MONDAY OCTOBER 23, 2017
 
Blog TALKING TO
ISADORE SHARP
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Even in his official bio they parenthetically refer to Isadore Sharp, founder, chairman, and CEO of the Four Seasons, as “Issy.” But when I meet him in the inner sanctum of his corporate office, I‘m much more comfortable with “Mr. Sharp.” Not that he’s an intimidating figure – on the contrary, he’s a warm and gracious host, befitting the man who made unparalleled service the defining characteristic of the world’s largest luxury hotel management company. No, the formal greeting is purely out of respect for his accomplishments, wide-ranging and far too numerous to list. But while he’s now a Companion to the Order of the Canadian Business Hall of Fame, he was also once a star athlete at Forest Hill junior high known to friends as “Razzle Dazzle Issy.” That bygone era and that youthful élan are more present than the many awards and honours and directorships. The first thing Sharp says to me is, “Back in high school we were all big fans of your father, who was the best football player we’d ever seen.” As he speaks, his face is alight.

My father was older, but they came from identical backgrounds – sons of immigrants guided by a ferocious work ethic and strong family support. Sharp began his career by working for his father’s small construction business in Upper Forest Hill Village, as did classmates and future business leaders like land developer Rudy Bratty and Tridel’s Angelo DelZotto. Sharp explains that it wasn’t only a rigorous work ethic that fueled his success – there was also, at an even deeper level, the core values of honour and respect upon which he was raised. In fact, Sharp believed so passionately in these principles that he would make the golden rule the foundation of his company – a decision which would have profound implications for every employee and guest to set foot in any of the now 83 Four Seasons hotels and resorts in 35 countries around the world.

Four Seasons: The Story of a Business Philosophy is both the heartfelt autobiography of a compassionate family man and the dazzling success story of a legendary entrepreneur. That these two narratives should interweave so seamlessly and naturally is, in itself, remarkable.

Q: What inspired you to write this book?
A: The main reason was for the benefit of the more than 35,000 people who work in the company, as well as the many thousands of people who will be joining the company as we continue to grow. I believe it is important for people to understand how and why we got to where we are today, as it will give them a better sense of how to deal with the future. And I thought, you know, I’d better get it down while I still can recall those events – which were the early building blocks. Because nobody else knows about it. So that was the goal. History gives a company legitimacy. History is really a connection to the past and a link to the future, and it becomes an unbroken chain. So I really wanted to tie those together, and the only way to do it was to write this book.

Q: Is it safe to say the company culture that you put into place early on was so crucial to the Four Seasons’s later growth and success?
A: Well there were four key strategic decisions that were made over a period of time, and these were the milestone events. And the culture arose out of a mission statement based on the golden rule.

Q: What I found interesting was that you were really going against the grain by implementing the golden rule as the key cornerstone of your company. Everyone knows it, many profess it, but the Four Seasons actually put it into practice, which was a radical management decision. Can you tell me about your vision for making this the basis of your company – even at a time when many within the company, at least at first, were not convinced that it could ever work?
A: Well, there’s a privilege to being the head of the company – but companies are not democracies. So you usually like to co-ordinate and organize and get people to understand and go along with you. But if they don’t, you still have that authority to be able to say, “I hear what you’re saying, but we’re going to do it this way.” So it gives you that privilege. And if you really believe in it, and have a conviction in it – while there’s no guarantee that it’s right – but it’s just, “This is worth working for.” So you’ve got that power. You don’t like to exert power, you want to influence instead.

But as far as the golden rule goes, and implementing it, it was a theory. Could we create a qualified work force who would be better than our competitors based upon an ethical credo? It was a theory. I didn’t know whether it would work, but it was worth pursuing. And now, having done it, in practice, it’s become a fact. It’s been proven by the people who’ve been with the company these 15, 20, 30 years. And through their own experiences – these are people who come out of college and say, “Okay, this is the way you want me to behave. I’d like that. That’s the way I was brought up. Yeah, I’d buy into it” – so in their own experiences, they see that process of working with people not by the whip but through leading by a string as producing remarkable results.

Q: There is an interesting moment in the book when your business partner, Prince Alwaleed, says that both you and he are religious men. You reply that you’re not observant but he says, “Yes, but we share a belief in the values underlying all the great religions.” The moment seemed a good example of how the basis of your entire company was an ethical vision of how people should be treated, whether employees or customers.
A: Some years ago, I said to my wife Rosalie, “Where does this come from? We have this saying, ‘Do unto others as you would have them do unto you’ – but who are the scribes? Who wrote this down?” I asked her to do some research for me and uncover where it all started. So she did. And I now have a plaque here in my office. Ten different religions, in their scripture, read out exactly what the golden rule stands for. They say it in different ways. In the Qur’an, you will read a sentence that identifies this exact same principle. So what Prince Alwaleed was referring to was, “This is what I believe in, as you believe in” – and, you know what, most people do. It’s how you were brought up.

It’s what I was mentioning earlier about how your father, and our whole group, were such close friends. It’s because we were all brought up with that as the basic value system – how do you deal with people respectfully, honorably? It’s not new. It just was never applied as a business principle. So what I was doing was saying, “Hey, look, I’m not doing anything that’s different from what you’ve all done. I mean, this is the way you want to bring your children up. Would you say differently?” So, the concept wasn’t new but the principle of applying it to business was what was new.

Q: In time, the Four Seasons brand becomes synonymous with the ultimate in quality. For instance, when interviewed about his accommodations during the Gulf War, General Schwarzkopf says, “Well, it isn’t the Four Seasons.” You would think, when something like that occurred, one would be satisfied with one’s brand – but you actually wanted to take it to another level.
A: Well when we went public, I tried to say, “Look, as a company we’re specializing at one end of the market. And that I believe, over a 10-year period, we will be as well-known for what we represent as Hilton, Hyatt for what they represent. We will build a brand name synonymous with quality that will immediately identify who we are.” I felt that either you had to be very big or very good. So I picked being very good as a way for people to know who you are. And that’s what a brand does.

Q: And at that time I understand that there was not a chain of solely five-star hotels – the big chains were a mix of five-star, three-star, two-star, etc. So that was a unique proposition too.
A: And that was the first of our major strategic decisions. I said, “We’re only going to operate medium-size hotels of exceptional quality, and we’re going to be the best.” Now to say that you’re going to operate one type of hotel, that’s no big deal. Other companies did that. But to say that you were going to be the best, that was a stretch. We only had three hotels at the time. Now I wasn’t saying that we were the best. But I was saying that is going to be our objective.

But it was based on what we had already achieved, because that was after we had opened the Inn on the Park in London. And I felt that if we could do it there – and we did, we beat the best on their home turf – then why can’t we do it elsewhere. So the idea of saying that we could be the best was based upon fact. It wasn’t a pipe dream. We did it in the most competitive market in the world, in a huge city. And all of a sudden with one little hotel we could be seen, and be successful. So all these ideas start with a thought process of what you’d like to do, but then you have to have a reason of can you do that. And that reason has to be based upon an understanding of yourself, of your abilities, and that reason has to be practical.

Q: Many business tycoons put themselves front and centre, and embody the brand; the most obvious example, Donald Trump. But you’ve remained behind the scenes, and have made sure that the focus is on Four Seasons itself and the frontline workers that deliver service to your clientele. Was this “selfless” stance a strategic decision – or a manifestation of your beliefs and you’re way of comporting yourself?
A: I think it’s my way of being comfortable, but also you have to think of the purpose. What’s the purpose of it? Trump did it because he’s a brand. So if he’s going to be a brand, you’ve got to pump it. So all of his effort and PR – and you might call it ego – but he’s created a brand, and therefore he has to promote it, he has to be up front, he has to be saying how good he is. And I’m doing the same thing with Four Seasons, but I don’t have to put my name up front with it. And if I’m trying to get everybody in the company to participate, you really want it to be a team effort. You don’t want to be a superstar. If you look at Four Seasons, we don’t have superstars. We have a team effort from many, many highly qualified people. And you get the odd person who might be better, but you try to make it that we can only move forward by working as a team.

As a matter of fact, I had a very nice call the other day from someone who knows the company very well and knows the role that I’ve played in the company. And they said, “You know I was very impressed, because I know what you’ve done in the company. But you never use the word ‘I,’ it was always ‘we.’ And I said, “Well, you know I can always have an idea, but it’s always ‘we’ who execute it.”

Q: The idea of selflessness, above, makes me think of the Eastern ideal of selflessness, which expressed itself in business via the success and efficiencies of some of the Japanese automakers like Toyota, where there is more of a unified or collective mindset. Interestingly, the Four Seasons would later find great success in the East (working with the Industrial Bank of Japan, and Fujita). Aside from the particulars of the business dealings that led to that, was there a deeper-seated kinship with how the Eastern culture incorporated a somewhat “selfless” approach to dealing with other people and companies and the basic principles of the Four Seasons business philosophy?
A: Well that’s right. And as a result of it, we were able to build a very trusting relationship. They saw that they could trust us. Now that very unusual, and I think I mention that in the book. Japan is an island, and it’s very insular. You couldn’t even get to it, years back. And I became very close – not from a social point of view. We’d go there, they’d take us out, entertain. But it was doing business with the people. And at one point in time, somebody came up to me and said, “Look, I want to tell you something that’s very personal. Do you realize that they have brought you into what they call the inner circle. And I don’t know any other non-Japanese that’s been included there.” And he said, “Never break that trust. It’s really something that’s very special, the way they’ve embraced you.” And I never forgot that.

And as a result of it, when the bubble burst, and all the people that you’ve been dealing with disappeared. In Japan, you don’t get fired – you’re just moved sideways and you’re more or less non grata. But these are people that I worked with. And so when I went back I would still want to have breakfast with one of these people. And they’d say, “Oh no, you can’t do that.” They’d say, “He’s no longer considered somebody that you should be speaking with. You should speak with the new president.” I said, “I will speak to the new president. But I’m still going to have this breakfast as well.” So I kept up those relationships, because that’s my custom. And even though it’s not what a Japanese would do with a Japanese, they accepted that that was appropriate to me, because that’s what I felt. They thought it was an insult to me, that he would take up my time. So, I think you can only be yourself – and that’s how you develop the respect of others, when you don’t try to pretend.

Q: Like in a good bio, it’s the ups and downs that are most interesting. In the past, the Four Seasons has not only experienced success but also faced tough times that affected the entire hotel industry: SARS, the post 9/11 slowdown, the Gulf War, and various recessions. Tell me about the business decisions/philosophy that saw you through those periods – and allowed you to emerge even stronger?
A: Well we faced these problems because business is cyclical. And we’re building hotels for 50 to 100 years, so you know in the course of that time, if you have a long-term commitment and obligation, you’re going to run into the rough weather – always, every 7 to 10 years. So you plan your business knowing that you’re going to have to be prepared. You don’t sort of bunker down or take big risks when there might be an obligation looming around the corner that you can’t meet. And you’re not always able to meet them. Today we’ve very financially sound and financially capable of doing whatever we want to do. So today’s economic downturn will not turn into a financial problem for us. And if you don’t have a financial problem, you can work your way through, because time will come around again.

But it wasn’t always like that. Like in 1981, when interests rates went to 20 to 22 per cent. Well that was serious, because now we had a financial problem. If you can’t get over the financial problem, then you haven’t got a business. So that was a very serious time for me and the company. And you had to say, “How do we get through it?” Because the first thing the banks will say is “What works at 10 per cent doesn’t work at 20 per cent.” And my response was “Of course not.” This is an unproductive cost. How can we all of a sudden double a huge expenditure. It’s not productive. So you have to deal with it.

So at that time, the bank – in fact, it was Gordie Bell – said to me, “Look, I thought you were coming here telling me how you were going to pay down this loan. And now you’re asking me to loan you more money. How do you think that I can go to any credit comity? You have no collateral. Your debt is way over your head.” And he said, “Why do you think this is going to work?” And I said, “Because I know the business. I know we’re going to get through this. I can’t be paying down you debt – I haven’t got the money for it now. But I will have the money.” So he said, “Okay, give me your stock as collateral.” And I said, “I’m not borrowing the money, the company is borrowing the money.” And he said, “Well, you’ve got so much confidence, so what’s the deal?”

And all of my advisers, accountants, lawyers said, “Forget it, the bank can’t do anything. What are they going to do? Run the hotel? They can’t do it. Don’t worry about it. They’ll give you the money.” But it wasn’t that. I knew they would have to give me the money. But if I wasn’t going to make it, what’s the difference? So I gave them my stock, because I wanted to demonstrate to everybody that “We’re going to get through this.” Now I didn’t make that a big deal. My inner circle knew. But I didn’t advertise it. But that is the belief in what you’re doing.

Q: And yet, with all the various challenges you’ve faced, I sense that you’ve enjoyed the journey.
A: People say to me, “Why today are you still doing it?” People my age are off playing golf all the time. But it’s simply because I like it. It’s enjoyable. And I’ve got choices. I don’t have to do this. But my preference is that this is the way I’d like to spend my time now, as long as I can add value.

Funny story: I was asked years ago at one of our Four Seasons town hall meetings, “Mr. Sharp, what’s going to happen when you retire?” And I said, “Well, you know, I’m feeling pretty good. I don’t have any intentions of retiring just yet.” But I spoke to Rosalie and I said that I hope I have enough understanding to know when to step aside. And she said, “Don’t worry, you’re going to know.” And I said, “What makes you so sure?” And she said, “Because I’m going to tell you.”

Four Seasons: The Story of a Business Philosophy is published by Viking Canada in Canada and Portfolio, an imprint of Penguin Group International, in the U.S. and available at bookstores across North America.

Isadore Sharp will be in conversation with Heather Reisman on May 12 at 7 p.m., at the Indigo bookstore in the Manulife Centre in Toronto. It’s a free public event including an onstage interview and signing to follow. Visit www.indigo.ca for more information.

William Morassutti is the co-founder and Editor-in-Chief of TOROmagazine.com. Prior to joining TORO, he worked in Canadian broadcasting as a writer, producer, director, reporter and host.

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