Tony Capuano: The Non-Negotiables In Business | E78

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. But the one variable that you do control is whether someone outworks you that is 100% within your control.

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. 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. 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.

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.

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?

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. 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. 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. 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.

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.

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.

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.

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.

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.

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. 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.

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.

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.

have face to face? Interaction with your employees and customers?

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. But I think the steepness of our recovery is the best illustration that people understand business is conducted face to face.

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. 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.

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.

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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. 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

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.

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. 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.