Leadership Lessons From Isadore Sharp

Four Seasons Hotels founder Isadore Sharp was a keynote speaker at the recent National Business and Technology Conference in Toronto. He spoke before more than 250 delegates at the Mars Discovery District. He was introduced by Nspire Innovation Network president Brad Menezes.

Thank you Brad for that very kind introduction.  And good evening ladies and gentlemen.  It is indeed a pleasure to be here among a group of such young and promising Canadian leaders and entrepreneurs.  And, when you think about it, entrepreneurship is basically leadership with a high tolerance and comfort with risk.

And recent events have certainly refocused attention on leadership.  I think there’s general agreement that it’s more important than ever before, but there’s not much consensus on what it is, except that it’s changed since competitiveness became global.  Leaders come in such a variety of styles that they don’t seem to have very much in common.

But the essence of leadership is simply the ability to unite, direct and motivate.  And there are many different qualities to leadership:  mental toughness, judgement, conviction, patience, enthusiasm.

And you could all add to this list ‑ each quality taking precedence from the task to be done.

That’s the trouble in trying to pin down the qualities of leadership.  Leadership is situational.  It depends on what is needed for a particular place and time.

Churchill and Truman were very different, yet each was right for his situation: Churchill as a great orator when Britain faced defeat, Truman as an organizer with the free world in disarray.

But the quality that a great many writers seem to place first when discussing leadership is vision.

Interestingly, one of the questions I’m often asked is “What was my vision of Four Seasons when I started?”

Well, frankly folks, and in all candour I can tell you, there was no vision, there was no grand dream.  It was just another real estate deal.

One motor hotel ‑ nothing more.

In fact, I had no intention of going into the hotel business at all.

The first one worked, so I tried a second and then a third and the rest is history.

But it was a slow process over many years.  An evolution rather than a farsighted vision.

Because I believe our ability to predict the future depends on our background and experience.  And, growing up in a poor immigrant household and knowing nothing about the hotel business, I simply didn’t have the wherewithal to anticipate Four Seasons’ success.

Interestingly, one could argue that much of the Company’s success stemmed from my lack of knowledge.  You see, having no experience in the hotel business, I had no preconceived notions about it.

So I approached the business from a customer’s perspective.  I asked myself: “What would customers consider important?  What would they value?”

And it’s from this premise that many innovations were born.

As an example, we were the first company to put shampoo in the bathrooms.  Now they weren’t the fancy bottles we now use … describe plastic sachet packages, etc.

Then there was 24‑hour room service, one‑hour pressing, overnight dry cleaning, terrycloth bathrobes, soft toilet paper, complimentary shoe shine, kids and teens programs, no smoking floors.  And the list goes on and on.

At the time, I was told by more experienced people that it couldn’t be done.

But today, many of these innovations have become the industry norm.

But being first doesn’t really count for much, because in today’s business environment, it’s not good enough to rely on the strength of the product alone.  International rivalry will make product quality a given.  And as products mature, technology brings parity.

So how can a Canadian business ‑ or any business ‑ hope to compete on the world stage?

Warren Buffett often talks about finding a sustainable competitive advantage.  He describes it as a moat, a barrier to entry which he believes is a company’s most important asset.

And recently, I went back and took a look at three of the most successful business books ever written.  You might have read them.  They are: In Search of Excellence, Built to Last and Good to Great.

And what’s interesting is that more than a third of the companies featured in those books are no longer a part of that elite group. Their competitive advantages were not sustainable.

And what the author Jim Collins concludes is, and I quote …. “what makes and keeps companies great is a strong set of core values; values that you never compromise.”

At Four Seasons, our commitment to our values is the oldest part of our story.  And it’s what propels us forward, as we continue to grow globally.  Increasingly, and what is now obvious, is that ethics matter greatly to every organization.

So I thought I’d share some of the fundamentals of our story with you today.  And I think you will see that the depth of our culture and our commitment to it has seen us through good and challenging times alike.

Now it may seem obvious that in the hotel business our objective is to provide great service.  The trick is pulling it off successfully.  And that requires an enormous commitment, as our experience will show.

At Four Seasons we’ve always believed that if we give our customers value, our customers will give us a profit.  And that has now been proven over time.

But the essential question for us in the early days was:  “What did our customers value most?”  Market research said it was luxury.  And luxury didn’t necessarily mean elegant surroundings and gourmet meals.

So when we looked closely, it became clear that the greatest luxury for our customer was time, and service could help them make the most of that.  Giving them greater productivity; greater enjoyment, and a memorable experience.

Of course, designing service to help busy people make the most of their precious time can be challenging.

We can’t pre check service or sample it ‑  production and consumption are simultaneous.

Those few moments of service delivery are a company’s make or break point, when reputation is either confirmed or denied.

And the outcome in our industry normally depends on front‑line employees:  doormen, bellmen, waiters, maids, the lowest paid people, and often, in too many companies, the least motivated.

These front line staff represent our product to our customers.  In the most realistic sense, they are the product, its personal component.

So to win or even survive the coming service battles, customer satisfaction must be everybody’s business.

And to be at the top of our game at Four Seasons, we have to get service standards down to the bottom of the pyramid, by far the hardest job in everyday management.

And that process begins for us with our hiring policy.

Most organizations hire for experience and appearance, how the applicants fit the company image.  We hire for attitude.  We want people who like other people and are, therefore, more motivated to serve them.

Competence we can teach.  Attitude is ingrained.

When we opened the Four Seasons in New York, we met more than 15,000 applicants for 400 jobs.

We interviewed the top prospects four or five times, and the last time with the General Manager of the hotel.

It’s a rigorous, highly selective, expensive procedure.  But minor compared with the cost of struggling for years to change habits that come with ingrained poor attitudes.

Now, surveys show that most managers in North America believe what employees want most is job security and competitive pay.

But job security, especially in today’s market, is questionable.  And while salary is certainly a consideration, other things matter much more.

And polls taken recently for Fortune’s annual listing of the “100 Best Companies To Work For”, which I’m happy to say has always included us, find that employees in these firms value, primarily, three things.

First, to work for leaders who demand and inspire their best.

Second, a physical environment that makes work enjoyable.

And third, and most important, a sense of purpose, and a feeling they’re working for more than a pay cheque.  That they’re helping build a company that they can take pride in.

In short, some daily meaning along with their daily bread.

In every area, we push down responsibility, from head office to our frontline people, who have the authority to make most decisions they feel are needed to satisfy our guests.

We treat them as members of an elite team, and we set challenging goals.  And that’s why, early on, we set a mandate of zero mistakes.

Inevitably, of course, mistakes occur.

But when our employees are trusted to use their common sense, they can, and do turn mishaps into new service opportunities.  Then, what the customer remembers is not the complaint but the outcome.

From the very beginning we always had an implicit operating philosophy.  But some 30 years ago, as we expanded, I decided to make it more explicit.

So I sat down with our Director of Communications and detailed a formal credo based on the Golden Rule.  The cornerstone of what would later be called our corporate culture.  In essence, to treat others ‑ all others: customers, employees, partners, suppliers ‑ as we ourselves would want to be treated.

There was nothing new about this, of course.  Even back then, such credos were common,  though seldom believed.  What was new was that we enforced it.

Senior managers who couldn’t or wouldn’t walk the talk were all winnowed out within a few years.

It was a painful process, personally distressing, and perhaps the hardest thing I ever did.  But the fastest way for management to destroy its credibility is to say employees come first and to be seen putting them last.  Better not to profess any values than not live up to them.

Now conceiving a vision and strategy is relatively easy.  The hard part is selling it, getting it across to all levels of employees.

And that became my task.  Preaching the gospel of service every day and on every trip to every hotel.  Continuously restating it.  Developing it.  Focussing employees at every level on one priority: giving customers added value through service.  And that’s the way it has to be.

As managers we live in a glass house, every action watched and discussed on the company grapevine.

If we’re seen showing greater concern for power, prestige, and costs, than for the customer and the values we profess, then we forfeit belief and trust, along with our goal of being the best.

Trust, trust  is the unseen and too often the neglected determinant of corporate success. It has never been a more important consideration than it is today.  It’s the emotional capital of leadership.

Building community spirit, certifying communication and fostering teamwork.  It’s the essence of a brand name, and a synonym for customer loyalty.

We’ve yet to go into a location, and we’re now in more than 30 countries, where upholding the Golden Rule hasn’t brought employees on side.

And every year that service culture grows stronger.  We see the effect every day in each hotel.  Employees develop a camaraderie that deepens, creating a sense of community that makes cooperation the norm.

This was illustrated more profoundly than any of us could have imagined during the tsunami several years ago in Southeast Asia.

When the wave approached and struck our hotel in the Maldives, each employee acted intuitively to ensure the comfort and safety of our guests ‑ and I emphasize intuitively.  They did everything they could think of to ease minds and calm nerves.  Some were even credited with saving lives.  Within 24 hours they evacuated the island and chartered a plane that flew every guest to safety.

Following the Tsunami, there was an outpouring of gratitude from many, many guests.  One wrote, and I quote,

“Let me stress that your group’s strength rests on rock, made up of the local employees who, while having been selected for doing their job well, have shown in a time of utmost crisis a level of dedication that no training and no amount of money can ever generate.”

Clearly, our employees’ actions that day touched our guests in ways they will never forget.

What they accomplished in the midst of adversity may sound extraordinary, but I believe any of our employees around the world would act with the same dignity and grace.

Motivated by an inner need to do well by others, our people delight and surprise our guests every day.

The sum of their efforts is what makes Four Seasons unique.

So by nurturing the full potential of every employee from top to bottom, I believe that businesses can tap the most important resource for success for the 21st Century.  It’s all about people.

And it’s an approach that can apply to every business, in every industry.

As some of you may know, I recently chronicled these and other experiences in a book on Four Seasons.

It’s a story about building a business by trial and error; and about people and all that they can accomplish when they share a strong set of values.

Now, my main reason for writing the book was for the benefit of the more than 35,000 people in Four Seasons and for the thousands more who will be joining the company as we continue to grow.

Because, I believe if one can understand how and why we got to where we are today, it can give you a better sense of how to deal with the future.

But the book also brought what my wife Rosalie called the unexpected rewards: hearing from friends of long ago and from people I didn’t know.

Many writing very kind letters and there was one that I’d like to share with you.

A Mr. Jay Nussbaum made reference to a quote that Rosalie wrote in the foreword.  Something I said many years ago which was “that I believe the only thing you can control is your attitude.”

Well, when he read that he sent me a copy of a memorandum titled Attitude, and asked if I wrote it ‑ which I didn’t and had never seen it before.

But I thought it was compelling, so I’d like to share it with you today.

The title is Attitude.

The longer you live, the more you will realize the impact of attitude on life.

Attitude is more important than facts.

It is more important than the past ‑ than education ‑ than money ‑ than circumstances ‑ than failures ‑ than successes ‑ than what other people think or say or do.

It is more important than appearance, giftedness or skill.

It will make or break a company ‑ a church ‑ a home ‑ a person.

The remarkable thing is we have a choice each and every day regarding the attitude we will embrace for that day.

We cannot change our past ‑ we cannot change the fact that people will act in a certain way.

We cannot change the inevitable.

The only thing we can do is play on the one string we have ‑ Our Attitude.

Life is 10% what happens to us and 90% how we react to it.  We are in charge of our attitudes.

So there you have it.  It’s a message that I thought you might find helpful.  The concept is also part of the fabric of my book.

One last thought for you future leaders.  Forget the myth of the self‑made man.  I doubt that anyone ever made it on his or her own.

On your journey, as on mine, you’ll encounter crises when support by others will be critical.

And for those determinative times, I’ve had the good fortune to be associated with very good partners and colleagues, and a very supportive wife. May you who are just setting out, have such luck ‑ another understated facet of success.

Again, thank you for inviting me.  I hope you find some value in our story and experiences.  And I wish you all continued good health and much success.

Thank you!

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