CEO of brighterkind Jeremy Richardson says he can see the provider becoming an independent business.
CHP: Can you tell me about your background and how you joined Four Seasons?
JR: I would describe myself as an entrepreneur. I started off initially in private equity and I left because what I really wanted to do was to get on the other side of the fence and set up my own business. I went to Business School and did an MBA at INSEAD and came back and worked for Bain Strategy Consulting for a couple of years. I then had the opportunity to go to Welcome Break, which was a chance to go into a real business. I wrote a strategic review and one of the things I thought we should be doing was to grow our on-estate hotel business because that’s where the best return on investment lay and it seemed to me to be a growing part of the market. They decided not to grow that part of the business but a colleague came up to me and said why don’t the two of us leave and set up a hotel company? We wrote a business plan and built Kew Green Hotels, which developed into the UK’s largest multi-franchise hotel company. We ran Holiday Inns, Express Holiday Inns, Crown Plazas and we grew it to 26 hotels. We were the Sunday Times second fastest growing company and won Management Team of the Year. It was a fantastic journey. We were close to selling the business in 2007 but unfortunately HBOS, who were funding the people who were going to buy, got into financial difficulties, which indirectly led to us undertaking a restructuring and refinancing. I left the business in 2010 partly because I had been there for 10 years and had gone intellectually stale.
I left to join Bourne Leisure. They owned Haven Holidays, Butlins and Warner Hotels. I went initially as part of the management of Haven Hotels, the biggest business in the group, to lead a cultural change programme. It’s been hugely successful. It was a business that already made a huge profit and now makes almost a third more money than it did previously. After about two-and-a-half years I left and ran Menzies Hotels on behalf of Lloyds Bank. They asked me to turnaround that business and sell it for them.
I was then approached by a head hunter to come into care. It was a completely new opportunity for me. There were two things that attracted me to it. Firstly, Four Seasons had identified a group of care homes that they wanted me to take and turn into a standalone business. There were strong elements of a start-up involved which appealed to my entrepreneurial nature. Secondly, I was really intrigued by the sector. It has had such a negative press. There is a view that a lot of people in the sector are not particularly good, which I think is wrong. There was a challenge to go into a sector and operate in a different way and change perceptions and an opportunity to think about a way of doing things that might not have been done previously and take a business and turn it into something unique.
brighterkind is now an almost entirely standalone business. We have our own leadership team, our own values, our own behaviours, our own culture, our own recruitment systems, and our own risk and governance systems. We share very little now with Four Seasons Group. Our ambition was always to become an entirely standalone business with a very clear strategic vision to be the best care home group in the UK.
CHP: How did you go about developing this common identity?
JR: it’s a process I’ve used before. It’s called Destination Thinking. You never get into a car without deciding where you are going to. We have a very clear destination: we want to be the best care home group in the UK and that’s how we are going to measure ourselves from a resident, team and shareholder perspective. These are not goals that we are going to achieve in 12 or 24 months. It could take us five to 10 years to get there.
Across all brighterkind homes, 98% of customers said they were satisfied or very satisfied with the service provided by the care team and 97% said they were satisfied or very satisfied with the quality of care.
Our net promoter score (NPS) has gone from 41.5% to 50%, which is a very strong measure of advocacy. NPS is a most rigorous measure. It is based on customer responses to how likely would you be to recommend the organisation or service to friends or relatives. NPS is calculated by taking those who scored 9 or 10 out of 10 and then subtracting respondents who scored 0-6 out of 10. To put this into context, a UK consumer benchmark study carried out this year gave an average NPS for hotels of 1; for supermarkets it was 20; for airlines the average NPS was a minus.
We have shifted our EBITDA by 33% in three years. We have done that through proper operational discipline. Our agency payroll is running at just 3%, which is about third of where the industry is. Our average weekly fee has increased by just over £200 over three years because we have applied discipline to it. We have looked at every room in our estate and individually priced them. We have spent over £16m on refurbishing and repositioning our properties. We have put in wet rooms, more beautiful lounges, enhanced reception areas and overhauled our food and dining experience. We have invested very heavily in our three signature elements: food and dining, recreation activities and extraordinary care.
I do a lot of travelling. I can’t manage people from spreadsheets. I can only manage them by getting in front of them. I make a commitment to go to every home every year as well as regional management meetings and care quality meetings. We have two big events with our home managers every year. I place huge value on face to face time.
We have invested heavily in cultural and leadership training as well as mandatory training. The one thing that people who come into home manager or other leadership positions from a caring or nursing perspective have never had is leadership training so it’s not surprising when they really struggle. We have created a multi-module programme. All of our homes managers, our regional support managers, regional managers and leadership team go on a two-day offsite course every year. We are in year three of our development so every person will have gone through six days of leadership training by the end of this year.
CHP: Do you have a clear career pathway?
JR: We have developed a properly integrated training matrix. We are developing role profiles at the moment. We have completely changed our induction processes and our appraisals processes. The next step in our journey will be to create a brighterkind academy where you will be able to come and select from courses to tailor an individual career development programme. We have created something called the Caring Leader, which is a training programme for anyone going into a first line leadership role. We have created a learning development programme where we take the best people in our business and put them through a 12 month training programme with a view to creating the next leaders within brighterkind.
We have seen a lot more internal promotions in terms of home managers and regional managers over the past 12 months, which gives me real confidence that the investments we are making in developing the leaders of tomorrow are working. It is much more important for me to have people in the business who understand our values and culture who want to part of the brighterkind journey because we can develop and work with them. It’s far lower risk than bringing people in from outside who don’t understand what we are about.
CHP: Are you creating more nursing positions?
JR: When I took the business over we had 69 full time nursing vacancies now we have 38. That’s because we have improved the retention of our nurses and we have started to make ourselves an employer of choice. One of the benefits of building the brighterkind brand and starting to win awards, which we have done this year, is that we are now better known. We are now getting people proactively applying to us – home managers, nurses and carers saying we want to come and work with you because we have heard you go about things in a different way and are really excited about that. Secondly, the people who are in our business are seeing they are being respected, cared for and listened to. When I took the business over we had team turnover of 45%, this month it was 29.4%.
CHP: Does being a privately focused operator help with your ability to incentivise your teams?
JR: There’s no doubt that we are in the part of the market where you have greater flexibility but we are not a purely private pay operator. When I took the business over we had about 40% privately funded residents, today we are at about 54.5% so we have 45% of our residents who are publically funded. We will never be an exclusively private operator. I think it’s really important we provide services to the local authority market as well because those community relationships are really important. Creating a culture is not about what you are earning in fees it’s about how you run the business. We have deliberately set about running our business in a different way to many other operators in the sector. That’s led by me. I am head of HR. For me the culture is really important and I make a point of role modelling that and I expect every single one of my leadership team to do it as well as every one of their direct reports. That’s nothing to do with the package we are offering. That’s about creating the right environment that enables people to do what they want on a daily basis.
CHP: Do you have a particular figure in mind for your private pay intake?
CHP: Where do you stand in the debate about whether private pay residents are subsidising local authority fee payers?
JR: I think it’s an inappropriately phrased question. The reality is a private pay resident pays much more closely to a real cost of care. The key question is whether the local authorities are paying enough money to enable operators to give a really outstanding quality of care. The answer in many cases is no. We are in a fortunate position whereby if a local authority is offering a fee that we believe doesn’t enable us to deliver the quality of care we want to deliver and be proud of, we won’t deal with them.
There’s a big problem coming in the country. Local authorities by and large are not paying a true cost of care. Many of them are paying £200 beneath the true cost of care and that’s unsustainable. A big group has the opportunity to carry or subsidise local authority residents for a period of time, provided their fees are contributing to the fixed overheads of the business but eventually those resources will run out. It’s not sustainable in the medium or longer term and smaller businesses who do not have the same level of corporate resources are the ones who are suffering most at the moment.
It’s a national scandal. The challenge we have as a country is to look at ourselves and say are we prepared to invest in and look after our elderly or are we are going to wash our hands of them? We all know what the answer should be – our elderly deserve a proper quality of life and care. The system won’t collapse spectacularly it will just gradually erode. That erosion is happening already. The sector is losing thousands of beds every year and the rate of closures is accelerating.
CHP: What are your views on the quality of CQC inspections?
JR: There is still a lack of consistency and that creates problems. We encourage our teams to build local relationships with all of our stakeholders and to work with them and demonstrate that we are open and honest and transparent. If we feel we are being inappropriately challenged then we will challenge back. Some of the inspections that we have are quite heavy handed. In some cases we have several people come into the home at one time, in other cases we have seen inspections conducted with a much more collaborative approach. I would love to see greater consistency and partnership working.
Ultimately we are all in this for the same reason in that we want to improve the outcome for the people living in our care homes and we want to help every single one of our residents to love every day. What I mean by that is that every single person in our care homes has the opportunity to live to the best of their ability, irrespective of the severity of their condition.
CHP: How does brighterkind rate in terms of Good and Outstanding?
JR: When I came into the business we were approximately 50% Good and Outstanding and 50% Requires Improvement or Inadequate. Today, we are 68% Good or Outstanding and 32% Requires Improvement with no Inadequate homes. We have still got some way to go. I want us to be up to 75% Good or Outstanding and right up there with the best multi-site operators in the sector. We are moving quickly in the right direction but we have more work to do.
The sector would benefit from significantly more sharing of best practice because ultimately we are all trying to move in the same direction. We all want the quality and provision of care in the UK to be better than it is today. We would like to see the CQC drawing out the themes of what it is that makes a home Outstanding or Good and what it is that they look for when they go into the home and what it is that really excites them.
CHP: What part of the luxury market are you targeting?
JR: We are looking at the mass affluent rather than the exceptionally wealthy. You need to be flexible in the way that you deliver your services. We are not providing hotels for elderly people. We need to remember that we are running homes. Is having cinemas and hydrotherapy rooms really useful or is it just a marketing gimmick to make you and I feel less guilty about putting mum and dad into a care home because we can’t look after them ourselves? We have a duty to ask ourselves the question: what is it our relatives really need and we should design our homes accordingly.
CHP: How do you see the business developing in terms of geographic presence?
JR: I have no interest in becoming the biggest care home operator in the UK. Care is intensely personal so the business that we operate should be personal. I want to be able get my arms around the business because I need to know about every care home I operate and every single home manager. There will come a time where the span of control becomes too great to run the business in the way that I would want to. I wouldn’t want to run a business that is bigger than allows me to get all of the senior managers in one room. I want to look around that room and recognise every face. I can see us growing from 70 to 80 or 90 homes but beyond that we would really have to sit down and have a think about it.
We need to continually innovate and look at the quality of our estate be that through investment, acquisition or even disposal. I think there are opportunities all around the UK. We have put together a model that summarises brighterkind behaviours and one of those is that we want our homes to have charm and character, to feel like home and be inspiring and be uplifting. If we are looking at acquisitions we put them through that lens. There are many parts of the UK where the model works and it’s certainly not restricted to the South East.
Business professors will tell you that approximately 75-80% of acquisitions fail and the reason that they fail is because when a business is acquired it loses its DNA, the special ingredient that made it an acquisition target in the first place. Often when small players are acquired by a bigger business they lose their identity. We have been very fortunate to have made acquisitions at the same time as we have been developing a brand. We have been able to put that exciting brand on top of businesses we have acquired.
CHP: How important is technology in helping you provide better care?
JR: Technology for me needs to do one of two things. It needs to free up the amount of time that people are using to transact or do administration tasks which would be better employed looking after residents, or it needs to be able to provide a degree of security and assurance which isn’t there currently. We have begun a full review of our IT. I don’t believe that you just chuck IT at a business. It would help if all our data sat in one platform. If I can put a system in that allows a home manager to fill in one set of data rather than three or four sets of data then that’s a worthwhile investment. We are looking at the way that we audit, the way that we manage our risk, and our quality assurance and governance, because we believe that IT can help in all of these areas. We will possibly link to electronic care planning in the future.
CHP: Are you happy that your carers are able to spend enough time with residents rather than having to fill out paperwork?
JR: Yes I am. We have increased the number of hours per resident week over the last three years so we can invest more into our workforce to spend more time with our residents. There is no doubt that the administrative burden has increased with regulation but there is little point moaning about it – we just have to find ways of being more effective.
CHP: What other technologies have you adopted?
JR: There’s technology all through our business. We have introduced Wi-Fi throughout all of our homes. We have introduced iPads into our homes, which we are using to enable better interaction between residents and their family members. We are about to introduce an interface that will allow residents to interact with their families on a more regular basis.
I have a very open mind to the way technology can help us and I am curious as to what new systems will be able to deliver for us but this an ongoing journey. I don’t think there’s an end point because technology will continue to change.
CHP: Could you ever see brighterkind operating outside the Four Seasons Group?
JR: Yes I can see us being an independent business.