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Discussion on Leadership and Values Between Carl R. Augusto and J.W. Marriott, Jr.

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[Narrator reading]: Discussion on leadership and values between Carl R. Augusto, President and CEO, American Foundation for the Blind, and J.W. Marriott, Jr., Executive Chairman and Chairman of the Board, Marriott International, at the AFB Leadership Conference, February 28, 2014

Carl Augusto: Well good afternoon everyone. It is my joy to introduce Bill Marriott to you this afternoon.

Mr. Marriott started working at Marriott in 1956, became the CEO in 1964, retired two years ago, and presently he is the Executive Chairman and the Chairman of the Board.

And, ladies and gentlemen please join me in welcoming J. W. Marriott, Jr.


So Bill, I have been a frequent traveler for nearly forty years, and I've stayed at a lot of hotels over the course of those forty years.

And in my earlier years I stayed in a variety of hotels. I try to avoid that now.

J.W. Marriott Jr.: That's good

CA: Yeah


Long before joining the staff at the American Foundation for the Blind 23 years ago, I came to the conclusion that Marriott does it better than anyone else. We have had a practice at AFB that all our AFB Leadership Conferences are held at Marriott hotels, our Board of Trustees meetings only at Marriott hotels and personally I love the different brands that you have. Depending upon my needs, I can stay at a Courtyard, I can stay at a Residence Inn, I can stay at a full service Marriott, and of course when I'm on vacation I want to go to the resorts.

But what I really appreciate about Marriott more than anything else are your associates. I know that you give them happy pills.


I'm not sure how you do it, but I'm sure you do. They're always cheerful, they're always helpful. And it doesn't surprise me that Marriott appears in the top ten of Fortune 500's Best Places to Work every single time they do a survey. And you guys do special efforts to accommodate people with special needs, and I don't mean necessarily people with disabilities, but whenever there are special needs you bend over backwards to meet those special needs.

And rarely do I ever find a Marriott associate that feels anything but home comfort in meeting a blind person.

Marriott was the first one to install braille signage on all its sleeping rooms and all its meeting rooms.

It's the only chain I've ever found that has sound alarms so that when I come in from a meeting, instead of trying to remember the three or four digit code or call the front desk, I hear the sound.

And you've had an outstanding record of employing people with disabilities and you have a special foundation for people with disabilities. You might talk about that in a few minutes from now.

Now, every year the American Foundation for the Blind honors corporations that demonstrate extraordinary access to people with vision loss. We do that through the Helen Keller Achievement Awards and when we were inaugurating this event in 1994 We knew exactly who we wanted the first recipient of this award to be, and it was you. And you were gracious enough to say yes. We had a great night. What a way to start off an event, a series of events—we had Bill Marriott and Ray Charles.


Ray Charles did the singing, I just wanted to point that out. [Laughter]

Periodically over the course of time Mr. Marriott and I have met several times. Bill, you've always been generous with your time, with your advice, you're really a true mentor.

So I know you spend a great deal of time visiting hotels. As I look at your background, you visit 200-300 Marriott hotels a year. That is incredible. So, I've always wanted to ask you this question: What do you do and what do you look for when you visit the hotels?

JW: That's a good question


It depends on the hotel, of course, but first let me give you a little background on our company.

We'll be 87 years old this year. My mom and dad started the business in 1927 as a root beer stand in Washington DC, and for 30 years they were in the restaurant business. They had drive-in restaurants and cafeterias, and finally opened up this hotel in 1957.

And the cardinal rule for them was if they take good care of their employees, then they take good care of their customers. So they looked to see the smiles. They wanted to make sure people were happy. That they're really enjoying their work. And they want to make sure the place is clean and all the braille is in place.


And to make sure we're up for the job, that we're doing a good job, and really just to see the people and let them know that we care about them, that they're important to us and do everything we can to make them happy.

CA: I think it was about 3 or 4 years ago, Bill, I was on a business trip in Scottsdale. I was staying at the Desert Ridge, which is a beautiful hotel. And I was sitting and waiting for the person who I was going to have business with, and there were introductions in the lobby and people were introducing themselves.

And I knew that there must have been this dignitary there. And I said to myself "Is it the governor?"

Then I said "I wonder if it's the president."

And then finally I said, "I wonder if it's Bill Marriott."


Now it turned out to be you, if I knew you were there, I would have jumped up and said hi. But I wasn't sure it was you. But after you left, I talked to some of the associates, and boy, do you make them feel good. They said every time Mr. Marriott comes around, he charges our batteries. He makes us feel so good and you are truly beloved.

I stopped by the front desk on Wednesday night when I registered and I said to the manager in charge, I said "Are you going to be working here on Friday?"

And she said "Yes," and I said "Do you know who's going to be here on Friday?" And she had this big smile on her face, and she said "Yes, and I am so excited." [Laughter]

And that's happened all this week talking to your associates. I know that they are really excited about you being here.

So what has been your greatest leadership challenge in your career and what are the lessons that you learned from that challenge?

JW: I think the biggest challenge is growing the business.

We started with a root beer stand and then we started one hotel and now we have four thousand hotels. But I think the big challenge is in developing people, and we say that we hire friendly and train technical.

We also say that we provide opportunities for people. 50% of our general managers have been with the company 25 years or more, and most of them started as hourly workers.

And we give them opportunities, we train them to meet these opportunities to grow and develop with the company and to really better their lives. And I think that's been one of the main reasons that we have the loyalty and the desire to work for Marriott that we have.

CA: How does your leadership style influence Marriott's culture?

JW: I think the most important thing you do as a leader is to listen to your people. Somebody said the other day, "I have one mouth and two ears and you should talk half of what you listen." [Laughter] And I think that's basically true.

I remember I was in the Navy for two years when I got out of college and I was on an aircraft carrier. And I was in charge of the war room mess, Which is where the officers eat dinner and the food was terrible and so I had a bunch of recipe cards from my Dad's old Hot Shoppes restaurants, Which we ran back then and I went down and I talked to the chefs and the cooks in the kitchen and I said "here's a group of recipe cards—let's see if we can improve the service of the food around here."

And they looked at the cards and they looked at me and they didn't say anything and the food got worse.


And so I went back and I said "I'm an officer in this Navy, you're not officers, you're enlisted men, and I'm giving an order to do something about this food, so follow these recipe cards."

The food didn't get any better. [Laughter]

I finally came to the conclusion that I had not included them in this decision that affected them. I had not sold them on why they should use the recipe cards. I did not put my arm around them and tell them how much they were appreciated. I went in and threw my authority at them and it was a big mistake.

And I learned a lot from that. In fact, that Christmas, I was at our family farm down in Virginia, and one of my Dad's best friends was Ezra Taft Benson, who was secretary of agriculture for President Eisenhower, and here comes Ike and Mamie and they show up down at the farm, and they're down there to have dinner and then we'd let Ike go out and shoot some quail.

Of course we filled the field with quail [laughter]...with a couple hundred of these birds and stuck them all over the place. So if we went out to shoot, we'd have quail to shoot.

And it was bitter cold like it is here in NY today and the wind was blowing as I said it was December, it was Christmas time. And somebody was saying "What do you want to do Mr. President? Should we go out and shoot the quail, or should we not go out and shoot the quail?"

And I was standing back in the corner as a lowest ranking officer of the United States Navy, and the five star general and the President of the United States turned to me and said, "What do you want to do, Bill? What do you think we should do?"

I said "It's too cold, let's stay inside."


And I thought about that a lot. I thought there was the Commander in Chief asking me, a lowly inst in the Navy, what I thought. And I thought of that as a great lesson in leadership I learned from him. Because when he was Supreme Commander, Allied Commander in Europe during the war, he had to work with some very difficult people—Montgomery, and Patton, and Churchill, and Marshall and some of these other generals and heads of countries—and I thought, you know, he probably asked that question a lot, "what do you think?" And didn't necessarily follow their advice obviously but a lot of time he got them on board by saying "What do you think?" And so I learned a lot from that.

If I had asked those cooks in the kitchen on my aircraft carrier "What do you think?" I probably would have gotten a lot better response than I got. Because I didn't get any response. [Laughter] So that was a truly great life lesson for me, and so I always try to think of those four important words, "What do you think?"

CA: As I mentioned earlier, I feel so strongly about Marriott associates providing excellent customer service. So how does Marriott create a customer-centric mindset?

JW: I think people that work for us know that we truly care about them. Our core belief is put your associates, your employees first. Take good care of them. I mean, back in the '30s my dad hired, put a doctor on the payroll because they didn't have healthcare [insurance] back then, to take care of his people because they got sick.

And then they found out in the '40s they needed surgery so he put a surgeon on the payroll, and he was there to care for his people. I think it started out in that little root beer stand When there were four employees, and my father working there and my mother working there. And one day, one of the ladies that served the root beer didn't show up, so my Dad and Mom had to spend the day pulling down root beer, and filling that mug and then my Dad said, "Hey, I gotta build a little chain here, if I do, I gotta have everybody want to work for me. What do I do to get them to work for me?"

And the answer to that was to train and treat them well, promote them, give them opportunities to grow and develop. And that's what started the culture for the company and that exists today.

CA: So what are Marriott's core values and how do those core values contribute to that culture?

JW: Well, the number one core value is take good care of your people, and I just mentioned that one. Another core value is to pursue excellence. We have a lot of standards at this company. Some people think we have more than we should. That came out of the restaurant business where we developed those recipe cards, and also it came out of the other standards we had at the restaurants. So we have 66 ways to make up a room today at our hotels. So consistency is a very important part of our business. And so we believe that to pursue excellence, we believe it is important to act with integrity. We believe it is important to serve our world and we work very hard at that.

We have, speaking of what you mentioned earlier, what are we doing to help people with disabilities? We have what we call Bridges to Work. And we placed, I think, fourteen, fifteen thousand people. Tad Asbury is here, how many people, Tad?

Tad Asbury: That's correct, 14,600. [Laughter]

CA: It's good to be exact.

JW: 600 since I last talked to you. Thank you, Tad. [Laughter] Good job. And we take these high school kids who have disabilities and we get them jobs and we get them into college, but primarily we get them jobs. And we have about 8 or 9 cities across the country where we have our Bridges program going, and so that is a way in which we're making a contribution. And we're so proud of this program because of the opportunities being provided to young people who needed a job and probably couldn't have gotten one had we not backed them up and then enlisted other companies into the Bridges program who bought into the belief that it is important to take good care of people, and that it is particularly important to take care of those that are disabled.

CA: So I've been a CEO for 29 years, it's not been 48, but I'm aspiring, to that number at some point. And I remember my very first day at my very first job as a CEO. I got the staff together and one of the things I said to them, because I knew that they were concerned about change, it seemed like everybody was. And I said, " I want to tell you that I have a philosophy," and this philosophy, it took me a very short time to realize it wasn't a good thing to say, I said, and it sounded good that day, I said, "My philosophy is ‘if it ain't broke, don't fix it'."

And I suddenly realized over the course of the next couple of months that was not a good philosophy for two reasons, because even if something is good, you don't ignore it, you try to make it better. And if you don't try to get a good thing to be better it might become broken. So you have to pay attention to every aspect of your organization. But I know change is very hard so how does Marriott encourage innovation? How does Marriot embrace change and help its associates embrace change?

JW: Oh, we're going through a very interesting time in America today with the young people, what we call the Millennials and what we call the X and Y generation. In other words, young people between the ages of 18-30/34. And they want a different experience when they stay in a hotel. They check in to their room and they throw their bag on the floor, they don't unpack, they don't hang anything up.


And they throw their computer on the bed, they don't need a desk. And they go back down to the lobby, and hang out with their friends and they don't go to the restaurant. They just want to eat in the lobby and have a drink and hang out with their friends and use their computer in the lobby.

And so we're taking a lot of desks out of our new rooms. They don't like color, which is, as you can see I like color. [Laughter] That's why you got the color in this ballroom. But...

CA: I don't like color either, I just wanted to point that out. [Laughter]

JW: And so we have a lot of tans and browns in our new rooms, we have a whole area in our office building on the lower level, of 10,000 square feet where we're innovating. We're designing new rooms or designing new concepts, new bathrooms, to appeal to this new young generation which will be 50% of our business next year. [Gasp from audience] So we really have to do things very differently than we did when I was growing up.

When I was coming up, I was just like a lot of you. I'd check in at the front desk, go up to my room, work, maybe order a sandwich, go to bed, get up in the morning, go to work. These kids check in, throw their suitcase on the floor and go back downstairs, and then they come back up and go to sleep. Or maybe they come back up and use their computer sitting on the bed or sitting in a chair, they don't use a desk. And so it's a very, very different mindset and a way of living. A different culture, so we have to adapt to that and make sure we're modern, we're innovating,

We have lots of new brands we're innovating. We have a new Edition brand that we're working with Ian Schrager who is an inventor of the boutique hotel that we had the first one open in London and now we're opening this year in Miami Beach and next year here in New York.

So we've got a lot of those going, we've got a Renaissance hotel brand Which is continuing to evolve into meeting the Millennials.

And then we have the Autograph Collection which also meets with them, and we have two lower-priced offerings. One we call the AC hotel, which is a Spanish chain of sleek, modern hotels with a lower price,

And then we're finally developing a hotel called Moxy which is even a smaller room, with a lower price but all hip and sharp for these new young people.

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