.
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Writing new rules and redefining the game.
Speaker 9:
And driving the world forward to a greener energy future.
Speaker 10:
Opportunity is setting a goal.
Speaker 11:
And charting a course to get there.
Speaker 3:
Sometimes the only thing standing between you and opportunity is someone who can make the connection.
Speaker 12:
At ICE, we connect people to opportunity.
Pete:
Our guest today, Cindy Baier is the President, CEO, and the member of the Board of Directors of Brookdale Senior Living, NYSE ticker BKD. She also sits on a number of company and industry boards, including the New York Stock Exchange Board Advisory Council. Prior to becoming CEO of Brookdale, Cindy was this company's CFO from 2015 until taking on the CEO role in 2018. Welcome, Cindy, inside the ICE House.
Cindy Baier:
Pete, it's so great to be here. Thank you so much for having me.
Pete:
It's our pleasure to have you. We were talking a little bit off before we started, just got into your book. It's amazing to have it in person. It's great to talk to you. So your book, Heroes Work Here, is being published in April, 2022, but it takes several months to get a book actually published. When did you start to write the book and how long did this whole project take?
Cindy Baier:
Well, quite honestly, I started the book last summer and it took longer than I thought it would to get published. We had the draft done by the first of the year, and then publishing is four to five months before the actual hard copies arrive.
Pete:
So the book chronicles, practically in real time, everything that you were thinking, doing, and reacting to. Can you take us inside your process of documenting everything going on across Brookdale and the country converting it into a clear narrative that has several very helpful poignant conclusions and lessons?
Cindy Baier:
Absolutely. So for me, the book really started with reflection. What I was trying to do is process my experience during the pandemic and really trying to think about what I'd learned. Then I thought about how great would it be if we could explore the pandemic, really, from as many different lenses as possible to get a holistic view of Brookdale's collective response, as well as to look at the pandemic from the lens of the resident, from those people who provide capital to Brookdale, leaders at all levels of the organization. So we started by reaching out to leaders at various levels of Brookdale to get their stories. We reached out to our residents, to critical capital partners. We reached out to partners in the healthcare industry as well. And what we were really trying to do was to talk about our pandemic experience and to really think about what were the lessons that we learned from this experience that were so transferable to other industries.
Cindy Baier:
And for me, it really started with the efforts, the truly heroic efforts of our Brookdale associates. I thought about all the large and small wins that we celebrated throughout the pandemic. And when we started this more than a year ago, we really collaborated with a lot of different leaders throughout Brookdale to really make sure that we had the right documentation, as well as the stories. We wanted to collect images for the book. We wanted to validate facts because our goal was really to preserve our story as accurately as possible.
Cindy Baier:
And for me, this was really a chance to celebrate so many Brookdale associates who are so deserving of that celebration, to preserve our collective memory of all of their achievements. And this book really has been both a keepsake for those who stepped up when it mattered most, as well as a guide to other leaders, to inspire them to overcome whatever challenges they may face.
Pete:
You also talk a little bit about your own background and the introduction takes us back to your childhood in central Illinois. What was life like on the family farm and what lessons have you taken into the corner office besides still getting up before the rooster's crow?
Cindy Baier:
There is no question that I am a farm girl from a small town in central Illinois. And early in my life, I realized how important it was to do whatever needed to be done. And on a farm, there is a lot that needs to be done. But certainly I leveraged that experience early in my life to something that was bigger and broader. I became an accountant because I saw one early in life and I said, oh gosh, that looks good. I want to be an accountant. And then when I became an accountant, I joined a public accounting firm and I saw so many possibilities for my life.
Cindy Baier:
This experience in a public accounting firm really allowed me get enough experience to work across industries and across roles. But in my view, senior living is really that opportunity to serve elders. And there's nothing that matters more, to me, at least, than that. So when I came to Brookdale, I really found my true purpose in life. I found a new extended family, and I know that my whole life really prepared me to get to be part of this amazing company.
Pete:
And you talk about in the book, some of your experiences growing up with your mother and your grandparents, and then starting out. But take us back to 2015. When did you first meet the Brookdale team? How did you get involved? What brought you from Whitehall Jewelers? You actually had worked at Sears. How does your career go from leaving the farm to walking in that door in 2015?
Cindy Baier:
Yeah, I think that you've highlighted on something that's really quite personal and very important to my story. My mom, when I was in middle school, had a pretty serious car accident that almost cost her her life. And so I learned to be a caregiver before I even went to high school. And luckily my mom recovered, but that taught me a lot about what people need and how important it is to have a support network for people. When I was in college, my grandfather had lost his sight and so I moved in with my grandparents to be a caregiver while I was in college. I was his favorite caregiver, he would say, and I helped him with everything from grooming to preparing shots for his diabetes. And then I went on to the corporate world after I graduated from college. And then I kind of went about my career, worked in public accounting, worked in a number of different industries.
Cindy Baier:
And then one day I got a call from a recruiter about the opportunity at Brookdale and I knew as soon as I got the phone call, that this was what I was meant to do, that I needed to be part of this company. So I joined in 2015 as the chief financial officer, and I loved it. It was fabulous working in a company that served so many people. About two years later, I was asked by the board to become the chief executive officer and I've been in that role for over four years now.
Pete:
So it's 2018. You've been in the role for three years as the company's CFO. And you have this opportunity to be the CEO of the company. How did those three years prepare you for that moment?
Cindy Baier:
The one thing about being the chief financial officer is you get exposed to every element of the operation of the business. And so when I stepped into the CEO role, I had a very clear view as to what I thought the company needed to do. What I knew was what unites our Brookdale associates is their passion for serving seniors. And we created a vision to be the nation's first choice in senior living. When I became the CEO, we also needed to make a pivot in our strategy and so we initiated an operational turnaround strategy that we called Winning Locally. And that really gave us the action plan to capitalize on what our seniors needed in the local community that our residents live in. We needed to have better diversity. And so I focused the company's efforts on increasing diversity that included at the board level and the executive leadership level, and quite brilliantly, I would say, our executive leadership team is approaching gender parity as is our board of directors.
Cindy Baier:
And then of course, the CFO spends a lot of time on leases. And so I led Brookdale's efforts to negotiate and restructure the leases with our largest landlords. Because of the CFO role, I knew that we needed to strategically sell assets and that involved us selling our interest in our unconsolidated entry fee CCRC venture, which really helped us during the pandemic. And then later in the pandemic, we divested our home health, hospice, and outpatient therapy business. So all of these strategies and tactics really had a foundation in my time as Brookdale CFO and so that really helped me to set the strategy and to align the organization around it. And all of these things together have really helped us improve the lives of the seniors that we serve.
Pete:
We've mentioned senior living, and I think most of us had experience helping older relatives. But when you think about sort of the overall sector, can you get the audience a quick primer? When we say senior living, what is it? And what are the type of providers in the sector?
Cindy Baier:
Brookdale's business, the senior living industry is at the intersection of healthcare, hospitality and real estate. And we are the nation's premier operator of senior living communities. We operate independent living, which provides housing, meals, activities for residents, including engagement. And then we have assisted living, which is all of that plus either healthcare management or assistance with activities of daily living like dressing or bathing, that sort of thing, to memory care, which is targeted for people who have dementia. And it allows them to live a very good life in a supportive and controlled environment to continuing care retirement communities. So those are the major sectors of our industry, but what they all have in common is a congregate living model where people live in a place that is like home and they receive the care and support that they need to live the best life that's possible for them. We help people with the challenges of aging.
Pete:
And when you're trying to think about how do you help people with challenges of aging, all the different types of facilities, I was reading in the book that in 2018, you didn't just look for feedback from the top levels of the company, you went into the field as well. And you also reached out to some of the past leadership of the company. You just Google your name, the first thing comes up, all these articles about this work you've done going out on these visits. So what were the visits and how did they help you set your priorities for the job?
Cindy Baier:
Let me start by saying that right after I became the CEO of Brookdale, I reached out to Bill Sheriff who had been the longest serving Brookdale CEO. And I asked him to mentor me because the company had really done amazing things under Bill's leadership and I wanted to understand on what a good CEO would do and what they would focus on. I wanted to be the best CEO that I could be for Brookdale. And some of the best time that I had with Bill is when we would go to a community together and we would talk to the residents, we would talk to the associates, we would see what we could do to be better. And so after that, I decided that our entire senior leadership team would benefit by working in a community.
Cindy Baier:
Now, when I say working in a community, I don't mean a visit. I mean actually working in a community. So we chose communities from all over the country and I chose two communities in Oregon. And so I cleaned rooms alongside a housekeeper. I served meals in the dining room. I worked as a cook in the restaurant. I followed the sales directors out on calls to bring new residents into our community. Every job that there was in the community, our leadership team actually took a week to really experience the roles, to do the jobs firsthand and to talk to the people who did it as well as the residents. And that was the beginning of community learning visits. It served us really well.
Cindy Baier:
I also learned just how valuable the feedback of the residents are. And so I thought, gosh, what if we could have a national resident advisory council? And so we started a resident advisory council with representatives from all across the country, and we originally would do the visits in person. When the pandemic hit that wasn't possible, so we transitioned our meetings to Zoom. That was an incredible learning experience for us because we had the voices of the people that we were trying to serve and were actually serving in the room with us, giving us direct feedback about what was working, what opportunities there were for improvement and what we could do. It was amazing. It was just amazing. I can't say enough positive things about the residents who live with us. They have a lifetime experience and they really are very helpful when you're trying to think about the direction of the company.
Pete:
James Quincy, the CEO of Coca-Cola and a colleague of yours on the NYSE Board Advisory Council, actually said on this podcast that people think of the CEO at the top of the pyramid, but in many ways that ignores the fact that there's another pyramid above them that's inverted. And they're actually the bottom point of the pyramid for all the stakeholders, the investors, in your case, the residents. So when you think about that, why did you decide to join the NYSE Board Advisory Council? And how does it that play into the way you run Brookdale to try to bring in different voices into your decisions?
Cindy Baier:
Well, first of all, I agree on the inverted pyramid. I definitely think that the CEO is in the bottom of the organization rather than the top. And I believe that's really important. The reason that I joined the New York Stock Exchange Board Advisory Council is because the work you do is so critically important. One of the things that is important to me is diversity. And the reason that it's important is because diverse teams perform better. They are more creative, they're more innovative, they get better outcomes. But often people need help making that connection, I've been pretty passionate about giving everyone a chance who has the ability and who raises their hand. But sometimes people don't know how to raise their hand for a position at a board. What the Stock Exchange has done that is absolutely in credible is that it has created a forum for candidates who want a corporate board role and companies that are looking for diverse talent. And so I take great pleasure in being able to be a connector, as you will, between incredible, talented, diverse associates who have real value to add to a corporate board and those board members who are looking for them.
Pete:
One of the central characters in Heroes Work Here is Jim Seward who provided some of that early warning to you of the impending pandemic. Who is Jim, and why did you know to take his warnings so seriously?
Cindy Baier:
Jim is a mentor of mine. When he left the Board, I gave him a watch that I had engraved on the back that said he was my north star, because I knew that Jim's wisdom and his dedication to doing the right thing would always inspire me. But he is a person who is this phenomenal intellect, he is constantly looking for trends around the world and trying to understand the trends on various businesses. And quite honestly, his heart is with Brookdale. When he saw the events that were happening in Wuhan, he worried about the possibility of something being a black swan event that would impact Brookdale. Of course, when Jim raised the alarm, he told me what he was worried about. I did all of my own research, but very quickly, I recognized that we needed to prepare for the possibility that something like COVID-19 could happen in the us. And I'm grateful for that early warning. Because of that phone call, we were able to be ahead of virtually everyone when it came to recognizing the threat that the virus presented and taking action early for the benefit of our residents, our associates, and our shareholders.
Pete:
This early response, who are the people that you bring together to make up your war room? And how do you start to respond before, as you say, really a pandemic had even reached our shores?
Cindy Baier:
A pandemic by its definition is about infection, and so the very first person that I reached out to was Kim Elliot, who is currently our chief nursing officer. And then, of course, we are focused on infection control in all of our communities throughout the 41 states that we operate in. So your head of operations, at the time, Mary Sue Patchett was in that role, were all about people serving people. We introduced Jacqueline Pritchett who was in charge of senior housing HR are at the time. And then it's always good to have someone who can operate as chief of staff. And so Sarah Terry, who is in charge of many of our centers of excellence, took that role as chief of staff.
Cindy Baier:
And so what we did is we had that four-person team was what we called our Emergency Command Center, but of course, the entire leadership team was focused on the pandemic as well, but it was really the ERC that was at the center of the efforts and we were all playing supporting roles for that.
Pete:
Early on, and how much time a day are the four of you having conversations as in information's flying in fast and furious?
Cindy Baier:
Well, I think if you talk to most of the leaders at Brookdale, I think the least amount of time anybody would work in a day was 12 hours a day, seven days a week, but many were 16, 17 hours a day, seven days a week and constant communication. The one thing about us is we know how to stay connected. We know how to mobilize and really to create a plan of action and to execute. The ERC actually operated 24 hours a day, but obviously there were people who would spell in and out of that as the pandemic went forward.
Pete:
And as the pandemic went forward, it was a case where, early on people were not taking it seriously. And then there's not as much information, and then information starts flying fast and furious. And then you get to the point where there's now misinformation and conflicting information. How did you manage communication, not just to the thousands of associates who looked to you for guidance, but also the residents and their families who may be hearing widespread of what they should and shouldn't be doing at that time?
Cindy Baier:
Communication during a crisis is critically important. And so what I would say is communicate, communicate, and communicate some more. One of the things that I'm particularly proud of is an initiative of Kathy McDonald. Kathy led our investor relations efforts, but what she thought at the beginning of the pandemic is that we were ahead of everyone else and that we had an to really share our knowledge with not just our associates, our residents, and our families, but really with the country at large. Early in the pandemic, we created a website to share our knowledge and so we did a video roughly every three days. We had a national platform that talked about whatever was relevant at that portion of the pandemic.
Cindy Baier:
Then, of course, we would have the normal communication cascade through every level of the Brookdale organization. We would do written and oral communication to residents and families. We would use town halls via Zoom, where people could kind of reach in and ask questions. We had Zoom meetings that literally had thousands of people on them. And then we had smaller group meetings at the local communities. So if you can think about a form of communication, we used it, including using outbound robocalls to deliver important updates when it was appropriate.
Pete:
You have footprint in 41 states. Were you able to also collect information from your different facilities to get a real sense of, as things are moving and shifting across the country?
Cindy Baier:
I would say that we received information from every single community, but not just Brookdale communities. We are an important part of the healthcare continuum, so one of the things that the National Healthcare Council did is they created a COVID-19 task force. Really, leaders from every single aspect of the healthcare continuum participated in these forums to share information. It included the public policy aspect of it, it included hospital systems, every part of the healthcare system was represented so that we could get the best, real time information that was possible and we used that to inform our response.
Pete:
After the break Cindy Baier, president and CEO of Brookdale Senior Living, and I discussed how COVID challenged every single aspect of its operation and how everyone banded together to defeat the virus. That's right after this.
Speaker 14:
And now a word from On Holding, NYSE ticker ONON.
Speaker 15:
Pause is essential, it's of the process.
Speaker 16:
Training doesn't end when my body stops moving.
Speaker 17:
Recovery looks different for every athlete. We have different needs, different goals, different abilities.
Speaker 16:
One thing we share, our bodies need time, time to heal.
Speaker 17:
The moment I stop training for the day, what people maybe don't realize is that the training is still going on.
Speaker 15:
In a way, the training never ends. The journey just starts again.
Speaker 16:
Pause is sanctuary. Familiar spaces and comforting routines. It clears your mind and rebuilds your body.
Speaker 17:
Let the healing begin. Time to reset. There's power in pause.
Pete:
Welcome back. Before the break we were discussing the early days of COVID and the focus of the book, Heroes Work Here. Before the break, we talked about the risk of COVID spreading, but your populations are not only the most medically vulnerable in the country, but also as you said, they're 24-hour communal living spaces. So what are some of the unique risks that your team had to deal with during that time?
Cindy Baier:
Senior living really is about serving seniors in a community where it operates 24 hours a day, seven days a week, 365 days a year. And normally what you see in a senior living community is residents having breakfast with all of their friends, exercising together in our Be Fit classes, going out into the broader community for activities of engagement. Everything that we do, really, is around connections and around people. And if you go back to the beginning of the pandemic, what we knew was that any person that you interacted with presented risk, because there was really a very infectious disease circulating. So what we needed to do was we needed to reinvent our business model nearly overnight and that involved changing everything. We went from serving meals in our dining rooms to doing room service during the height of the pandemic. And so that in and of itself is no small feat.
Cindy Baier:
Think about what is required to serve every single resident, every single meal in their room. That's a pretty big feat. We needed to find a way to help our with physical exercise. Normally they would come to an exercise class called Be Fit, and they would get their exercise in. But you needed to learn how to give residents an opportunity to exercise in a socially distanced way. That was a challenge for our team. During the worst of the pandemic, we closed our to visitors, that included family members and that included prospects. And so we needed to help seniors connect with their families, whether it was through video technology or window visits or socially distanced visits outside of the community like car parades and things like that. Literally every element of our business had to be reinvented and we leaned on technology and we leaned on our associates to know how to innovate quickly, to pivot, and how to keep the health and wellbeing of our residents and associates as our north star.
Cindy Baier:
It was always the way that we made the decision is, what do the residents need? And if you think about sort of our business, we have to replace about 50% of our residents every year. If you think about moving into a community that you haven't been able to see, you haven't been able to meet your neighbors, you haven't been able to meet the people who will take care of you. We really had to do a lot of innovation on our sales process as well.
Cindy Baier:
Now, thankfully with the arrival of the vaccines, they are literally shots of hope and that has really changed the risk profile. And so we're much closer to our historical operations now, which is a very engaging senior lifestyle.
Pete:
And you touched on it a little bit in your answer, but I think morale management, just in a typical operation of a senior livings facility is a big part of the job. Can you talk about some of the ways you were able to keep residents, associates, and their families optimistic and hopeful when they couldn't see each other, they couldn't see family? And what were some of the ways you were able to keep everyone as upbeat as possible?
Cindy Baier:
I think at the end of the day, we leaned very heavily on our culture. Being part of Brookdale, we've created a culture that people want to be part of. So I think that it's true that everyone wants to be part of something that's bigger than themselves. During the height of the pandemic, I think that the connection between our associates and the residents was stronger than ever. We found associates who really found very strong, shared connections with the residents, whether that meant writing poems to each other, watching a game together, or having associate take the time to style a resident's hair.
Cindy Baier:
What is important is really the energy that you bring into something. And I think that being positive, being calm is infectious. We really had our associates lead by example. We encouraged gratitude, empathy, active listening. And what we really did was we provided a connection that everyone knew that if they needed help, all they had to do was ask and someone would be there to lend a helping hand. I think that's pretty important.
Pete:
You're leaning on your associates, there's 40,000 plus of them. They're also facing their own challenges during this time. How did you manage staffing during the pandemic? And now that we've seen these labor shortages across the country, is that impacting your operation?
Cindy Baier:
Staffing is something that it might surprise you to find that at the beginning of pandemic, instead of needing fewer associates, we needed more because we had to had add positions that weren't part of our business model going forward. We needed room service attendants to deliver meals to residents. We needed health screeners at the front door and so recruiting was an active part of our business model. And really, we were always focused on making sure that Brookdale and the senior living industry overall is an attractive place for associates because it fulfills their purpose. We make sure that we provide competitive compensation and benefits. We give people the opportunity to grow professionally. And one of the things that I really like about our industry is a really something that we call the second paycheck. And the second paycheck is really the relationships that are formed within our communities.
Cindy Baier:
It's something that it's so hard to describe because the connection that you have with residents or with other associates, I don't think it's matched in any other industry, and obviously, that's something that we needed to focus on. During the pandemic, we had some of the lowest turnover that we've ever had. And I think that's because people really understood that they were needed. They felt valued. They knew that we were prioritizing their health and wellbeing, and that's something that I'm very proud of. Now, as the economy has reopened, I will say that turnover has been more of a challenge for us and so we're constantly focusing on how can we focus on our associate value proposition and make it even better and stronger.
Pete:
And one of the things in addition to having to staff in new positions, new people, you're also operating in many regions across the country. So you're facing different COVID regulations, different risks, even the legality of implementing certain policies. How did you establish policies and procedures across the company?
Cindy Baier:
Well, our business is very much a local business, but it has the benefit to capitalize on size and scale. So if you think about some of the areas where size and scale benefited us during the pandemic, it would be things like acquiring enough personal protective equipment. At the beginning of the pandemic, it was virtually impossible to secure appropriate PPE, but we had the resources to create an entirely new supply chain and to literally evaluate hundreds of vendors to get the products that we needed.
Cindy Baier:
Infection control is something that is something that you can capitalize on the benefits of size and scale. Local regulation, however, is something that you have to do at the local level. So the benefit of our business model is we've got this tremendous size and scale that gives us resources that no other company in senior living has, but we also have the flexibility to know when is the decision best made locally as close to your resident as possible, and when do you leverage the size and scale of the organization? And so it's constantly shifting back and forth between local and national decisions based on whether the size and scale of the organization allows you to provide a better response.
Pete:
Can you talk a little bit about how you were able to turn to technology to connect your residents to the outside world, but also, and you touched on this a little bit earlier, how you were able to continue to operate your business with as limited interruptions as possible.
Cindy Baier:
Technology is really important. And what I will say is we have some residents who could teach us a thing or two about technology, it's important to know that some of our residents are cutting edge when it comes to technology. But importantly, we really did rely on Zoom as a fabulous tool. We were able to capitalize on engagement that was provided in a way that was never been provided before. If you think about museums like the Uffizi Gallery in Italy, it created tours of the museum, and normally you would have to go there to experience it. Some of the talent that was available for operas or plays provided just this wonderful series of learning opportunities for engagement. That really allowed something for virtually every resident interest that you can imagine.
Cindy Baier:
But technology also plays a critically important role in making people more productive, one of the things that we have done recently at Brookdale is we have put new software in that allows our associates to have more flexibility over their schedule by using cutting edge tools for our HR management systems. They're also technologies as it relates to telehealth, as an example, is something that was really a game changer. Can you imagine how incredible it is for our residents to be able to have a telehealth visit with their doctor, as opposed to having to leave the community, go to the doctor's office, particularly in the middle of a pandemic. So technology is truly a game changer, and I think we learned a lot during the pandemic that will serve us well for many years to come.
Pete:
Now that you know that you can opt great with more digital, you can operate with telemedicine, how much of that is sort of a permanent change and how much of that was just a short-term reaction?
Cindy Baier:
I think that there is a time and place for everything. And so I think technology for telehealth is a permanent change. I think that is something that we have learned that really makes a difference and we shouldn't go back. I think that using technology to connect with friends and families that are far away, that should always stay. We've had residents who get to see their grandchildren and great-grandchildren either get married or born when they live in a state that's far away. That is something that should stay forever. But there is nothing that would replace hugging your daughter, hugging your son, holding your grandchild for the first time, and so I think finding the time and place for each type of technology is the way that we should think about the future.
Pete:
I just wanted to go back to something you've mentioned about some of the residents being very technologically savvy. Is that somewhere you look to your residents for some leadership during that period where did you have any formal sort of resident-led trainings and things like that?
Cindy Baier:
We have a national resident advisory council. We actually have a technology subcommittee. Now, I think that in some of our communities, our residents have raised their hand to help fellow residents with technology. I know that there are many residents who do that. I don't think that the residents necessarily set the strategy for Brookdale or kind of the training in that regard, but I do think that we are in an industry where people help people. And so if somebody has a passion about technology, they want to help the people that they care about and so that often happens very organically.
Pete:
When you go through things like this, a lot of this is preparation. A lot of this is racking real time and there's also is luck. And one of the things that Brookdale came into 2020 with was some cash on its book from a recent divestment. Going into a strong balance sheet in 2020 can only take you so far. Can you talk about the financing and some of the lessons you took going into this crisis from your career that prepared Brookdale to survive? What initially was a shock to the stock price and then a full economic shutdown across the country?
Cindy Baier:
I think that preparation and action are essential. I think that my farm upbringing helped prepare me for that. One of the things that I've learned from being on a farm and throughout my life is that focusing on what matters most is critically important. And it's really important to make sure that you have cash during a crisis. One of the things that you should never ever do in business is run out of cash. And whenever there is a pandemic, you know that there's going to be incremental uncertainty. And when there's uncertainty, usually the credit market's tighten and liquidity is more important than ever. And so we focused on liquidity very diligently during the pandemic and I think that served us well.
Cindy Baier:
We were lucky that we had just closed the sale of our joint venture interest in our continuing care retirement communities before the pandemic and that gave us time. But we were also very proactive in terms of extending the maturities of our near term debt. That's something that George Hicks, our treasurer, and Steve Swain, our chief financial officer did early in the pandemic. And we were constantly making sure that we had enough cash to weather the storm and to thrive throughout the pandemic and I think that really served us well.
Pete:
And now that we're hopefully in the late stages of pandemic, if not beyond the pandemic, though don't want to commit to that. There's a lot of focus on sort of the long term impact and personal costs that people are facing. We talked a little bit about telemedicine, but there are a lot of routine medical care and other treatments that were put off. Is that something that's being felt across your sector? And are you seeing any impact from the end of COVID on the number of potential residents now looking to move into one of your facilities, perhaps after staying a couple years longer than they planned at their last residence?
Cindy Baier:
Well, I definitely think that throughout the country people put off medical care and that's something that is a challenge. It's really important to have preventative care to stay as healthy as you can possibly be. But I am very grateful that we had incredibly strong demand for our product and that our occupancy that we just reported was very strong, our best first quarter in quite some time. So I believe in the product. I think that there is a true need for the services that we provide and I'm pretty optimistic about the future.
Pete:
You mentioned the vaccine as the number one protection against the pandemic, but what are some of the other safeguards that are still in place to protect residents from the disease? And how has that part of the facility changed forever?
Cindy Baier:
Brookdale has more than 40 years experience in strong infection control and we are continuing that focus sort of every single day. During the pandemic, we upgraded many of the environmental protocols within the community, whether that included cleaning the communities or whether that included adding bipolar ionization to our HVAC systems. Now, that is a mouthful to say, but what it really does is it helps us to provide a better air quality within the communities and we are continuously looking for ways to make our communities as safe as we can.
Pete:
You write about the importance of Brookdale's north star, how it played a role in guiding everyone through the past three years. Can you explain what it is and how it helped?
Cindy Baier:
So our north star is the health and wellbeing of our residents and associates. And if you think about anything, there is nothing, nothing that matters more than our health and wellbeing of our residents and our associates. So we aligned the entire organization around that, that was our top priority. And during the pandemic, whenever someone had a decision to make, they focused on what would it mean for our residents and our associates. And then the decision was clear. Now, today, as we come out of the pandemic, it is important and that is still our north star, but we're also focused on attracting, engaging, developing, and retaining the best associates. We are focused on getting every room in service at the best profitable rate. We are focused on earning resident and family trust and satisfaction by providing valued high quality care and personalized service. So it's not the sole focus of the health and wellbeing of our residents and associates that we had during the pandemic. Now, we're able to do more than that because it takes less than 16 hours a day to do that.
Pete:
This is a story that really any business leader can learn from. So what are the lessons you want anyone who wants to get the business lessons from this story to get out of it?
Cindy Baier:
I think that this story is really so important. Virtually every one of us will experience some adversity, either in our personal life and in our careers and so we need to know how to have the resilience to overcome that. For any leader that is facing challenges, they need to know how to align their organization and to serve a greater good for society. I think virtually anyone in any industry who wants to be a strong leader can benefit from the lessons that we learned during the pandemic. I also think as individuals, there are many lessons that we learned during the pandemic that will help us in our personal lives as well.
Pete:
After everything that the entire Brookdale family's been through, what is the state of the community today and how is the company positioned for the future?
Cindy Baier:
At Brookdale, we are focused on what we learned during the pandemic, and we're using that to drive strong recovery in 2021 and also in 2022. Our first quarter had the best sequential occupancy in 10 years. We had more than 2000 move-ins in March and all this time, we're still focused on what matters most, which is the health and wellbeing of our residents and associates. So looking forward, we'll focus on strong occupancy growth. We will implement appropriate rate increases and we'll increase our positive net hires. For all these reasons, we're so optimistic about the future.
Pete:
Being optimistic about the future is a wonderful place to be. Thank you so much, Cindy, for joining us inside the ICE House.
Cindy Baier:
Thanks so much, Pete.
Pete:
That's our conversation for this week guest was Cindy Baier, the president and CEO of Brookdale Senior Living, NYSE ticker BKD. Her book, Heroes Work Here is available now at brookdale.com/heroes. All net proceeds from Heroes Work Here will go to the Associate Compassion Fund that provides financial assistance to eligible Brookdale associates who are dealing with a catastrophe or personal crisis outside of their control.
Pete:
If you like, what you heard, please rate us on iTunes so other folks know where to find us. Got a comment or question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us at @icehousepodcast. Our show was produced by Stephan Capiles with a production assistance from Ken Abel and Ian Wolff. I'm Pete Asch, your host signing off from Library of the New York Stock Exchange. Thanks for listening, talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties express or implied as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein all of which is presented solely for informational and educational purpose. Nothing here in constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
