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Tony Capuano: CEO Of The World’s Largest Hospitality Company | E77 · In Search Of Excellence

• 0:00
  Tony Capuano: I was lucky enough to interview as you point out with eight companies and Bell privileged to get seven job offers, but I did get one rejection and I kept that on that rejection letter, still habit, and it was from Marriott I had made a lot of relationships during the course of my eight years in consulting with folks that worked with Mariette I was impressed with their intellect, I was impressed with the innovation the company had showed, I think whatever industry you pursue learning with granularity, the nuts and bolts of the industry that you choose is invaluable. There are no bad jobs, there are things you can learn that will serve you well later in your career.
• 0:43
  Randall Kaplan: Welcome to In Search of Excellence where we meet entrepreneurs, CEOs, entertainers, athletes, motivational speakers, and trailblazers of excellence with incredibly stories from all walks of life. My name is Randall Kaplan. I'm a serial entrepreneur, venture capitalist and the host of In Search of Excellence, which I started to motivate and inspire us to achieve excellence in our lives.
• 1:03
  Randall Kaplan: My guest today is Tony cap on Oh, Tony is the President CEO of Marriott International, the world's largest hospitality company with nearly 8600 properties in 139 countries and territories in over 31 brands, including JW, Marriott, St.
• 1:19
  Randall Kaplan: Regis, Bulgari, Ritz Carlton Weston and Sheridan, among many others. Marriott also has the travel industry's largest customer loyalty program, Marriott bonvoy, which has more than 186 million members. Tony serves on the board of directors of McDonald's Corporation and say Venice, a nonprofit organization dedicated to preserving the artistic heritage of Venice, Italy, which since its founding in 1971, has funded the conservation of nearly 2000 individual artworks. Tony, it's a true pleasure to have you on my show. Welcome to Search of Excellence.
• 1:54
  Tony Capuano: Well, I'm delighted thanks so much for having me.
• 1:56
  Randall Kaplan: You were born and raised in Baltimore, your dad was 20 years old when you were born. He was going to John Hopkins during the day and loading UPS trucks on the graveyard shift at night. While I worked his way through school, when he graduated, he went to work for AT and T he moved all around Baltimore and ended up in Columbia, Maryland. Can you tell us about the impact he had on you and your future. And as part of this talk to us about the value of work ethic and our search for excellence?
• 2:24
  Tony Capuano: Sure. So obviously, he was an extraordinary influence on my life from my earliest memories, and not just the work ethic. But whether it was him whether it was his father, my grandfather, there was an extraordinary work ethic accompanied by this idea that that's just what you do.
• 2:45
  Tony Capuano: And you really don't complain about it, you do what's necessary, both to take care of your family, but also to advance your ambitions. And so I think about my grandfather as well, he came to this country. Not particularly well educated, he had to care for his four siblings, and he was a professional boxer. And as a result of that, he ended up with detached retinas ended up fully blind in one eye, partially blind in the other eye. Rather than feeling particularly sorry for himself, he said, What am I going to do now? And he started a second career with the National Federation for the Blind. My dad's similarly, I'm sure with the demands of Johns Hopkins wasn't necessarily that excited about coming home for a couple hours, and then heading to graveyard shifts at UPS. But that was necessary. And so from my earliest memories, this notion of of strong work ethic and doing what was required, was instilled in me and remains with me today.
• 3:51
  Randall Kaplan: You remember him actually coming home from school, trying to study and then going to work? Was he exhausted all the time? And how old were you when you actually recognize the sacrifices he was making for your family?
• 4:03
  Tony Capuano: Yeah, I probably didn't recognize it till much later. My earliest memory, no matter how rough a day, there was a small newsstand between where he went to school and where our row house was in Baltimore. And I always remembered no matter what a rough day he had, he always stopped by and bought a candy bar for me. And so the highlight was wondering what candy bar he got me, and whether he could sneak it to me before my mom took it away. But, you know, I remember I have a lot of great memories from those early days.
• 4:37
  Tony Capuano: I'm sure he was exhausted, but he sure never showed it. He just dusted himself self off and went about doing what was necessary.
• 4:46
  Randall Kaplan: Now it's a little bit about what you were like as a kid growing up from say, five to 12 or 13 years old.
• 4:53
  Randall Kaplan: We're going to talk about high school and some of the things you did then in a minute. But before then what what were you like as a kid
• 5:00
  Tony Capuano: When I was an only child and my parents split up when I was about 12 years old, and I ended up living with my father, and again, our age gap is 20 years old. So you think about that he was 32. He was still relatively early in his career, and trying to build a strong career for himself. And so I spent a lot of time by myself at that age, very self sufficient, played a lot of sports, spend a lot of time with my friends. By necessity a self starter. Learn to Cook at a very early age, again, by necessity, learn to do laundry after the early days of the two of us living his bachelor's, because he didn't know any better at the end of a long week of work. He took all of his suits and put them in the washing machine, because he didn't know they had to be dry cleaned, so he had to buy all new suits. And so he and I figured it out together. But I would say very self sufficient from an early age.
• 6:09
  Randall Kaplan: So you mentioned sports, you were a lacrosse player in high school and a coach and also an investor in a place called Toby's Dinner Theatre, which was your first exposure to hospitality? Can you tell us about your first job as a pot washer and your progression from that job to be able to carve a steamship around half at the end of the breakfast buffet? And what's your advice to everybody in the workforce in particular, those graduating from college who are in the early stages of their career, who don't want to work in what we call unsexy jobs and don't want to do the nitty gritty work.
• 6:46
  Tony Capuano: So my you're right, my lacrosse coach was one of the owners of Toby's and as a result, myself many, many of my teammates and part time jobs there, and didn't matter whether you were the star player or you rode the bench, you had the same career progression at Toby's you started as a dishwasher. If you worked hard, or excuse me as a pot washer, if you worked hard, you got promoted to dishwasher, then salad prep, then hot food runner. And the pinnacle of your Toby's career was you got the paper chef's hat, and you stood at the end of the buffet and carved that steamship around a beef. But again, it was all about work ethic. And it was a great job for me. I really fell in love with the hospitality industry during that job. I love the culinary side of the business. And and even when I went away to Cornell and in hospitality, while I had an affinity for the real estate and finance side of the business, I spent every one of my summers interning on the operation side of the business. And so to your second question, I think whatever industry you pursue, learning with granularity, the nuts and bolts of the industry that you choose, is invaluable.
• 8:04
  Tony Capuano: And I would suggest to any student, there are no bad jobs, there are things you can learn that will serve you well later in your career. And that should be the the approach you take to any opportunity you have. Rather than grousing about that it's unsexy or it's difficult, or it doesn't pay well use that as a learning opportunity. Hopefully, someday you'll have some measure of success. And you will understand the challenges of those frontline jobs. Why it's hard to find folks for those jobs. What you can do to make those jobs more appealing. What you can do to remove friction for the employees that fill those jobs, and to really have some true empathy and understand how challenging those frontline jobs can be.
• 8:56
  Randall Kaplan: This episode of In Search of Excellence is brought to you by sandy.com s a n d e.com. We're a Yelp for beaches and have created the world's most comprehensive beach resource by cataloging more than 100 categories of information for every beach in the world, more than 100,000 beaches and 212 countries. sandy.com provides beach goers around the world with detailed comprehensive and easy to use information to help them plan their perfect beach getaway at home and abroad. And to make sure you're never disappointed by a beach visit again. Plan the perfect beach trip today by visiting sandy.com. That's www.sand.com the link is in our show notes. Stay Sandy my friends. I have 36 interns each summer we got this summer we had 750 job applications. We recruit from all different colleges, both lower ranked schools and then the Cornell's of the world.
• 9:49
  Randall Kaplan: We had four kids from Cornell this summer and what I've learned over the last 20 years of having this program is there's definitely a shift from when I went to school. or maybe when you went to school, I'm 54.
• 10:03
  Randall Kaplan: It's a little different today, the mindset of the students, they want to do something sexy, they want to work at Facebook, when you start talking about going to work at some very, very low level, they simply don't want to do it. We're building a beaches company we built to yell for beaches, we've catalogued over 100 categories of data from more than 100,000 beaches in 2012 countries. It's the world's most definitive beach resource for the $5 trillion year beach tourism business. The interns worked on data all summer long.
• 10:31
  Randall Kaplan: And we tell them when they come in, this is going to be an interesting job, you're going to learn how one person me there's 1000 ways builds a company, but the work is going to be grueling and boring, and beneath your intelligence level and capabilities. But but this is what it takes to create a company. Can you just comment on that? And what you're seeing in your own company and the workforce? Is it the same? Or is it different?
• 11:52
  Tony Capuano: Well, you know, it's top of mind for me, just last week, I gave a parting address to bet 114 headquarters in terms we had at Marriott across disciplines. And I actually came away from spending a couple hours with them quite optimistic. They were engaged, they were inquisitive. And I asked them, I said, Did we keep you busy? Did we keep you interested? Did we give you work that was substantive. And and the reactions and the responses I got gave me a lot of optimism about the future of the company, and the future of the industry.
• 12:30
  Tony Capuano: Because almost to a person, what they said was, you gave us real work, we felt like the work we did really mattered. And even tasks that weren't terribly challenging, we tried to figure out how they might be applicable to what our long term goals were. And so rather than being dismissive, or suggesting, that's work that was quote beneath us, they took it on as an opportunity to learn and and to figure out how it might have applications to their long term aspirations. So I have, I'm lucky enough to sit on the Dean's Advisory Board at the hospitality school at Cornell.
• 13:08
  Tony Capuano: And one of the things we talk about is many of the students there are aspire to go into investment banking, or private equity or real estate. And that's terrific. But we want to make sure there's still a cohort of students that have a real passion for the operating side of our business. And one of the nice things about the cohort of interns we had here this summer, is yet a nice distribution. You had some folks that absolutely wanted to push me down the stairs and take my job. But he had other folks whose real dream is to be the general manager of one of our hotels or resorts.
• 13:45
  Tony Capuano: And that gives me a lot of optimism about the future of our business. At some
• 13:50
  Randall Kaplan: point. When you're younger, you want to be a fighter pilot pilot, you received the congressional nomination to the Naval Academy or you had a vision issue. And then on the advice of a family friend, you applied and had an interview with Cornell, where you graduated from the School of Hotel Administration. But you grant and by the way, love Cornell, my daughter goes there, she's a senior I think she knows your daughter. I think they know that at some point. My daughter, Bianca, Kaplan, super proud of her. When you graduated eighth job interviews and earn offers from all of them, except for one of us about the one you didn't get the importance of humility in our success. And the letter you still carry with you. Yeah, so
• 14:34
  Tony Capuano: the career services team at Cornell does a remarkable job. They work very hard to cultivate real relationships with companies across the industry. And if students apply themselves and really get engaged, they are lucky to get lots of interviews, and hopefully, they have a number of offers to choose from.
• 14:53
  Tony Capuano: I was lucky enough to interview as you point out with eight companies and felt privileged to get seven job offers, but I did get one rejection. And I kept that, that rejection letter, still have it. And it was from Marriott. And, you know, people sort of laugh at that story and it's an entertaining story. But when I reflect on it, and I tell that story, I have a little different perspective. And and one of the things that I treasure about this company and its culture is its humility.
• 15:24
  Tony Capuano: Bill Marriott who is a true icon, who has really shaped the hospitality industry in ways that will be felt for decades, if not centuries, is as humble amount as you'll ever meet. When Kate Walsh the dean of the hotel school, had the chance to meet Mr. Marriott. She said to him, all the kids in Ithaca know that I'm here. or the minute I get back on campus, they'll say, What did he say? What advice did he have? And she said, if you had one bit of advice, what should what would you share with the students? And without pause, he said, tell them to be humble.
• 16:02
  Tony Capuano: And I think he really believes that. And when I reflect on that rejection, I think the company did me a huge favor. I think they thought, here's this brash kid, he's graduating from this wonderful school. He thinks he knows more than he really does.
• 16:17
  Tony Capuano: We might be interested in him someday. But he needs to go out and realize how much he doesn't know. And that's stuck with me.
• 16:26
  Tony Capuano: I went and worked in consulting for about eight years, but always watched from afar. The company I had deep admiration for its culture. The fact that its core values guided to everything they did, I watched with great interest some of the financial challenges they had in the late 80s. And the early 90s, I was extraordinarily impressed with the the innovative approach they took to navigating those difficulties, and ultimately splitting the company and spinning off. Now the company that I lead Marriott International, and was lucky enough to take another shot in 95. And they were gracious enough to give me another chance. And I joined the company in early 95.
• 17:17
  Randall Kaplan: Let's go back in time, your first job you began your career, as you said in a consulting group, or consulting firm lab and fell in Horwath, in Boston, in their leisure time advisory group at the time, it was the premier real estate consulting firm. You're there for two months. And you turn in your first feasibility study on a Friday afternoon and had an awesome and super fun weekend.
• 17:37
  Randall Kaplan: When you got to work. On Monday morning, your boss asked to see you. What did he tell you? And what was the lesson you learned?
• 17:43
  Randall Kaplan: And what's your advice to all the students and all the recent graduates have good and great schools with good or great grades? As they enter the workforce and think that what they did in college, or where they went to school actually matters? Once they walk in the door?
• 18:00
  Tony Capuano: Yeah, my boss at the Times gentleman named Fred Tim, who's still a dear friend of mine. And the phrase he used was, you can't take a B anymore.
• 18:07
  Tony Capuano: And I said, What do you mean by that? And he said, Listen, I'm not that much older than you. I was in college not long ago. And I remember this calculus. I remember it would be a Wednesday night. And there was a great party that I was thinking about attending. But I had an exam Thursday morning. And I would do that calculus. And I'd say, well, I should stay home and study for a few more hours. But I'd really like to go to that party, I probably have done enough work to get a beat. If I stay in and I can probably get an egg, I'm going to take the B and I'm going to go to the party, because the only one that's going to hurt is me. And that's an acceptable trade. He said the work you did here is a B, he said the problem is we're paying you for a work, our clients are paying us for a work. And you have a decision to make. You know, if if you don't want to be here that much longer than continue to turn in the work. If you'd like to stay here a lot longer, you certainly have the intellect and the and the potential to be here longer. But you've got to decide if you want to do a work on a consistent basis. And as you can imagine, as a newly minted graduate was a terribly difficult message to receive. But it was probably the most valuable professional message I've ever received. And he said go home while you go home today, and think about what your future looks like here. And I did go home. But I went home and redid the feasibility study stayed up till four o'clock in the morning. And the next morning I came in and I turned it in. And he said great, do that every time and you've got a future here. And I have told that story off and to folks that have worked on my team. And and it's a great way to phrase it, you know, you don't have the option of taking the bee anymore. Because the work you do does not simply impact you. It impacts your team. It impacts your customers. It impacts your investors, it impacts all the folks that you that are relying on terrific work.
• 20:21
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• 21:05
  Randall Kaplan: Because there's someone behind you who can do the same amount of work and for us, starts with the most commonly asked question in the world, which is, how are you? And you're going to say that probably 1020 times a day, depending on what your life is like, and 99% of people get it wrong. They say I'm good. And I always give, I tell them that 3.0 are that a good is a 3.0 very good as a 3.3. Do you want to be a 3.3? Or do you want to be a 4.0? So we train people to say great, couldn't be better.
• 21:35
  Randall Kaplan: Fantastic. And we even use something called verging on superb, which the vice chairman of a company I used to work at Sun America used to say and it's it's, it's good to borrow phrases from people who make a difference you want to have starting with the first communication with people, something that starts out it's great and that one is a layup for us.
• 21:56
  Tony Capuano: You know, there are some catchphrases here, most of which came from Bill Marriott or his father that really guide what we do. An example of that is success is never final. And and, you know, we take about 30 seconds, when we achieve some measure of success. Say that was great. What's next? You know, I experienced that over the last couple of weeks, for the first time in our 96 year history. We broke through a $200 stock price. And as you might expect around the building and around the world. A lot of high fives a lot of Pat's on the back. And somebody said, Isn't that amazing? What do you think? I said, that's great. It's a nice milestone on our way to a $300 or $400 stock price. And that's really the mindset I don't want anybody to be satisfied. It's it's a nice achievement. But it's a milestone on what I hope is a journey to greater and greater achievement for the for the company.
• 22:54
  Randall Kaplan: So you leave Boston your next job you packed up to LA where you work as a bartender and played a lot of volleyball before joining.
• 23:01
  Randall Kaplan: Before joining Kenneth Leventhal and companies Hospitality Group in LA where you worked for nearly six years working on mostly failed Savings and Loan deals. Then in 1995, as you said, you went to work at Marriott. As part of the market planning and feasibility team.
• 23:17
  Randall Kaplan: That's a group that looks at prospective new hotel projects.
• 23:21
  Randall Kaplan: What made you join Marriott was going through some very hard times back then it was a very different company than it is now.
• 23:30
  Tony Capuano: I'd say two things. Number one, my experience at Kenneth Leventhal maybe two facets of that experience were the catalyst for me gravitating towards Marriott.
• 23:43
  Tony Capuano: Number one, it was the first time in my career that I got to do significant international work. At the time, Kenneth Leventhal was world renowned for its expertise in Japanese investment in us real estate. If you think back to the early 90s, the Japanese were aggressively acquiring trophy assets. And they on the Chrysler Building, they bought Pebble Beach. And so I was spending a lot of time in Japan, I was underwriting a lot of acquisition work. And and it was eye opening to me about the global nature of real estate.
• 24:17
  Tony Capuano: Secondly, as I worked on all these transactions, the best analogy I can give you, if you love cars, and you're walking down the street and you see a beautiful Ferrari parked on the street, you can peek in the window, you can walk all the way around, but you don't get the chance to drive it. And sometimes that's an analogy for being a consultant, you maybe get to touch it, but you don't really feel like you have ownership. And and so I had this burning desire to be inside those projects rather than just happened to sort of touch them as they drove by. And and I saw Marriott growing more and more internationally. And the combination of those two interests really had me gravitate further, I had made a lot of relationships during the course of my eight years in consulting with folks that worked with Marriott. I was impressed with their intellect.
• 25:16
  Tony Capuano: I was impressed with their integrity. I was impressed with the innovation the company had showed, shown and all those factors drew me towards the company.
• 25:28
  Randall Kaplan: You're there for two months, and you're in your cubicle at 10 o'clock at night when a guy named Jim Sullivan said he had an idea to buy Ritz Carlton, which you did. Two years later, Arne Sorenson, who we're going to talk about in a little bit, who was running m&a at the time came by your cubicle again at 10pm at night, and had the idea to acquire Renaissance hotels for a billion dollars, which you all also did you got to work on that? How much of our success is being at the right place at the right time? Which requires a tremendous amount of hard work to get there? Like working at the office till 10pm every night?
• 26:06
  Tony Capuano: Yeah, you know, I think it's like anything else the, you've got to have the table stakes, right? You've got to have basic knowledge, basic work ethic, but some of it is putting yourself in those positions. By working hard by being in the right place by networking, by making folks aware of your ambition and your capabilities. In that case, you know, you started our discussion, talking about my father, and even my grandfather's work ethic. I wasn't doing it for effect, it's just how I was raised. I, the first month I worked for the company, I was in feasibility.
• 26:49
  Tony Capuano: And my boss at the time a woman named Carol Wagner said, host Marriott at the time, was looking at acquiring a portfolio of hotels. This tells you how long ago it was there were still physical data rooms. And she said, there's a data room in New York, I need you to take the train up to New York, get all the data you need, and put together pro formas for these five hotels. I said great. When do you need it? She said as soon as possible. And so I took her literally. So the next morning, I took the train up to New York.
• 27:18
  Tony Capuano: I collected all the data. I took the train back that afternoon, I sat in my cubicle, I started working on the pro formas. And then the next morning she came in. She was an early riser. She came in at about 6am saw me in my cubicle. And she said what are you doing here so early? And I said I'm so sorry. I got forgotten. I have one left. She said how's that possible? I said while I came back from New York, and I started working. She said if you've been here all night, I said Well, you said you needed them as soon as possible. I said I should have the last one done in about an hour. And again, it was not kind of to show off or to get FaceTime with my boss.
• 27:59
  Tony Capuano: That's just how I was raised is to do what I've been asked to do. And so the two examples you give with Jim and Arne. I had responsibilities that had deadlines. And so I stayed in the office to make sure that I could meet those deadlines. And thankfully, you know, I used to joke with both of them. They didn't come down the hall looking for me. They came down the hall looking for a warm body. And thankfully, I was the only warm body that happened to be down at that end of the hall that night, but I sure took full advantage of it and learned an extraordinary amount from both of them. They were both extraordinary deal makers and extraordinary mentors.
• 28:41
  Randall Kaplan: Thanks for listening to part one of my amazing conversation with Tony cap wantto, the CEO of Marriott International. Be sure to tune in next week to part two of my awesome conversation with Tony