CEOs onPeople - In Conversation With Isadore Sharp, Founder and Chairman, Four Seasons Hotels and Resorts

February 22, 2016 Lee Hecht Harrison

“The reason for our success is no secret. It comes down to one single principle that transcends time and geography, religion and culture. It’s the Golden Rule – the simple idea that if you treat people well, the way you would like to be treated, they will do the same.”

For more than 40 years, Four Seasons has operated by a simple but profound credo: treat others as you would like to be treated. In this interview, founder and chairman Isadore Sharp talks about how The Golden Rule has shaped all aspects of the company’s brand and culture, from customer service to employee engagement and beyond.

Lee Hecht Harrison: Are you surprised that more than 50 years later people are celebrating the “Golden Rule?”

Isadore Sharp: Am I surprised? No, because it wasn’t an invention, it wasn’t something new. It’s something that when people understand the meaning and importance of it, they see it can apply to anything, not just business.

Of course when I first started the company it wasn’t about a specific vision or grand dream, I was just working to put a business deal together. Back then I couldn’t even articulate a philosophy because we didn’t have a company, it was just one hotel. And remember, it was just a theory – could we create a highly motivated, competent workforce based on an ethical credo? Many people were very skeptical about it. We had difficulty with some people, but over these last 30, 40 years, thanks to the people who did believe in it and stayed with the company, that theory has become a fact.

We now have over 40,000 people, there’s no doubt that they know this works. We’re now in 38 different countries worldwide, and this concept of the Golden Rule is our universally accepted principle, our way of life. Many years ago I asked my wife Rosalie, “Could you find out where it (the Golden Rule) started?

The Golden Rule, we say it so easily, but where did it all start from?” So she did some research and came back with a list of the ten religions that each has in their scripture a saying that embodies the principle of the Golden Rule. The first thing I said in my original memorandum to the employees was “The Golden Rule is the first law of human rights and is honoured by every religion.” So, even though we’re working in different parts of the world, every country has this as part of their religious beliefs. So, it’s not a surprise that we’re still talking about it.

LHH: Was there a seminal moment when you realized this was what you wanted the philosophy of your company to be, or did it evolve over time?

IS: This all came together for me 15 years after we built the first hotel. We had just built our third hotel, which was in London, England, and it was very successful. It won Best Hotel in Europe the first year of operation. And it wasn’t because we built a finer building. Remember, we were competing against these classic hotels that were really palaces. Our advantage was the way we treated our customers.

The service was very different. It was low profile, without the stiff formality that these other hotels conveyed. That’s when I saw that we had a philosophy that would allow us to compete handily. And that’s when I decided to make the hotel business a career. That was 1972. Based upon the success of that hotel in London, I made what I now call my first major strategic decision, which was to only operate medium-sized hotels of exceptional quality, and to be the best. We became the best in London through our service.

LHH: What was it like for hotel workers at that time? Did Four Seasons offer its employees a much different experience?

IS: In that particular city in that part of the world, people were held down by their employers. Those who were at the lower level of the service chart were treated as servile. You were told what to do and if you didn’t obey, you were not treated with much dignity. My approach to the first hotel was very different. We treated all employees just as we wanted to be treated. They loved that.

It also extended to the way we treated customers. I felt that any customer who came in should never be judged. And to do that, you had to explain to people that we shouldn’t be judging guests by what they looked like and how they dressed. They came to check in to the hotel, we accepted them as a good host should. And that was very different from the way the hotel industry seemed to perform at that time. Creating more of an egalitarian type of atmosphere was the beginning of this Golden Rule concept.

LHH: How did your employees react to the early stages of the Golden Rule philosophy?

IS: That was a difficult time for the company. When I put out this concept, several of our senior people thought it was too much of a motherhood statement. They were very skeptical and almost made jokes about it, complaining that ‘we’re running a business not a philosophy class.’ So I decided then that if I can’t get the senior people at the top to buy into this, then it’s not going to go anywhere. And that’s when I had to make changes at the top of the company.

Before we could put forward a mission statement, I had to make sure that the people at the very top of the company would not just give lip service to it but would really buy into it and support it. It really took a couple of years to be able to establish the senior personnel who would be able to go out and sell this concept. We wrote out a mission statement that explained our goals, our beliefs, and principles, but we never sent it out. What I wanted to do was to travel and talk about it. So myself and another senior person of the company at that time, John Sharp, who was not a relative of mine, went out to each hotel and talked about this idea. We reviewed this mission statement which was intended to guide how we run the company. It was an open discussion with the senior people – did they believe, did they think they could work under these rules, did they feel this was something they could buy into? It wasn’t something that happened overnight just by sending out a policy. This process of sharing it throughout the company took several years.

When we finally got to the point that we felt we had a core group of people at the top of the company who would live by this principle, that’s when we sent out the mission statement so that people could read what we as a company were prepared to stand by. And that took years. It started in the early seventies but what I’m relating to you now was the late seventies, early eighties. You have to start at the tip of the triangle and get it down to the base of the triangle to make it work. So that whole process was getting it down through that triangle. Today it’s at the base. Everybody in this company believes in this principle.

LHH: If you had to create a new company from scratch, would you do it the same way?

IS: Yes, because as I said, when we started it was a theory: could we create this workforce based upon this ethical credo? And through practice, it has proven itself. I didn’t know when we started whether it would work but I was prepared to persevere, to go as far as I had to to make it work. I controlled the company so I didn’t need anybody’s approval and when you have the authority to be able to follow through on something you believe is worth pursuing, it’s a privilege. It allowed me the ability to say ‘we’re going to keep at this until it works.’ That’s why it took a long time. To get the right people to buy into it, to go out and not preach it, but practice it. It was through our actions that we demonstrated the meaning of the Golden Rule.

LHH: How did your competitors react?

IS: In the company’s history, we have innovated many, many things in the industry that have now become an industry norm. We were the first company to put shampoo in the bathrooms. We were the first to decide a very good mattress is going to be a selling feature. The first fitness institute, the first overnight dry cleaning – there’s a list of 20 or so things that we started that were innovations in the industry. And most of those things have been copied, and that’s good because our industry is better for it. But the culture of a company cannot be copied by sending out a policy. A culture of a company grows over a long period of time based upon the actions of its senior people.

And when I say actions, I really mean the consistency of those actions. You can’t just be a good employer in the good times. What about when things are going south, when there’s a problem, when the markets are falling apart? How do you deal then with your people? You have to prove, over a great many years, your dedication to the culture of a company. You can’t suddenly change the way you have done business for the last 20, 30 years.

I guess one of the most traumatic experiences I’ve been though was after 9-11. That wasn’t just an economic problem; it was a world problem. Our lives changed forever because of the terrorist attack. So naturally, business collapsed as a result of it. Everyone wanted to know, what was the future going to be like? Myself and the president of the hotel operations at that time, Wolf Hengst, visited every hotel and spoke to all the people to explain what we intended to do as a company. They were fearful that their jobs might come to an end. They didn’t know what was going to happen to the company. I told them I was confident we could get through this. I assured them that we weren’t going to change as a company. We were going to continue managing, that we’re going to control our business as best as we can. But we’re not going to compromise on the guest experience. We’re not going to change what the customer expects from us. The question was, ‘how long will this go on?’ I said, ‘I don’t know, it might be six months, it might be a year, it might be two, it might be five. But however long it goes, we are financially stable and we will get through this.’ This gave a glimmer of hope to everybody. Just knuckle down, do your job, we’ll all get through this together.

LHH: As your company grew over the years, was there any need to evolve or amend the Golden Rule?

IS: No, as we grew we had more people who bought into it and believed it, so we had more support. Years back, when we only had five or six hotels, I would visit the hotels and hold town hall meetings. People would ask the question, ‘How many more hotels can we operate with this fanatical attention to detail and concern about every customer?” And I would say, ‘I don’t know, but if the last hotel we built doesn’t embody everything we’ve learned then we will have failed. If for our seventh hotel we can’t do that anymore, then I guess that’s probably as far as we can go. I used to give that answer when we had five, eight, 10, 15 hotels. But then I stopped saying that because I knew it had nothing to do with how many hotels we ran. It was just a matter of how we ran the hotels. And if we could keep running them the way we established the reputation of the company, then there was no finite number.

Today we have 92 hotels. We are much better at embodying this principle of the Golden Rule than ever because we have so many of what I call culture carriers – people who’ve joined the company, have stayed with the company, whose lives have been enriched not just through their employment with the company, but their personal lives. It has affected the way they have met their spouses, how they’ve raised their children. So now, when I say culture it’s not just the company’s culture, it’s the culture of the people who work in the company.

In order to make sure we had people who would understand what we’re doing, we hired on attitude, not on aptitude. We brought people into the company who really understood what we were talking about and believed in it because that’s the way they were brought up. If you think about it, most people have been brought up with this belief of how to treat other people. Not everybody abides by it, but they understand it. It's the way you try to guide your children: trust, fairness, honesty. This isn’t something that’s hard to understand. You just have to live up to the principle all the time.

LHH: Four Seasons was an early adopter of employee engagement programs. Were all those by design to reinforce and sustain the Golden Rule, or were they for another purpose?

IS: No, everything is based upon the idea of giving people what they need to do their job extraordinarily well. So there are many things: the perks that people get, the way you treat them, the locker room, the staff cafeteria, the uniforms, the understanding of individuals’ needs. We’re all different, we all have problems, and we all need compassion at points in time. So it’s being aware that you’re dealing with individuals and you must treat them as individuals.

LHH: There seem to be many companies struggling with employee engagement. Are you surprised that more companies don’t treat their employees better?

IS: I think there are a lot of companies now who are good at it, including some big companies. If you look at Google, it’s grown dramatically but I think they have a way of dealing with a person that is similar. Many, many companies do what we do. We’re not alone in this field. There are many companies that do understand the principle and live up to the principle.

LHH: Is the Golden Rule relevant across different generations as well?

IS: The Millennials, the young group that everybody feels is going to be different, is not really all that different. They still need basic trust and respect. We all have weaknesses that we’d like to make sure nobody discovers and we all want to develop our strengths.

LHH: You transitioned to the role of chairman. Do you have any concern that as you change roles, the company will lose touch with the Golden Rule?

IS: No. I have absolutely no fear and no doubt that it’ll continue on indefinitely. It’s not about me anymore because there are thousands and thousands of people, at all levels of this company, who have grown up with the Golden Rule. I can count on one hand the number of people in this company I might run into that wouldn’t agree with me. If you’ve got people that understand the value of something and the benefit that you’ve achieved from it, you don’t change it. You build on it, you make it stronger, you reinforce it, and you come up with new ideas. There’s no doubt in my mind that 10, 15, 20, 30 years from today, the company will still be solidly based on those core values. There are too many people whose lives have been enriched by it.

LHH: Your Company has gone from public to private. In some cases, a change like this could change a company’s culture. Having retained its culture through this change, is Four Seasons a model for others to study?

IS: The Company is used as a case study in many universities. It’s not a magic formula; it’s something that other companies have done. Unfortunately, as ownership changes, so do companies. And that means you could lose the understanding of what made the company unique. Some companies have lost their way.

I mentioned before that my control of the company gave me opportunities, and one of them was that I could control who the next ownership group would be. When we went private, I was in control of deciding who would then control this company. Now it’s a calculated risk because you can’t know everything for sure, but I knew that both of the owners of these companies, Prince Alwaleed Bin Talal and Bill Gates, were buying into this company because of what the value of this company was, and they understood the importance of the brand. And the brand is only as good as the culture of the company.

I was quite certain that this new ownership would be able to establish stability and certainty for the foreseeable future. It’s not like an equity fund that every five, ten years, they have to turn it over. These are long-term owners. The Prince has said he would never sell his interest. And a company like Cascade Investment, which is owned by Bill Gates, they look to hold things like a Warren Buffett, which is for a very long time. So having long-term investors gives you an opportunity to sustain what has made it a success.

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