An Unfiltered Conversation With The Founder of The Four Seasons: Issy Sharp (Part 2)

That took time—not to envision, but to create. Because as I say, we started with this hospitality host concept, and that's really what differentiated us in England. That's what I knew made us a success. Because in England at that time, few went into the Dorchester, the Claridge's. If you weren't dressed properly you couldn't even come into the hotel. They looked down upon you because of social class. That attitude was very much social class in Europe at that time. So our hotel was very different. London—we hired people and told them, this is not how we judge others. We're not the Dorchester, we're not Claridge's, we are the Inn on the Park. Ian Monroe hired people and explained, look, this is how we operate. We don't judge people. We treat everybody the same—whether they're an important person or a worker. Everybody coming into the hotel or working in the hotel gets an egalitarian, equal approach. London became the best hotel, and I knew why. We didn't build a grand hotel—we were in a modern building, nothing impressive compared to them. But our people, the service, changed how people were treated in London.

That's right.

That happened over many years. But London made it clear to me that service and attitude was the key for Four Seasons. So if you fast forward, as we're starting to build more hotels and hiring people, I figured—if this is an industry we're going to compete in, we're certainly never going to compete by being bigger. There's Hilton, Marriott, Hyatt—name brand hotels that controlled the marketplace. I said we've got to have something that makes us different, something sustainable. Because if you don't have a sustainable competitive advantage, you're run over pretty quick. Everybody sees what you're doing, they cost it out, and say I can do it better. So you have to have something they cannot do better. I'm telling our people—the only way we're going to compete, since we haven't got the capital to become big, is we're going to make our service our distinguishing feature. That is how we will compete and continue to grow.

That got a lot of laughs and jeers. They said, you're not really serious. It seems gimmicky. Everybody does service—how can you make service your advantage? It's intangible. What are you talking about? So the senior people in the company wouldn't even think about it. Now, I'm in control of the company, and as you know, control is the privilege. If you don't have to ask other people. So I wanted to figure out: how can we make service our advantage? And at that time—we're talking the 1970s—McDonald's was the number one fast food service company. I knew they had kids working behind the counter who always had this upbeat, pleasant, can-do attitude. Sixteen-year-olds who always had a smile. So I had a friend who was the president of McDonald's Canada, George Cohon. I said, George, can I come and spend a day in your orientation when you're hiring new kids? He said sure. So I spent a day at the McDonald's orientation, sitting down with all these kids. You're running a fancy hotel in London, England, and you're sitting at the McDonald's orientation.

I had my own hair, so I didn't wear a hat. I came at eight o'clock in the morning, sitting with the same notebook they give you, listening to all the hype—the 'would you like fries with that' training. But I noticed the one thing that was most important, that they focused on, was this film they had that had to be fifteen to twenty years old. The way people were dressed, etc. They were showing that film as the number one focus point for all these kids. I noticed that this one film was the most important element—trying to get these kids to understand what service is all about.

It was all about attitude. Everything came down to attitude, attitude, attitude. So I'm thinking about it, and I say—you have to get something that sticks. Because at that time, McDonald's ads on TV changed every month, millions of dollars. And here, on the most important thing they want to communicate, one single video, fifteen years old. Because the message was current—never went out of style. Timeless message. So I figured, if you could have a timeless message to talk about your employees, then you don't have to keep reinventing the wheel as times change, because it's what you stand for. So I take all our senior people and say, I want you to come with me and we're going to spend a day at McDonald's orientation.

I brought the Four Seasons staff to McDonald's—all my senior people, seven of them. These are the senior people, heads of hotel development. Can you imagine going to your executive team, saying, okay, I got this great idea, here's how we're going to figure out hospitality—we're going to sit in on the orientation for McDonald's with a bunch of teenagers.

I said, I know you do, but we're going. Sure, you're the boss, you gotta do what the boss says. So they go, they're sitting there, joking, laughing, making jokes about it. And I'm sitting there taking all this in. One of the guys says, look, they're selling hamburgers and we're selling filet mignon. I said, I know what we're selling—it's how we sell it. So I knew we were in trouble. There was no way I could get this message down to these people. Because that gave me the idea that the message we might use is the Golden Rule. Because it's motherhood—do unto others as you'd have them do unto you. What could be simpler in telling an individual that is how we are going to manage our workforce? These senior people joked about it, laughed about it. They said, look, it's philosophy—we're running a business. How are you going to get that across? I said, I don't know, but that's what we're going to do. So my first task was that I had to terminate all these senior people. People who were very competent, knew how to run a hotel, knew all the business aspects. One of them was a very close personal friend. So I decided we're going to start over. Over the next couple years I changed the senior people in the company. They weren't willing to live the brand—they would give it lip service. But if they weren't going to walk the talk, if their actions weren't going to speak louder than their words, how can you do it? Because if you can't get the message down to the bottom of the triangle—the people who are talking to the customers—it's spitting in the wind.

Good friend. That's a sacrifice I was willing to make.

The message we started with—I had people who already believed, because that was their work ethic. This wasn't new, this wasn't something you had to invent. This is how they had been brought up. So the people I finally hired understood and believed. We set out to talk about it rather than put out a memo. A man named John Sharp—no relation, just very hardworking, bright, could have been a doctor, that was the caliber of people—so he and I set out to talk to each hotel, meeting with senior people. I wrote out a mission statement that is still the mission statement today. I talked to our head of marketing, Doug Hall, and said, I want to write something about the Golden Rule—our goals, our beliefs, our principles—in a way that people can say, hey, that makes sense. I used that when I went out and talked to the hotels, going through the mission statement with senior people, saying: do you think you can live with this? Are you prepared to work with this principle? Some said, yeah, I think we can do that. But how are you going to get everybody else to do it? I said, you're the senior people in this hotel. If you do it, and you come across people below you who don't, make a change. You as the leaders are going to be responsible for making sure all the people below you walk the talk. They're the keepers of the culture. And if they can't do it, there's no way they can disseminate it to others. They said, what about peers who don't buy in? I said, the rule applies to everybody. If you see things that aren't right, there are senior people above who will take action.

One doesn't necessarily conflict with the other. Business problems—and you're right, Vancouver was going to be a disaster. The principle we were building Vancouver on was already a formula of success. That's how I got London, that's how the first six or seven hotels were built—you start a hotel, you build it, you own it, you run it. We owned the real estate or leased it, which is like ownership. Making money on the operation and the real estate. Good business. Until Vancouver. Inflation hit, I'm responsible for the costs, and I don't have that kind of money. So I approached the three landlords and said, look, I can't go ahead with this. I've spent all the money I've got. We're not going to be able to finish this hotel. I'm at your mercy. Here are the keys to my company.

They said, we don't want to run your company. We want this hotel to be what you've already built. I said, I haven't got the money to live up to this contract. They said, what if we reorganize? I said, that'd be different. They said, go ahead and finish the hotel, and we'll talk about it after. So I went on spending money I didn't have. After the hotel was finished, we had a meeting with Thompson, Fred Eaton, Cadillac Fairview. They rewrote the deal to make it reasonable for me to continue operating the company and this hotel. Why did they do that? Because I lived up to doing what I said I could do for them. Vancouver became a phenomenal success. It was the center of Vancouver. They had built two office buildings and wanted the hotel to be the feature—and it was spectacular. So I lived up to the promise. They didn't need my money. We had made a deal, and they rewrote the contract so that the rent we could pay would be reasonable. And that changed the company completely. The business model of Four Seasons changed from that point forward. I decided we can no longer own the real estate of a hotel. But I believed in real estate, so I said we should still take participation in ownership. I arranged a business model where we would become a management company but still take an equity position we could afford. I worked out a formula: the management fees we would earn on a new hotel over five years would be X dollars, and I would take 70 percent of that because I didn't have overhead. I knew 70 percent of that fee is clear cash. I could go to the bank and say, over five years I can pay you back out of these fees. If you lend me the money, I can get the deal and take a piece of the equity. That became the business model.

But the principle of the deal was: if there was additional cash required, and if I had a 10 or 15 percent ownership, I wanted the privilege to reduce my equity or put up the cash—but I would never be obligated for money I didn't have. So my equity might go to zero, I could lose my equity, but I would have the management contract which would give me the income.

That's right. You have to be so good at that management piece that everybody wants you as their partner. At the beginning, we had seven or eight hotels. Who are you? What do you do? You make a deal. I'm a good salesman. I make a good first impression. And I never disappoint. I live up to what I say. Then I can be a charming partner. I've been able to make very good business relationships that have lasted.

I think it's my upbringing. I've never felt uncomfortable relating and dealing with people at different levels or at low levels. So it's just a personality trait—a combination of my mother and my father. My mother's side gives me the confidence and belief, and my father's good nature—always nice to be around, always positive, never a negative word out of his mouth. So I think that combination of a personality has allowed me to make good impressions. And I've done that through dealing with the most tough business people of New York and to the more gracious people in the Far East. So it's been a part of my DNA.

But the business model is what has got us through all these economic downturns. So when interest rates went up to 21 percent in the '80s, if you're not caught with having a financial burden that you have to worry about—and the pandemic, hotels closed—if we were responsible for the ownership, we would lose those hotels. But the partners who own those hotels have deep pockets. So the business model of becoming a management company—we still will put money into the hotels that we're building to this day. We'll either invest in equity or invest in a management contract. So I'm still a believer in real estate. If you can hold on to it, if you've got staying power, you will always make money in real estate. It's only the time that you're forced to sell if you must that you lose.

Time after time, because real estate is a diminishing product—it's almost used up. Look downtown here, you're not making more land. So now that's gone, where else do you go? So the ownership of that land will appreciate over time, always. The buildings might depreciate and give you a tax write-off, but the asset itself will always continue to increase in value.

I'm not sure. I mean, we try our best. We're doing whatever we can. There's a constant adjustment.

Well, you're right. I think the relationship you have—that is the most important support you will ever get—is from the partner you have chosen to live with, regardless of who that is. And your family—there's nothing more important to everybody. It's just innate. You cannot ever give up the love and devotion you have for your children. I've often said the only true love that exists is the love a parent has for their child. It doesn't go the other way. It's involuntary—you cannot help the feelings you have for your children. It's biological. And a woman has a stronger connection—that umbilical cord never gets cut. So that's what we're all faced with.

Now, relationships you have with your wives or husbands change, and that's what breaks up a lot of businesses and marriages. If you're fortunate—look, when you get married you're young. What do you know? It's sex, it's emotions, it's 'you're good looking'—all these things go into those first relationship building. And it's a question: does that change? But what else happens in the course of your growing up together? And I find—and I think the fact that if you continue having the respect and appreciation of your spouses. Appreciation—never losing the fact that they're special. The same feeling you had because of the hormones which drove you to get together does now move into a different level of knowing the person, who the person is, and continuing to appreciate and respect that. So when you ask them a question, you're talking about something you really want to know what they have to say. You're not just being polite to say 'What do you think about this?' You want that answer from that person. And I have found over the years that appreciation gets stronger and stronger.

This morning, when I'm talking to Rosalie and doing something, and she does something, it's just—had a string of my heart was pulled because I've never stopped appreciating who she is and what she has given me in terms of my life, by what I've learned, her support. And as you say, your priorities—and I didn't have the experience or understanding of having my priorities in the right place, bringing up the kids. Fortunately, Rosalie filled in the gaps. Like when I talk about it now, the regrets I have are that I left a lot of that part of my life on the cutting room floor. I know that kids say, 'No, Dad, you're wrong, you're always there.' And Rosie now says—as much as we tried to tell him, his regrets are still there.

No. You're young. Your priorities are all in a different mode of what you're trying to do. You know, did I have to take all those trips to London? Of course—the deal wouldn't happen. That's the result: you show up. Could I have said no, I'll make it a telephone call? Because when I used to go over, we didn't accomplish anything. I would have lunch, we'd talk, and we'd go back. So unfortunately, I think I left a lot of the role I played as a father, I believe. But I was there doing my job when I could. And the kids don't agree with me. Sometimes I'm holding a town hall and one of my sons is in the audience, and that question always comes up. And he said, 'Look, Dad, I'm here—you were wrong.' So I think they see it differently. And it's tough. You don't build a business by going from eight to five in the afternoon—24/7 job. And when they always say, 'How can I learn to become an entrepreneur?' You can't. You're born with that. It ain't learned.

Because that's what drives you. And as much as you have the other priorities clear in your vision, some people are better at it than others. So I say it's tough when you're young to know the right thing to do at the right time. But having a spouse, a partner that's there to fill in for you—you probably take advantage of it.

Yeah, no. Rosalie, from my point of view, has never been negative. Has never asked me not to take that trip—ever. Knowing full well that I'm going to be gone a week and she's going to have four kids and three in diapers, without having help sometimes.

They were to the point where we were not where we are today, but enough of the difference in life for them to see it and share in it.

My dad lived to 103.

Yeah, you know, we've got good genes. Longevity gene that we both inherited—it goes a long way to help you. So no, they did—they were around to see the glamour of what Four Seasons became.

You're right. And because of my problem—like Rosie and I faced with our son dying from cancer—that's something that's with you forever.

Seventeen.

So the loss of a son for any family is an unnatural event, especially when they're young. That's with you forever. Over time, you're able to... And when that occurred, we had three other kids. And the trauma and tragedy—you've got to make sure it doesn't get worse than what it is. So both Rosie and I independently—didn't talk about it—but independently, we both approached it the same way: we can't cause this to be hurtful for our other kids. So we sucked it up as best we could. We didn't cause each other a problem, because a lot of times families break up because each person is so deep in their grief. But we weren't sharing or displaying grief. And what you do is build up a shield that when you know you're going to a social event, a bar mitzvah, wedding, etc., you know you're going to hear stories that are going to affect you. So you really build up that preparation, knowing there's going to be things that bother you. But sometimes something happens you're not expecting, and the tears flow. You just can't stop it. So I think, like a lot of people who have been affected, I have a different connection when you deal with cancer.

So with Terry Fox, what he set out to do and what he talked about—the suffering, that he wanted to do something about so the pain would stop—resonated with me in a way that I figured we've got to help this kid. So I had somebody who went out and tracked him when he first started. Her name was Bev Norris, and she reported back. She said, 'It's terrible. People don't believe him. They think it's some gimmick, advertising stunt. How could a kid on one leg run across Canada?' And she said cars are almost running him off the road because they think he's just some advertising.

So I decided we'd try to do something and be more visible. We put ads in the newspapers and magazines which said something like, 'We at Four Seasons will donate $10,000,' and I invited 999 other companies to join with Four Seasons to make it a $10 million run. And put ads in the newspapers. And he heard about it and then called me on the middle of a highway somewhere, I guess. And in a voice—you could hear the tears, his voice was breaking down—saying, 'I was just ready to throw in the towel, but if one person cares enough, that's all I need.' And he kept going. And then it did take off. People started saying, 'Hey, look what this kid has already done—a marathon a day.' And with one leg. Unbelievable.

So when he came to Toronto, I did meet with him and I held a big luncheon for him. And the event that went well. And I told him—I said, 'Look, Terry, this is bigger than you ever thought. This is much more than Canada. This is a world event. You should talk now and organize what could be done when you get to Vancouver.' And what was remarkable about this 18-year-old kid—he was a mature adult—and he just said very calmly, 'No, I don't want to think about that now.' And I knew then he's not going to make it, because he was running under pain. And you could almost feel it when you were with him. So when he had to stop, I spoke to him and his mother and suggested that, if he wouldn't mind, I'd like to organize something—that we'd maybe start a run. Not to finish his run and not to make it a Marathon of Hope, but just a Terry Fox annual run of raising money for cancer. I sent him a telegram outlining what we would try to do. He liked that idea, and he said, 'But I don't want anybody to finish my run.' I said, 'No, we'll just make it a family affair.' So now it's going on to its 43rd year, I think—$850 million. And what occurred to me this year, when I was making a speech to our crowd—that's an additional $850 million that would never have been raised had we not started this Terry Fox Run.

So in Terry's name, almost a billion dollars has been raised.

He's our Daniel Boone.

I think it's—it's not a personality of a braggart. I think it's a personality that you have a subliminal belief in yourself that what you're doing will work. Even though there's skeptics all around you telling you why it won't work—all the reasons that they can give you. But that doesn't stop you from saying, 'I know what you're saying is true,' because what they are telling you are facts of the past. And you say, 'I know you're not telling me something I haven't heard before, but I think this will work.' It's not going to deter me. You have an inner feeling, and you don't know where it comes from, but it's part of you in terms of your ability to have the courage to be able to persevere against all the odds and take and accept the consequences. Because you know if you are going to roll the dice with everything you own, you may lose. So I think that comes from your genes that you inherit. It's not what you learn in school or you can read in books. It's your natural personality that gives you the drive and the energy. As you well know, when people say—as Rosie, I think, said in her book—I could go to 10, 12 hotels in 15, 16 days, and she said, 'I marvel at your physical energy and intellectual capacity to always be on.' And I say, Rosalie, when you're doing something that you enjoy, it's not work. You don't really get tired. It's something that human nature has given you that extra strength to continue. So it's an innate belief that you're born with in terms of how you develop as a child.

And I think it's not like being a narcissistic Trump—not that at all. You don't have an ego. It's not like you're doing this because, hey, look how good I am. So I think it's personality. And I have to say, our Jewish heritage goes back a long way. That gives us the belief of 'can do.' If it doesn't work, so be it, but I'm going to give it my all. Sometimes I tell the kids when they ask these questions—I say, look: in your vocabulary, when you're doing things, take the word 'if' out of your vocabulary. Don't say, 'If I would have studied, I could have passed into honors. If I would have practiced, I could have run faster.' That's bull. 'If' is a crutch. You're afraid to say, 'I gave it my all. I ran as fast as I could. I came last, but you know what? That's good. I know how fast I can run now.'

Well, first of all, you have to give me a second here—I'm a little bit taken by what you just said. David and I are proud Jewish entrepreneurs, but we attribute a lot of our success to standing on the shoulders of giants. Isadore, you're that giant, whether you know it or not. This office that we're sitting in right now, the companies that we have built, the produce that we work on together—we have modeled our ambition and our own ability to imagine what is possible based on what you did. Watching you build what is truly one of the greatest companies, one of the greatest brands on the planet. Our bedtime stories and dinner time stories were about the Izzy Sharps of the world—all these amazing, incredible Jewish entrepreneurs who came from very humble beginnings to become titans of industry, and did so against this backdrop of anti-Semitism that we haven't known to the same degree as you did in the '50s and the '60s and even the '40s, a bit, I'm sure. And what's our excuse, right? If you're able to overcome all these—whether it be poverty or difficulties, anti-Semitism, people barring you from various institutions, can't get the right jobs—I know one of your early jobs, you faced some anti-Semitism. And then you're able to take all that and it doesn't stop you from keeping going, showing up every day. We have no excuse. And I think that's inspiring. It drives us. We want to be that next generation of Jewish entrepreneurs that contributes to the world and makes a difference. If we can have half the impact on the next vintage of Harleys and Davids that you and some of your peers have had in us, we think that would be a really great thing. And frankly, there is no archival of these stories. You can find bits and pieces of it, but there is no one place where you can go to find out about the stories of the world's greatest Jewish entrepreneurs of the last century. And so sitting down with people like you hopefully creates this time capsule that we can share with many more generations that come after us. And hopefully they start the next Four Seasons, the next Shopify, the next David's Teas. Those are the bedtime stories that we grew up hearing about and listening to from our bubbies and our zadies. And that's why I say this is partially a documentary, but it's also partially just sitting in a Jewish deli and talking about what God has given us. So literally, for schmoozing.

I have played a lot of sports my whole life. You know, I went to school not to learn but to play games. And it was my life. So after college, and I'm trying to still find what am I going to do to give up team sports—I've got to start staying in shape. So we built the first Fitness Institute, it was called, in the end of the park. So I used to go after work and work out, and the person we hired to run it was Lloyd Percival, who was Canada's foremost track and field coach. And he put me through training programs and I got into the best shape of my life—physically stronger, everything about it. And he explained to me, 'Now look, this is as good as you will ever get. But don't worry—it'll slowly go down. But if you keep it up as much as you can, it'll take a long time before you do much less.' And he said, 'Besides, if you keep physically fit throughout your life and mentally alert—because the brain is a muscle; if you don't use it, it'll atrophy—so keep the brain going as you always have. And I guarantee you, you'll never lose your sex life.'

You tell a 35-year-old kid, 'Keep your brain going, your sex life will be okay'—it's pretty good. Sounds good to me.

I know. But that's the point. Sex is a strong part of people's lives. And the point is, if you have a companion who believes in it as you do, it goes on indefinitely.