““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Isadore "Issy" Sharp
Fifty-three years ago, Isadore M. Sharp opened a modest 125-room motel in downtown Toronto and called it the Four Seasons. From that starting point, he built the Four Seasons Hotels and Resorts brand, which today includes 90 properties in 36 countries and ranks among the world’s largest and most prestigious suppliers of luxury lodging.
Sharp—who was born in Toronto in 1931 to immigrant parents who spoke no English—had not planned to be a hotelier. From his early teens on, Issy, as he was called, worked in plastering construction for his father, Max. Upon Issy’s college graduation, Max let him take over the company, Max Sharp & Son. Just 21 years old, Issy was in charge of construction and was also a rental agent, salesperson and financier.
One of the projects he built was a prospering 14-room motel in an out-of-the-way Toronto neighborhood, led him to conclude that a hotel downtown would be even more successful. So, despite knowing nothing about hotels, he built the aforementioned Four Seasons Motor Hotel.
Sharp approached the business of innkeeping from the customers’ perspective. What would they consider important? What would make them feel they’d received good value? The answer is first-rate service, which remains the brand’s distinguishing quality. Even Steve Jobs admitted that his retail service model owed a debt to Sharp’s vision.
In 2007, to protect the integrity of the brand into the future, Sharp took the company private. Though now 81, he has no intention of surrendering his title of chairman and continues to be involved in the development and aesthetics of Four Seasons properties. “I plan to remain as long as my health allows me to travel,” he said, when we spoke to him recently at his home in Toronto.
In your book, Four Seasons, The Story of a Business Philosophy, you say, “The reason for our success is no secret. It comes down to one single principle that transcends time and geography, religion and culture. It’s the Golden Rule, the simple idea that if you treat people well, the way you would like to be treated, they will do the same.” How did this principle become the basis of your entire company?
My parents taught me the values and principles of integrity, trust, fairness and the responsibility that you have to help and support others no matter what you’ve got, so it wasn’t unusual for me to have that as a work ethic.
How were you able to make service the brand’s distinguishing quality?
Service is an intangible, so I had to find a way to do that. I called my friend George Cohon, [founder and senior chairman] of McDonald’s [of Canada], and asked to go through their [new-employee] orientation program. I sat in the classroom with all the other kids, and what I saw impressed me. This was in the late ’70s.
[The question for us was] could we create a highly motivated, competent workforce that would distinguish Four Seasons based on an ethical credo, the Golden Rule? Over these last 30 years, thousands and thousands of people have proved that it works. Give the people what they’re entitled to, create an environment that makes them want to come to work because they’re going to enjoy themselves and they’re going to have an opportunity to participate in a meaningful way—that’s the principle. If people feel that they are part of something, they put more effort into it than you could ever ask of them. Everybody wants to show you how good they are. So we get an army of people every day proving how good they are.
There are four pillars of your business model: quality, service, culture and brand, plus a goal to become the undisputed leader in luxury hospitality. Do you feel you’ve achieved all five?
We have certainly achieved the first four and the fifth is yet to be determined. In 1972 we decided to operate only medium-sized hotels of exceptional quality and to try to be the best. In 1970, the contrast between London’s Inn on the Park hotel and Four Seasons Sheraton [now the Sheraton Center] on the outskirts of Toronto gave me this focus. That’s when we decided to make the quality of our service our distinguishing factor, our ace in the hole. The Golden Rule became our third decision and the fourth was to build a management company and a brand name rather than [simply own] real estate. The fifth, how can we become the undisputed leader, is like winning the gold medal at the Olympics. If you competed and won the gold, the world knows you’re the best. And that is our objective.
You were the first to have mini-bars, to have bathrobes, to have pillow menus, to have 24-hour room service. How does it feel to know that many other brands have stolen all these ideas from you?
Good, because anybody who is copying you knows that it’s working. You can never sustain yourself with just a product because people will copy and innovate and improve. It’s a constant effort. What else can you do that is going to satisfy the customer? Many of the things that we put in place [to increase] customer value have become an industry norm. But the one thing that separates us and gives us a way to sustain our advantage is service. That you cannot copy.
Well, Steve Jobs did say he was copying the way the Four Seasons employees do their jobs. What impact did that have?
It’s the most powerful and meaningful third-party endorsement that we will ever receive. Jobs hired Ron Johnson from Target [to oversee retail-store development] and asked him, “Who offers the best customer experience in the world?” And Johnson said the Four Seasons. It is a remarkable acknowledgement, but to me, it’s much more meaningful for the employees to know that the way they’re working is the best way to work. It builds up that sense of pride.
Hoteliers such as Donald Trump have made themselves the brand, but you stay behind the scenes. Was this a strategic decision or is this part of your DNA?
I think it’s part of my DNA. My parents taught me humility, to understand that there’s always going to be somebody who’s better, smarter, et cetera, so don’t think you’ll always be at the top of the list. That quality of humility and quiet confidence is why I wouldn’t think of calling it “Sharp Hotels.”
In 2006 Bill Gates and Prince Al-Waleed bin Talal bought up 95 percent of the shares in Four Seasons and you took the company private. Why?
It wasn’t something that I’d thought about doing. A money manager believed we could take the company private with a few major investors and asked if I would I be interested. I said not really. The company was financially very healthy and I wasn’t interested in changing my lifestyle.
He said, “If you could set the rule and there’d be no change in what you believe is important, would you then be interested?” I took it to Prince Waleed because he was first a good friend, and then a shareholder. He liked the idea. He’s the one who said, “Look, let me talk to my friend Bill Gates,” and they bought it. I kept 5 percent so we have a three-way partnership. Life went on perfectly. It was the right thing to do.
Do you fly for business or pleasure?
For business. I stay home for pleasure.
How has business aviation aided your career?
Flying private has allowed me to keep doing what I’m doing because it takes away a lot of the lost time in airports. When you’re on the plane, it’s like you’re in your office so you really aren’t traveling. You’re just changing the location of where you’re doing work. There are no interruptions, ever. It’s true luxury. It’s extraordinarily costly but you get to a point in your life [where] this is what you feel would be the right way to invest your time and money.
You charter your aircraft. What airplane do you prefer?
Challenger 604. Sometimes a Challenger 300 for short trips.
Why do you opt for Challengers?
I like the idea that it’s Bombardier, and that plane has a great track record. Because it’s part of their business I’ve always felt that they would never compromise on the plane. It’s a very, very comfortable plane to fly and very safe.
Why do you opt for charter rather than full or partial ownership or jet cards?
I use the same planes, the pilots are all the same and as qualified, and it’s more economical and convenient to charter when you need it rather than to own it and try to charter it out to others. Charter has come to be the best way for businesses to operate.
Where do you see your brand 10 years from now?
We’ll probably have 150 hotels at that time and another 50 in the pipeline. We won’t diversify and try to run other levels of the hotel. I think that China is clearly the new frontier. India, Russia, Latin America—our opportunities are endless.
How will the hotel of the future differ from today’s?
Over the years, hotels have become more functional and comfortable and practical. Years back, it was just a clean sheet on the bed and a shower. Today the bathrooms are quite exotic and the technology is constantly being upgraded. The actual scale of bedrooms has changed to become more of a place to have a meeting, not just a place to sleep.
I think the major change is going to be in marketing because of social networking. We will be spending most of our marketing money on the Internet, in social media, versus paid advertising. Years ago, there was a saying that if a person had a bad experience, he might tell 10 people. Today he might tell 10,000. We have an opportunity to prevent that from getting out of our control because we’re 24/7, always online. But I think the basic needs are still a good place to sleep, the ability to have a good meal and be refreshed to start the day. The industry is not going to go out of style.
Why do you choose to work when you could easily retire?
As long as I can continue to add value, I will. When it’s time to retire, my wife will let me know.
Isadore M. Sharp
BIRTHDATE: October 8, 1931
POSITION: Founder and chairman of Four Seasons Hotels and Resorts
PREVIOUS POSITION: Partner at Max Sharp & Son, 1952
EDUCATION: Graduate of Ryerson University of Technology, 1952
PERSONAL: Married for 57 years to Rosalie Wise Sharp. Three grown sons. Hobbies include tennis and bridge. Divides his time between Toronto and Palm Springs, California.
The Terry Fox Foundation
In 1978, Isadore Sharp’s 18-year-old son Chris died of cancer. Two years later, Sharp was asked to support another 18-year-old, Terry Fox, who had lost his leg to cancer. Fox was running across Canada in an improbable journey to raise money for cancer research, averaging 26 miles a day, but he wasn’t getting media attention. “He sounded discouraged and despondent, ready to throw in the towel,” said Sharp. “Having lost Chris, Terry’s youth, sincerity and resolve moved me deeply.” The Four Seasons pledged $2 for each mile Fox ran. Sharp invited 999 other companies to join the cause.
Fox ran 3,339 miles before he had to stop because cancer had entered both his lungs. Sharp phoned him, offering to initiate an annual family run to raise money for cancer research. On June 28, 1981, Fox passed away at age 22, but not before he learned that the dream he’d thought impossible had come true: he had raised $24 million, one dollar for every person then living in Canada.
The first Terry Fox Run took place shortly after Fox died. The event has now continued for 32 years and has raised well over $600 million for cancer research, according to Sharp. “That’s the wider implication of Terry’s message,” he said. “That mankind shares a deeply rooted instinctive moral sense, that the ethic of mutual responsibility, caring and sharing–the goodwill sometimes known as brotherly love–is as universal as selfishness and hate.”