A conversation with Four Seasons’ Isadore Sharp from KML’s newly launched breakfast speaker series
In March, Kostuch Media launched its fledgling Icons and Innovators Breakfast Speaker Series. In the first instalment, Hotelier’s editor/publisher, Rosanna Caira, interviewed Four Seasons’ founder and chairman Isadore Sharp, as his company was about to close its Yorkville property and prepare to move into its new flagship hotel on Bay and Scollard Streets.
The following is an abridged version of that interview.
ROSANNA CAIRA: This year marks the 51st anniversary of the first Four Seasons Hotel. You now have 86 properties in 35 countries. Did you ever imagine when you opened the first motor hotel on Jarvis Street in Toronto in 1961 that you would create such a world-renowned hotel company?
ISADORE SHARP: There was no idea and no vision for the company. Remember my background is in construction, and that’s what I intended to do for the rest of my life. I was only building a hotel as a real estate deal — nothing more. I wasn’t looking to build a company — one deal and that was it. My ideas really were formed through a stepping-stone approach.
CAIRA: Four Seasons has expanded into markets one might not expect, including India, Istanbul, Egypt and China. Yet in Canada there are only three Four Seasons. At one time, you had units in Montreal, Ottawa, Edmonton, Calgary and even the Minaki Lodge in northern Ontario. Why the international focus and the lack of Canadian properties?
SHARP: Obviously it’s easier to work in your hometown [so when I started] Toronto became the easiest thing. The next step, of course, was where else in Canada might we be able to grow: Vancouver, Calgary and Edmonton. At the time, we were building and owning or leasing, so it was still real estate. We built and had hotels in Canada’s major cities, but they were a bit of a mixed bag. It wasn’t until many years later we refined and decided to only operate medium-sized hotels of exceptional quality and try to be the best.
That came as a result of an experience we had while opening a hotel in London, England in 1970. A light turned on for me personally as to what I, and the company, could do best. That’s when we first made the statement that we would only own and operate medium-sized hotels of exceptional quality. And, if you look at that statement, the earlier hotels didn’t fit — not to take anything away from them, because every hotel to this day was a meaningful contribution to the success of Four Seasons.
CAIRA: In the early days, you opened in a lot of business centres and then in the early ’90s you began to focus on resorts. Was that based on what you saw happening in the world or was it the logical next step?
SHARP: That’s exactly how it started. Many years before we were offered an opportunity to look at a resort in Hawaii. At that time we were small and didn’t have anything in the resort business. So I turned down the deal. We weren’t ready for it, [which required] quite a different means of marketing and therefore was put on the back burner. But as we continued to grow into the United States, in particular, then we did have a base, and we were building a bit of a reputation. So I said, ‘Well, let’s look at the resort opportunities,’ because we were able, with the same business people and leisure travellers who were coming to Four Seasons, and we had enough confidence, to be able to market the resort. Today we still have more hotels in city centres, but resorts are now a big part of it.
CAIRA: A few years ago when you had 82 properties, you’d stated you’d like to double that number in the next decade. You’re now at 86 units, how big do you envision the company becoming in the next decade?
SHARP: I’m not picking a number to say, ‘Let’s try x.’ I’m using a number that’s really a fact, because we have quite a robust pipeline of hotels in one form of development or another. There are over 60 hotels either under construction, or that will open this year, and others that are under construction that will open in the next two to three years. The last time I looked at the list there were around 14 deals that we have already made letters of intent; and management contracts signed, that total is over 60.
Today we have 86 hotels, so when I talk about doubling the number over 10 to 12 years it’s going to be a natural evolution. Going forward we will more than likely be able to make eight to 10 new business deals every year.
CAIRA: When you mention Four Seasons everyone has an image that comes to mind. Usually it’s about great service and leadership. What makes a good leader and what makes you good at what you do? Do you think the concept of leadership has changed over the last few years?
SHARP: It’s a personal opinion, but leadership must embody trust, integrity and optimism to be effective.
Now there are many different styles and, I believe, leadership is situational [based on] what is required at a point in time. Leadership must be earned. To truly be effective you must earn the trust and respect of the people you are empowered to lead by your influence. Through trust you then can get people to rise to their best, because you believe in them. And because you believe in them and trust them, they don’t want to let you down.
They go beyond what they thought they could do themselves. [Leadership is] the ability to unite, direct and motivate. People have different styles; mine is dealing in a much more personal way, trusting in a manner, which many people will probably call naïve.
CAIRA: Six years ago when you completed the deal with Prince Alwaleed Bin Talal and Bill Gates you took on a different kind of role. And then a couple of years ago you moved away from the role of CEO. Even though you retain a minority share in the company and function as founder and chairman, how involved are you in the company today?
SHARP: Going from a public to a private company was a major transaction in my life. It wasn’t done for financial purposes. It was done, because I controlled a company and it was an opportunity to preserve its legacy by joining with two partners who would never have to sell. The only thing that changes a company is the ownership. These are people who have a lot of history with the company — Prince Alwaleed for almost 15 years and Cascade through Bill Gates. They were major shareholders of the public company, so they’re very much committed. They understood the company’s business model, and therefore it would carry forward. It was done for that purpose. But in so doing I didn’t want to change my lifestyle, so I maintained control in the company in a way that allowed me to continue running it even though I only had a minor share in it. But the main priority of every CEO is always to be prepared for succession with the inevitable or the unexpected.
Having my whole life at stake in Four Seasons, one of my main tasks has always been who the next CEO would be. In every company the CEO changes every eight to 10 years; that’s a natural process. About three or four years ago I identified who I thought could manage this next step. This is a decision I could control and one I didn’t want to make a mistake about. I was careful in choosing Katie Taylor. I put her in a position as a COO but told her, ‘look, that represents chief operating officer but think about it as a CEO in training.’ I felt by still being there it would make her more comfortable in the decision-making process, to have somebody where the buck stops at my desk made it a lot easier for her transition.
But in deciding to step down a couple years ago, I wanted to preserve a role in the company that I thought would still be helpful for her and the company, [and the role] is something I’ve always done, which is controlling the aesthetics: what you see, what the company looks like as well as the concepts of how it should come together architecturally. It’s something I’ve always done with the designers and engineers we hire. So I said ‘I’ll continue to take control and have that approval process.’ And, with over 60 hotels in development process, there’s enough that keeps me busy in terms of what I like doing. As far as giving up the day-to-day crap, that’s no big deal.
CAIRA: When you move into the new Four Seasons on Bay and Scollard this summer, it’s going to be a stunning building and feature several unique amenities you’ve never had in this hotel, including a spa.
SHARP: Yes, it will be a spectacular building. We’ll be having a hiatus getting ready to open there. I don’t necessarily refer to any hotel as our flagship, but I’m taking the privilege to call this our flagship because this is my hometown, and I’m simply very proud.
We’re incorporating everything that over the years we’ve learned becomes a necessary part of people’s expectations. So you build upon the successes and knowledge you’ve had. Years ago I used to say the latest hotel we open should be our best, because it incorporates the experience and knowledge and therefore, it should rise to the top.
CAIRA: The Four Seasons is known for upscale elegance and luxury. Obviously the last few years have been difficult for the luxury segment. Do you think the notion of luxury has changed in the last 50 years?
SHARP: It’s become more refined and sophisticated in terms of the word luxury. But when you go through a recession — and we’ve gone through many — you have the same perception, frugality becomes king. People talk about let’s now look at how we conserve lower costs, but that’s short-lived because by nature nobody goes backwards in lifestyle by choice. You work to aspire to get ahead, for your children, for yourself and family, so it’s a constant move upwards. When things turn down as they have in the past, you buckle down, you change a bit and conserve and do what’s right. But as things turn around again you adopt what I call the new normal. You go back to a normal way of life, but the experiences you have learned during that period of downturn — you gain by that.
CAIRA: When you open the new Four Seasons in a few months it’s going to be a different marketplace in Toronto, because we now have several luxury properties in Toronto, including the Ritz, the Trump, and, later this year, the Shangri-La. Do you think Toronto can sustain that number of luxury properties?
SHARP: Definitely. Remember these people aren’t coming here because they don’t see an opportunity. They look at Toronto, they look at Canada and they say, ‘This is the major centre of this country.’ We all share the same size of pie. We all bring business with us. So the market expands proportionally and each company — in order to make its hotel a success — is marketing and attracting new people to Toronto. The city is the beneficiary of these products that come and become part of its services.
We are a service that suits the needs of the city. Sometimes the economy might cause some problems as we get started, but, overall, you build these hotels to last 50 to 100 years. During that time there’s going to be economic cycles. There’s room for all of us. I much prefer to go into a city that has a lot of top-end hotels, because that means the market is big enough. I think that’s the way all these hotels are looking at it.
CAIRA: How do you define great service?
SHARP: Service has to be measured on its consistency. It’s not what you can do some of the time; it’s what you can do all of the time that determines what you can hold out to the customer as their expectation. The Four Seasons brand stands for the consistent quality of our service. Every company, every place in the world, can do it some of the times and many try to do it. That smile and ‘have a nice day’ is what they start with, but that doesn’t count if that is what you hold out to the customer as what they expect. To me it’s the ability to deliver on the customer’s expectation of what they’ve heard, and, in more cases, to try to exceed that. That’s what you would consider as quality service.
CAIRA: When you look at the last 15 years we’ve been hit with a great deal: 9/11, SARS, a couple of recessions, the last of which was particularly challenging. Recently we’ve also been plagued by problems in the Eurozone as well as problems in China. What’s the biggest challenge moving forward in the next decade?
SHARP: In terms of recessions, the last one was clearly different. There’s nobody in the workforce today that has experienced a situation as critical and as difficult. The last was the Great Depression. After we got through it they made reference to it as the Great Recession. So this last time in 2008-’09 clearly produced a major drop in the economy. It was at the abyss; everything was falling off the cliff. Clearly, many companies could not get through it. Luckily the governments did the right thing. In Canada we really were above the fray. You’ve got to give credit to our banking system. They were the only banks around the world that were able to sustain without getting into trouble. It was a serious downturn, but it’s passed. Now people are saying, ‘Maybe it’s a double-dip. Things aren’t going to be as good as we thought.’ You’ve got to recognize that if it was the worst recession we’ve ever seen then it’s going to take longer to come out of it and [recovery] will be slower. So the people who are saying, ‘Well, this is not the way it was before and we should be out of this in eight to 10 months,’ no way. This is going to take years.
CAIRA: What do you think the tourism industry and perhaps hotels, specifically, can do to stimulate business during our recovering economy?
SHARP: Communication is important. With the ability now to use the Internet, and what social media brings to the table, there’s an enormous opportunity. That’s going to be the biggest change in hotels. We’re just scratching the surface in understanding how much that can mean to our industry. Because communication and letting people know what’s available and what’s happening is everything.
CAIRA: When you look at Four Seasons you clearly are one of the leaders in the industry with regard to innovation. What do you think are the next amenities in hotels?
SHARP: There’s going to be a refinement of many things we’ve taken for granted, mechanically, electrically and structurally. There’s great concern, as there should be, and which may become more prominent in the way people do things in terms of the environment and making sure we’re conserving energy as best we can.
As far as the things that we call amenities, like the shampoo and all those things, they will continue to be better. No perfume in soaps and no perfume in the cream, things that people become conscious of as we go forward. But the biggest change in the industry is going to come from social networking and what that will do in terms of helping us communicate with our customers.
CAIRA: What do you think has to be in place for innovation to take place in a company?
SHARP: You have to have a culture that asks people to keep an open mind. As a company, we have grown to be what we are through innovation. Remember, this industry has been around for 500 years. We didn’t invent anything. We’ve taken an industry and added and created value for the customers by doing things that would be appealing to the customer, and they in turn respond. Innovation versus being inventive is what, Four Seasons, has done since day one.
My son had a great expression when he worked for the company. He was having difficulty, because he was heading our MIS department and he was trying to get our company into the computer world, which at that time, they were resisting. He was speaking to one senior person in the company and said, ‘You know, the mind is like a parachute. It only works when it’s open,’ and I think that’s what you have to continue to give people … that sense that we’re not looking for whose idea it is; we’re looking for the best ideas.
CAIRA: What you’re talking about is culture and what you’re saying is a huge part of the Four Seasons culture — being open to change and being innovative. Culture is one of the Four Seasons four pillars. How do you define it?
SHARP: Culture is a company’s standard and the rules upon which they expect people to work — it’s not about telling people how to lead their lives but how you expect them to act and behave when they are representing the company.
There are many different routes people can follow subject to what the company’s objectives are. At Four Seasons it’s based upon trust and integrity. That becomes the religion of the company. There’s a book that came out recently, called How the Mighty Fall by Jim Collins who has written several books on corporations that have risen to the top and how they lose their way. The one thing he maintains is you never compromise your core values. Never. He demonstrates how companies have gone from that elite group and lost their way because [they changed], even incremental little things and they [think] ‘Well, who’s going to notice? It’s only one or two per cent.’ And, maybe they don’t [notice], but it’s the mindset of how those people start thinking, ‘Wow, we can make a little more, do a little more, by giving a little less.’
CAIRA: In your memoirs, you cite a fifth pillar — to become the industry’s undisputed leader. Do
you think you are?
SHARP: Well you never want to admit you are. I’ve always maintained that perfection is an ever-receding goal. It’s the pursuit of excellence that allows you to never be complacent, to always say, ‘What else should we be doing?’ We’re acknowledged by many people to be leaders but undisputed means you’ve won the gold at the Olympics. Everybody in the world judges you that way and says you are the best. So that’s what the objective is. Until we get everybody who would give us that vote — and we don’t get that everywhere — we’re keeping it as an objective.
CAIRA: In the foreword of your memoir your wife, Rosalie, states that you have an innate humanity that sets you apart. You believe every person has potential and it’s opportunity that really makes the difference in a person’s growth. How did opportunity help you achieve success and what opportunities have you in turn tried to provide to your Four Seasons employees?
SHARP: We are all born with DNA of some skills. We all have it. The question is do we get the chance through our upbringing to nourish it? It’s either nature or nurture, and they both play a role. It becomes a question of how you believe in yourself so that when opportunity passes your way you grab it. You say, ‘I’ll take a chance with that.’ Really, it’s a question of one’s ability to not fear failure, to say, ‘Why not?’ There are great examples of heroes who have done the impossible. We have our own Canadian hero Terry Fox. He did the impossible. It’s the ability to believe and not let the challenge deter your willingness to grab onto the opportunity. For many people, it sort of passes you by and you think, ‘I should have done that.’ Well, that’s when you have the courage of conviction that you’re going to try. What’s to lose? [Don’t] be fearful of the fact that it might not work, because there is always a learning experience that goes with it.
CAIRA: You have been very central to the success of the Terry Fox Marathon of Hope. What would your advice be for the industry today about community involvement? How can a company incorporate charitable giving into its business model so it can make an impact?
SHARP: There are so many worthy causes, but we’re limited in our time and efforts. Whatever cause can be dealt with where you can involve more people within your company, something that everyone can participate in — and not necessarily by giving money, because I think the most charitable thing people can do is give of their time. There are many ways that can be done. We found that supporting Terry Fox was something everybody [could relate to], because so many people are touched by cancer. That has worked for Four Seasons.
We at Four Seasons have added another element this coming year with regard to sustainability. We are committing to plant 10-million trees around the world. So each hotel is picking up on the challenge to be part of the community. We as a hotel company, when we go to a new city, we make that point, and I used to say it at the opening of every hotel, ‘I trust over time that we will earn our position as a responsible citizen of your community.’ Every hotel was given that mandate. What is it that you should do in that community? Every corporation has something to give back. I think what you find from that is you develop camaraderie of the people who then take pride in the company, and therefore everybody benefits.
CAIRA: As the person who founded the company, how do you want to be best remembered?
SHARP: The true measure of one’s success is really how many people have had an improvement in their life — business and social — as a result of your leadership and what you have done. As a legacy what I would like to be known as is a person who has caused thousands upon thousands of people to have a better life because of the success of Four Seasons. That should continue, because I think one’s success is not really what one does, but how many other people have risen with the tide.