The Art of Conversation with Issy Sharp

Financially, that was the most difficult — to raise the money, to convince people that this would work. Fortunately, it succeeded almost from day one. The difficulty was the five years I spent knocking on doors with much rejection and skepticism. People said, 'You don't know anything about this business. Why in the world would I give you money to build it?' Those five years were the difficult times. But to me it was obvious that this should work. When you have a passion about something, it allows you to persevere. The combination of belief, passion, and perseverance usually ends up in something that might be different but clearly is something you believe will work. And it did.

Over the history of the company, there have been many downturns. The only issues that cause you to have real difficulty surviving are financial commitments you cannot meet. If you can manage to get through recessions by meeting your obligations, you can survive. But a financial problem you cannot live up to puts you out of business. The first major crisis was in 1981. I built the first motel for a friend in 1955, which gave me the idea to try one on my own. It wasn't until 15 years later, after the third hotel in London, that I decided to make the hotel industry a career. So in 1980-81, when interest rates shot from 8 to 22 percent, I had arranged borrowings with the bank. They called and asked, 'What works at 8 percent — does it work at 20?' I said of course not. They said, 'You better come down here.' In the meeting, they asked how I'd manage the money I owed. I said I clearly couldn't pay it down now because of the additional cost, and what I needed was for them to lend me more to cover the extra interest. They were astounded — they called it a ridiculous request. They told me to put a proposal in: pledge everything I owned — my shares, assets, even our small house — as collateral. My lawyers and accountants told me to play hardball, that the bank wouldn't take over the hotel. But I didn't listen. I went back and said I was prepared to do what they asked, provided they guaranteed they'd continue lending me the money to cover the extra cost as long as it might take, and then I would pay it all back. That was the deal. I believed interest rates would come down, and the bank knew that. Once they did, we had a good business and could repay everything. Which we did. If you have the conviction and belief in something, it gives you the courage to back it.

You have to remember, I'm not a hotel manager — I run a business of hotels. My role is to decide what to build and how to operate it. My expertise is understanding what the company could do best. At a point in time, around 1970-72, we decided to specialize — we would only operate medium-sized hotels of exceptional quality, and we were going to try to be the best. That was a stretch with only three hotels, but it was based on what we'd already achieved. The Toronto Four Seasons Motor Hotel, the Inn on the Park in Toronto, and the Inn on the Park in London — each was considered the best. In London, we won the award in our first year as the best hotel in Europe and the UK. So when I said we'd try to be the best, it was based on real experience. My approach was very different from the general industry. Today, the industry is a conglomeration of companies running many different levels and brands, from low-end budget to five-star. Four Seasons set course to only operate one type of hotel, and I thought if we were going to specialize, we should be better at it than others who did not.

What made us the best was the way we dealt with our customers — the service side. I decided it wasn't going to be through architecture or decor, but through the quality of our service. We were going to make our service so much better than our competitors that it would become a competitive advantage and distinguish Four Seasons from other hotel companies. If we reconstruct the history, there were four key strategic decisions made over a 25-year period, each supporting the one before. The first: we're going to try to be the best. The second: service will be our competitive advantage — that's how we become the best. The third: we had to create a workforce and environment that allowed employees to deliver that quality of service. We decided on an ethical credo — the Golden Rule. That was the most important single decision the company has ever made. Over the next 25 years, that theory became fact. Today with 45,000 employees, 98 percent understand and believe that treating people with that respect works, and they've benefited from it as a way of life.

Managers reach their positions through promotions — they do a good job and their superior gives them the next role. Each time they get a promotion, the people they now manage see this new person as someone anointed from above — they don't know anything about them. For a manager to become great, they have to earn the respect and trust of the people they're in charge of. That only happens over time. When people believe in you and trust you, you have influence. Rather than doing what you say because you're the boss, they do what you ask because of the respect and trust they have in you. You can get people to go way beyond what they believe they can do on their own. That moves you from being a manager and a boss to what I call a leader. Leaders unite, direct, and motivate — they get people to work together to accomplish much more than individuals think they can do themselves. That's the difference: a great manager is a leader.

That's always something you never can do both the best way, I think, in hindsight. Fortunately, I was married to Rose Lee, a wife who really took on the burden of making up for what I didn't do. I missed a lot of my early years in family life — raising kids. I didn't look after my end of the bargain as well as I should have. But fortunately, a partner picked up all the things I didn't do and did them so well that our children ended up as good as we could ever expect. You can't go back — you only have one chance at every point in time. It's a myth, this expression of the self-made man or woman. Nobody accomplishes everything on their own. It's always with the support you get, and many times it's that invisible hand. I would never have accomplished what I have today without the support of my wife. It takes two.

Ideas come forth and you don't know why. My approach was simple: I looked at what a customer would consider important, what they would value. All the things I did in developing hotels were innovative ideas trying to build value from a customer's needs. Over the years, there were 30 or 40 different things we did that people in the industry said would never work.

We were the first to put shampoo in the bathroom, large bars of soap, large cotton towels, two telephone lines, and good mattresses. The first to put a fitness facility in a hotel, offer 24-hour room service, eliminate housekeeping carts from corridors, provide concierge service, and put bathrobes in bedrooms. People said guests would steal the bathrobes. So I put a note in the pocket: 'If you wish to purchase one, please notify room service.' A lot of people stole them, but just as many bought them, so we covered our cost. Today every hotel has them. We were also the first to build an all-shallow pool. I noticed in a normal pool, everyone stands at one end. So I built one no deeper than four and a half feet, with a separate diving pool. Today I don't think anybody builds a pool that isn't all shallow. It's just common sense. Not being groomed as a hotelier allowed me to think of ways to be innovative. Whether it's the design of the bedroom or overnight dry cleaning and pressing — all things hotels have now adopted as normal services.

You have to know what you're going to do to be competitive. It's not an easy business to get into because major companies are merging and getting bigger and stronger. But like everything else, it's possible, and people are doing it.

I'm not sure it's the best, but it's one I've kept in mind. It came from a very successful English businessman named Sir Oliver Simmons. In the course of negotiating with him, he came up with an expression I always remembered: 'It's a good thing to know in negotiating — know what you want, ask for it, and then make sure you get it.' It's always important to get the points crucial to you, but also to understand what's crucial to the other person. Both parties have to get what they believe is important to them. So identify that and make sure you get it.

Of course, generations deal with very different circumstances. Consider the documentary about the men who built America — Vanderbilt, Rockefeller, J.P. Morgan, Carnegie, and Ford. These were brilliant, hard-working entrepreneurs and extraordinary visionaries. They built railroads, shipping, oil and gas — everything they saw the future could use. Just as Steve Jobs could see what technology could do with communication through the iPhone. Times give us more information, and with that understanding, we can do things yet to be done. So entrepreneurs are the same — they deal with the times at hand. Whether the digital age allows people to become multi-billionaires over two short years because someone thinks their idea will work — that's the difference today.

I've always controlled the company. When I decided to give up the CEO role, I carved out what I wanted to continue as chairman. I still approve all the aesthetics and concepts of what we build and improve. I've always been more like a statesman — I still visit hotels on a reduced scale, meet with general staff, and share with them like a state of the union address. I also retain a role preserving our partnership arrangements and making new deals. We continue to host dinners in our home for people visiting Toronto for business, preserving relationships built over 50 years. I act as a goodwill ambassador. As a founder, you speak from a very different pulpit. There will be many senior people and many different CEOs, but there's only one founder. That's the role I play today.