Scaling Mount Kilimanjaro might seem like good preparation for running the nation’s largest nursing home chain.And for Bill Floyd, taking on the three-and-a-half-mile uphill climb was within character. For whether it’s trekking to the highest point in Africa (official height: 19,335 feet) or redirecting Beverly Enterprises away from the brink of bankruptcy, Floyd has never been one to back down from a challenge.
The 60-year-old has faced more than his share in the nearly five years he has been with the Fort Smith, AR-based nursing home chain. There, he has directed one of the more notable corporate turnarounds in recent eldercare history.
But few of the challenges have been as personally directed as one Floyd now finds himself in: a hostile takeover bid. Formation Capital LLC, an investment firm based in Alpharetta, GA, plans to take over Beverly and put a new board of directors in place.
While Floyd and Formation’s point man have publicly traded accusatory letters about the possible purchase, Floyd sees the developments as a chance to shine.
“It’s easy to look good when things are going well, but the real mark of a leader … is when things are tough,” Floyd says. He adds that this philosophy holds whether the challenge is facing a steep incline or speaking candidly to a roomful of concerned employees.
The former CEO of Choice Hotels and avid outdoorsman has handled the takeover bid the way he dealt with other trying situations at Beverly (which recently renamed itself BEI). First, he informed all employees about what was going on.
“You provide a very balanced, honest assessment of the situation. My experience has been that you do that and you do that on a regular basis because it shows the organization you have respect for them. I think it’s a way to keep the organization very focused,” he said.
“He’s got his finger on the pulse of how associates feel and he knows people look to him,” observes Jim Griffith, senior vice president of investor relations and corporate communications at BEI.
Floyd says he has tried to encourage an “open, communicative” environment since he was hired to turn the company financially in April 2000 (he was named CEO about a year later). It’s not uncommon to find him eating lunch with different people in the dining center.
When he arrived, the company’s outlook was dire. More than 1,500 operators had filed for creditor protection, and there were rumors that Beverly might have to do the same. Debt totaled nearly $1 billion at the end of 2000; BEI had only $26 million in cash, skilled nursing home receivables totaled $495 million, and low morale permeated the culture.
Floyd, who led turnaround situations at Taco Bell and Kentucky Fried Chicken, established new guiding principles, strategies and tactics. Most notably, the firm sold 112 under-performing skilled facilities.
It also focused on hiring and promoting “the best athletes,” or the best people in their professional disciplines inside and outside the company, for the senior management team.
Today, the changes are evident. Cash balance at the end of the third quarter of 2004 was more than $207 million. Debt has been reduced to $558 million. Receivables are stronger and the company’s portfolio is diversified between nursing homes, assisting living, hospice and home health and rehabilitation services.
Nancy Weaver, an analyst with Stephens Inc. of Little Rock, Ark., called Floyd, a Virginia native, a “results-oriented CEO.”
“He demanded results from people and held them accountable,” said Weaver, whose company performs investment banking services for BEI.
Floyd gained some of his business acumen while earning an MBA from the Wharton School at the University of Pennsylvania. A former first lieutenant in the Army, he said he developed some of his core values of leadership at Valley Forge Military Academy in Wayne, PA. He says the best advice he ever received was to act with integrity.
“Do what you say you’re going to do,” said Floyd, who is married with three children. “When you make a commitment to someone or to an organization, you deliver on those commitments.”
Tom Mirgon, senior vice president of administration and human resources at Choice Hotels, said that his former boss is an “achievement-oriented individual” who performs well during times of adversity.
“He’s very focused,” said Mirgon, who joined Floyd in climbing Mount Kilimanjaro in 1999. “He’s very driven. But he has a compassion an
