The DNA of Our
Culture.

Ours is a unique culture. And we are obsessed with it. Defining, refining, fine tuning, and living our culture – EVERY DAY. EVERY STEP. EVERY ACTION. But before we delve into our culture, we want to first define what culture means to us. After spending thousands of hours in books related to business, psychology, philosophy, biographies, anthropology, and culture itself, we found the definition of a culture that resonates with us in an unusual place – in a book of science essays – “ The Lives of a Cell – Notes of a Biology Watcher” by Lewis Thomas. In this 1974 book, Thomas writes:

“It is instinctive behavior, in my view, and I do not understand how it works. It cannot be prearranged in any precise way; the minds cannot be lined in tidy rows and given directions from printed sheets. You cannot get it done by instructing each mind to make this or that piece, for central committees to fit with the pieces made by other instructed minds. It does not work this way.”

And he continues, “What it needs is for the air to be made right. If you want a bee to make honey, you do not issue protocols on solar navigation or carbohydrate chemistry, you put him together with other bees (and you’d better do this quickly, for solitary bees do not stay alive) and you do what you can to arrange the general environment around the hive. If the air is right, the science will come in its own season, like pure honey.”

At a macro level, we believe this to be the very definition of culture– getting the air just right around the hive (aka our organization). And it is our belief, if we get the air right, the honey (“compounding of per share value for existing owners”) will come.

At a micro level, we once again borrow from science to help define our culture. We are decisive disrupters who believe we can reinvent real estate as an asset class. We founded a unique culture of owners – not managers with agency problems – and bring the view of an “outsider” driven by a fundamental physics principle, Galilean Relativity. The principle states that it is impossible to grasp or define any system that you yourself are part of. One must be outside a system to fully understand it. If you are holding a ball on a train that is moving at 50mph, the ball looks static to you. You need to be outside of the train to realize that the ball is also moving at 50mph. In other words, distance gives perspective.

Our culture is also one of shared values with our operating partners, to deliver real value for customers and site level employees – we stand shoulder-to-shoulder, no matter what. A culture of resilience, having endured four different crises over the past decade – crises that included oversupply, a crippling pandemic, the labor shortage, and the worst inflation scare in 40 years. We have never shied away from a challenge. Instead, we tackle them with sheer grit and tenacity while simultaneously finding solutions to strengthen our company. For most of us at Welltower, this is not work – this is our life’s work.

We believe that life is not about predicting, it’s about positioning. Therefore, we are laser-focused on what we can control to extend the duration of our growth, whether it be through structuring, creating optionality, or rolling up our sleeves to find solutions in the most challenging moments; not just around ripping the band-aid off. We will act quickly and decisively when prudent to do so and can also exercise significant patience as the benefits from the network effect of our business grows. But we will never cut corners in how we deal with our owners, customers, and site-level employees.

We share a culture of extreme excellence to create true residual alpha for our owners – not defined by Wall Street’s view of the real estate industry which has a checkered history of creating real value. But, an organization’s ability to create real value for shareholders is often ephemeral. Just consider that in the late 1970s, companies remained members of the S&P 500 index for an average of approximately 35 years. Today, that number is closer to 15 years.  In our view, this phenomenon can be explained by the three different types of organizations that exist:

1. Organizations in which people show up to win
2. Organizations in which people show up to not lose and
3. Organizations in which people don’t show up

Over time, and as companies attain success, they often evolve from a handshake organization where people show up to win to a bureaucratic organization with a defensive posture where the prevailing mentality is not to lose. This is the point at which complacency and mediocrity seep in. We fight against this tendency every day by playing offense with no fear of looking foolish. Guarding against this negative drift toward decay is ingrained in our culture. Our goal isn’t to succeed for a short period of time and to “get out.” Nor is to maintain our seats for as long as we can. The key is to warding off the “we made it” mentality and foster a mindset comprised of two questions: for how long can we compound and how much can we compound. Like the Navy Seals, we believe “the only easy day is yesterday.”

“Culture is destiny.”

-Lee Kuan Yew

What are the shared characteristics of our culture that set us apart?

These guiding principles, modeled at the top and infused throughout our Company have been instrumental in fostering an exceptional culture at our firm. Our leaders show up every day to win with qualities such as:

These seemingly mundane qualities in the right combination create a leaping emergent effect of a culture where everyone is fully committed – we go all in and stay all in. Is there an example of this kind leaping emergent effect in nature? Many. Tin and Copper represent two of nature’s weaker elements. When they are mixed together in the right proportion, a much stronger material is created, Bronze – a leaping emergent effect. Or consider two weather systems – one filled with cooler air coming from the north and another with warmer air from the south. When they collide, one of the most powerful forces in nature is formed: a tornado in the Great Plains. Leadership and culture are just that – mundane qualities, such as those mentioned above, which create a powerful moat for an organization that just cannot be copied. We truly believe that the most powerful weapon on earth is "the human soul on fire”. We built a culture where we are all-in with everybody’s soul on fire.