Arne Sorenson4:02
Thank you, Tim, and thank you all for coming out. It's great to see you all on a weeknight and great to see this parish that I've heard about from friends for a long time. A number of friendly faces here. I want to start by welcoming my wife Ruth, who condescended to come with me to the Midwest this weekend. It's always a special treat to have you in the audience, although it makes me a little fearful because she's the one afterwards who will say, "Why did you say that? What were you thinking?" And my sister Mary is here, whose birthday is today. And it's Tim's birthday today too. It's not decent to say how many years, but it's one that ends in a zero, so it's a big one. I'm sure she'd appreciate a hug as she leaves. Happy birthday, Mary. And Ruth's folks, my in-laws Paul and Louie Christensen, are here from Red Wing. Thank you for driving up. Great to have you here. And we've got lots of other friends and family here: Bob and Barb, John and Jenny, who are good members here, and I see Warren and Sonia. It's great to see you all. I also discovered at least one Marriott associate who I met tonight. Any other Marriott people here? Oh, there are a few hands. Welcome. Thank you for coming. Really great to see that kind of family here as well. So, faith and hospitality. I don't know whether we gave you another title for the speech. I sent my assistant a couple of times the suggestion that we talk about "Practicing Hospitality in an Inhospitable World," and that will be something that I actually talk about more than faith in hospitality. I want to talk about the concept of faith first in the work environment and confess that I find that a bit of a riddle. It's harder for me to stand here and talk about how my faith impacts the way I work at Marriott than I think in many respects it might be for other people who observe and have the objectivity to say, "Okay, here's what we see about the way you conduct business." Mary and I and our siblings are two of four born to Lutheran missionaries in Japan. Of course, you know from that that our folks were willing to proclaim the faith literally in a foreign land, in a foreign tongue, and in a place where we stuck out. In fact, we had a little cottage in the northern part of Japan near Nagano where the Winter Olympics were later held, and the cottage was in a place called Gaijin Mura, which means "Foreigners' Village." That was a big sign over the drive as we entered, so we knew exactly where we belonged. But I sometimes feel a little like a coward when I say, "Okay, well, if they could go to Japan, totally foreign place, in the 50s and proclaim their faith, am I simply a coward to be uncomfortable maybe in using the same boldness that they did in their work in Japan?" But obviously, part of that is I run a company that is in 110 different countries. We have 500,000 people that wear our name badge every day and take care of our guests around the world, and they represent all cultures and all faiths. For me to suggest that my faith is somehow more important than theirs doesn't seem to be a constructive way to run the company, and so I don't. And it causes me to stand back and say, "Okay, well, why then is my faith relevant to the work?" And there are three possible answers to that. One is that I think people know that I'm an active Lutheran and that I take that part of my life quite seriously. It's not hidden from anybody, and that example by itself, however subtle, may mean something to some. I think the second thing is the concept of faithfulness, not necessarily my faith, but the importance of having a faith is something that in fact I do talk about, and I think we talk about as a company. It is not necessarily saying you must have a religious faith or you must practice a religion in a traditional sense, but we think it's important to have a long-term perspective. We think it's important to think about the meaning that you're getting from your work. We think it's important that you think about the impact that your work is having. And all of those things can and should lead to an idea about faith, an idea about our relationship to the world and maybe to things beyond this world. And so we will get into conversations about faith traditions. One of the things that is a great pleasure of my job is the ability to go all around the world and listen to people in different cultures talk about what they're doing. I was in the Middle East three weeks ago, and we fit in a quick visit to the Grand Mosque in Abu Dhabi. Has anybody seen it? It is unbelievable. Marble structure, massive. It would have been the largest mosque in the world except the ruler of Abu Dhabi knew that it would not be right for him to build a mosque bigger than the mosque in Mecca, so he kept it a step shy of that. But to be able to be there and talk to our associates who practice the Islamic faith and listen to them talk about their traditions is, I think, very much fair game and a way to encourage people to have faithfulness and to be willing to embrace faithfulness. I think the third way that faith could be relevant is how does it impact character? How does it impact my character? How does it impact the decisions we make as leaders in our businesses or in our schools or in our families or the other things that we do in day-to-day life? And that too is a complicated question to answer. I mean, I think we could start by saying, "Well, shouldn't it be clear that you shouldn't lie or cheat?" Yeah, that's probably a reasonably good conclusion. So don't commit securities fraud. Don't do business in a way with your partners or your customers that is fundamentally about taking advantage of them or being dishonest with them. But then you get to the much harder decisions, and it is to me a whole lot less clear how faith necessarily, even in my case, impacts the decisions we're making. I'll use a very specific example: right after 9/11. All of you remember that horrific day. We sat in the boardroom in Bethesda, Maryland, where our company's headquarters, watching the TV at the end of the room. We were all consumed by the bizarre notion of watching those Twin Towers burn and then ultimately seeing them fall. We had an 800-room hotel that was part of the World Trade Center complex. Almost nobody remembers that it was 40 stories tall, a big building in any other place, but because those two towers reached 100 stories tall, nobody really focused on that. When the two towers came down, the hotel was flattened like a pancake. Fortunately, relatively few lives were lost because they had a few hours to clear the place out. And we were, I suppose, a little bit slow on the uptake, but it was hours before we stopped and thought selfishly, "This is bad for our business," because we were consumed as everybody was by the tragedy of that day. Well, then immediately afterwards, it had a profound impact on our business. The Wardman Park Marriott in Washington, DC, is about 1,200 or 1,300 rooms. I don't remember precisely. Big group house. Full year average occupancy probably in the 70 to 75 percent range, so maybe a thousand rooms occupied every night. In the weeks after 9/11, the rooms occupied in the hotel would be five or six. Count them on one hand. And those hotels, and hotels all across the country, were empty. Initially, of course, airplanes were grounded. Nobody knew whether there was going to be another event. And we were afraid, and so we stayed home. And it was really much of the next year before people started to tentatively get back and start to travel. Well, I go through all of this because it has a profound impact on the jobs of the people that we employ at our hotels. Think about Wardman Park: typically would have something like 1,500 associates working there. There's nothing for 1,500 associates to do when there are five customers in a hotel. And by the way, if you continue to employ 1,500 customers, the place would go bankrupt fairly quickly because you'd have the full expense burden but none of the income coming in. So we sat around, not just focused on that hotel but focused on a portfolio of hotels, and said, "What are the things that we can do? What are the decisions we make?" Well, one of the decisions we made, which we were proud of, we thought it was a long-term good decision, is we said we're going to grandfather health care eligibility for all of our people for a full year. Basically, you have to work at least 32 hours a week to be eligible under our rules at that time to be eligible for health care benefits. In an environment in which there were five people in a hotel and you couldn't get your hours, the last thing they wanted was for folks to lose their health care eligibility. So we made that stamp, and lots of associates appreciated it. Is that a step which is influenced by character or faithfulness? Right, maybe. Does it matter to you why we made that decision? Does it matter to you that we couldn't protect all of the jobs and all of the income that the 1,500 people in that hotel had? Would it meet a test of faithfulness? Would it require actually that I pounded the table and said none of those 1,500 jobs should be impacted in that hotel? I didn't do that. And so I think in some respects, this is why you get to this riddle of, "Okay, does faith connect directly to a decision that we make in the marketplace, in the work that I do every day?" And I think it's hard to say necessarily it does. I believe that it influences who I am, and I hope I make decisions which reflect that, but they're not crystal clear, and they're decisions that still have to be made very much in the real world. Go to this motive question just for a second. If you thought we made that decision about grandfathering health care eligibility because we were generous and we cared about our people, that sounds pretty good. What if we made that decision because we thought this is a way for us to make sure we retain our people and that they don't run away from us and we have lower turnover, and that in fact long term it is in our financial interest to provide the grandfathered eligibility for health care? You get into this question around motive. I had about five years ago, I was at a conference and we spoke on corporate social responsibility, and we had a Harvard professor, Michael Porter, who was there who's done a bunch of writing on this. He asked me to lead a small group discussion and then come back and report to the larger group. So we went off and we talked about corporate social responsibility. In the small group, people said, "Well, what does Marriott do?" And I said, "Well, we could talk about things like we've got a program in the Amazon and we've got a program with Children's Miracle Network and we've got a number of other programs which are important to us. But I said, actually, I think the thing that's most profound is that we are committed to creating careers for our people, for them to be able to grow in their careers, to support their families, to build lives that derive from having the confidence in an income to grow in their jobs no matter what their pedigrees, no matter what kind of education they had. And that to us is the most profound thing we can do every day in what we do in our business." And a number of voices in that conversation said, "That's not enough. That's in your self-interest," because it goes back to this motive question. If that's in our self-interest, can it at the same time be an act of faithfulness or an act that is inspired by faith? In any event, I think it's such a tough riddle that I'm not going to talk more specifically about that but instead talk about some of the decisions that we make, particularly in this divisive world that we live in, and the way the world looks at them. And maybe they can be useful as you have conversations about what are the right decisions to be made, what's the right role of a public company CEO or of a business person as it relates to the issues of the day. Before doing that, let me just take a minute to talk about Marriott. I hope you all have heard of the company. Next year will be our 90th anniversary. Famously, my boss Bill Marriott, who is 84 and still chairman of the board, was CEO for 40 years after his father was CEO for 45. He has told these stories so often that they are, you can do it in his sleep, and increasingly I'm getting to the same point. But his parents drove from Salt Lake to Washington in a Ford. It took them about 12 days to do it. When they got to Washington, they opened a nine-stool A&W root beer stand in downtown Washington, and that was the beginning of the company. When the weather got cold, not as cold as Minnesota of course, but when it got cold, they realized they needed hot food. Alice Marriott went to the Mexican embassy and talked to the cook and got recipes for hot tamales and other things, put them on the menu, and the A&W root beer stand became the Hot Shoppes. The restaurant business was Marriott's first 30 years exclusively before the first hotel was opened in 1957 in the Washington, DC area. In many respects, the hotel business at Marriott grew with the traveling world that we now take for granted. I think about Eisenhower building the interstate highway system in the 50s. Before that, the notion of driving cross-country was a real adventurer's kind of thing. By the time I was growing up here in Minnesota in the 60s and 70s, everybody was driving everywhere. Now, we didn't stay in hotels. My dad was a Lutheran preacher, not enough scratch, and to the extent he had money, he wasn't going to spend it on a hotel, so we stayed with relatives or wherever we could find a place to stay. But the business grew in that way as our appetite as a community for travel grew. So today, we are 1.1 million hotel rooms, about 5,700 hotels. That includes 1,200 hotels that we just brought into the family with the acquisition of Starwood, which we completed about a month ago, a month ago Sunday actually, so a very recent thing and something I'm spending a lot of time with. We've got 30 brands, and the only thing we're in today is the hotel business. In years past, we had restaurants of course, but cruise ships, theme parks, food distribution, senior living, and all sorts of other things. Basically, we discovered that the thing that we were passionate about was the hotel business, and we ought to stay focused on what we really cared about, and so that's what we're doing exclusively today. Culturally, we have a commitment to our culture. We talk very boldly about our associates coming before our guests, which is sort of upside down in the way most businesses talk about what they do. It is popular to say the customer always comes first, and of course in a sense we don't disagree with that, but we know that we can't get to our customers except through our associates. So we have to focus on our associates first. How do we work on creating careers? It's not a soft and squishy idea. It's not simply we're going to put our arms around associates and tell them we love them. It is instead how do we empower them, how do we train them, how do we let them grow in their jobs, how do we put them in a position where they say, "I am proud of what I do in this hotel or in this department of this hotel or in this sales office, to make sure I'm delivering something that I can look at and say I'm proud of that." So that focus on associates is a very powerful part of our culture. Two other aspects of our culture which we love: one is we want to be engaged in the communities where we do business, because we think we can make those communities better for it, but also we think we create a better morale among our teams because they have a greater sense of meaning and depth in their work. It's great team building. It's a great way for them to know what's happening in the communities, and they take pride in it. So back to this motive question, it's a good thing, but it's also something which is in our interest because it makes us a better employer. And then I think the last aspect of our culture, which the Starwood acquisition really will amplify going forward, is we are absolutely relentless about embracing change. How do we come up with a new brand? How do we grow in a new market? How do we get a new restaurant concept? How do we come up with a new design and make sure that we are not resisting change simply because we're changing things that we've done before? Enough commercial about Marriott. I want to talk a little bit about some of the tough issues that we've confronted and use them a little bit as examples that again, many of you maybe will criticize some of the positions we've taken. I'm an equal opportunity speaker here in the sense that some of these things will rub liberals harder than conservatives, and some will be just the other way around. But these are best efforts to work through this. I know a few people in here have heard the story before, but every commencement speech I've done I've used the same joke, and I'm going to use it tonight because I think it illustrates something about the divisive society that we live in. Let me make sure I get it right here. So a woman in a hot air balloon realized she was lost. She lowered her altitude and spotted a man in a boat below, and she shouted to him, "Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don't know where I am." So the man in the boat looked at his GPS and he replied, "You're in a hot air balloon, approximately 30 feet above sea level. You're at 41 degrees 27 minutes north latitude and 87 degrees 2 minutes west longitude." She rolled her eyes and said, "You must be a Republican." "I am," he replied. "How did you know?" "Well," answered the woman in the balloon, "everything you told me is technically correct but totally irrelevant to my life. You've told me where I am, but I'm still lost. Frankly, you're not much help to me." The man smiled and responded, "You must be a Democrat." "I am," she replied. "How did you know?" "Well," said the man, "you don't know where you are or where you're going. You made a promise you have no idea how to keep. You're in exactly the same position you were in before we met, but somehow now it's all my fault." When I first told that story about five years ago or so, it seemed to really capture the sort of divisive political divisiveness we had at the time. It now seems sort of old-fashioned and tame, because if anything, we've gotten much more divisive in the era that we live in today, politically and in many other respects. And partly of course it's the political season which makes us all confront this all the time, but partly it's also the impulsiveness that our devices maybe drive a little bit. We're tweeting or we're sending emails or we're responding instantly on Instagram or Snapchat or whatever tools we're using, and we lose our civility when we do it. Because if you're frustrated and you immediately pull out that phone and you write something, the odds are afterwards you're going to think, "Oh my goodness, that was a little bit blunt." But that impulsiveness with divisiveness, I think, feeds this sort of cynicism that causes us to question again maybe the motives of what's being done, but also to question anybody who has a different point of view. And that's the world we live in. Three recent examples of how this comes to play out in our business and what we've been through. A few years ago, we announced some public communication about tipping housekeepers. Anybody see this? A friend of mine, a well-known woman, had a very high-profile divorce, and she left her home and checked into a hotel and stayed there for about a month. And she was surprised that maybe for the first time she realized that we tipped the men and not the women. I said, "What do you mean?" She said, "Well, it's usually men on the front drive, men who are bellmen who help you take your bags to your room, and because we have an interaction with them, we often give them a couple of bucks or maybe more in a luxury hotel. In contrast, the housekeepers, typically women, because we don't have an interaction with them, we might see them in the hallway but we don't interact with them in our room. Many people don't ever think about it." So she reached out and said, "We need to communicate something about think about the housekeeper, think about these women who are heroes of mine. They do extraordinary work, often thanklessly." And it probably won't surprise you, collectively we're not at our best when we're in hotel rooms. It's a little bit like, did you ever wash a rental car? Probably not. But people stay in guest rooms of hotels, they don't clean up, there's somebody to clean up for them. And some of these housekeepers get a special burden, and they persevere through this, and they really are extraordinary women, almost always not literally always but almost always. And so we went out and we said, "You know, we encourage people to think about it, not necessarily that you have to." But at the same time, it was on the evening news program essentially in every local evening news across the country, biggest story we had had in a decade. The traditional media said, "Hey, do you tip housekeepers? Marriott came out and said something about tipping housekeepers." Everybody was intrigued by it. It was a great story, great feel-good story. But the social media was devastating. Absolutely devastated. "You're doing this because you won't pay these women a fair wage. You're trying to offload your obligation as a good employer on us as guests. You, Arne Sorensen, make too much money. Why don't you give them some of your money?" And the social media words were often awful, simply awful. It's something that you would never stomach from a child or a peer or an employee or a boss or a friend. You'd be embarrassed to read it afterwards. But again, it's out there in this world in which we're impulsive and we don't really trust anybody. Now, we anticipated we'd get a little bit of that feedback. We still thought it was the right thing to do. I was a week later in the New York Marriott Marquis, which is a 2,000-room hotel in Times Square, and I was talking to the housekeepers on the floor I was staying in. Suddenly I had five or six around. I said, "What's happening? Are you getting tips?" And they were filled with hugs, filled with hugs actually even before we started talking about tips, because they were proud of their work. But when asked about the tips, "Yeah, I'm getting tips, and this is wonderful." And I don't regret for a minute the fact that we went out and encouraged that to happen, even though there were these negative comments. Second example: within essentially the same month or two, about two years ago, I was deluged with emails so much so that essentially my email inbox was rendered unusable. Emails coming in every few seconds. Overnight you might have 3,000 or 4,000 emails. One set came in because we had a group in a hotel in Arizona that had a conference on reparative therapy. People know what reparative therapy is? It's basically counseling gay people to make them straight, which in liberal society particularly is a total outrage. And so by and large, those emails were coming in from folks who were saying, "How can you possibly let those people meet in your hotel? We're going to boycott you." Within a month, I got a similar deluge of emails from a group of folks objecting to the fact that CAIR, which I think is the Council for American Islamic Relations, something like that, I might have it a little bit off, that they met in one of our hotels in Washington, and they're Islamic and they're connected somehow to terrorists, and we should have never let them eat in our hotels, and they were going to boycott us. And again, the language around some of these emails, pretty chilling stuff. I think the response is easy now. You could reach a different conclusion and go back to this question about, "Okay, what is your faith? What kind of decision would you make if you brought your faith to that question?" But from my perspective, we are in the hospitality business. We welcome everybody. We don't ask you what you believe when you check into a hotel, politically or religiously or in any other respect. And of course, if it's illegal, you're not going to meet in our hotel. But we're not going to sit in judgment on every set of principles or every set of views of the folks who individually check into our hotels or other groups that meet. Last example, and this is one that very much continues today, and this is again around LGBT issues primarily. Probably started with the Indiana legislation that Mike Pence signed when he was governor about a year and a half ago. That was a law in Indiana that basically said religious freedom, we believe, should permit businesses to refuse service to people who are gay or lesbian, if that's inconsistent with your faith and you're running a business, you should be permitted to say you can't come. I spoke out against that. Now, I suppose I was coincidentally speaking at an LGBT conference about two days after the governor signed the bill in New York. I didn't know that there were TV cameras there. I'm not sure I would have done anything differently had I known it. But I came out and said the law is absolute madness, and it's not fair to the people of Indiana who are hospitable people who welcome people, and it's going to be bad for business in Indiana, and it's bad for business generally. I think if you're going to be in business, if your religious points of view or other points of view cause you not to be willing to do business with somebody, well then you should be in a different business. Would we let somebody say no because they're black? And so I made a comment that ended up in the news all over the place in April or May of 2015, which is when this occurred. I did get some blowback, but maybe only a hundred messages, which in the scheme of things was not very much, and an awful lot of positive commentary. This year with the bathroom wars in North Carolina, where there is already a profound impact, a billion dollars of business has left the state, the NBA All-Star game being the most prominent of them. But basically, here you've got Charlotte and the state moving in different directions to create an issue about who should use which bathroom. We have a few bathrooms in North Carolina and in other markets around the world, and I have yet to find anybody who's ever complained about who uses which bathroom. This is not an issue at all in real life. It's not an issue. I've never had a customer come and say, "You know, somebody told me I couldn't use the bathroom I wanted," or another customer say, "I saw somebody in the bathroom I was using and they shouldn't have been there, and I insist that you kick them out." But we end up now with this set of bathroom issues, and we've spoken out about that too and basically said we think that legislation is wrong. It's not fair to the people of North Carolina, it's not good for business, and it's creating divisiveness where it never existed before, because nobody had a problem with this. In the year and a few months between those two episodes, Indiana and North Carolina, the difference in the social media response was night and day. Massive this year. We are more divided this year and more cynical and more angry and more willing to use words that shouldn't be used in civilized company than we were even just a year ago. Now, you can have a debate, and I actually quite respect folks saying, "It's not your place to speak about that issue. You're running the hotel business, and this is something that people have strong feelings about, and sometimes they have strong feelings about it in a way that they connect with their faith." But this one we thought, no, we do speak out about this because we're in the hospitality business, and we are fighting to welcome everybody, no matter who they are and no matter where they've come from and no matter what color their skin is and no matter what lifestyle they have, because we want to embrace people who are moving around the world and doing the things that they do. The response on this most recent one does often lead to some sadness or pessimism or concern, I suppose, about the kind of society that we live in. But a recent example of something that I think gives a lot of hope: after being in the Middle East and stopping by that mosque, we went to Dubai for a day and then we flew to Kigali, Rwanda, where we just opened the Marriott in Kigali. Rwanda, as I suspect all of you know, 21 years ago had a million people bludgeoned to death in 90 days. The Hutus and the Tutsis went after each other, and it was genocidal, awful. Today in Rwanda, you see a country filled with optimism. We opened a hotel, proud to open a hotel. It's not particularly relevant to us financially; it's one hotel in a very big company. But in that hotel, there will be 250 Rwandans working. Those jobs will absolutely transform their lives. There were 37 young women already working there who graduated from the Agahozo-Shalom Youth Village near Kigali, virtually all of them orphans, who have had extraordinarily difficult family stories but who show up with absolutely winning smiles and this enthusiasm for how their future can be different from their past or their parents' past. And you see that, and you see in that hotel people from all over the world, all colors, all faiths, who are experiencing Rwanda, who are experiencing not just the hotel but this place. And you see this ability to actually break down some of the things that divide and bring us back together. And it's one thing I pray for, and when we get a chance to contribute a little bit to that, it makes what I do extremely special. So thank you all for listening tonight. I don't know if we have time for a few questions.