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Tony Capuano: The Non-Negotiables In Business | E78 · In Search Of Excellence

• 0:00
  Tony Capuano: I feel like I am telling the story of hundreds of 1000s of Marriott associates and and the extraordinary work they do every day, I don't want to miss a single detail, I want to make sure I am telling their story thoughtfully and comprehensively. The ability to actively listen is a rapidly evaporating skill. And if you can master it, you are going to be lightyears ahead of many of your peers, there will always be someone with a better education or more experience, or taller, less gray hair, all those factors are beyond your control.
• 0:34
  Tony Capuano: But the one variable that you do control is whether someone outworks you that is 100% within your control.
• 0:45
  Randall Kaplan: You're listening to part two of my awesome conversation with Tony Capano, the CEO of Marriott International. If you haven't yet listened to part one, be sure to check that one out first. Without further ado, here's part two with the amazing Tony Kaplan Oh, I'm a big believer in work ethic, it's probably the most important determinant of my success. And I tell everyone that having a great work ethic is probably going to be the most determinant factor in your success, especially when we're talking about being the first person and last person out again offer FaceTime, but I write I tell my mentees we have something called Philo. And that means first in first out. And I tell everyone, no matter where you work, if you're that person, Mr. or Mrs.
• 1:32
  Randall Kaplan: Philo, you're going to have an incredible career. And I remember I was on successful lawyer had an opportunity to be the assistant to the chairman for Forbes 400 person, Eli Brode. And I'd already met with him. And now, I was told that Jay when trov, who's a former person in that role, wanted to meet with me as well. And he was going to call me then my phone rang at 7am. And I was in my office at the law firm. And sure, I couldn't call them back.
• 2:02
  Randall Kaplan: But it made an impact that I was there and picked up the phone at seven in the morning. I was also the first person in the office that day. It works.
• 2:10
  Tony Capuano: It does. And you know, my dad gave me a bit of advice one time and and I gave my daughter as she was getting ready to graduate from Cornell the same advice. And what he said to me was, there are lots of factors that you can't control. There will always be someone with a better education or more experience, or taller, less gray hair or whatever, or more gray hair or whatever it might be. All those factors are beyond your control. But the one variable that you do control is whether someone outworks you the only way someone outworks you as if you allow him that is 100% within your control. And that bit of advice always stuck with me and hopefully we'll stick with her as well.
• 2:56
  Randall Kaplan: You became CEO of Marriott on February 16 2020, on after your former CEO legendary Arne Sorenson died after a two year battle with pancreatic cancer at the age of 62. You were only the fourth CEO on the company's 90 something year old history at the time. By the way, most people don't know that Marriott started in 1927, as the root beer stand. That's right. When Steve Jobs died, Tim Cook took over and there was a lot of talk about whether he could progress from being a great number two, who shone the spotlight to being a great CEO and the frontman of probably the most important and iconic company in the world. And he's done that. And then some you've done the same thing. And you've had to follow a legend. You've done an incredible job. How hard is it to follow a legend and take over from someone who was so universally loved by everybody?
• 3:47
  Tony Capuano: Yeah, I'd say it's an interesting set of questions.
• 3:50
  Tony Capuano: Maybe I'll try to answer it a couple of ways. Number one, you know, for all of us, not only was Arnie generational leader, he was our friend, right? He was our mentor. He was, you know, I talked about the humility of the company. If Bill Marriott's, the most humble, iconic leader I've ever met, Arne is sure a close number two, right, I mean, caught from the same cloth. Just a remarkable person as well as leader and friend. And and he passed as you point out on Presidents Day in 2021. And I was appointed the following Sunday, so six days later. And when Mr. Marriott called me to tell me that the board had appointed me, one of the things he said to me it was late Sunday evening. And he said, I know you are as devastated as I am about the loss of our friend. And if I had the ability to stop the world from spinning for a few weeks, so that we could properly mourn the loss smart friend, I would, he said, uh, you are going to have to somehow figure out not to suspend mourning, but to somehow compartmentalize your emotions. He said, The reason you're going to have to do that is whether you like it or not.
• 5:18
  Tony Capuano: At seven o'clock tomorrow morning, 800,000 people are going to pin a merit name badge on their lapel. And whether you're ready or not, they're going to expect you to lead them. And by the way, not lead them in a normal business environment. But lead them in the middle of this pandemic, which is the most extraordinary, perhaps existential threat that our company in our industry has ever faced. You know, and then he sort of laughed and said, so good luck with that. I'll see you tomorrow. And, you know, just a remarkable challenge. And that night, as you can imagine, I didn't sleep much. But one of the things I thought about at the time, I had this conversation with Arne. I clearly never thought it would be personally relevant to me.
• 6:06
  Tony Capuano: But right after we bought Starwood, we did what he called an around the world tour, and the whole leadership team of the company got on planes. And we went visited every Starwood office in the world to start to harmonize the culture of the two companies. And during one of the legs of that trip, he and I found ourselves together on a plane one night, and we were chatting and I said to him, do you ever think about the challenge that you took on a following Bill Marriott, this, this icon of the industry, his name's on all the buildings. I mean, what a remarkable challenge you took on and you've done it so so incredibly, and he said, When Mr. Mehra told me that I was going to succeed him as CEO. The one bit of advice he gave me said, Arnie, you were selected for this job, because I believe Arne Sorenson can leave this lead this company. I think the only way you might fail, is if you try to be Bill Marriott.
• 7:08
  Tony Capuano: He said, Don't try to emulate me. Hopefully, I've taught you a couple things along the way. But the only way you'll succeed is if you're Arne Sorenson, right, I believe Arne Sorenson has the ability to lead this company.
• 7:25
  Tony Capuano: And so that's Sunday night, as I laid in bed trying to figure out how the hell I might do what was being asked of me, you know, that that story sort of wrong in my head. Arnie was remarkable in so many ways. I would never dishonor his memory by trying to be him. He was one of a kind, and he was incredible. And I only know how to be me. I don't I don't know how to be anybody else. Thankfully, I learned some incredible lessons from him. I learned some incredible lessons from Mr. Mara. And I luckily, get the chance to continue to learn those lessons from him. It is a privilege to talk to him a couple of times a week, which I continue to do. But that was the only option I had.
• 8:15
  Randall Kaplan: I had a chance to meet him at the skift conference, you've probably been there, of course. And I just went up to him and said, Hi, I have a promotional products company called color card. I think we have 86 Marriott Hotels is clients, I just want to thank them for all the business course he didn't know the product. I gave him one. And I sent him a nice note, email, and he wrote back within two hours, but couldn't have been any nicer when I met him. He said, Tell me more about you. And I thought that's pretty remarkable. I mean, you've been to skift, all the big CEOs from Delta, Marriott, every major hotel companies there and there's a ton of people there who actually took the time to ask me, How are you doing? Tell me a little bit about your background, it made an impression on me, because none of the other CEOs did that, that I met with at the conference, which was about 20.
• 9:07
  Tony Capuano: Oh, and I think, you know, on that sad day, when we lost RNA, when you read all these beautiful tributes that were written about him, the thing that really struck me, not a lot of them were written about his professional accomplishments, right, which were some significant. They were stories like the one you just told, and oftentimes, when young professionals or students asked me for advice, one of the things I always encourage them to do is work on being active, engaged listeners, and on the long list of skills that aren't he had that might have been his best skill before and you saw it in these tributes that were written about him. Somebody that may have spent five minutes with him in the lobby of a hotel or in the port cars share waiting for their car. For those five minutes they spent with him. He looked him in the eye He was not distracted. He wasn't thinking about his next meeting. He wasn't staring at his phone. He actually engaged for those five minutes. And as a result, that person left feeling like they had really connected with him, even though it was only a short interaction. And I encourage young professionals and students. The ability to actively listen is a rapidly evaporating skill. And if you can master it, you are going to be lightyears ahead of many of your peers.
• 10:30
  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. You mentioned you joined the company at a crazy time in the middle of a pandemic. You've already described it as the most challenging crisis in the history of the company in the travel industry. occupancy levels of Marriott in North America and Europe had fallen below 20% to right around 70%, pre COVID revenue per available room known as rev par dropped around 90%, your stock price went from $153 per share to $59 per share losing more than $20 billion of market value. He posted a loss of $260 million in 2020, which was Marriott its first loss since 2009. And you drew down 2.5 billion of your$4.5 billion of credit. What were the biggest three lessons you learned from COVID? How important is culture and team to our success.
• 12:06
  Tony Capuano: So I mean, I think you hit on the first most important lesson. Core values and culture have never mattered more than in those dark days of the early days of the pandemic.
• 12:21
  Tony Capuano: those core values have been the true north that have guided this company through wars, the impact of 911, the great financial crisis and the pandemic. And there is a comfort knowing that when you're trying to feel your way in the dark, it's those core values and the strength of that culture that that really you can lean on to guide you through those most difficult periods. I think the second most important lesson is the value of transparent communication. I am quite certain you've seen the video already recorded for our associates in the very early days of the pandemic. And I'm quite certain that video will be shown shown in business schools for the next 100 years. There is no better illustration of the importance of authentic transparent communication. And boy, no better set of circumstances to learn the value of that sort of communication than what we went through in the early days of the pandemic. And now, I was just gonna say third.
• 13:30
  Tony Capuano: You know, I've been with the company coming up on 30 years, I have always viewed us as being if we erred, we erred on the side of maybe being a bit conservative stewards of our balance sheet. But I can assure you in the 29 years I've been here, not once did I ever see somebody run a financial model that said, wonder how to model looks if revenue drops 92% overnight. And so I think you know, the third lesson was really about the value of thoughtful stewardship and the company's financial position.
• 14:11
  Tony Capuano: And maybe Lastly, the resilience of travel. The fact that we could go from a period in our history two and a half years ago where there were real, probably internal, certainly external questions about the long term viability of the enterprise, to posting quarter after quarter of of record, financial performance. I think that the speed and the steepness of that Recovery to me illustrate two real and obvious truths. Number one, the strength and resilience of travel on a global basis. And number two, the wisdom of our business model. And the combination of those two factors have produce just extraordinary financial results.
• 15:03
  Randall Kaplan: Congratulations on all of that I think stock price 200, huge milestone, congratulations to you and to your team.
• 15:09
  Tony Capuano: Yeah, it's really on the shoulders of the team.
• 15:12
  Tony Capuano: And, and, to me, the most gratifying facet of my time in this role is getting back on the road visiting with our associates, and really seeing the joy on their faces. These are folks that have chosen jobs in the service of others. And so they're at their happiest when our hotels are full. And they get to do what they've chosen to do, which is take care of each other and take care of our guests. And so, you know, I appreciate your kind words, but those congratulations, really go to our frontline associates that are doing such amazing work.
• 15:50
  Randall Kaplan: Tell us in 30 seconds or less about the video and what it was and what he said on the video and why it was so important to have that transparency.
• 16:52
  Tony Capuano: Yeah, I think his willingness, you know, he mentions in the video that there were members of the team that thought he should do an audio message because he had lost his hair as a result of his cancer treatment. He said absolutely not. The fact that he was so candid about how little we knew about the pandemic, and how long it might last, and how impactful it might be. And he was so authentic and saying how difficult it was for him to recognize the impact this was going to have on associates who had nothing to do with what was happening to them.
• 17:28
  Randall Kaplan: First day announced your CEO, you got almost 20,000 emails from associates most from people who've been furloughed, and you travel as you said a lot more than 200 days a year visiting Marriott properties. A lot of us have this vision of big CEOs in the tower, they're not in touch.
• 17:46
  Randall Kaplan: They don't if they're an airplane company, they actually are not flying back and coach right there in first class are treated like kings or queens. Do you respond to every email you get? And how important is it to have face to face? Interaction with your employees and customers?
• 18:07
  Tony Capuano: Yeah, I do respond to every email I receive. Not as quickly as I used to, to be sure. But I do. I'll admit, I used to maybe have a little OCD, I used to take great Glee from clearing out my inbox. Maybe I've I've, I've I've given up, it'll never be zero. But I do endeavored to respond to every email that I get, both from associates and from guests.
• 18:38
  Tony Capuano: There is arguably no more important part of my job than getting out into the field, seeing our associates, being with our customers, and meeting with our owners and our partners. Ours is a face to face business. And we muddled through with technology by necessity.
• 18:57
  Tony Capuano: But I think the steepness of our recovery is the best illustration that people understand business is conducted face to face.
• 19:09
  Randall Kaplan: One of the elements of my success has been something I call extreme preparation. I'm talking about preparing 10 times more than someone else does for a meeting, a job interview a presentation going way above and beyond a certain period one hour, I'll sometimes prepare 40 hours. Can you give examples of things you've done using extreme preparation in your career? And how important is it to our success to stand out a lot more than the average person and show that you've actually done the work?
• 19:42
  Tony Capuano: Yeah, I mean, I could give you a few I think to this day, every earnings call, I prepare for hours and hours and hours. One I feel like I am telling the story of hundreds of 1000s of Marriott associates and and the extraordinary work they do every day. I don't want to miss a single detail. I want to make sure I am telling their story thoughtfully and comprehensively. And so I you know, if you saw the binder I take into the earnings call. I should I should buy a lot of three M stock because it's got hundreds of post it notes all over because I want to make sure I have a full and and comprehensive command of all the facts in that binder. So I prepare probably over prepare a bit for those calls. I talked a little bit about that extraordinarily difficult week after RNA passed and the board had a tough decision to make they had to they also had to compartmental why's there grief because you could argue among the most important responsibilities of a public company board is the selection of a CEO, particularly in the face of the loss of such an incredible leader. And in the face of the challenges that the pandemic had created for our company. I think I did for all nighters that week, because I was given an audience with the board, to give them a perspective on what my my vision and strategy might be for the company going forward. If I were lucky enough to be selected as CEO. I had several hours to make that presentation for the board.
• 21:32
  Tony Capuano: I think I wrote 30 pages of preparation. And when I finally got to the board, I'm not sure I looked at them at all. I had written and rewritten, written and rehearsed so many times.
• 21:44
  Tony Capuano: That when it came time to make that presentation, I don't think I memorized it, but it was so embedded in my head that I felt comfortable just talking to the board for a few hours.
• 21:57
  Randall Kaplan: Are you looking for your next great gift to surprise a friend colleague or loved one plus speeches makes the perfect gift is best selling bright and beautiful coffee table book by Randall Kaplan features stunning drone photography from exotic beach locations around the world. It's the perfect housewarming gift, a great addition to any home or office. And a fun and creative alternative to bringing a bottle of wine to somebody's house for dinner bliss speeches is available for purchase on Amazon, where it has glowing reviews and a five star rating get your next amazing gift and order a copy of plus speeches by clicking the link in our show notes. The great story I think, probably not a single listener or viewer if you polled a million people that if you asked, would the CEO of Marriott going into essentially a job interview for lack of a better term preparing for all nighters.
• 22:44
  Randall Kaplan: I think most people would say no one is going to do that. But that's the advice I give when someone says who does that I respond nobody, which is exactly why you should. And
• 22:55
  Tony Capuano: I think it's silly also wouldn't guess that I had a shirt and tie and jacket on. And then Nike shorts and flip flops because it was on Zoom. So I figured they wouldn't see me from you know, anywhere. But here up.
• 23:10
  Randall Kaplan: Hopefully you had a good pair of kicks on some some nice chickens or something.
• 23:11
  Randall Kaplan: That's something cool just to make you feel cool and relaxed when you were when you were doing it. Let's talk about the importance of giving back. You advise students to remember the nobility of serving others, how important is it to give back in our success?
• 23:30
  Tony Capuano: I think it's critically important. I you know, I think about all of the blessings that I and my family have. And I given an extraordinary amount of credit to Cornell and all that Cornell did for me all of my professors, my advisor, the dean that was there when I was there, the career services office. I would guess over the years I've had 1000s of students reach out to me, from Cornell, whether it was for assistance on a school project, for internships for full time jobs for career advice, I can tell you with absolute certainty, I've responded to every one of those inquiries. And when I have the privilege to speak at Cornell, one of the things I say to them, I'm not unique. That school has an incredibly passionate alumni base, all of whom want to pay back the blessings they've received. Similarly, and if I have any frustration with with the students there, the phrase I use with them, I say the day you started here, you are given a big, shiny golden treasure chest. And very few of you ever open the lid of that treasure chest. You have this passionate alumni base that want to help you. They want to give you counsel they want to give you advice they want to help you as you as you navigate your career in this amazing industry. Take advantage of it.
• 24:57
  Randall Kaplan: Before I finished today, I want to go ahead and ask more open ended questions. I call this part of my podcast fill in the blank to excellence. Are you ready to play? Ready? The biggest lesson I've learned in my life is
• 25:09
  Tony Capuano: listen to the advice of your parents.
• 25:12
  Randall Kaplan: My number one professional goal is to give back. My number one personal goal is to give back. My biggest regret is
• 25:23
  Tony Capuano: and not have taken more advantage of what Cornell had to offer. The one
• 25:29
  Randall Kaplan: thing I've dreamed of doing for a long time but haven't done is
• 25:33
  Tony Capuano: get my pilot's license. You're going to do it.
• 25:36
  Tony Capuano: I don't know if they'll let me maybe
• 25:38
  Randall Kaplan: if you could go back in time, the one piece of advice you would give your 21 year old self is Be humble. If you could meet one person in the world who would it be? Do they have to be alive? Let's go dead and alive. Dead.
• 25:52
  Tony Capuano: It would probably be DaVinci love it alive would probably be Cal Ripken. Wow. The Baltimore guy.
• 26:07
  Randall Kaplan: Alright, for those of the listeners of viewers who don't know Cal Ripken holds the MLB Major League Baseball record for most consecutive games played. I don't remember Tony what it is, but I think it's 148 2148. I was gonna say more than 2000 Incredible. The one question you wish I asked you is,
• 26:27
  Tony Capuano: why should a student that's trying to figure out what they want to do for a living? Consider the travel and tourism industry?
• 26:34
  Randall Kaplan: And the answer is
• 26:37
  Tony Capuano: I'm going to give full credit to my hero, Bill Marriott. Every year we do a senior leadership meeting and one of the highlights of that meeting is some some words of advice from Mr. Marriott. And in the middle of the pandemic, I sat down and did a little fireside chat with him. And I said, Mr. Merritt, our folks, especially in the field have gone through just an extraordinarily difficult period coming out of the pandemic. What words would you give them to energize them as they continue to work through recovery? And he said, I had reminded them what a fun business this is. And he sort of joked and he said, Can you imagine spending your whole career working for a box manufacturer? So that sounds horrible. He said, think about what we do for a living. He said travel is such a fun industry.
• 27:25
  Tony Capuano: And if we do our jobs, well, we end up being part of the fabric of people's lives. They celebrate the most important milestones of their lives with us, their weddings, their anniversaries, birthdays, family reunion, family reunions. And if we're doing our jobs, well, we're making those memories even more significant for them. He said, what we do for a living is is enhance people's lives. It's a great profession.
• 27:56
  Randall Kaplan: Tony, this has been awesome talking with you.
• 27:59
  Randall Kaplan: I'm grateful for the time you've given us. I appreciate your responding. I sent you a cold email, and you responded right away. So this has been incredible. Thank you so much for your time, and congratulations on all of your huge success. I'm looking forward to more great things from Marriott. Well, thank
• 28:13
  Tony Capuano: you and thanks so much for having me. And good luck with your daughter's graduation. I'm going to send you some Kleenex, blubbering mess, so get ready.
• 28:22
  Randall Kaplan: Oh, me too. No, no doubt about it. Thank you.
• 28:25
  Tony Capuano: I have the privilege to do lots of these sorts of conversations. I know extreme preparation is is a buzz phrase for you. Boy, did you do your homework? I felt like this is an episode of This Is Your Life. You dug deep you did terrific research. You certainly were extremely prepared and I appreciate it. It made for a much richer conversation. So thank you