Stuart Nicholson, the CEO of Becton's Retirement Business

What is more important for a CEO in today's market: property skills or
marketing skills Becton chose marketing.

Stuart Nicolson is the CEO of Becton's Retirement business. A veteran marketing executive, he was plucked from the prestigious Melbourne Business School (University of Melbourne) just two years ago when Becton had three established villages. They now have market leading occupancy levels and 13 projects on their books worth more than $500 million.

When first approached Stuart was not excited.

"When I was approached by Hamish McDonald (the then CEO of Becton), right from the jump I said I was not interested because I thought the sector was a bit daggy - I wanted my next move to be into an exciting, challenging industry. I had this conception that retirement villages were dated, dull and just not invigorating.

Hamish asked me to keep an open mind and go and take a look at his Becton villages, the Classic at Brighton, the Menzies at Malvern, the Breezes at Mackay, the Breezes at Hervey Bay, Dee Why Gardens at Dee Why, Waverley Country Club at Waverley, and the Woniora at Wahroonga. When I did my immediate response was, my goodness, how wrong could I be.

Becton has a development and growth strategy of not being the biggest, but being the best. Hamish explained to me that the village sector was entirely different from development. Here you stay and manage the product and it's how effectively you drive that management that delivers the profit. It's a different skill set to straight developments.

When I looked at the fundamentals of the ageing population, downsizing and the need for care and support, I recognized the huge opportunity and especially at this end of the market, the top end.

I also looked at Becton's brand and heritage; I am a big believer in the value of reputation, for innovation and the importance of trajectory. Becton is at the top. I joined and it has been a great ride ever since.

As I got to understand the business I came to appreciate that while it is a commercial enterprise it also has a strong social overlay, and this appealed to me. We have a responsibility to create communities and lifestyles that meet the expectations of our residents.

I have always worked in the marketing sphere but this concept of communities has been an increasing interest for me. My last position was with the not-for-profit Melbourne Business School (University of Melbourne), where I was the Operations Director.

Essentially I was selling education to overseas students - a very competitive market. Fortunately the Melbourne Business School is the best in the Asia-Pacific region. Our marketing homework recognized the intense interest in the Asia-Pacific business region and we designed courses around this and offered Melbourne as the perfect geographic location to study. I set us apart from our competitors by targeting Latin America, Europe and North America. It worked.

Prior to that my career spanned selling computers (for NCRCR), working in the pharmaceutical industry with the Swiss company Sandoz and then for the Australian Dairy Corporation, where I was Marketing Director.

I spent my first six months here at Becton building my understanding of the business and the key drivers of our potential customers and therefore sales. We gathered lots of data and looked at lots of operators. We also looked overseas and reviewed all the trends. And of course we've talked to a lot of seniors, as well as our own staff.

At the end of that six months we had a clear idea of what our brand is and our strategy, which is to deliver "enriched living' - that is creating communities where people have an enriched and fulfilling life.

We developed our 5 F's principles, which is now the embodiment of our product and our brand. Everything we now do is measured against whether we are ‘on brand or off brand'.

The 5 F's are Food, Form, Fitness, Freedom and Friendship

Food relates to the food available in our villages. Form is the built form. Fitness is the health and well-being of our residents. Freedom is the sense of security and support to explore and enjoy life and friendship is exactly that, the friendships they build with other residents in the village.

Each of the 5 F's overlap. For instance food overlaps with friendship but it also overlaps with form, such as in the way the restaurants and cafes in our community centres are designed. Just think about a restaurant; some engender a warm, convivial feeling while some don't.

These principles have helped us tremendously. For instance the Menzies (at Malvern) was a difficult project when we acquired it but we reworked it and now we are re-selling apartments for up to $1.3 million in a matter of hours. In fact we have sold three in the last month for around that figure, which is significantly higher than our June 30 valuations for those apartments.

Last year we acquired our Woniora project at Wahroonga (NSW) from the Estate Properties Group who were in receivership. It was a straight apartment development so we reworked it with an upscale restaurant and bar facilities and have achieved eight pre-sales in the first two months.

Every quarter we now have staff meetings to review 5 F initiatives; for instance we will develop ideas around friendship and then test them. This keeps us all focused.

It has been very gratifying to experience the latest round of Annual General Meetings that we have just had where the Chairman of each Residents Committee examined every aspect of their village down to the minutia; the performance of the grounds people, the maintenance and of course the budgets, and each of them complemented their management and therefore Becton for a very satisfactory year.

To achieve this everyone has to be a salesperson, and the most important salesperson is the village manager. They create the environment where people want to live. This is after all a service business; the people in this business are critical.

I spend a lot of my time on recruitment and I reckon all the people I have hand-picked from within and outside the industry are the best. I can also sit here and honestly and genuinely say that our projects are the best compared to their competition and in their catchment area.

The core of marketing is understanding your customer deeply, in developing a product that holistically meets their requirements and expectation.

And that is now the Becton brand.

 

 

Other stories in this section:

• Christine Daly - Reducing Residents' Costs and Saving the Environment
• Dr June Heinrich, the CEO of Baptist Community Services
• The SCV Group Australia's Toughest Village Job
• John Martin, Managing Director, Babcock & Brown Communities
• Ken Barber and ARV - The Business of Providing Better Care

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