Isadore Sharp, founder, chairman, Four Seasons Hotels and Resorts

Thank you, Bob. Thank you for this very generous introduction.

Thank you, thank you. As you know, it's been a long time in coming and I'm glad to sort of get it launched, so to say. But hopefully it's well received. And as you know, the main reason was for the really many, many people in the company, for their benefit. You know, 35-plus thousand who presently work in the company, for the many other thousands who will be joining the company as we continue to grow. So I thought it was because I think if they can understand how and why we got to where we are now, it gives them a better sense of how they can deal with the future. And I thought I better get it down now while I can still recall some of those early decisions and how they came to be.

Well, as you know, we're talking — it was quite an experience, having to go back and recall things I haven't thought about in 40 years. So in that regard, it became quite interesting to think of things that I did when I was 25 and 30, and wondered why in the world did I ever think I could do that, because it's affected even today with the strength and breadth of the company. There were some of those things that I wouldn't even attempt to do today, but I guess that's what you do when you're naive and don't know the pitfalls that might be in front of you — you just go ahead. So that's what it did for me, is to recognize that many, many things are possible if you keep that concept in mind.

Well, he was an unusual man inasmuch as he came from poor beginnings. He's an immigrant, you know, struggled through early parts of life, lived through the pogroms and then the early parts of trying to build a country in Israel. So he came here prepared to work as hard as he had to, to put food and shelter on the table and over his family's head. So he was a very quiet man. He never raised his voice or ever raised his hand to any of the four kids. And he was, as I say, probably the most tolerant man I've ever met. No education, but he really bridged every generation gap simply because he wasn't judgmental. So whether it's his great-grandkids who would talk to him about something, he would have such an open mind. And he was quite a religious man but never forced us to follow his religion. So in that regard, he gave me an understanding of how to behave in life, how to accept people for who they are, and not try to determine who's worthy or not. I guess you learn that not from what he says, because it was never a speech, but from how people are, how they respond. And over a lifetime, you acquire those things that you do respect and admire. And he had that impact on everybody. I mean, he was a man loved and respected by anybody who knew him. So you don't get that unless there's a special quality inside. And he lived to 102 and had a loving life. He admired and loved his wife, my mother, like no other love could ever be. So if you're sort of surrounded with that type of personality, by osmosis I guess you're learning things.

No, never, never. He never suggested one way of doing one thing. There was one time he told me — I had this opportunity very young and I was approached by ITT that they wanted to buy my small company and have me come and help them build a hotel company. He said something that, you know, I'm not sure that's why I made my decision, but he said, 'You know, you've never worked for anybody.' That's all he said. And he was right. So I did not sell my company.

Well, like everything else, you put it all in the basket and you got to carry what's in that basket — the good things, just the choices you make that work, and the choices you make that don't, but they all come together to be what they are today.

Yeah, I don't know to this day, I can't really understand how and why. But you know, I had an education — wasn't a good one, I was always a terrible student. But I think he just, from his life, assumed that if you've gone to school and you've graduated, you must know things that he wouldn't know. But he was such a generous person that if he saw you doing something, he wouldn't stop you. So I guess my approach was I would just go ahead and do things, and he slowly was able to say, 'Fine, that's what you want to do, I'll watch you.' So he was very generous. And usually it's very difficult — remember, it's a two-man organization, I'm not going into a company — and it's very difficult for children to work under their parents. But this was very different. I never had any trouble with it. I think it was a mutual respect that seemed to prevail.

Thank you, yeah.

Well, you know, as I said, my dad was a builder, so we were building houses and apartments. That's the way I came into the work world, was growing up working on construction sites and really enjoying it. I loved the physical part of working outside with strong, hard-working people. So I just got interested by building a small motel for somebody. That intrigued me — how did he think this is going to work? And I thought, gee, maybe that's a good idea. So I tried to put together a small hotel deal. Now, I was only doing it as a real estate plan. I wasn't doing it in any way thinking about going into the hotel business. I knew nothing about the business. So my approach to trying to figure out what to build and how to operate was really from a customer's perspective. What would a customer find of value? What would they consider to be useful? So my approach right from that very first hotel was based upon the 101 of business — what do you have to do to attract a pleased customer? And that strategy hasn't changed to this day. But I was only doing it as a real estate deal, not in any way thinking of going into the hotel business. And I didn't think about going into the hotel business until about 10 years after that first hotel. So it was a slow evolution of opportunities, and then I came to quite enjoy what the hotel business is offering. It was a stepping-stone approach — try something, it worked, the next one, the same thing. It got to a point where I thought I saw what I thought I could do quite well, and that gave me the desire to try it.

Yeah. My idea was to take the concept of a motel, which was built on the highway, easy access to drive up and check in, and combine it with the better attributes of a hotel, which was more service if you wished it and more facilities. So that was the concept of what I was trying to put together — that's an idea that might work. Now, if it was such a brilliant idea, then tell me, why did it take me five years to convince people to invest in it? So it didn't happen overnight.

Well, again, going through the history, I could identify what I call now the four key strategic decisions that really formed the foundation of the company. You could classify them as milestone objectives, but those occurred over a 25-year period and each one was to support the one before. So the first hotel took me five years but it opened in 1961. And then some years later, when we opened and we're running the Inn on the Park in London — and this is the third hotel — that was what I call a crossroads where I really felt I had an idea that I would like to work on. And that's when I made that first strategic decision, which was to only operate medium-sized hotels of exceptional quality and to be the best. Now, the first part of that's no big deal if you just want to operate one type — that wasn't new. But to say we're going to be the best, that was a stretch. Because I didn't say we were the best, but I wanted to be. But it was based upon fact, because when we opened and operated the Inn on the Park in London, we were up against the most famous and some of the best hotels in the world — the Dorchester, the Grosvenor, the Ritz, Claridge's, the Savoy, the Berkeley — all of them. And we beat them all. We had the most successful hotel in London. It was considered, was voted the best hotel in Europe in 1970. So my thought was, if we could do it there on their home field, why can't we do it everywhere? And that's how I based that we're going to be the best. Now, that of course begged the next question: how do you determine that? What's going to make you better? And I said the same thing that made us better in London was the quality of our service. We approached it very differently than the other hotels. We had what I call class without out-of-date formality. So that was the second major decision — that we were going to define ourselves not by the architecture and decor, but by the quality and consistency of our service. That again led to, well, how are you going to do that? And that then became the most important decision that the company has ever made. And that's when we defined how we were going to operate — to create a work environment that would make our employees better able to do their job than other hotels. And we wrote out our mission statement based upon that very simple, profound statement of the Golden Rule: do unto others as you would have them do unto you. And we built that into how we as a company would operate. That's how we would treat our people, and that's how we expected our people to treat our customers, our suppliers, our business people. So that really set the stage of what defines Four Seasons today. That's why I say it became the most important decision. So if you look at — and we now call them the classic Four Seasons — the fourth one, of course, we decided to make the hotel and develop a management company as a business model and build a brand name that would be more valuable than the ownership of real estate. So those, in reconstructing the history, are what I can now define as those milestone objectives that supported decisions, and then the filling in between those, what we call the Four Pillars, were really those stepping stones of how you got from one point to the next.

Because if people aren't with you, they automatically are against you. So that became a very personally distressing time in my business life. But I was convinced this is the only way we're going to be able to compete with people who were bigger and better at what they did. We were going to do it by creating — it was a theory — could we create a highly qualified, competent workforce based on an ethical credo? Now, that's where these people said that nobody's going to buy into it because nobody's going to really care. And that's where we parted company with many people in the company. But there were many others who did buy into it, who did say, 'Yeah, I like that. That's the way you're going to treat me, I have no problem treating other people the same way.' So it slowly got roots, because it's a universal belief system that most people really adopt. If you think about your own family life and how your parents aspired to raise you in a manner which would make you the best person you are, and I'm sure it's the way you are trying to raise your children — giving them values that they can rely upon. So the principle has meaning, but it has to be used without compromise. You can't say it — you got to walk the talk. And that's where we had differences of opinion. People would say, 'OK, I can say it, don't worry about it,' but their actions wouldn't follow their words.

Yeah, no, there's no doubt — it's not just me now, it's everybody. I've got thousands of people now who have bought into this in a way that gives the company enormous breadth of strength. Because what I say — it was a theory, but now because of the actions of so many people over so many years, that theory has become a fact. It does work. It gives you a workforce that truly differentiates the company, and not in an arrogant way — not to say we're doing it better than others, we're just doing it more sincerely. It's a legitimacy that people see — our employees do mean it, they do try to do their best. It's not 'smile and have a nice day' — it's a very sincere effort on everybody to try to support each other and follow through on what their responsibilities are.

Well, it's to understand what the day is going to be and they're further reviewing everybody who's coming into the hotel who might have special needs or loyalty or special requests that's been made to a meeting planner or whatever. So everybody is brought up to date on what's happening. And then there are the glitch reports — people want to know what happened yesterday, did everything work? Not everything works, so they wanted to address those things that might have fallen between the cracks, so we can correct it or other people can be aware of it. So the person who did have a mishap, the doorman might say, 'Sorry, Mrs. Smith or Mr. Jones, I understand this happened.' And it's getting everybody to recognize that we will make mistakes — it's inevitable — but it's what you do about them. Not to sweep it under the carpet, come forward. And that's what these meetings are all about — let's make sure we all understand what our problems might be that day. So it's a very open, it's not a long meeting, nothing more than an hour I guess, but it's a very open way of making sure that everybody's familiar with what the task of that day or that week is they're going to encounter. So it's preparation. That's the whole idea — execution is nothing more than if you're well prepared and organized, execution becomes quite simple.

Yep, that's exactly it. Understand that we're all there to make sure that the ability to perform at the level we're talking about — meeting every guest's expectation every time — can only be achieved if it's a complete team effort. If everybody in the hotel recognizes their job is essential to the ultimate outcome. One slip — that might be a person working in the kitchen cleaning and washing dishes, a shift glass not taken off the line and gets on a dining room table — that's a problem. So everybody realizes it's not the position of power that counts, it's everybody's position that counts. And it truly is — we all are part of that effort to make that guest experience. So what we call zero mistakes, or 99% in terms of guest satisfaction, is just not good enough. So we're all looking for that elusive goal of perfection, which is always a receding goal.

Oh yeah, yeah. We have a policy that we adhere to without ever compromising — promotion from within. Some jobs are posted and everybody is available, whether it's getting visas or getting languages. But the only way we can grow is to continue to attract the brightest and the best and to retain the brightest and the best. So it's the combination of both that gives us this army of people who really take great pride in the roles they play, whatever that role is. I'm often reminded that the person might be working in whatever job they are and they say, 'Well, what do you do?' And they all say, 'I work at Four Seasons.' They don't say 'I'm the general manager at Four Seasons' or 'I'm the doorman at Four Seasons' — they carry that with pride because that's what they built. Remember, this company is where it is today because of the efforts of many, many people, and they know it. They all know that they've participated in making something better than the competitor. So it's not anything we say or what they read in the newspapers — they see it every day.

Yeah, I know there are. And that's really what our job is — we don't try to be judgmental about what people's requests are. If they need that, we're going to try to get it for them and it's their choice. And our people go to great extremes sometimes to meet those requests. But that's a bit of a challenge too, and it literally is an incentive when an employee gets a request that might be outrageous and they can do it. That sense of satisfaction of having done something — firstly, it's appreciated because the guest, the customer, knows when they're making demands that are difficult. So these are things that have grown slowly over the history of the company. Today, we get the benefit of what experience has taught us. And I think that's why the book can be helpful, because history really gives people a sense of their roots and a connection to the past and a link to the future that really becomes an unbroken chain. So the people now can go back — that's why I say it'll be to the benefit of the people in the company that they'll see those steps that we've taken, those that worked, those that didn't. But the ones that didn't still helped us move forward.

I think they'll see that it does work, because they can see it's worked for us. But it really takes a discipline and the belief that you're prepared to stick with it over a very long time. So I don't think we're giving secrets away, because whatever it is, we've got a 40-year head start, and we don't have to change anything to make it work. So I think we're going to continue to, as I mentioned, what we put out there is that perfection really is an ever-receding goal, because once you get to the objective that you've set, by human nature you just seem to set another one that reaches higher. And that's really what our people do — they constantly look for ways to improve.

No, you always — Rosalie always said, 'Gee, why did you tell about such-and-such?' I said, 'Well, I didn't think about it then.' So there's always things that you're reminded of. But I tried to pick up what I thought would be pertinent, helpful.

Not really. You know, the lawyers made sure that whatever things that might have been a little bit off the color, I was trying not to — I wasn't trying to make us better by putting other people down. I don't think of it means anything. And there are a lot of people in the history of any company that you could talk about any one of them at great length. Because I've met some wonderful people along the way, business associates that I've been partners with for 20, 30, and sometimes 40 years. So I was attempting to be as candid as I could and trying not to unearth anything that might be embarrassing to anybody.

Well, it clearly touched open nerves to see a young man who was really trying to do something that I thought was remarkable, and who had fought the good battle and won. So it was somebody you could look to and say, 'Gee, that's somebody I'd like to meet and somebody I'd like to help,' which is the way it started. Because he was trying the impossible — I mean, he had trained for a couple years and then decided what to do is run across the country on one leg. So what he ultimately achieved, doctors and scientists will say it's impossible — the human body cannot withstand. I think, if I recall the numbers, he ran for 144 days and covered 3,400 miles on one leg, and he did that a marathon a day. Now that is something that they statistically say can't happen, but he did it. So I look upon it as there was a purpose — if someone could do something, there had to be a spiritual inner strength that was for a cause greater than we can think about. And fortunately that's what happens, because starting and meeting them and deciding I would carry on in a manner which — the reason he started was to raise money for cancer. Now we're going to go into our 29th year, and we'll have raised over 500 million dollars, and I think we've operated in over 50 countries worldwide. So it was an opportunity of meeting somebody and saying yes. There's no doubt — Rosie and I are obviously, I've never gotten over the loss of our son. So there was a connection with his parents, to understand and have feeling and empathy the way they felt. So when he lost that battle, I just felt the same way all over again. You got to do something to not continue what he did, but to at least use what he started as a reason to try to fight this very debilitating disease. So I'm fortunate that I have a company that I could control and say, 'We're going to do this.' And I didn't have to — everybody volunteered. It wasn't something that was part of what they had to do, but everybody comes forward on their own time to help put these runs together. It's been a great experience for me personally, but I think everybody in the company is really embracing a similar feeling about it.

Well, at one time, every hotel used to organize the run. Of late, though, we still do runs, but it's a major organized foundation now, and the Fox family controls it and keeps the purity of what he wanted. So the control of what people can and can't do sort of restricts exactly how we can use the Terry Fox name. But it still is run worldwide — we get embassies, we get schools. It's big now because it's into the school system. So I think it now has momentum that will continue. It just doesn't seem to — you think it would die out, but it never did.

Well, we leave it as an individual choice. We expect each hotel to be a responsible corporate citizen within their community, so they should be participating in a way that supports their community, both by time and by whatever means we can. So as a company, we have our normal charitable giving in terms of the amounts of money we as a corporation would do. But I think generally the nature of people who join Four Seasons is that they also have that responsibility to give back to the community because of their good fortune. So I think we've got a normal way of people recognizing that supporting others is part and parcel of our responsibilities.

I'm sure there are individuals, situations, hotels that do probably attempt and probably do it quite well. I don't think there is another company that has it as a consistent mandate that can market it as something that is special. I think every hotel does attempt to give good service — it's the consistency of it that really counts. Having something work 75% of the time is not going to be very helpful if you're in that other part when something doesn't work. Let me give you an example. When we were going public, this is going back in 1985, and we're on the roadshow visiting small communities to meet with the analysts. We forget which city, but where we just rented another hotel room, a meeting room, to make our presentation. We all came down the night before because we're having a seven o'clock meeting and then moving on. The hotel had set up the meeting room. As our analysts came in, these people are only giving you the benefit of a half an hour to an hour max, and the hotel had the wrong setup for our presentation. Now we couldn't do anything about it, it's too late. So the first question was, 'Well, tell me what's different about Four Seasons and this other hotel? Why should we be thinking of investing in your company?' And I said, 'Well, what I can tell you would be the main difference,' and I explained. We came here to present to you what we can show you on a screen — we can't do that now because this setup is not correct. So we've lost the complete benefit of this meeting from a visual point. That would never happen at Four Seasons, because our people would have been down here the night before to make sure that everything was set up according to our needs. That is the difference. It's fail-safe service that you can rely upon, and therefore your use of your time is most effective. It's not a luxury that we're selling — it's a practical, useful service that really gives you what you need. And nothing is more valuable than a person's time, whether it's for pleasure or business. Pleasure even more — you plan for six months before you go to a place that you're hoping with the kids is going to be a great time. So that is the explanation of everybody's role being important, because you don't know where it is that something might fall between the cracks.

Well, the prince has been a partner of mine going back to 1994, when at that point I was looking to reorganize my own personal holdings. And he bought in about 25% — not investing in the company, but 25% of the outstanding shares. So we've been partners since that time, and he's been a very strong supporter, building several hotels for Four Seasons to manage, which has been most helpful to us. Bill Gates's company that he uses or that represents him — it's called Cascade, and that's an investment company. They also were a major shareholder of Four Seasons, have been for many, many years. So when the concept of taking the company private came to me from a third-party investment dealer — subject to conditions that would satisfy my needs of not giving up control — it just worked out that here were the two major investors that said, 'Fine, we like what we've had to date,' and that deal slowly came to fruition. So they know the company well, have done well by it. The important aspect of that business deal is that it puts the company in the change of ownership and ensures the continuity and stability of the company for the foreseeable future. Because with my family's ownership and their ownership, the company never will be sold. These are the type of investors who aren't forced to sell because of having to have a return over a certain number of years — they've truly invested for the very long term. So for people within the company and for all our hotel owners, they can now look and say Four Seasons' legacy is almost insured to continue as it has in the past, because there won't be a change of ownership. Because my control of the company was such that if something happened to me unexpectedly, or be inevitable, my family would more than likely have had to sell the company. And at that time, it would be like a jump ball — who's the highest bidder might hit it, and it could change the complexion of Four Seasons completely. So this was a way of controlling an ownership change that would be for the benefit of everybody.

Well, as a responsible — one of the most responsible positions that I have is to make sure there's continuity of the company's management skills. So we've always, always, going right back since we were a public company, I've always had succession plans in place for every senior executive — both for the unexpected event or for the anticipated retirement events. So we had many retirements in this company at the very senior level. Everybody right directly below me up through the company and their roles have all been filled by people from within the company. Today, it's the third person who's in charge of all the hotel operations worldwide — Jim Fitzgibbon. He's a 30-year veteran and he's the fourth person who's had this particular position. So the changes at the senior levels are the most crucial because that reverberates right down through the company. And we've always been able — and we will continue — that the senior management of this company will always come from within the company, promoted from within. So there will be a seamless transition, as I have put in place today people who, if I decided to step away or something happened, will take over the company in the CEO roles. And I don't think there will be any change. There'll be a bit of a shock. What will happen then? People will say, 'Let's see.' I believe within six months you'll see an organization that will come together and be able to move the company forward just as it has in the past. So succession for a CEO's role must be part of the CEO's responsibility to make sure that there's no shock that would occur as a result of that change. And I've done that. So I remember — I've got an interest in this company that's going to go on indefinitely. I'm very conscious of making sure that's going to be the right decision.

Well, she's a remarkable woman and has helped me a great deal in this book process because she's an exceptionally gifted writer. I mean, she wrote her book every word. So she was very helpful in giving me guidance — 'this doesn't sound right, can you change it?' And she would edit the book as we went through it. She takes great joy in any accolades I get. Very real joy, and that is not a put-on. It's something that she has the pleasure of living together and growing up together that — whatever accolades I get, she benefits. She gets the same thrill as if it's to her alone, because we are connected at the hip. So there's absolutely no envy. She's very, very strong in her own self-esteem. And so when I look at our grandkids — they're remarkably brilliant. Our youngest grandchild is just graduating this year from McGill and he's in the top 5% of the school. His sister who went to the same school is now in second year med, and she said like she was in the top 10, and she's in medical school. So I say those kids inherited Rosalie's genes in terms of their intellect, because she has that capacity of being what I call a unique personality — a very creative person with an exceptionally high IQ. So she's quite satisfied with herself.

Yeah, well, then I would give them credit for that. That's true.

Bob, I appreciate you taking this time to sort of help me along getting the book out into the public's mind. Thank you, and I appreciate so much the work you did in terms of spending that time to interview and help me, and putting some magic in that book that made it come to life.

Thank you very much. All right, take care.